Document:

AMERIQUEST MORTGAGE SECURITIES INC.

                                    Depositor

                           AMERIQUEST MORTGAGE COMPANY

                                 Master Servicer

                                       and

                    BANKERS TRUST COMPANY OF CALIFORNIA, N.A.

                                     Trustee

                    -----------------------------------------

                         POOLING AND SERVICING AGREEMENT
                          Dated as of November 1, 2001

                    -----------------------------------------

                Floating Rate Mortgage Pass-Through Certificates

                                  Series 2001-3

<PAGE>

<TABLE>
<CAPTION>
                                                 TABLE OF CONTENTS

SECTION                                                                                                        PAGE
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                                                     ARTICLE I

                                                    DEFINITIONS

<S>                                                                                                            <C>
         1.01.     Defined Terms..................................................................................4
                   Accrued Certificate Interest...................................................................4
                   Addition Notice................................................................................4
                   Adjustable-Rate Mortgage Loan..................................................................4
                   Adjustment Date................................................................................5
                   Affiliate......................................................................................5
                   Agreement......................................................................................5
                   Assignment.....................................................................................5
                   Available Distribution Amount..................................................................5
                   Bankruptcy Code................................................................................6
                   Bankruptcy Loss................................................................................6
                   Book-Entry Certificate.........................................................................6
                   Book-Entry Custodian...........................................................................6
                   Business Day...................................................................................6
                   Certificate....................................................................................6
                   Certificate Factor.............................................................................6
                   Certificateholder" or "Holder..................................................................6
                   Certificate Margin.............................................................................7
                   Certificate Owner..............................................................................7
                   Certificate Principal Balance..................................................................7
                   Certificate Register" and "Certificate Registrar...............................................8
                   Class   .......................................................................................8
                   Class A Certificate............................................................................8
                   Class A Principal Distribution Amount..........................................................8
                   Class CE Certificate...........................................................................8
                   Class Exemption................................................................................8
                   Class M-1 Certificate..........................................................................8
                   Class M-1 Principal Distribution Amount........................................................8
                   Class M-2 Certificate..........................................................................9
                   Class M-2 Principal Distribution Amount........................................................9
                   Class M-3 Certificate..........................................................................9
                   Class M-3 Principal Distribution Amount........................................................9
                   Class P Certificate...........................................................................10
                   Class R-I Interest............................................................................10
                   Class R-II Interest...........................................................................10
                   Class R-III Interest..........................................................................10
                   Class S Certificate...........................................................................10
                   Class S Rate..................................................................................10

                                       i

<PAGE>

SECTION                                                                                                        PAGE
-------                                                                                                        ----

                   Closing Date..................................................................................11
                   Code    ......................................................................................11
                   Collection Account............................................................................11
                   Commission....................................................................................11
                   Corporate Trust Office........................................................................11
                   Corresponding Certificate.....................................................................11
                   Credit Enhancement Percentage.................................................................11
                   Cumulative Loss Percentage....................................................................11
                   Custodian.....................................................................................11
                   Cut-off Date..................................................................................11
                   Debt Service Reduction........................................................................12
                   Deficient Valuation...........................................................................12
                   Definitive Certificates.......................................................................12
                   Deleted Mortgage Loan.........................................................................12
                   Delinquency Percentage........................................................................12
                   Depositor.....................................................................................12
                   Depository....................................................................................12
                   Depository Institution........................................................................12
                   Depository Participant........................................................................13
                   Determination Date............................................................................13
                   Directly Operate..............................................................................13
                   Disqualified Organization.....................................................................13
                   Distribution Account..........................................................................13
                   Distribution Date.............................................................................13
                   Due Date......................................................................................14
                   Due Period....................................................................................14
                   Eligible Account..............................................................................14
                   ERISA   ......................................................................................14
                   Estate in Real Property.......................................................................14
                   Excess Overcollateralized Amount..............................................................14
                   Expense Adjusted Mortgage Rate................................................................14
                   Expense Adjusted Net Maximum Mortgage Rate....................................................14
                   Extraordinary Trust Fund Expense..............................................................14
                   Fannie Mae....................................................................................14
                   Fixed Rate Mortgage Loan......................................................................15
                   Funding Period................................................................................15
                   FDIC    ......................................................................................15
                   Final Recovery Determination..................................................................15
                   Formula Rate..................................................................................15
                   Freddie Mac...................................................................................15
                   Gross Margin..................................................................................15
                   Independent...................................................................................15
                   Independent Contractor........................................................................15
                   Indenture.....................................................................................16

                                       ii

<PAGE>

SECTION                                                                                                        PAGE
-------                                                                                                        ----

                   Index   ......................................................................................16
                   Initial Mortgage Loan.........................................................................16
                   Insurance Proceeds............................................................................16
                   Interest Accrual Period.......................................................................16
                   Interest Carry Forward Amount.................................................................16
                   Interest Coverage Account.....................................................................17
                   Interest Coverage Amount......................................................................17
                   Interest Determination Date...................................................................17
                   Interest Distribution Amount..................................................................17
                   Interest Remittance Amount....................................................................17
                   Late Collections..............................................................................17
                   Liquidation Event.............................................................................17
                   Liquidation Proceeds..........................................................................17
                   Loan-to-Value Ratio...........................................................................17
                   London Business Day...........................................................................18
                   Loss Mitigation Action Plan...................................................................18
                   Majority Class CE Certificateholder...........................................................18
                   Master Servicer...............................................................................18
                   Master Servicer Event of Default..............................................................18
                   Master Servicer Prepayment Charge Payment Amount..............................................18
                   Master Servicer Remittance Date...............................................................18
                   Master Servicer Termination Test..............................................................18
                   Maximum Cap Rate..............................................................................18
                   Maximum II-LT6 Uncertificated Interest Deferral Amount........................................19
                   Maximum Mortgage Rate.........................................................................19
                   Mezzanine Certificate.........................................................................19
                   Minimum Mortgage Rate.........................................................................19
                   Monthly Payment...............................................................................19
                   Moody's ......................................................................................19
                   Mortgage......................................................................................19
                   Mortgage File.................................................................................19
                   Mortgage Loan.................................................................................20
                   Mortgage Loan Purchase Agreement..............................................................20
                   Mortgage Loan Schedule........................................................................20
                   Mortgage Note.................................................................................21
                   Mortgage Pool.................................................................................22
                   Mortgage Rate.................................................................................22
                   Mortgaged Property............................................................................22
                   Mortgagor.....................................................................................22
                   Net Monthly Excess Cashflow...................................................................22
                   Net Mortgage Rate.............................................................................22
                   Net WAC Pass-Through Rate.....................................................................22
                   Net WAC Rate Carryover Amount.................................................................23
                   New Lease.....................................................................................23

                                      iii

<PAGE>

SECTION                                                                                                        PAGE
-------                                                                                                        ----

                   Nonrecoverable P&I Advance....................................................................23
                   Nonrecoverable Servicing Advance..............................................................23
                   Non-United States Person......................................................................23
                   Notional Amount...............................................................................23
                   Officers' Certificate.........................................................................23
                   One-Month LIBOR...............................................................................24
                   Opinion of Counsel............................................................................24
                   Original Pre-Funded Amount....................................................................24
                   Originator....................................................................................24
                   Overcollateralized Amount.....................................................................24
                   Overcollateralization Deficiency Amount.......................................................25
                   Overcollateralization Increase Amount.........................................................25
                   Overcollateralization Reduction Amount........................................................25
                   Ownership Interest............................................................................25
                   Pass-Through Rate.............................................................................25
                   Percentage Interest...........................................................................26
                   Periodic Rate Cap.............................................................................26
                   Permitted Investments.........................................................................26
                   Permitted Transferee..........................................................................27
                   Person  ......................................................................................28
                   P&I Advance...................................................................................28
                   Plan    ......................................................................................28
                   Pre-Funding Account...........................................................................28
                   Prepayment Assumption.........................................................................28
                   Prepayment Charge.............................................................................28
                   Prepayment Charge Schedule....................................................................28
                   Prepayment Interest Excess....................................................................29
                   Prepayment Interest Shortfall.................................................................29
                   Prepayment Period.............................................................................29
                   Principal Distribution Amount.................................................................29
                   Principal Prepayment..........................................................................30
                   PTCE    ......................................................................................30
                   Purchase Price................................................................................30
                   Qualified Substitute Mortgage Loan............................................................31
                   Rating Agency or Rating Agencies..............................................................32
                   Realized Loss.................................................................................32
                   Record Date...................................................................................33
                   Reference Banks...............................................................................33
                   Refinanced Mortgage Loan......................................................................33
                   Regular Certificate...........................................................................33
                   Regular Interest..............................................................................33
                   Relief Act....................................................................................33
                   Relief Act Interest Shortfall.................................................................33
                   REMIC   ......................................................................................33

                                       iv

<PAGE>

SECTION                                                                                                        PAGE
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                   REMIC I ......................................................................................33
                   REMIC I Regular Interest......................................................................34
                   REMIC I Regular Interest I-LT1................................................................34
                   REMIC I Regular Interest I-LT2................................................................34
                   REMIC I Regular Interest I-LTP................................................................34
                   REMIC I Remittance Rate.......................................................................34
                   REMIC II......................................................................................34
                   REMIC II Interest Loss Allocation Amount......................................................35
                   REMIC II Overcollateralized Amount............................................................35
                   REMIC II Principal Loss Allocation Amount.....................................................35
                   REMIC II Regular Interest.....................................................................35
                   REMIC II Regular Interest II-LT1..............................................................35
                   REMIC II Regular Interest II-LT2..............................................................35
                   REMIC II Regular Interest II-LT3..............................................................36
                   REMIC II Regular Interest II-LT4..............................................................36
                   REMIC II Regular Interest II-LT5..............................................................36
                   REMIC II Regular Interest II-LT6..............................................................36
                   REMIC II Regular Interest II-LTS..............................................................36
                   Regular ......................................................................................36
                   REMIC II Regular Interest II-LTP..............................................................36
                   REMIC II Remittance Rate......................................................................36
                   REMIC II Required Overcollateralized Amount...................................................37
                   REMIC III.....................................................................................37
                   REMIC III Certificate.........................................................................37
                   REMIC III Certificateholder...................................................................37
                   REMIC Provisions..............................................................................37
                   Remittance Report.............................................................................37
                   Rents from Real Property......................................................................37
                   REO Account...................................................................................37
                   REO Disposition...............................................................................37
                   REO Imputed Interest..........................................................................37
                   REO Principal Amortization....................................................................37
                   REO Property..................................................................................38
                   Request for Release...........................................................................38
                   Required Overcollateralized Amount............................................................38
                   Reserve Fund..................................................................................38
                   Reserve Interest Rate.........................................................................38
                   Residential Dwelling..........................................................................38
                   Residual Certificate..........................................................................38
                   Residual Interest.............................................................................38
                   Responsible Officer...........................................................................39
                   Scheduled Principal Balance...................................................................39
                   Senior Interest Distribution Amount...........................................................39
                   Servicing Account.............................................................................39

                                       v

<PAGE>

SECTION                                                                                                        PAGE
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                   Servicing Advances............................................................................39
                   Servicing Fee.................................................................................40
                   Servicing Fee Rate............................................................................40
                   Servicing Officer.............................................................................40
                   Single Certificate............................................................................40
                   S&P     ......................................................................................40
                   Startup Day...................................................................................40
                   Stated Principal Balance......................................................................40
                   Stayed Funds..................................................................................41
                   Stepdown Date.................................................................................41
                   Subsequent Cut-off Date.......................................................................41
                   Subsequent Mortgage Loan......................................................................41
                   Subsequent Mortgage Loan Purchase Agreement...................................................41
                   Subsequent Transfer Date......................................................................41
                   Subsequent Transfer Instrument................................................................42
                   Sub-Servicer..................................................................................42
                   Sub-Servicing Account.........................................................................42
                   Sub-Servicing Agreement.......................................................................42
                   Substitution Shortfall Amount.................................................................42
                   Tax Returns...................................................................................42
                   Telerate Page 3750............................................................................42
                   Termination Price.............................................................................42
                   Terminator....................................................................................42
                   Transfer......................................................................................42
                   Transferee....................................................................................42
                   Transferor....................................................................................42
                   Trigger Event.................................................................................42
                   Trust Fund....................................................................................43
                   Trustee ......................................................................................43
                   Trustee's Fee.................................................................................43
                   Trustee's Fee Rate............................................................................43
                   Uncertificated Balance........................................................................43
                   Uncertificated Interest.......................................................................43
                   Uncertificated Notional Amount................................................................44
                   Underwriters' Exemption.......................................................................44
                   Uninsured Cause...............................................................................44
                   United States Person..........................................................................44
                   Value   ......................................................................................44
                   Voting Rights.................................................................................45
         1.02.     Allocation of Certain Interest Shortfalls.....................................................45
         1.03      Rights of the NIMs Insurer....................................................................46

                                       vi

<PAGE>

                                                    ARTICLE II

                                           CONVEYANCE OF MORTGAGE LOANS;
                                         ORIGINAL ISSUANCE OF CERTIFICATES

         2.01.     Conveyance of Mortgage Loans..................................................................47
         2.02.     Acceptance of REMIC I by the Trustee..........................................................49
         2.03.     Repurchase or Substitution of Mortgage Loans by the Originator or the Depositor;
                   Payment of Prepayment Charge Payment Amounts..................................................51
         2.04.     [Reserved]....................................................................................55
         2.05.     Representations, Warranties and Covenants of the Master Servicer..............................55
         2.06.     Issuance of the REMIC I Regular Interests and the Class R-I Interest..........................57
         2.07.     Conveyance of the REMIC I Regular Interests; Acceptance of REMIC II by the
                   Trustee.......................................................................................57
         2.08.     Conveyance of the REMIC II Regular Interests; Acceptance of REMIC III by the
                   Trustee.......................................................................................58
         2.09.     Issuance of Class R Certificates..............................................................58
         2.10.     Conveyance of the Subsequent Mortgage Loans...................................................58

                                                    ARTICLE III

                                           ADMINISTRATION AND SERVICING
                                               OF THE MORTGAGE LOANS

         3.01.     Master Servicer to Act as Master Servicer.....................................................62
         3.02.     Sub-Servicing Agreements Between the Master Servicer and Sub-Servicers........................63
         3.03.     Successor Sub-Servicers.......................................................................64
         3.04.     Liability of the Master Servicer..............................................................65
         3.05.     No Contractual Relationship Between Sub-Servicers and the NIMs Insurer, Trustee
                   or Certificateholders.........................................................................65
         3.06.     Assumption or Termination of Sub-Servicing Agreements by Trustee..............................65
         3.07.     Collection of Certain Mortgage Loan Payments..................................................66
         3.08.     Sub-Servicing Accounts........................................................................67
         3.09.     Collection of Taxes, Assessments and Similar Items; Servicing Accounts........................67
         3.10.     Collection Account and Distribution Account...................................................68
         3.11.     Withdrawals from the Collection Account and Distribution Account..............................71
         3.12.     Investment of Funds in the Pre-Funding Account, the Interest Coverage Account, the
                   Collection Account and the Distribution Account...............................................72
         3.13.     [intentionally omitted].......................................................................74
         3.14.     Maintenance of Hazard Insurance and Errors and Omissions and Fidelity
                   Coverage......................................................................................74
         3.15.     Enforcement of Due-On-Sale Clauses; Assumption Agreements.....................................75
         3.16.     Realization Upon Defaulted Mortgage Loans.....................................................76
         3.17.     Trustee to Cooperate; Release of Mortgage Files...............................................79
         3.18.     Servicing Compensation........................................................................80
         3.19.     Reports to the Trustee; Collection Account Statements.........................................80

                                      vii

<PAGE>

SECTION                                                                                                        PAGE
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         3.20.     Statement as to Compliance....................................................................81
         3.21.     Independent Public Accountants' Servicing Report..............................................81
         3.22.     Access to Certain Documentation...............................................................82
         3.23.     Title, Management and Disposition of REO Property.............................................82
         3.24.     Obligations of the Master Servicer in Respect of Prepayment Interest
                   Shortfalls....................................................................................85
         3.25.     Obligations of the Master Servicer in Respect of Mortgage Rates and Monthly
                   Payments......................................................................................86
         3.26.     Advance Facility..............................................................................86
         3.27.     [Reserved]....................................................................................87
         3.28      Reserve Fund..................................................................................87

                                                    ARTICLE IV

                                          PAYMENTS TO CERTIFICATEHOLDERS

         4.01.     Distributions.................................................................................89
         4.02.     Statements to Certificateholders..............................................................95
         4.03.     Remittance Reports; P&I Advances..............................................................98
         4.04.     Allocation of Realized Losses.................................................................99
         4.05.     Compliance with Withholding Requirements.....................................................101
         4.06.     Commission Reporting.........................................................................101
         4.07.     Pre-Funding Account..........................................................................102
         4.08.     Interest Coverage Account....................................................................103

                                                     ARTICLE V

                                                 THE CERTIFICATES

         5.01.     The Certificates.............................................................................104
         5.02.     Registration of Transfer and Exchange of Certificates........................................106
         5.03.     Mutilated, Destroyed, Lost or Stolen Certificates............................................111
         5.04.     Persons Deemed Owners........................................................................111
         5.05.     Certain Available Information................................................................111

                                                    ARTICLE VI

                                       THE DEPOSITOR AND THE MASTER SERVICER

         6.01.     Liability of the Depositor and the Master Servicer...........................................113
         6.02.     Merger or Consolidation of the Depositor or the Master Servicer..............................113
         6.03.     Limitation on Liability of the Depositor, the Master Servicer and Others.....................113
         6.04.     Limitation on Resignation of the Master Servicer.............................................114
         6.05.     Rights of the Depositor in Respect of the Master Servicer....................................115

                                      viii

<PAGE>

SECTION                                                                                                        PAGE
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                                                    ARTICLE VII

                                                      DEFAULT

         7.01.     Master Servicer Events of Default............................................................116
         7.02.     Trustee to Act; Appointment of Successor.....................................................118
         7.03.     Notification to Certificateholders...........................................................120
         7.04.     Waiver of Master Servicer Events of Default..................................................120

                                                   ARTICLE VIII

                                              CONCERNING THE TRUSTEE

         8.01.     Duties of Trustee............................................................................121
         8.02.     Certain Matters Affecting the Trustee........................................................122
         8.03.     Trustee Not Liable for Certificates or Mortgage Loans........................................123
         8.04.     Trustee May Own Certificates.................................................................123
         8.05.     Trustee's Fees and Expenses..................................................................124
         8.06.     Eligibility Requirements for Trustee.........................................................124
         8.07.     Resignation and Removal of the Trustee.......................................................125
         8.08.     Successor Trustee............................................................................125
         8.09.     Merger or Consolidation of Trustee...........................................................126
         8.10.     Appointment of Co-Trustee or Separate Trustee................................................126
         8.11.     Appointment of Custodians....................................................................127
         8.12.     Appointment of Office or Agency..............................................................128
         8.13.     Representations and Warranties of the Trustee................................................128

                                                    ARTICLE IX

                                                    TERMINATION

         9.01      Termination Upon Repurchase or Liquidation of All Mortgage Loans.............................130
         9.02      Additional Termination Requirements..........................................................132

                                                     ARTICLE X

                                                 REMIC PROVISIONS

         10.01.    REMIC Administration.........................................................................133
         10.02.    Prohibited Transactions and Activities.......................................................135
         10.03.    Master Servicer and Trustee Indemnification..................................................136

                                       ix

<PAGE>

SECTION                                                                                                        PAGE
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                                                    ARTICLE XI

                                             MISCELLANEOUS PROVISIONS

         11.01.    Amendment....................................................................................137
         11.02.    Recordation of Agreement; Counterparts.......................................................138
         11.03.    Limitation on Rights of Certificateholders...................................................138
         11.04.    Governing Law................................................................................139
         11.05.    Notices......................................................................................139
         11.06.    Severability of Provisions...................................................................140
         11.07.    Notice to Rating Agencies and the NIMs Insurer...............................................140
         11.08.    Article and Section References...............................................................141
         11.09.    Grant of Security Interest...................................................................141
         11.10     Third Party Rights...........................................................................142
         11.11     NIMs Insurer's Rights........................................................................142
</TABLE>

                                       x

<PAGE>

<TABLE>
<CAPTION>
         Exhibits
         --------
<S>                        <C>
         Exhibit A-1       Form of Class A Certificate
         Exhibit A-2       Form of Class M-1 Certificate
         Exhibit A-3       Form of Class M-2 Certificate
         Exhibit A-4       Form of Class M-3 Certificate
         Exhibit A-5       Form of Class CE Certificate
         Exhibit A-6       Form of Class P Certificate
         Exhibit A-7       Form of Class S Certificate
         Exhibit A-8       Form of Class R Certificate
         Exhibit B         [Reserved]
         Exhibit C-1       Form of Trustee's Initial Certification
         Exhibit C-2       Form of Trustee's Interim Certification
         Exhibit C-2       Form of Trustee's Final Certification
         Exhibit D         Form of Mortgage Loan Purchase Agreement
         Exhibit E-1       Request for Release
         Exhibit E-2       Request for Release Mortgage Loans paid in full
         Exhibit F-1       Form of Transferor Representation Letter and Form of Transferee
                           Representation Letter in Connection with Transfer of Class CE  and Class P
                           Certificates Pursuant to Rule 144A Under the 1933 Act
         Exhibit F-2       Form of Transfer Affidavit and Agreement and Form of Transferor Affidavit
                           in Connection with Transfer of Residual Certificates
         Exhibit G         Form of Certification with respect to ERISA and the Code
         Exhibit H         [Reserved]
         Exhibit I         Form of Subsequent Transfer Instrument
         Exhibit J         Form of Addition Notice
         Exhibit O         Loss Mitigation Action Plan
         Schedule 1        Mortgage Loan Schedule
         Schedule 2        Prepayment Charge Schedule
</TABLE>

                                       xi

<PAGE>

                   This Pooling and Servicing Agreement, is dated and effective
as of November 1, 2001, among AMERIQUEST MORTGAGE SECURITIES INC., as Depositor,
AMERIQUEST MORTGAGE COMPANY, as Master Servicer and BANKERS TRUST COMPANY OF
CALIFORNIA, N.A., as Trustee.

                             PRELIMINARY STATEMENT:

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

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

<TABLE>
<CAPTION>
                                         REMIC I                       Initial                   Latest Possible
         Designation                 Remittance Rate           Uncertificated Balance           Maturity Date(1)
         -----------                 ---------------           ----------------------           -------------
<S>                                  <C>                       <C>                              <C>
            I-LT1                      Variable(2)                 $ 89,999,900.00              February 25, 2032
            I-LT2                      Variable(2)                 $ 10,000,000.00              February 25, 2032
            I-LTP                      Variable(2)                 $        100.00              February 25, 2032
</TABLE>

---------------
(1)      Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
         regulations, the Distribution Date immediately following the maturity
         date for the Mortgage Loan with the latest maturity date has been
         designated as the "latest possible maturity date" for each REMIC I
         Regular Interest.
(2)      Calculated in accordance with the definition of "REMIC I Remittance
         Rate" herein.

<PAGE>

                                    REMIC II
                                    --------

                   As provided herein, the Trustee will elect to treat the
segregated pool of assets consisting of the REMIC I Regular Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC II". The Class R-II Interest will be the sole class of
"residual interests" in REMIC II for purposes of the REMIC Provisions (as
defined herein). The following table irrevocably sets forth the designation, the
REMIC II Remittance Rate, the initial Uncertificated Balance and, solely for
purposes of satisfying Treasury regulation Section 1.860G- 1(a)(4)(iii), the
"latest possible maturity date" for each of the REMIC II Regular Interests (as
defined herein). None of the REMIC II Regular Interests will be certificated.

<TABLE>
<CAPTION>
                                      REMIC II                       Initial                    Latest Possible
        Designation                Remittance Rate            Uncertificated Balance            Maturity Date(1)
        -----------                ---------------            ----------------------            ----------------
<S>                                <C>                        <C>                               <C>
           II-LT1                    Variable(2)                  $ 97,999,902.00               February 25, 2032
           II-LT2                    Variable(2)                  $    835,000.00               February 25, 2032
           II-LT3                    Variable(2)                  $     60,000.00               February 25, 2032
           II-LT4                    Variable(2)                  $     50,000.00               February 25, 2032
           II-LT5                    Variable(2)                  $     40,000.00               February 25, 2032
           II-LT6                    Variable(2)                  $  1,014,998.00               February 25, 2032
           II-LTS                    Variable(2)                        N/A(3)                  February 25, 2032
           II-LTP                    Variable(2)                  $        100.00               February 25, 2032
</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 II Regular Interest.

(2)   Calculated in accordance with the definition of "REMIC II Remittance Rate"
      herein.

(3)   REMIC II Regular Interest II-LTS will not have an Initial Uncertificated
      Balance, but will accrue interest on its respective Uncertificated
      Notional Amount outstanding from time to time which shall equal the
      Initial Uncertificated Balance of REMIC I Interest I-LT2.

                                       2

<PAGE>

                                    REMIC III
                                    ---------

      As provided herein, the Trustee will 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 will be designated as
"REMIC III." The Class R-III Interest will evidence 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 designation, the
Pass-Through Rate, the initial aggregate Certificate Principal Balance and,
solely for purposes of satisfying Treasury regulation section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for the indicated
Classes of Certificates.

<TABLE>
<CAPTION>
                                                                  Initial Aggregate               Latest Possible
     Designation                       Pass-Through Rate    Certificate Principal Balance        Maturity Date(1)
     -----------                       -----------------    -----------------------------        ----------------
<S>                                    <C>                  <C>                                  <C>
    Class A                                Variable(2)             $83,500,000.00                February 25, 2032
    Class M-1                              Variable(2)             $ 6,000,000.00                February 25, 2032
    Class M-2                              Variable(2)             $ 5,000,000.00                February 25, 2032
    Class M-3                              Variable(2)             $ 4,000,000.00                February 25, 2032
    Class S                                Variable(2)                  N/A(3)                   February 25, 2032
    Class CE                               Variable(3)             $ 1,499,900.00                February 25, 2032
    Class P                                   N/A(4)                      $100.00                February 25, 2032
</TABLE>

-----------------------------
(1)   Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
      regulations, the Distribution Date immediately following the maturity date
      for the Mortgage Loans with the latest maturity date has been designated
      as the "latest possible maturity date" for each Class of Certificates.

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

(3)   The Class S Certificates will not have a Certificate Principal Balance,
      but will receive all amounts distributed to REMIC II Regular Interest
      II-LTS.

(4)   The Class CE Certificates will accrue interest at their variable
      Pass-Through Rate on the Notional Amount of the Class CE Certificates
      outstanding from time to time which shall equal the Uncertificated Balance
      of REMIC II Regular Interest II-LT1, REMIC II Regular Interest II-LT2,
      REMIC II Regular Interest II-LT3, REMIC II Regular Interest II-LT4, REMIC
      II Regular Interest II-LT5, REMIC II Regular Interest II-LT6 and REMIC II
      Regular Interest II-LTP. The Class CE Certificates will not accrue
      interest on their Certificate Principal Balance.

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

                  As of the Cut-off Date, the Initial Mortgage Loans had an
aggregate Scheduled Principal Balance equal to $79,941,802.78. The amount
deposited by the Depositor in the Pre- Funding Account on the Closing Date is
the Original Pre-Funded Amount.

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

                                       3
<PAGE>

                                    ARTICLE I

                                   DEFINITIONS

                  SECTION 1.01.             Defined Terms.

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

                  "Accrued Certificate Interest": With respect to any Class of
Certificates (other than the Class P Certificates and the Residual Certificates)
and each Distribution Date, interest accrued during the related Interest Accrual
Period at the Pass-Through Rate for such Certificate for such Distribution Date
on the Certificate Principal Balance, in the case of the Class A Certificates
and the Mezzanine Certificates, or on the Notional Amount, in the case of the
Class S Certificates and the Class CE Certificates, of such Certificate
immediately prior to such Distribution Date. The Class P Certificates are not
entitled to distributions in respect of interest and, accordingly, will not
accrue interest. All distributions of interest on the Class A Certificates and
the Mezzanine Certificates will be calculated on the basis of a 360-day year and
the actual number of days in the applicable Interest Accrual Period. All
distributions of interest on the Class S Certificates and the Class CE
Certificates will be based on a 360-day year consisting of twelve 30-day months.
Accrued Certificate Interest with respect to each Distribution Date, as to any
Class A Certificate, Mezzanine Certificate, Class S Certificate or Class CE
Certificate, shall be reduced by an amount equal to the portion allocable to
such Certificate pursuant to Section 1.02 hereof of the sum of (a) the aggregate
Prepayment Interest Shortfall, if any, for such Distribution Date to the extent
not covered by payments pursuant to Section 3.24 or allocated to the Class CE
Certificates and (b) the aggregate amount of any Relief Act Interest Shortfall,
if any, for such Distribution Date. In addition, Accrued Certificate Interest
with respect to each Distribution Date, as to any Class CE Certificate, shall be
reduced by an amount equal to the portion allocable to such Class CE Certificate
of Realized Losses, if any, pursuant to Section 4.04 hereof. Notwithstanding the
foregoing, for federal income tax purposes and under the REMIC Provisions, the
Accrued Certificate Interest for the Class S Certificates and any Distribution
Date will be deemed to be 100% of the Uncertificated Interest for REMIC II
Regular Interest II-LTS for such Distribution Date.

                  "Addition Notice": With respect to the transfer of Subsequent
Mortgage Loans to the Trust Fund pursuant to Section 2.11, a notice of the
Depositor's designation of the Subsequent Mortgage Loans to be sold to the Trust
Fund and the aggregate principal balance of such Subsequent Mortgage Loans as of
the related Subsequent Cut-off Date. The Addition Notice shall be given not
later than three Business Days prior to the related Subsequent Transfer Date and
shall be substantially in the form of Exhibit J.

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

                                       4
<PAGE>

                  "Adjustment Date": With respect to each Adjustable-Rate
Mortgage Loan, the first day of the month in which the Mortgage Rate of such
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.

                  "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.

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

                  "Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form (excepting therefrom if applicable,
the mortgage recordation information which has not been returned by the
applicable recorder's office and/or the assignee's name), which is sufficient
under the laws of the jurisdiction wherein the related Mortgaged Property is
located to reflect of record the sale of the Mortgage.

                  "Available Distribution Amount": With respect to any
Distribution Date, an amount equal to (1) the sum of (a) the aggregate of the
amounts on deposit in the Collection Account and Distribution Account as of the
close of business on the related Determination Date, (b) the aggregate of any
amounts received in respect of an REO Property withdrawn from any REO Account
and deposited in the Distribution Account for such Distribution Date pursuant to
Section 3.23, (c) the aggregate of any amounts deposited in the Distribution
Account by the Master Servicer in respect of Prepayment Interest Shortfalls for
such Distribution Date pursuant to Section 3.24, (d) the aggregate of any P&I
Advances made by the Master Servicer for such Distribution Date pursuant to
Section 4.03, (e) the aggregate of any advances made by the Trustee for such
Distribution Date pursuant to Section 7.02(b), (f) with respect to the
Distribution Date immediately following the end of the Funding Period, any
amounts in the Pre-Funding Account after giving effect to any purchase of
Subsequent Mortgage Loans and (g) with respect to each Distribution Date during
the Funding Period and on the Distribution Date immediately following the end of
the Funding Period, any amounts withdrawn by the Trustee from the Interest
Coverage Account for distribution on the Certificates, reduced (to not less than
zero) by (2) the sum of (x) the portion of the amount described in clause (1)(a)
above that represents (i) Monthly Payments on the Mortgage Loans received from a
Mortgagor on or prior to the Determination Date but due during any Due Period
subsequent to the related Due Period, (ii) Principal Prepayments on the Mortgage
Loans received after the related Prepayment Period (together with any interest
payments received with such Principal Prepayments to the extent they represent
the payment of interest accrued on the Mortgage Loans during a period subsequent
to the related Prepayment Period), (iii) Liquidation Proceeds and Insurance
Proceeds received in respect of the Mortgage Loans after the related Prepayment
Period, (iv) amounts reimbursable or payable to the Depositor, the Master
Servicer, the Trustee, the Originator or any Sub-Servicer pursuant to Section
3.11 or Section 3.12 or otherwise payable in respect of

                                       5
<PAGE>

Extraordinary Trust Fund Expenses, (v) Stayed Funds, (vi) [Reserved], (vii) the
Trustee Fee payable from the Distribution Account pursuant to Section 8.05,
(viii) amounts deposited in the Collection Account or the Distribution Account
in error and (ix) the amount of any Prepayment Charges collected by the Master
Servicer and the amount of any Master Servicer Prepayment Charge Payment Amounts
and (y) amounts reimbursable to the Trustee for an advance made pursuant to
Section 7.02(b) which advance the Trustee has determined to be nonrecoverable
from the Stayed Funds in respect of which it was made.

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

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

                  "Book-Entry Certificate": Any Certificate registered in the
name of the Depository or its nominee. Initially, the Book-Entry Certificates
will be the Class A Certificates and the Mezzanine Certificates.

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

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

                  "Certificate": Any one of the Depositor's Floating Rate
Mortgage Pass-Through Certificates, Series 2001-3, Class A, Class M-1, Class
M-2, Class M-3, Class S, Class CE, Class P and Class R, issued under this
Agreement.

                  "Certificate Factor": With respect to any Class of Regular
Certificates as of any Distribution Date, a fraction, expressed as a decimal
carried to six places, the numerator of which is the aggregate Certificate
Principal Balance (or the Notional Amount, in the case of the Class S
Certificates and the Class CE Certificates) of such Class of Certificates on
such Distribution Date (after giving effect to any distributions of principal
and allocations of Realized Losses in reduction of the Certificate Principal
Balance (or the Notional Amount, in the case of the Class S Certificates and the
Class CE Certificates) of such Class of Certificates to be made on such
Distribution Date, and the denominator of which is the initial aggregate
Certificate Principal Balance (or the Notional Amount, in the case of the Class
S Certificates and the Class CE Certificates) of such Class of Certificates as
of the Closing Date.

                  "Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in the Certificate Register, except that a
Disqualified Organization or a Non-United States Person shall not be a Holder of
a Residual Certificate for any purposes hereof and, solely for the purposes of
giving any consent pursuant to this Agreement, any Certificate registered in the
name of the Depositor or the Master Servicer or any Affiliate thereof shall be
deemed not to be outstanding and the Voting Rights to which it is entitled shall
not be taken into account in determining whether the

                                       6
<PAGE>

requisite percentage of Voting Rights necessary to effect any such consent has
been obtained, except as otherwise provided in Section 11.01. The Trustee and
the NIMs Insurer may conclusively rely upon a certificate of the Depositor or
the Master Servicer in determining whether a Certificate is held by an Affiliate
thereof. All references herein to "Holders" or "Certificateholders" shall
reflect the rights of Certificate Owners as they may indirectly exercise such
rights through the Depository and participating members thereof, except as
otherwise specified herein; provided, however, that the Trustee and the NIMs
Insurer shall be required to recognize as a "Holder" or "Certificateholder" only
the Person in whose name a Certificate is registered in the Certificate
Register.

                  "Certificate Margin": With respect to the Class A Certificates
and, for purposes of the Marker Rate REMIC II Regular Interest II-LT2, 0.410% in
the case of each Distribution Date through and including the Distribution Date
on which the aggregate principal balance of the Mortgage Loans (and properties
acquired in respect thereof) remaining in the Trust is reduced to less than 10%
of the sum of the aggregate principal balance of the Initial Mortgage Loans as
of the Cut-off Date and the Original Pre-Funded Amount, or 0.820%, in the case
of any Distribution Date thereafter.

                  With respect to the Class M-1 Certificates and, for purposes
of the Marker Rate REMIC II Regular Interest II-LT3, 0.980% in the case of each
Distribution Date through and including the Distribution Date on which the
aggregate principal balance of the Mortgage Loans (and properties acquired in
respect thereof) remaining in the Trust is reduced to less than 10% of the sum
of the aggregate principal balance of the Initial Mortgage Loans as of the
Cut-off Date and the Original Pre-Funded Amount, or 1.470%, in the case of any
Distribution Date thereafter.

                  With respect to the Class M-2 Certificates and, for purposes
of the Marker Rate REMIC II Regular Interest II-LT4, 1.420% in the case of each
Distribution Date through and including the Distribution Date on which the
aggregate principal balance of the Mortgage Loans (and properties acquired in
respect thereof) remaining in the Trust is reduced to less than 10% of the sum
of the aggregate principal balance of the Initial Mortgage Loans as of the
Cut-off Date and the Original Pre-Funded Amount, or 2.130%, in the case of any
Distribution Date thereafter.

                  With respect to the Class M-3 Certificates and, for purposes
of the Marker Rate REMIC II Regular Interest II-LT5, 2.350% in the case of each
Distribution Date through and including the Distribution Date on which the
aggregate principal balance of the Mortgage Loans (and properties acquired in
respect thereof) remaining in the Trust is reduced to less than 10% of the sum
of the aggregate principal balance of the Initial Mortgage Loans as of the
Cut-off Date and the Original Pre-Funded Amount, or 3.525%, in the case of any
Distribution Date thereafter.

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

                  "Certificate Principal Balance": With respect to each Class A
Certificate, Mezzanine Certificate or Class P Certificate as of any date of
determination, the Certificate Principal Balance of such Certificate on the
Distribution Date immediately prior to such date of determination, minus

                                       7
<PAGE>

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

                  "Certificate Register" and "Certificate Registrar": The
register maintained and the registrar appointed pursuant to Section 5.02.

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

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

                  "Class A Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the Certificate Principal Balance of the
Class A Certificates immediately prior to such Distribution Date over (y) the
lesser of (A) the product of (i) 67.00% and (ii) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) and (B) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period (after giving effect to scheduled payments of principal due during
the related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) minus
$500,000.

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

                  "Class Exemption": A class exemption granted by the DOL, which
provides relief from certain of the prohibited transaction provisions of ERISA
and the related excise tax provisions of the Code.

                  "Class M-1 Certificate": Any one of the Class M-1 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-2 and
evidencing a Regular Interest in REMIC III for purposes of the REMIC Provisions.

                  "Class M-1 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the sum of (i) the Certificate Principal
Balance of the Class A Certificates (after

                                       8
<PAGE>

taking into account the payment of the Class A Principal Distribution Amount on
such Distribution Date), and (ii) the Certificate Principal Balance of the Class
M-1 Certificates immediately prior to such Distribution Date over (y) the lesser
of (A) the product of (i) 79.00% and (ii) the aggregate Stated Principal Balance
of the Mortgage Loans as of the last day of the related Due Period (after giving
effect to scheduled payments of principal due during the related Due Period, to
the extent received or advanced, and unscheduled collections of principal
received during the related Prepayment Period) and (B) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) minus
$500,000.

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

                  "Class M-2 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the sum of (i) the Certificate Principal
Balance of the Class A Certificates (after taking into account the payment of
the Class A Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date) and (iii) the Certificate Principal Balance of the Class M-2
Certificates immediately prior to such Distribution Date over (y) the lesser of
(A) the product of (i) 89.00% and (ii) the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day of the related Due Period (after giving
effect to scheduled payments of principal due during the related Due Period, to
the extent received or advanced, and unscheduled collections of principal
received during the related Prepayment Period) and (B) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) minus
$500,000.

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

                  "Class M-3 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the sum of (i) the Certificate Principal
Balance of the Class A Certificates (after taking into account the payment of
the Class A Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date), (iii) the Certificate Principal Balance of the Class M-2
Certificates (after taking into account the payment of the Class M-1 Principal
Distribution Amount on such Distribution Date) and (iv) the Certificate
Principal Balance of the Class M-3 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 97.00% and (ii)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period (after giving effect to scheduled

                                       9
<PAGE>

payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) and (B) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) minus $500,000.

                  "Class P Certificate": Any one of the Class P Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-6, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC III.

                  "Class R Certificate": Any one of the Class R Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-8 and
evidencing the ownership of the Class R-I Interest, the Class R-II Interest and
the Class R-III Interest.

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

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

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

                  "Class S Certificate": Any one of the Class S Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-7

                  "Class S Rate": With respect to REMIC II Regular Interest
II-LTS and the Class S Certificates;

                  (A)      in the case of the Distribution Dates beginning in
                           December 2001 and ending in September 2002, a per
                           annum rate equal to the excess of (i) the REMIC I
                           Remittance Rate over (ii) the excess (but not less
                           than zero) of (x) the REMIC I Remittance Rate over
                           (y) 6.50% per annum;

                  (B)      in the case of the Distribution Dates beginning in
                           October 2002 and ending in July 2003, a per annum
                           rate equal to the excess of (i) the REMIC I
                           Remittance Rate over (ii) the excess (but not less
                           than zero) of (x) the REMIC I Remittance Rate over
                           (y) 4.50% per annum;

                  (C)      in the case of the Distribution Dates beginning in
                           August 2003 and ending in May 2004, a per annum rate
                           equal to the excess of (i) the REMIC I Remittance
                           Rate over (ii) the excess (but not less than zero) of
                           (x) the REMIC I Remittance Rate over (y) 2.50% per
                           annum;

                  (D)      in the case of each Distribution Date thereafter,
                           0.00% per annum.

                                       10
<PAGE>

                  "Closing Date":  December 7, 2001.

                  "Code":  The Internal Revenue Code of 1986.

                  "Collection Account": The account or accounts created and
maintained by the Master Servicer pursuant to Section 3.10(a), which shall be
entitled "Ameriquest Mortgage Company, as Master Servicer for Bankers Trust
Company of California, N.A., as Trustee, in trust for the registered holders of
Ameriquest Mortgage Securities Inc., Floating Rate Mortgage Pass-Through
Certificates, Series 2001-3" The Collection Account must be an Eligible Account.

                  "Commission": The Securities and Exchange Commission.

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

                  "Corresponding Certificate": With respect to REMIC II Regular
Interest II-LT2, REMIC II Regular Interest II-LT3, REMIC II Regular Interest
II-LT4, REMIC II Regular Interest II- LT5 and REMIC II Regular Interest II-LTP,
the Class A Certificates, Class M-1 Certificates, Class M-2 Certificates, the
Class M-3 Certificates and Class P Certificates, respectively.

                  "Credit Enhancement Percentage": For any Distribution Date,
the percentage equivalent of a fraction, calculated after taking into account
distributions of principal on the Mortgage Loans and distribution of the
Principal Distribution Amount to the Certificates then entitled to distributions
of principal on such Distribution Date, the numerator of which is the sum of the
aggregate Certificate Principal Balances of the Mezzanine Certificates and the
Class CE Certificates, and the denominator of which is the sum of (i) the
aggregate Stated Principal Balance of the Mortgage Loans as of the last day of
the related Due Period (after giving effect to scheduled payments of principal
due during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period) and (ii) the amount on deposit in the Pre-Funding Account, exclusive of
investment earnings therein.

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

                  "Custodian": A Custodian, which shall initially be Bankers
Trust Company of California, N.A.

                  "Cut-off Date": With respect to any Initial Mortgage Loan, the
close of business on the later of (i) the date of origination of such Mortgage
Loan or (ii) November 1, 2001. With respect to all Qualified Substitute Mortgage
Loans, their respective dates of substitution. References herein

                                       11
<PAGE>

to the "Cut-off Date," when used with respect to more than one Mortgage Loan,
shall be to the respective Cut-off Dates for such Mortgage Loans.

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

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

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

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

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

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

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

                  "Depository Institution": Any depository institution or trust
company, including the Trustee, that (a) is incorporated under the laws of the
United States of America or any State thereof, (b) is subject to supervision and
examination by federal or state banking authorities and (c) has outstanding
unsecured commercial paper or other short-term unsecured debt obligations that
are rated P-1 by Moody's and A-1 by S&P (or comparable ratings if Moody's and
S&P are not the Rating Agencies).

                                       12
<PAGE>

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

                  "Determination Date": With respect to each Distribution Date,
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.

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

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

                  "Distribution Account": The trust account or accounts created
and maintained by the Trustee pursuant to Section 3.10(b) which shall be
entitled "Bankers Trust Company of California, N.A., as Trustee, in trust for
the registered holders of Ameriquest Mortgage Securities Inc., Floating Rate
Mortgage Pass-Through Certificates, Series 2001-3." The Distribution Account
must be an Eligible Account.

                  "Distribution Date": The 25th day of any month, or if such
25th day is not a Business Day, the next succeeding Business Day, commencing in
December 2001.

                                       13
<PAGE>

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

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

                  "Eligible Account": Any of (i) an account or accounts
maintained with a Depository Institution or trust company the short-term
unsecured debt obligations of which are rated P-1 by Moody's and A-1+ by S&P (or
comparable ratings if Moody's and S&P are not the Rating Agencies) at the time
any amounts are held on deposit therein, (ii) an account or accounts the
deposits in which are fully insured by the FDIC or (iii) a trust account or
accounts maintained with the corporate trust department of a federal or state
chartered depository institution or trust company acting in its fiduciary
capacity. Eligible Accounts may bear interest.

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

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

                  "Excess Overcollateralized Amount": With respect to the Class
A Certificates and the Mezzanine Certificates and any Distribution Date, the
excess, if any, of (i) the Overcollateralized Amount for such Distribution Date
over (ii) the Required Overcollateralized Amount for such Distribution Date.

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

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

                  "Extraordinary Trust Fund Expense": Any amounts reimbursable
to the Trustee, or any director, officer, employee or agent of the Trustee, from
the Trust Fund pursuant to Section 8.05, any amounts payable from the
Distribution Account in respect of taxes pursuant to Section 10.01(g)(iii) and
any amounts payable by the Trustee for the recording of the assignments of
mortgage pursuant to Section 2.01.

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

                                       14
<PAGE>

                  "Fixed Rate Mortgage Loan": A first or second lien Mortgage
Loan which provides for a fixed Mortgage Rate payable with respect thereto. The
Fixed Rate Mortgage Loans are identified as such on the Mortgage Loan Schedule.

                  "Funding Period": The period beginning on the Closing Date and
ending on the earlier of the date on which (a) the amount on deposit in the
Pre-Funding Account is reduced to zero or (b) 2:00 p.m., New York City time, on
February 11", 2002.

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

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

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

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

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

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

                  "Independent Contractor": Either (i) any Person (other than
the Master Servicer) that would be an "independent contractor" with respect to
REMIC I within the meaning of Section 856(d)(3) of the Code if REMIC I were a
real estate investment trust (except that the ownership tests set forth in that
section shall be considered to be met by any Person that owns, directly or
indirectly,

                                       15
<PAGE>

35% or more of any Class of Certificates), so long as REMIC I does not receive
or derive any income from such Person and provided that the relationship between
such Person and REMIC I is at arm's length, all within the meaning of Treasury
Regulation Section 1.856-4(b)(5), or (ii) any other Person (including the Master
Servicer) if the Trustee has received an Opinion of Counsel to the effect that
the taking of any action in respect of any REO Property by such Person, subject
to any conditions therein specified, that is otherwise herein contemplated to be
taken by an Independent Contractor will not cause such REO Property to cease to
qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of
the Code (determined without regard to the exception applicable for purposes of
Section 860D(a) of the Code), or cause any income realized in respect of such
REO Property to fail to qualify as Rents from Real Property.

                  "Indenture": An indenture relating to the issuance of notes
guaranteed by the NIMs Insurer.

                  "Index": With respect to each Adjustable-Rate Mortgage Loan
and each related Adjustment Date, the average of the interbank offered rates for
six-month United States dollar deposits in the London market as published in THE
WALL STREET JOURNAL and as most recently available as of the first business day
45 days or more prior to such Adjustment Date, as specified in the related
Mortgage Note.

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

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

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

                  "Interest Carry Forward Amount": With respect to any
Distribution Date and any Class of Class A Certificates, Class S Certificates or
Mezzanine 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.

                                       16
<PAGE>

                  "Interest Coverage Account": The account established and
maintained pursuant to Section 4.08.

                  "Interest Coverage Amount": The amount to be paid by the
Depositor to the Trustee for deposit into the Interest Coverage Account on the
Closing Date pursuant to Section 4.08, which amount is $146,201.97.

                  "Interest Determination Date": With respect to the Class A
Certificates, the Mezzanine Certificates, and solely for purposes of calculating
the Marker Rate REMIC II Regular Interest II-LT2, REMIC II Regular Interest
II-LT3, REMIC II Regular Interest II-LT4 and REMIC II Regular Interest II-LT5
and any Interest Accrual Period therefor, the second London Business Day
preceding the commencement of such Interest Accrual Period.

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

                  "Interest Remittance Amount": With respect to any Distribution
Date, that portion of the Available Distribution Amount for such Distribution
Date allocable to interest.

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

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

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

                                       17
<PAGE>

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

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

                  "Loss Mitigation Action Plan": The policies and procedures set
forth in Exhibit O hereto relating to the realization on delinquent Mortgage
Loans, which are incorporated by reference into this Agreement shall be deemed a
part hereof.

                  "Majority Class CE Certificateholder": Any single Holder or
group of Holders of Class CE Certificates representing a greater than 50%
Percentage Interest in such Class.

                  "Marker Rate": With respect to the Class CE Certificates and
any Distribution Date, a per annum rate equal to two (2) times the weighted
average of the REMIC II Remittance Rate for each of the REMIC II Regular
Interests, with the rate on each REMIC II Regular Interest (other than REMIC II
Regular Interest I-LT6) subject to a cap equal to (A) with respect to the first
three Distribution Dates, 7.44776588794%, and (B) with respect to each
Distribution Date thereafter, the related Formula Rate for the purpose of this
calculation for such Distribution Date and with the rate on REMIC II Regular
Interest I-LT6 subject to a cap of zero for the purpose of this calculation:
provided, however, that solely for this purpose, calculations of the REMIC II
Remittance Rate and the related caps with respect to REMIC II Regular Interest
II-LT2, REMIC II Regular Interest II-LT3, REMIC II Regular Interest II-LT4 and
REMIC II Regular Interest II-LT5 shall be multiplied by a fraction, the
numerator of which is the actual number of days in the Interest Accrual Period
and the denominator of which is 30.

                  "Master Servicer": Ameriquest Mortgage Company ("Ameriquest")
or any successor master servicer appointed as herein provided, in its capacity
as Master Servicer hereunder.

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

                  "Master Servicer Prepayment Charge Payment Amount": The
amounts payable by the Master Servicer in respect of any waived Prepayment
Charges pursuant to Section 2.03(b).

                  "Master Servicer Remittance Date": With respect to any
Distribution Date, 3:00 p.m. New York time on the last Business Day preceding
the related Distribution Date.

                  "Master Servicer Reporting Date": With respect to any
Distribution Date, 3:00 p.m. New York time on 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 succeeding such 18th day.

                  "Master Servicer Termination Test": With respect to any
Distribution Date, the Master Servicer Termination Test will be failed if the
Cumulative Loss Percentage exceeds 4.000%.

                                       18
<PAGE>

                  "Maximum Cap Rate": For any Distribution Date a per annum rate
equal to the product of (x) the weighted average of the Expense Adjusted Net
Maximum Mortgage Rates of the Mortgage Loans, weighted based on their Scheduled
Principal Balances as of the first day of the calendar month preceding the month
in which the Distribution Date occurs (after giving effect to unscheduled
collections of principal received during the related Prepayment Period) and (y)
a fraction, the numerator of which is 30 and the denominator of which is the
actual number of days elapsed in the related Interest Accrual Period.

                  "Maximum II-LT6 Uncertificated Interest Deferral Amount": With
respect to any Distribution Date, the excess of (i) accrued interest at the
REMIC II Remittance Rate applicable to REMIC II Regular Interest I-LT6 for such
Distribution Date on a balance equal to the Uncertificated Balance of REMIC II
Regular Interest I-LT6 minus the REMIC II Overcollateralization Amount, in each
case for such Distribution Date, over (ii) Uncertificated Interest on REMIC II
Regular Interest II-LT2, REMIC II Regular Interest II-LT3, REMIC II Regular
Interest II-LT4 and REMIC Regular Interest II-LT5 for such Distribution Date,
with the rate on each of REMIC II Regular Interest II-LT2, REMIC II Regular
Interest II-LT3, REMIC II Regular Interest II-LT4 and REMIC II Regular Interest
II-LT5 subject to a cap equal to (A) with respect to the first three
Distribution Dates, 6.7977658879%, and (B) with respect to each Distribution
Date thereafter, the related rate provided, however, that for this purpose,
calculations of the REMIC II Remittance Rate and the related caps with respect
to REMIC II Regular Interest II-LT2, REMIC II Regular Interest II-LT3, REMIC II
Regular Interest II-LT4 and REMIC II Regular Interest II-LT5 shall be multiplied
by a fraction, the numerator of which is the actual number of days in the
Interest Accrual Period and the denominator of which is 30.

                  "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.

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

                  "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.

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

                  "Moody's": Moody's Investors Service, 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.

                                       19
<PAGE>

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

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

                  "Mortgage Loan Purchase Agreement": The agreement between the
Originator and the Depositor, regarding the transfer of the Mortgage Loans by
the Originator to or at the direction of the Depositor, substantially in the
form of Exhibit D annexed hereto.

                  "Mortgage Loan Schedule": As of any date, the list of Mortgage
Loans included in REMIC I on such date, attached hereto as Schedule 1 as
supplemented by each schedule of Subsequent Mortgage Loans attached to a
Subsequent Transfer Instrument. The Mortgage Loan Schedule shall set forth the
following information with respect to each Mortgage Loan:

              (i)     the Originator's Mortgage Loan identifying number;

              (ii)    the Mortgagor's name;

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

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

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

              (vi)    the original months to maturity;

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

              (viii)  the Mortgage Rate in effect immediately following the
                      Cut-off Date (or the related Subsequent Cut-off Date, with
                      respect to a Subsequent Mortgage Loan);

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

              (x)     the stated maturity date;

              (xi)    the amount of the Monthly Payment due on the first Due
                      Date after the Cut-off Date (or the related Subsequent
                      Cut-off Date, with respect to a Subsequent Mortgage Loan);

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

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

                                       20
<PAGE>

              (xiv)   the Scheduled Principal Balance of the Mortgage Loan as of
                      the close of business on the Cut-off Date (or the related
                      Subsequent Cut-off Date, with respect to a Subsequent
                      Mortgage Loan);

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

              (xvi)   a code indicating the purpose of the Mortgage Loan (I.E.,
                      purchase financing, rate/term refinancing, cash-out
                      refinancing);

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

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

              (xix)   the Mortgage Rate at origination;

              (xx)    with respect to each Adjustable-Rate Mortgage Loan, the
                      Periodic Rate Cap and the maximum first Adjustment Date
                      Mortgage Rate adjustment;

              (xxi)   a code indicating the documentation program (I.E., Full
                      Documentation, Fast Trac or Stated Income);

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

              (xxiii) the risk grade;

              (xxiv)  the Value of the Mortgaged Property;

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

              (xxvi)  [Reserved]; and

              (xxvii) a code indicating the underwriting program (i.e. Standard
                      or LTV Plus).

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

                                       21
<PAGE>

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

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

                  "Mortgage Rate": With respect to each Mortgage Loan, the
annual rate at which interest accrues on such Mortgage Loan from time to time in
accordance with the provisions of the related Mortgage Note, which rate with
respect to the Adjustable-Rate Mortgage Loans, (A) as of any date of
determination until the first Adjustment Date following the Cut-off Date (or
Subsequent Cut-off Date, with respect to a Subsequent Mortgage Loan) shall be
the rate set forth in the Mortgage Loan Schedule as the Mortgage Rate in effect
immediately following the Cut-off Date (or Subsequent Cut-off Date, with respect
to a Subsequent Mortgage Loan) and (B) as of any date of determination
thereafter shall be the rate as adjusted on the most recent Adjustment Date
equal to the sum, rounded to the nearest 0.125% as provided in the Mortgage
Note, of the Index, as most recently available as of a date prior to the
Adjustment Date as set forth in the related Mortgage Note, plus the related
Gross Margin; provided that the Mortgage Rate on such Adjustable-Rate Mortgage
Loan on any Adjustment Date shall never be more than the lesser of (i) the sum
of the Mortgage Rate in effect immediately prior to the Adjustment Date plus the
related Periodic Rate Cap, if any, and (ii) the related Maximum Mortgage Rate,
and shall never be less than the greater of (i) the Mortgage Rate in effect
immediately prior to the Adjustment Date less the Periodic Rate Cap, if any, and
(ii) the related Minimum Mortgage Rate. With respect to each Mortgage Loan that
becomes an REO Property, as of any date of determination, the annual rate
determined in accordance with the immediately preceding sentence as of the date
such Mortgage Loan became an REO Property.

                  "Mortgaged Property": The underlying property identified in
the related Mortgage as securing a Mortgage Loan, including any REO Property,
consisting of an Estate in Real Property improved by a Residential Dwelling
(excluding for purposes of construing the representations or warranties made in
the Mortgage Loan Purchase Agreement, any improvements thereupon not considered
by the appraiser in determining the value of such Mortgaged Property).

                  "Mortgagor":  The obligor on a Mortgage Note.

                  "Net Monthly Excess Cashflow": With respect to any
Distribution Date, the sum of (i) any Overcollateralization Reduction Amount for
such Distribution Date and (ii) the excess of (x) the Available Distribution
Amount for such Distribution Date over (y) the sum for such Distribution Date of
(A) the Senior Interest Distribution Amount payable to the holders of the Class
A Certificates and the Interest Distribution Amounts payable to the Mezzanine
Certificates and (B) the sum of the amounts described in clauses (b)(i) through
(iii) of the definition of Principal Distribution Amount.

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

                                       22
<PAGE>

                  "Net WAC Pass-Through Rate": With respect to any Distribution
Date, a rate per annum equal to the weighted average of (x) the REMIC I
Remittance Rate with respect to REMIC I Regular Interest I-LT1 and REMIC I
Regular Interest I-LTP for such Distribution Date and (y) the excess, if any, of
(i) the REMIC I Remittance Rate with respect to REMIC I Regular Interest I-LT2
for such Distribution Date over (ii) the applicable Class S Rate, weighted, in
the case of clause (x), on the basis of the aggregate Uncertificated Balance of
REMIC I Regular Interest I-LT1 and REMIC I Regular Interest I-LTP, and in the
case of clause (y), on the basis of the Uncertificated Balance of REMIC I
Regular Interest I-LT2, respectively.

                  "Net WAC Rate Carryover Amount": With respect to the Class A
Certificates and the Mezzanine Certificates and any Distribution Date, the sum
of (A) the positive excess of (i) the amount of interest payable to such Class
of Certificates on such Distribution Date calculated at the related Pass-Through
Rate for such Distribution Date and (B) the related Net WAC Rate Carryover
Amount for the previous Distribution Date not previously paid, together with
interest thereon at a rate equal to the related Pass-Through Rate for such Class
of Certificates for such Distribution Date.

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

                  "NIMs Insurer": Any insurer that is guaranteeing certain
payments under notes issued by a trust, the principal assets of which include
all or a portion of the Class CE Certificates, the Class P Certificates and/or
the Class R Certificates.

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

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

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

                  "Notional Amount": With respect to the Class CE Certificates
and any Distribution Date, the aggregate Uncertificated Balance of the REMIC II
Regular Interest II-LT1, REMIC II Regular Interest II-LT2, REMIC II Regular
Interest II-LT3, REMIC II Regular Interest II-LT4, REMIC II Regular Interest
II-LT5, REMIC II Regular Interest II-LT6 and REMIC II Regular Interest II-LTP
immediately prior to such Distribution Date. With respect to the Class S
Certificates and any Distribution Date, an amount equal to the Uncertificated
Notional Amount for the REMIC II Regular Interest II-LTS immediately prior to
such Distribution Date.

                                       23
<PAGE>

                  "Officers' Certificate": With respect to the Depositor, a
certificate signed by the Chairman of the Board, the Vice Chairman of the Board,
the President or a vice president (however denominated), and by the Treasurer,
the Secretary, or one of the assistant treasurers or assistant secretaries. With
respect to the Master Servicer, any officer who is authorized to act for the
Master Servicer in matters relating to this Agreement, and whose action is
binding upon the Master Servicer, initially including those individuals whose
names appear on the list of authorized officers delivered at the closing.

                  "One-Month LIBOR": With respect to the Class A Certificates,
the Mezzanine Certificates, REMIC II Regular Interest II-LT2, REMIC II Regular
Interest II-LT3, REMIC II Regular Interest II-LT4 and REMIC II Regular Interest
II-LT5 and any Interest Accrual Period therefor, the rate determined by the
Trustee on the related Interest Determination Date on the basis of the offered
rate for one-month U.S. dollar deposits, as such rate appears on Telerate Page
3750 as of 11:00 a.m. (London time) on such Interest Determination Date;
provided that if such rate does not appear on Telerate Page 3750, the rate for
such date will be determined on the basis of the offered rates of the Reference
Banks for one-month U.S. dollar deposits, as of 11:00 a.m. (London time) on such
Interest Determination Date. In such event, the Trustee will request the
principal London office of each of the Reference Banks to provide a quotation of
its rate. If on such Interest Determination Date, two or more Reference Banks
provide such offered quotations, One-Month LIBOR for the related Interest
Accrual Period shall be the arithmetic mean of such offered quotations (rounded
upwards if necessary to the nearest whole multiple of 1/16%). If on such
Interest Determination Date, fewer than two Reference Banks provide such offered
quotations, One-Month LIBOR for the related Interest Accrual Period shall be the
higher of (i) LIBOR as determined on the previous Interest Determination Date
and (ii) the Reserve Interest Rate. Notwithstanding the foregoing, if, under the
priorities described above, LIBOR for an Interest Determination Date would be
based on LIBOR for the previous Interest Determination Date for the third
consecutive Interest Determination Date, the Trustee shall select, after
consultation with the NIMs Insurer, an alternative comparable index (over which
the Trustee has no control), used for determining one-month Eurodollar lending
rates that is calculated and published (or otherwise made available) by an
independent party.

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

                  "Original Pre-Funded Amount": The amount deposited by the
Depositor in the Pre- Funding Account on the Closing Date, which amount is
$20,058,197.22.

                  "Originator": Ameriquest Mortgage Company, or its successor in
interest, in its capacity as originator under the Mortgage Loan Purchase
Agreement.

                  "Overcollateralized Amount": With respect to any Distribution
Date, the excess, if any, of (a) the sum of the aggregate Stated Principal
Balances of the Mortgage Loans and REO Properties immediately following such
Distribution Date and the amount on deposit in the Pre-

                                       24
<PAGE>

Funding Account 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), exclusive of any investment
earnings therein over (b) the sum of the aggregate Certificate Principal
Balances of the Class A Certificates, the Mezzanine Certificates and the Class P
Certificates as of such Distribution Date (after taking into account the payment
of the amounts described in clauses (b)(i) through (iv) of the definition of
Principal Distribution Amount on such Distribution Date).

                  "Overcollateralization Deficiency Amount": With respect to any
Distribution Date, the excess, if any, of (a) the Required Overcollateralized
Amount applicable to such Distribution Date over (b) the Overcollateralized
Amount applicable to such Distribution Date prior to taking into account the
payment of any Overcollateralization Increase Amount on such Distribution Date.

                  "Overcollateralization Increase Amount": With respect to any
Distribution Date, the lesser of (a) the Overcollateralization Deficiency Amount
as of such Distribution Date (after taking into account the payment of the
Principal Distribution Amount on such Distribution Date, exclusive of the
payment of any Overcollateralization Increase Amount) and (b) the amount of
Accrued Certificate Interest payable on the Class CE Certificates on such
Distribution Date as reduced by Realized Losses allocated thereto with respect
to such Distribution Date pursuant to Section 4.04.

                  "Overcollateralization Reduction Amount": With respect to any
Distribution Date, an amount equal to the lesser of (a) the Excess
Overcollateralized Amount and (b) the sum of the amounts available for
distribution specified in clauses (b)(i) through (iii) of the definition of
Principal Distribution Amount.

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

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

                  (A) the REMIC II Remittance Rate for REMIC II Regular Interest
II-LT1 minus the Marker Rate, applied to an amount equal to the Uncertificated
Balance of REMIC II Regular Interest II-LT1;

                  (B) the REMIC II Remittance Rate for REMIC II Regular Interest
II-LT2 minus the Marker Rate, applied to an amount equal to the Uncertificated
Balance of REMIC II Regular Interest II-LT2;

                                       25
<PAGE>

                  (C) the REMIC II Remittance Rate for REMIC II Regular Interest
II-LT3 minus the Marker Rate, applied to an amount equal to the Uncertificated
Balance of REMIC II Regular Interest II-LT3;

                  (D) the REMIC II Remittance Rate for REMIC II Regular Interest
II-LT4 minus the Marker Rate, applied to an amount equal to the Uncertificated
Balance of REMIC II Regular Interest II-LT4;

                  (E) the REMIC II Remittance Rate for REMIC II Regular Interest
II-LT5 minus the Marker Rate, applied to an amount equal to the Uncertificated
Balance of REMIC II Regular Interest II-LT5; and

                  (F) the REMIC II Remittance Rate for REMIC II Regular Interest
II-LT6 minus the Marker Rate, applied to an amount equal to the Uncertificated
Balance of REMIC II Regular Interest II-LT6; and

                  (G) 100% of the interest on REMIC II Regular Interest II-LTP

                  "Percentage Interest": With respect to any Class of
Certificates (other than the Residual Certificates), the undivided percentage
ownership in such Class evidenced by such Certificate, expressed as a
percentage, the numerator of which is the initial Certificate Principal Balance
represented by such Certificate and the denominator of which is the aggregate
initial Certificate Principal Balance of all of the Certificates of such Class.
The Class A Certificates and the Mezzanine Certificates are issuable only in
minimum Percentage Interests corresponding to minimum initial Certificate
Principal Balances of $25,000 and integral multiples of $1.00 in excess thereof.
The Class S Certificates are issuable only in minimum Percentage Interests
corresponding to minimum initial Notional Amounts of $25,000 and integral
multiples of $1.00 in excess thereof. The Class P Certificates are issuable only
in minimum Percentage Interests corresponding to minimum initial Certificate
Principal Balances of $20 and integral multiples thereof. The Class CE
Certificates are issuable only in minimum Percentage Interests corresponding to
minimum initial Certificate Principal Balances of $10,000 and integral multiples
of $1.00 in excess thereof; provided, however, that a single Certificate of 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, as set forth on the face
of such Certificate. The Residual Certificates are issuable in Percentage
Interests of 20% and multiples thereof.

                  "Periodic Rate Cap": With respect to each 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.

                                       26
<PAGE>

                  "Permitted Investments": Any one or more of the following
obligations or securities acquired at a purchase price of not greater than par,
regardless of whether issued by the Depositor, the Master Servicer, the NIMs
Insurer, the Trustee or any of their respective Affiliates:

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

                  (ii) demand and time deposits in, certificates of deposit of,
         or bankers' acceptances (which shall each have an original maturity of
         not more than 90 days and, in the case of bankers' acceptances, shall
         in no event have an original maturity of more than 365 days or a
         remaining maturity of more than 30 days) denominated in United States
         dollars and issued by, any Depository Institution;

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

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

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

                  (vi) units of money market funds, including money market funds
         advised by the Trustee or an Affiliate thereof, that have been rated
         "Aaa" by Moody's and "AAA" by S&P; and

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

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

                                       27
<PAGE>

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

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

                  "P&I Advance": As to any Mortgage Loan or REO Property, any
advance made by the Master Servicer in respect of any Distribution Date
representing the aggregate of all payments of principal and interest, net of the
Servicing Fee, that were due during the related Due Period on the Mortgage Loans
and that were delinquent on the related Determination Date, plus certain amounts
representing assumed payments not covered by any current net income on the
Mortgaged Properties acquired by foreclosure of deed in lieu of foreclosure as
determined pursuant to Section 4.03.

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

                  "Pre-Funding Account": The account established and maintained
pursuant to Section 4.07.

                  "Prepayment Assumption": A prepayment rate for the Mortgage
Loans of 28% CPR. The Prepayment Assumption is used solely for determining the
accrual of original issue discount on the Certificates for federal income tax
purposes. A CPR (or Constant Prepayment Rate) represents an annualized constant
assumed rate of prepayment each month of a pool of mortgage loans relative to
its outstanding principal balance for the life of such pool.

                  "Prepayment Charge": With respect to any Prepayment Period,
any prepayment premium, penalty or charge payable by the a Mortgagor in
connection with any Principal Prepayment pursuant to the terms of the related
Mortgage Note as from time to time held as a part of the Trust Fund, the
Prepayment Charges so held being identified in the Prepayment Charge Schedule
(other than any Master Servicer Prepayment Charge Payment Amount).

                  "Prepayment Charge Schedule": As of any date, the list of
Prepayment Charges included in the Trust Fund on such date, attached hereto as
Schedule 2 (including the prepayment charge summary attached thereto) as
supplemented by each schedule of Subsequent Mortgage Loans which by their terms
have related Prepayment Charges. The Prepayment Charge Schedule shall set forth
the following information with respect to each Prepayment Charge:

                  (i)      the Master Servicer's Mortgage Loan identifying
                           number;

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

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<PAGE>

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

                  (iv)     the term of the Prepayment Charge;

                  (v)      the original principal balance of the related
                           Mortgage Loan;

                  (vi)     the principal balance of the related Mortgage Loan as
                           of the Cut-off Date (or the related Subsequent
                           Cut-off Date, with respect to a Subsequent Mortgage
                           Loan);

                  The Prepayment Charge Schedule shall be amended from time to
time by the Master Servicer in accordance with the provisions of this Agreement
and a copy of such amended Prepayment Charge Schedule shall be furnished by the
Master Servicer to the NIMs Insurer.

                  "Prepayment Interest Excess": With respect to any Distribution
Date, for each Mortgage Loan that was the subject of a Principal Prepayment in
full during the portion of the related Prepayment Period occurring between the
first day and the Determination Date of the calendar month in which such
Distribution Date occurs, an amount equal to interest (to the extent received)
at the applicable Net Mortgage Rate on the amount of such Principal Prepayment
for the number of days commencing on the first day of the calendar month in
which such Distribution Date occurs and ending on the date on which such
prepayment is so applied.

                  "Prepayment Interest Shortfall": With respect to any
Distribution Date, for each Mortgage Loan that was the subject of a Principal
Prepayment in full during the portion of the related Prepayment Period occurring
between the first day of the related Prepayment Period and the last day of the
calendar month preceding the month in which such Distribution Date occurs, an
amount equal to interest at the applicable Net Mortgage Rate on the amount of
such Principal Prepayment for the number of days commencing on the date on which
the prepayment is applied and ending on the last day of the calendar month
preceding the month in which such Distribution Date occurs. The obligations of
the Master Servicer in respect of any Prepayment Interest Shortfall are set
forth in Section 3.24.

                  "Prepayment Period": With respect to any Distribution Date,
the period commencing on the day after the Determination Date in the calendar
month preceding the calendar month in which such Distribution Date occurs (or,
in the case of the first Distribution Date, commencing on the Cut-Off Date) and
ending on the Determination Date of the calendar month in which such
Distribution Date occurs.

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

                  (a) the excess of the Available Distribution Amount over the
amount payable on the Class A Certificates, the Mezzanine Certificates and the
Class S Certificates pursuant to Section 4.01(a)(2); and

                                       29
<PAGE>

                  (b) the sum of:

                  (i) the principal portion of each Monthly Payment on the
                  Mortgage Loans due during the related Due Period, whether or
                  not received on or prior to the related Determination Date;

                  (ii) the Stated Principal Balance of any Mortgage Loan that
                  was purchased during the related Prepayment Period pursuant to
                  or as contemplated by Section 2.03, Section 3.16(c) or Section
                  9.01 and the amount of any shortfall deposited in the
                  Collection Account in connection with the substitution of a
                  Deleted Mortgage Loan pursuant to Section 2.03 during the
                  related Prepayment Period;

                  (iii) the principal portion of all other unscheduled
                  collections (including, without limitation, Principal
                  Prepayments, Insurance Proceeds, Liquidation Proceeds and REO
                  Principal Amortization) received during the related Prepayment
                  Period, net of any portion thereof that represents a recovery
                  of principal for which an advance was made by the Master
                  Servicer pursuant to Section 4.03 in respect of a preceding
                  Distribution Date, and with respect to the Distribution Date
                  immediately following the end of the Funding Period, any
                  amounts in the Pre-Funding Account after giving effect to the
                  purchase of any Subsequent Mortgage Loans;

                  (iv) the principal portion of any Realized Losses incurred on
                  the Mortgage Loans in the calendar month preceding such
                  Distribution Date; and

                  (v) the amount of any Overcollateralization Increase Amount
                  for such Distribution Date;

                           minus:

                  (vi) the amount of any Overcollateralization Reduction Amount
                  for such Distribution Date.

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

                  "PTCE":  A Prohibited Transaction Class Exemption.

                  "Purchase Price": With respect to any Mortgage Loan or REO
Property to be purchased pursuant to or as contemplated by Section 2.03, Section
3.16(c) or Section 9.01, and as confirmed by an Officers' Certificate from the
Master Servicer to the Trustee, an amount equal to the sum of (i) 100% of the
Stated Principal Balance thereof as of the date of purchase (or such other price
as provided in Section 9.01), (ii) in the case of (x) a Mortgage Loan, accrued
interest on such Stated Principal Balance at the applicable Net Mortgage Rate in
effect from time to time from the Due Date as to which interest was last covered
by a payment by the Mortgagor or an advance by the

                                       30
<PAGE>

Master Servicer, which payment or advance had as of the date of purchase been
distributed pursuant to Section 4.01, through the end of the calendar month in
which the purchase is to be effected and (y) an REO Property, the sum of (1)
accrued interest on such Stated Principal Balance at the applicable Net Mortgage
Rate in effect from time to time from the Due Date as to which interest was last
covered by a payment by the Mortgagor or an advance by the Master Servicer
through the end of the calendar month immediately preceding the calendar month
in which such REO Property was acquired, plus (2) REO Imputed Interest for such
REO Property for each calendar month commencing with the calendar month in which
such REO Property was acquired and ending with the calendar month in which such
purchase is to be effected, net of the total of all net rental income, Insurance
Proceeds, Liquidation Proceeds and P&I Advances that as of the date of purchase
had been distributed as or to cover REO Imputed Interest pursuant to Section
4.01, (iii) any unreimbursed Servicing Advances and P&I Advances and any unpaid
Servicing Fees allocable to such Mortgage Loan or REO Property, (iv) any amounts
previously withdrawn from the Collection Account in respect of such Mortgage
Loan or REO Property pursuant to Sections 3.11(ix) and 3.16(b), and (v) in the
case of a Mortgage Loan required to be purchased pursuant to Section 2.03,
expenses reasonably incurred or to be incurred by the Master Servicer, the NIMs
Insurer or the Trustee in respect of the breach or defect giving rise to the
purchase obligation.

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

                                       31
<PAGE>

terms to maturity, the Loan-to-Value Ratios described in clause (ix) hereof
shall be satisfied as to each such mortgage loan and, except to the extent
otherwise provided in this sentence, the representations and warranties
described in clause (xi) hereof must be satisfied as to each Qualified
Substitute Mortgage Loan or in the aggregate, as the case may be.

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

                  "Realized Loss": With respect to each Mortgage Loan as to
which a Final Recovery Determination has been made, an amount (not less than
zero) equal to (i) the unpaid principal balance of such Mortgage Loan as of the
commencement of the calendar month in which the Final Recovery Determination was
made, plus (ii) accrued interest from the Due Date as to which interest was last
paid by the Mortgagor through the end of the calendar month in which such Final
Recovery Determination was made, calculated in the case of each calendar month
during such period (A) at an annual rate equal to the annual rate at which
interest was then accruing on such Mortgage Loan and (B) on a principal amount
equal to the Stated Principal Balance of such Mortgage Loan as of the close of
business on the Distribution Date during such calendar month, plus (iii) any
amounts previously withdrawn from the Collection Account in respect of such
Mortgage Loan pursuant to Section 3.11(a)(ix) and Section 3.16(b), minus (iv)
the proceeds, if any, received in respect of such Mortgage Loan during the
calendar month in which such Final Recovery Determination was made, net of
amounts that are payable therefrom to the Master Servicer with respect to such
Mortgage Loan pursuant to Section 3.11(a)(iii).

                  With respect to any REO Property as to which a Final Recovery
Determination has been made, an amount (not less than zero) equal to (i) the
unpaid principal balance of the related Mortgage Loan as of the date of
acquisition of such REO Property on behalf of REMIC I, plus (ii) accrued
interest from the Due Date as to which interest was last paid by the Mortgagor
in respect of the related Mortgage Loan through the end of the calendar month
immediately preceding the calendar month in which such REO Property was
acquired, calculated in the case of each calendar month during such period (A)
at an annual rate equal to the annual rate at which interest was then accruing
on the related Mortgage Loan and (B) on a principal amount equal to the Stated
Principal Balance of the related Mortgage Loan as of the close of business on
the Distribution Date during such calendar month, plus (iii) REO Imputed
Interest for such REO Property for each calendar month commencing with the
calendar month in which such REO Property was acquired and ending with the
calendar month in which such Final Recovery Determination was made, plus (iv)
any amounts previously withdrawn from the Collection Account in respect of the
related Mortgage Loan pursuant to Section 3.11(a)(ix) and Section 3.16(b), minus
(v) the aggregate of all P&I Advances made by the Master Servicer in respect of
such REO Property or the related Mortgage Loan for which the Master Servicer has
been or, in connection with such Final Recovery Determination, will be
reimbursed pursuant to Section 3.23 out of rental income, Insurance Proceeds and
Liquidation Proceeds received in respect of such REO Property, minus (vi) the
total of all net rental income, Insurance Proceeds and Liquidation Proceeds
received in respect of such REO Property that has been, or in connection with
such Final Recovery Determination, will be transferred to the Distribution
Account pursuant to Section 3.23.

                                       32
<PAGE>

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

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

                  "Record Date": With respect to each Distribution Date and any
Book-Entry Certificate (other than the Class S Certificates), the Business Day
immediately preceding such Distribution Date. With respect to each Distribution
Date and any other Class of Certificates, including any Definitive Certificates,
the last Business Day of the month immediately preceding the month in which such
Distribution Date occurs except that the Record Date for the first Distribution
Date shall be the Closing Date.

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

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

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

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

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

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

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

                  "REMIC I": The segregated pool of assets subject hereto,
constituting the primary trust created hereby and to be administered hereunder,
with respect to which a REMIC election is to be made, consisting of: (i) such
Mortgage Loans and Prepayment Charges as from time to time

                                       33
<PAGE>

are subject to this Agreement, together with the Mortgage Files relating
thereto, and together with all collections thereon and proceeds thereof, (ii)
any REO Property, together with all collections thereon and proceeds thereof,
(iii) the Trustee's rights with respect to the Mortgage Loans under all
insurance policies, required to be maintained pursuant to this Agreement and any
proceeds thereof, (iv) the Depositor's rights under the Mortgage Loan Purchase
Agreement (including any security interest created thereby) to the extent
conveyed pursuant to Section 2.01 and (v) the Collection Account (other than any
amounts representing any Master Servicer Prepayment Charge Payment Amounts), the
Distribution Account (other than any amounts representing any Master Servicer
Prepayment Charge Payment Amounts) and any REO Account and such assets that are
deposited therein from time to time and any investments thereof, together with
any and all income, proceeds and payments with respect thereto. Notwithstanding
the foregoing, however, REMIC I specifically excludes any Master Servicer
Prepayment Charge Payment Amounts, the Pre-Funding Account, the Interest
Coverage Account, the Reserve Fund, all payments and other collections of
principal and interest due on the Mortgage Loans on or before the Cut-off Date
and all Prepayment Charges payable in connection with Principal Prepayments made
before the Cut-off Date.

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

                  "REMIC I Regular Interest I-LT1": 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-LT1
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LT2": 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-LT2
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

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

                                       34
<PAGE>

                  "REMIC I Remittance Rate": With respect to each REMIC I
Regular Interest, (i) for the first three Distribution Dates, 7.4477659% and
(ii) for each Distribution Date thereafter, the weighted average of the Expense
Adjusted Mortgage Rates.

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

                  "REMIC II Interest Loss Allocation Amount": With respect to
any Distribution Date, an amount (subject to adjustment based on the actual
number of days elapsed in the respective Interest Accrual Periods for the
indicated Regular Interests for such Distribution Date) equal to (a) the product
of (i) the aggregate Stated Principal Balance of the Mortgage Loans and REO
Properties then outstanding (plus any amounts in the Pre-Funding Account) and
(ii) the REMIC II Remittance Rate for REMIC II Regular Interest II-LT1 minus the
Marker Rate, divided by (b) 12.

                  "REMIC II Overcollateralized Amount": With respect to any date
of determination, (i) 1% of the aggregate Uncertificated Balances of the REMIC
II Regular Interests minus (ii) the aggregate of the Uncertificated Balances of
REMIC II Regular Interest II-LT2, REMIC II Regular Interest II-LT3, REMIC II
Regular Interest II-LT4 and REMIC II Regular Interest II-LT5, in each case as of
such date of determination.

                  "REMIC II Principal Loss Allocation Amount": With respect to
any Distribution Date, an amount equal to the product of (i) the aggregate
Stated Principal Balance of the Mortgage Loans and REO Properties (plus any
amounts in the Pre-Funding Account) then outstanding and (ii) 1 minus a
fraction, the numerator of which is two times the aggregate of the
Uncertificated Balances of REMIC II Regular Interest II-LT2, REMIC II Regular
Interest II-LT3, REMIC II Regular Interest II-LT4 and REMIC II Regular Interest
II-LT5 and the denominator of which is the aggregate of the Uncertificated
Balances of REMIC II Regular Interest II-LT2, REMIC II Regular Interest II-LT3,
REMIC II Regular Interest II-LT4, REMIC II Regular Interest II-LT5 and REMIC II
Regular Interest II-LT6.

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

                  "REMIC II Regular Interest II-LT1": 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 II-LT1
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and

                                       35
<PAGE>

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

                  "REMIC II Regular Interest II-LT2": 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 II-LT2
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC II Regular Interest II-LT3": 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 II-LT3
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC II Regular Interest II-LT4": One of the separate
non-certificated beneficial ownership interests in REMIC III issued hereunder
and designated as a Regular Interest in REMIC II. REMIC II Regular Interest
II-LT4 shall accrue interest at the related REMIC II Remittance Rate in effect
from time to time, and shall be entitled to distributions of principal, subject
to the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC II Regular Interest II-LT5": 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 II-LT5
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC II Regular Interest II-LT6": 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 II-LT6
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC II Regular Interest II-LTS": 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 II-LTS
shall accrue interest at the related REMIC II Remittance Rate on its
Uncertificated Notional Amount, as in effect from time to time. REMIC II Regular
Interest II- LTS has no principal balance and is not entitled to distributions
of principal.

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

                                       36
<PAGE>

II. REMIC II Regular Interest II-LTP shall be entitled to any Prepayment Charges
collected by the Master Servicer and to a distribution of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC II Remittance Rate": With respect to each REMIC II
Regular Interest (other than REMIC II Regular Interest II-LTS) (i) for the first
three Distribtiuon Date 6.7977659% and (ii) any Distribution Date thereafter,
the Net WAC Pass-Through Rate. With respect to REMIC II Regular Interest II-LTS,
the Class S Rate.

                  "REMIC II Required Overcollateralized Amount": 1% of the
Required Overcollateralization Amount.

                  "REMIC III": The segregated pool of assets consisting of all
of the REMIC II Regular Interests conveyed in trust to the Trustee, for the
benefit of the REMIC III Certificateholders pursuant to Section 2.09, and all
amounts deposited therein, with respect to which a separate REMIC election is to
be made.

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

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

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

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

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

                  "REO Account": Each of the accounts maintained by the Master
Servicer in respect of an REO Property pursuant to Section 3.23 which account
may be the Collection Account subject to Section 3.23.

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

                  "REO Imputed Interest": As to any REO Property, for any
calendar month during which such REO Property was at any time part of REMIC I,
one month's interest at the applicable Net Mortgage Rate on the Stated Principal
Balance of such REO Property (or, in the case of the first

                                       37
<PAGE>

such calendar month, of the related Mortgage Loan, if appropriate) as of the
close of business on the Distribution Date in such calendar month.

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

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

                  "Request for Release": A release signed by a Servicing
Officer, in the form of Exhibit E-1 or Exhibit E-2 attached hereto.

                  "Required Overcollateralized Amount": With respect to any
Distribution Date (i) prior to the Stepdown Date, $1,500,000, (ii) on or after
the Stepdown Date provided a Trigger Event is not in effect, the greater of (x)
3.00% of the aggregate Stated Principal Balance of the Mortgage Loans as of the
last day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) and (y) $500,000, and (iii) on or after the Stepdown Date and a Trigger
Event is in effect, the Required Overcollateralized Amount for the immediately
preceding Distribution Date.

                  "Reserve Fund": The Reserve Fund established and maintained
pursuant to Section 3.28.

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

                  "Residential Dwelling": Any one of the following: (i) an
attached or detached one- family dwelling, (ii) a detached two- to four-family
dwelling, (iii) a one-family dwelling unit in a condominium project or (iv) a
detached or attached one-family dwelling in a planned unit

                                       38
<PAGE>

development, none of which is a co-operative, mobile or manufactured home
(unless such mobile or manufactured home is defined as real property under
applicable state law).

                  "Residual Certificate":  Any one of the Class R Certificates.

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

                  "Responsible Officer": When used with respect to the Trustee,
any director, any vice president, any assistant vice president, any associate,
any assistant secretary, any trust officer or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and, with respect to a particular matter, to whom such
matter is referred because of such officer's knowledge of and familiarity with
the particular subject.

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

                  "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 the Class S
Certificates and (ii) the Interest Carry Forward Amount with respect to the
Class A Certificates and the Class S Certificates.

                                       39
<PAGE>

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

                  "Servicing Advances": The reasonable "out-of-pocket" costs and
expenses incurred by the Master Servicer in connection with a default,
delinquency or other unanticipated event by the Master Servicer in the
performance of its servicing obligations, including, but not limited to, the
cost of (i) the preservation, restoration and protection of a Mortgaged
Property, (ii) any enforcement or judicial proceedings, including foreclosures,
in respect of a particular Mortgage Loan, (iii) the management (including
reasonable fees in connection therewith) and liquidation of any REO Property and
(iv) the performance of its obligations under Section 3.01, Section 3.09,
Section 3.14, Section 3.16 and Section 3.23. The Master Servicer shall not be
required to make any Servicing Advance in respect of a Mortgage Loan or REO
Property that, in the good faith business judgment of the Master Servicer, would
not be ultimately recoverable from related Insurance Proceeds or Liquidation
Proceeds on such Mortgage Loan or REO Property as provided herein.

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

                  "Servicing Fee Rate":  0.50% per annum.

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

                  "Single Certificate": With respect to any Class of
Certificates (other than the Class P Certificates and the Residual
Certificates), a hypothetical Certificate of such Class evidencing a Percentage
Interest for such Class corresponding to an initial Certificate Principal
Balance or Notional Amount of $1,000. With respect to the Class P Certificates
and the Residual Certificates, a hypothetical Certificate of such Class
evidencing a 20% Percentage Interest in such Class.

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

                  "Startup Day": With respect to each of REMIC I, REMIC II or
REMIC III, the day designated as such pursuant to Section 10.01(b) hereof.

                  "Stated Principal Balance": With respect to any Mortgage Loan:
(a) as of any date of determination up to but not including the Distribution
Date on which the proceeds, if any, of a Liquidation Event with respect to such
Mortgage Loan would be distributed, the Scheduled Principal Balance of such
Mortgage Loan as of the Cut-off Date (or the related Subsequent Cut-off Date,
with

                                       40
<PAGE>

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

                  "Stayed Funds": If the Master Servicer is the subject of a
proceeding under the federal Bankruptcy Code and the making of a Remittance (as
defined in Section 7.02(b)) is prohibited by Section 362 of the federal
Bankruptcy Code, funds that are in the custody of the Master Servicer, a trustee
in bankruptcy or a federal bankruptcy court and should have been the subject of
such Remittance absent such prohibition.

                  "Stepdown Date": The later to occur of (i) the Distribution
Date occurring in December 2004 and (ii) the first Distribution Date on which
the Credit Enhancement Percentage (calculated for this purpose only after taking
into account distributions of principal on the Mortgage Loans but prior to any
distribution of the Principal Distribution Amount to the Certificates then
entitled to distributions of principal on such Distribution Date) is equal to or
greater than 33.00%.

                  "Subsequent Cut-off Date": With respect to those Subsequent
Mortgage Loans sold to the Trust Fund pursuant to a Subsequent Transfer
Instrument, the first day of the month in which the related Subsequent Transfer
Date occurs.

                  "Subsequent Mortgage Loan": A Mortgage Loan sold by the
Depositor to the Trust Fund pursuant to Section 2.11, such Mortgage Loan being
identified on the Mortgage Loan Schedule attached to a Subsequent Transfer
Instrument.

                                       41
<PAGE>

                  "Subsequent Mortgage Loan Purchase Agreement": The agreement
between the Depositor and the Seller regarding the transfer of the Subsequent
Mortgage Loans by the Seller to the Depositor.

                  "Subsequent Transfer Date": With respect to each Subsequent
Transfer Instrument, the date on which the related Subsequent Mortgage Loans are
sold to the Trust Fund.

                  "Subsequent Transfer Instrument": Each subsequent transfer
instrument, dated as of a Subsequent Transfer Date, executed by the Trustee and
the Depositor substantially in the form of Exhibit I, by which Subsequent
Mortgage Loans are sold to the Trust Fund.

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

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

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

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

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

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

                  "Termination Price":  As defined in Section 9.01.

                  "Terminator":  As defined in Section 9.01.

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

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

                                       42
<PAGE>

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

                  "Trigger Event": A Trigger Event has occurred with respect to
a Distribution Date if the Delinquency Percentage exceeds 50.00% of the Credit
Enhancement Percentage.

                  "Trust Fund": Collectively, all of the assets of REMIC I,
REMIC II, REMIC III, Master Servicer Prepayment Charge Payment Amounts, the
Pre-Funding Account, the Reserve Fund and the Interest Coverage Account.

                  "Trustee": Bankers Trust Company of California, N.A., a
national banking association, or its successor in interest, or any successor
trustee appointed as herein provided.

                  "Trustee's Fee": The amount payable to the Trustee on each
Distribution Date pursuant to Section 8.05 as compensation for all services
rendered by it in the execution of the trust hereby created and in the exercise
and performance of any of the powers and duties of the Trustee hereunder, which
amount shall equal one twelfth of the product of (i) the Trustee's Fee Rate,
multiplied by (ii) the aggregate Scheduled Principal Balance of the Mortgage
Loans and any REO Properties and any amount in the Pre-Funding Account as of the
second preceding Due Date (or, in the case of the initial Distribution Date, as
of the Cut-off Date).

                  "Trustee's Fee Rate":  0.015% per annum.

                  "Uncertificated Balance": The amount of any REMIC I Regular
Interest or REMIC II Regular Interest (other than REMIC II Regular Interest
II-LTS) outstanding as of any date of determination. As of the Closing Date, the
Uncertificated Balance of each REMIC I Regular Interest and each REMIC II
Regular Interest (other than REMIC II Regular Interest II-LTS) shall equal the
amount set forth in the Preliminary Statement hereto as its initial
uncertificated balance. On each Distribution Date, the Uncertificated Balance of
each REMIC I Regular Interest and each REMIC II Regular Interest (other than
REMIC II Regular Interest II-LTS) shall be reduced by all distributions of
principal made on such REMIC I Regular Interest or such REMIC II Regular
Interest on such Distribution Date pursuant to Section 4.01 and, if and to the
extent necessary and appropriate, shall be further reduced on such Distribution
Date by Realized Losses as provided in Section 4.04. The Uncertificated Balance
of REMIC II Regular Interest I-LT6 shall be increased by interest deferrals as
provided in Section 4.01(a)(1)(A)(i). The Uncertificated Balance of each REMIC I
Regular Interest and each REMIC II Regular Interest shall never be less than
zero.

                  "Uncertificated Interest": With respect to any REMIC I Regular
Interest for any Distribution Date, one month's interest at the REMIC I
Remittance Rate applicable to such REMIC I Regular Interest for such
Distribution Date, accrued on the Uncertificated Balance thereof immediately
prior to such Distribution Date. With respect to any REMIC II Regular Interest
for any Distribution Date, one month's interest at the REMIC II Remittance Rate
applicable to such REMIC II Regular Interest for such Distribution Date, accrued
on the Uncertificated Balance or Uncertificated Notional Amount thereof
immediately prior to such Distribution Date. Uncertificated Interest in respect
of any REMIC I Regular Interest, REMIC II Regular Interest, shall accrue on the
basis of a 360-day year consisting of twelve 30-day months. Uncertificated
Interest with respect to

                                       43
<PAGE>

each Distribution Date, as to any REMIC I Regular Interest or REMIC II Regular
Interest, shall be reduced by an amount equal to the sum of (a) the aggregate
Prepayment Interest Shortfall, if any, for such Distribution Date to the extent
not covered by payments pursuant to Section 3.24 and (b) the aggregate amount of
any Relief Act Interest Shortfall, if any allocated, in each case, to such REMIC
I Regular Interest or REMIC II Regular Interest pursuant to Section 1.02. In
addition, Uncertificated Interest with respect to each Distribution Date, as to
any REMIC I Regular Interest or REMIC II Regular Interest shall be reduced by
Realized Losses, if any, allocated to such REMIC I Regular Interest or REMIC II
Regular Interest pursuant to Section 1.02 and Section 4.04.

                  "Uncertificated Notional Amount": With respect to REMIC II
Regular Interest II- LTS, shall equal the Uncertificated Balance of REMIC I
Regular Interest I-LT2.

                  "Underwriters' Exemption": An individual exemption issued by
the United States Department of Labor, Prohibited Transaction Exemption ("PTE")
96-92 at 61 F.R. 66334, and amended on July 21, 1997 by PTE 97-34 at 62 F.R.
39021 and further amended on November 13, 2000 by PTE 2000-58 at 65 F.R. 67767,
to Banc of America Securities LLC, for specific offerings in which Banc of
America Securities LLC or any person directly or indirectly, through one or more
intermediaries, controlling, controlled by or under common control with Banc of
America Securities LLC is an underwriter, placement agent or a manager or
co-manager of the underwriting syndicate or selling group where the trust and
the offered certificates meet specified conditions. The Underwriters' Exemption,
as amended, provides a partial exemption for transactions involving certificates
representing a beneficial interest in a trust and entitling the holder to
pass-through payments of principal, interest and/or other payments with respect
to the trust's assets.

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

                  "United States Person": A citizen or resident of the United
States, a corporation, partnership or other entity created or organized in, or
under the laws of, the United States, any state thereof or the District of
Columbia (except, in the case of a partnership, to the extent provided in
regulations) provided that, solely for purposes of the restrictions on the
transfer of Class R Certificates, no partnership or other entity treated as a
partnership for United States federal income tax purposes shall be treated as a
United States Person unless all persons that own an interest in such partnership
either directly or through any entity that is not a corporation for United
States federal income tax purposes are required by the applicable operative
agreement to be United States Persons, or an estate whose income is subject to
United States federal income tax regardless of its source, or a trust if a court
within the United States is able to exercise primary supervision over the
administration of the trust and one or more United States persons have the
authority to control all substantial decisions of the trust. To the extent
prescribed in regulations by the Secretary of the Treasury, 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 I of subchapter J
of chapter 1 of the Code), and which was treated as a United States person on
August 20, 1996 may elect to continue to be treated as a United States person
notwithstanding the previous sentence. The term "United States" shall have the
meaning set forth in Section 7701 of the Code.

                                       44
<PAGE>

                  "Value": With respect to any Mortgaged Property, the lesser of
(i) the value thereof as determined by an appraisal made for the originator of
the Mortgage Loan at the time of origination of the Mortgage Loan by an
appraiser who met the minimum requirements of the Financial Institutions Reform,
Recovery and Enforcement Act of 1989, and (ii) the purchase price paid for the
related Mortgaged Property by the Mortgagor with the proceeds of the Mortgage
Loan, provided, however, in the case of a Refinanced Mortgage Loan, such value
of the Mortgaged Property is based solely upon the value determined by an
appraisal made for the originator of such Refinanced Mortgage Loan at the time
of origination of such Refinanced Mortgage Loan by an appraiser who met the
minimum requirements of the Financial Institutions Reform, Recovery and
Enforcement Act of 1989.

                  "Voting Rights": The portion of the voting rights of all of
the Certificates which is allocated to any Certificate. With respect to any date
of determination, 97% 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 to the holders of the Class S Certificates in proportion to the then
outstanding Notional Amount of their Certificates, 1% of all Voting Rights will
be allocated to the holders of the Class P Certificates and 1% of all Voting
Rights will be allocated among the holders of the Residual Certificates. The
Voting Rights allocated to each Class of Certificate shall be allocated among
Holders of each such Class in accordance with their respective Percentage
Interests as of the most recent Record Date.

                  SECTION 1.02.             Allocation of Certain Interest
                                            Shortfalls.

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

                  For purposes of calculating the amount of Uncertificated
Interest for the REMIC I Regular Interests for any Distribution Date, the
aggregate amount of any Prepayment Interest Shortfalls (to the extent not
covered by payments by the Master Servicer pursuant to Section 3.24) and Relief
Act Interest Shortfalls incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated first, to Uncertificated Interest payable
to REMIC I Regular Interests (other than

                                       45
<PAGE>

REMIC I Regular Interest I-LTP) PRO RATA based on, and to the extent of, one
month's interest at the then applicable respective Pass-Through Rate on the
respective Uncertificated Balance of each such REMIC I Regular Interest (other
than REMIC I Regular Interest I-LTP).

                  For purposes of calculating the amount of Uncertificated
Interest for the REMIC II Regular Interests 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 3.24) and Relief
Act Interest Shortfalls incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated first, to Uncertificated Interest payable
to REMIC II Regular Interest II-LT1 and REMIC II Regular Interest II-LT6 up to
an aggregate amount equal to the REMIC II Interest Loss Allocation Amount, 98%
and 2%, respectively, and thereafter among REMIC II Regular Interest II- LT1,
REMIC II Regular Interest II-LT2, REMIC II Regular Interest II-LT3, REMIC II
Regular Interest II-LT4, REMIC II Regular Interest II-LT5 and REMIC II Regular
Interest II-LT6 PRO RATA based on, and to the extent of, one month's interest at
the then applicable respective Pass-Through Rate on the respective
Uncertificated Balance of each such REMIC II Regular Interest.

                  SECTION 1.03              Rights of the NIMs Insurer.

                  Each of the rights of the NIMs Insurer set forth in this
Agreement shall exist so long as the notes issued pursuant to the Indenture
remain outstanding or the NIMs Insurer is owed amounts in respect of its
guarantee of payment on such notes.

                                       46
<PAGE>

                                   ARTICLE II

                          CONVEYANCE OF MORTGAGE LOANS;
                        ORIGINAL ISSUANCE OF CERTIFICATES

                  SECTION 2.01.             Conveyance of Mortgage Loans.

                  The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey to the
Trustee without recourse for the benefit of the Certificateholders all the
right, title and interest of the Depositor, including any security interest
therein for the benefit of the Depositor, in and to the Mortgage Loans
identified on the Mortgage Loan Schedule, the rights of the Depositor under the
Mortgage Loan Purchase Agreement (except Section 17 thereof), and all other
assets included or to be included in REMIC I. Such assignment includes all
interest and principal received by the Depositor or the Master Servicer on or
with respect to the Mortgage Loans (other than payments of principal and
interest due on such Mortgage Loans on or before the Cut-off Date). The
Depositor herewith delivers to the Trustee an executed copy of the Mortgage Loan
Purchase Agreement, the Original Pre-Funded Amount and the required deposit to
the Interest Coverage Account.

                  In connection with such transfer and assignment, the Depositor
does hereby deliver to, and deposit with, the Trustee, or to one or more
Custodians as the agent or agents of the Trustee, the following documents or
instruments with respect to each Initial Mortgage Loan so transferred and
assigned and the Depositor shall, in accordance with Section 2.11, deliver or
cause to be delivered to the Trustee with respect to each Subsequent Mortgage
Loan, the following documents or instruments (a "Mortgage File"):

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

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

                  (iii) an original Assignment of the Mortgage in blank;

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

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

                                       47
<PAGE>

                  (vi) the original lenders's title insurance policy or an
         attorney's opinion of title or similar guarantee of title acceptable to
         mortgage lenders generally in the jurisdiction where the Mortgaged
         Property is located, together with all endorsements or riders which
         were issued with or subsequent to the issuance of such policy, insuring
         the priority of the Mortgage as a first lien on the Mortgaged Property
         represented therein as a fee interest vested in the Mortgagor, or in
         the event such original title policy is unavailable, a written
         commitment or uniform binder or preliminary report of title issued by
         the title insurance or escrow company.

                  The Trustee agrees to execute and deliver (or cause the
Custodian to execute and deliver) to the Depositor and the NIMs Insurer on or
prior to the Closing Date an acknowledgment of receipt of the Mortgage Note
(with any exceptions noted), substantially in the form attached as Exhibit C-1
hereto.

                  The Master Servicer (in its capacity as Originator) shall
promptly (and in no event later than thirty (30) Business Days, subject to
extension upon a mutual agreement between the Master Servicer and the Trustee,
following the later of (i) the Closing Date (or the related Subsequent Transfer
Date, with respect to the Subsequent Mortgage Loans), (ii) the date on which the
Originator receives the Assignment from the Custodian and (iii) the date of
receipt by the Master Servicer of the recording information for a Mortgage)
submit or cause to be submitted for recording, at no expense to the Trust Fund
or the Trustee, in the appropriate public office for real property records, each
Assignment referred to in Sections 2.01(iii) and (iv) above and shall execute
each original Assignment referred to in section 2.01(iii) above in the following
form: "Bankers Trust Company of California, N.A., as Trustee under the
applicable agreement". In the event that any such Assignment is lost or returned
unrecorded because of a defect therein, the Master Servicer (in its capacity as
Originator) shall promptly prepare or cause to be prepared a substitute
Assignment or cure or cause to be cured such defect, as the case may be, and
thereafter cause each such Assignment to be duly recorded. Notwithstanding the
foregoing, however, for administrative convenience and facilitation of servicing
and to reduce closing costs, the assignments of Mortgage shall not be required
to be completed and submitted for recording with respect to any Mortgage Loan
only if the NIMs Insurer, Trustee and each Rating Agency has received an opinion
of counsel, satisfactory in form and substance to the Trustee and each Rating
Agency, to the effect that the recordation of such assignments in any specific
jurisdiction is not necessary to protect the Trustee's interest in the related
Mortgage Note; provided further, however, notwithstanding the delivery of any
opinion of counsel, each assignment of Mortgage shall be submitted for recording
by the Originator in the manner described above, at no expense to the Trust Fund
or Trustee, upon the earliest to occur of: (i) reasonable direction by Holders
of Certificates entitled to at least 25% of the Voting Rights, (ii) failure of
the Master Servicer Termination Test, (iii) the occurrence of a bankruptcy,
insolvency or foreclosure relating to the Originator, (iv) the occurrence of a
servicing transfer as described in Section 7.02 hereof and (v) if the Originator
is not the Master Servicer and with respect to any one assignment of Mortgage,
the occurrence of a bankruptcy, insolvency or foreclosure relating to the
Mortgagor under the related Mortgage. Notwithstanding the foregoing, if the
Master Servicer is unable to pay the cost of recording the Assignments of
Mortgage, such expense will be paid by the Trustee.

                                       48
<PAGE>

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

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

                  SECTION 2.02.             Acceptance of REMIC I by the
                                            Trustee.

                  Subject to the provisions of Section 2.01 and subject to any
exceptions noted on the exception report described in the next paragraph below,
the Trustee acknowledges receipt (or, with respect to Mortgage Loans subject to
a Custodial Agreement, receipt by the respective Custodian as the duly appointed
agent of the Trustee) of the documents referred to in Section 2.01 (other than
such documents described in Section 2.01(v)) above and all interests 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, or such Custodian as its agent, holds and will hold such
documents and the other documents delivered to it constituting the Mortgage
File, and that it holds or will hold all such assets and such other assets
included in the definition of "REMIC I" in trust for the exclusive use and
benefit of all present and future Certificateholders.

                  The Trustee agrees, for the benefit of the Certificateholders,
to review (or cause a Custodian on its behalf to review) each Mortgage Note on
or before the Closing Date (or the related Subsequent Transfer Date, with
respect to the Subsequent Mortgage Loans) and to certify in

                                       49
<PAGE>

substantially the form attached hereto as Exhibit C-1 (or cause the Custodian to
certify in the form of the Initial Certification attached to the Custodial
Agreement) that, as to each Initial Mortgage Loan or Subsequent Mortgage Loan
listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full
or any Mortgage Loan specifically identified in the exception report annexed
thereto as not being covered by such certification), the Trustee is in
possession of the Mortgage Note. Within 30 days following the Closing Date, the
Trustee agrees, for the benefit of the Certificateholders, to review (or cause a
Custodian on its behalf to review) each Mortgage File on or before the Closing
Date and to certify in substantially the form attached hereto as Exhibit C-2 (or
cause the Custodian to certify in the form of the Interim Certification attached
to the Custodial Agreement) that, as to each Mortgage Loan listed in the
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any
Mortgage Loan specifically identified in the exception report annexed thereto as
not being covered by such certification), (i) all documents constituting part of
such Mortgage File (other than such documents described in Section 2.01(v))
required to be delivered to it pursuant to this Agreement are in its possession,
(ii) such documents have been reviewed by it or such Custodian and are not
mutilated, torn or defaced unless initialed by the related borrower and relate
to such Mortgage Loan, (iii) based on its or the Custodian's examination and
only as to the foregoing, the information set forth in the Mortgage Loan
Schedule that corresponds to items (i) through (iii), (vi), (ix), (x), (xiii),
(xv) and (xix) of the definition of "Mortgage Loan Schedule" accurately reflects
information set forth in the Mortgage File. It is herein acknowledged that, in
conducting such review, the Trustee or such Custodian was under no duty or
obligation (i) to inspect, review or examine any such documents, instruments,
certificates or other papers to determine whether they are genuine, enforceable,
or appropriate for the represented purpose or whether they have actually been
recorded or that they are other than what they purport to be on their face or
(ii) to determine whether any Mortgage File should include any of the documents
specified in clause (v) of Section 2.01.

                  Prior to the first anniversary date of this Agreement the
Trustee shall deliver to the Depositor, the Master Servicer and the NIMs Insurer
a final certification in the form annexed hereto as Exhibit C-3 (or shall cause
the Custodian to deliver to the Trustee, the Depositor, the Master Servicer and
the NIMs Insurer a final certification in the form attached to the Custodial
Agreement) evidencing the completeness of the Mortgage Files, with any
applicable exceptions noted thereon, with respect to all of the Initial Mortgage
Loans and the Subsequent Mortgage Loans.

                  If in the process of reviewing the Mortgage Files and making
or preparing, as the case may be, the certifications referred to above, the
Trustee or any Custodian finds any document or documents constituting a part of
a Mortgage File to be missing, mutilated, damaged or torn or does not conform to
the requirements identified above, at the conclusion of its review the Trustee
(or a Custodian on behalf of the Trustee) shall so notify the Depositor, the
NIMs Insurer and the Master Servicer. In addition, upon the discovery by the
Depositor, the NIMs Insurer, the Master Servicer or the Trustee of a breach of
any of the representations and warranties made by the Originator in the Mortgage
Loan Purchase Agreement in respect of any Mortgage Loan which materially
adversely affects such Mortgage Loan or the interests of the related
Certificateholders in such Mortgage Loan, the party discovering such breach
shall give prompt written notice to the other parties.

                                       50
<PAGE>

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

                  SECTION 2.03.             Repurchase or Substitution of
                                            Mortgage Loans by the Originator or
                                            the Depositor; Payment of Prepayment
                                            Charge Payment Amounts.

                  (a) Upon discovery or receipt of notice (including notice
under Section 2.02) of any materially defective document in, or that a document
is missing from, the Mortgage File or of the breach by the Originator of any
representation, warranty or covenant under the Mortgage Loan Purchase Agreement
in respect of any Mortgage Loan which materially adversely affects the value of
such Mortgage Loan or the interest therein of the Certificateholders, the
Trustee shall promptly notify the Originator, the NIMs Insurer and the Master
Servicer of such defect, missing document or breach and request that the
Originator deliver such missing document or cure such defect or breach within 90
days from the date the Originator was notified of such missing document, defect
or breach, and if the Originator does not deliver such missing document or cure
such defect or breach in all material respects during such period, the Master
Servicer (or, in accordance with Section 3.02(b), the Trustee) shall enforce the
obligations of the Originator under the Mortgage Loan Purchase Agreement to
repurchase such Mortgage Loan from REMIC I at the Purchase Price within 90 days
after the date on which the Originator was notified (subject to Section 2.03(d))
of such missing document, defect or breach, if and to the extent that the
Originator is obligated to do so under the Mortgage Loan Purchase Agreement. The
Purchase Price for the repurchased Mortgage Loan shall be deposited in the
Collection Account, and the Trustee, upon receipt of written certification from
the Master Servicer of such deposit, shall release to the Originator the related
Mortgage File and shall execute and deliver such instruments of transfer or
assignment, in each case without recourse, as the Originator shall furnish to it
and as shall be necessary to vest in the Originator any Mortgage Loan released
pursuant hereto, and the Trustee shall have no further responsibility with
regard to such Mortgage File. In lieu of repurchasing any such Mortgage Loan as
provided above, if so provided in the Mortgage Loan Purchase Agreement, the
Originator may cause such Mortgage Loan to be removed from REMIC I (in which
case it shall become a Deleted Mortgage Loan) and substitute one or more
Qualified Substitute Mortgage Loans in the manner and subject to the limitations
set forth in Section 2.03(c). It is understood and agreed that the obligation of
the Originator to cure or to repurchase (or to substitute for) any Mortgage Loan
as to which a document is missing, a material defect in a constituent document
exists or as to which such a breach has occurred and is continuing shall
constitute the sole remedy respecting such omission, defect or breach available
to the Trustee on behalf of the Certificateholders.

                  (b)      (i) Promptly upon 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 2.05 which materially and adversely
                           affects the interests of the Certificateholders in
                           any Mortgage Loan, the Master Servicer shall cure
                           such breach in all material respects.

                           (ii) Notwithstanding the provisions of Section
                           2.03(b)(i) above,

                                       51
<PAGE>

                                    (A) on the later of (x) the Master Servicer
                                    Remittance Date next following the earlier
                                    of discovery by the Master Servicer or
                                    receipt of notice by the Master Servicer of
                                    the breach of the representation made by the
                                    Master Servicer in Section 2.05(vii), which
                                    breach materially and adversely affects the
                                    interests of the Holders of the Class P
                                    Certificates to any Prepayment Charge and
                                    (y) the Master Servicer Remittance Date next
                                    following the Prepayment Period relating to
                                    such a breach, the Master Servicer shall
                                    deposit into the Collection Account the
                                    amount of the scheduled Prepayment Charge,
                                    less any amount collected and deposited by
                                    the Master Servicer into the Collection
                                    Account in respect of such Prepayment
                                    Charge; and

                                    (B) on the later of (x) the Master Servicer
                                    Remittance Date next following the earlier
                                    of discovery by the Master Servicer or
                                    receipt of notice by the Master Servicer of
                                    the breach of the covenant made by the
                                    Master Servicer in Section 2.05(viii), which
                                    breach materially and adversely affects the
                                    interests of the Holders of the Class P
                                    Certificates to any Prepayment Charge and
                                    (y) the Master Servicer Remittance Date next
                                    following the Prepayment Period relating to
                                    such a breach, the Master Servicer shall
                                    deposit into the Collection Account, as a
                                    Master Servicer Prepayment Charge Payment
                                    Amount, the amount of the waived Prepayment
                                    Charge, but only to the extent required
                                    under Section 2.03(b)(iii) below.

                           (iii)    If with respect to any Prepayment Period

                                    (x) the dollar amount of Prepayment Charges
                                    that are the subject of breaches by the
                                    Master Servicer of the covenant made by the
                                    Master Servicer in Section 2.05(viii), which
                                    breaches materially and adversely affects
                                    the interests of the Holders of the Class P
                                    Certificates to such Prepayment Charges,
                                    exceeds

                                    (y) 5% of the total the dollar amount of
                                    Prepayment Charges (exclusive of (A)
                                    Prepayment Charges not enforced or collected
                                    upon because (i) the enforceability thereof
                                    shall have been limited by bankruptcy,
                                    insolvency, moratorium, receivership and
                                    other similar laws relating to creditors'
                                    rights generally or (ii) the collectability
                                    thereof shall have been limited due to
                                    acceleration in connection with a
                                    foreclosure or other involuntary payment and
                                    (B) Prepayment Charges waived by the Master
                                    Servicer where such waiver does not breach
                                    the covenant set forth in Section
                                    2.05(viii)) payable by Mortgagors in
                                    connection with Principal Prepayments on the
                                    related Mortgage Loans that occurred during
                                    such Prepayment Period,

then the amount required to be paid by the Master Servicer pursuant to Section
2.03(b)(ii)(B) above shall be limited to an amount, that when added to the
amount of Prepayment Charges actually

                                       52
<PAGE>

collected by the Master Servicer in respect of Prepayment Charges relating to
Principal Prepayments on the related Mortgage Loans that occurred during such
Prepayment Period, will yield a sum equal to 95% of the total the dollar amount
of Prepayment Charges (exclusive of (A) Prepayment Charges not enforced or
collected upon because (i) the enforceability thereof shall have been limited by
bankruptcy, insolvency, moratorium, receivership and other similar laws relating
to creditors' rights generally or (ii) the collectability thereof shall have
been limited due to acceleration in connection with a foreclosure or other
involuntary payment and (B) Prepayment Charges waived by the Master Servicer
where such waiver does not breach the covenant set forth in Section 2.05(viii))
payable by Mortgagors in connection with Principal Prepayments on the related
Mortgage Loans that occurred during such Prepayment Period.

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

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

                                       53
<PAGE>

a substitution effected by the Originator, the Mortgage Loan Purchase Agreement,
including all applicable representations and warranties thereof.

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

                  In addition, the Depositor or the Originator, as the case may
be, shall obtain at its own expense and deliver to the Trustee and the NIMs
Insurer an Opinion of Counsel to the effect that such substitution will not
cause (a) any federal tax to be imposed on any of REMIC I, REMIC II or REMIC
III, 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 of REMIC I,
REMIC II or REMIC III to fail to qualify as a REMIC at any time that any
Certificate is outstanding.

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

                                       54
<PAGE>

                  SECTION 2.04.             [Reserved].

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

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

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

                  (ii) The Master Servicer has the full 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 has duly authorized by all necessary corporate
         action on the part of the Master Servicer the execution, delivery and
         performance of this Agreement; and this Agreement, assuming the due
         authorization, execution and delivery thereof by the Depositor and the
         Trustee, constitutes a legal, valid and binding obligation of the
         Master Servicer, enforceable against the Master Servicer in accordance
         with its terms, except to the extent that (a) the enforceability
         thereof 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 the 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 by the
         Master Servicer, the servicing of the Mortgage Loans by the Master
         Servicer hereunder, the consummation of any other of the transactions
         herein contemplated, and the fulfillment of or compliance with the
         terms hereof are in the ordinary course of business of the Master
         Servicer and will not (A) result in a breach of any term or provision
         of the charter or by-laws of the Master Servicer or (B) conflict with,
         result in a breach, violation or acceleration of, or result in a
         default under, the terms of any other material agreement or instrument
         to which the Master Servicer is a party or by which it may be bound, or
         any statute, order or regulation applicable to the Master Servicer of
         any court, regulatory body, administrative agency or governmental body
         having jurisdiction over the Master Servicer; and the Master Servicer
         is not a party to, bound by, or in breach or violation of any indenture
         or other agreement or instrument, or subject to or in violation of any
         statute, order or regulation of any court, regulatory body,
         administrative agency or governmental body having jurisdiction over it,
         which materially and adversely affects or, to the Master Servicer's
         knowledge, would in the future materially and adversely affect, (x) the
         ability of the Master Servicer to perform its obligations under this
         Agreement

                                       55
<PAGE>

         or (y) the business, operations, financial condition, properties or
         assets of the Master Servicer taken as a whole;

                  (iv) The Master Servicer is an approved seller/servicer for
         Fannie Mae or Freddie Mac in good standing and is a HUD approved
         mortgagee pursuant to Section 203 and Section 211 of the National
         Housing Act;

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

                  (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 Master Servicer of, or compliance by the Master
         Servicer with, this Agreement or the consummation 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;

                  (vii) The information set forth in the Prepayment Charge
         Schedule attached hereto as Schedule 2 (including the prepayment charge
         summary attached thereto) is complete, true and correct in all material
         respects at the date or dates respecting which such information is
         furnished and each Prepayment Charge is permissible and enforceable in
         accordance with its terms (except to the extent that (i) the
         enforceability thereof may be limited by bankruptcy, insolvency,
         moratorium, receivership and other similar laws relating to creditors'
         rights generally and (ii) the collectability thereof may be limited due
         to acceleration in connection with a foreclosure or other involuntary
         payment;

                  (viii) The Master Servicer will not waive any Prepayment
         Charge or part of a Prepayment Charge unless, in the Master Servicer's
         reasonable judgment as described in Section 3.01 hereof, (x) such
         waiver relates to a default or a reasonably foreseeable default, (y)
         such waiver would maximize recovery of total proceeds taking into
         account the value of such Prepayment Charge and related Mortgage Loan
         and (z) doing so is standard and customary in servicing similar
         Mortgage Loans (including any waiver of a Prepayment Charge in
         connection with a refinancing of a Mortgage Loan that is related to a
         default or a reasonably foreseeable default) and in no event will it
         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;

                  (ix) The information set forth in the "monthly tape" provided
         to the Trustee or any of its affiliates is true and correct in all
         material respects; and

                  (x) With respect to each Mortgage Loan, the Assignment is in
         recordable form; (except that the name of the assignee and the
         recording information with respect to such Mortgage Loan is blank) and
         each Mortgage Loan was originated in the name of the Master Servicer or
         an affiliate thereof.

                                       56
<PAGE>

                  It is understood and agreed that the representations,
warranties and covenants set forth in this Section 2.05 shall survive delivery
of the Mortgage Files to the Trustee or to a Custodian, as the case may be, and
shall inure to the benefit of the Trustee, the Depositor and the
Certificateholders. Upon discovery by any of the Depositor, the NIMs Insurer,
the Master Servicer or the Trustee of a breach of any of the foregoing
representations, warranties and covenants which materially and adversely affects
the value of any Mortgage Loan, Prepayment Charge or the interests therein of
the Certificateholders, the party discovering such breach shall give prompt
written notice (but in no event later than two Business Days following such
discovery) to the NIMs Insurer and the Trustee. Subject to Section 7.01, the
obligation of the Master Servicer set forth in Section 2.03(b) to cure breaches
(or in the case of the representations, warranties and covenants set forth in
Section 2.05(vii) and Section 2.05(viii) above, to otherwise remedy such
breaches pursuant to Section 2.03(b)) shall constitute the sole remedies against
the Master Servicer available to the Certificateholders, the Depositor or the
Trustee on behalf of the Certificateholders respecting a breach of the
representations, warranties and covenants contained in this Section 2.05. The
preceding sentence shall not, however, limit any remedies available to the
Certificateholders, the Depositor or the Trustee on behalf of the
Certificateholders (other than in the case of the representations, warranties
and covenants set forth in Section 2.05(vii) and Section 2.05(viii) above)
pursuant to the Mortgage Loan Purchase Agreement signed by the Master Servicer
in its capacity as Originator, respecting a breach of the representations,
warranties and covenants of the Master Servicer in its capacity as Originator
contained in such Mortgage Loan Purchase Agreement.

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

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

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

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

                                       57
<PAGE>

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

                  SECTION 2.08.             Conveyance of the REMIC II Regular
                                            Interests; Acceptance of REMIC III
                                            by the Trustee.

                  The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey to the
Trustee, without recourse all the right, title and interest of the Depositor in
and to the REMIC II Regular Interests for the benefit of the Class R-
Certificateholders and REMIC III (as holder of the REMIC II Regular Interests).
The Trustee acknowledges receipt of the REMIC II Regular Interests and declares
that it holds and will hold the same in trust for the exclusive use and benefit
of all present and future Class R Certificateholders and REMIC III (as holder of
the REMIC II Regular Interests). The rights of the Class R Certificateholders
and REMIC III (as holder of the REMIC II Regular Interests) to receive
distributions from the proceeds of REMIC III in respect of the Class R
Certificates and REMIC III Certificates, respectively, and all ownership
interests evidenced or constituted by the Class R Certificates and the REMIC III
Certificates, shall be as set forth in this Agreement.

                  SECTION 2.09.             Issuance of Class R Certificates.

                  The Trustee acknowledges the assignment to it of the REMIC II
Regular Interests and, concurrently therewith and in exchange therefor, pursuant
to the written request of the Depositor executed by an officer of the Depositor,
the Trustee has executed, authenticated and delivered to or upon the order of
the Depositor, the Class R Certificates in authorized denominations. The
interests evidenced by the Class R Certificates, together with the REMIC III
Certificates, constitute the entire beneficial ownership interest in REMIC III.

                  SECTION 2.10.             Conveyance of the Subsequent
                                            Mortgage Loans.

                  (a) Subject to the conditions set forth in paragraph (b)
below, in consideration of the Trustee's delivery on the Subsequent Transfer
Dates to or upon the order of the Depositor of all or a portion of the balance
of funds in the Pre-Funding Account, the Depositor shall on any Subsequent
Transfer Date sell, transfer, assign, set over and convey without recourse to
the Trust Fund but subject to the other terms and provisions of this Agreement
all of the right, title and interest of the Depositor in and to (i) the
Subsequent Mortgage Loans identified on the Mortgage Loan Schedule attached to
the related Subsequent Transfer Instrument delivered by the Depositor on such
Subsequent Transfer Date, (ii) principal due and interest accruing on the
Subsequent Mortgage Loans after the related Subsequent Cut-off Date and (iii)
all items with respect to such Subsequent Mortgage Loans to be delivered
pursuant to Section 2.01 and the other items in the related Mortgage Files;
provided, however, that the Depositor reserves and retains all right, title and
interest in and

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<PAGE>

to principal due and interest accruing on the Subsequent Mortgage Loans prior to
the related Subsequent Cut-off Date. The transfer to the Trustee for deposit in
the Mortgage Pool by the Depositor of the Subsequent Mortgage Loans identified
on the Mortgage Loan Schedule attached to the related Subsequent Transfer
Agreement shall be absolute and is intended by the Depositor, the Master
Servicer, the Trustee and the Certificateholders to constitute and to be treated
as a sale of the Subsequent Mortgage Loans by the Depositor to the Trust Fund.
The related Mortgage File for each Subsequent Mortgage Loan shall be delivered
to the Trustee or the Custodian at least three Business Days prior to the
related Subsequent Transfer Date.

                  The purchase price paid by the Trustee from amounts released
from the Pre-Funding Account shall be one-hundred percent (100%) of the
aggregate Stated Principal Balance of the Subsequent Mortgage Loans so
transferred (as identified on the Mortgage Loan Schedule provided by the
Depositor). This Agreement shall constitute a fixed-price purchase contract in
accordance with Section 860G(a)(3)(A)(ii) of the Code.

                  (b) The Depositor shall transfer to the Trustee for deposit in
the Trust the Subsequent Mortgage Loans and the other property and rights
related thereto as described in paragraph (a) above, and the Trustee shall
release funds from the Pre-Funding Account only upon the satisfaction of each of
the following conditions on or prior to the related Subsequent Transfer Date:

                  (i) the Depositor shall have provided the Trustee and the NIMs
         Insurer with a timely Addition Notice;

                  (ii) the Depositor shall have delivered to the Trustee and the
         NIMs Insurer a duly executed Subsequent Transfer Instrument, which
         shall include a Mortgage Loan Schedule listing the Subsequent Mortgage
         Loans, and the Master Servicer, in its capacity as Originator, shall
         have delivered a computer file containing such Mortgage Loan Schedule
         to the Trustee and each Rating Agency at least three Business Days
         prior to the related Subsequent Transfer Date;

                  (iii) as of each Subsequent Transfer Date, as evidenced by
         delivery of the Subsequent Transfer Instrument, substantially in the
         form of Exhibit I, the Depositor shall not be insolvent nor shall it
         have been rendered insolvent by such transfer nor shall it be aware of
         any pending insolvency;

                  (iv) such sale and transfer shall not result in a material
         adverse tax consequence to the Trust Fund or the Certificateholders;

                  (v) the Funding Period shall not have terminated;

                  (vi) the Depositor shall not have selected the Subsequent
         Mortgage Loans in a manner that it believed to be adverse to the
         interests of the Certificateholders;

                  (vii) the Depositor shall have delivered to the Trustee and
         the NIMs Insurer a Subsequent Transfer Instrument confirming the
         satisfaction of the conditions precedent

                                       59
<PAGE>

         specified in this Section 2.11 and, pursuant to the Subsequent Transfer
         Instrument, assigned to the Trustee without recourse for the benefit of
         the Certificateholders all the right, title and interest of the
         Depositor, in, to and under the Subsequent Mortgage Loan Purchase
         Agreement, to the extent of the Subsequent Mortgage Loans;

                  (viii) the Depositor shall have delivered to the Trustee and
         the NIMs Insurer a letter from an Independent accountant (with copies
         provided to each Rating Agency) stating that the characteristics of the
         Subsequent Mortgage Loans conform to the characteristics set forth in
         paragraphs (c) and (d) below;

                  (ix) the Depositor shall have delivered to the Trustee and the
         NIMs Insurer an Opinion of Counsel addressed to the Trustee and the
         Rating Agencies with respect to the transfer of the Subsequent Mortgage
         Loans substantially in the form of the Opinion of Counsel delivered to
         the Trustee on the Closing Date regarding the true sale of the
         Subsequent Mortgage Loans; and

                  (x) the Depositor shall have delivered to the Trustee the
         consent of the NIMs Insurer to the transfer of such Subsequent Mortgage
         Loans.

                  (c) The obligation of the Trust Fund to purchase a Subsequent
Mortgage Loan on any Subsequent Transfer Date is subject to the satisfaction of
the conditions set forth in paragraph (d) below and the accuracy of the
following representations and warranties with respect to such Subsequent
Mortgage Loan determined as of the related Subsequent Cut-off Date: (i) the
Subsequent Mortgage Loan may not be 30 or more days delinquent as of the related
Subsequent Cut-off Date; (ii) the term to stated maturity of the Subsequent
Mortgage Loan will not be less than 180 months and will not exceed 360 months
from its first payment date; (iii) the Subsequent Mortgage Loan may not provide
for negative amortization; (iv) the Subsequent Mortgage Loan will not have a
Loan-to-Value Ratio greater than 95.00%; (v) the Subsequent Mortgage Loans will
have, as of the Subsequent Cut-off Date, a weighted average term since
origination not in excess of 6 months; (vi) no Subsequent Mortgage Loan shall
have a Mortgage Rate less than 6.30% or greater than 13.10%; (vii) the
Subsequent Mortgage Loan shall have been serviced by the Master Servicer since
origination or purchased by the Originator in accordance with its underwriting
guidelines; (viii) the Subsequent Mortgage Loan must have a first payment date
occurring on or before March 1, 2002 and (ix) the Subsequent Mortgage Loan shall
have been be underwritten in accordance with the criteria set forth under the
section "The Mortgage Pool--Underwriting Standards; Representations" in the
Prospectus Supplement.

                  (d) Following the purchase of the Subsequent Mortgage Loans by
the Trust Fund, the Mortgage Loans (including the Subsequent Mortgage Loans)
will, as of the related Subsequent Cut-off Date: (i) have a weighted average
original term to stated maturity of not more than 360 months from the first
payment date thereon; (ii) have a weighted average Mortgage Rate of not less
than 9.00% and not more than 9.25%, by aggregate principal balance of the
Mortgage Loans; (iii) have a weighted average Loan-to-Value Ratio of not more
than 80.80%; (iv) have no Mortgage Loan with a principal balance in excess of
$580,000 and (v) have a weighted average Gross Margin of not less than 6.35%, in
each case, as applicable, by aggregate principal balance of the Mortgage Loans
as of the related Subsequent Cut-off Date.

                                       60
<PAGE>

                  (e) Notwithstanding the foregoing, any Subsequent Mortgage
Loan may be rejected by the NIMs Insurer or each Rating Agency if the inclusion
of any such Subsequent Mortgage Loan would adversely affect the ratings of any
class of Certificates. At least one Business Day prior to the related Subsequent
Transfer Date, the Depositor shall obtain confirmation from each Rating Agency
which Subsequent Mortgage Loans, if any, shall not be included in the transfer
on the related Subsequent Transfer Date and deliver such confirmation to the
Trustee and the Master Servicer; provided, however, that the Master Servicer, in
its capacity as Originator, shall have delivered to each Rating Agency at least
three Business Days prior to such Subsequent Transfer Date a computer file
reasonably acceptable to each Rating Agency describing the characteristics
specified in paragraphs (c) and (d) above.

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<PAGE>

                                   ARTICLE III

                          ADMINISTRATION AND SERVICING
                              OF THE MORTGAGE LOANS

                  SECTION 3.01.             Master Servicer to Act as Master
                                            Servicer.

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

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

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

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

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

                  To the extent consistent with the foregoing, the Master
Servicer shall also seek the timely and complete recovery of principal and
interest on the Mortgage Notes. Subject only to the above-described servicing
standards and the terms of this Agreement and of the respective Mortgage Loans,
the Master Servicer shall have full power and authority, acting alone or through
Sub-Servicers as provided in Section 3.02, to do or cause to be done any and all
things in connection with such servicing and administration which it may deem
necessary or desirable. Without limiting the generality of the foregoing, the
Master Servicer in its own name or in the name of a Sub-Servicer is hereby
authorized and empowered by the Trustee, in accordance with the servicing
standards set forth above, to execute and deliver, on behalf of the
Certificateholders and the Trustee, and upon notice to the Trustee, any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge, and all other comparable instruments, with respect to the Mortgage
Loans and the Mortgaged Properties and to institute foreclosure proceedings or
obtain a deed-in-lieu of foreclosure to convert the ownership of such
properties, and to hold or cause to be held title to such properties, on behalf
of the Trustee and the Certificateholders. The Master Servicer shall service and
administer the Mortgage Loans in accordance with applicable state and federal
law and shall provide to the Mortgagors any reports required to be provided to
them thereby. Subject to Section 3.17, the Trustee shall execute, at the written
request of the Master Servicer, and furnish to the Master Servicer and any
Sub-Servicer such documents as are necessary or appropriate to enable the Master
Servicer or any Sub-Servicer to carry out their servicing and administrative
duties hereunder, and

                                       62
<PAGE>

by execution of this Agreement, the Trustee hereby grants to the Master Servicer
a power of attorney to carry out such duties (including the taking of and
transferring title of REO Properties held in the name of the Trustee for the
benefit of the Trust). The Trustee shall not be liable for the actions of the
Master Servicer or any Sub-Servicers under such powers of attorney.

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

                  Notwithstanding anything in this Agreement to the contrary,
the Master Servicer may not make any future advances with respect to a Mortgage
Loan (except as provided in Section 4.03) and the Master Servicer shall not (i)
permit any modification with respect to any Mortgage Loan that would change the
Mortgage Rate, reduce or increase the principal balance (except for reductions
resulting from actual payments of principal) or change the final maturity date
on such Mortgage Loan (unless, as provided in Section 3.07, the Mortgagor is in
default with respect to the Mortgage Loan or such default is, in the judgment of
the Master Servicer, reasonably foreseeable) or (ii) permit any modification,
waiver or amendment of any term of any Mortgage Loan that would both (A) effect
an exchange or reissuance of such Mortgage Loan under Section 1001 of the Code
(or final, temporary or proposed Treasury regulations promulgated thereunder)
and (B) cause any of REMIC I, REMIC II or REMIC III to fail to qualify as a
REMIC under the Code or the imposition of any tax on "prohibited transactions"
or "contributions after the startup date" under the REMIC Provisions.

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

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

                  (a) The Master Servicer may enter into Sub-Servicing
Agreements (provided that such agreements would not result in a withdrawal or a
downgrading by any Rating Agency of the ratings on any Class of Certificates and
the the NIMs Insurer shall have consented to such Sub- Servicing Agreement) with
Sub-Servicers, for the servicing and administration of the Mortgage Loans.

                  Each Sub-Servicer shall be (i) authorized to transact business
in the state or states in which the related Mortgaged Properties it is to
service are situated, if and to the extent required by applicable law to enable
the Sub-Servicer to perform its obligations hereunder and under the Sub-
Servicing Agreement, (ii) an institution approved as a mortgage loan originator
by the Federal

                                       63
<PAGE>

Housing Administration or an institution the deposit accounts in which are
insured by the FDIC and (iii) a Freddie Mac or Fannie Mae approved mortgage
servicer. Each Sub-Servicing Agreement must impose on the Sub-Servicer
requirements conforming to the provisions set forth in Section 3.08 and provide
for servicing of the Mortgage Loans consistent with the terms of this Agreement.
The Master Servicer will examine each Sub-Servicing Agreement and will be
familiar with the terms thereof. The terms of any Sub-Servicing Agreement will
not be inconsistent with any of the provisions of this Agreement. The Master
Servicer and the Sub-Servicers may enter into and make amendments to the
Sub-Servicing Agreements or enter into different forms of Sub-Servicing
Agreements; provided, however, that any such amendments or different forms shall
be consistent with and not violate the provisions of this Agreement, and that no
such amendment or different form shall be made or entered into which could be
reasonably expected to be materially adverse to the interests of the
Certificateholders, without the consent of the Holders of Certificates entitled
to at least 66% of the Voting Rights. Any variation without the consent of the
Holders of Certificates entitled to at least 66% of the Voting Rights from the
provisions set forth in Section 3.08 relating to insurance or priority
requirements of Sub-Servicing Accounts, or credits and charges to the Sub-
Servicing Accounts or the timing and amount of remittances by the Sub-Servicers
to the Master Servicer, are conclusively deemed to be inconsistent with this
Agreement and therefore prohibited. The Master Servicer shall deliver to the
Trustee and the NIMs Insurer copies of all Sub-Servicing Agreements, and any
amendments or modifications thereof, promptly upon the Master Servicer's
execution and delivery of such instruments.

                  (b) As part of its servicing activities hereunder, the Master
Servicer (except as otherwise provided in the last sentence of this paragraph),
for the benefit of the Trustee and the Certificateholders, shall enforce the
obligations of each Sub-Servicer under the related Sub-Servicing Agreement and
of the Originator under the Mortgage Loan Purchase Agreement, including, without
limitation, any obligation to make advances in respect of delinquent payments as
required by a Sub- Servicing Agreement, or to purchase a Mortgage Loan on
account of missing or defective documentation or on account of a breach of a
representation, warranty or covenant, as described in Section 2.03(a). Such
enforcement, including, without limitation, the legal prosecution of claims,
termination of Sub-Servicing Agreements, and the pursuit of other appropriate
remedies, shall be in such form and carried out to such an extent and at such
time as the Master Servicer, in its good faith business judgment, would require
were it the owner of the related Mortgage Loans. The Master Servicer shall pay
the costs of such enforcement at its own expense, and shall be reimbursed
therefor only (i) from a general recovery resulting from such enforcement, to
the extent, if any, that such recovery exceeds all amounts due in respect of the
related Mortgage Loans or (ii) from a specific recovery of costs, expenses or
attorneys' fees against the party against whom such enforcement is directed.
Enforcement of the Mortgage Loan Purchase Agreement against the Originator shall
be effected by the Master Servicer to the extent it is not the Originator, and
otherwise by the Trustee, in accordance with the foregoing provisions of this
paragraph.

                  SECTION 3.03.             Successor Sub-Servicers.

                  The Master Servicer, with the consent of the NIMs Insurer,
shall be entitled to terminate any Sub-Servicing Agreement and the rights and
obligations of any Sub-Servicer pursuant to any Sub-Servicing Agreement in
accordance with the terms and conditions of such Sub-Servicing Agreement. In the
event of termination of any Sub-Servicer, all servicing obligations of such Sub-

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Servicer shall be assumed simultaneously by the Master Servicer without any act
or deed on the part of such Sub-Servicer or the Master Servicer, and the Master
Servicer either shall service directly the related Mortgage Loans or shall enter
into a Sub-Servicing Agreement with a successor Sub-Servicer which qualifies
under Section 3.02.

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

                  SECTION 3.04.             Liability of the Master Servicer.

                  Notwithstanding any Sub-Servicing Agreement, any of the
provisions of this Agreement relating to agreements or arrangements between the
Master Servicer and a Sub-Servicer or reference to actions taken through a
Sub-Servicer or otherwise, the Master Servicer shall remain obligated and
primarily liable to the Trustee and the Certificateholders for the servicing and
administering of the Mortgage Loans in accordance with the provisions of Section
3.01 without diminution of such obligation or liability by virtue of such
Sub-Servicing Agreements or arrangements or by virtue of indemnification from
the Sub-Servicer and to the same extent and under the same terms and conditions
as if the Master Servicer alone were servicing and administering the Mortgage
Loans. The Master Servicer shall be entitled to enter into any agreement with a
Sub- Servicer for indemnification of the Master Servicer by such Sub-Servicer
and nothing contained in this Agreement shall be deemed to limit or modify such
indemnification.

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

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

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

                  In the event the Master Servicer shall for any reason no
longer be the master servicer (including termination due to a Master Servicer
Event of Default), the Trustee or its designee shall thereupon assume (or cause
its designee or the successor master servicer for the Trustee appointed pursuant
to Section 7.02 to assume) all of the rights and obligations of the Master
Servicer under each Sub-Servicing Agreement that the Master Servicer may have
entered into, unless the Trustee elects to terminate any Sub-Servicing Agreement
in accordance with its terms as provided in Section 3.03. Upon such assumption,
the Trustee, its designee or the successor servicer for the Trustee

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appointed pursuant to Section 7.02 shall be deemed, subject to Section 3.03, to
have assumed all of the Master Servicer's interest therein and to have replaced
the Master Servicer as a party to each Sub-Servicing Agreement to the same
extent as if each Sub-Servicing Agreement had been assigned to the assuming
party, except that (i) the Master Servicer shall not thereby be relieved of any
liability or obligations under any Sub-Servicing Agreement and (ii) none of the
Trustee, its designee or any successor Master Servicer shall be deemed to have
assumed any liability or obligation of the Master Servicer that arose before it
ceased to be the Master Servicer.

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

                  SECTION 3.07.             Collection of Certain Mortgage Loan
                                            Payments.

                  The Master Servicer shall make reasonable efforts to collect
all payments called for under the terms and provisions of the Mortgage Loans,
and shall, to the extent such procedures shall be consistent with this Agreement
and the terms and provisions of any applicable insurance policies, follow such
collection procedures as it would follow with respect to mortgage loans
comparable to the Mortgage Loans and held for its own account. Consistent with
the foregoing, the Master Servicer may in its discretion (i) waive any late
payment charge or, if applicable, penalty interest, or (ii) extend the due dates
for the Monthly Payments due on a Mortgage Note for a period of not greater than
180 days; provided that any extension pursuant to clause (ii) above shall not
affect the amortization schedule of any Mortgage Loan for purposes of any
computation hereunder, except as provided below; provied further that the NIMs
Insurer's prior written consent shall be required for any modification, waiver
or amendment if the amendment if the aggregate number of outstanding Mortgage
Loans which have been modified, waived or amended exceeds 5% of the number of
Mortgage Loans as of the Cut-off Date and any Subsequent Cut-off Date. In the
event of any such arrangement pursuant to clause (ii) above, the Master Servicer
shall make timely advances on such Mortgage Loan during such extension pursuant
to Section 4.03 and in accordance with the amortization schedule of such
Mortgage Loan without modification thereof by reason of such arrangements.
Notwithstanding the foregoing, in the event that any Mortgage Loan is in default
or, in the judgment of the Master Servicer, such default is reasonably
foreseeable, the Master Servicer, consistent with the standards set forth in
Section 3.01, may also waive, modify or vary any term of such Mortgage Loan
(including modifications that would change the Mortgage Rate, forgive the
payment of principal or interest or extend the final maturity date of such
Mortgage Loan), accept payment from the related Mortgagor of an amount less than
the Stated Principal Balance in final satisfaction of such Mortgage Loan, or
consent to the postponement of strict compliance with any such term or otherwise
grant indulgence to any Mortgagor (any and all such waivers, modifications,
variances, forgiveness of principal or interest, postponements, or indulgences
collectively referred to herein as "forbearance"), provided, however, that in
determining which course of action permitted by this sentence it shall pursue,
the Master Servicer shall adhere to the Loss Mitigation Action Plan. The Master
Servicer's analysis supporting any forbearance and the conclusion that any
forbearance meets the standards of Section 3.01 and the Loss Mitigation Action
Plan shall be reflected in writing in the Mortgage File.

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                  SECTION 3.08.             Sub-Servicing Accounts.

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

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

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

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manner and at a time that avoids the loss of the Mortgaged Property due to a tax
sale or the foreclosure of a tax lien. The Master Servicer assumes full
responsibility for the payment of all such bills and shall effect payments of
all such bills irrespective of the Mortgagor's faithful performance in the
payment of same or the making of the Escrow Payments and shall make advances
from its own funds to effect such payments.

                  SECTION 3.10.             Collection Account and Distribution
                                            Account.

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

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

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

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

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

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

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

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<PAGE>

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

                  (viii) all Prepayment Charges collected by the Master
         Servicer, all Prepayment Charges payable by the Master Servicer
         pursuant to Section 2.03(b)(ii)(A) and all Master Servicer Prepayment
         Charge Payment Amounts payable by the Master Servicer pursuant to
         Section 2.03(b)(ii)(B), subject to Section 2.03(b)(iii); and

                  (ix) [reserved].

                  For purposes of the immediately preceding sentence, the
Cut-off Date with respect to any Qualified Substitute Mortgage Loan shall be
deemed to be the date of substitution.

                  The foregoing requirements for deposit in the Collection
Accounts shall be exclusive, it being understood and agreed that, without
limiting the generality of the foregoing, payments in the nature of late payment
charges, NSF fees, reconveyance fees or assumption fees and other similar fees
and charges need not be deposited by the Master Servicer in the Collection
Account and shall, upon collection, belong to the Master Servicer as additional
compensation for its servicing activities. In the event the Master Servicer
shall deposit in the Collection Account any amount not required to be deposited
therein, it may at any time withdraw such amount from the Collection Account,
any provision herein to the contrary notwithstanding.

                  (b) On behalf of the Trust Fund, the Trustee shall establish
and maintain one or more accounts (such account or accounts, the "Distribution
Account"), held in trust for the benefit of the Certificateholders. On behalf of
the Trust Fund, the Master Servicer shall deliver to the Trustee in immediately
available funds for deposit in the Distribution Account on or before 3:00 p.m.
New York time (i) on the Master Servicer Remittance Date, (A) that portion of
the Available Distribution Amount (calculated without regard to the references
in clause (2) of the definition thereof to amounts that may be withdrawn from
the Distribution Account) for the related Distribution Date then on deposit in
the Collection Account and (B) the sum of all Prepayment Charges collected by
the Master Servicer, all Prepayment Charges payable by the Master Servicer
pursuant to Section 2.03(b)(ii)(A) and all Master Servicer Prepayment Charge
Payment Amounts payable by the Master Servicer pursuant to Section
2.03(b)(ii)(B), subject to Section 2.03(b)(ii) (in each case, to the extent not
related to Principal Prepayments occurring after the related Prepayment Period)
and (ii) on each Business Day as of the commencement of which the balance on
deposit in the Collection Account exceeds $75,000 following any withdrawals
pursuant to the next succeeding sentence, the amount of such excess, but only if
the Collection Account constitutes an Eligible Account solely pursuant to clause
(ii) of the definition of "Eligible Account." If the balance on deposit in the
Collection Account exceeds $75,000 as of the commencement of business on any
Business Day and the Collection Account constitutes an Eligible Account solely
pursuant to clause (ii) of the definition of "Eligible Account," the Master
Servicer shall, on or before 3:00 p.m. New York time on such Business Day,
withdraw from the Collection Account any and all amounts payable or reimbursable
to the Depositor, the Master Servicer, the Trustee or any Sub-Servicer pursuant
to Section 3.11 and shall pay such amounts to the Persons entitled thereto.

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<PAGE>

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

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

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

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

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

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

                  (v) any Stayed Funds, as soon as permitted by the federal
         bankruptcy court having jurisdiction in such matters; and

                  (vi) any amounts required to be paid by the Master Servicer
         pursuant to Section 3.12(b) in connection with any losses realized on
         Permitted Investments with respect to funds held in the Collection
         Account.

                  (e) Promptly upon receipt of any Stayed Funds, whether from
the Master Servicer, a trustee in bankruptcy, or federal bankruptcy court or
other source, the Trustee shall deposit such funds in the Distribution Account,
subject to withdrawal thereof pursuant to Section 7.02(b) or as otherwise
permitted hereunder. In addition, the Trustee shall deposit in the Distribution
Account any amounts required to be deposited pursuant to Section 3.12(c) in
connection with losses realized on Permitted Investments with respect to funds
held in the Distribution Account.

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

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

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

                  (ii) subject to Section 3.16(d), to reimburse the Master
         Servicer for (a) P&I Advances, but only to the extent of amounts
         received which represent Late Collections (net of the related Servicing
         Fees) of Monthly Payments on Mortgage Loans with respect to which such
         P&I Advances were made in accordance with the provisions of Section
         4.03 and (b) subject to Section 4.03(b), any unreimbursed P&I Advances
         to the extent of funds held in the Collection Account for future
         distribution that were not included in Available Funds for the
         preceding Distribution Date;

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

                  (iv) to pay to the Master Servicer as servicing compensation
         (in addition to the Servicing Fee) on the Master Servicer Remittance
         Date any interest or investment income earned on funds deposited in the
         Collection Account or the Interest Coverage Account (other than
         interest or investment income earned on funds deposited in the
         Pre-Funding Account and transferred to the Interest Coverage Account
         pursuant to Section 4.07(c)(iv));

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

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

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

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<PAGE>

                  (viii) to reimburse the NIMs Insurer, the Master Servicer or
         the Trustee, as the case may be, for enforcement expenses reasonably
         incurred in respect of the breach or defect giving rise to the purchase
         obligation under Section 2.03 of this Agreement that were included in
         the Purchase Price of the Mortgage Loan, including any expenses arising
         out of the enforcement of the purchase obligation;

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

                  (x) to pay itself any Prepayment Interest Excess; and

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

                  The Master Servicer shall keep and maintain separate
accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose of
justifying any withdrawal from the Collection Account, to the extent held by or
on behalf of it, pursuant to subclauses (ii), (iii), (iv), (v), (vi), (viii) and
(ix) above. The Master Servicer shall provide written notification to the
Trustee and the NIMs Insurer on or prior to the next succeeding Master Servicer
Reporting Date, upon making any withdrawals from the Collection Account pursuant
to subclause (vii) above.

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

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

                  (ii) to pay to itself the Trustee's Fee and expenses pursuant
         to Section 8.05;

                  (iii) to pay itself any interest income earned on funds
         deposited in the Distribution Account pursuant to Section 3.12(c);

                  (iv) to reimburse itself pursuant to Section 7.01 and Section
         7.02;

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

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

                  (vii) [reserved].

                  SECTION 3.12.             Investment of Funds in the
                                            Pre-Funding Account, the Interest
                                            Coverage Account, the Collection
                                            Account and the Distribution
                                            Account.

                  (a) The Master Servicer may direct any depository institution
maintaining the Pre- Funding Account, the Interest Coverage Account or the
Collection Account (for purposes of this Section 3.12, an "Investment Account"),
and the Trustee, in its individual capacity, may direct any depository
institution maintaining the Distribution Account (for purposes of this Section
3.12, also

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an "Investment Account"), to invest the funds in such Investment Account in one
or more Permitted Investments bearing interest or sold at a discount, and
maturing, unless payable on demand, (i) no later than the Business Day
immediately preceding the date on which such funds are required to be withdrawn
from such account pursuant to this Agreement, if a Person other than the Trustee
is the obligor thereon and (ii) no later than the date on which such funds are
required to be withdrawn from such account pursuant to this Agreement, if the
Trustee is the obligor thereon. All such Permitted Investments shall be held to
maturity, unless payable on demand. Any investment of funds in an Investment
Account shall be made in the name of the Trustee (in its capacity as such) or in
the name of a nominee of the Trustee. The Trustee shall be entitled to sole
possession (except with respect to investment direction of funds held in the
Pre-Funding Account, the Interest Coverage Account and the Collection Account
and any income and gain realized thereon) over each such investment, and any
certificate or other instrument evidencing any such investment shall be
delivered directly to the Trustee or its agent, together with any document of
transfer necessary to transfer title to such investment to the Trustee or its
nominee. In the event amounts on deposit in an Investment Account are at any
time invested in a Permitted Investment payable on demand, the Trustee shall:

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

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

                  (b) All income and gain realized from the investment of funds
deposited in the the Interest Coverage Account, the Pre-Funding Account and the
Collection Account held by or on behalf of the Master Servicer, shall be for the
benefit of the Master Servicer and shall be subject to its withdrawal in
accordance with Section 3.11. The Master Servicer shall deposit in the Pre-
Funding Account, the Interest Coverage Account and the Collection Account the
amount of any loss of principal incurred in respect of any such Permitted
Investment made with funds in such accounts immediately upon realization of such
loss.

                  (c) All income and gain realized from the investment of funds
deposited in the Distribution Account held by or on behalf of the Trustee, shall
be for the benefit of the Trustee and shall be subject to its withdrawal at any
time. The Trustee shall deposit in the Distribution Account, the amount of any
loss of principal incurred in respect of any such Permitted Investment made with
funds in such accounts immediately upon realization of such loss.

                  (d) Except as otherwise expressly provided in this Agreement,
if any default occurs in the making of a payment due under any Permitted
Investment, or if a default occurs in any other performance required under any
Permitted Investment, the Trustee may and, subject to Section 8.01 and Section
8.02(v), upon the request of the NIMs Insurer or the Holders of Certificates
representing more than 50% of the Voting Rights allocated to any Class of
Certificates, shall take

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such action as may be appropriate to enforce such payment or performance,
including the institution and prosecution of appropriate proceedings.

                  SECTION 3.13.             [intentionally omitted]

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

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

                  In the event that the Master Servicer shall obtain and
maintain a blanket policy with an insurer having a General Policy Rating of A:V
or better in Best's Key Rating Guide (or such other rating that is comparable to
such rating) insuring against hazard losses on all of the Mortgage Loans,

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

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

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

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

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person satisfies the underwriting criteria of the Master Servicer. In connection
with any assumption or substitution, the Master Servicer shall apply such
underwriting standards and follow such practices and procedures as shall be
normal and usual in its general mortgage servicing activities and as it applies
to other mortgage loans owned solely by it. The Master Servicer shall not take
or enter into any assumption and modification agreement, however, unless (to the
extent practicable in the circumstances) it shall have received confirmation, in
writing, of the continued effectiveness of any applicable hazard insurance
policy, or a new policy meeting the requirements of this Section is obtained.
Any fee collected by the Master Servicer in respect of an assumption or
substitution of liability agreement will be retained by the Master Servicer as
additional servicing compensation. In connection with any such assumption, no
material term of the Mortgage Note (including but not limited to the related
Mortgage Rate and the amount of the Monthly Payment) may be amended or modified,
except as otherwise required pursuant to the terms thereof or otherwise
permitted under Section 3.01. The Master Servicer shall notify the Trustee and
any respective Custodian that any such substitution or assumption agreement has
been completed by forwarding to the Trustee or to such Custodian, as the case
may be, the executed original of such substitution or assumption agreement,
which document shall be added to the related Mortgage File and shall, for all
purposes, be considered a part of such Mortgage File to the same extent as all
other documents and instruments constituting a part thereof.

                  Notwithstanding the foregoing paragraph or any other provision
of this Agreement, the Master Servicer shall not be deemed to be in default,
breach or any other violation of its obligations hereunder by reason of any
assumption of a Mortgage Loan by operation of law or by the terms of the
Mortgage Note or any assumption which the Master Servicer may be restricted by
law from preventing, for any reason whatever. For purposes of this Section 3.15,
the term "assumption" is deemed to also include a sale (of the Mortgaged
Property) subject to the Mortgage that is not accompanied by an assumption or
substitution of liability agreement.

                  SECTION 3.16.             Realization Upon Defaulted Mortgage
                                            Loans.

                  (a) The Master Servicer shall, consistent with the servicing
standard set forth in Section 3.01 and the Loss Mitigation Action Plan,
foreclose upon or otherwise comparably convert the ownership of properties
securing such of the Mortgage Loans as come into and continue in default and as
to which no satisfactory arrangements can be made for collection of delinquent
payments pursuant to Section 3.07. The Master Servicer shall be responsible for
all costs and expenses incurred by it in any such proceedings; provided,
however, that such costs and expenses will be recoverable as Servicing Advances
by the Master Servicer as contemplated in Section 3.11 and Section 3.23. The
foregoing is subject to the provision that, in any case in which Mortgaged
Property shall have suffered damage from an Uninsured Cause, the Master Servicer
shall not be required to expend its own funds toward the restoration of such
property unless it shall determine in its discretion that such restoration will
increase the proceeds of liquidation of the related Mortgage Loan after
reimbursement to itself for such expenses.

                  (b) Notwithstanding the foregoing provisions of this Section
3.16 or any other provision of this Agreement, with respect to any Mortgage Loan
as to which the Master Servicer has received actual notice of, or has actual
knowledge of, the presence of any toxic or hazardous substance on the related
Mortgaged Property, the Master Servicer shall not, on behalf of the Trustee,

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either (i) obtain title to such Mortgaged Property as a result of or in lieu of
foreclosure or otherwise or (ii) otherwise acquire possession of, or take any
other action with respect to, such Mortgaged Property, if, as a result of any
such action, the Trustee, the Trust Fund or the Certificateholders would be
considered to hold title to, to be a "mortgagee-in-possession" of, or to be an
"owner" or "operator" of such Mortgaged Property within the meaning of the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended from time to time, or any comparable law, unless the Master Servicer has
also previously determined, based on its reasonable judgment and a report
prepared by a Person who regularly conducts environmental audits using customary
industry standards, that:

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

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

                  Notwithstanding the foregoing, if such environmental audit
reveals, or if the Master Servicer has actual knowledge or notice, that such
Mortgaged Property contains such toxic or hazardous wastes or substances, the
Master Servicer shall not foreclose or accept a deed in lieu of foreclosure
without the prior written consent of the NIMs Insurer.

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

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

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<PAGE>

                  (c) (i) The NIMs Insurer may, at its option, purchase a
Mortgage Loan which has become 90 or more days delinquent or for which the
Master Servicer has accepted a deed in lieu of foreclosure. Prior to purchase
pursuant to this Section 3.16(c)(i), the Master Servicer shall be required to
continue to make Advances pursuant to Section 4.04. The NIMs Insurer shall not
use any procedure in selecting Mortgage Loans to be repurchased which is
materially adverse to the interests of the Certificateholders. The NIMs Insurer
shall purchase such delinquent Mortgage Loan at a price equal to the Purchase
Price of such Mortgage Loan. Any such purchase of a Mortgage Loan pursuant to
this Section 3.16(c)(i) shall be accomplished by remittance to the Master
Servicer for deposit in the Collection Account of the amount of the Purchase
Price. The Trustee shall immediately effectuate the conveyance of such
delinquent Mortgage Loan to the NIMs Insurer to the extent necessary, including
the prompt delivery of all documentation to the NIMs Insurer.

                           (ii) During the first full calender month (but
excluding the last Business Day thereof) following a Mortgage Loan or related
REO Property becoming 90 days or more delinquent, the Master Servicer shall have
the option, but not the obligation to purchase from the Trust Fund any such
Mortgage Loan or related REO Property that is then still 90 days or more
delinquent, which the Master Servicer determines in good faith will otherwise
become subject to foreclosure proceedings (evidence of such determination to be
delivered in writing to the Trustee prior to purchase), at a price equal to the
Purchase Price. The Purchase Price for any Mortgage Loan or related REO Property
purchased hereunder shall be deposited in the Collection Account, and the
Trustee, upon written certification of such deposit, shall release or cause to
be released to the Master Servicer the related Mortgage File and shall execute
and deliver such instruments of transfer or assignment, in each case without
recourse, as the Master Servicer shall furnish and as shall be necessary to vest
in the Master Servicer title to any Mortgage Loan or related REO Property
released pursuant hereto.

                  If with respect to any delinquent Mortgage Loan or related REO
Property, the option of the Master Servicer set forth in the preceding paragraph
shall have arisen but the Master Servicer shall have failed to exercise such
option on or before the Business Day preceding the last Business Day of the
calender month following the calender month during which such Mortgage Loan or
related REO Property first became 90 days or more delinquent, then such option
shall automatically expire; provided, however, that if any such Mortgage Loan or
related REO Property shall cease to be 90 days or more delinquent but then
subsequently shall again become 90 days or more delinquent, then the Master
Servicer shall be entitled to another repurchase option with respect to such
Mortgage Loan or REO Property as provided in the preceding paragraph.

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

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Master Servicer as follows: first, to unpaid Servicing Fees; and second, to the
balance of the interest then due and owing. The portion of the recovery so
allocated to unpaid Servicing Fees shall be reimbursed to the Master Servicer or
any Sub-Servicer pursuant to Section 3.11(a)(iii).

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

                  (a) Upon the payment in full of any Mortgage Loan, or the
receipt by the Master Servicer of a notification that payment in full shall be
escrowed in a manner customary for such purposes, the Master Servicer will
promptly notify the Trustee and any related Custodian by a certification in the
form of Exhibit E-2 (which certification shall include a statement to the effect
that all amounts received or to be received in connection with such payment
which are required to be deposited in the Collection Account pursuant to Section
3.10 have been or will be so deposited) of a Servicing Officer and shall request
delivery to it of the Mortgage File. Upon receipt of such certification and
request, the Trustee or such Custodian, as the case may be, shall promptly
release the related Mortgage File to the Master Servicer. No expenses incurred
in connection with any instrument of satisfaction or deed of reconveyance shall
be chargeable to the Collection Account or the Distribution Account.

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

                  (c) Upon written certification of a Servicing Officer, the
Trustee shall execute and deliver to the Master Servicer any court pleadings,
requests for trustee's sale or other documents reasonably necessary to the
foreclosure or trustee's sale in respect of a Mortgaged Property or to any legal
action brought to obtain judgment against any Mortgagor on the Mortgage Note or
Mortgage or to obtain a deficiency judgment, or to enforce any other remedies or
rights provided by the

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Mortgage Note or Mortgage or otherwise available at law or in equity. Each such
certification shall include a request that such pleadings or documents be
executed by the Trustee and a statement as to the reason such documents or
pleadings are required and that the execution and delivery thereof by the
Trustee will not invalidate or otherwise affect the lien of the Mortgage, except
for the termination of such a lien upon completion of the foreclosure or
trustee's sale.

                  SECTION 3.18.             Servicing Compensation.

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

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

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

                  Not later than fifteen days after each Distribution Date, the
Master Servicer shall forward to the Trustee, the NIMs Insurer and the Depositor
a statement prepared by the Master Servicer setting forth the status of the
Collection Account as of the close of business on such Distribution Date and
showing, for the period covered by such statement, the aggregate amount of
deposits into and withdrawals from the Collection Account of each category of
deposit specified in Section 3.10(a) and each category of withdrawal specified
in Section 3.11. Such statement may be in the form of the then current Fannie
Mae Monthly Accounting Report for its Guaranteed Mortgage Pass-Through Program
with appropriate additions and changes, and shall also include information as to
the aggregate of the outstanding principal balances of all of the Mortgage Loans
as of the last day of the calendar month immediately preceding such Distribution
Date. Copies of such statement shall be provided by the Trustee to any
Certificateholder and to any Person identified to the Trustee as a prospective
transferee of a Certificate, upon request at the expense of the requesting
party, provided such statement is delivered by the Master Servicer to the
Trustee.

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                  SECTION 3.20.             Statement as to Compliance.

                  The Master Servicer will deliver to the Trustee, the NIMs
Insurer, the Depositor and each Rating Agency on or before April 30th of each
calendar year commencing in 2003, an Officers' Certificate stating, as to each
signatory thereof, that (i) a review of the activities of the Master Servicer
during the preceding year and of performance under this Agreement has been made
under such officers' supervision and (ii) to the best of such officers'
knowledge, based on such review, the Master Servicer has fulfilled all of its
obligations under this Agreement throughout such year, or, if there has been a
default in the fulfillment of any such obligation, specifying each such default
known to such officer and the nature and status thereof. Copies of any such
statement shall be provided by the Trustee to any Certificateholder and to any
Person identified to the Trustee as a prospective transferee of a Certificate,
upon the request and at the expense of the requesting party, provided that such
statement is delivered by the Master Servicer to the Trustee.

                  SECTION 3.21.             Independent Public Accountants'
                                            Servicing Report.

                  Not later than April 30th of each calendar year commencing in
2003, the Master Servicer, at its expense, shall cause a nationally recognized
firm of independent certified public accountants to furnish to the Master
Servicer a report stating that (i) it has obtained a letter of representation
regarding certain matters from the management of the Master Servicer which
includes an assertion that the Master Servicer has complied with certain minimum
residential mortgage loan servicing standards, identified in the Uniform Single
Attestation Program for Mortgage Bankers established by the Mortgage Bankers
Association of America, with respect to the servicing of residential mortgage
loans during the most recently completed fiscal year and (ii) on the basis of an
examination conducted by such firm in accordance with standards established by
the American Institute of Certified Public Accountants, such representation is
fairly stated in all material respects, subject to such exceptions and other
qualifications that may be appropriate. In rendering its report such firm may
rely, as to matters relating to the direct servicing of residential mortgage
loans by Sub- Servicers, upon comparable reports of firms of independent
certified public accountants rendered on the basis of examinations conducted in
accordance with the same standards (rendered within one year of such report)
with respect to those Sub-Servicers. Immediately upon receipt of such report,
the Master Servicer shall furnish a copy of such report to the Trustee, the NIMs
Insurer and each Rating Agency. Copies of such statement shall be provided by
the Trustee to any Certificateholder upon request at the Master Servicer's
expense, provided that such statement is delivered by the Master Servicer to the
Trustee. In the event such firm of independent certified public accountants
requires the Trustee to agree to the procedures performed by such firm, the
Master Servicer shall direct the Trustee in writing to so agree; it being
understood and agreed that the Trustee will deliver such letter of agreement in
conclusive reliance upon the direction of the Master Servicer, and the Trustee
has not made any independent inquiry or investigation as to, and shall have no
obligation or liability in respect of, the sufficiency, validity or correctness
of such procedures.

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                  SECTION 3.22.             Access to Certain Documentation.

                  The Master Servicer shall provide to the Office of Thrift
Supervision, the FDIC, and any other federal or state banking or insurance
regulatory authority that may exercise authority over any Certificateholder,
access to the documentation regarding the Mortgage Loans required by applicable
laws and regulations. Such access shall be afforded without charge, but only
upon reasonable request and during normal business hours at the offices of the
Master Servicer designated by it. In addition, access to the documentation
regarding the Mortgage Loans will be provided to any Certificateholder, the
Trustee, the NIMs Insurer and to any Person identified to the Master Servicer as
a prospective transferee of a Certificate, upon reasonable request during normal
business hours at the offices of the Master Servicer designated by it at the
expense of the Person requesting such access. In each case, access to any
documentation regarding the Mortgage Loans may be conditioned upon the
requesting party's acknowledgment in writing of a confidentiality agreement
regarding any information that is required to remain confidential under the
Gramm-Leach-Bliley Act of 1999.

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

                  (a) The deed or certificate of sale of any REO Property shall
be taken in the name of the Trustee, or its nominee, in trust for the benefit of
the Certificateholders. Pursuant to the power of attorney granted in Section
3.01, the Master Servicer is hereby authorized to transfer the title of any REO
Property taken in the name of the Trustee to a third party purchaser pursuant to
this Section 3.23 without further documentation of its authority as
attorney-in-fact for the Trustee on behalf of the Trust. The Master Servicer, on
behalf of REMIC I (and on behalf of the Trustee for the benefit of the
Certificateholders), shall either sell any REO Property before the close of the
third taxable year after the year REMIC I acquires ownership of such REO
Property for purposes of Section 860G(a)(8) of the Code or request from the
Internal Revenue Service, no later than 60 days before the day on which the
three-year grace period would otherwise expire, an extension of the three-year
grace period, unless the Master Servicer shall have delivered to the Trustee,
the NIMs Insurer and the Depositor an Opinion of Counsel, addressed to the
Trustee, the NIMs Insurer and the Depositor, to the effect that the holding by
REMIC I of such REO Property subsequent to three years after its acquisition
will not result in the imposition on REMIC I, REMIC II or REMIC III of taxes on
"prohibited transactions" thereof, as defined in Section 860F of the Code, or
cause any of REMIC I, REMIC II or REMIC III to fail to qualify as a REMIC under
Federal law at any time that any Certificates are outstanding. The Master
Servicer shall manage, conserve, protect and operate each REO Property for the
benefit of the Certificateholders and solely for the purpose of its prompt
disposition and sale in a manner which does not cause such REO Property to fail
to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of
the Code or result in the receipt by REMIC I, REMIC II or REMIC III of any
"income from non-permitted assets" within the meaning of Section 860F(a)(2)(B)
of the Code, or any "net income from foreclosure property" which is subject to
taxation under the REMIC Provisions.

                  (b) The Master Servicer shall segregate and hold all funds
collected and received in connection with the operation of any REO Property
separate and apart from its own funds and general assets and shall establish and
maintain with respect to REO Properties an account held in trust for the Trustee
for the benefit of the Certificateholders (the "REO Account"), which shall be an
Eligible Account. The Master Servicer shall be permitted to allow the Collection
Account to

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serve as the REO Account, subject to separate ledgers for each REO Property. The
Master Servicer shall be entitled to retain or withdraw any interest income paid
on funds deposited in the REO Account.

                  (c) The Master Servicer shall have full power and authority,
subject only to the specific requirements and prohibitions of this Agreement
(including the Loss Mitigation Action Plan), to do any and all things in
connection with any REO Property as are consistent with the manner in which the
Master Servicer manages and operates similar property owned by the Master
Servicer or any of its Affiliates, all on such terms and for such period as the
Master Servicer deems to be in the best interests of Certificateholders and
appropriate to effect the prompt disposition and sale of the REO Property. In
connection therewith, the Master Servicer shall deposit, or cause to be
deposited in the clearing account (which account must be an Eligible Account) in
which it customarily deposits payments and collections on mortgage loans in
connection with its mortgage loan servicing activities on a daily basis, and in
no event more than one Business Day after the Master Servicer's receipt thereof,
and shall thereafter deposit in the REO Account, in no event more than two
Business Days after the deposit of such funds into the clearing account, all
revenues received by it with respect to an REO Property and shall withdraw
therefrom funds necessary for the proper operation, management and maintenance
of such REO Property including, without limitation:

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

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

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

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

                  Notwithstanding the Master Servicer's obligation to the
Certificateholders to manage and operate (including the collection of rents from
existing tenants and management of any leases acquired with the REO property to
the extent applicable) the REO Property from the date of acquisition until the
date of sale, the Master Servicer shall not, and shall not direct the Trustee
to:

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

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

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

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

unless, in any such case, the Master Servicer has obtained an Opinion of
Counsel, provided to the Trustee and the NIMs Insurer, to the effect that such
action will not cause such REO Property to fail to qualify as "foreclosure
property" within the meaning of Section 860G(a)(8) of the Code at any time that
it is held by REMIC I, and (B) the Master Servicer has received written
instructions from the Trustee authorizing the specific action to be taken.

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

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

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

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

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

                  The Master Servicer shall be entitled to enter into any
agreement with any Independent Contractor performing services for it related to
its duties and obligations hereunder for indemnification of the Master Servicer
by such Independent Contractor, and nothing in this Agreement shall be deemed to
limit or modify such indemnification. The Master Servicer shall be solely liable
for all fees owed by it to any such Independent Contractor, irrespective of
whether the Master Servicer's compensation pursuant to Section 3.18 is
sufficient to pay such fees. The Master Servicer shall not engage an Independent
Contractor to engage in any activities that the Master

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Servicer would not be permitted to engage in itself in accordance with the other
provisions of this Agreement (including the Loss Mitigation Action Plan).

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

                  (e) Subject to the time constraints set forth in Section
3.23(a), (including the constraint that the Master Servicer hold and manage each
REO Property "solely for the purpose of its prompt disposition") each REO
disposition shall be carried out by the Master Servicer at such price and upon
such terms and conditions as shall be in conformity with the requirements of the
Loss Mitigation Action Plan and as shall be normal and usual in its general
servicing activities for similar properties.

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

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

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

                  The Master Servicer shall deliver to the Trustee for deposit
into the Distribution Account on or before 3:00 p.m. New York time on the Master
Servicer Remittance Date from its own funds an amount equal to the lesser of (i)
the aggregate of the Prepayment Interest Shortfalls for the related Distribution
Date resulting solely from Principal Prepayments during the related Prepayment
Period and (ii) the amount of its aggregate Servicing Fee for the most recently
ended calendar month. The Master Servicer shall not have the right to
reimbursement for any amounts remitted to the Trustee in respect of Prepayment
Interest Shortfalls. Such amounts so remitted shall

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be included in the Available Funds and distributed therewith on the next
Distribution Date. The Master Servicer shall not be obligated to pay any amounts
with respect to Relief Act Interest Shortfalls.

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

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

                  SECTION 3.26.             Advance Facility.

                  (a) The Master Servicer, with the consent of the NIMs Insurer,
is hereby authorized to enter into a facility with any Person which provides
that such Person (an "Advancing Person") may fund P&I Advances and/or Servicing
Advances under this Agreement, although no such facility shall reduce or
otherwise affect the Master Servicer's obligation to fund such P&I Advances
and/or Servicing Advances. To the extent that an Advancing Person funds any P&I
Advance or any Servicing Advance and provides the Trustee with notice
acknowledged by the Master Servicer that such Advancing Person is entitled to
reimbursement directly from the Trustee pursuant to the terms of the Advance
Facility, such Advancing Person shall be entitled to receive reimbursement
pursuant to this Agreement for such amount to the extent provided in Section
3.26(b). Such notice from the Advancing Person must specify the amount of the
reimbursement, the Section of this Agreement that permits the applicable P&I
Advance or Servicing Advance to be reimbursed and the section(s) of the Advance
Facility that entitle the Advancing Person to request reimbursement from the
Trustee, rather than the Master Servicer, and include the Master Servicer's
acknowledgment thereto or proof of an Event of Default under the Advance
Facility. The Trustee shall have no duty or liability with respect to any
calculation of any reimbursement to be paid to an Advancing Person and shall be
entitled to rely without independent investigation on the Advancing Person's
notice provided pursuant to this Section 3.26. An Advancing Person whose
obligations hereunder are limited to the funding of P&I Advances and/or
Servicing Advances shall not be required to meet the qualifications of a
Sub-Servicer pursuant to Section 3.02 hereof. If the terms of a facility
proposed to be entered into with an Advancing Servicer by the Trust Fund would
not materially and adversely affect the interests of any Certificateholder, then
the NIMs Insurer shall not withhold its consent to the Trust Fund's entering
such facility.

                  (b) If an Advancing Person is entitled to reimbursement for
any particular P&I Advance or Servicing Advance as set forth in Section 3.26(a),
then the Master Servicer shall not be permitted to reimburse itself therefor
under Section 3.11(a)(ii), Section 3.11(a)(iii), Section 3.11(a)(vi) or Section
3.11(a)(ix), but instead the Master Servicer shall include such amounts in the
applicable remittance to the Trustee made pursuant to Section 3.10(b) to the
extent of amounts on

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deposit in the Collection Account on the related Master Servicer Remittance
Date. The Trustee is hereby authorized to pay to an Advancing Person
reimbursements for P&I Advances and Servicing Advances from the Distribution
Account to the same extent the Master Servicer would have been permitted to
reimburse itself for such P&I Advances and/or Servicing Advances in accordance
with Section 3.11(a)(ii), Section 3.11(a)(iii), Section 3.11(a)(vi) or Section
3.11(a)(ix), as the case may be, had the Master Servicer made such Advance or
Servicing Advance.

                  SECTION 3.27.             [Reserved].

                  SECTION 3.28              Reserve Fund.

                  (a) No later than the Closing Date, the Trustee shall
establish and maintain with itself a separate, segregated trust account titled,
"Reserve Fund, Bankers Trust Company of California, N.A., as Trustee, in trust
for the registered holders of Ameriquest Mortgage Securities Inc., Floating Rate
Mortgage Pass-Through Certificates, Series 2001-3." On the Closing Date, the
Depositor will deposit, or cause to be deposited, into the Reserve Fund $1,000.

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

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

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

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

                  (e) At the direction of the Holders of a majority in
Percentage Interest in the Class CE Certificates, the Trustee shall direct any
depository institution maintaining the 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 Trustee or an Affiliate manages or advises such investment, and (ii) no
later than the date on which such funds are required to be withdrawn from such
account pursuant to this Agreement, if the Trustee or an Affiliate manages or
advises such investment. If no investment direction of the Holders of a majority
in Percentage Interest in the Class CE Certificates with respect to the Reserve
Fund is received by the Trustee, the Trustee shall invest the funds in such
account in Permitted Investments managed by the Trustee or an Affiliate of the
kind described in clause (vi) of the definition of Permitted Investments.
Interest earned on such investment shall be deposited into the Reserve Fund.

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

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                                   ARTICLE IV

                         PAYMENTS TO CERTIFICATEHOLDERS

                  SECTION 4.01.             Distributions.

                  (a)(1)(A) 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-I Certificates, as the
case may be:

                  (i) first, to the Holders of REMIC I Regular Interest I-LT2,
         in an amount equal to (A) the Uncertificated Interest for such
         Distribution Date, plus (B) any amounts in respect thereof remaining
         unpaid from previous Distribution Dates and second, to the Holders of
         REMIC I Regular Interest I-LT1 and I-LTP, in an amount equal to (A) the
         Uncertificated Interest for such Distribution Date, plus (B) any
         amounts in respect thereof remaining unpaid from previous Distribution
         Dates;

                  (ii) to the Holders of the REMIC I Regular Interest I-LTP, on
         the Distribution Date immediately following the expiration of the
         latest Prepayment Charge term as identified on the Mortgage Loan
         Schedule or any Distribution Date thereafter 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) and clause (ii) above, first,
         to the Holders of REMIC I Regular Interest I-LT1 until the principal
         balance of such REMIC I Regular Interest is reduced to zero and second,
         to the Holders of REMIC I Regular Interest I-LT2 until the principal
         balance of such REMIC I Regular Interest is reduced to zero; and

                  (iv) to the Holders of the Class R-I Certificates, 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 Mortgage Loans received during the related Prepayment
Period will be distributed by REMIC I to the Holders of REMIC I Regular Interest
I-LTP. The payment of the foregoing amounts to the Holders of REMIC I Regular
Interest I-LTP shall not reduce the Uncertificated Balance thereof.

                  (B) On each Distribution Date, the following amounts, in the
following order of priority, 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-II Interest, as the case
may be:

                  (i) first, to the Holders of REMIC II Regular Interest II-LTS,
         in an amount equal to (A) the Uncertificated Interest for such
         Distribution Date, plus (B) any amounts in respect thereof remaining
         unpaid from previous Distribution Dates and then to Holders of REMIC

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         II Regular Interest II-LT1, REMIC Regular Interest II-LT2, REMIC II
         Regular Interest II-LT3, REMIC II Regular Interest II-LT4, REMIC II
         Regular Interest II-LT5, REMIC II Regular Interest II-LT6 and REMIC II
         Regular Interest II-LTP, 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 Interest in
         respect of REMIC II Regular Interest II-LT6 shall be reduced when the
         REMIC II Overcollateralized Amount is less than the REMIC II Required
         Overcollateralized Amount, by the lesser of (x) the amount of such
         difference and (y) the Maximum II-LT6 Uncertificated Interest Deferral
         Amount and such amount will be payable to the Holders of REMIC II
         Regular Interest II-LT2, REMIC II Regular Interest II-LT3, REMIC II
         Regular Interest II-LT4 and REMIC II Regular Interest II-LT5 in the
         same proportion as the Overcollateralization Increase Amount is
         allocated to the Corresponding Certificates;

                  (ii) second, to the Holders of REMIC II Regular Interests, in
         an amount equal to the remainder of the Available Funds for such
         Distribution Date after the distributions made pursuant to clause (i)
         above, allocated as follows:

                  (a) to the Holders of REMIC II Regular Interest II-LT1, 98.00%
of such remainder (other than amounts payable under clause (d) below), until the
Uncertificated Balance of such REMIC II Regular Interest is reduced to zero;

                  (b) to the Holders of REMIC II Regular Interest II-LT2, REMIC
II Regular Interest II-LT3, REMIC II Regular Interest II-LT4 and REMIC II
Regular Interest II-LT5, 1.00% of such remainder (other than amounts payable
under clause (d) below), in the same proportion as principal payments are
allocated to the Corresponding Certificates, until the Uncertificated Balances
of such REMIC II Regular Interests are reduced to zero;

                  (c) to the Holders of REMIC II Regular Interest II-LT6, 1.00%
of such remainder (other than amounts payable under clause (d) below), until the
Uncertificated Balance of such REMIC II Regular Interest is reduced to zero;

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

                  (e) any remaining amount to the Holders of the Class R-II
Interest; and

                  (iii) third, to REMIC II Regular Interest II-LTP, 100% of the
         amount paid in respect of REMIC I Regular Interest I-LTP;

         provided, however, that 98.00% and 2.00% of any principal payments that
are attributable to an Overcollateralization Reduction Amount shall be allocated
to Holders of REMIC II Regular Interest II-LT1 and REMIC II Regular Interest
II-LT6, respectively.

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<PAGE>

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

                  (i) concurrently to the Holders of the Class A Certificates
         and the Holders of the Class S Certificates, an amount equal to the
         Senior Interest Distribution Amount allocable to such Certificates, on
         a pro rata basis;

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

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

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

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

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

                  FIRST, to the Holders of the Class A Certificates, until the
         Certificate Principal Balance of such Class has been reduced to zero;

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

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

                  FOURTH, to the Holders of the Class M-3 Certificates, until
         the Certificate Principal Balance of such Class has been reduced to
         zero.

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

                  FIRST, to the holders of the Class A Certificates, the Class A
         Principal Distribution Amount until the Certificate Principal Balance
         thereof has been reduced to zero;

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

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<PAGE>

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

                  FOURTH, to the holders of the Class M-3 Certificates, the
         Class M-3 Principal Distribution Amount until the Certificate Principal
         Balance thereof has been reduced to zero.

                  (4) On each Distribution Date, the Net Monthly Excess Cashflow
(or, in the case of clause (i) below, the Net Monthly Excess Cashflow exclusive
of any Overcollateralization Reduction Amount) shall be distributed as follows:

                  (i) to the Holders of the Class or Classes of Certificates
         then entitled to receive distributions in respect of principal, in an
         amount equal to the principal portion of any Realized Losses incurred
         or deemed to have been incurred on the Mortgage Loans, applied to
         reduce the Certificate Principal Balance of such Certificates until the
         aggregate Certificate Principal Balance of such Certificates is reduced
         to zero;

                  (ii) to the Holders of the Class or Classes of Certificates
         then entitled to receive distributions in respect of principal, in an
         amount equal to the Overcollateralization Increase Amount, applied to
         reduce the Certificate Principal Balance of such Certificates until the
         aggregate Certificate Principal Balance of such Certificates is reduced
         to zero;

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

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

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

                  (vi) to the Reserve Fund, the amount required by Section
         3.28(b);

                  (vii) to the Holders of the Class CE Certificates the Interest
         Distribution Amount and any remaining Overcollateralization Reduction
         Amount for such Distribution Date; and

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

                  (b) On each Distribution Date, after making the distributions
of the Available Funds as set forth above, the Trustee will FIRST, withdraw from
the Reserve Fund all income from the investment of funds in the Reserve Fund and
distribute such amount to the Holders of the Class CE

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Certificates, and SECOND, withdraw from the Reserve Fund, to the extent of
amounts remaining on deposit therein, the amount of any Net WAC Rate Carryover
Amount for such Distribution Date and distribute such amount first, to the Class
A Certificates, second, to the Class M-1 Certificates, third, to the Class M-2
Certificates and fourth, to the Class M-3 Certificates, in each case to the
extent the Net WAC Carryover Amount is allocable to each such Class.

                  On each Distribution Date, the Trustee shall withdraw any
amounts then on deposit in the Distribution Account that represent Prepayment
Charges collected by the Master Servicer, Prepayment Charges payable by the
Master Servicer pursuant to Section 2.03(b)(ii)(A) and Master Servicer
Prepayment Charge Payment Amounts payable by the Master servicer pursuant to
Section 2.03(b)(ii)(B), subject to Section 2.03(b)(iii), in each case to the
extent not related to Principal Prepayments occurring after the related
Prepayment Period, and the Trustee shall distribute such amounts to the Holders
of the Class P Certificates. Such distributions shall not be applied to reduce
the Certificate Principal Balance of the Class P Certificates.

                  (c) All distributions made with respect to each Class of
Certificates on each Distribution Date shall be allocated PRO RATA among the
outstanding Certificates in such Class based on their respective Percentage
Interests. Payments in respect of each Class of Certificates on each
Distribution Date will be made to the Holders of the respective Class of record
on the related Record Date (except as otherwise provided in Section 4.01(e) or
Section 9.01 respecting the final distribution on such Class), based on the
aggregate Percentage Interest represented by their respective Certificates, and
shall be made by wire transfer of immediately available funds to the account of
any such Holder at a bank or other entity having appropriate facilities
therefor, if such Holder shall have so notified the Trustee in writing at least
five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Certificates having an initial
aggregate Certificate Principal Balance that is in excess of the lesser of (i)
$5,000,000 or (ii) two-thirds of the initial Certificate Principal Balance of
such Class of Certificates, or otherwise by check mailed by first class mail to
the address of such Holder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the Corporate Trust Office or
such other location specified in the notice to Certificateholders of such final
distribution.

                  Each distribution with respect to a Book-Entry Certificate
shall be paid to the Depository, as Holder thereof, and the Depository shall be
responsible for crediting the amount of such distribution to the accounts of its
Depository Participants in accordance with its normal procedures. Each
Depository Participant shall be responsible for disbursing such distribution to
the Certificate Owners that it represents and to each indirect participating
brokerage firm (a "brokerage firm" or "indirect participating firm") for which
it acts as agent. Each brokerage firm shall be responsible for disbursing funds
to the Certificate Owners that it represents. None of the Trustee, the
Certificate Registrar, the Depositor or the Master Servicer shall have any
responsibility therefor except as otherwise provided by this Agreement or
applicable law.

                  (d) The rights of the Certificateholders to receive
distributions in respect of the Certificates, and all interests of the
Certificateholders in such distributions, shall be as set forth in this
Agreement. Neither the Holders of any Class of Certificates nor the Trustee nor
the Master

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Servicer shall in any way be responsible or liable to the Holders of any other
Class of Certificates in respect of amounts properly previously distributed on
the Certificates.

                  (e) Except as otherwise provided in Section 9.01, whenever the
Trustee expects that the final distribution with respect to any Class of
Certificates will be made on the next Distribution Date, the Trustee shall, no
later than five (5) days after the related Determination Date, mail to each
Holder on such date of such Class of Certificates a notice to the effect that:

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

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

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

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

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                  SECTION 4.02.             Statements to Certificateholders.

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

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

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

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

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

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

                  (vi) the number, aggregate principal balance, weighted average
         remaining term to maturity and weighted average Mortgage Rate of the
         Mortgage Loans as of the related Due Date and the number and aggregate
         principle balance of all Subsequent Mortgage Loans added during the
         preceding Due Period;

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

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

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

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

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

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

                  (xiii) the aggregate Certificate Principal Balance of the each
         Class of Certificates, after giving effect to the distributions, and
         allocations of Realized Losses, made on such Distribution Date,
         separately identifying any reduction thereof due to allocations of
         Realized Losses;

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

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

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

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

                  (xviii) the Required Overcollateralized Amount and the Credit
         Enhancement Percentage for such Distribution Date;

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

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

                  (xxi) with respect to any Mortgage Loan as to which
         foreclosure proceedings have been concluded, the loan number and unpaid
         principal balance of such Mortgage Loan as of the date of such
         conclusion of foreclosure proceedings;

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                  (xxii) with respect to Mortgage Loans as to which a Final
         Liquidation has occurred, the number of Mortgage Loans, the unpaid
         principal balance of such Mortgage Loans as of the date of such Final
         Liquidation and the amount of proceeds (including Liquidation Proceeds
         and Insurance Proceeds) collected in respect of such Mortgage Loans;

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

                  (xxiv) the amount on deposit in the Pre-Funding Account, the
         Reserve Account and the Interest Coverage Account as of the
         Determination Date;

                  (xxv) for the distribution occurring on the Distribution Date
         immediately following the end of the Funding Period, the current
         balance on deposit in the Pre-Funding Account that has not been used to
         purchase Subsequent Mortgage Loans and that is being distributed to the
         Class A Certificateholders as a mandatory prepayment of principal, if
         any, on such Distribution Date;

                  (xxvi)   [reserved];

                  (xxvii)  [reserved]; and

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

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

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

                  Within a reasonable period of time after the end of each
calendar year, the Trustee shall furnish to the NIMs Insurer and each Person who
at any time during the calendar year was a Holder of a Regular Certificate a
statement containing the information set forth in subclauses (i) through (iii)
above, aggregated for such calendar year or applicable portion thereof during
which

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

                  Within a reasonable period of time after the end of each
calendar year, the Trustee shall furnish to the NIMs Insurer and 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.
Such obligation of the Trustee shall be deemed to have been satisfied to the
extent that substantially comparable information shall be prepared by the
Trustee and furnished to such Holders pursuant to the rules and regulations of
the Code as are in force from time to time.

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

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

                  SECTION 4.03.             Remittance Reports; P&I Advances.

                  (a) On the Master Servicer Reporting Date, the Master Servicer
shall deliver to the Trustee and the NIMs Insurer by telecopy (or by such other
means as the Master Servicer, the Trustee and the NIMs Insurer may agree from
time to time) a Remittance Report with respect to the related Distribution Date.
Such Remittance Report will include (i) the amount of P&I Advances to be made by
the Master Servicer in respect of the related Distribution Date, the aggregate
amount of P&I Advances outstanding after giving effect to such P&I Advances, and
the aggregate amount of Nonrecoverable P&I Advances in respect of such
Distribution Date and (ii) such other information with respect to the Mortgage
Loans as the Trustee may reasonably require to perform the calculations
necessary to make the distributions contemplated by Section 4.01 and to prepare
the statements to Certificateholders contemplated by Section 4.02. The Trustee
shall not be responsible to recompute, recalculate or verify any information
provided to it by the Master Servicer.

                  (b) The amount of P&I Advances to be made by the Master
Servicer for any Distribution Date shall equal, subject to Section 4.03(d), the
sum of (i) the aggregate amount of Monthly Payments (with each interest portion
thereof net of the related Servicing Fee), due on the related Due Date in
respect of the Mortgage Loans, which Monthly Payments were delinquent as of the
close of business on the related Determination Date and (ii) with respect to
each REO Property, which REO Property was acquired during or prior to the
related Prepayment Period and as to which

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such REO Property an REO Disposition did not occur during the related Prepayment
Period, an amount equal to the excess, if any, of the Monthly Payments (with
each interest portion thereof net of the related Servicing Fee) that would have
been due on the related Due Date in respect of the related Mortgage Loans, over
the net income from such REO Property transferred to the Distribution Account
pursuant to Section 3.23 for distribution on such Distribution Date.

                  On or before 3:00 p.m. New York time on the Master Servicer
Remittance Date, the Master Servicer shall remit in immediately available funds
to the Trustee for deposit in the Distribution Account an amount equal to the
aggregate amount of P&I Advances, if any, to be made in respect of the Mortgage
Loans and REO Properties for the related Distribution Date either (i) from its
own funds or (ii) from the Collection Account, to the extent of funds held
therein for future distribution (in which case, it will cause to be made an
appropriate entry in the records of Collection Account that amounts held for
future distribution have been, as permitted by this Section 4.03, used by the
Master Servicer in discharge of any such P&I Advance) or (iii) in the form of
any combination of (i) and (ii) aggregating the total amount of P&I Advances to
be made by the Master Servicer with respect to the Mortgage Loans and REO
Properties. Any amounts held for future distribution used by the Msater Servicer
to make a P&I Advance as permitted in the preceding sentence or withdrawn by the
Master Servicer as permitted in Section 3.11(a)(ii) in reimbursement of Advances
previously made shall be appropriately reflected in the Master Servicer's
records and replaced by the Master Servicer by deposit in the Collection Account
on or before any future Master Servicer Remittance Date to the extent that the
Available Distribution Amount for the related Distribution Date (determined
without regard to P&I Advances to be made on the Master Servicer Remittance
Date) shall be less than the total amount that would be distributed to the
Classes of Certificateholders pursuant to Section 4.01 on such Distribution Date
if such amounts held for future distributions had not been so used to make P&I
Advances. The Trustee will provide notice to the Master Servicer and the NIMs
Insurer by telecopy by the close of business on any Master Servicer Remittance
Date in the event that the amount remitted by the Master Servicer to the Trustee
on such date is less than the P&I Advances required to be made by the Master
Servicer for the related Distribution Date.

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

                  (d) Notwithstanding anything herein to the contrary, no P&I
Advance or Servicing Advance shall be required to be made hereunder by the
Master Servicer if such P&I Advance or Servicing Advance would, if made,
constitute a Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance. The
determination by the Master Servicer that it has made a Nonrecoverable P&I
Advance or a Nonrecoverable Servicing Advance or that any proposed P&I Advance
or Servicing Advance, if made, would constitute a Nonrecoverable P&I Advance or
Nonrecoverable Servicing Advance, respectively, shall be evidenced by an
Officers' Certificate of the Master Servicer delivered to the Trustee and the
NIMs Insurer.

                  SECTION 4.04.             Allocation of Realized Losses.

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

                  (b) All Realized Losses on the Mortgage Loans shall be
allocated to any REMIC II Regular Interest pursuant to Section 4.04(c), shall be
allocated by the Trustee on each Distribution Date as follows: first, to Net
Monthly Excess Cashflow; second, to the Class CE Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; third, to the
Class M-2 Certificates, until the Certificate Principal Balance thereof has been
reduced to zero; and fourth, to the Class M-1 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero. All Realized
Losses to be allocated to the Certificate Principal Balances of all Classes on
any Distribution Date shall be so allocated after the actual distributions to be
made on such date as provided above. All references above to the Certificate
Principal Balance of any Class of Certificates shall be to the Certificate
Principal Balance of such Class immediately prior to the relevant Distribution
Date, before reduction thereof by any Realized Losses, in each case to be
allocated to such Class of Certificates, on such Distribution Date.

                  Any allocation of Realized Losses to a Mezzanine Certificate
on any Distribution Date shall be made by reducing the Certificate Principal
Balance thereof by the amount so allocated; any allocation of Realized Losses to
a Class CE Certificate shall be made by reducing the amount otherwise payable in
respect thereof pursuant to Section 4.01(a)(4)(x). No allocations of any
Realized Losses shall be made to the Certificate Principal Balances of the Class
A Certificates or the Class P Certificates.

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

                  (c) All Realized Losses on the Mortgage Loans shall be
allocated by the Trustee on each Distribution Date, first to REMIC I Regular
Interest I-LT1, until the Uncertificated Principal

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Balance has been reduced to zero and REMIC I Regular Interest I-LT2 based on
their respective Uncertificated Balances, until the Uncertificated Principal
Balance has been reduced to zero.

                  (d) All Realized Losses on the Mortgage Loans shall be
allocated by the Trustee on each Distribution Date to the following REMIC II
Regular Interests in the specified percentages, as follows: first, to
Uncertificated Interest payable to the REMIC II Regular Interest II-LT1 and
REMIC II Regular Interest II-LT6 up to an aggregate amount equal to the REMIC II
Interest Loss Allocation Amount, 98% and 2%, respectively; second, to the
Uncertificated Balances of the REMIC II Regular Interest II-LT1 and REMIC II
Regular Interest II-LT6 up to an aggregate amount equal to the REMIC II
Principal Loss Allocation Amount, 98% and 2%, respectively; third, to the
Uncertificated Balances of REMIC II Regular Interest II-LT1, REMIC II Regular
Interest II-LT5 and REMIC II Regular Interest II-LT6, 98%, 1% and 1%,
respectively, until the Uncertificated Balance of REMIC II Regular Interest
II-LT5 has been reduced to zero; fourth to the Uncertificated Balances of REMIC
II Regular Interest II-LT1, REMIC II Regular Interest II-LT4 and REMIC II
Regular Interest II-LT6, 98%, 1% and 1%, respectively, until the Uncertificated
Balance of REMIC II Regular Interest II-LT4 has been reduced to zero; and fifth
to the Uncertificated Balances of REMIC II Regular Interest II-LT1, REMIC II
Regular Interest II-LT3 and REMIC II Regular Interest II-LT6, 98%, 1% and 1%,
respectively, until the Uncertificated Balance of REMIC II Regular Interest
II-LT3 has been reduced to zero.

                  SECTION 4.05.             Compliance with Withholding
                                            Requirements.

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

                  SECTION 4.06.             Commission Reporting.

                  Within 15 days after each Distribution Date, the Trustee shall
file with the Commission via the Electronic Data Gathering and Retrieval System,
a Form 8-K with a copy of the statement to Certificateholders for such
Distribution Date as an exhibit thereto. Prior to January 30, 2002, the Trustee
shall file a Form 15 Suspension Notification with respect to the Trust Fund, if
applicable. Prior to March 31, 2002, the Trustee shall file a Form 10-K, in
substance conforming to industry standards, with respect to the Trust Fund. 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 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. Promptly after filing any Form 8-K or Form 10-K
pursuant to this Section 4.06, the Trustee shall deliver a copy of such Form 8-K
or Form 10-K, as the case may be, to the Depositor. 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 and the Mortgage Loans as the Trustee reasonably deems appropriate to
prepare and file all necessary reports with the Commission.

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                  SECTION 4.07.             Pre-Funding Account.

                  (a) No later than the Closing Date, the Trustee shall
establish and maintain a segregated trust account that is an Eligible Account,
which shall be titled "Pre-Funding Account, Bankers Trust Company of California.
N.A. as Trustee for the registered holders of Ameriquest Mortgage Securities
Inc., Floating Rate Mortgage Pass-Through Certificates, Series 2001-3" (the
"Pre-Funding Account"). The Trustee shall, promptly upon receipt, deposit in the
Pre-Funding Account and retain therein the Original Pre-Funded Amount remitted
on the Closing Date to the Trustee by the Depositor. Funds deposited in the
Pre-Funding Account shall be held in trust by the Trustee for the
Certificateholders for the uses and purposes set forth herein.

                  (b) The Trustee will invest funds deposited in the Pre-Funding
Account in Permitted Investments of the kind described in clauses (i), (v) or
(vi) of the definition of Permitted Investments, as directed by the Master
Servicer, with a maturity date no later than the second Business Day preceding
each Distribution Date. For federal income tax purposes, the holder of the
largest Percentage Interest of the Residual Certificates shall be the owner of
the Pre-Funding Account and shall report all items of income, deduction, gain or
loss arising therefrom. All income and gain realized from investment of funds
deposited in the Pre-Funding Account shall be transferred to the Interest
Coverage Account on the Business Day immediately preceding each Distribution
Date. The Master Servicer shall deposit in the Pre-Funding Account the amount of
any net loss incurred in respect of any such Permitted Investment immediately
upon realization of such loss without any right of reimbursement therefor. The
Pre-Funding Account will not be an asset of any of REMIC I, REMIC II or REMIC
III.

                  (c) Amounts on deposit in the Pre-Funding Account shall be
withdrawn by the Trustee as follows:

                  (i) On any Subsequent Transfer Date, the Trustee shall
         withdraw from the Pre- Funding Account an amount equal to 100% of the
         Stated Principal Balances of the Subsequent Mortgage Loans transferred
         and assigned to the Trustee for deposit in the Mortgage Pool on such
         Subsequent Transfer Date and pay such amount to or upon the order of
         the Depositor upon satisfaction of the conditions set forth in Section
         2.11 with respect to such transfer and assignment;

                  (ii) if the amount on deposit in the Pre-Funding Account has
         not been reduced to zero during the Funding Period, on the day
         immediately following the termination of the Funding Period, the
         Trustee shall deposit into the Distribution Account any amounts
         remaining in the Pre-Funding Account, net of any gain realized from the
         investment of funds on deposit therein to the extent not previously
         paid to the Interest Coverage Account, for distribution in accordance
         with the terms hereof;

                  (iii) to withdraw any amount not required to be deposited in
         the Pre-Funding Account or deposited therein in error;

                  (iv) to distribute to the Interest Coverage Account any income
         and gain realized from the investment of funds in the Pre-Funding
         Account; and

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                  (v) to clear and terminate the Pre-Funding Account upon the
         earlier to occur of (A) the day immediately following the end of the
         Funding Period and (B) the termination of this Agreement, with any
         amounts remaining on deposit therein being paid to the Holders of the
         Certificates then entitled to distributions in respect of principal.

                  SECTION 4.08.             Interest Coverage Account.

                  (a) No later than the Closing Date, the Trustee shall
establish and maintain a segregated trust account that is an Eligible Account,
which shall be titled "Interest Coverage Account, Bankers Trust Company of
California, N.A., as Trustee for the registered holders of Ameriquest Mortgage
Securities Inc., Floating Rate Mortgage Pass-Through Certificates, Series
2001-3" (the "Interest Coverage Account"). The Trustee shall, promptly upon
receipt, deposit in the Interest Coverage Account and retain therein the
Interest Coverage Amount remitted on the Closing Date to the Trustee by the
Depositor. Funds deposited in the Interest Coverage Account shall be held in
trust by the Trustee for the Certificateholders for the uses and purposes set
forth herein.

                  (b) The Trustee will invest funds deposited in the Interest
Coverage Account in Permitted Investments of the kind described in clauses (i),
(v) or (vi) of the definition of Permitted Investments, as directed by the
Master Servicer, with a maturity date no later than the second Business Day
preceding each Distribution Date. For federal income tax purposes, the holder of
the largest Percentage Interest of the Residual Certificates shall be the owner
of the Interest Coverage Account and shall report all items of income,
deduction, gain or loss arising therefrom. At no time will the Interest Coverage
Account be an asset of any of REMIC I, REMIC II or REMIC III. All income and
gain realized from investment of funds deposited in the Interest Coverage
Account shall be for the sole and exclusive benefit of the Master Servicer and
shall be remitted by the Trustee to the Master Servicer on the first Business
Day following each Distribution Date. The Master Servicer shall deposit in the
Interest Coverage Account the amount of any net loss incurred in respect of any
such Permitted Investment immediately upon realization of such loss.

                  (c) On the Distribution Date immediately following the end of
the Funding Period, the Trustee shall withdraw from the Interest Coverage
Account and deposit in the Distribution Account an amount, as provided in the
related Remittance Report, equal to (i) 30 days' interest on the Original
Pre-Funded Amount calculated at 4.177% per annum minus (ii) the sum of (1) any
interest payments received by the Master Servicer on Subsequent Mortgage Loans
that were during the related Due Period and (2) any P&I Advance in respect of
the interest portion of delinquent Monthly Payments that were due during the
related Due Period on the Subsequent Mortgage Loans in the Trust and having a
Subsequent Cut-off Date prior to the commencement of such Due Period.

                  (d)      [reserved].

                  (e) Upon the earlier of (i) the Distribution Date immediately
following the end of the Funding Period, (ii) the reduction of the Certificate
Principal Balance of the Class A Certificates and the Mezzanine Certificates to
zero or (iii) the termination of this Agreement in accordance with Section 9.01,
any amount remaining on deposit in the Interest Coverage Account

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after distributions pursuant to paragraph (c) and (d) above shall be withdrawn
by the Trustee and paid to the Depositor or its designee.

                                    ARTICLE V

                                THE CERTIFICATES

                  SECTION 5.01.             The Certificates.

                  (a) The Certificates in the aggregate will represent the
entire beneficial ownership interest in the Mortgage Loans and all other assets
included in REMIC I. At the Closing Date, the aggregate Certificate Principal
Balance of the Certificates will equal the aggregate Stated Principal Balance of
the Mortgage Loans.

                  The Certificates will be substantially in the forms annexed
hereto as Exhibits A-1 through A-8. The Certificates of each Class will be
issuable in registered form only, in denominations of authorized Percentage
Interests as described in the definition thereof. Each Certificate will share
ratably in all rights of the related Class.

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

                  (b) The Class A Certificates, the Class S Certificates and the
Mezzanine Certificates shall initially be issued as one or more Certificates
held by the Book-Entry Custodian or, if appointed to hold such Certificates as
provided below, the Depository and registered in the name of the Depository or
its nominee and, except as provided below, registration of such Certificates may
not be transferred by the Trustee except to another Depository that agrees to
hold such Certificates for the respective Certificate Owners with Ownership
Interests therein. The Certificate Owners shall hold their respective Ownership
Interests in and to such Certificates through the book-entry facilities of the
Depository and, except as provided below, shall not be entitled to definitive,
fully registered Certificates ("Definitive Certificates") in respect of such
Ownership Interests. All transfers by Certificate Owners of their respective
Ownership Interests in the Book- Entry Certificates shall be made in accordance
with the procedures established by the Depository Participant or brokerage firm
representing such Certificate Owner. Each Depository Participant shall

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only transfer the Ownership Interests in the Book-Entry Certificates of
Certificate Owners it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures. The Trustee is
hereby initially appointed as the Book-Entry Custodian and hereby agrees to act
as such in accordance herewith and in accordance with the agreement that it has
with the Depository authorizing it to act as such. The Book-Entry Custodian may,
and if it is no longer qualified to act as such, the Book-Entry Custodian shall,
appoint, by a written instrument delivered to the Depositor, the Master
Servicer, the Trustee (if the Trustee is not the Book-Entry Custodian) and any
other transfer agent (including the Depository or any successor Depository) to
act as Book-Entry Custodian under such conditions as the predecessor Book-Entry
Custodian and the Depository or any successor Depository may prescribe, provided
that the predecessor Book-Entry Custodian shall not be relieved of any of its
duties or responsibilities by reason of any such appointment of other than the
Depository. If the Trustee resigns or is removed in accordance with the terms
hereof, the successor trustee or, if it so elects, the Depository shall
immediately succeed to its predecessor's duties as Book-Entry Custodian. The
Depositor shall have the right to inspect, and to obtain copies of, any
Certificates held as Book-Entry Certificates by the Book-Entry Custodian.

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

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

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of such instructions and may conclusively rely on, and shall be protected in
relying on, such instructions. Upon the issuance of Definitive Certificates all
references herein to obligations imposed upon or to be performed by the
Depository shall be deemed to be imposed upon and performed by the Trustee, to
the extent applicable with respect to such Definitive Certificates, and the
Trustee shall recognize the Holders of the Definitive Certificates as
Certificateholders hereunder.

                  SECTION 5.02.             Registration of Transfer and
                                            Exchange of Certificates.

                  (a) The Trustee shall cause to be kept at one of the offices
or agencies to be appointed by the Trustee in accordance with the provisions of
Section 8.12 a Certificate Register for the Certificates in which, subject to
such reasonable regulations as it may prescribe, the Trustee shall provide for
the registration of Certificates and of transfers and exchanges of Certificates
as herein provided. The Trustee will initially serve as Certificate Registrar
for the purpose of registering Certificates and transfers and exchanges of
Certificates as herein provided. The Certificate Registrar may appoint, by a
written instrument delivered to the Master Servicer and the Depositor, any other
bank or trust company to act as Certificate Registrar under such conditions as
the predecessor Certificate Registrar may prescribe, provided that the
predecessor Certificate Registrar shall not be relieved of any of its duties or
responsibilities hereunder by reason of such appointment. If the Trustee shall
at any time not be the Certificate Registrar, the Trustee shall have and
maintain the right to inspect the Certificate Register or to obtain a copy
thereof at all reasonable times, and to rely conclusively upon a certificate of
the Certificate Registrar as to the information set forth in the Certificate
Register.

                  (b) No transfer of any Class CE Certificate, Class P
Certificate or Residual Certificate shall be made unless that transfer is made
pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and 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 a Class CE Certificate, Class P Certificate or
Residual Certificate is to be made without registration or qualification (other
than in connection with the initial transfer of any such Certificate by the
Depositor to an affiliate of the Depositor), the Trustee and the Certificate
Registrar shall each require receipt of: (i) if such transfer is purportedly
being made in reliance upon Rule 144A under the 1933 Act, written certifications
from the Certificateholder desiring to effect the transfer and from such
Certificateholder's prospective transferee, substantially in the forms attached
hereto as Exhibit F-1; and (ii) in all other cases, an Opinion of Counsel
satisfactory to it that such transfer may be made without such registration or
qualification (which Opinion of Counsel shall not be an expense of the
Depositor, the Trustee, the Master Servicer, in its capacity as such, or the
Trust Fund), together with copies of the written certification(s) of the
Certificateholder desiring to effect the transfer and/or such
Certificateholder's prospective transferee upon which such Opinion of Counsel is
based, if any. None of the Depositor, the Certificate Registrar or the Trustee
is obligated to register or qualify the Class CE Certificates, the Class P
Certificates or the Residual Certificates under the 1933 Act or any other
securities laws or to take any action not otherwise required under this
Agreement to permit the transfer of such Certificates without registration or
qualification. Any Certificateholder desiring to effect the transfer of a Class
CE Certificate, a Class P Certificate or a Residual Certificate shall, and does
hereby agree to, indemnify the Trustee, the Depositor, the Certificate Registrar
and the Master

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Servicer against any liability that may result if the transfer is not so exempt
or is not made in accordance with such federal and state laws.

                  (c) No transfer of a Class CE Certificate, Class P Certificate
or Residual Certificate or any interest therein shall be made to any Plan
subject to ERISA or Section 4975 of the Code, any Person acting, directly or
indirectly, on behalf of any such Plan or any Person acquiring such Certificates
with "Plan Assets" of a Plan within the meaning of the Department of Labor
regulation promulgated at 29 C.F.R. ss. 2510.3-101 ("Plan Assets") unless the
Depositor, the Trustee and the Master Servicer are provided with an Opinion of
Counsel which establishes to the satisfaction of the Depositor, the Trustee and
the Master Servicer 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 or the Trust Fund to any obligation or liability
(including obligations or liabilities under ERISA or Section 4975 of the Code)
in addition to those undertaken in this Agreement, which Opinion of Counsel
shall not be an expense of the Depositor, the Master Servicer, the Trustee or
the Trust Fund. Unless such Opinion of Counsel is provided, any prospective
Transferee of such Certificates must provide a certification in the form of
Exhibit G to this Agreement (or other form acceptable to the Depositor, the
Trustee and the Master Servicer), which the Trustee may rely upon without
further inquiry or investigation. Neither an Opinion of Counsel nor any
certification will be required in connection with the initial transfer of any
such Certificate by the Depositor to an affiliate of the Depositor (in which
case, the Depositor or any affiliate thereof shall have deemed to have
represented that such affiliate is not a Plan or a Person investing Plan Assets)
and the Trustee shall be entitled to conclusively rely upon a representation
(which, upon the request of the Trustee, shall be a written representation) from
the Depositor of the status of such transferee as an affiliate of the Depositor.

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

                  If any Class CE Certificate, Class P Certificate or Residual
Certificate or any interest therein is acquired or held in violation of the
provisions of the preceding paragraph, the next preceding permitted beneficial
owner will be treated as the beneficial owner of that Certificate retroactive to
the date of transfer to the purported beneficial owner. Any purported beneficial
owner whose acquisition or holding of any such Certificate or interest therein
was effected in violation of the provisions of the preceding paragraph shall
indemnify and hold harmless the Depositor, the Master Servicer, the Trustee, the
NIMs Insurer and the Trust Fund from and against any and all liabilities,
claims, costs or expenses incurred by those parties as a result of that
acquisition or holding.

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                  (d) (i) Each Person who has or who acquires any Ownership
Interest in a Residual Certificate shall be deemed by the acceptance or
acquisition of such Ownership Interest to have agreed to be bound by the
following provisions and to have irrevocably authorized the Trustee or its
designee under clause (iii)(A) below to deliver payments to a Person other than
such Person and to negotiate the terms of any mandatory sale under clause
(iii)(B) below and to execute all instruments of Transfer and to do all other
things necessary in connection with any such sale. The rights of each Person
acquiring any Ownership Interest in a Residual Certificate are expressly subject
to the following provisions:

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

                  (B) In connection with any proposed Transfer of any Ownership
         Interest in a Residual Certificate, the Trustee shall require delivery
         to it and shall not register the Transfer of any Residual Certificate
         until its receipt of an affidavit and agreement (a "Transfer Affidavit
         and Agreement"), in the form attached hereto as Exhibit F-2 from the
         proposed Transferee, in form and substance satisfactory to the Trustee,
         representing and warranting, among other things, that such Transferee
         is a Permitted Transferee, that it is not acquiring its Ownership
         Interest in the Residual Certificate that is the subject of the
         proposed Transfer as a nominee, trustee or agent for any Person that is
         not a Permitted Transferee, that for so long as it retains its
         Ownership Interest in a Residual Certificate, it will endeavor to
         remain a Permitted Transferee, and that it has reviewed the provisions
         of this Section 5.02(d) and agrees to be bound by them.

                  (C) Notwithstanding the delivery of a Transfer Affidavit and
         Agreement by a proposed Transferee under clause (B) above, if a
         Responsible Officer of the Trustee who is assigned to this transaction
         has actual knowledge that the proposed Transferee is not a Permitted
         Transferee, no Transfer of an Ownership Interest in a Residual
         Certificate to such proposed Transferee shall be effected.

                  (D) Each Person holding or acquiring any Ownership Interest in
         a Residual Certificate shall agree (x) to require a Transfer Affidavit
         and Agreement from any other Person to whom such Person attempts to
         transfer its Ownership Interest in a Residual Certificate and (y) not
         to transfer its Ownership Interest unless it provides a Transferor
         Affidavit (in the form attached hereto as Exhibit F-2), to the Trustee
         stating that, among other things, it has no actual knowledge that such
         other Person is not a Permitted Transferee.

                  (E) Each Person holding or acquiring an Ownership Interest in
         a Residual Certificate, by purchasing an Ownership Interest in such
         Certificate, agrees to give the Trustee written notice that it is a
         "pass-through interest holder" within the meaning of temporary Treasury
         regulation Section 1.67-3T(a)(2)(i)(A) immediately upon acquiring an
         Ownership Interest in a Residual Certificate, if it is, or is holding
         an Ownership Interest in a Residual Certificate on behalf of, a
         "pass-through interest holder."

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                  (ii) The Trustee will register the Transfer of any Residual
Certificate only if it shall have received the Transfer Affidavit and Agreement
and all of such other documents as shall have been reasonably required by the
Trustee as a condition to such registration. In addition, no Transfer of a
Residual Certificate shall be made unless the Trustee shall have received a
representation letter from the Transferee of such Certificate to the effect that
such Transferee is a Permitted Transferee.

                  (iii)(A) If any purported Transferee shall become a Holder of
a Residual Certificate in violation of the provisions of this Section 5.02(d),
then the last preceding Permitted Transferee shall be restored, to the extent
permitted by law, to all rights as holder thereof retroactive to the date of
registration of such Transfer of such Residual Certificate. The Trustee shall be
under no liability to any Person for any registration of Transfer of a Residual
Certificate that is in fact not permitted by this Section 5.02(d) or for making
any payments due on such Certificate to the holder thereof or for taking any
other action with respect to such holder under the provisions of this Agreement.

                  (B) If any purported Transferee shall become a holder of a
         Residual Certificate in violation of the restrictions in this Section
         5.02(d) and to the extent that the retroactive restoration of the
         rights of the holder of such Residual Certificate as described in
         clause (iii)(A) above shall be invalid, illegal or unenforceable, then
         the Trustee shall have the right, without notice to the holder or any
         prior holder of such Residual Certificate, to sell such Residual
         Certificate to a purchaser selected by the Trustee on such terms as the
         Trustee may choose. Such purported Transferee shall promptly endorse
         and deliver each Residual Certificate in accordance with the
         instructions of the Trustee. Such purchaser may be the Trustee itself
         or any Affiliate of the Trustee. The proceeds of such sale, net of the
         commissions (which may include commissions payable to the Trustee or
         its Affiliates), expenses and taxes due, if any, will be remitted by
         the Trustee to such purported Transferee. The terms and conditions of
         any sale under this clause (iii)(B) shall be determined in the sole
         discretion of the Trustee, and the Trustee shall not be liable to any
         Person having an Ownership Interest in a Residual Certificate as a
         result of its exercise of such discretion.

                  (iv) The Trustee shall make available to the Internal Revenue
Service and those Persons specified by the REMIC Provisions all information
necessary to compute any tax imposed (A) as a result of the Transfer of an
Ownership Interest in a Residual Certificate to any Person who is a Disqualified
Organization, including the information described in Treasury regulations
sections 1.860D-1(b)(5) and 1.860E-2(a)(5) with respect to the "excess
inclusions" of such Residual Certificate and (B) as a result of any regulated
investment company, real estate investment trust, common trust fund,
partnership, trust, estate or organization described in Section 1381 of the Code
that holds an Ownership Interest in a Residual Certificate having as among its
record holders at any time any Person which is a Disqualified Organization.
Reasonable compensation for providing such information may be accepted by the
Trustee.

                  (v) The provisions of this Section 5.02(d) set forth prior to
this subsection (v) may be modified, added to or eliminated, provided that there
shall have been delivered to the Trustee at the expense of the party seeking to
modify, add to or eliminate any such provision the following:

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                  (A) written notification from each Rating Agency to the effect
         that the modification, addition to or elimination of such provisions
         will not cause such Rating Agency to downgrade its then-current ratings
         of any Class of Certificates; and

                  (B) an Opinion of Counsel, in form and substance satisfactory
         to the Trustee, to the effect that such modification of, addition to or
         elimination of such provisions will not cause any of REMIC I, REMIC II
         or REMIC III to cease to qualify as a REMIC and will not cause any of
         REMIC I, REMIC II or REMIC III, as the case may be, to be subject to an
         entity-level tax caused by the Transfer of any Residual Certificate to
         a Person that is not a Permitted Transferee or (y) a Person other than
         the prospective transferee to be subject to a REMIC-tax caused by the
         Transfer of a Residual Certificate to a Person that is not a Permitted
         Transferee.

                  The Trustee shall forward to the NIMs Insurer a copy of the
items delivered to it pursuant to (A) and (B) above.

                  (e) Subject to the preceding subsections, upon surrender for
registration of transfer of any Certificate at any office or agency of the
Trustee maintained for such purpose pursuant to Section 8.12, the Trustee shall
execute and the Certificate Registrar shall authenticate and deliver, in the
name of the designated Transferee or Transferees, one or more new Certificates
of the same Class of a like aggregate Percentage Interest.

                  (f) At the option of the Holder thereof, any Certificate may
be exchanged for other Certificates of the same Class with authorized
denominations and a like aggregate Percentage Interest, upon surrender of such
Certificate to be exchanged at any office or agency of the Trustee maintained
for such purpose pursuant to Section 8.12. Whenever any Certificates are so
surrendered for exchange the Trustee shall execute and cause the Certificate
Registrar to authenticate and deliver the Certificates which the
Certificateholder making the exchange is entitled to receive. Every Certificate
presented or surrendered for transfer or exchange shall (if so required by the
Trustee) be duly endorsed by, or be accompanied by a written instrument of
transfer in the form satisfactory to the Trustee and the Certificate Registrar
duly executed by, the Holder thereof or his attorney duly authorized in writing.
In addition, with respect to each Class R Certificate, the Holder thereof may
exchange, in the manner described above, such Class R Certificate for three
separate Certificates, each representing such Holder's respective Percentage
Interest in the Class R-1 Interest, the Class R-2 Interest and the Class R-3
Interest, respectively, in each case that was evidenced by the Class R
Certificate being exchanged.

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

                  (h) All Certificates surrendered for transfer and exchange
shall be canceled and destroyed by the Certificate Registrar in accordance with
its customary procedures.

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<PAGE>

                  (i) The Trustee will cause the Certificate Registrar (unless
the Trustee is acting as Certificate Registrar) to provide notice to the Trustee
of each transfer of a Certificate and to provide the Trustee with an updated
copy of the Certificate Register on the first Business Day in January and June
of each year, commencing in June 2002.

                  (j) Any attempted or purported transfer of any Certificate in
violation of the provisions of Section 5.02(c) hereof shall be void ab initio
and such Certificate shall be considered to have been held continuously by the
prior permitted Holder.

                  SECTION 5.03.             Mutilated, Destroyed, Lost or Stolen
                                            Certificates.

                  If (i) any mutilated Certificate is surrendered to the Trustee
or the Certificate Registrar, or the Trustee and the Certificate Registrar
receive evidence to their satisfaction of the destruction, loss or theft of any
Certificate, and (ii) there is delivered to the Trustee, the NIMs Insurer and
the Certificate Registrar such security or indemnity as may be required by them
to save each of them harmless, then, in the absence of actual knowledge by the
Trustee or the Certificate Registrar that such Certificate has been acquired by
a bona fide purchaser, the Trustee shall execute and deliver, in exchange for or
in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of the same Class and of like denomination and Percentage Interest.
Upon the issuance of any new Certificate under this Section, the Trustee may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Certificate Registrar) connected therewith. Any
replacement Certificate issued pursuant to this Section shall constitute
complete and indefeasible evidence of ownership in the applicable REMIC created
hereunder, as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.

                  SECTION 5.04.             Persons Deemed Owners.

                  The Depositor, the Master Servicer, the Trustee, the NIMs
Insurer, the Certificate Registrar and any agent of any of them may treat the
Person in whose name any Certificate is registered as the owner of such
Certificate for the purpose of receiving distributions pursuant to Section 4.01
and for all other purposes whatsoever, and none of the Depositor, the Master
Servicer, the Trustee, the Certificate Registrar, the NIMs Insurer for any agent
of any of them shall be affected by notice to the contrary.

                  SECTION 5.05.             Certain Available Information.

                  On or prior to the date of the first sale of any Class CE
Certificate, Class P Certificate or Residual Certificate to an Independent third
party, the Depositor shall provide to the Trustee ten copies of any private
placement memorandum or other disclosure document used by the Depositor in
connection with the offer and sale of the Class CE Certificates, Class P
Certificates or the Residual Certificates. In addition, if any such private
placement memorandum or disclosure document is revised, amended or supplemented
at any time following the delivery thereof to the Trustee, the Depositor
promptly shall inform the Trustee of such event and shall deliver to the Trustee
ten copies of the private placement memorandum or disclosure document, as
revised, amended or supplemented. The Trustee shall maintain at its Corporate
Trust Office and shall make

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available free of charge during normal business hours for review by any Holder
of a Certificate or any Person identified to the Trustee as a prospective
transferee of a Certificate, originals or copies of the following items: (i) in
the case of a Holder or prospective transferee of a Class CE Certificate, a
Class P Certificate or a Residual Certificate, the private placement memorandum
or other disclosure document relating to such Certificates, if any, in the form
most recently provided to the Trustee; and (ii) in all cases, (A) this Agreement
and any amendments hereof entered into pursuant to Section 11.01, (B) all
monthly statements required to be delivered to Certificateholders of the
relevant Class pursuant to Section 4.02 since the Closing Date, and all other
notices, reports, statements and written communications delivered to the
Certificateholders of the relevant Class pursuant to this Agreement since the
Closing Date, (C) all certifications delivered by a Responsible Officer of the
Trustee since the Closing Date pursuant to Section 10.01(h), (D) any and all
Officers' Certificates delivered to the Trustee by the Master Servicer since the
Closing Date to evidence the Master Servicer's determination that any P&I
Advance or Servicing Advance was, or if made, would be a Nonrecoverable P&I
Advance or Nonrecoverable Servicing Advance, respectively, and (E) any and all
Officers' Certificates delivered to the Trustee by the Master Servicer since the
Closing Date pursuant to Section 4.04(a). Copies and mailing of any and all of
the foregoing items will be available from the Trustee upon request at the
expense of the person requesting the same.

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                                   ARTICLE VI

                      THE DEPOSITOR AND THE MASTER SERVICER

                  SECTION 6.01.             Liability of the Depositor and the
                                            Master Servicer.

                  The Depositor and the Master Servicer each shall be liable in
accordance herewith only to the extent of the obligations specifically imposed
by this Agreement and undertaken hereunder by the Depositor and the Master
Servicer herein.

                  SECTION 6.02.             Merger or Consolidation of the
                                            Depositor or the Master Servicer.

                  Subject to the following paragraph, the Depositor will keep in
full effect its existence, rights and franchises as a corporation under the laws
of the jurisdiction of its incorporation. Subject to the following paragraph,
the Master Servicer will keep in full effect its existence, rights and
franchises as a corporation under the laws of the jurisdiction of its
incorporation and its qualification as an approved conventional seller/servicer
for Fannie Mae or Freddie Mac in good standing. The Depositor and the Master
Servicer each will obtain and preserve its qualification to do business as a
foreign corporation in each jurisdiction in which such qualification is or shall
be necessary to protect the validity and enforceability of this Agreement, the
Certificates or any of the Mortgage Loans and to perform its respective duties
under this Agreement.

                  The Depositor or the Master Servicer may be merged or
consolidated with or into any Person, or transfer all or substantially all of
its assets to any Person, in which case any Person resulting from any merger or
consolidation to which the Depositor or the Master Servicer shall be a party, or
any Person succeeding to the business of the Depositor or the Master Servicer,
shall be the successor of the Depositor or the Master Servicer, as the case may
be, hereunder, without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor or surviving Person to
the Master Servicer shall be qualified to service mortgage loans on behalf of
Fannie Mae or Freddie Mac; and provided further that the Rating Agencies'
ratings of the Class A Certificates and the Mezzanine Certificates in effect
immediately prior to such merger or consolidation will not be qualified, reduced
or withdrawn as a result thereof (as evidenced by a letter to such effect from
the Rating Agencies).

                  SECTION 6.03.             Limitation on Liability of the
                                            Depositor, the Master Servicer and
                                            Others.

                  None of the Depositor, the NIMs Insurer, the Master Servicer
or any of the directors, officers, employees or agents of the Depositor or the
Master Servicer shall be under any liability to the Trust Fund or the
Certificateholders for any action taken or for refraining from the taking of any
action in good faith pursuant to this Agreement, or for errors in judgment;
provided, however, that this provision shall not protect the Depositor, the NIMs
Insurer, the Master Servicer or any such person against any breach of
warranties, representations or covenants made herein, or against any specific
liability imposed on the Master Servicer pursuant hereto, or against any
liability which

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would otherwise be imposed by reason of willful misfeasance, bad faith or
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder. The Depositor, the NIMs Insurer, the Master
Servicer and any director, officer, employee or agent of the Depositor or the
Master Servicer may rely in good faith on any document of any kind which, PRIMA
FACIE, is properly executed and submitted by any Person respecting any matters
arising hereunder. The Depositor, the NIMs Insurer, the Master Servicer and any
director, officer, employee or agent of the Depositor, the NIMs Insurer or the
Master Servicer shall be indemnified and held harmless by the Trust Fund against
any loss, liability or expense incurred in connection with any legal action
relating to this Agreement or the Certificates, other than any loss, liability
or expense relating to any specific Mortgage Loan or Mortgage Loans (except as
any such loss, liability or expense shall be otherwise reimbursable pursuant to
this Agreement) or any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or negligence in the performance of duties hereunder or
by reason of reckless disregard of obligations and duties hereunder. Neither the
Depositor, the NIMs Insurer nor the Master Servicer shall be under any
obligation to appear in, prosecute or defend any legal action unless such action
is related to its respective duties under this Agreement and, in its opinion,
does not involve it in any expense or liability; provided, however, that each of
the Depositor, the NIMs Insurer and the Master Servicer may in its discretion
undertake any such action which it may deem necessary or desirable with respect
to this Agreement and the rights and duties of the parties hereto and the
interests of the Certificateholders hereunder. In such event, unless the
Depositor or the Master Servicer acts without the consent of Holders of
Certificates entitled to at least 51% of the Voting Rights (which consent shall
not be necessary in the case of litigation or other legal action by either to
enforce their respective rights or defend themselves hereunder), the legal
expenses and costs of such action and any liability resulting therefrom (except
any loss, liability or expense incurred by reason of willful misfeasance, bad
faith or negligence in the performance of duties hereunder or by reason of
reckless disregard of obligations and duties hereunder) shall be expenses, costs
and liabilities of the Trust Fund, and the Depositor, the NIMs Insurer and the
Master Servicer shall be entitled to be reimbursed therefor from the Collection
Account as and to the extent provided in Section 3.11, any such right of
reimbursement being prior to the rights of the Certificateholders to receive any
amount in the Collection Account.

                  SECTION 6.04.             Limitation on Resignation of the
                                            Master Servicer.

                  The Master Servicer shall not resign from the obligations and
duties hereby imposed on it except (i) upon determination that its duties
hereunder are no longer permissible under applicable law or (ii) with the
written consent of the Trustee, the NIMs Insurer and written confirmation from
each Rating Agency (which confirmation shall be furnished to the Depositor, the
NIMs Insurer and the Trustee) that such resignation will not cause such Rating
Agency to reduce the then current rating of the Class A Certificates or the
Mezzanine Certificates. Any such determination pursuant to clause (i) of the
preceding sentence permitting the resignation of the Master Servicer shall be
evidenced by an Opinion of Counsel to such effect obtained at the expense of the
Master Servicer and delivered to the Trustee and the NIMs Insurer. No
resignation of the Master Servicer shall become effective until the Trustee or a
successor servicer acceptable to the NIMs Insurer shall have assumed the Master
Servicer's responsibilities, duties, liabilities (other than those liabilities
arising prior to the appointment of such successor) and obligations under this
Agreement.

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                  Except as expressly provided herein, the Master Servicer shall
not assign or transfer any of its rights, benefits or privileges hereunder to
any other Person, nor delegate to or subcontract with, nor authorize or appoint
any other Person to perform any of the duties, covenants or obligations to be
performed by the Master Servicer hereunder. If, pursuant to any provision
hereof, the duties of the Master Servicer are transferred to a successor master
servicer, the entire amount of the Servicing Fee and other compensation payable
to the Master Servicer pursuant hereto shall thereafter be payable to such
successor master servicer.

                  SECTION 6.05.             Rights of the Depositor in Respect
                                            of the Master Servicer.

                  The Master Servicer shall afford (and any Sub-Servicing
Agreement shall provide that each Sub-Servicer shall afford) the Depositor, the
NIMs Insurer and the Trustee, upon reasonable notice, during normal business
hours, access to all records maintained by the Master Servicer (and any such
Sub-Servicer) in respect of the Master Servicer's rights and obligations
hereunder and access to officers of the Master Servicer (and those of any such
Sub-Servicer) responsible for such obligations. Upon request, the Master
Servicer shall furnish to the Depositor, the NIMs Insurer and the Trustee its
(and any such Sub-Servicer's) most recent financial statements and such other
information relating to the Master Servicer's capacity to perform its
obligations under this Agreement that it possesses. To the extent such
information is not otherwise available to the public, the Depositor, the NIMs
Insurer and the Trustee shall not disseminate any information obtained pursuant
to the preceding two sentences without the Master Servicer's (or any such
Sub-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, rating
agencies or reinsurers 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
either case, the Depositor, the NIMs Insurer 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.

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                                   ARTICLE VII

                                     DEFAULT

                  SECTION 7.01.             Master Servicer Events of Default.

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

                  (i) any failure by the Master Servicer to remit to the Trustee
         for distribution to the Certificateholders any payment (other than a
         P&I Advance required to be made from its own funds on any Master
         Servicer Remittance Date pursuant to Section 4.03) required to be made
         under the terms of the Certificates and this Agreement which continues
         unremedied for a period of one Business Day after the date upon which
         written notice of such failure, requiring the same to be remedied,
         shall have been given to the Master Servicer by the Depositor or the
         Trustee (in which case notice shall be provided by telecopy), or to the
         Master Servicer, the Depositor and the Trustee by the NIMs Insurer or
         the Holders of Certificates entitled to at least 25% of the Voting
         Rights; or

                  (ii) any failure on the part of the Master Servicer duly to
         observe or perform in any material respect any of the covenants or
         agreements on the part of the Master Servicer contained in the
         Certificates or in this Agreement (or, if the Master Servicer is the
         Originator, the failure of the Originator to repurchase a Mortgage Loan
         as to which a breach has been established that requires a repurchase
         pursuant to the terms of Section 7 of the Mortgage Loan Purchase
         Agreement) which continues unremedied for a period of 45 days after the
         earlier of (i) the date on which written notice of such failure,
         requiring the same to be remedied, shall have been given to the Master
         Servicer by the Depositor or the Trustee, or to the Master Servicer,
         the Depositor and the Trustee by the NIMs Insurer or the Holders of
         Certificates entitled to at least 25% of the Voting Rights and (ii)
         actual knowledge of such failure by a Servicing Officer of the Master
         Servicer; or

                  (iii) a decree or order of a court or agency or supervisory
         authority having jurisdiction in the premises in an involuntary case
         under any present or future federal or state bankruptcy, insolvency or
         similar law or the appointment of a conservator or receiver or
         liquidator in any insolvency, readjustment of debt, marshalling of
         assets and liabilities or similar proceeding, or for the winding-up or
         liquidation of its affairs, shall have been entered against the Master
         Servicer and if such proceeding is being contested by the Master
         Servicer in good faith, such decree or order shall have remained in
         force undischarged or unstayed for a period of 60 days or results in
         the entry of an order for relief or any such adjudication or
         appointment; 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 the Master Servicer or of or relating to all or
         substantially all of its property; or

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

                  (vi) any failure by the Master Servicer of the Master Servicer
         Termination Test; or

                  (vii) any failure of the Master Servicer to make any P&I
         Advance on any Master Servicer Remittance Date required to be made from
         its own funds pursuant to Section 4.03 which continues unremedied until
         3:00 p.m. New York time on the Business Day immediately following the
         Master Servicer Remittance Date.

                  If a Master Servicer Event of Default described in clauses (i)
through (vi) of this Section shall occur, then, and in each and every such case,
so long as such Master Servicer Event of Default shall not have been remedied,
the Depositor, the NIMs Insurer or the Trustee may, and at the written direction
of the Holders of Certificates entitled to at least 51% of Voting Rights, then
at the direction of the NIMs Insurer, the Trustee shall, by notice in writing to
the Master Servicer, terminate all of the rights and obligations of the Master
Servicer in its capacity as Master Servicer under this Agreement, to the extent
permitted by law, and in and to the Mortgage Loans and the proceeds thereof. If
a Master Servicer Event of Default described in clause (vii) hereof shall occur,
the Trustee shall, by notice in writing to the Master Servicer and the
Depositor, terminate all of the rights and obligations of the Master Servicer in
its capacity as Master Servicer under this Agreement and in and to the Mortgage
Loans and the proceeds thereof. On or after the receipt by the Master Servicer
of such written notice, all authority and power of the Master Servicer under
this Agreement, whether with respect to the Certificates (other than as a Holder
of any Certificate) or the Mortgage Loans or otherwise, shall pass to and be
vested in the Trustee pursuant to and under this Section and, without
limitation, the Trustee is hereby authorized and empowered, as attorney-in-fact
or otherwise, to execute and deliver on behalf of and at the expense of the
Master Servicer, any and all documents and other instruments and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Mortgage Loans and related documents, or
otherwise. The Master Servicer agrees, at its sole cost and expense, promptly
(and in any event no later than ten Business Days subsequent to such notice) to
provide the Trustee with all documents and records requested by it to enable it
to assume the Master Servicer's functions under this Agreement, and to cooperate
with the Trustee in effecting the termination of the Master Servicer's
responsibilities and rights under this Agreement, including, without limitation,
the transfer within one Business Day to the Trustee for administration by it of
all cash amounts which at the time shall be or should have been credited by the
Master Servicer to the Collection Account held by or on behalf of the Master
Servicer, the Distribution Account or any REO Account or Servicing Account held
by or on behalf of the Master Servicer or thereafter be received with respect to
the Mortgage Loans or any REO Property serviced by the Master Servicer
(provided, however, that the Master Servicer shall continue to be entitled to
receive all amounts accrued or owing to it under this Agreement on or prior to
the date of such termination, whether in respect of P&I Advances or otherwise,
and shall continue to be entitled to the benefits of Section 6.03,
notwithstanding any such termination, with respect to events occurring prior to
such termination). For purposes of this Section 7.01, the Trustee shall not be
deemed to

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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, REMIC I or this Agreement.

                  The Trustee shall be entitled to be reimbursed by the Master
Servicer (or by the Trust Fund if the Master Servicer is unable to fulfill its
obligations hereunder) for all costs associated with the transfer of servicing
from the predecessor servicer, including without limitation, any costs or
expenses associated with the complete transfer of all servicing data and the
completion, correction or manipulation of such servicing data as may be required
by the Trustee to correct any errors or insufficiencies in the servicing data or
otherwise to enable the Trustee to service the Mortgage Loans properly and
effectively.

                  SECTION 7.02.             Trustee to Act; Appointment of
                                            Successor.

                  (a) On and after the time the Master Servicer receives a
notice of termination, the Trustee shall be the successor in all respects to the
Master Servicer in its capacity as Master Servicer under this Agreement and the
transactions set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto and arising thereafter
placed on the Master Servicer (except for any representations or warranties of
the Master Servicer under this Agreement, the responsibilities, duties and
liabilities contained in Section 2.03(c) its obligation to deposit amounts in
respect of losses pursuant to Section 3.12) by the terms and provisions hereof
including, without limitation, the Master Servicer's obligations to make P&I
Advances pursuant to Section 4.03; provided, however, that if the Trustee is
prohibited by law or regulation from obligating itself to make advances
regarding delinquent mortgage loans, then the Trustee shall not be obligated to
make P&I Advances pursuant to Section 4.03; and provided further, that any
failure to perform such duties or responsibilities caused by the Master
Servicer's failure to provide information required by Section 7.01 shall not be
considered a default by the Trustee as successor to the Master Servicer
hereunder; provided, however, it is understood and acknowledged by the parties
that there will be a period of transition (not to exceed 90 days) before the
servicing transfer is fully effected. As compensation therefor, effective from
and after the time the Master Servicer receives a notice of termination or
immediately upon assumption of the obligations to make P&I Advances, the Trustee
shall be entitled to the Servicing Fee and all funds relating to the Mortgage
Loans to which the Master Servicer would have been entitled if it had continued
to act hereunder (other than amounts which were due or would become due to the
Master Servicer prior to its termination or resignation). Notwithstanding the
above and subject to the next 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 entitled to at least 51% of the Voting Rights or the
NIMs Insurer so request in writing to the Trustee, promptly appoint or petition
a court of competent jurisdiction to appoint, an established mortgage loan
servicing institution acceptable to each Rating Agency and the NIMs Insurer 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 under this
Agreement shall be effective until the assumption by the successor of all of the
Master Servicer's responsibilities, duties and liabilities hereunder. In
connection with such appointment and assumption described herein, the Trustee
may

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make such arrangements for the compensation of such successor out of payments on
Mortgage Loans as it and such successor shall agree; provided, however, that no
such compensation shall be in excess of that permitted the Master Servicer as
such hereunder. The Depositor, the Trustee and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession. Pending appointment of a successor to the Master Servicer under
this Agreement, the Trustee shall act in such capacity as hereinabove provided.

                  Upon removal or resignation of the Master Servicer, the
Trustee, with the cooperation of the Depositor, (x) shall solicit bids for a
successor Master Servicer as described below and (y) pending the appointment of
a successor Master Servicer as a result of soliciting such bids, shall serve as
Master Servicer of the Mortgage Loans serviced by such predecessor Master
Servicer. The Trustee shall solicit, by public announcement, bids from housing
and home finance institutions, banks and mortgage servicing institutions meeting
the qualifications set forth above (including the Trustee or any affiliate
thereof). Such public announcement shall specify that the successor Master
Servicer shall be entitled to the servicing compensation agreed upon between the
Trustee, the successor Master Servicer and the Depositor; provided, however,
that no such fee shall exceed the Servicing Fee. Within thirty days after any
such public announcement, the Trustee, with the cooperation of the Depositor,
shall negotiate in good faith and effect the sale, transfer and assignment of
the servicing rights and responsibilities hereunder to the qualified party
submitting the highest satisfactory bid as to the price they will pay to obtain
such servicing. The Trustee upon receipt of the purchase price shall pay such
purchase price to the Master Servicer being so removed, after deducting from any
sum received by the Trustee from the successor to the Master Servicer in respect
of such sale, transfer and assignment all costs and expenses of any public
announcement and of any sale, transfer and assignment of the servicing rights
and responsibilities reasonably incurred hereunder. After such deductions, the
remainder of such sum shall be paid by the Trustee to the Master Servicer at the
time of such sale.

                  (b) If the Master Servicer fails to remit to the Trustee for
distribution to the Certificateholders any payment required to be made under the
terms of the Certificates and this Agreement (for purposes of this Section
7.02(b), a "Remittance") because the Master Servicer is the subject of a
proceeding under the federal Bankruptcy Code and the making of such Remittance
is prohibited by Section 362 of the federal Bankruptcy Code, the Trustee shall
upon notice of such prohibition, regardless of whether it has received a notice
of termination under Section 7.01, advance the amount of such Remittance by
depositing such amount in the Distribution Account on the related Distribution
Date. The Trustee shall be obligated to make such advance only if (i) such
advance, in the good faith judgment of the Trustee, can reasonably be expected
to be ultimately recoverable from Stayed Funds and (ii) the Trustee is not
prohibited by law from making such advance or obligating itself to do so. Upon
remittance of the Stayed Funds to the Trustee or the deposit thereof in the
Distribution Account by the Master Servicer, a trustee in bankruptcy or a
federal bankruptcy court, the Trustee may recover the amount so advanced,
without interest, by withdrawing such amount from the Distribution Account;
however, nothing in this Agreement shall be deemed to affect the Trustee's
rights to recover from the Master Servicer's own funds interest on the amount of
any such advance. If the Trustee at any time makes an advance under this
Subsection which it later determines in its good faith judgment will not be
ultimately recoverable from the Stayed Funds with respect to which such advance
was made, the Trustee shall be entitled to reimburse itself for such

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advance, without interest, by withdrawing from the Distribution Account, out of
amounts on deposit therein, an amount equal to the portion of such advance
attributable to the Stayed Funds.

                  If the Master Servicer is terminated pursuant to Section 7.01,
then the successor Master Servicer shall not be permitted to reimburse itself
for P&I Advances or Servicing Advances under Section 3.11(a)(ii), Section
3.11(a)(iii), Section 3.11(a)(vi) or Section 3.11(a)(ix), but instead the
successor Master Servicer shall include such amounts in the applicable
remittance to the Trustee made pursuant to Section 3.10(b) to the extent of
amounts on deposit in the Collection Account on the related Master Servicer
Remittance Date. The Trustee is hereby authorized to pay to the terminated
Master Servicer and the successor Master Servicer, as applicable, reimbursements
for P&I Advances and Servicing Advances from the Distribution Account to the
same extent the Master Servicer would have been permitted to reimburse itself
for such P&I Advances and/or Servicing Advances in accordance with Section
3.11(a)(ii), Section 3.11(a)(iii), Section 3.11(a)(vi) or Section 3.11(a)(ix),
as the case may be. 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.

                  SECTION 7.03.             Notification to Certificateholders.

                  (a) Upon any termination of the Master Servicer pursuant to
Section 7.01 above or any appointment of a successor to the Master Servicer
pursuant to Section 7.02 above, the Trustee shall give prompt written notice
thereof to Certificateholders and the NIMs Insurer 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 NIMs Insurer and to all Holders
of Certificates notice of each such occurrence, unless such default or Master
Servicer Event of Default shall have been cured or waived.

                  SECTION 7.04.             Waiver of Master Servicer Events of
                                            Default.

                  The Holders representing at least 66% of the Voting Rights
(with the consent of the NIMs Insurer) evidenced by all Classes of Certificates
affected by any default or Master Servicer Event of Default hereunder may waive
such default or Master Servicer Event of Default; provided, however, that a
default or Master Servicer Event of Default under clause (i) or (vii) of Section
7.01 may be waived only by all of the Holders of the Regular Certificates (with
the consent of the NIMs Insurer). Upon any such waiver of a default or Master
Servicer Event of Default, such default or Master Servicer Event of Default
shall cease to exist and shall be deemed to have been remedied for every purpose
hereunder. No such waiver shall extend to any subsequent or other default or
Master Servicer Event of Default or impair any right consequent thereon except
to the extent expressly so waived.

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                                  ARTICLE VIII

                             CONCERNING THE TRUSTEE

                  SECTION 8.01.             Duties of Trustee.

                  The Trustee, prior to the occurrence of a Master Servicer
Event of Default and after the curing of all Master Servicer Events of Default
which may have occurred, undertakes to perform such duties and only such duties
as are specifically set forth in this Agreement. During a Master Servicer Event
of Default, the Trustee shall exercise such of the rights and powers vested in
it by this Agreement, and use the same degree of care and skill in their
exercise as a prudent person would exercise or use under the circumstances in
the conduct of such person's own affairs. Any permissive right of the Trustee
enumerated in this Agreement shall not be construed as a duty.

                  The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform on their face to the requirements of this Agreement. If any such
instrument is found not to conform on its face to the requirements of this
Agreement in a material manner, the Trustee shall take such action as it deems
appropriate to have the instrument corrected, and if the instrument is not
corrected to the Trustee's satisfaction, the Trustee will provide notice thereof
to the Certificateholders and the NIMs Insurer.

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

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

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

                  (iii) The Trustee shall not be personally liable with respect
         to any action taken, suffered or omitted to be taken by it in good
         faith in accordance with the direction of the NIMs Insurer or the
         Holders of Certificates entitled to at least 25% of the Voting Rights
         relating to the time, method and place of conducting any proceeding for
         any remedy available

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         to the Trustee, or exercising any trust or power conferred upon the
         Trustee, under this Agreement.

                  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 under this Agreement, except during
such time, if any, as the Trustee shall be the successor to, and be vested with
the rights, duties, powers and privileges of, the Master Servicer in accordance
with the terms of this Agreement.

                  SECTION 8.02.             Certain Matters Affecting the
                                            Trustee.

                  (a) Except as otherwise provided in Section 8.01:

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

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

                  (iii) The Trustee shall be under no 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 or the
         NIMs Insurer, pursuant to the provisions of this Agreement, unless such
         Certificateholders or the NIMs Insurer, as applicable, 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 a Master Servicer Event of
         Default (which has not been cured or waived), to exercise such of the
         rights and powers vested in it by this Agreement, and to use the same
         degree of care and skill in their exercise as a prudent person would
         exercise or use under the circumstances in the conduct of such person's
         own affairs;

                  (iv) The Trustee shall not be personally liable for any action
         taken, suffered or omitted by it in good faith and believed by it to be
         authorized or within the discretion or rights or powers conferred upon
         it by this Agreement;

                  (v) Prior to the occurrence of a Master Servicer Event of
         Default hereunder and after the curing of all Master Servicer Events of
         Default which may have occurred, the Trustee shall not be bound to make
         any investigation into the facts or matters stated in any

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         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 NIMs Insurer or
         the Holders of Certificates entitled to at least 25% of the Voting
         Rights; provided, however, that if the payment within a reasonable time
         to the Trustee of the costs, expenses or liabilities likely to be
         incurred by it in the making of such investigation is, in the opinion
         of the Trustee, not reasonably assured to the Trustee by such
         Certificateholders, the Trustee may require reasonable indemnity
         against such expense, or liability from such Certificateholders or the
         NIMs Insurer 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

                  (vii) The Trustee shall not be personally liable for any loss
         resulting from the investment of funds held in the Collection Account
         at the direction of the Master Servicer pursuant to Section 3.12.

                  (b) All rights of action under this Agreement or under any of
the Certificates, enforceable by the Trustee, may be enforced by it without the
possession of any of the Certificates, or the production thereof at the trial or
other proceeding relating thereto, and any such suit, action or proceeding
instituted by the Trustee shall be brought in its name for the benefit of all
the Holders of such Certificates, subject to the provisions of this Agreement.

                  SECTION 8.03.             Trustee Not Liable for Certificates
                                            or Mortgage Loans.

                  The recitals contained herein and in the Certificates (other
than the signature of the Trustee, the authentication of the Certificate
Registrar on the Certificates, the acknowledgments of the Trustee contained in
Article II and the representations and warranties of the Trustee in Section
8.13) shall be taken as the statements of the Depositor and the Trustee assumes
no responsibility for their correctness. The Trustee makes no representations or
warranties as to the validity or sufficiency of this Agreement (other than as
specifically set forth in Section 8.13) or of the Certificates (other than the
signature of the Trustee and authentication of the Certificate Registrar on the
Certificates) or of any Mortgage Loan or related document. The Trustee shall not
be accountable for the use or application by the Depositor of any of the
Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Depositor or the Master Servicer in respect
of the Mortgage Loans or deposited in or withdrawn from the Collection Account
by the Master Servicer, other than any funds held by or on behalf of the Trustee
in accordance with Section 3.10.

                  SECTION 8.04.             Trustee May Own Certificates.

                  The Trustee in its individual capacity or any other capacity
may become the owner or pledgee of Certificates with the same rights it would
have if it were not Trustee.

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                  SECTION 8.05.             Trustee's Fees and Expenses.

                  (a) The Trustee shall withdraw from the Distribution Account
on each Distribution Date and pay to itself the Trustee Fee and, to the extent
that the funds therein are at any time insufficient for such purpose, the
Depositor shall pay such fees. The Trustee, or any director, officer, employee
or agent of the Trustee, shall be indemnified by REMIC I and held harmless
against any loss, liability or expense (not including expenses, disbursements
and advances incurred or made by the Trustee, including the compensation and the
expenses and disbursements of its agents and counsel, in the ordinary course of
the Trustee's performance in accordance with the provisions of this Agreement)
incurred by the Trustee in connection with any claim or legal action or any
pending or threatened claim or legal action arising out of or in connection with
the acceptance or administration of its obligations and duties under this
Agreement, other than any loss, liability or expense (i) resulting from a breach
of the Master Servicer's obligations and duties under this Agreement and the
Mortgage Loans, (ii) that constitutes a specific liability of the Trustee
pursuant to Section 10.01(c) or (iii) any loss, liability or expense incurred by
reason of willful misfeasance, bad faith or negligence in the performance of
duties hereunder or by reason of reckless disregard of obligations and duties
hereunder or as a result of a breach of the Trustee's obligations under Article
X hereof. Any amounts payable to the Trustee, or any director, officer, employee
or agent of the Trustee, in respect of the indemnification provided by this
paragraph (a), or pursuant to any other right of reimbursement from the Trust
Fund that the Trustee, or any director, officer, employee or agent of the
Trustee, may have hereunder in its capacity as such, may be withdrawn by the
Trustee from the Distribution Account at any time.

                  (b) The Master Servicer agrees to indemnify the Trustee from,
and hold it harmless against, any loss, liability or expense resulting from a
breach of the Master Servicer's obligations and duties under this Agreement.
Such indemnity shall survive the termination or discharge of this Agreement and
the resignation or removal of the Trustee. Any payment hereunder made by the
Master Servicer to the Trustee shall be from the Master Servicer's own funds,
without reimbursement from the Trust Fund therefor.

                  (c) The Master Servicer shall pay any annual rating agency
fees of Moody's and S&P for ongoing surveillance from its own funds without
right of reimbursement.

                  SECTION 8.06.             Eligibility Requirements for
                                            Trustee.

                  The Trustee hereunder shall at all times be a corporation or
an association (other than the Depositor, the Originator, the Master Servicer or
any Affiliate of the foregoing) organized and doing business under the laws of
any state or the United States of America, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000 and 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 shall cease to be
eligible in accordance with the provisions of this

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Section, the Trustee shall resign immediately in the manner and with the effect
specified in Section 8.07.

                  SECTION 8.07.             Resignation and Removal of the
                                            Trustee.

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

                  If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.06 and shall fail to resign after
written request therefor by the Depositor or the NIMs Insurer, or if at any time
the Trustee shall become incapable of acting, or shall be adjudged bankrupt or
insolvent, or a receiver of the Trustee or of its property shall be appointed,
or any public officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Depositor or the NIMs Insurer may remove the Trustee and
appoint a successor trustee acceptable to the NIMs Insurer by written
instrument, in duplicate, which instrument shall be delivered to the Trustee so
removed and to the successor trustee. A copy of such instrument shall be
delivered to the Certificateholders and the Master Servicer by the Depositor.

                  The Holders of Certificates entitled to at least 51% of the
Voting Rights (or the NIMs Insurer upon failure of the Trustee to perform its
obligations hereunder) may at any time remove the Trustee and appoint a
successor trustee acceptable to the NIMs Insurer by written instrument or
instruments, in triplicate, signed by such Holders or their attorneys-in-fact
duly authorized, one complete set of which instruments shall be delivered to the
Depositor, one complete set to the Trustee so removed and one complete set to
the successor so appointed. A copy of such instrument shall be delivered to the
Certificateholders and the Master Servicer by the Depositor.

                  Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall not
become effective until acceptance of appointment by the successor trustee as
provided in Section 8.08.

                  SECTION 8.08.             Successor Trustee.

                  Any successor trustee appointed as provided in Section 8.07
shall execute, acknowledge and deliver to the Depositor, the NIMs Insurer and to
its predecessor trustee an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor trustee shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee herein. The predecessor

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trustee shall deliver to the successor trustee all Mortgage Files and related
documents and statements, as well as all moneys, held by it hereunder (other
than any Mortgage Files at the time held by a Custodian, which Custodian shall
become the agent of any successor trustee hereunder), and the Depositor and the
predecessor trustee shall execute and deliver such instruments and do such other
things as may reasonably be required for more fully and certainly vesting and
confirming in the successor trustee all such rights, powers, duties and
obligations.

                  No successor trustee shall accept appointment as provided in
this Section unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 8.06 and the appointment of such
successor trustee shall not result in a downgrading of any Class of Certificates
by either Rating Agency, as evidenced by a letter from each Rating Agency.

                  Upon acceptance of appointment by a successor trustee as
provided in this Section, the Depositor shall mail notice of the succession of
such trustee hereunder to all Holders of Certificates at their addresses as
shown in the Certificate Register. If the Depositor fails to mail such notice
within 10 days after acceptance of appointment by the successor trustee, the
successor trustee shall cause such notice to be mailed at the expense of the
Depositor.

                  SECTION 8.09.             Merger or Consolidation of Trustee.

                  Any corporation or association into which the Trustee may be
merged or converted or with which it may be consolidated or any corporation or
association resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation or association succeeding to the
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation or association shall be eligible under the provisions
of Section 8.06, without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding.

                  SECTION 8.10.             Appointment of Co-Trustee or
                                            Separate Trustee.

                  Notwithstanding any other provisions hereof, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of REMIC I or property securing the same may at the time be located, the
Master Servicer and the Trustee acting jointly shall have the power and shall
execute and deliver all instruments to appoint one or more Persons approved by
the Trustee and the NIMs Insurer to act as co-trustee or co-trustees, jointly
with the Trustee, or separate trustee or separate trustees, of all or any part
of REMIC I, and to vest in such Person or Persons, in such capacity, such title
to REMIC I, or any part thereof, and, subject to the other provisions of this
Section 8.10, such powers, duties, obligations, rights and trusts as the Master
Servicer and the Trustee may consider necessary or desirable. Any such
co-trustee or separate trustee shall be subject to the written approval of the
Master Servicer and the NIMs Insurer. If the Master Servicer and the NIMs
Insurer shall not have joined in such appointment within 15 days after the
receipt by it of a request so to do, or in case a Master Servicer Event of
Default shall have occurred and be continuing, the Trustee alone shall have the
power to make such appointment. No co-trustee or separate trustee hereunder
shall be required to meet the terms of eligibility as a successor trustee under
Section 8.06 hereunder and no notice to Holders of Certificates of the
appointment of co-trustee(s) or separate trustee(s) shall be required under
Section 8.08 hereof.

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<PAGE>

                  In the case of any appointment of a co-trustee or separate
trustee pursuant to this Section 8.10 all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed by the Trustee (whether as
Trustee hereunder or as successor to the Master Servicer hereunder), the Trustee
shall be incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including the holding of title to
REMIC I or any portion thereof in any such jurisdiction) shall be exercised and
performed by such separate trustee or co-trustee at the direction of the
Trustee.

                  Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VIII. Each separate trustee and co-trustee, upon
its acceptance of the trust conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Trustee. Every such instrument shall be filed with the Trustee and a
copy thereof given to the Depositor, the Master Servicer and the NIMs Insurer.

                  Any separate trustee or co-trustee may, at any time,
constitute the Trustee, its agent or attorney-in-fact, with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.

                  SECTION 8.11.             Appointment of Custodians.

                  The Trustee may, with the consent of the Depositor and the
Master Servicer, appoint one or more Custodians to hold all or a portion of the
Mortgage Files as agent for the Trustee, by entering into a Custodial Agreement.
The appointment of any Custodian may at any time be terminated and a substitute
Custodian appointed therefor upon the reasonable request of the Master Servicer
to the Trustee, the consent to which shall not be unreasonably withheld. The
Trustee shall pay any and all fees and expenses of any Custodian in accordance
with each Custodial Agreement (provided that if expenses of the kind that would
be reimbursable to the Trustee pursuant to Section 8.05 if incurred by the
Trustee are incurred by the Custodian, the Trustee shall be entitled to
reimbursement under Section 8.05 for such kind of expenses to the extent the
Trustee has paid such expenses on behalf of the Custodian or for which the
Trustee has reimbursed the Custodian). The Trustee initially appoints the
Custodian as Custodian, and the Depositor and the Master Servicer consent to
such appointment. Subject to Article VIII hereof, the Trustee agrees to comply
with the terms of each Custodial Agreement and to enforce the terms and
provisions thereof against the Custodian for the benefit of the
Certificateholders having an interest in any Mortgage File held by such
Custodian. Each Custodian shall be a depository institution or trust company
subject to supervision by federal or state authority, shall have combined
capital and surplus of at least

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$10,000,000 and shall be qualified to do business in the jurisdiction in which
it holds any Mortgage File. Each Custodial Agreement may be amended only as
provided in Section 11.01. In no event shall the appointment of any Custodian
pursuant to a Custodial Agreement diminish the obligations of the Trustee
hereunder.

                  SECTION 8.12.             Appointment of Office or Agency.

                  The Trustee will appoint an office or agency in the City of
New York where the Certificates may be surrendered for registration of transfer
or exchange, and presented for final distribution, and where notices and demands
to or upon the Trustee in respect of the Certificates and this Agreement may be
served.

                  SECTION 8.13.             Representations and Warranties of
                                            the Trustee.

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

                  (i) The Trustee is a national banking association duly
         organized, validly existing and in good standing under the laws of the
         United States.

                  (ii) The execution and delivery of this Agreement by the
         Trustee, and the performance and compliance with the terms of this
         Agreement by the Trustee, will not violate the Trustee's charter 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) The Trustee 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 Master Servicer and the Depositor, constitutes a valid,
         legal and binding obligation of the Trustee, enforceable against the
         Trustee 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) The Trustee 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 the Trustee's good faith and reasonable
         judgment, is likely to affect materially and adversely either the
         ability of the Trustee to perform its obligations under this Agreement
         or the financial condition of the Trustee.

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                  (vi) No litigation is pending or, to the best knowledge,
         threatened against the Trustee which would prohibit the Trustee from
         entering into this Agreement or, in the Trustee's good faith reasonable
         judgment, is likely to materially and adversely affect either the
         ability of the Trustee to perform its obligations under this Agreement
         or the financial condition of the Trustee.

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                                   ARTICLE IX

                                   TERMINATION

                  SECTION 9.01              Termination Upon Repurchase or
                                            Liquidation of All Mortgage Loans.

                  (a) Subject to Section 9.02, the respective obligations and
responsibilities under this Agreement of the Depositor, the Master Servicer and
the Trustee (other than the obligations of the Master Servicer to the Trustee
pursuant to Section 8.05 and of the Master Servicer to provide for and the
Trustee to make payments in respect of the REMIC I Regular Interests, the REMIC
II Regular Interests or the Classes of Certificates as hereinafter set forth)
shall terminate upon payment to the Certificateholders and the deposit of all
amounts held by or on behalf of the Trustee and required hereunder to be so paid
or deposited on the Distribution Date coinciding with or following the earlier
to occur of (i) the purchase by the Terminator (as defined below) of all
Mortgage Loans and each REO Property remaining in REMIC I and (ii) the final
payment or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan or REO Property remaining in REMIC I; provided, however, that in
no event shall the trust created hereby continue beyond the expiration of 21
years from the death of the last survivor of the descendants of Joseph P.
Kennedy, the late ambassador of the United States to the Court of St. James,
living on the date hereof. The purchase by the Terminator of all Mortgage Loans
and each REO Property remaining in REMIC I shall be at a price (the "Termination
Price") equal to the greater of (A) the aggregate Purchase Price of all the
Mortgage Loans included in REMIC I, plus the appraised value of each REO
Property, if any, included in REMIC I, such appraisal to be conducted by an
appraiser mutually agreed upon by the Terminator and the Trustee in their
reasonable discretion and (B) the aggregate fair market value of all of the
assets of REMIC I (as determined by the Terminator and the Trustee, as of the
close of business on the third Business Day next preceding the date upon which
notice of any such termination is furnished to Certificateholders pursuant to
the third paragraph of this Section 9.01).

                  (b) The Master Servicer (or if the Master Servicer Fails to
exercise such right, the NIMs Insurer) shall have the right (the party
exercising such right, the "Terminator"), to purchase all of the Mortgage Loans
and each REO Property remaining in REMIC I pursuant to clause (i) of the
preceding paragraph no later than the Determination Date in the month
immediately preceding the Distribution Date on which the Certificates will be
retired; provided, however, that the Terminator may elect to purchase all of the
Mortgage Loans and each REO Property remaining in REMIC I pursuant to clause (i)
above only (A) if the aggregate Stated Principal Balance of the Mortgage Loans
and each REO Property remaining in the Trust Fund at the time of such election
is less than 10% of the sum of the aggregate Stated Principal Balance of the
Initial Mortgage Loans as of the Cut-off Date and the Original Pre-Funded Amount
and (B) if the Terminator is the Master Servicer and is an affiliate of the
Originator, the Master Servicer shall have delivered to the Trustee and the NIMs
Insurer a written certification that the burdens of servicing the Mortgage Loans
and REO Properties remaining in REMIC I exceed the benefits of the Servicing
Fees that would be realized by the Master Servicer if it continued to service
such assets on behalf of the Trust Fund. By acceptance of the Residual
Certificates, the Holders of the Residual Certificates agree, in connection with
any termination hereunder, to assign and transfer any amounts in excess of par,
and

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<PAGE>

to the extent received in respect of such termination, to pay any such amounts
to the Holders of the Class CE Certificates.

                  (c) Notice of the liquidation of the REMIC I Regular Interests
shall be given promptly by the Trustee by letter to Certificateholders mailed
(a) in the event such notice is given in connection with the purchase of the
Mortgage Loans and each REO Property by the Terminator, not earlier than the
15th day and not later than the 25th day of the month next preceding the month
of the final distribution on the Certificates or (b) otherwise during the month
of such final distribution on or before the Determination Date in such month, in
each case specifying (i) the Distribution Date upon which the Trust Fund will
terminate and final payment in respect of the REMIC I Regular Interests, the
REMIC II Regular Interests and the Certificates will be made upon presentation
and surrender of the related Certificates at the office of the Trustee therein
designated, (ii) the amount of any such final payment, (iii) that no interest
shall accrue in respect of the REMIC I Regular Interests, the REMIC II Regular
Interests or the Certificates from and after the Interest Accrual Period
relating to the final Distribution Date therefor and (iv) that the Record Date
otherwise applicable to such Distribution Date is not applicable, payments being
made only upon presentation and surrender of the Certificates at the office of
the Trustee. The Trustee shall give such notice to the Certificate Registrar at
the time such notice is given to Certificateholders. In the event such notice is
given in connection with the purchase of all of the Mortgage Loans and each REO
Property remaining in REMIC I by the Terminator, the Terminator shall deliver to
the Trustee for deposit in the Distribution Account not later than the last
Business Day of the month next preceding the month of the final distribution on
the Certificates an amount in immediately available funds equal to the
above-described purchase price. Upon certification to the Trustee by a Servicing
Officer of the making of such final deposit, the Trustee shall promptly release
or cause to be released to the Terminator the Mortgage Files for the remaining
Mortgage Loans, and the Trustee shall execute all assignments, endorsements and
other instruments necessary to effectuate such transfer.

                  (d) Upon presentation of the Certificates by the
Certificateholders on the final Distribution Date, the Trustee shall distribute
to each Certificateholder so presenting and surrendering its Certificates the
amount otherwise distributable on such Distribution Date in accordance with
Section 4.01 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 by
the Trustee and credited to the account of the appropriate non-tendering Holder
or Holders. If any Certificates as to which notice has been given pursuant to
this Section 9.01 shall not have been surrendered for cancellation within six
months after the time specified in such notice, the Trustee shall mail a second
notice to the remaining non-tendering Certificateholders to surrender their
Certificates for cancellation in order to receive the final distribution with
respect thereto. If within one year after the second notice all such
Certificates shall not have been surrendered for cancellation, the Trustee
shall, directly or through an agent, mail a final notice to remaining related
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 Trustee shall pay to Banc of America
Securities LLC 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

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<PAGE>

Certificateholder on any amount held in trust by the Trustee as a result of such
Certificateholder's failure to surrender its Certificate(s) for final payment
thereof in accordance with this Section 9.01.

                  Immediately following the deposit of funds in trust hereunder
in respect of the Certificates, the Trust Fund shall terminate.

                  SECTION 9.02              Additional Termination Requirements.

                  (a) In the event that the Terminator purchases all the
Mortgage Loans and each REO Property or the final payment on or other
liquidation of the last Mortgage Loan or REO Property remaining in REMIC I
pursuant to Section 9.01, the Trust Fund shall be terminated in accordance with
the following additional requirements:

                  (i) The Trustee shall specify the first day in the 90-day
         liquidation period in a statement attached to REMIC I's, REMIC II's and
         REMIC III's final Tax Return pursuant to Treasury regulation Section
         1.860F-1 and shall satisfy all requirements of a qualified liquidation
         under Section 860F of the Code and any regulations thereunder, as
         evidenced by an Opinion of Counsel obtained at the expense of the
         Terminator;

                  (ii) During such 90-day liquidation period, and at or prior to
         the time of making of the final payment on the Certificates, the
         Trustee shall sell all of the assets of REMIC I to the Terminator for
         cash; and

                  (iii) At the time of the making of the final payment on the
         Certificates, the Trustee shall distribute or credit, or cause to be
         distributed or credited, to the Holders of the Residual Certificates
         all cash on hand in the Trust Fund (other than cash retained to meet
         claims), and the Trust Fund shall terminate at that time.

                  (b) At the expense of the applicable Terminator (or in the
event of termination under Section 9.01(a)(ii), at the expense of the Trustee),
the Trustee shall prepare or cause to be prepared the documentation required in
connection with the adoption of a plan of liquidation of each of REMIC I, REMIC
II and REMIC III pursuant to this Section 9.02.

                  (c) By their acceptance of Certificates, the Holders thereof
hereby agree to authorize the Trustee to specify the 90-day liquidation period
for each of REMIC I, REMIC II and REMIC III which authorization shall be binding
upon all successor Certificateholders.

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                                    ARTICLE X

                                REMIC PROVISIONS

                  SECTION 10.01.            REMIC Administration.

                  (a) The Trustee shall elect to treat each of REMIC I, REMIC II
and REMIC III, as a REMIC under the Code and, if necessary, under applicable
state law. Each such election will be made by the Trustee on Form 1066 or other
appropriate federal tax or information return or any appropriate state return
for the taxable year ending on the last day of the calendar year in which the
Certificates are issued. For the purposes of the REMIC election in respect of
REMIC I, the REMIC I Regular Interests shall be designated as the Regular
Interests in REMIC I and the Class R-I Interests shall be designated as the
Residual Interests in REMIC I. The REMIC II Regular Interests shall be
designated as the Regular Interests in REMIC II and the Class R-II Interest
shall be designated as the Residual Interests in REMIC II. The Class A
Certificates, the Mezzanine Certificates, the Class S Certificates, the Class CE
Certificates and the Class P Certificates shall be designated as the Regular
Interests in REMIC III and the Class R-III Interest shall be designated as the
Residual Interests in REMIC III. The Trustee shall not permit the creation of
any "interests" in REMIC I, REMIC II or REMIC III (within the meaning of Section
860G of the Code) other than the REMIC I Regular Interests, the REMIC II Regular
Interests and the interests represented by the Certificates.

                  (b) The Closing Date is hereby designated as the "Startup Day"
of REMIC I, REMIC II and REMIC III within the meaning of Section 860G(a)(9) of
the Code.

                  (c) The Trustee shall pay out of its own funds, without any
right of reimbursement, any and all expenses relating to any tax audit of the
Trust Fund caused by the Trustee (including, but not limited to, any
professional fees or any administrative or judicial proceedings with respect to
any of REMIC I, REMIC II or REMIC III that involve the Internal Revenue Service
or state tax authorities), other than the expense of obtaining any tax related
Opinion of Counsel except as specified herein. The Trustee, as agent for all of
REMIC I's, REMIC II's and REMIC III's tax matters person, shall (i) act on
behalf of the Trust Fund in relation to any tax matter or controversy involving
any of REMIC I, REMIC II or REMIC III 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 Trustee or an Affiliate as its agent to perform all of
the duties of the tax matters person for the Trust Fund.

                  (d) The Trustee shall prepare, sign and file all of the Tax
Returns in respect of each REMIC created hereunder. The expenses of preparing
and filing such returns shall be borne by the Trustee without any right of
reimbursement therefor. The Master Servicer shall provide on a timely basis to
the Trustee or its designee such information with respect to the assets of the
Trust Fund as is in its possession and reasonably required by the Trustee to
enable it to perform its obligations under this Article.

                                      133
<PAGE>

                  (e) The Trustee shall perform on behalf of each of REMIC I,
REMIC II and REMIC III all reporting and other tax compliance duties that are
the responsibility of such REMIC under the Code, the REMIC Provisions or other
compliance guidance issued by the Internal Revenue Service or any state or local
taxing authority. Among its other duties, as required by the Code, the REMIC
Provisions or other such compliance guidance, the Trustee shall provide (i) to
any Transferor of a Residual Certificate such information as is necessary for
the application of any tax relating to the transfer of a Residual Certificate to
any Person who is not a Permitted Transferee, (ii) to the Certificateholders
such information or reports as are required by the Code or the REMIC Provisions
including reports relating to interest, original issue discount and market
discount or premium (using the Prepayment Assumption as required) and (iii) to
the Internal Revenue Service the name, title, address and telephone number of
the person who will serve as the representative of REMIC I, REMIC II and REMIC
III. The Master Servicer shall provide on a timely basis to the Trustee such
information with respect to the assets of the Trust Fund, including, without
limitation, the Mortgage Loans, as is in its possession and reasonably required
by the Trustee to enable it to perform its obligations under this subsection. In
addition, the Depositor shall provide or cause to be provided to the Trustee,
within ten (10) days after the Closing Date, all information or data that the
Trustee reasonably determines to be relevant for tax purposes as to the
valuations and issue prices of the Certificates, including, without limitation,
the price, yield, prepayment assumption and projected cash flow of the
Certificates.

                  (f) The Trustee shall take such action and shall cause each
REMIC created hereunder to take such action as shall be necessary to create or
maintain the status thereof as a REMIC under the REMIC Provisions (and the
Master Servicer shall assist it, to the extent reasonably requested by it). The
Trustee shall not take any action, cause the Trust Fund to take any action or
fail to take (or fail to cause to be taken) any action that, under the REMIC
Provisions, if taken or not taken, as the case may be, could (i) endanger the
status of REMIC I, REMIC II or REMIC III as a REMIC or (ii) result in the
imposition of a tax upon the Trust Fund (including but not limited to the tax on
prohibited transactions as defined in Section 860F(a)(2) of the Code and the tax
on contributions to a REMIC set forth in Section 860G(d) of the Code) (either
such event, an "Adverse REMIC Event") unless the Trustee and the NIMs Insurer
have received an Opinion of Counsel, addressed to the Trustee (at the expense of
the party seeking to take such action but in no event at the expense of the
Trustee) to the effect that the contemplated action will not, with respect to
any of REMIC I, REMIC II or REMIC III, endanger such status or result in the
imposition of such a tax, nor shall the Master Servicer take or fail to take any
action (whether or not authorized hereunder) as to which the Trustee and the
NIMs Insurer 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. In addition, prior to taking any action with respect to REMIC I,
REMIC II or REMIC III or the respective assets of each, or causing REMIC I,
REMIC II or REMIC III to take any action, which is not contemplated under the
terms of this Agreement, the Master Servicer will consult with the Trustee, the
NIMs Insurer or its designee, in writing, with respect to whether such action
could cause an Adverse REMIC Event to occur with respect to REMIC I, REMIC II or
REMIC III, and the Master Servicer shall not take any such action or cause
either REMIC I, REMIC II or REMIC III to take any such action as to which the
Trustee or the NIMs Insurer has advised it in writing that an Adverse REMIC
Event could occur. The Trustee or the NIMs Insurer may consult with counsel to
make such written advice, and the cost of same shall be borne by the party
seeking to take the action not permitted by this Agreement, but in no event
shall such cost be an expense of the Trustee. At

                                      134
<PAGE>

all times as may be required by the Code, the Trustee will ensure that
substantially all of the assets of both REMIC I, REMIC II and REMIC III will
consist of "qualified mortgages" as defined in Section 860G(a)(3) of the Code
and "permitted investments" as defined in Section 860G(a)(5) of the Code.

                  (g) In the event that any tax is imposed on "prohibited
transactions" of any REMIC created hereunder as defined in Section 860F(a)(2) of
the Code, on the "net income from foreclosure property" of such REMIC as defined
in Section 860G(c) of the Code, on any contributions to any such REMIC after the
Startup Day therefor pursuant to Section 860G(d) of the Code, or any other tax
is imposed by the Code or any applicable provisions of state or local tax laws,
such tax shall be charged (i) to the Trustee pursuant to Section 10.03 hereof,
if such tax arises out of or results from a breach by the Trustee of any of its
obligations under this Article X, (ii) to the Master Servicer pursuant to
Section 10.03 hereof, if such tax arises out of or results from a breach by the
Master Servicer of any of its obligations under Article III or this Article X,
or otherwise (iii) against amounts on deposit in the Distribution Account and
shall be paid by withdrawal therefrom.

                  (h) On or before April 15 of each calendar year, commencing
April 15, 2002, the Trustee shall deliver to the Master Servicer, the NIMs
Insurer and each Rating Agency a Certificate from a Responsible Officer of the
Trustee stating, without regard to any action taken by any party other than the
Trustee, the Trustee's compliance with this Article X.

                  (i) The Trustee shall, for federal income tax purposes,
maintain books and records with respect to each of REMIC I, REMIC II and REMIC
III on a calendar year and on an accrual basis. The Trustee will apply for an
Employer Identification Number for the Trust from the Internal Revenue Service
via a Form SS-4 or such other form as is appropriate.

                  (j) Following the Startup Day, the Trustee shall not accept
any contributions of assets to any of REMIC I, REMIC II or REMIC III other than
in connection with any Qualified Substitute Mortgage Loan delivered in
accordance with Section 2.03 unless it shall have received an Opinion of Counsel
to the effect that the inclusion of such assets in the Trust Fund will not cause
the related REMIC to fail to qualify as a REMIC at any time that any
Certificates are outstanding or subject such REMIC to any tax under the REMIC
Provisions or other applicable provisions of federal, state and local law or
ordinances.

                  (k) Neither the Trustee nor the Master Servicer shall enter
into any arrangement by which REMIC I, REMIC II or REMIC III will receive a fee
or other compensation for services nor permit any such REMIC to receive any
income from assets other than "qualified mortgages" as defined in Section
860G(a)(3) of the Code or "permitted investments" as defined in Section
860G(a)(5) of the Code.

                  SECTION 10.02.            Prohibited Transactions and
                                            Activities.

                  None of the Depositor, the Master Servicer or the Trustee
shall sell, dispose of or substitute for any of the Mortgage Loans (except in
connection with (i) the foreclosure of a Mortgage Loan, including but not
limited to, the acquisition or sale of a Mortgaged Property acquired by deed in
lieu of foreclosure, (ii) the bankruptcy of REMIC I, (iii) the termination of
REMIC I pursuant to

                                      135
<PAGE>

Article IX of this Agreement, (iv) a substitution pursuant to Article II of this
Agreement or (v) a purchase of Mortgage Loans pursuant to Article II or III of
this Agreement), nor acquire any assets for any of REMIC I, REMIC II or REMIC
III (other than REO Property acquired in respect of a defaulted Mortgage Loan),
nor sell or dispose of any investments in the Collection Account or the
Distribution Account for gain, nor accept any contributions to any of REMIC I,
REMIC II or REMIC III after the Closing Date (other than a Qualified Substitute
Mortgage Loan delivered in accordance with Section 2.03), unless it has received
an Opinion of Counsel, addressed to the Trustee and the NIMs Insurer (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 of REMIC I, REMIC II or REMIC III as a REMIC
or (b) cause any of REMIC I, REMIC II or REMIC III to be subject to a tax on
"prohibited transactions" or "contributions" pursuant to the REMIC Provisions.

                  SECTION 10.03.            Master Servicer and Trustee
                                            Indemnification.

                  (a) The Trustee agrees to indemnify the Trust Fund, the NIMs
Insurer, the Depositor and the Master Servicer for any taxes and costs
including, without limitation, any reasonable attorneys fees imposed on or
incurred by the Trust Fund, the Depositor or the Master Servicer, caused solely
by the Trustee's failure to act in accordance with its standard of care set
forth in this Article X.

                  (b) The Master Servicer agrees to indemnify the Trust Fund,
the NIMs Insurer, the Depositor and the Trustee for any taxes and costs
including, without limitation, any reasonable attorneys' fees imposed on or
incurred by the Trust Fund, the Depositor or the Trustee, as a result of a
breach of the Master Servicer's covenants set forth in Article III or this
Article X.

                                      136
<PAGE>

                                   ARTICLE XI

                            MISCELLANEOUS PROVISIONS

                  SECTION 11.01.            Amendment.

                   This Agreement or any Custodial Agreement may be amended from
time to time by the Depositor, the Master Servicer, the Trustee and, if
applicable, the Custodian with the consent of the NIMs Insurer and without the
consent of any of the Certificateholders, (i) to cure any ambiguity or defect,
(ii) to correct, modify or supplement any provisions herein (including to give
effect to the expectations of Certificateholders), or in any Custodial
Agreement, or (iii) to make any other provisions with respect to matters or
questions arising under this Agreement or in any Custodial Agreement which shall
not be inconsistent with the provisions of this Agreement or such Custodial
Agreement, provided that such action shall not, as evidenced by an Opinion of
Counsel delivered to the Trustee, adversely affect in any material respect the
interests of any Certificateholder. 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 or any Custodial Agreement may also be amended
from time to time by the Depositor, the Master Servicer, the NIMs Insurer and
the Trustee with the consent of the NIMs Insurer and the Holders of Certificates
entitled to at least 66% of the Voting Rights for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement or any Custodial Agreement or of modifying in any manner the
rights of the Holders of Certificates; provided, however, that no such amendment
shall (i) reduce in any manner the amount of, or delay the timing of, payments
received on Mortgage Loans which are required to be distributed on any
Certificate without the consent of the Holder of such Certificate, (ii)
adversely affect in any material respect the interests of the Holders of any
Class of Certificates in a manner, other than as described in (i), without the
consent of the Holders of Certificates of such Class evidencing at least 66% of
the Voting Rights allocated to such Class, or (iii) modify the consents required
by the immediately preceding clauses (i) and (ii) without the consent of the
Holders of all Certificates then outstanding. Notwithstanding any other
provision of this Agreement, for purposes of the giving or withholding of
consents pursuant to this Section 11.01, Certificates registered in the name of
the Depositor or the Master Servicer or any Affiliate thereof shall be entitled
to Voting Rights with respect to matters affecting such Certificates.

                  Notwithstanding any contrary provision of this Agreement,
neither the Trustee nor the NIMs Insurer shall consent to any amendment to this
Agreement unless it shall have first received an Opinion of Counsel satisfactory
to the NIMs Insurer to the effect that such amendment will not result in the
imposition of any tax on any of REMIC I, REMIC II or REMIC III pursuant to the
REMIC Provisions or cause any of REMIC I, REMIC II or REMIC III to fail to
qualify as a REMIC at any time that any Certificates are outstanding.

                  Notwithstanding any of the other provisions of this Section
11.01, none of the Depositor, the Master Servicer or the Trustee shall enter
into any amendment of this Agreement that would significantly change the
permitted activities of the Trust Fund without the consent of the

                                      137
<PAGE>

NIMs Insurer and the holders of Certificates that represent more than 50.00% of
the aggregate Certificate Principal Balance of all Certificates.

                  Promptly after the execution of any such amendment the Trustee
shall furnish a copy of such amendment to each Certificateholder.

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

                  The cost of any Opinion of Counsel to be delivered pursuant to
this Section 11.01 shall be borne by the Person seeking the related amendment,
but in no event shall such Opinion of Counsel be an expense of the Trustee.

                  The Trustee may, but shall not be obligated to enter into any
amendment pursuant to this Section that affects its rights, duties and
immunities under this Agreement or otherwise.

                  SECTION 11.02.            Recordation of Agreement;
                                            Counterparts.

                  To the extent permitted by applicable law, this Agreement is
subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the properties subject to the Mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Master Servicer at the expense of the Certificateholders, but
only upon direction of the Trustee accompanied by an Opinion of Counsel to the
effect that such recordation materially and beneficially affects the interests
of the Certificateholders.

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

                  SECTION 11.03.            Limitation on Rights of
                                            Certificateholders.

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

                  No Certificateholder shall have any right to vote (except as
expressly provided for herein) or in any manner otherwise control the operation
and management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of any of the
Certificates, be construed so as to constitute the Certificateholders from time
to time as

                                      138
<PAGE>

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

                  No Certificateholder shall have any right by virtue of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless (i)
such Holder previously shall have given to the Trustee a written notice of
default and of the continuance thereof, as hereinbefore provided, and (ii) the
Holders of Certificates entitled to at least 25% of the Voting Rights shall have
made written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for 15 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding. It is
understood and intended, and expressly covenanted by each Certificateholder with
every other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatsoever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, or to enforce any right
under this Agreement, except in the manner herein provided and for the equal,
ratable and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section, each and every Certificateholder
and the Trustee shall be entitled to such relief as can be given either at law
or in equity.

                  SECTION 11.04.            Governing Law.

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

                  SECTION 11.05.            Notices.

                  All directions, demands, requests, authorizations and notices
hereunder shall be in writing and shall be deemed to have been duly given when
received if personally delivered at or mailed by first class mail, postage
prepaid, or by express delivery service, facsimile, electronic mail or delivered
in any other manner specified herein, to (a) in the case of the Depositor, 1100
Town & Country Road, Suite 1100, Orange, California 92868, Attention: Capital
Markets (telecopy number (714) 245-0198), or such other address or telecopy
number as may hereafter be furnished to the Master Servicer, the NIMs Insurer
and the Trustee in writing by the Depositor, (b) in the case of the Master
Servicer, 1100 Town & Country Road, 11th Floor, Orange, California 92868,
Attention: General Counsel (telecopy number: (714) 564-9639), or such other
address or telecopy number as may hereafter be furnished to the Trustee, the
NIMs Insurer and the Depositor in writing by the Master Servicer, (c) in the
case of the Trustee, Bankers Trust Company of California, N.A., 1761 East St.
Andrew Place, Santa Ana, CA 92705-4934, Attention: Trust Administration-AQ0103
(telecopy number: (714) 247-6009), or such other address or telecopy number as
may hereafter be furnished to the Master Servicer, the NIMs Insurer and the
Depositor in writing by the Trustee and (d) in the case of the NIMs Insurer, (i)
Radian Insurance Inc., 1601 Market Street, Philadelphia,

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<PAGE>

Pennsylvania 19103, Attention: General Counsel and (ii) Financial Security
Assurance, Inc. 350 Park Avenue, New York, New York 10022, Attn: Transaction
Oversight, or such other address or telecopy number as may hereafter be
furnished to the Depositor, the Master Servicer and the Trustee in writing by
the NIMs Insurer. Any notice required or permitted to be given to a
Certificateholder shall be given by first class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given when mailed, whether or not the
Certificateholder receives such notice. A copy of any notice required to be
telecopied hereunder also shall be mailed to the appropriate party in the manner
set forth above.

                  SECTION 11.06.            Severability of Provisions.

                  If any one or more of the covenants, agreements, provisions or
terms of this Agreement shall be for any reason whatsoever held invalid, then
such covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions of
this Agreement or of the Certificates or the rights of the Holders thereof.

                  SECTION 11.07.            Notice to Rating Agencies and the
                                            NIMs Insurer.

                  The Trustee shall use its best efforts promptly to provide
notice to the Rating Agencies and the NIMs Insurer with respect to each of the
following of which it has actual knowledge:

                  1.       Any material change or amendment to this Agreement;

                  2.       The occurrence of any Master Servicer Event of
                           Default that has not been cured or waived;

                  3.       The resignation or termination of the Master Servicer
                           or the Trustee;

                  4.       The repurchase or substitution of Mortgage Loans
                           pursuant to or as contemplated by Section 2.03;

                  5.       The final payment to the Holders of any Class of
                           Certificates;

                  6.       Any change in the location of the Collection Account
                           or the Distribution Account;

                  7.       Any event that would result in the inability of the
                           Trustee, were it to succeed as Master Servicer, to
                           make advances regarding delinquent Mortgage Loans;
                           and

                  8.       The filing of any claim under the Master Servicer's
                           blanket bond and errors and omissions insurance
                           policy required by Section 3.14 or the cancellation
                           or material modification of coverage under any such
                           instrument.

                                      140
<PAGE>

                  In addition, the Trustee shall promptly furnish to each Rating
Agency and the NIMs Insurer copies of each report to Certificateholders
described in Section 4.02 and the Master Servicer, as required pursuant to
Section 3.20 and Section 3.21, shall promptly furnish to each Rating Agency
copies of the following:

                  1.       Each annual statement as to compliance described in
                           Section 3.20; and

                  2.       Each annual independent public accountants' servicing
                           report described in Section 3.21.

                  Any such notice pursuant to this Section 11.07 shall be in
writing and shall be deemed to have been duly given if personally delivered at
or mailed by first class mail, postage prepaid, or by express delivery service
to Moody's Investors Service, 99 Church Street, New York, New York 10007 and to
Standard & Poor's, a division of the McGraw-Hill Companies, Inc., 25 Broadway,
New York, New York 10004, or such other addresses as the Rating Agencies may
designate in writing to the parties hereto.

                  SECTION 11.08.            Article and Section References.

                  All article and section references used in this Agreement,
unless otherwise provided, are to articles and sections in this Agreement.

                  SECTION 11.09.            Grant of Security Interest.

                  It is the express intent of the parties hereto that the
conveyance of the Mortgage Loans by the Depositor to the Trustee be, and be
construed as, a sale of the Mortgage Loans by the Depositor and not a pledge of
the Mortgage Loans by the Depositor to secure a debt or other obligation of the
Depositor or the Originator. However, in the event that, notwithstanding the
aforementioned intent of the parties, the Mortgage Loans are held to be property
of the Depositor or the Originator, then, (a) it is the express intent of the
parties that such conveyance be deemed a pledge of the Mortgage Loans by the
Depositor to the Trustee to secure a debt or other obligation of the Depositor
or the Originator and (b)(1) this Agreement shall also be deemed to be a
security agreement within the meaning of Articles 8 and 9 of the Uniform
Commercial Code as in effect from time to time in the State of New York; (2) the
conveyance provided for in Section 2.01 hereof shall be deemed to be a grant by
the Originator and the Depositor to the Trustee of a security interest in all of
the Originator's and the Depositor's right, title and interest in and to the
Mortgage Loans and all amounts payable to the holders of the Mortgage Loans in
accordance with the terms thereof and all proceeds of the conversion, voluntary
or involuntary, of the foregoing into cash, instruments, securities or other
property, including without limitation all amounts, other than investment
earnings, from time to time held or invested in the Collection Account and the
Distribution Account, whether in the form of cash, instruments, securities or
other property; (3) the obligations secured by such security agreement shall be
deemed to be all of the Depositor's obligations under this Agreement, including
the obligation to provide to the Certificateholders the benefits of this
Agreement relating to the Mortgage Loans and the Trust Fund; and (4)
notifications to persons holding such property, and acknowledgments, receipts or
confirmations from persons holding such property, shall be deemed notifications
to, or acknowledgments, receipts or confirmations from, financial

                                      141
<PAGE>

intermediaries, bailees or agents (as applicable) of the Trustee for the purpose
of perfecting such security interest under applicable law. Accordingly, the
Depositor hereby grants to the Trustee a security interest in the Mortgage Loans
and all other property described in clause (2) of the preceding sentence, for
the purpose of securing to the Trustee the performance by the Depositor of the
obliga tions described in clause (3) of the preceding sentence. Notwithstanding
the foregoing, the parties hereto intend the conveyance pursuant to Section 2.01
and the transfer pursuant to the Mortgage Loan Purchase Agreement to be a true,
absolute and unconditional sale of the Mortgage Loans and assets constituting
the Trust Fund by the Depositor to the Trustee.

                  SECTION 11.10             Third Party Rights.

                  The NIMs 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 11.11             NIMs Insurer's Rights.

                  Notwithstanding anything to the contrary anywhere in this
Agreement, all rights of the NIMs Insurer hereunder (i) shall not be operable
whenever an Insurer Default or an Insurer Insolvency Event and a Backup Insurer
Default (as defined in the Indenture) shall have occurred and be continuing and
(ii) except in the case of any right to indemnification hereunder shall
permanently cease to be operable upon the later to occur of (A) the payment in
full of the NIM Notes as provided in the Indenture and (B) the payment in full
to the NIMs Insurer of any amounts owed to the NIMs Insurer as provided in the
Indenture.

                                      142
<PAGE>

                  IN WITNESS WHEREOF, the Depositor, the Master Servicer and the
Trustee have caused their names to be signed hereto by their respective officers
thereunto duly authorized, in each case as of the day and year first above
written.

                                  AMERIQUEST MORTGAGE SECURITIES INC.,
                                  as Depositor

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

                                  AMERIQUEST MORTGAGE COMPANY,
                                    as Master Servicer

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

                                  BANKERS TRUST COMPANY OF CALIFORNIA, N.A.
                                  as Trustee

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

<PAGE>

STATE OF CALIFORNIA     )
                        ) ss.:
COUNTY OF ORANGE        )

                  On the ___ day of December, 2001, before me, a notary public
in and for said State, personally appeared ____________, known to me to be an
________________ of Ameriquest 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 CALIFORNIA                 )
                                    ) ss.:
COUNTY OF ORANGE                    )

                  On the __th day of December 2001, before me, a notary public
in and for said State, personally appeared __________________, known to me to be
a _________________ of Ameriquest Mortgage Company, one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.

                  IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                                ________________________________
                                                         Notary Public

[Notarial Seal]

<PAGE>

STATE OF CALIFORNIA                 )
                                    ) ss.:
COUNTY OF                           )

                  On the ___ day of December 2001, before me, a notary public in
and for said State, personally appeared _________________, known to me to be an
____________________ of Bankers Trust Company of California, N.A., one of the
entities 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 entity 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 CERTIFICATE

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
         "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
         THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
         INTERNAL REVENUE CODE OF 1986 (THE "CODE").
<TABLE>
<CAPTION>

<S>                                                    <C>
Series 2001-3, Class A                                 Aggregate Certificate Principal
                                                       Balance of the Class A Certificates as of the
                                                       Issue Date:
Pass-Through Rate:  Variable                           $

Date of Pooling and Servicing Agreement                Denomination:  $______________________
and Cut-off Date:  November 1, 2001
                                                       Master Servicer:  Ameriquest Mortgage Company
First Distribution Date:  December 26,
2001                                                   Trustee:  Bankers Trust Company of California,
                                                       N.A.
No. ____
                                                       Issue Date:  December __, 2001

                                                       CUSIP: 03072S ____
</TABLE>

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
         CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
         OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
         LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
         CERTIFICATE.

                                      A-1-1

<PAGE>

                 FLOATING RATE MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
         AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER SERVICER, THE TRUSTEE
         OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
         UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
         INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that _________________ is the registered owner
of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class A
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class A Certificates in REMIC III created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among Ameriquest Mortgage Securities Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Master
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class A Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class A Certificates, or otherwise by check mailed by
first class mail to the address of the Person entitled thereto, as such name and
address shall appear on the Certificate Register. Notwithstanding the above, the
final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.

                                      A-1-2

<PAGE>

                  The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
be the lesser of (x) the Formula Rate for such Distribution Date and (y) the Net
WAC Pass-Through Rate for such Distribution Date. For any Distribution Date and
this Certificate, the Formula Rate is the lesser of (i) One-Month LIBOR plus the
Certificate Margin and (ii) the Maximum Cap Rate. The Certificate Margin for
this Certificate is with respect to this Certificate is ____% in the case of
each Distribution Date through and including the Distribution Date on which the
aggregate principal balance of the Mortgage Loans (and properties acquired in
respect thereof) remaining in the Trust is reduced to less than 10% of the
aggregate principal balance of the Mortgage Loans as of the Cut-off Date, or
____% in the case of any Distribution Date thereafter.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Floating Rate Mortgage Pass-Through Certificates of
the Series specified on the face hereof (herein called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new

                                      A-1-3

<PAGE>

Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

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

                  The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee, or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the aggregate
Stated Principal Balance of the Mortgage Loans at the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee does not assume any responsibility for their
correctness.

                  Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

                                      A-1-4

<PAGE>

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

Dated: December __, 2001

                                        BANKERS TRUST COMPANY
                                        OF CALIFORNIA, N.A.
                                        as Trustee

                                        By:__________________________
                                                 Authorized Officer

                         CERTIFICATE OF AUTHENTICATION

                  This is one of the Class A Certificates referred to in the
within-mentioned Agreement.

                                        BANKERS TRUST COMPANY OF
                                        CALIFORNIA, N.A.
                                        as Certificate Registrar

                                        By:__________________________
                                                 Authorized Signatory

                                      A-1-5

<PAGE>

                                  ABBREVIATIONS

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:

<TABLE>
<CAPTION>
<S>                                                           <C>
         TEN COM -         as tenants in common               UNIF GIFT MIN ACT -        Custodian
                                                                                     -----------------
                                                                                   (Cust)   (Minor)
         TEN ENT -         as tenants by the entireties                            under Uniform Gifts to
                                                                                   Minors Act
         JT TEN -          as joint tenants with right if                            -----------------
                           survivorship and not as tenants                                  (State)
                           in common
</TABLE>

                  Additional abbreviations may also be used though not in the
above list.

                                   ASSIGNMENT

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

a Percentage Interest equal to____% evidenced by the within Floating Rate
Mortgage Pass- Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.

                  I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following
address: ----------------------------------------------------------------------
--------------------------------------------------------------------------------
Dated:

                                        -------------------------------------
                                        Signature by or on behalf of assignor

                                        ------------------------------------
                                        Signature Guaranteed

                                      A-1-6

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
________________________________ for the account of ___________________________
_______________________________, account number______________ or, if mailed by
check, to _____________________________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to______________________________________
_______________________________________________________________________________
_______________________________________________________________________________.

         This information is provided by ______________________________________,
the assignee named above, or ____________________________________, as its agent.

                                      A-1-7

<PAGE>

                                   EXHIBIT A-2

                          FORM OF CLASS M-1 CERTIFICATE

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
         "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
         THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
         INTERNAL REVENUE CODE OF 1986 (THE "CODE").

         THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A
         CERTIFICATES AND THE CLASS SCERTIFICATES TO THE EXTENT
         DESCRIBED IN THE POOLING AND SERVICING AGREEMENT
         REFERRED TO HEREIN.
<TABLE>
<CAPTION>

<S>                                                    <C>
Series 2001-3, Class M-1                               Aggregate Certificate
                                                       Principal Balance of the
                                                       Class M-1 Certificates as
                                                       of the Issue Date: $
Pass-Through Rate:  Variable
                                                       Denomination:  $___________________
Date of Pooling and Servicing Agreement
and Cut-off Date:  November 1, 2001                    Master Servicer:  Ameriquest Mortgage Company

First Distribution Date:  December 26,                 Trustee:  Bankers Trust Company of California,
2001                                                   N.A.

No. _____                                              Issue Date: December __, 2001

                                                       CUSIP:  03072S ____
</TABLE>

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
         CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
         OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
         LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
         CERTIFICATE.

                                      A-2-1

<PAGE>

                 FLOATING RATE MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
         AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER SERVICER, THE TRUSTEE
         OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
         UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
         INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that _________________ is the registered owner
of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class M-1
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class M-1 Certificates in REMIC III created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among Ameriquest Mortgage Securities Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Master
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-1 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class M-1 Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class M-1 Certificates, or otherwise by check mailed by
first class mail to the address of the Person entitled thereto, as such name and
address shall appear on the Certificate Register. Notwithstanding the above, the
final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.

                                      A-2-2

<PAGE>

                  The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
be the lesser of (x) the Formula Rate for such Distribution Date and (y) the Net
WAC Pass-Through Rate for such Distribution Date. For any Distribution Date and
this Certificate, the Formula Rate is the lesser of (i) One-Month LIBOR plus the
Certificate Margin and (ii) the Maximum Cap Rate. The Certificate Margin for
this Certificate is with respect to this Certificate is ____% in the case of
each Distribution Date through and including the Distribution Date on which the
aggregate principal balance of the Mortgage Loans (and properties acquired in
respect thereof) remaining in the Trust is reduced to less than 10% of the
aggregate principal balance of the Mortgage Loans as of the Cut-off Date, or
____% in the case of any Distribution Date thereafter.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Floating Rate Mortgage Pass-Through Certificates of
the Series specified on the face hereof (herein called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new

                                      A-2-3

<PAGE>

Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

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

                  The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee, or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the aggregate
Stated Principal Balance of the Mortgage Loans at the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee does not assume any responsibility for their
correctness.

                  Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

                                      A-2-4

<PAGE>

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

Dated: December __, 2001

                                        BANKERS TRUST COMPANY
                                        OF CALIFORNIA, N.A.
                                        as Trustee

                                        By:__________________________
                                                 Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

                  This is one of the Class M-1 Certificates referred to in the
within-mentioned Agreement.

                                        BANKERS TRUST COMPANY OF
                                        CALIFORNIA, N.A.
                                        as Certificate Registrar

                                        By:__________________________
                                                 Authorized Signatory

                                      A-2-5

<PAGE>

                                  ABBREVIATIONS

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:

<TABLE>
<CAPTION>
<S>                                                           <C>
         TEN COM -         as tenants in common               UNIF GIFT MIN ACT -        Custodian
                                                                                     -----------------
                                                                                   (Cust)   (Minor)
         TEN ENT -         as tenants by the entireties                            under Uniform Gifts to
                                                                                   Minors Act
         JT TEN -          as joint tenants with right if                            -----------------
                           survivorship and not as tenants                                  (State)
                           in common
</TABLE>

                  Additional abbreviations may also be used though not in the
above list.

                                   ASSIGNMENT

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

a Percentage Interest equal to____% evidenced by the within Floating Rate
Mortgage Pass- Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.

                  I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following
address: ----------------------------------------------------------------------
--------------------------------------------------------------------------------
Dated:

                                        -------------------------------------
                                        Signature by or on behalf of assignor

                                        ------------------------------------
                                        Signature Guaranteed

                                                       A-2-6

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
________________________________ for the account of ___________________________
_______________________________, account number______________ or, if mailed by
check, to _____________________________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to______________________________________
_______________________________________________________________________________
_______________________________________________________________________________.

         This information is provided by ______________________________________,
the assignee named above, or ____________________________________, as its agent.

                                      A-2-7

<PAGE>

                                   EXHIBIT A-3

                          FORM OF CLASS M-2 CERTIFICATE

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
         "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
         THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
         INTERNAL REVENUE CODE OF 1986 (THE "CODE").

         THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE CLASS
         S CERTIFICATES AND THE CLASS M-1 CERTIFICATES TO THE EXTENT DESCRIBED
         IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

<TABLE>
<CAPTION>

<S>                                                    <C>
Series 2001-3, Class M-2                               Aggregate Certificate
                                                       Principal Balance of the
                                                       Class M-2 Certificates as
                                                       of the Issue Date: $
Pass-Through Rate:  Variable
                                                       Denomination:  $___________________
Date of Pooling and Servicing Agreement
and Cut-off Date:  November 1, 2001                    Master Servicer:  Ameriquest Mortgage Company

First Distribution Date:  December 26,                 Trustee:  Bankers Trust Company of California,
2001                                                   N.A.

No. ______                                             Issue Date:  December __, 2001

                                                       CUSIP:  03072S ____
</TABLE>

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
         CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
         OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
         LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
         CERTIFICATE.

                                      A-3-1

<PAGE>

                 FLOATING RATE MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
         AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER SERVICER, THE TRUSTEE
         OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
         UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
         INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that _________________ is the registered owner
of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class M-2
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class M-2 Certificates in REMIC III created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among Ameriquest Mortgage Securities Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Master
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-2 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class M-2 Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class M-2 Certificates, or otherwise by check mailed by
first class mail to the address of the Person entitled thereto, as such name and
address shall appear on the Certificate Register. Notwithstanding the above, the
final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.

                                      A-3-2

<PAGE>

                  The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
be the lesser of (x) the Formula Rate for such Distribution Date and (y) the Net
WAC Pass-Through Rate for such Distribution Date. For any Distribution Date and
this Certificate, the Formula Rate is the lesser of (i) One-Month LIBOR plus the
Certificate Margin and (ii) the Maximum Cap Rate. The Certificate Margin for
this Certificate is with respect to this Certificate is ____% in the case of
each Distribution Date through and including the Distribution Date on which the
aggregate principal balance of the Mortgage Loans (and properties acquired in
respect thereof) remaining in the Trust is reduced to less than 10% of the
aggregate principal balance of the Mortgage Loans as of the Cut-off Date, or
____% in the case of any Distribution Date thereafter.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Floating Rate Mortgage Pass-Through Certificates of
the Series specified on the face hereof (herein called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new

                                      A-3-3

<PAGE>

Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

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

                  The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee, or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the aggregate
Stated Principal Balance of the Mortgage Loans at the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee does not assume any responsibility for their
correctness.

                  Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

                                      A-3-4

<PAGE>

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

Dated: December __, 2001

                                        BANKERS TRUST COMPANY
                                        OF CALIFORNIA, N.A.
                                        as Trustee

                                        By:__________________________
                                                 Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

                  This is one of the Class M-2 Certificates referred to in the
within-mentioned Agreement.

                                        BANKERS TRUST COMPANY OF
                                        CALIFORNIA, N.A.
                                        as Certificate Registrar

                                        By:__________________________
                                                 Authorized Signatory

                                      A-3-5

<PAGE>

                                  ABBREVIATIONS

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:

<TABLE>
<CAPTION>
<S>                                                           <C>
         TEN COM -         as tenants in common               UNIF GIFT MIN ACT -        Custodian
                                                                                     -----------------
                                                                                   (Cust)   (Minor)
         TEN ENT -         as tenants by the entireties                            under Uniform Gifts to
                                                                                   Minors Act
         JT TEN -          as joint tenants with right if                            -----------------
                           survivorship and not as tenants                                  (State)
                           in common
</TABLE>

                  Additional abbreviations may also be used though not in the
above list.

                                   ASSIGNMENT

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

a Percentage Interest equal to____% evidenced by the within Floating Rate
Mortgage Pass- Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.

                  I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following
address: ----------------------------------------------------------------------
--------------------------------------------------------------------------------
Dated:

                                        -------------------------------------
                                        Signature by or on behalf of assignor

                                        ------------------------------------
                                        Signature Guaranteed

                                      A-3-6

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
________________________________ for the account of ___________________________
_______________________________, account number______________ or, if mailed by
check, to _____________________________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to______________________________________
_______________________________________________________________________________
_______________________________________________________________________________.

         This information is provided by ______________________________________,
the assignee named above, or ____________________________________, as its agent.

                                      A-3-7

<PAGE>

                                   EXHIBIT A-4

                          FORM OFCLASS M-3 CERTIFICATE

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
         "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
         THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
         INTERNAL REVENUE CODE OF 1986 (THE "CODE").

         THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE CLASS
         S CERTIFICATES, THE CLASS M-1 CERTIFICATES AND THE CLASS M-2
         CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING
         AGREEMENT REFERRED TO HEREIN.

<TABLE>
<CAPTION>

<S>                                                    <C>
Series 2001-3, Class M-3                               Aggregate Certificate Principal Balance of the
                                                       Class M-3 Certificates as of the Issue Date: $
Pass-Through Rate:  Variable
                                                       Denomination:  $_______________
Date of Pooling and Servicing Agreement
and Cut-off Date:  November 1, 2001                    Master Servicer:  Ameriquest Mortgage Company

First Distribution Date:  December 26,                 Trustee:  Bankers Trust Company of California,
2001                                                   N.A.

No. ____                                               Issue Date:  December __, 2001

                                                       CUSIP:  03072S _____
</TABLE>

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
         CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
         OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
         LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
         CERTIFICATE.

                                      A-4-1

<PAGE>

                 FLOATING RATE MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
         AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER SERVICER, THE TRUSTEE
         OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
         UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
         INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that _________________ is the registered owner
of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class M-3
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class M-3 Certificates in REMIC III created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among Ameriquest Mortgage Securities Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Master
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-3 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class M-3 Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class M-3 Certificates, or otherwise by check mailed by
first class mail to the address of the Person entitled thereto, as such name and
address shall appear on the Certificate Register. Notwithstanding the above, the
final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.

                                      A-4-2

<PAGE>

                  The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
be the lesser of (x) the Formula Rate for such Distribution Date and (y) the Net
WAC Pass-Through Rate for such Distribution Date. For any Distribution Date and
this Certificate, the Formula Rate is the lesser of (i) One-Month LIBOR plus the
Certificate Margin and (ii) the Maximum Cap Rate. The Certificate Margin for
this Certificate is with respect to this Certificate is ____% in the case of
each Distribution Date through and including the Distribution Date on which the
aggregate principal balance of the Mortgage Loans (and properties acquired in
respect thereof) remaining in the Trust is reduced to less than 10% of the
aggregate principal balance of the Mortgage Loans as of the Cut-off Date, or
____% in the case of any Distribution Date thereafter.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Floating Rate Mortgage Pass-Through Certificates of
the Series specified on the face hereof (herein called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new

                                      A-4-3

<PAGE>

Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

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

                  The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee, or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the aggregate
Stated Principal Balance of the Mortgage Loans at the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee does not assume any responsibility for their
correctness.

                  Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

                                      A-4-4

<PAGE>

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

Dated: December __, 2001

                                        BANKERS TRUST COMPANY
                                        OF CALIFORNIA, N.A.
                                        as Trustee

                                        By:__________________________
                                                 Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

                  This is one of the Class M-3 Certificates referred to in the
within-mentioned Agreement.

                                        BANKERS TRUST COMPANY OF
                                        CALIFORNIA, N.A.
                                        as Certificate Registrar

                                        By:__________________________
                                                 Authorized Signatory

                                      A-4-5

<PAGE>

                                  ABBREVIATIONS

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:

<TABLE>
<CAPTION>
<S>                                                           <C>
         TEN COM -         as tenants in common               UNIF GIFT MIN ACT -        Custodian
                                                                                     -----------------
                                                                                   (Cust)   (Minor)
         TEN ENT -         as tenants by the entireties                            under Uniform Gifts to
                                                                                   Minors Act
         JT TEN -          as joint tenants with right if                            -----------------
                           survivorship and not as tenants                                  (State)
                           in common
</TABLE>

                  Additional abbreviations may also be used though not in the
above list.

                                   ASSIGNMENT

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

a Percentage Interest equal to____% evidenced by the within Floating Rate
Mortgage Pass- Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.

                  I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following
address: ----------------------------------------------------------------------
--------------------------------------------------------------------------------
Dated:

                                        -------------------------------------
                                        Signature by or on behalf of assignor

                                        ------------------------------------
                                        Signature Guaranteed

                                      A-4-6

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
________________________________ for the account of ___________________________
_______________________________, account number______________ or, if mailed by
check, to _____________________________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to______________________________________
_______________________________________________________________________________
_______________________________________________________________________________.

         This information is provided by ______________________________________,
the assignee named above, or ____________________________________, as its agent.

                                      A-4-7

<PAGE>

                                   EXHIBIT A-5

                          FORM OF CLASS CE CERTIFICATE

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
         "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT", AS
         THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
         INTERNAL REVENUE CODE OF 1986 (THE "CODE").

         THIS CERTIFICATE IS SUBORDINATE TO THE A CERTIFICATES, THE CLASS S
         CERTIFICATES AND THE MEZZANINE CERTIFICATES TO THE EXTENT DESCRIBED IN
         THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

         THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
         SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE
         AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT
         TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE
         EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW
         AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF
         THE AGREEMENT.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
         RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE
         RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE
         CODE WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES
         DESCRIBED HEREIN.

                                      A-5-1

<PAGE>

<TABLE>
<CAPTION>

<S>                                                    <C>
Series 2001-3, Class CE                                Aggregate Certificate Principal Balance of the
                                                       Class CE Certificates as of the Issue Date: $
Date of Pooling and Servicing Agreement
and Cut-off Date:  November 1, 2001                    Denomination:  $__________________

First Distribution Date:  December 26,                 Master Servicer:  Ameriquest Mortgage Company
2001
                                                       Trustee:  Bankers Trust Company of California,
No. ___                                                N.A.

Aggregate Notional Amount of the Class                 Issue Date:  December __, 2001
CE Certificates as of the Issue Date:  $

Notional Amount:  $
</TABLE>

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
         CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
         OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
         LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
         CERTIFICATE.

                                      A-5-2

<PAGE>

                 FLOATING RATE MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
         AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER SERVICER, THE TRUSTEE
         OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
         UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
         INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that _________________ is the registered owner
of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class CE
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class CE Certificates in REMIC III created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among Ameriquest Mortgage Securities Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Master
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class CE Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class CE Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class CE Certificates, or otherwise by check mailed by
first class mail to the address of the Person entitled thereto, as such name and
address shall appear on the Certificate Register. Notwithstanding the above, the
final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.

                                      A-5-3

<PAGE>

                  This Certificate is one of a duly authorized issue of
Certificates designated as Floating Rate Mortgage Pass-Through Certificates of
the Series specified on the face hereof (herein called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

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

                  No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee and the Certificate Registrar 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

                                      A-5-4

<PAGE>

Agreement as Exhibit F-1, and (ii) in all other cases, an Opinion of Counsel
satisfactory to it that such transfer may be made without such registration or
qualification (which Opinion of Counsel shall not be an expense of the Trust
Fund or of the Depositor, the Trustee or the Master Servicer in their respective
capacities as such), together with copies of the written certification(s) of the
Holder of the Certificate desiring to effect the transfer and/or such Holder's
prospective transferee upon which such Opinion of Counsel is based. None of the
Depositor, the Certificate Registrar 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 Depositor, the
Certificate Registrar and the Master Servicer against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.

                  No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 5.02(c) of the Agreement.

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

                  The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee, or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the aggregate
Stated Principal Balance of the Mortgage Loans at the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee does not assume any responsibility for their
correctness.

                                      A-5-5

<PAGE>

                  Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, 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: December __, 2001

                                        BANKERS TRUST COMPANY
                                        OF CALIFORNIA, N.A.
                                        as Trustee

                                        By:__________________________
                                                 Authorized Officer

                                           CERTIFICATE OF AUTHENTICATION

                  This is one of the Class CE Certificates referred to in the
within-mentioned Agreement.

                                        BANKERS TRUST COMPANY OF
                                        CALIFORNIA, N.A.
                                        as Certificate Registrar

                                        By:__________________________
                                                 Authorized Signatory

                                      A-5-7

<PAGE>

                                  ABBREVIATIONS

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:

<TABLE>
<CAPTION>
<S>                                                           <C>
         TEN COM -         as tenants in common               UNIF GIFT MIN ACT -        Custodian
                                                                                     -----------------
                                                                                   (Cust)   (Minor)
         TEN ENT -         as tenants by the entireties                            under Uniform Gifts to
                                                                                   Minors Act
         JT TEN -          as joint tenants with right if                            -----------------
                           survivorship and not as tenants                                  (State)
                           in common
</TABLE>

                  Additional abbreviations may also be used though not in the
above list.

                                   ASSIGNMENT

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

a Percentage Interest equal to____% evidenced by the within Floating Rate
Mortgage Pass- Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.

                  I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following
address: ----------------------------------------------------------------------
--------------------------------------------------------------------------------
Dated:

                                        -------------------------------------
                                        Signature by or on behalf of assignor

                                        ------------------------------------
                                        Signature Guaranteed

                                      A-5-8

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
________________________________ for the account of ___________________________
_______________________________, account number______________ or, if mailed by
check, to _____________________________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to______________________________________
_______________________________________________________________________________
_______________________________________________________________________________.

         This information is provided by ______________________________________,
the assignee named above, or ____________________________________, as its agent.

                                      A-5-9

<PAGE>

                                   EXHIBIT A-6

                           FORM OF CLASS P CERTIFICATE

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
         "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT", AS
         THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
         INTERNAL REVENUE CODE OF 1986 (THE "CODE").

         THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
         SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE
         AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT
         TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE
         EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW
         AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF
         THE AGREEMENT.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
         RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE
         RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE
         CODE WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES
         DESCRIBED HEREIN.

<TABLE>
<CAPTION>

<S>                                                    <C>
Series 2001-3, Class P                                 Aggregate Certificate Principal Balance of the
                                                       Class P Certificates as of the Issue Date: $100.00
Date of Pooling and Servicing Agreement
and Cut-off Date:  November 1, 2001                    Denomination:  $_______________

First Distribution Date:  December 26,                 Master Servicer:  Ameriquest Mortgage Company
2001
                                                       Trustee:  Bankers Trust Company of California,
No. ____                                               N.A.

                                                       Issue Date: December __, 2001
</TABLE>

                                      A-6-1

<PAGE>

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
         CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
         OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
         LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
         CERTIFICATE.

                 FLOATING RATE MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
         AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER SERVICER, THE TRUSTEE
         OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
         UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
         INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that _________________ is the registered owner
of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class P
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class P Certificates in REMIC III created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among Ameriquest Mortgage Securities Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Master
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class P Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution

                                      A-6-2

<PAGE>

Date and is the registered owner of Class P Certificates the aggregate initial
Certificate Principal Balance of which is in excess of the lesser of (i)
$5,000,000 or (ii) two-thirds of the aggregate initial Certificate Principal
Balance of the Class P Certificates, or otherwise by check mailed by first class
mail to the address of the Person entitled thereto, as such name and address
shall appear on the Certificate Register. Notwithstanding the above, the final
distribution on this Certificate will be made after due notice by the Trustee of
the pendency of such distribution and only upon presentation and surrender of
this Certificate at the office or agency appointed by the Trustee for that
purpose as provided in the Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Floating Rate Mortgage Pass-Through Certificates of
the Series specified on the face hereof (herein called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

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

                                      A-6-3

<PAGE>

                  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 and the Certificate Registrar shall
require receipt of (i) if such transfer is purportedly being made in reliance
upon Rule 144A under the 1933 Act, written certifications from the Holder of the
Certificate desiring to effect the transfer, and from such Holder's prospective
transferee, substantially in the forms attached to the Agreement as Exhibit F-1,
and (ii) in all other cases, an Opinion of Counsel satisfactory to it that such
transfer may be made without such registration or qualification (which Opinion
of Counsel shall not be an expense of the Trust Fund or of the Depositor, the
Trustee or the Master Servicer in their respective capacities as such), together
with copies of the written certification(s) of the Holder of the Certificate
desiring to effect the transfer and/or such Holder's prospective transferee upon
which such Opinion of Counsel is based. None of the Depositor, the Certificate
Registrar 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 Depositor, the Certificate
Registrar and the Master Servicer against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws.

                  No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 5.02(c) of the Agreement.

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

                  The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee, or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right

                                      A-6-4

<PAGE>

will effect early retirement of the Certificates; however, such right to
purchase is subject to the aggregate Stated Principal Balance of the Mortgage
Loans at the time of purchase being less than 10% of the aggregate Stated
Principal Balance of the Mortgage Loans at the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee does not assume any responsibility for their
correctness.

                  Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

                                      A-6-5

<PAGE>

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

Dated: December __, 2001

                                        BANKERS TRUST COMPANY
                                        OF CALIFORNIA, N.A.
                                        as Trustee

                                        By:__________________________
                                                 Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

                  This is one of the Class P Certificates referred to in the
within-mentioned Agreement.

                                        BANKERS TRUST COMPANY OF
                                        CALIFORNIA, N.A.
                                        as Certificate Registrar

                                        By:__________________________
                                                 Authorized Signatory

                                      A-6-6

<PAGE>

                                  ABBREVIATIONS

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:

<TABLE>
<CAPTION>
<S>                                                           <C>
         TEN COM -         as tenants in common               UNIF GIFT MIN ACT -        Custodian
                                                                                     -----------------
                                                                                   (Cust)   (Minor)
         TEN ENT -         as tenants by the entireties                            under Uniform Gifts to
                                                                                   Minors Act
         JT TEN -          as joint tenants with right if                            -----------------
                           survivorship and not as tenants                                  (State)
                           in common
</TABLE>

                  Additional abbreviations may also be used though not in the
above list.

                                   ASSIGNMENT

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

a Percentage Interest equal to____% evidenced by the within Floating Rate
Mortgage Pass- Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.

                  I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following
address: ----------------------------------------------------------------------
--------------------------------------------------------------------------------
Dated:

                                        -------------------------------------
                                        Signature by or on behalf of assignor

                                        ------------------------------------
                                        Signature Guaranteed

                                      A-6-7

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
________________________________ for the account of ___________________________
_______________________________, account number______________ or, if mailed by
check, to _____________________________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to______________________________________
_______________________________________________________________________________
_______________________________________________________________________________.

         This information is provided by ______________________________________,
the assignee named above, or ____________________________________, as its agent.

                                      A-6-8

<PAGE>

                                   EXHIBIT A-7

                           FORM OF CLASS S CERTIFICATE

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
         "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
         THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
         INTERNAL REVENUE CODE OF 1986 (THE "CODE").

<TABLE>
<CAPTION>

<S>                                                    <C>
Series 2001-3, Class S                                 Aggregate Notional Amount of the Class S
                                                       Certificates as of the Issue Date:
Pass-Through Rate:  Variable                           $

Date of Pooling and Servicing Agreement                Denomination:  $______________________
and Cut-off Date:  November 1, 2001
                                                       Master Servicer:  Ameriquest Mortgage Company
First Distribution Date:  December 26,
2001                                                   Trustee:  Bankers Trust Company of California,
                                                       N.A.
No. ____
                                                       Issue Date:  December __, 2001

                                                       CUSIP: 03072S ____
</TABLE>

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
         CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
         OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
         LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
         CERTIFICATE.

                                      A-7-1

<PAGE>

                 FLOATING RATE MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
         AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER SERVICER, THE TRUSTEE
         OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
         UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
         INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that _________________ is the registered owner
of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Notional Amount of the Class S Certificates as of
the Issue Date) in that certain beneficial ownership interest evidenced by all
the Class S Certificates in REMIC III created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among
Ameriquest Mortgage Securities Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer and
the Trustee, a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class S Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class S Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class S Certificates, or otherwise by check mailed by
first class mail to the address of the Person entitled thereto, as such name and
address shall appear on the Certificate Register. Notwithstanding the above, the
final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.

                                      A-7-2

<PAGE>

                  The Pass-Through Rate for the Class S Certificates will be
____% per annum for the December 2001 Distribution Date through the September
2002 Distribution Date, ____% per annum for the October 2002 Distribution Date
through the July 2003 Distribution Date and ____% per annum for the August 2003
Distribution Date through the May 2004 Distribution Date. After the May 2004
Distribution Date, the Pass-Through Rate for the Class S Certificates will be
0.00% per annum.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Floating Rate Mortgage Pass-Through Certificates of
the Series specified on the face hereof (herein called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

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

                                      A-7-3

<PAGE>

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

                  The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee, or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the aggregate
Stated Principal Balance of the Mortgage Loans at the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee does not assume any responsibility for their
correctness.

                  Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

                                      A-7-4

<PAGE>

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

Dated: December __, 2001

                                        BANKERS TRUST COMPANY
                                        OF CALIFORNIA, N.A.
                                        as Trustee

                                        By:__________________________
                                                 Authorized Officer

                                           CERTIFICATE OF AUTHENTICATION

                  This is one of the Class S Certificates referred to in the
within-mentioned Agreement.

                                        BANKERS TRUST COMPANY OF
                                        CALIFORNIA, N.A.
                                        as Certificate Registrar

                                        By:__________________________
                                                 Authorized Signatory

                                      A-7-5

<PAGE>

                                  ABBREVIATIONS

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:

<TABLE>
<CAPTION>
<S>                                                           <C>
         TEN COM -         as tenants in common               UNIF GIFT MIN ACT -        Custodian
                                                                                     -----------------
                                                                                   (Cust)   (Minor)
         TEN ENT -         as tenants by the entireties                            under Uniform Gifts to
                                                                                   Minors Act
         JT TEN -          as joint tenants with right if                            -----------------
                           survivorship and not as tenants                                  (State)
                           in common
</TABLE>

                  Additional abbreviations may also be used though not in the
above list.

                                   ASSIGNMENT

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

a Percentage Interest equal to____% evidenced by the within Floating Rate
Mortgage Pass- Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.

                  I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following
address: ----------------------------------------------------------------------
--------------------------------------------------------------------------------
Dated:

                                        -------------------------------------
                                        Signature by or on behalf of assignor

                                        ------------------------------------
                                        Signature Guaranteed

                                      A-7-6

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
________________________________ for the account of ___________________________
_______________________________, account number______________ or, if mailed by
check, to _____________________________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to______________________________________
_______________________________________________________________________________
_______________________________________________________________________________.

         This information is provided by ______________________________________,
the assignee named above, or ____________________________________, as its agent.

                                      A-7-7

<PAGE>

                                   EXHIBIT A-8

                           FORM OF CLASS R CERTIFICATE

         THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON- UNITED
         STATES PERSON.

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
         "RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT"
         ("REMIC"), AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G
         AND 860D OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE").

         THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
         SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE
         AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT
         TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE
         EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW
         AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF
         THE AGREEMENT.

         ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS
         CERTIFICATE MAY BE MADE ONLY IN ACCORDANCE WITH THE
         PROVISIONS OF SECTION 5.02 OF THE POOLING AND SERVICING
         AGREEMENT REFERRED TO HEREIN.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
         RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE
         RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE
         CODE WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES
         DESCRIBED HEREIN.

         ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
         MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (I) AN AFFIDAVIT TO THE
         TRUSTEE THAT (A) SUCH TRANSFEREE IS NOT (1) THE UNITED STATES OR ANY
         POSSESSION THEREOF, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY
         FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR
         INSTRUMENTALITY OF ANY OF THE FOREGOING, (2) ANY ORGANIZATION (OTHER
         THAN A COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) THAT IS EXEMPT
         FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH ORGANIZATION
         IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE, (3) ANY
         ORGANIZATION DESCRIBED IN SECTION

                                      A-8-1

<PAGE>

         1381(A)(2)(C) OF THE CODE (ANY SUCHPERSON DESCRIBED IN THE FOREGOING
         CLAUSES (1), (2) OR (3) SHALL HEREINAFTER BE REFERRED TO AS A
         "DISQUALIFIED ORGANIZATION") OR (4) AN AGENT OF A DISQUALIFIED
         ORGANIZATION AND (B) NO PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE
         ASSESSMENT OR COLLECTION OF TAX, AND (II) SUCH TRANSFEREE SATISFIES
         CERTAIN ADDITIONAL CONDITIONS RELATING TO THE FINANCIAL CONDITION OF
         THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE
         CERTIFICATE REGISTER OF ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS
         CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT OF A
         DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE OF
         NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED
         TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT
         LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH
         HOLDER OF THIS CERTIFICATE BY ACCEPTANCE HEREOF SHALL BE DEEMED TO HAVE
         CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH AND THE PROVISIONS OF
         SECTION 5.02(D) OF THE POOLING AND SERVICING AGREEMENT REFERRED TO
         HEREIN. ANY PERSON THAT IS A DISQUALIFIED ORGANIZATION IS PROHIBITED
         FROM ACQUIRING BENEFICIAL OWNERSHIP OF THIS CERTIFICATE.

<TABLE>
<CAPTION>

<S>                                                    <C>
Series 2001-3, Class R                                 Aggregate Percentage Interest of the Class R
                                                       Certificates as of the Issue Date: 100.00%
Date of Pooling and Servicing Agreement                Percentage Interest
and Cut-off Date:  November 1, 2001
                                                       Denomination: ______% Percentage Interest
First Distribution Date:  December 26,
2001                                                   Master Servicer:  Ameriquest Mortgage Company

No._____                                               Trustee:  Bankers Trust Company of California,
                                                       N.A.

                                                       Issue Date:  December __, 2001
</TABLE>

                                      A-8-2

<PAGE>

                 FLOATING RATE MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
         AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER SERVICER, THE TRUSTEE
         OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
         UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
         INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that _________________ is the registered owner
of a Percentage Interest specified above in that certain beneficial ownership
interest evidenced by all the Class R Certificates in REMIC III created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Ameriquest Mortgage Securities Inc. (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class R Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class R Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class R Certificates, or otherwise by check mailed by
first class mail to the address of the Person entitled thereto, as such name and
address shall appear on the Certificate Register. Notwithstanding the above, the
final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.

                                      A-8-3

<PAGE>

                  This Certificate is one of a duly authorized issue of
Certificates designated as Floating Rate Mortgage Pass-Through Certificates of
the Series specified on the face hereof (herein called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

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

                  No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee and the Certificate Registrar 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

                                      A-8-4

<PAGE>

Agreement as Exhibit F-1, and (ii) in all other cases, an Opinion of Counsel
satisfactory to it that such transfer may be made without such registration or
qualification (which Opinion of Counsel shall not be an expense of the Trust
Fund or of the Depositor, the Trustee or the Master Servicer in their respective
capacities as such), together with copies of the written certification(s) of the
Holder of the Certificate desiring to effect the transfer and/or such Holder's
prospective transferee upon which such Opinion of Counsel is based. None of the
Depositor, the Certificate Registrar 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 Depositor, the
Certificate Registrar and the Master Servicer against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.

                  No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 5.02(c) of the Agreement.

                  Prior to registration of any transfer, sale or other
disposition of this Certificate, the proposed transferee shall provide to the
Trustee (i) an affidavit to the effect that such transferee is any Person other
than a Disqualified Organization or the agent (including a broker, nominee or
middleman) of a Disqualified Organization, and (ii) a certificate that
acknowledges that (A) the Class R Certificates have been designated as a
residual interest in a REMIC, (B) it will include in its income a PRO RATA share
of the net income of the Trust Fund and that such income may be an "excess
inclusion," as defined in the Code, that, with certain exceptions, cannot be
offset by other losses or benefits from any tax exemption, and (C) it expects to
have the financial means to satisfy all of its tax obligations including those
relating to holding the Class R Certificates. Notwithstanding the registration
in the Certificate Register of any transfer, sale or other disposition of this
Certificate to a Disqualified Organization or an agent (including a broker,
nominee or middleman) of a Disqualified Organization, such registration shall be
deemed to be of no legal force or effect whatsoever and such Person shall not be
deemed to be a Certificateholder for any purpose, including, but not limited to,
the receipt of distributions in respect of this Certificate.

                  The Holder of this Certificate, by its acceptance hereof,
shall be deemed to have consented to the provisions of Section 5.02 of the
Agreement and to any amendment of the Agreement deemed necessary by counsel of
the Depositor to ensure that the transfer of this Certificate to any Person
other than a Permitted Transferee or any other Person will not cause the Trust
Fund to cease to qualify as a REMIC or cause the imposition of a tax upon the
REMIC.

                  No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 5.02(c) of the Agreement.

                                      A-8-5

<PAGE>

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

                  The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee, or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the aggregate
Stated Principal Balance of the Mortgage Loans at the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee does not assume any responsibility for their
correctness.

                  Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

                                      A-8-6

<PAGE>

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

Dated: December __, 2001

                                        BANKERS TRUST COMPANY
                                        OF CALIFORNIA, N.A.
                                        as Trustee

                                        By:__________________________
                                                 Authorized Officer

                                           CERTIFICATE OF AUTHENTICATION

                  This is one of the Class R Certificates referred to in the
within-mentioned Agreement.

                                        BANKERS TRUST COMPANY OF
                                        CALIFORNIA, N.A.
                                        as Certificate Registrar

                                        By:__________________________
                                                 Authorized Signatory

                                      A-8-7

<PAGE>

                                  ABBREVIATIONS

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:

<TABLE>
<CAPTION>
<S>                                                           <C>
         TEN COM -         as tenants in common               UNIF GIFT MIN ACT -        Custodian
                                                                                     -----------------
                                                                                   (Cust)   (Minor)
         TEN ENT -         as tenants by the entireties                            under Uniform Gifts to
                                                                                   Minors Act
         JT TEN -          as joint tenants with right if                            -----------------
                           survivorship and not as tenants                                  (State)
                           in common
</TABLE>

                  Additional abbreviations may also be used though not in the
above list.

                                   ASSIGNMENT

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

a Percentage Interest equal to____% evidenced by the within Floating Rate
Mortgage Pass- Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.

                  I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following
address: ----------------------------------------------------------------------
--------------------------------------------------------------------------------
Dated:

                                        -------------------------------------
                                        Signature by or on behalf of assignor

                                        ------------------------------------
                                        Signature Guaranteed

                                      A-8-8

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
________________________________ for the account of ___________________________
_______________________________, account number______________ or, if mailed by
check, to _____________________________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to______________________________________
_______________________________________________________________________________
_______________________________________________________________________________.

         This information is provided by ______________________________________,
the assignee named above, or ____________________________________, as its agent.

                                      A-8-9

<PAGE>

                                    EXHIBIT B

                                   [RESERVED]

                                       B-1

<PAGE>

                                   EXHIBIT C-1

                     FORM OF TRUSTEE'S INITIAL CERTIFICATION

                                                        [Date]

Ameriquest Mortgage Securities Inc.
1100 Town & Country Road, Suite 1100
 Orange, California 92868

Ameriquest Mortgage Company
1100 Town & Country Road
Orange, California 92868

               Re:  Pooling and Servicing Agreement, dated as of November 1,
                    2001, among Ameriquest Mortgage Securities Inc., Ameriquest
                    Mortgage Company and Bankers Trust Company of California,
                    N.A., Floating Rate Mortgage Pass- Through Certificates,
                    Series 2001-3
                    ------------------------------------------------------------

Ladies and Gentlemen:

         Pursuant to Section 2.02 of the Pooling and Servicing Agreement,
attached hereto is the Trustee's Initial Certification delivered by the Trustee,
pursuant to the Pooling and Servicing Agreement dated as of November 1, 2001, by
and among Bankers Trust Company, N.A., Ameriquest Mortgage Securities Inc. and
Ameriquest Mortgage Company.

         The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
due authorization, recordability or genuineness of any of the documents
contained in the Mortgage File of any of the Mortgage Loans identified on the
Mortgage Loan Schedule, or (ii) the collectability, insurability, effectiveness
or suitability of any such Mortgage Loan.

                                        BANKERS TRUST COMPANY
                                        OF CALIFORNIA, N.A.
                                        as Trustee

                                        By: ______________________________
                                        Name:
                                        Title:

                                      C-1-1

<PAGE>

                                   EXHIBIT C-2

                     FORM OF TRUSTEE'S INTERIM CERTIFICATION

                                                    [Date]

Ameriquest Mortgage Securities Inc.
1100 Town & Country Road, Suite 1100
Orange, California 92868

Ameriquest Mortgage Company
1100 Town & Country Road
Orange, California 92868

               Re:  Pooling and Servicing Agreement, dated as of November 1,
                    2001, among Ameriquest Mortgage Securities Inc., Ameriquest
                    Mortgage Company Bankers Trust Company of California, N.A.,
                    Floating Rate Mortgage Pass- Through Certificates, Series
                    2001-3
                    -----------------------------------------------------------

Ladies and Gentlemen:

         Pursuant to Section 2.02 of the Pooling and Servicing Agreement,
attached hereto is the Trustee's Interim Certification delivered by the Trustee,
pursuant to the Pooling and Servicing Agreement dated as of November 1, 2001, by
and among Bankers Trust Company of California, N.A., Ameriquest Mortgage
Securities Inc. and Ameriquest Mortgage Company.

         The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
due authorization, recordability or genuineness of any of the documents
contained in the Mortgage File of any of the Mortgage Loans identified on the
Mortgage Loan Schedule, or (ii) the collectability, insurability, effectiveness
or suitability of any such Mortgage Loan.

                                         BANKERS TRUST COMPANY OF
                                         CALIFORNIA, N.A., as Trustee

                                         By:      ______________________________
                                         Name:
                                         Title:

                                      C-2-1

<PAGE>

                                   EXHIBIT C-3

                       FORM OF TRUSTEE FINAL CERTIFICATION

                                                        [Date]

Ameriquest Mortgage Securities Inc.
1100 Town & Country Road
Orange, California 92868

Ameriquest Mortgage Company
1100 Town & Country Road
Orange, California 92868

               Re:  Pooling and Servicing Agreement, dated as of November 1,
                    2001, among Ameriquest Mortgage Securities Inc., Ameriquest
                    Mortgage Company Bankers Trust Company of California, N.A.,
                    Floating Rate Mortgage Pass- Through Certificates, Series
                    2001-3
                    -----------------------------------------------------------

Ladies and Gentlemen:

         In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan paid in full or listed on the attachment hereto), it or a Custodian on its
behalf has received:

                  (i) the original recorded Mortgage, and the original recorded
         power of attorney, if the Mortgage was executed pursuant to a power of
         attorney, or a certified copy thereof in those instances where the
         public recording office retains the original or where the original has
         been lost; and

                  (ii) an original recorded Assignment to the Trustee together
         with the original recorded Assignment or Assignments showing a complete
         chain of assignment from the originator, or a certified copy of such
         Assignments in those instances where the public recording retains the
         original or where original has been lost; and

                  (iii) the original lender's title insurance policy.

         The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in the Mortgage File of any of
the

                                      C-3-1

<PAGE>

Mortgage Loans identified on the Mortgage Loan Schedule, or (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan.

         Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.

                                        BANKERS TRUST COMPANY OF
                                        CALIFORNIA, N.A., as Trustee

                                        By:      ______________________________
                                        Name:
                                        Title:

                                      C-3-2

<PAGE>

                                    EXHIBIT D

                    FORM OF MORTGAGE LOAN PURCHASE AGREEMENT

                                       D-1

<PAGE>

                        MORTGAGE LOAN PURCHASE AGREEMENT

                  This is a Mortgage Loan Purchase Agreement (the "Agreement"),
dated December 6, 2001, between Ameriquest Mortgage Company, a Delaware
corporation (the "Originator") and Ameriquest Mortgage Securities Inc., a
Delaware corporation (the "Purchaser").

                              Preliminary Statement
                              ---------------------

                  The Originator intends to sell the Mortgage Loans (as
hereinafter defined) to the Purchaser on the terms and subject to the conditions
set forth in this Agreement. The Purchaser shall deposit the Mortgage Loans into
a mortgage pool constituting the trust fund. The trust fund will be evidenced by
a single series of floating rate mortgage pass-through certificates designated
as Series 2001-3 (the "Certificates"). The Certificates will consist of eight
classes of certificates. The Class CE Certificates, the Class P Certificates and
the Class R Certificates (collectively, the "Non-offered Certificates") will be
delivered to the Originator as partial consideration for the Mortgage Loans as
further described below.

                  The Certificates will be issued pursuant to a Pooling and
Servicing Agreement, dated as of November 1, 2001 (the "Pooling and Servicing
Agreement"), among the Purchaser as depositor (in such capacity, the
"Depositor"), the Originator as master servicer (in such capacity the "Master
Servicer") and Bankers Trust Company of California, N.A. as Trustee (in such
capacity the "Trustee") . Pursuant to the Pooling and Servicing Agreement, the
Depositor will assign all of its right, title and interest in and to the
Mortgage Loans, together with its rights under this Agreement, to the Trustee
for the benefit of the Certificateholders. Capitalized terms used but not
defined herein shall have the meanings set forth in the Pooling and Servicing
Agreement.

                  The parties hereto agree as follows:

                  SECTION 1. AGREEMENT TO PURCHASE. The Originator agrees to
sell, and the Purchaser agrees to purchase, on or before December 7, 2001 (the
"Closing Date"), certain adjustable-rate and fixed-rate conventional residential
mortgage loans (the "Mortgage Loans"), having an aggregate principal balance as
of the close of business on the Cut-off Date of approximately $79,941,803, after
giving effect to all payments due on the Mortgage Loans on or before the Cut-off
Date (the "Closing Balance"), whether or not received including the right to any
Prepayment Charges collected after the Cut-off Date from the Mortgagors in
connection with any Principal Prepayments on the Mortgage Loans. Any payments
(including Prepayment Charges) collected on or before the Cut-off Date,
including all scheduled payments of principal and interest due on or before the
Cut-off Date and collected after the Cut-off Date, shall belong to the
Originator.

                  SECTION 2. MORTGAGE LOAN SCHEDULE. The Purchaser and the
Originator have agreed upon which of the mortgage loans owned by the Originator
are to be purchased by the Purchaser pursuant to this Agreement, and the
Originator shall prepare or cause to be prepared on or prior to the Closing Date
a final schedule (the "Closing Schedule") describing such Mortgage Loans and
setting forth all of the Mortgage Loans to be purchased under this Agreement,
including

<PAGE>

                                       -2-

the related Prepayment Charges. The Closing Schedule shall conform to the
requirements set forth in this Agreement and to the definition of "Mortgage Loan
Schedule" under the Pooling and Servicing Agreement. The Closing Schedule shall
be used as the Mortgage Loan Schedule under the Pooling and Servicing Agreement.

                  SECTION 3. CONSIDERATION.

                  In consideration for the Mortgage Loans to be purchased
hereunder, the Purchaser shall, as described in Section 8, (i) pay to or upon
the order of the Originator in immediately available funds an amount (the
"Purchase Price") equal to the net sale proceeds of the Class A Certificates,
the Class S Certificates, the Class M-1 Certificates, the Class M-2 Certificates
and the Class M-3 Certificates and (ii) deliver to Ameriquest Securities L.L.C.,
upon the order of the Originator, the Class CE Certificates, the Class P
Certificates and the Class R Certificates (the "Ameriquest L.L.C.
Certificates").

                  SECTION 4. TRANSFER OF THE MORTGAGE LOANS.

                           (a) POSSESSION OF MORTGAGE FILES. The Originator does
hereby sell and contribute, transfer, assign, set over and convey to the
Purchaser, without recourse but subject to the terms of this Agreement, all of
its right, title and interest in, to and under the Mortgage Loans, including the
related Prepayment Charges collected after the Cut-off Date. The contents of
each Mortgage File not delivered to the Purchaser or to any assignee, transferee
or designee of the Purchaser on or prior to the Closing Date are and shall be
held in trust by the Originator for the benefit of the Purchaser or any
assignee, transferee or designee of the Purchaser. Upon the sale and
contribution of the Mortgage Loans the ownership of each Mortgage Note, the
related Mortgage and the other contents of the related Mortgage File is vested
in the Purchaser and the ownership of all records and documents with respect to
the related Mortgage Loan prepared by or that come into the possession of the
Originator on or after the Closing Date shall immediately vest in the Purchaser
and shall be delivered immediately to the Purchaser or as otherwise directed by
the Purchaser.

                           (b) DELIVERY OF MORTGAGE LOAN DOCUMENTS. The
Originator will, on or prior to the Closing Date, deliver or cause to be
delivered to the Purchaser or any assignee, transferee or designee of the
Purchaser each of the following documents for each Mortgage Loan:

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

                           (ii) the original Mortgage with evidence of recording
                  thereon, and a copy, certified by the appropriate recording
                  office, of the recorded power of attorney, if the

<PAGE>

                                       -3-

                  Mortgage was executed pursuant to a power of attorney, with
                  evidence of recording thereon;

                           (iii) an original Assignment of the Mortgage in
                  blank;

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

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

                           (vi) the original lender's title insurance policy or
                  an attorney's opinion of title or similar, guarantee of title
                  acceptable to mortgage lenders generally in the jurisdiction
                  where the Mortgaged Property is located, together with all
                  endorsements or riders which were issued with or subsequent to
                  the issuance of such policy, insuring the priority of the
                  Mortgage as a first lien on the Mortgaged Property represented
                  therein as a fee interest vested in the Mortgagor, or in the
                  event such original title policy is unavailable, a written
                  commitment or uniform binder or preliminary report of title
                  issued by the title insurance or escrow company.

                  The Originator shall promptly (and in no event later than
thirty (30) Business Days, subject to extension upon mutual agreement between
the Originator and the Trustee, following the later of (i) the Closing Date,
(ii) the date on which the Originator receives the Assignment from the Trustee
and (iii) the date of receipt by the Originator of the recording information for
a Mortgage) submit or cause to be submitted for recording, at no expense to the
Trust Fund or the Trustee, in the appropriate public office for real property
records, each Assignment referred to in (iii) and (iv) above and shall execute
each original Assignment referred to in (iii) in the following form: "Bankers
Trust Company of California, N.A., as Trustee under the applicable agreement
without recourse". In the event that any such Assignment is lost or returned
unrecorded because of a defect therein, the Originator shall promptly prepare or
cause to be prepared a substitute Assignment or cure or cause to be cured such
defect, as the case may be, and thereafter cause each such Assignment to be duly
recorded. Notwithstanding the foregoing, however, for administrative convenience
and facilitation of servicing and to reduce closing costs, the assignments of
Mortgage shall not be required to be submitted for recording with respect to any
Mortgage Loan if the Trustee and each Rating Agency has received an opinion of
counsel, satisfactory in form and substance to each Rating Agency, to the effect
that the recordation of such Assignments in any specific jurisdiction is not
necessary to protect the Trustee's interest in the related Mortgage Note;
provided further, however, notwithstanding the delivery of any opinion of
counsel, each assignment of Mortgage shall be submitted for recording by the
Originator in the manner described above, at no expense to the Trust Fund or the
Trustee, upon the earliest to occur of: (i) reasonable direction by Holders of
Certificates entitled to at least

<PAGE>

                                       -4-

25% of the Voting Rights, (ii) failure of the Master Servicer Termination Test,
(iii) the occurrence of the bankruptcy or insolvency of the Originator, (iv) the
occurrence of a servicing transfer as described in Section 7.02 of the Pooling
and Servicing Agreement, and (v) if the Originator is not the Master Servicer
and with respect to any one Assignment of Mortgage, the occurrence of a
bankruptcy of the mortgagor under the related Mortgage or a foreclosure of
related Mortgage.

                  Notwithstanding the foregoing, if the Originator is unable to
pay the cost of recording the Assignments of Mortgage, such expense will be paid
by the Trustee. Notwithstanding anything to the contrary contained in this
Section 4, if any document referred to in Section 4(b)(ii) or 4(b)(iv) above has
been submitted for recording but either (x) has not been returned from the
applicable public recording office or (y) has been lost or such public recording
office has retained the original of such document, the obligations of the
Originator hereunder shall be deemed to have been satisfied upon (1) delivery by
or on behalf of the Originator promptly upon receipt thereof to the Purchaser or
any assignee, transferee or designee of the Purchaser of either the original or
a copy of such document certified by the Originator in the case of (x) above or
the public recording office in the case of (y) above to be a true and complete
copy of the recorded original thereof and (2) if such delivered copy is
certified by the Originator then in addition thereto delivery promptly upon
receipt thereof of either the original or a copy of such document certified by
the public recording office to be a true and complete copy of the original.

                  In the event that the original lender's title insurance policy
has not yet been issued, the Originator shall deliver to the Purchaser or any
assignee, transferee or designee of the Purchaser a written commitment or
interim binder or preliminary report of title issued by the title insurance or
escrow company. Promptly upon receipt by the Originator of any such original
title insurance policy the Originator shall deliver such to the Purchaser or any
assignee, transferee or designee of the Purchaser.

                  Each original document relating to a Mortgage Loan which is
not delivered to the Purchaser or its assignee, transferee or designee, if held
by the Originator, shall be so held for the benefit of the Purchaser or its
assignee, transferee or designee.

                           (c) ACCEPTANCE OF MORTGAGE LOANS. The documents
delivered pursuant to Section 4(b) hereof shall be reviewed by the Purchaser or
any assignee, transferee or designee of the Purchaser at any time before or
after the Closing Date (and with respect to each document permitted to be
delivered after the Closing Date within seven days of its delivery) to ascertain
that all required documents have been executed and received and that such
documents relate to the Mortgage Loans identified on the Mortgage Loan Schedule.

                           (d) RESERVED.

                           (e) TRANSFER OF INTEREST IN AGREEMENTS. The Purchaser
has the right to assign its interest under this Agreement, in whole or in part,
to the Trustee, as may be required to

<PAGE>

                                       -5-

effect the purposes of the Pooling and Servicing Agreement, without the consent
of the Originator, and the assignee shall succeed to the rights and obligations
hereunder of the Purchaser. Any expense reasonably incurred by or on behalf of
the Purchaser or the Trustee in connection with enforcing any obligations of the
Originator under this Agreement will be promptly reimbursed by the Originator.

                           (f) EXAMINATION OF MORTGAGE FILES. Prior to the
Closing Date, the Originator shall either (i) deliver in escrow to the Purchaser
or to any assignee, transferee or designee of the Purchaser, for examination,
the Mortgage File pertaining to each Mortgage Loan or (ii) make such Mortgage
Files available to the Purchaser or to any assignee, transferee or designee of
the Purchaser for examination at the Trustee's offices in Santa Ana, California.
Such examination may be made by the Purchaser, and its respective designees,
upon reasonable notice to the Originator and the Trustee during normal business
hours before the Closing Date and within 60 days after the Closing Date. If any
such person makes such examination prior to the Closing Date and identifies any
Mortgage Loans that do not conform to the requirements of the Purchaser as
described in this Agreement, such Mortgage Loans shall be deleted from the
Closing Schedule. The Purchaser may, at its option and without notice to the
Originator, purchase all or part of the Mortgage Loans without conducting any
partial or complete examination. The fact that the Purchaser or any person has
conducted or has failed to conduct any partial or complete examination of the
Mortgage Files shall not affect the rights of the Purchaser or any assignee,
transferee or designee of the Purchaser to demand repurchase or other relief as
provided herein or under the Pooling and Servicing Agreement.

                  SECTION 5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
                             ORIGINATOR.

                  The Originator hereby represents and warrants to the
Purchaser, as of the date hereof and as of the Closing Date, and covenants,
that:

                  (i) The Originator is a corporation duly organized, 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 Originator in any state in which a
Mortgaged Property is located or is otherwise not required under applicable law
to effect such qualification and, in any event, is in compliance with the doing
business laws of any such State, to the extent necessary to ensure its ability
to enforce each Mortgage Loan and to service the Mortgage Loans in accordance
with the terms of the Pooling and Servicing Agreement;

                  (ii) The Originator had the full corporate power and authority
to originate, hold and sell each Mortgage Loan and 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 has duly authorized by all necessary corporate action on the part
of the Originator the execution, delivery and performance of this Agreement; and
this Agreement, assuming the due authorization, execution and delivery thereof
by the Purchaser, constitutes a legal, valid and binding obligation of the
Originator, enforceable against the Originator in accordance with

<PAGE>

                                       -6-

its terms, except to the extent that (a) the enforceability thereof 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
the 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 by the
Originator, the servicing of the Mortgage Loans by the Originator under the
Pooling and Servicing Agreement, the consummation 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 Originator and will
not (A) result in a breach of any term or provision of the charter or by-laws of
the Originator 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 Originator is a party or by which it may be
bound, or any statute, order or regulation applicable to the Originator of any
court, regulatory body, administrative agency or governmental body having
jurisdiction over the Originator; and the Originator 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 Originator's
knowledge, would in the future materially and adversely affect, (x) the ability
of the Originator to perform its obligations under this Agreement or (y) the
business, operations, financial condition, properties or assets of the
Originator taken as a whole;

                  (iv) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery and
performance by the Originator of, or compliance by the Originator with, this
Agreement or the consummation of the transactions contemplated hereby, or if any
such consent, approval, authorization or order is required, the Originator has
obtained the same;

                  (v) The Originator is an approved Originator/servicer for
Fannie Mae or Freddie Mac in good standing and is a HUD approved mortgagee
pursuant to Section 203 and Section 211 of the National Housing Act; and

                  (vi) Except as otherwise disclosed in the Prospectus
Supplement, no litigation is pending against the Originator that would
materially and adversely affect the execution, delivery or enforceability of
this Agreement or the ability of the Originator to service the Mortgage Loans or
to perform any of its other obligations hereunder in accordance with the terms
hereof.

                  SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE ORIGINATOR
                             RELATING TO THE MORTGAGE LOANS.

                  The Originator hereby represents and warrants to the Purchaser
that as of the Closing Date:

<PAGE>

                                       -7-

                           (i) The information set forth on the related Mortgage
Loan Schedule with respect to each Mortgage Loan is true and correct in all
material respects;

                           (ii) [Reserved];

                           (iii) No material error, omission, misrepresentation,
negligence, fraud or similar occurrence with respect to a Mortgage Loan has
taken place on the part of any person, including without limitation, the
Mortgagor, any appraiser, any builder or developer, or any other party involved
in the origination of the Mortgage Loan or in the application of any insurance
in relation to such Mortgage Loan;

                           (iv) All payments due prior to the Cut-off Date have
been made and none of the Mortgage Loans will have been contractually delinquent
for more than one calendar month more than once since the origination thereof;

                           (v) Each Mortgage is a valid and enforceable first
lien on the Mortgaged Property, including all improvements thereon, subject only
to (a) the lien of nondelinquent current real property taxes and assessments,
(b) covenants, conditions and restrictions, rights of way, easements and other
matters of public record as of the date of recording of such Mortgage, such
exceptions appearing of record being acceptable to mortgage lending institutions
generally or specifically reflected in the appraisal made in connection with the
origination of the related Mortgage Loan, and (c) other matters to which like
properties are commonly subject which do not materially interfere with the
benefits of the security intended to be provided by such Mortgage;

                           (vi) Immediately prior to the assignment of the
Mortgage Loans to the Purchaser, the Originator had good title to, and was the
sole legal and beneficial owner of, each Mortgage Loan free and clear of any
pledge, lien, encumbrance or security interest and has full right and authority,
subject to no interest or participation of, or agreement with, any other party
to sell and assign the same;

                           (vii) There is no delinquent tax or assessment lien
against any Mortgaged Property;

                           (viii) There is no valid offset, defense or
counterclaim to any Mortgage Note or Mortgage, including the obligation of the
Mortgagor to pay the unpaid principal of or interest on such Mortgage Note, 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 valid right of rescission, set-off,
counterclaim or defense, including the defense of usury and no such valid right
of rescission, set-off, counterclaim or defense has been asserted with respect
thereto;

<PAGE>

                                       -8-

                           (ix) There are no mechanics' liens or claims for
work, labor or material rendered to the Mortgaged Property affecting any
Mortgaged Property which are or may be a lien prior to, or equal with, the lien
of the related Mortgage, except those which are insured against by the title
insurance policy referred to in (xiii) below;

                           (x) Subject to the Escrow Withhold referred to in
(xx) below, each Mortgaged Property is free of material damage and is in good
repair;

                           (xi) Each Mortgage Loan at origination complied in
all material respects with applicable local, state and federal laws, including,
without limitation, usury, equal credit opportunity, real estate settlement
procedures, truth-in-lending and disclosure laws, and consummation of the
transactions contemplated hereby will not involve the violation of any such
laws;

                           (xii) Neither the Originator nor any prior holder of
any Mortgage has modified the Mortgage in any material respect (except that a
Mortgage Loan may have been modified by a written instrument which has been
recorded, if necessary, to protect the interests of the Purchaser and which has
been delivered to the Trustee); satisfied, canceled or subordinated such
Mortgage in whole or in part; released the related Mortgaged Property in whole
or in part from the lien of such Mortgage; or executed any instrument of
release, cancellation, modification or satisfaction with respect thereto;

                           (xiii) A lender's policy of title insurance together
with a condominium endorsement, extended coverage endorsement, and an adjustable
rate mortgage endorsement (each as applicable) in an amount at least equal to
the Cut-off Date principal balance of each such Mortgage Loan or a commitment
(binder) to issue the same was effective on the date of the origination of each
Mortgage Loan, each such policy is valid and remains in full force and effect,
the transfer of the related Mortgage Loan to the Purchaser will not affect the
validity or enforceability of such policy and each such policy was issued by a
title insurer qualified to do business in the jurisdiction where the Mortgaged
Property is located and in a form acceptable to Fannie Mae or Freddie Mac, which
policy insures the Originator and successor owners of indebtedness secured by
the insured Mortgage, as to the first priority lien of the Mortgage; no claims
have been made under such lender's title insurance policy and no prior holder of
the related Mortgage, including the Originator, has done, by act or omission,
anything which would impair the coverage of such lender's title insurance
policy;

                           (xiv) Each Mortgage Loan was originated by the
Originator (or, if generated on behalf of the Originator by a person other than
the Originator, is subject to the same underwriting standards and procedures
used by the Originator in originating mortgage loans directly) or by a savings
and loan association, savings bank, commercial bank, credit union, insurance
company or similar institution which is supervised and examined by a federal or
state authority (including a mortgage broker), or by a mortgagee approved by the
Secretary of Housing and Urban Development pursuant to Sections 203 and 211 of
the National Housing Act;

<PAGE>

                                       -9-

                           (xv) With respect to each Adjustable-Rate Mortgage
Loan, on each adjustment date, the Mortgage Rate will be adjusted to equal the
Index plus the Gross Margin, rounded to the nearest 0.125%, subject to the
Periodic Rate Cap, the Maximum Mortgage Rate and the Minimum Mortgage Rate. The
related Mortgage Note is payable on the first day of each month in
self-amortizing monthly installments of principal and interest, with interest
payable in arrears, and requires a monthly payment which is sufficient to fully
amortize the outstanding principal balance of the Mortgage Loan over its
remaining term and to pay interest at the applicable Mortgage Rate. No Mortgage
Loan is subject to negative amortization;

                           (xvi) All of the improvements which were included for
the purpose of determining the appraised value of the Mortgaged Property lie
wholly within the boundaries and building restriction lines of such property,
and no improvements on adjoining properties encroach upon the Mortgaged
Property, except those, if any, which are insured against by the lender's title
insurance policy referred to in (xiii) above.

                           (xvii) All inspections, licenses and certificates
required to be made or issued with respect to all occupied portions of the
Mortgaged Property including but not limited to certificates of occupancy, have
been made or obtained from the appropriate authorities and the Mortgaged
Property is lawfully occupied under applicable law except as may otherwise be
insured against by the lender's title insurance policy referred to in (xiii)
above.

                           (xviii) 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) in
compliance with any and all applicable licensing requirements of the laws of the
state wherein the Mortgaged Property is located;

                           (xix) 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 and with applicable laws. All
parties to the Mortgage Note and the Mortgage had legal capacity to execute the
Mortgage Note and the Mortgage and each Mortgage Note and Mortgage have been
duly and properly executed by such parties;

                           (xx) The proceeds of each Mortgage Loan have been
fully disbursed, there is no requirement for future advances thereunder and any
and all requirements as to completion of any on-site or off-site improvements
and as to disbursements of any escrow funds therefor have been complied with,
excepting therefrom any Mortgaged Property or Mortgage Loan subject to an Escrow
Withhold as defined in the Originator's underwriting guidelines. All costs, fees
and expenses incurred in making, closing or recording the Mortgage Loans were
paid;

                           (xxi) The related Mortgage contains customary and
enforceable provisions which render the rights and remedies of the holder
thereof adequate for the realization against the

<PAGE>

                                      -10-

Mortgaged Property of the benefits of the security, including, (i) in the case
of a Mortgage designated as a deed of trust, by trustee's sale, and (ii)
otherwise by judicial foreclosure. There is no homestead or other exemption
available to the Mortgagor which would materially interfere with the right to
sell the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage;

                           (xxii) With respect to each Mortgage constituting 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 such
Mortgage, and no fees or expenses are or will become payable by the Purchaser to
the trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;

                           (xxiii) There exist no deficiencies with respect to
escrow deposits and payments, if such are required, for which customary
arrangements for repayment thereof have not been made, and no escrow deposits or
payments of other charges or payments due the Originator have been capitalized
under the Mortgage or the related Mortgage Note;

                           (xxiv) The origination, collection and servicing
practices used by the Originator with respect to each Mortgage Loan have been in
all material respects legal, proper, reasonable and customary in the subprime
mortgage origination and servicing business;

                           (xxv) There is no pledged account or other security
other than real estate securing the Mortgagor's obligations;

                           (xxvi) No Mortgage Loan has a shared appreciation
feature, or other contingent interest feature;

                           (xxvii) The improvements upon each Mortgaged Property
are covered by a valid and existing hazard insurance policy with a generally
acceptable carrier that provides for fire extended coverage and such other
hazards as are customary in the area where the Mortgaged Property is located
representing coverage not less than the lesser of the outstanding principal
balance of the related Mortgage Loan or the minimum amount required to
compensate for damage or loss on a replacement cost basis. All individual
insurance policies and flood policies referred to in clause (xxviii) below
contain a standard mortgagee clause naming the Originator or the original
mortgagee, and its successors in interest, as mortgagee, and the Originator has
received no notice that any premiums due and payable thereon have not been paid;
the Mortgage obligates the Mortgagor thereunder to maintain all such insurance,
including flood insurance, at the Mortgagor's cost and expense, and upon the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to obtain
and maintain such insurance at the Mortgagor's cost and expense and to seek
reimbursement therefor from the Mortgagor, except as may be limited or
restricted by applicable law;

                           (xxviii) If the Mortgaged Property is in an area
identified in the Federal Register by the Federal Emergency Management Agency as
having special flood hazards, a flood

<PAGE>

                                      -11-

insurance policy in a form meeting the requirements of the current guidelines of
the Flood Insurance Administration is in effect with respect to such Mortgaged
Property with a generally acceptable carrier in an amount representing coverage
not less than the least of (A) the original outstanding principal balance of the
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;

                           (xxix) There is no default, breach, violation or
event of acceleration existing under the Mortgage or the related Mortgage Note;
and the Originator has not waived any default, breach, violation or event of
acceleration;

                           (xxx) Each Mortgaged Property is improved by a one-
to four-family residential dwelling, including condominium units and dwelling
units in planned unit developments, which does not include (a) cooperatives or
(b) mobile homes and manufactured homes (as defined in the Fannie Mae
Seller-Servicer's Guide), except when the appraisal indicates that (i) the
mobile or manufactured home was built under the Federal Manufactured Home
Construction and Safety Standards of 1976 or (ii) otherwise assumes the
characteristics of site-built housing and meets local building codes, is readily
marketable, has been permanently affixed to the site, is not in a mobile home
"park," and is treated as real property under the applicable state law. With
respect to any Mortgage Loan that is secured by a leasehold estate, (a) the
lease is valid, in full force and effect; (b) all rents and other payments due
under the lease have been paid; (c) the lessee is not in default under any
provision of the lease; (d) the term of the lease exceeds the maturity date of
the related Mortgage Loan by at least five years and (e) the Mortgagee under the
Mortgage Loan is given notice and an opportunity to cure any defaults under the
lease;

                           (xxxi) There is no obligation on the part of the
Originator or any other party under the terms of the Mortgage or related
Mortgage Note to make payments in lieu of or in addition to those made by the
Mortgagor;

                           (xxxii) Any future advances made prior to the related
Purchase Date have been consolidated with the outstanding principal amount
secured by the Mortgage, and the secured principal amount, as consolidated,
bears a single interest rate and single repayment term reflected on the Mortgage
Loan Schedule. The consolidated principal amount does not exceed the original
principal amount of the Mortgage Loan;

                           (xxxiii) Each Mortgage Loan was underwritten in
accordance with the Originator's underwriting guidelines;

                           (xxxiv) The Mortgage File contains an appraisal which
was performed by an appraiser who satisfied, and which was conducted in
accordance with, all of the applicable requirements of the Financial
Institutions Reform, Recovery and Enforcement Act of 1989, as amended;.

<PAGE>

                                      -12-

                           (xxxv) None of the Mortgage Loans is a graduated
payment mortgage loan, nor is any Mortgage Loan subject to a temporary buydown
or similar arrangement;

                           (xxxvi) With respect to each Mortgage Loan, no loan
junior in lien priority to such Mortgage Loan and secured by the related
Mortgaged Property was originated by the Originator at the time of origination
of such Mortgage Loan;

                           (xxxvii) The Mortgage Loans comply in all material
respects with the description set forth under the heading "The Mortgage Pool" in
the Depositor's Prospectus Supplement, dated December 6, 2001 (the "Prospectus
Supplement");

                           (xxxviii) The Mortgage contains an enforceable
provision for the acceleration of the payment of the unpaid principal balance of
the Mortgage Loan in the event that the Mortgaged Property is sold or
transferred without the prior written consent of the mortgagee thereunder,
except as may be limited by applicable law;

                           (xxxix) The information set forth in the Mortgage
Loan Schedule relating to the existence of a Prepayment Charge is complete, true
and correct in all material respects at the date or dates respecting which such
information is furnished and each Prepayment Charge is permissible and
enforceable in accordance with its terms upon the full and voluntary prepayment
by the Mortgagor under applicable law (except to the extent that: (1) the
enforceability thereof may be limited by bankruptcy, insolvency, moratorium,
receivership and other similar laws relating to creditors' rights generally; or
(2) the collectability thereof may be limited due to acceleration in connection
with a foreclosure or other involuntary payoff; and

                           (xl) Each Mortgage Loan is an obligation that is
principally secured by real property for purposes of the REMIC Provisions of the
Code.

                  SECTION 7. REPURCHASE OBLIGATION FOR DEFECTIVE DOCUMENTATION
                             AND FOR BREACH OF REPRESENTATION AND WARRANTY.

                  (a) The representations and warranties contained in Section 6
shall not be materially impaired by any review and examination of loan files or
other documents evidencing or relating to the Mortgage Loans or any failure on
the part of the Purchaser to review or examine such documents and shall inure to
the benefit of any assignee, transferee or designee of the Purchaser, including
the Trustee for the benefit of the Certificateholders.

                  Upon discovery by the Originator, the Purchaser or any
assignee, transferee or designee of the Purchaser of any materially defective
document in, or that any material document was not transferred by the Originator
(as listed on the Trustee's Preliminary Exception Report), as part of, any
Mortgage File or of a breach of any of the representations and warranties
contained in

<PAGE>

                                      -13-

Section 5 or Section 6 that materially and adversely affects the value of any
Mortgage Loan or the interest therein of the Purchaser or the Purchaser's
assignee, transferee or designee, the party discovering the breach shall give
prompt written notice to the other. Within ninety (90) days of its discovery or
its receipt of notice of any such missing documentation which was not
transferred to the Purchaser as described above or materially defective
documentation or any such breach of a representation and warranty the Originator
promptly shall deliver such missing document or cure such defect or breach in
all material respects, or in the event the Originator cannot deliver such
missing document or such defect or breach cannot be cured, the Originator shall,
within 90 days of its discovery or receipt of notice, either (i) repurchase the
affected Mortgage Loan at a price equal to the Purchase Price (as such term is
defined in the Pooling and Servicing Agreement) or (ii) pursuant to the
provisions of the Pooling and Servicing Agreement, cause the removal of such
Mortgage Loan from the Trust Fund and substitute one or more Qualified
Substitute Mortgage Loans. In the event that any Mortgage Loan is subject to a
breach of the representation and warranty in Section 6(xxxix) resulting in the
Master Servicer's inability to collect all or part of the Prepayment Charge from
the Mortgagor, in lieu of repurchase, the Originator shall be obligated to remit
to the Master Servicer (for deposit in the Collection Account) any shortfall in
the Prepayment Charge collected upon the Mortgagor's voluntary and full
principal prepayment.

                  The Originator shall amend the Closing Schedule to reflect the
withdrawal of such Mortgage Loan from the terms of this Agreement and the
Pooling and Servicing Agreement and the addition, if any, of a Qualified
Substitute Mortgage Loan. The Originator shall deliver to the Purchaser such
amended Closing Schedule and shall deliver such other documents as are required
by this Agreement or the Pooling and Servicing Agreement within five (5) days of
any such amendment. Any repurchase pursuant to this Section 7(a) shall be
accomplished by deposit in the Collection Account of the amount of the Purchase
Price in accordance with Section 2.03 of the Pooling and Servicing Agreement.
Any repurchase or substitution required by this Section shall be made in a
manner consistent with Section 2.03 of the Pooling and Servicing Agreement.

                  In addition, upon discovery by the Originator, the Purchaser,
or any assignee, transferee or designee of the Purchaser that any Mortgage Loan
does not constitute a "qualified mortgage" within the meaning of Section
860G(a)(3) of the Code, the party discovering the breach shall give prompt
written notice within five Business Days to the others. Within ninety (90) days
of its discovery or its receipt of notice, the Originator promptly shall either
(i) repurchase the affected Mortgage Loan at the Purchase Price (as such term is
defined in the Pooling and Servicing Agreement) or (ii) pursuant to the
provisions of the Pooling and Servicing Agreement, cause the removal of such
Mortgage Loan from the Trust Fund and substitute one or more Qualified
Substitute Mortgage Loans.

                  (b) It is understood and agreed that the obligations of the
Originator set forth in this Section 7 to cure, remit a Prepayment Charge
shortfall, repurchase or substitute for a defective Mortgage Loan constitute the
sole remedies of the Purchaser against the Originator respecting a

<PAGE>

                                      -14-

missing or defective material document or a breach of the representations and
warranties contained in Section 5 or Section 6.

                  SECTION 8. CLOSING; PAYMENT FOR THE MORTGAGE LOANS. The
closing of the purchase and sale of the Mortgage Loans shall be held at the New
York City office of Thacher Proffitt & Wood at 10:00 AM New York City time on
the Closing Date.

                  The closing shall be subject to each of the following
conditions:

                  (a)      All of the representations and warranties of the
                           Originator under this Agreement shall be true and
                           correct in all material respects as of the date as of
                           which they are made and no event shall have occurred
                           which, with notice or the passage of time, would
                           constitute a default under this Agreement;

                  (b)      The Purchaser shall have received, or the attorneys
                           of the Purchaser shall have received in escrow (to be
                           released from escrow at the time of closing), all
                           Closing Documents as specified in Section 9 of this
                           Agreement, in such forms as are agreed upon and
                           acceptable to the Purchaser, duly executed by all
                           signatories other than the Purchaser as required
                           pursuant to the respective terms thereof;

                  (c)      The Originator shall have delivered or caused to be
                           delivered and released to the Purchaser or to its
                           designee, all documents (including without
                           limitation, the Mortgage Loans) required to be so
                           delivered by the Purchaser pursuant to Section 2.01
                           of the Pooling and Servicing Agreement; and

                  (d)      All other terms and conditions of this Agreement
                           shall have been complied with.

                  Subject to the foregoing conditions, the Purchaser shall
deliver or cause to be delivered to the Originator on the Closing Date, against
delivery and release by the Originator to the Trustee of all documents required
pursuant to the Pooling and Servicing Agreement, the consideration for the
Mortgage Loans as specified in Section 3 of this Agreement, by delivery to the
Originator of the Purchase Price.

                  SECTION 9. CLOSING DOCUMENTS. Without limiting the generality
of Section 8 hereof, the closing shall be subject to delivery of each of the
following documents:

                  (a)      An Officers' Certificate of the Originator, dated the
                           Closing Date, in form satisfactory to and upon which
                           the Purchaser and the Underwriters may rely, and
                           attached thereto copies of the certificate of
                           incorporation, by-laws and certificate of good
                           standing of the Originator under the laws of Delaware
                           and

<PAGE>

                                      -15-

                           (ii) if the Class CE Certificates and Class P
                           Certificates are offered on the Closing Date pursuant
                           to a Private Placement Memorandum, the Originator
                           shall deliver an Officer's Certificate stating that
                           the same information contained in such Private
                           Placement Memorandum is true and accurate in all
                           material respects;

                  (b)      An Officers' Certificate of the Originator, dated the
                           Closing Date, in form satisfactory to and upon which
                           the Purchaser and the Underwriters may rely, with
                           respect to certain facts regarding the sale of the
                           Mortgage Loans by the Originator to the Purchaser;

                  (c)      An Opinion of Counsel of the Originator, dated the
                           Closing Date, in form satisfactory to and addressed
                           to the Purchaser and the Underwriters;

                  (d)      Such opinions of counsel from the Purchaser's or
                           Originator's counsel as the Rating Agencies may
                           request in connection with the sale of the Mortgage
                           Loans by the Originator to the Purchaser or the
                           Originator's execution and delivery of, or
                           performance under, this Agreement and upon which the
                           Underwriters may rely;

                  (e)      A letter from Deloitte & Touche L.L.P., certified
                           public accountants, dated the date hereof and to the
                           effect that they have performed certain specified
                           procedures as a result of which they determined that
                           certain information of an accounting, financial or
                           statistical nature set forth in the Prospectus
                           Supplement, under the captions "Summary of Prospectus
                           Supplement", "Risk Factors", "The Mortgage Pool",
                           "Yield on the Certificates", "Description of the
                           Certificates", and "Pooling and Servicing
                           Agreement--The Originator and Master Servicer",
                           agrees with the records of the Originator;

                  (f)      The Originator shall deliver for inclusion in the
                           Prospectus Supplement under the captions "The
                           Mortgage Pool--Underwriting Standards;
                           Representations" and "Pooling and Servicing
                           Agreement--The Originator and Master Servicer", or
                           for inclusion in other offering material such
                           publicly available information regarding its
                           financial condition and its mortgage loan
                           delinquency, foreclosure and loss experience,
                           underwriting standards, lending activities and loan
                           sales, production, and servicing and collection
                           practices, and any similar nonpublic, unaudited
                           financial information; and

                  (g)      Such further information, certificates, opinions and
                           documents as the Purchaser or the Underwriters may
                           reasonably request.

<PAGE>

                                      -16-

                  SECTION 10. COSTS. The Originator shall pay (or shall
reimburse the Purchaser or any other Person to the extent that the Purchaser or
such other Person shall pay) all costs and expenses incurred in connection with
the transfer and delivery of the Mortgage Loans, including without limitation,
assignment of mortgage recording costs and/or fees for title policy endorsements
and continuations, the fees and expenses of the Originator's in-house
accountants and in-house attorneys, the costs and expenses incurred in
connection with producing the Originator's loan loss, foreclosure and
delinquency experience, and the costs and expenses incurred in connection with
obtaining the documents referred to in Sections 9(d) and 9(e) to the extent such
costs and expenses were not previously paid by the Originator. The Originator
shall pay (or shall reimburse the Purchaser or any other Person to the extent
that the Purchaser or such other Person shall pay) the costs and expenses of
printing (or otherwise reproducing) and delivering this Agreement, the Pooling
and Servicing Agreement, the Certificates, the prospectus, the prospectus
supplement, and the private placement memorandum relating to the Certificates
and other related documents, the initial fees, costs and expenses of the Trustee
relating to the issuance of the initial certification of the Trustee under
Section 2.02 of the Pooling and Servicing Agreement, the fees and expenses of
the Originator's counsel in connection with the preparation of all documents
relating to the securitization of the Mortgage Loans, the filing fee charged by
the Securities and Exchange Commission for registration of the Certificates, the
cost of outside special counsel that may be required for the Purchaser, the cost
of obtaining the documents referred to in Section 9(g) and the fees charged by
any rating agency to rate the Certificates. All other costs and expenses in
connection with the transactions contemplated hereunder shall be borne by the
party incurring such expense.

                  SECTION 11. SERVICING. The Originator has represented to the
Purchaser that the Mortgage Loans are being serviced by the Originator in
accordance with the terms and provisions set forth in either: (i) the
Aggregation Facility, as memorialized in the Letter Agreement dated October 29,
2001 among Salomon Brothers Realty Corp., Salomon Smith Barney Inc. and the
Originator or (ii) the Aggregation Facility, as memorialized in the Letter
Agreement dated October 29, 2001 among Banc of America Capital Corporation, Banc
of America Securities LLC and the Originator (each and "Aggregation Facility"),
and it is understood and agreed by and between the Originator and the Purchaser
that the interim servicing arrangements under the Aggregation Facility with the
Originator will be superseded by the servicing arrangements set forth in the
Pooling and Servicing Agreement.

                  SECTION 12. [Reserved]

                  SECTION 13. MANDATORY DELIVERY; GRANT OF SECURITY INTEREST.
The sale and delivery on the Closing Date of the Mortgage Loans described on the
Mortgage Loan Schedule in accordance with the terms and conditions of this
Agreement is mandatory. It is specifically understood and agreed that each
Mortgage Loan is unique and identifiable on the date hereof and that an award of
money damages would be insufficient to compensate the Purchaser for the losses
and damages incurred by the Purchaser in the event of the Originator's failure
to deliver the Mortgage Loans on or before the Closing Date. The Originator
hereby grants to the Purchaser a lien on and a continuing

<PAGE>

                                      -17-

security interest in the Originator's interest in each Mortgage Loan and each
document and instrument evidencing each such Mortgage Loan to secure the
performance by the Originator of its obligation hereunder, and the Originator
agrees that it holds such Mortgage Loans in custody for the Purchaser, subject
to the Purchaser's (i) right, prior to the Closing Date, to reject any Mortgage
Loan to the extent permitted by this Agreement, and (ii) obligation to deliver
or cause to be delivered the consideration for the Mortgage Loans pursuant to
Section 8 hereof. Any Mortgage Loans rejected by the Purchaser shall
concurrently therewith be released from the security interest created hereby.
The Originator agrees that, upon acceptance of the Mortgage Loans by the
Purchaser or its designee and delivery of payment to the Originator, that its
security interest in the Mortgage Loans shall be released. All rights and
remedies of the Purchaser under this Agreement are distinct from, and cumulative
with, any other rights or remedies under this Agreement or afforded by law or
equity and all such rights and remedies may be exercised concurrently,
independently or successively.

         Notwithstanding the foregoing, if on the Closing Date, each of the
conditions set forth in Section 8 hereof shall have been satisfied and the
Purchaser shall not have paid or caused to be paid the Purchase Price, or any
such condition shall not have been waived or satisfied and the Purchaser
determines not to pay or cause to be paid the Purchase Price, the Purchaser
shall immediately effect the redelivery of the Mortgage Loans, if delivery to
the Purchaser has occurred and the security interest created by this Section 12
shall be deemed to have been released.

                  SECTION 14. NOTICES. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered to or mailed by registered mail, postage prepaid, or
transmitted by telex or telegraph and confirmed by a similar mailed writing, if
to the Purchaser, addressed to the Purchaser at 1100 Town & Country Road, Suite
1100, Orange, California 92868, Attention: General Counsel, or such other
address as may hereafter be furnished to the Originator in writing by the
Purchaser; if to the Originator, addressed to the Originator at 1100 Town &
Country Road, Suite 1100, Orange, California 92868, Attention: General Counsel,
or to such other address as the Originator may designate in writing to the
Purchaser.

                  SECTION 15. SEVERABILITY OF PROVISIONS. Any part, provision,
representation or warranty of this Agreement which is prohibited or which is
held to be void or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof. Any part, provision, representation or warranty of this Agreement which
is prohibited or unenforceable or is held to be void or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof.

<PAGE>

                                      -18-

                  SECTION 16. AGREEMENT OF PARTIES. The Originator and the
Purchaser agree to execute and deliver such instruments and take such actions as
either of the others may, from time to time, reasonably request in order to
effectuate the purpose and to carry out the terms of this Agreement and the
Pooling and Servicing Agreement.

                  SECTION 17. SURVIVAL. The Originator agrees that the
representations, warranties and agreements made by it herein and in any
certificate or other instrument delivered pursuant hereto shall be deemed to be
relied upon by the Purchaser, notwithstanding any investigation heretofore or
hereafter made by the Purchaser or on its behalf, and that the representations,
warranties and agreements made by the Originator herein or in any such
certificate or other instrument shall survive the delivery of and payment for
the Mortgage Loans and shall continue in full force and effect, notwithstanding
any restrictive or qualified endorsement on the Mortgage Notes and
notwithstanding subsequent termination of this Agreement, the Pooling and
Servicing Agreement or the Trust Fund.

                  SECTION 18. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS,
DUTIES, OBLIGATIONS AND RESPONSIBILITIES OF THE PARTIES HERETO SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS (INCLUDING THE CHOICE OF LAW
PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK. THE PARTIES HERETO INTEND
THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW
SHALL APPLY TO THIS AGREEMENT.

                  SECTION 19. MISCELLANEOUS. This Agreement may be executed in
two or more counter-parts, each of which when so executed and delivered shall be
an original, but all of which together shall constitute one and the same
instrument. This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns. This Agreement
supersedes all prior agreements and understandings relating to the subject
matter hereof. Neither this Agreement nor any term hereof may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against whom enforcement of the change, waiver, discharge or
termination is sought. The headings in this Agreement are for purposes of
reference only and shall not limit or otherwise affect the meaning hereof.

                  It is the express intent of the parties hereto that the
conveyance of the Mortgage Loans by the Originator to the Purchaser as provided
in Section 4 hereof be, and be construed as, a sale of the Mortgage Loans by the
Originator to the Purchaser and not as a pledge of the Mortgage Loans by the
Originator to the Purchaser to secure a debt or other obligation of the
Originator. However, in the event that, notwithstanding the aforementioned
intent of the parties, the Mortgage Loans are held to be property of the
Originator, then, (a) it is the express intent of the parties that such
conveyance be deemed a pledge of the Mortgage Loans by the Originator to the
Purchaser to secure a debt or other obligation of the Originator and (b) (1)
this Agreement shall also be deemed to be a security agreement within the
meaning of Articles 8 and 9 of the New York Uniform Commercial Code; (2) the
conveyance provided for in Section 4 hereof shall be deemed to be a grant by the

<PAGE>

                                      -19-

Originator to the Purchaser of a security interest in all of the Originator's
right, title and interest in and to the Mortgage Loans and all amounts payable
to the holders of the Mortgage Loans in accordance with the terms thereof and
all proceeds of the conversion, voluntary or involuntary, of the foregoing into
cash, instruments, securities or other property, including without limitation
all amounts, other than investment earnings, from time to time held or invested
in the Collection Account whether in the form of cash, instruments, securities
or other property; (3) the possession by the Purchaser or its agent of Mortgage
Notes, the related Mortgages and such other items of property that constitute
instruments, money, negotiable documents or chattel paper shall be deemed to be
"possession" for purposes of perfecting the security interest pursuant to the
New York Uniform Commercial Code; and (4) notifications to persons holding such
property, and acknowledgments, receipts or confirmations from persons holding
such property, shall be deemed notifications to, or acknowledgments, receipts or
confirmations from, financial intermediaries, bailees or agents (as applicable)
of the Purchaser for the purpose of perfecting such security interest under
applicable law. Any assignment of the interest of the Purchaser pursuant to
Section 4(d) hereof shall also be deemed to be an assignment of any security
interest created hereby. The Originator and the Purchaser shall, to the extent
consistent with this Agreement, take such actions as may be necessary to ensure
that, if this Agreement were deemed to create a security interest in the
Mortgage Loans, such security interest would be deemed to be a perfected
security interest of first priority under applicable law and will be maintained
as such throughout the term of this Agreement and the Pooling and Servicing
Agreement.

<PAGE>

                  IN WITNESS WHEREOF, the Originator and the Purchaser have
caused their names to be signed by their respective officers thereunto duly
authorized as of the date first above written.

                                        AMERIQUEST MORTGAGE COMPANY

                                        By:_____________________________________
                                        Name:
                                        Title:

                                        AMERIQUEST MORTGAGE SECURITIES
                                        INC.

                                        By:_____________________________________
                                        Name:
                                        Title:

<PAGE>

                                   EXHIBIT E-1

                               REQUEST FOR RELEASE
                                  (for Trustee)

LOAN INFORMATION

         Name of Mortgagor:         ______________________________

         Master Servicer
         Loan No.:                  ______________________________

TRUSTEE

         Name:                      ______________________________

         Address:                   ______________________________
                                    ______________________________

         Trustee Mortgage
         File No.:                  ______________________________

DEPOSITOR

         Name:                      AMERIQUEST MORTGAGE SECURITIES INC.

         Address:                   ______________________________

         Certificates:              Floating Rate Mortgage Pass-Through
                                    Certificates, Series 2001-3.

                                      E-1-1

<PAGE>

                           The undersigned Master Servicer hereby acknowledges
that it has received from _______________________, as Trustee for the Holders of
Floating Rate Mortgage Pass- Through Certificates, Series 2001-3, the documents
referred to below (the "Documents"). All capitalized terms not otherwise defined
in this Request for Release shall have the meanings given them in the Pooling
and Servicing Agreement, dated as of November 1, 2001, among the Trustee, the
Depositor and the Master Servicer (the "Pooling and Servicing Agreement").

( )  Promissory Note dated _______________, 20__, in the original principal
     sum of $__________, made by _____________________, payable to, or endorsed
     to the order of, the Trustee.

( )  Mortgage recorded on _________________________ as instrument no.
     ____________________ in the County Recorder's Office of the County of
     _______________, State of __________________ in book/reel/docket___________
     of official records at page/image _____________.

( )  Deed of Trust recorded on ___________________ as instrument no.
     ________________ in the County Recorder's Office of the County of
     _________________, State of ____________________ in book/reel/docket
     _________________ of official records at page/image ______________.

( )  Assignment of Mortgage or Deed of Trust to the Trustee, recorded on
     __________________ as instrument no. _________ in the County Recorder's
     Office of the County of _______________, State of _______________________
     in book/reel/docket ____________ of official records at page/image
     ____________.

( )  Other documents, including any amendments, assignments or other
     assumptions of the Mortgage Note or Mortgage.

( )  ---------------------------------------------

( )  ---------------------------------------------

( )  ---------------------------------------------

( )  ---------------------------------------------

                           The undersigned Master Servicer hereby acknowledges
and agrees as follows:

                           (1) The Master Servicer shall hold and retain
possession of the Documents in trust for the benefit of the Trustee, solely for
the purposes provided in the Agreement.

                           (2) The Master Servicer shall not cause or permit the
Documents to become subject to, or encumbered by, any claim, liens, security
interest, charges, writs of attachment or other impositions nor shall the Master
Servicer assert or seek to assert any claims or rights of setoff to or against
the Documents or any proceeds thereof.

                                      E-1-2

<PAGE>

                           (3) The Master Servicer shall return each and every
Document previously requested from the Mortgage File to the Trustee when the
need therefor no longer exists, unless the Mortgage Loan relating to the
Documents has been liquidated and the proceeds thereof have been remitted to the
Collection Account and except as expressly provided in the Agreement.

                           (4) The Documents and any proceeds thereof, including
any proceeds of proceeds, coming into the possession or control of the Master
Servicer shall at all times be earmarked for the account of the Trustee, and the
Master Servicer shall keep the Documents and any proceeds separate and distinct
from all other property in the Master Servicer's possession, custody or control.

Dated:

                                        [MASTER SERVICER]

                                        By:      ______________________________
                                        Name:
                                        Title:

                                      E-1-3

<PAGE>

                                   EXHIBIT E-2

                               REQUEST FOR RELEASE
                          [Mortgage Loans Paid in Full]

      OFFICERS' CERTIFICATE AND TRUST RECEIPT FLOATING RATE MORTGAGE PASS-
                       THROUGH CERTIFICATES SERIES 2001-3

____________________________________________________ HEREBY CERTIFIES THAT
HE/SHE IS AN OFFICER OF THE MASTER SERVICER, HOLDING THE OFFICE SET FORTH
BENEATH HIS/HER SIGNATURE, AND HEREBY FURTHER CERTIFIES AS FOLLOWS:

WITH RESPECT TO THE MORTGAGE LOANS, AS THE TERM IS DEFINED IN THE POOLING AND
SERVICING AGREEMENT DESCRIBED IN THE ATTACHED SCHEDULE:

ALL PAYMENTS OF PRINCIPAL, PREMIUM (IF ANY), AND INTEREST HAVE BEEN
MADE.

LOAN NUMBER:  _______________                     BORROWER'S NAME: ____________

COUNTY: ______________________

WE HEREBY CERTIFY THAT ALL AMOUNTS RECEIVED IN CONNECTION WITH SUCH PAYMENTS,
WHICH ARE REQUIRED TO BE DEPOSITED IN THE COLLECTION ACCOUNT PURSUANT TO SECTION
3.10 OF THE POOLING AND SERVICING AGREEMENT, HAVE BEEN OR WILL BE CREDITED.

________________________________                 DATED:  ______________________

/ / VICE PRESIDENT

/ / ASSISTANT VICE PRESIDENT

                                      E-2-1

<PAGE>

                                   EXHIBIT F-1

                    FORM OF TRANSFEROR REPRESENTATION LETTER

                                              [DATED]

Bankers Trust Company of California, N.A.
1761 East St. Andrew Place
Santa Ana, California 92705-4934

               Re:  Ameriquest Mortgage Securities Inc., Floating Rate Mortgage
                    Pass-Through Certificates, Series 2001-1, Class ___,
                    representing a ___% Class ___ Percentage Interest
                    -----------------------------------------------------------

Ladies and Gentlemen:

         In connection with the transfer by ________________ (the "Transferor")
to ________________ (the "Transferee") of the captioned mortgage pass-through
certificates (the "Certificates"), the Transferor hereby certifies as follows:

         Neither the Transferor nor anyone acting on its behalf has (a) offered,
pledged, sold, disposed of or otherwise transferred any Certificate, any
interest in any Certificate or any other similar security to any person in any
manner, (b) has solicited any offer to buy or to accept a pledge, disposition or
other transfer of any Certificate, any interest in any Certificate or any other
similar security from any person in any manner, (c) has otherwise approached or
negotiated with respect to any Certificate, any interest in any Certificate or
any other similar security with any person in any manner, (d) has made any
general solicitation by means of general advertising or in any other manner, (e)
has taken any other action, that (in the case of each of subclauses (a) through
(e) above) would constitute a distribution of the Certificates under the
Securities Act of 1933, as amended (the "1933 Act"), or would render the
disposition of any Certificate a violation of Section 5 of the 1933 Act or any
state securities law or would require registration or qualification pursuant
thereto. The Transferor will not act, nor has it authorized or will it authorize
any person to act, in any manner set forth in the foregoing sentence with
respect to any Certificate. The Transferor will not sell or otherwise transfer
any of the Certificates, except in compliance with the provisions of that
certain Pooling and Servicing Agreement, dated as of November 1, 2001, among
Ameriquest Mortgage Securities Inc. as Depositor, Ameriquest Mortgage Company as
Master Servicer and Bankers Trust Company of California, N.A. as Trustee (the
"Pooling and Servicing Agreement"), pursuant to which Pooling and Servicing
Agreement the Certificates were issued.

                                      F-1-1

<PAGE>

                  Capitalized terms used but not defined herein shall have the
meanings assigned thereto in the Pooling and Servicing Agreement.

                                        Very truly yours,

                                        [Transferor]

                                        By:      ______________________________
                                        Name:
                                        Title:

                                      F-1-2

<PAGE>

                    FORM OF TRANSFEREE REPRESENTATION LETTER

                                                        [Date]

Bankers Trust Company of California, N.A.
1761 East St. Andrew Place
Santa Ana, California 92705-4934

               Re:  Ameriquest Mortgage Securities Inc., Floating Rate Mortgage
                    Pass-Through Certificates, Series 2001-3, Class ___,
                    representing a ___% Class ___ Percentage Interest
                    -----------------------------------------------------------

Ladies and Gentlemen:

In connection with the purchase from ______________________ (the "Transferor")
on the date hereof of the captioned trust certificates (the "Certificates"),
_______________ (the "Transferee") hereby certifies as follows:

                  1. The Transferee is a "qualified institutional buyer" as that
         term is defined in Rule 144A ("Rule 144A") under the Securities Act of
         1933 (the "1933 Act") and has completed either of the forms of
         certification to that effect attached hereto as Annex 1 or Annex 2. The
         Transferee is aware that the sale to it is being made in reliance on
         Rule 144A. The Transferee is acquiring the Certificates for its own
         account or for the account of a qualified institutional buyer, and
         understands that such Certificate may be resold, pledged or transferred
         only (i) to a person reasonably believed to be a qualified
         institutional buyer that purchases for its own account or for the
         account of a qualified institutional buyer to whom notice is given that
         the resale, pledge or transfer is being made in reliance on Rule 144A,
         or (ii) pursuant to another exemption from registration under the 1933
         Act.

                  2. The Transferee has been furnished with all information
         regarding (a) the Certificates and distributions thereon, (b) the
         nature, performance and servicing of the Mortgage Loans, (c) the
         Pooling and Servicing Agreement referred to below, and (d) any credit
         enhancement mechanism associated with the Certificates, that it has
         requested.

                                      F-1-3

<PAGE>

                  All capitalized terms used but not otherwise defined herein
have the respective meanings assigned thereto in the Pooling and Servicing
Agreement, dated as of November 1, 2001, among Ameriquest Mortgage Securities
Inc. as Depositor, Ameriquest Mortgage Company as Master Servicer and Bankers
Trust Company of California, N.A. as Trustee, pursuant to which the Certificates
were issued.

                                        [TRANSFEREE]

                                        By: ______________________________
                                        Name:
                                        Title:

                                      F-1-4

<PAGE>

                                                          ANNEX 1 TO EXHIBIT F-1

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

          [For Transferees Other Than Registered Investment Companies]

                  The undersigned hereby certifies as follows to [name of
Transferor] (the "Transferor") and Bankers Trust Company of California, N.A. as
Trustee, with respect to the mortgage pass- through certificates (the
"Certificates") described in the Transferee Certificate to which this
certification relates and to which this certification is an Annex:

                  1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
entity purchasing the Certificates (the "Transferee").

                  2. In connection with purchases by the Transferee, the
Transferee is a "qualified institutional buyer" as that term is defined in Rule
144A under the Securities Act of 1933 ("Rule 144A") because (i) the Transferee
owned and/or invested on a discretionary basis $______________________1 in
securities (except for the excluded securities referred to below) as of the end
of the Transferee's most recent fiscal year (such amount being calculated in
accordance with Rule 144A) and (ii) the Transferee satisfies the criteria in the
category marked below.

         ___      CORPORATION, ETC. The Transferee is a corporation (other than
                  a bank, savings and loan association or similar institution),
                  Massachusetts or similar business trust, partnership, or any
                  organization described in Section 501(c)(3) of the Internal
                  Revenue Code of 1986.

         ___      BANK. The Transferee (a) is a national bank or banking
                  institution organized under the laws of any State, territory
                  or the District of Columbia, the business of which is
                  substantially confined to banking and is supervised by the
                  State or territorial banking commission or similar official or
                  is a foreign bank or equivalent institution, and (b) has an
                  audited net worth of at least $25,000,000 as demonstrated in
                  its latest annual financial statements, A COPY OF WHICH IS
                  ATTACHED HERETO.

         ___      SAVINGS AND LOAN. The Transferee (a) is a savings and loan
                  association, building and loan association, cooperative bank,
                  homestead association or similar institution, which is
                  supervised and examined by a State or Federal authority having
                  supervision over any such institutions or is a foreign savings
                  and loan association or equivalent institution and (b) has an
                  audited net worth of at least 1Transferee must own and/or
                  invest on a discretionary basis at least $100,000,000 in
                  securities unless Transferee is a dealer, and, in that case,
                  Transferee must own and/or invest on a discretionary basis at
                  least $10,000,000 in securities. $25,000,000 as demonstrated
                  in its latest annual financial statements, A COPY OF WHICH IS
                  ATTACHED HERETO.

                                      F-1-5

<PAGE>

         ___      BROKER-DEALER. The Transferee is a dealer registered pursuant
                  to Section 15 of the Securities Exchange Act of 1934.

         ___      INSURANCE COMPANY. The Transferee is an insurance company
                  whose primary and predominant business activity is the writing
                  of insurance or the reinsuring of risks underwritten by
                  insurance companies and which is subject to supervision by the
                  insurance commissioner or a similar official or agency of a
                  State, territory or the District of Columbia.

         ___      STATE OR LOCAL PLAN. The Transferee is a plan established and
                  maintained by a State, its political subdivisions, or any
                  agency or instrumentality of the State or its political
                  subdivisions, for the benefit of its employees.

         ___      ERISA PLAN. The Transferee is an employee benefit plan within
                  the meaning of Title I of the Employee Retirement Income
                  Security Act of 1974.

         ___      INVESTMENT ADVISOR. The Transferee is an investment advisor
                  registered  under the Investment Advisers Act of 1940.

                  3. The term "SECURITIES" as used herein DOES NOT INCLUDE (i)
securities of issuers that are affiliated with the Transferee, (ii) securities
that are part of an unsold allotment to or subscription by the Transferee, if
the Transferee is a dealer, (iii) securities issued or guaranteed by the U.S. or
any instrumentality thereof, (iv) bank deposit notes and certificates of
deposit, (v) loan participations, (vi) repurchase agreements, (vii) securities
owned but subject to a repurchase agreement and (viii) currency, interest rate
and commodity swaps.

                  4. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the Transferee, the
Transferee used the cost of such securities to the Transferee and did not
include any of the securities referred to in the preceding paragraph. Further,
in determining such aggregate amount, the Transferee may have included
securities owned by subsidiaries of the Transferee, but only if such
subsidiaries are consolidated with the Transferee in its financial statements
prepared in accordance with generally accepted accounting principles and if the
investments of such subsidiaries are managed under the Transferee's direction.
However, such securities were not included if the Transferee is a
majority-owned, consolidated subsidiary of another enterprise and the Transferee
is not itself a reporting company under the Securities Exchange Act of 1934.

                  5. The Transferee acknowledges that it is familiar with Rule
144A and understands that the Transferor and other parties related to the
Certificates are relying and will continue to rely on the statements made herein
because one or more sales to the Transferee may be in reliance on Rule 144A.

         _____   _____      Will the Transferee be purchasing the Certificates
         Yes      No        only for the Transferee's own account?

                                      F-1-6

<PAGE>

                  6. If the answer to the foregoing question is "no", the
Transferee agrees that, in connection with any purchase of securities sold to
the Transferee for the account of a third party (including any separate account)
in reliance on Rule 144A, the Transferee will only purchase for the account of a
third party that at the time is a "qualified institutional buyer" within the
meaning of Rule 144A. In addition, the Transferee agrees that the Transferee
will not purchase securities for a third party unless the Transferee has
obtained a current representation letter from such third party or taken other
appropriate steps contemplated by Rule 144A to conclude that such third party
independently meets the definition of "qualified institutional buyer" set forth
in Rule 144A.

                  7. The Transferee will notify each of the parties to which
this certification is made of any changes in the information and conclusions
herein. Until such notice is given, the Transferee's purchase of the
Certificates will constitute a reaffirmation of this certification as of the
date of such purchase. In addition, if the Transferee is a bank or savings and
loan as provided above, the Transferee agrees that it will furnish to such
parties updated annual financial statements promptly after they become
available.

Dated:

                                          Print Name of Transferee

                                          By:      _____________________________
                                          Name:
                                          Title:

                                      F-1-7

<PAGE>

                                                       ANNEX 2 TO EXHIBIT F-1
                                                       ----------------------

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
            --------------------------------------------------------

           [For Transferees That Are Registered Investment Companies]

                  The undersigned hereby certifies as follows to [name of
Transferor] (the "Transferor") and Bankers Trust Company of California, N.A., as
Trustee, with respect to the mortgage pass- through certificates (the
"Certificates") described in the Transferee Certificate to which this
certification relates and to which this certification is an Annex:

                  1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the entity purchasing the
Certificates (the "Transferee") or, if the Transferee is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933 ("Rule 144A") because the Transferee is part of a Family of
Investment Companies (as defined below), is such an officer of the investment
adviser (the "Adviser").

                  2. In connection with purchases by the Transferee, the
Transferee is a "qualified institutional buyer" as defined in Rule 144A because
(i) the Transferee is an investment company registered under the Investment
Company Act of 1940, and (ii) as marked below, the Transferee alone, or the
Transferee's Family of Investment Companies, owned at least $100,000,000 in
securities (other than the excluded securities referred to below) as of the end
of the Transferee's most recent fiscal year. For purposes of determining the
amount of securities owned by the Transferee or the Transferee's Family of
Investment Companies, the cost of such securities was used.

         ____     The Transferee owned $___________________ in securities (other
                  than the excluded securities referred to below) as of the end
                  of the Transferee's most recent fiscal year (such amount being
                  calculated in accordance with Rule 144A).

         ____     The Transferee is part of a Family of Investment Companies
                  which owned in the aggregate $______________ in securities
                  (other than the excluded securities referred to below) as of
                  the end of the Transferee's most recent fiscal year (such
                  amount being calculated in accordance with Rule 144A).

                  3. The term "FAMILY OF INVESTMENT COMPANIES" as used herein
means two or more registered investment companies (or series thereof) that have
the same investment adviser or investment advisers that are affiliated (by
virtue of being majority owned subsidiaries of the same parent or because one
investment adviser is a majority owned subsidiary of the other).

                  4. The term "SECURITIES" as used herein does not include (i)
securities of issuers that are affiliated with the Transferee or are part of the
Transferee's Family of Investment Companies, (ii) securities issued or
guaranteed by the U.S. or any instrumentality thereof, (iii) bank deposit notes
and certificates of deposit, (iv) loan participations, (v) repurchase
agreements, (vi) securities owned but subject to a repurchase agreement and
(vii) currency, interest rate and commodity swaps.

                                      F-1-8

<PAGE>

                  5. The Transferee is familiar with Rule 144A and understands
that the parties to which this certification is being made are relying and will
continue to rely on the statements made herein because one or more sales to the
Transferee will be in reliance on Rule 144A. In addition, the Transferee will
only purchase for the Transferee's own account.

                  6. The undersigned will notify the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice, the Transferee's purchase of the Certificates will constitute
a reaffirmation of this certification by the undersigned as of the date of such
purchase.

Dated:

                                       Print Name of Transferee or Advisor

                                       By:      ____________________________
                                       Name:
                                       Title:

                                       IF AN ADVISER:

                                       ---------------------------------------
                                       Print Name of Transferee

                                      F-1-9

<PAGE>

                    FORM OF TRANSFEREE REPRESENTATION LETTER

                  The undersigned hereby certifies on behalf of the purchaser
named below (the "Purchaser") as follows:

                  1.       I am an executive officer of the Purchaser.

                  2.       The Purchaser is a "qualified institutional buyer",
         as defined in Rule 144A, ("Rule 144A") under the Securities Act of
         1933, as amended.

         3. As of the date specified below (which is not earlier than the last
         day of the Purchaser's most recent fiscal year), the amount of
         "securities", computed for purposes of Rule 144A, owned and invested on
         a discretionary basis by the Purchaser was in excess of $100,000,000.

Name of Purchaser          __________________________________________________

By:      (Signature)       __________________________________________________

Name of Signatory          __________________________________________________

Title    ____________________________________________________________________

Date of this certificate            _________________________________________

Date of information provided in paragraph 3          ________________________

                                     F-1-10

<PAGE>

                                   EXHIBIT F-2

                    FORM OF TRANSFER AFFIDAVIT AND AGREEMENT

STATE OF NEW YORK                            )
                                     : ss.:
COUNTY OF NEW YORK                          )

                  ____________________________, being duly sworn, deposes,
represents and warrants as follows:

                  1. I am a ______________________ of
____________________________ (the "Owner") a corporation duly organized and
existing under the laws of ______________, the record owner of Ameriquest
Mortgage Securities Inc., Floating Rate Mortgage Pass-Through Certificates,
Series 2001-3, [Class R] (the "Class R Certificates"), on behalf of whom I make
this affidavit and agreement. Capitalized terms used but not defined herein have
the respective meanings assigned thereto in the Pooling and Servicing Agreement
pursuant to which the Class R Certificates were issued.

                  2. The Owner (i) is and will be a "Permitted Transferee" as of
____________________, 2001 and (ii) is acquiring the Class R Certificates for
its own account or for the account of another Owner from which it has received
an affidavit in substantially the same form as this affidavit. A "Permitted
Transferee" is any person other than a "disqualified organization" or a
possession of the United States. For this purpose, a "disqualified organization"
means the United States, any state or political subdivision thereof, any agency
or instrumentality of any of the foregoing (other than an instrumentality all of
the activities of which are subject to tax and, except for the Federal Home Loan
Mortgage Corporation, a majority of whose board of directors is not selected by
any such governmental entity) or any foreign government, international
organization or any agency or instrumentality of such foreign government or
organization, any rural electric or telephone cooperative, or any organization
(other than certain farmers' cooperatives) that is generally exempt from federal
income tax unless such organization is subject to the tax on unrelated business
taxable income.

                  3. The Owner is aware (i) of the tax that would be imposed on
transfers of the Class R Certificates to disqualified organizations under the
Internal Revenue Code of 1986 that applies to all transfers of the Class R
Certificates after March 31, 1988; (ii) that such tax would be on the transferor
or, if such transfer is through an agent (which person includes a broker,
nominee or middleman) for a non-Permitted Transferee, on the agent; (iii) that
the person otherwise liable for the tax shall be relieved of liability for the
tax if the transferee furnishes to such person an affidavit that the transferee
is a Permitted Transferee and, at the time of transfer, such person does not
have actual knowledge that the affidavit is false; and (iv) that each of the
Class R Certificates may be a "noneconomic residual interest" within the meaning
of proposed Treasury regulations promulgated under the Code and that the
transferor of a "noneconomic residual interest" will remain liable for any taxes
due with respect to the income on such residual interest, unless no significant
purpose of the transfer is to impede the assessment or collection of tax.

                                      F-2-1

<PAGE>

                  4. The Owner is aware of the tax imposed on a "pass-through
entity" holding the Class R Certificates if, at any time during the taxable year
of the pass-through entity, a non-Permitted Transferee is the record holder of
an interest in such entity. (For this purpose, a "pass-through entity" includes
a regulated investment company, a real estate investment trust or common trust
fund, a partnership, trust or estate, and certain cooperatives.)

                  5. The Owner is aware that the Trustee will not register the
transfer of any Class R Certificate unless the transferee, or the transferee's
agent, delivers to the Trustee, among other things, an affidavit in
substantially the same form as this affidavit. The Owner expressly agrees that
it will not consummate any such transfer if it knows or believes that any of the
representations contained in such affidavit and agreement are false.

                  6. The Owner consents to any additional restrictions or
arrangements that shall be deemed necessary upon advice of counsel to constitute
a reasonable arrangement to ensure that the Class R Certificates will only be
owned, directly or indirectly, by an Owner that is a Permitted Transferee.

                  7. The Owner's taxpayer identification number is ____________.

                  8. The Owner has reviewed the restrictions set forth on the
face of the Class R Certificates and the provisions of Section 5.02(d) of the
Pooling and Servicing Agreement under which the Class R Certificates were issued
(in particular, clauses (iii)(A) and (iii)(B) of Section 5.02(d) which authorize
the Trustee to deliver payments to a person other than the Owner and negotiate a
mandatory sale by the Trustee in the event that the Owner holds such Certificate
in violation of Section 5.02(d)); and that the Owner expressly agrees to be
bound by and to comply with such restrictions and provisions.

                  9. The Owner is not acquiring and will not transfer the Class
R Certificates in order to impede the assessment or collection of any tax.

                  10. The Owner anticipates that it will, so long as it holds
the Class R Certificates, have sufficient assets to pay any taxes owed by the
holder of such Class R Certificates, and hereby represents to and for the
benefit of the person from whom it acquired the Class R Certificates that the
Owner intends to pay taxes associated with holding such Class R Certificates as
they become due, fully understanding that it may incur tax liabilities in excess
of any cash flows generated by the Class R Certificates.

                  11. The Owner has no present knowledge that it may become
insolvent or subject to a bankruptcy proceeding for so long as it holds the
Class R Certificates.

                  12. The Owner has no present knowledge or expectation that it
will be unable to pay any United States taxes owed by it so long as any of the
Certificates remain outstanding.

                  13. The Owner is not acquiring the Class R Certificates with
the intent to transfer the Class R Certificates to any person or entity that
will not have sufficient assets to pay any taxes

                                      F-2-2

<PAGE>

owed by the holder of such Class R Certificates, or that may become insolvent or
subject to a bankruptcy proceeding, for so long as the Class R Certificates
remain outstanding.

                  14. The Owner will, in connection with any transfer that it
makes of the Class R Certificates, obtain from its transferee the
representations required by Section 5.02(d) of the Pooling and Servicing
Agreement under which the Class R Certificate were issued and will not
consummate any such transfer if it knows, or knows facts that should lead it to
believe, that any such representations are false.

                  15. The Owner will, in connection with any transfer that it
makes of the Class R Certificates, deliver to the Trustee an affidavit, which
represents and warrants that it is not transferring the Class R Certificates to
impede the assessment or collection of any tax and that it has no actual
knowledge that the proposed transferee: (i) has insufficient assets to pay any
taxes owed by such transferee as holder of the Class R Certificates; (ii) may
become insolvent or subject to a bankruptcy proceeding for so long as the Class
R Certificates remains outstanding; and (iii) is not a "Permitted Transferee".

                  16. The Owner is a citizen or resident of the United States, a
corporation or partnership (or other entity treated as a corporation or
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
(except, in the case of a partnership or entity treated as a partnership, to the
extent provided in regulations), an estate the income of which is subject to
United States federal income taxation regardless of its source or a trust other
than a "foreign trust" described in section 7701(a)(31) of the Code.

                                      F-2-3

<PAGE>

                  IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
__________, 200__.

                                            [OWNER]

                                            By:      _________________________
                                            Name:
                                            Title:   [Vice] President

ATTEST:

By:      ______________________________
Name:
Title:   [Assistant] Secretary

                  Personally appeared before me the above-named , known or
proved to me to be the same person who executed the foregoing instrument and to
be a [Vice] President of the Owner, and acknowledged to me that [he/she]
executed the same as [his/her] free act and deed and the free act and deed of
the Owner.

                  Subscribed and sworn before me this ____ day of __________,
200__.

                                         ___________________________________
                                                   Notary Public

                                          County of _____________________
                                          State of ______________________

                                          My Commission expires:

                                      F-2-4

<PAGE>

                          FORM OF TRANSFEROR AFFIDAVIT

STATE OF NEW YORK        )
                         : ss. :
COUNTY OF NEW YORK       )

                  _______________________________________, being duly sworn,
deposes, represents and warrants _____________________________ as follows:

                  1. I am a ____________________ of (the "Owner"), a corporation
duly organized and existing under the laws of ______________, on behalf of whom
I make this affidavit.

                  2. The Owner is not transferring the [Class R] (the "Residual
Certificates") to impede the assessment or collection of any tax.

                  3. The Owner has no actual knowledge that the Person that is
the proposed transferee (the "Purchaser") of the Residual Certificates: (i) has
insufficient assets to pay any taxes owed by such proposed transferee as holder
of the Residual Certificates; (ii) may become insolvent or subject to a
bankruptcy proceeding for so long as the Residual Certificates remain
outstanding and (iii) is not a Permitted Transferee.

                  4. The Owner understands that the Purchaser has delivered to
the Trustee a transfer affidavit and agreement in the form attached to the
Pooling and Servicing Agreement as Exhibit F-2. The Owner does not know or
believe that any representation contained therein is false.

                  5. At the time of transfer, the Owner has conducted a
reasonable investigation of the financial condition of the Purchaser as
contemplated by Treasury Regulations Section 1.860E- 1(c)(4)(i) and, as a result
of that investigation, the Owner has determined that the Purchaser has
historically paid its debts as they became due and has found no significant
evidence to indicate that the Purchaser will not continue to pay its debts as
they become due in the future. The Owner understands that the transfer of a
Residual Certificate may not be respected for United States income tax purposes
(and the Owner may continue to be liable for United States income taxes
associated therewith) unless the Owner has conducted such an investigation.

                  6. Capitalized terms not otherwise defined herein shall have
the meanings ascribed to them in the Pooling and Servicing Agreement.

                                      F-2-5

<PAGE>

                  IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
___________, 200__.

                                         [OWNER]

                                         By:      ______________________________
                                         Name:
                                         Title:   [Vice] President

ATTEST:

By:      ______________________________
Name:
Title:   [Assistant] Secretary

                  Personally appeared before me the above-named , known or
proved to me to be the same person who executed the foregoing instrument and to
be a [Vice] President of the Owner, and acknowledged to me that [he/she]
executed the same as [his/her] free act and deed and the free act and deed of
the Owner.

                  Subscribed and sworn before me this ____ day of __________,
200__.

                                         _____________________________________
                                                   Notary Public

                                         County of ____________________________
                                         State of _____________________________

                                         My Commission expires:

                                      F-2-6

<PAGE>

                                    EXHIBIT G

            FORM OF CERTIFICATION WITH RESPECT TO ERISA AND THE CODE

                                                  _____________, 200__

Ameriquest Mortgage Securities Inc.
1100 Town & Country Road
Orange, California 92868

Bankers Trust Company of California, N.A.
1761 East St. Andrew Place
Santa Ana, California 92705-4934

Ameriquest Mortgage Company
1100 Town & Country Road
Orange, California 92868

          Re:  Ameriquest Mortgage Securities Inc. Floating Rate Mortgage
               Pass-Through Certificates, Series 2001-3, Class [CE], [P], [R]

Dear Ladies and Gentlemen:

                  __________________________________ (the "Transferee") intends
to acquire from _____________________ (the "Transferor") $____________ Initial
Certificate Principal Balance of Ameriquest Mortgage Securities Inc., Floating
Rate Mortgage Pass-Through Certificates, Series 2001-3, Class ___ (the
"Certificates"), issued pursuant to a Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement") dated as of November 1, 2001 among Ameriquest
Mortgage Securities Inc. as depositor (the "Depositor"), Ameriquest Mortgage
Company as master servicer (the "Master Servicer"), and Bankers Trust Company of
California, N.A. as trustee (the "Trustee"). Capitalized terms used herein and
not otherwise defined shall have the meanings assigned thereto in the Pooling
and Servicing Agreement. The Transferee hereby certifies, represents and
warrants to, and covenants with the Depositor, the Trustee and the Master
Servicer that the following statements in either (1) or (2) are accurate:

         _____    (1) The Certificates (i) are not being acquired by, and will
                  not be transferred to, any employee benefit plan within the
                  meaning of section 3(3) of the Employee Retirement Income
                  Security Act of 1974, as amended ("ERISA"), or other
                  retirement arrangement, including individual retirement
                  accounts and annuities, Keogh plans and bank collective
                  investment funds and insurance company general or separate
                  accounts in which such plans, accounts or arrangements are
                  invested, that is subject to Section 406 of ERISA or Section
                  4975 of the Internal Revenue Code of 1986 (the "Code") (any of
                  the foregoing, a "Plan"), (ii) are not being acquired with
                  "plan

                                       G-1

<PAGE>

                  assets" of a Plan within the meaning of the Department of
                  Labor ("DOL") regulation, 29 C.F.R. ss. 2510.3-101, and
                  (iii) will not be transferred to any entity that is deemed
                  to be investing in plan assets within the meaning of the DOL
                  regulation at 29 C.F.R.ss.2510.3-101;         or

         _____    (2) The purchase of Certificates is permissible under
                  applicable law, will not constitute or result in any
                  prohibited transaction under ERISA or Section 4975 of the
                  Code, will not subject the Depositor, the Trustee or the
                  Master Servicer to any obligation in addition to those
                  undertaken in the Pooling and Servicing Agreement and the
                  transferee is an insurance company and (A) the source of funds
                  used to purchase such Certificate is an "insurance company
                  general account" (as such term is defined in PTCE 95-60), (B)
                  the conditions set forth in Sections I and III PTCE 95- 60
                  have been satisfied and (C) there is no Plan with respect to
                  which the amount of such general account's reserves and
                  liabilities for contracts held by or on behalf of such Plan
                  and all other Plans maintained by the same employer (or any
                  "affiliate" thereof, as defined in PTCE 95-60) or by the same
                  employee organization, exceeds 10% of the total of all
                  reserves and liabilities of such general account (as
                  determined under PTCE 95-60) as of the date of the acquisition
                  of such Certificates.

                                              Very truly yours,

                                              By: ______________________________
                                              Name:
                                              Title:

                                       G-2

<PAGE>

                                    EXHIBIT H

                                   [RESERVED]

                                       H-1

<PAGE>

                                    EXHIBIT I

                     FORM OF SUBSEQUENT TRANSFER INSTRUMENT

                  Pursuant to this Subsequent Transfer Instrument, dated
_______, 2001 (the "Instrument"), between Ameriquest Mortgage Securities Inc. as
seller (the "Depositor") and Bankers Trust Company of California, N.A. as
trustee (the "Trustee") of the Ameriquest Mortgage Securities Inc., Floating
Rate Mortgage Pass-Through Certificates, Series 2001-3, and pursuant to the
Pooling and Servicing Agreement, dated as of November 1, 2001 (the "Pooling and
Servicing Agreement"), among the Depositor as depositor, Ameriquest Mortgage
Company as master servicer and the Trustee as trustee, the Depositor and the
Trustee agree to the sale by the Depositor and the purchase by the Trustee on
behalf of the Trust Fund, of the Mortgage Loans listed on the attached Schedule
of Mortgage Loans (the "Subsequent Mortgage Loans").

                  Capitalized terms used but not otherwise defined herein shall
have the meanings set forth in the Pooling and Servicing Agreement.

                  Section 1.        Conveyance of Subsequent Mortgage Loans.
                                    ---------------------------------------

                  (a) The Depositor does hereby sell, transfer, assign, set over
and convey to the Trustee on behalf of the Trust Fund, without recourse, all of
its right, title and interest in and to the Subsequent Mortgage Loans, and
including all amounts due on the Subsequent Mortgage Loans after the related
Subsequent Cut-off Date, and all items with respect to the Subsequent Mortgage
Loans to be delivered pursuant to Section 2.01 of the Pooling and Servicing
Agreement; provided, however that the Depositor reserves and retains all right,
title and interest in and to amounts due on the Subsequent Mortgage Loans on or
prior to the related Subsequent Cut-off Date. The Depositor, contemporaneously
with the delivery of this Agreement, has delivered or caused to be delivered to
the Trustee each item set forth in Section 2.01 of the Pooling and Servicing
Agreement. The transfer to the Trustee by the Depositor of the Subsequent
Mortgage Loans identified on the Mortgage Loan Schedule shall be absolute and is
intended by the Depositor, the Master Servicer, the Trustee and the
Certificateholders to constitute and to be treated as a sale by the Depositor to
the Trust Fund.

                  (b) The Depositor, concurrently with the execution and
delivery hereof, does hereby transfer, assign, set over and otherwise convey to
the Trustee without recourse for the benefit of the Certificateholders all the
right, title and interest of the Depositor, in, to and under the Subsequent
Mortgage Loan Purchase Agreement, dated the date hereof, between the Depositor
as purchaser and the Master Servicer as originator and as seller, to the extent
of the Subsequent Mortgage Loans.

                  (c)      Additional terms of the sale are set forth on
Attachment A hereto.

         Section 2.        Representations and Warranties; Conditions Precedent.
                           ----------------------------------------------------

                                       I-1

<PAGE>

                  (a) The Depositor hereby confirms that each of the conditions
precedent and the representations and warranties set forth in Section 2.10 of
the Pooling and Servicing Agreement are satisfied as of the date hereof.

                  (b) All terms and conditions of the Pooling and Servicing
Agreement are hereby ratified and confirmed; provided, however, that in the
event of any conflict, the provisions of this Instrument shall control over the
conflicting provisions of the Pooling and Servicing Agreement.

                  Section 3.        Recordation of Instrument.
                                    -------------------------

                  To the extent permitted by applicable law, this Instrument, or
a memorandum thereof if permitted under applicable law, is subject to
recordation in all appropriate public offices for real property records in all
of the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Master Servicer at the Certificateholders' expense on direction of the related
Certificateholders, but only when accompanied by an Opinion of Counsel to the
effect that such recordation materially and beneficially affects the interests
of the Certificateholders or is necessary for the administration or servicing of
the Mortgage Loans.

                  Section 4.        Governing Law.
                                    -------------

                  This Instrument shall be construed in accordance with the laws
of the State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws, without giving
effect to principles of conflicts of law.

                  Section 5.        Counterparts.
                                    ------------

                  This Instrument may be executed in one or more counterparts
and by the different parties hereto on separate counterparts, each of which,
when so executed, shall be deemed to be an original; such counterparts,
together, shall constitute one and the same instrument.

                                       I-2

<PAGE>

                  Section 6.         Successors and Assigns.
                                     ----------------------

                  This Instrument shall inure to the benefit of and be binding
upon the Depositor and the Trustee and their respective successors and assigns.

                                AMERIQUEST MORTGAGE SECURITIES INC.

                                By:      ______________________________
                                Name:
                                Title:

                                BANKERS TRUST COMPANY OF
                                CALIFORNIA, N.A.,
                                as Trustee

                                By:      ______________________________
                                Name:
                                Title:

ATTACHMENTS

A.                Additional terms of sale.
B.                Schedule of Subsequent Mortgage Loans.

                                       I-3

<PAGE>

                                  ATTACHMENT A

                            ADDITIONAL TERMS OF SALE

         A.       General

                  1.   Subsequent Cut-off Date: ________, 2001
                  2.   Subsequent Transfer Date: ________, 2001
                  3.   Aggregate Principal Balance of the Subsequent Mortgage
                       Loans as of the Subsequent Cut-off Date: $______________
                  4.   Purchase Price: 100.00%

         B. The following representations and warranties with respect to each
Subsequent Mortgage Loan determined as of the Subsequent Cut-off Date is true
and correct: (i) the Subsequent Mortgage Loan may not be 30 or more days
delinquent as of the related Subsequent Cut-off Date (except with respect to
1.00% of the Subsequent Mortgage Loans, by aggregate principal balance as of the
related Subsequent Cut-off Date, which may be 30 or more days delinquent but
less than 60 days delinquent as of the related Subsequent Cut-off Date); (ii)
the stated term to maturity of the Subsequent Mortgage Loan will not be less
than ___ months and will not exceed 360 months; (iii) the Subsequent Mortgage
Loan may not provide for negative amortization; (iv) the Subsequent Mortgage
Loan will not have a Loan-to-Value Ratio greater than ____% the Subsequent
Mortgage Loans will have as of the Subsequent Cut-off Date, a weighted average
term since origination not in excess of __ months; (vi) no Subsequent Mortgage
Loan shall have a Mortgage Rate less than ___% or greater than ____%; (vii) the
Subsequent Mortgage Loan will have been serviced by the Master Servicer since
origination or purchased by the Depositor; (viii) the Subsequent Mortgage Loan
must have a first Monthly Payment due on or before [MONTH/YEAR]; and (ix) the
Subsequent Mortgage Loan will be underwritten in accordance with the criteria
set forth under the section "The Mortgage Pool--Underwriting Standards;
Representations" in the Prospectus Supplement.

         C. Following the purchase of the Subsequent Mortgage Loans by the Trust
Fund, the Mortgage Loans (including the Subsequent Mortgage Loans) will, as of
the Subsequent Cut-off Date: (i) have a weighted average original term to stated
maturity of not more than 360 months; (ii) have a weighted average Mortgage Rate
of not less than _____% and not more than ______%; (iii) have a weighted average
Loan-to-Value Ratio of not more than ______%; (iv) have no Mortgage Loan with a
principal balance in excess of $________ and (v) have a weighted average Gross
Margin of not less than _____%, in each case, as applicable, by aggregate
principal balance of the Mortgage Loans as of the Subsequent Cut-off Date.
Notwithstanding the foregoing, any Subsequent Mortgage Loan may be rejected by
any of the Rating Agencies if the inclusion of such Subsequent Mortgage Loan
would adversely affect the ratings on any class of Offered Certificates.

                                       I-4

<PAGE>

                                    EXHIBIT J

                             FORM OF ADDITION NOTICE

                                                            ____________, 2001

Bankers Trust Company of California, N.A.
1761 East St. Andrew Place
Santa Ana, California 92705-4934

          Re:  Pooling and Servicing Agreement, dated as of October 1, 2001,
               among Ameriquest Mortgage Securities Inc., Ameriquest Mortgage
               Company and Bankers Trust Company of California, N.A., relating
               to Ameriquest Mortgage Securities Inc., Floating Rate Mortgage
               Pass-Through Certificates, Series 2001-3
               ----------------------------------------------------------------

Ladies and Gentlemen:

                  Pursuant to Section 2.10 of the referenced Pooling and
Servicing Agreement, Ameriquest Mortgage Securities Inc. has designated
Subsequent Mortgage Loans to be sold to the Trust Fund on ________, 2001 with an
aggregate principal balance of $_______________. Capitalized terms not otherwise
defined herein have the meaning set forth in the Pooling and Servicing
Agreement.

                  Please acknowledge your receipt of this notice by
countersigning the enclosed copy in the space indicated below and returning it
to the attention of the undersigned.

                                                  Very truly yours,

                                                  AMERIQUEST MORTGAGE
                                                  SECURITIES INC.

                                                  By:________________________
                                                  Name:
                                                  Title:

Acknowledged and Agreed:

BANKERS TRUST COMPANY OF
CALIFORNIA, N.A., as Trustee

By:      __________________________
Name:
Title:

                                       J-1

<PAGE>

                                    EXHIBIT K
<TABLE>
<CAPTION>

                           LOSS MITIGATION ACTION PLAN

<S>                                                        <C>
DEFAULT MITIGATION ACTION                                  SUPPORTING STANDARDS
-------------------------                                  --------------------
FORBEARANCE WORKOUT                                        Borrower documents a temporary financial hardship
Defer any of the following:                                resulting in request for a forbearance
1.accrued interest                                         Borrower documents financial ability to pay under the
2.past due principal                                       proposed forbearance terms
3.escrow advances                                          Borrower expresses a willingness to perform.
4.corporate advances                                       Current monthly payments  are scheduled to be made
5.ancillary fees                                           prior to late charge date during the forbearance term
6.any combination of the above

LOAN MODIFICATION WORKOUT                                  Borrower documents a  non-temporary financial
Any of the following:                                      hardship resulting in the request for a loan modification
1.waive accrued interest                                   Borrower documents financial ability to pay under the
2.waive past due principal                                 proposed loan modification terms
3.waive corporate advances                                 Borrower does not have the ability to pay under the
4.waive ancillary fees                                     original loan terms
5.reduce principal                                         Borrower expresses a willingness to perform
6.reduce interest rate                                     No waiver of escrow advances (taxes and insurance) is
7.any combination of the above items                       allowed
8.any combination with the Forbearance items

SHORT SALE DISPOSAL                                        Sale to a third party
Waive or negotiate a reduced amount of any of the          Independent appraisal supports sale price
following:                                                 No cash to seller (borrower), excluding costs necessary
1.accrued interest                                         to close
2.principal                                                Borrower does not have the ability and/or willingness
3.escrow advances                                          to pay
4.corporate advances                                       Borrower no longer wants property
5.ancillary fees
6.prepayment charges
7.any combination of the above items

SHORT PAY-OFF DISPOSAL                                     Refinance by independent third party Lender
Waive or negotiate a reduced amount of any of the          Independent appraisal supports new loan amount
following:                                                 New loan is no cash out (i.e. no cash to borrower
1.accrued interest                                         excluding costs necessary to close)
2.principal                                                Borrower has expressed his/her unwillingness to pay
3.escrow advances                                          Anticipated refinance time frame is less than
4.corporate advances                                       anticipated foreclosure time frame
5.ancillary fees
6.prepayment charges
7.any combination of the above items
</TABLE>

                                       K-1

<PAGE>

<TABLE>
<CAPTION>

DEFAULT MITIGATION ACTION                                  SUPPORTING STANDARDS
-------------------------                                  --------------------
<S>                                                        <C>
DEED-IN-LIEU DISPOSAL                                      Borrower has already  or will abandon the property or
                                                           is willing to vacate the property (in a broom sweep
                                                           condition) on a mutually agreeable date
                                                           Borrower does not have the ability and/or willingness
                                                           to pay
                                                           Independent appraisal confirms property has a value
                                                           Title is clean
                                                           Property appears to be resalable based on condition
                                                           and value shown in independent appraisal
                                                           Property does not appear to have any environmental or
                                                           hazardous conditions (or such conditions appear to be
                                                           curable)

FORECLOSURE DISPOSAL                                       Borrower has already  or will abandon the property
                                                           (which may be by an eviction proceeding or mutual
                                                           agreement)
                                                           Borrower does not have the ability and/or willingness
                                                           to pay
                                                           Independent appraisal confirms property has a value
                                                           Property appears to be resalable based on condition
                                                           and value shown in independent appraisal
                                                           Property does not appear to have any environmental or
                                                           hazardous conditions (or such conditions appear to be
                                                           curable)
</TABLE>

  Workouts in the form of either a Forbearance or Loan Modification require that
  the Borrower document the existence of a financial hardship leading to the
  payment delinquency and document the ability to make the payments required
  under the proposed Forbearance or Loan Modification. If the Borrower fails to
  meet both of these conditions or the Borrower is uncooperative, a Disposal
  Loss Mitigation Action will be employed to liquidate the delinquent loan,
  assuming the Borrower does not otherwise cure the existing default. Each of
  the Default Mitigation Actions and Supporting Standards may not be applicable
  to each and every loan subject to a default in its monthly payments and in
  those cases where a Default Mitigation Action or Supporting Standard may be
  applicable, each is subject to amendment and/or waiver on an individual basis
  pursuant to applicable federal, state and local laws, decisional authorities,
  court orders, instructions of regulatory and/or other governmental
  authorities, the advice of legal counsel, instructions from the Trustee and
  changes in the loan servicing standards.

                                       K-2

<PAGE>

                                   SCHEDULE 1

                             MORTGAGE LOAN SCHEDULE

                                 Filed By Paper

                                  Schedule-1-1

<PAGE>

                                   SCHEDULE 2

                           PREPAYMENT CHARGE SCHEDULE

                             Available Upon Request

                                  Schedule-2-1<PAGE>
                                                                     EXHIBIT 4.7
================================================================================

                          REGISTRATION RIGHTS AGREEMENT

                             Dated October 22, 2001

                                     between

                              WEYERHAEUSER COMPANY

                                       and

                        MORGAN STANLEY & CO. INCORPORATED

                                       and

                           J.P. MORGAN SECURITIES INC.

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

<PAGE>

                          REGISTRATION RIGHTS AGREEMENT

     This Registration Rights Agreement (the "AGREEMENT") is made and entered
into October 22, 2001, between Weyerhaeuser Company, a Washington corporation
(the "COMPANY"), and Morgan Stanley & Co. Incorporated and J.P. Morgan
Securities Inc. (the "REPRESENTATIVES"), as representatives of the several
initial purchasers named in the Purchase Agreement (the "INITIAL PURCHASERS").

     This Agreement is made pursuant to the Purchase Agreement dated October 16,
2001 between the Company and the Representatives (the "PURCHASE AGREEMENT"),
which provides for the sale by the Company to the Initial Purchasers of an
aggregate of $750,000,000 principal amount of the 5.95% Notes due 2008 (the
"SECURITIES") to be issued by the Company. In order to induce the Initial
Purchasers to enter into the Purchase Agreement, the Company has agreed to
provide to the Initial Purchasers and their direct and indirect transferees the
registration rights set forth in this Agreement. The execution of this Agreement
is a condition to the closing under the Purchase Agreement.

     In consideration of the foregoing, the parties hereto agree as follows:

     1.   Definitions.

     As used in this Agreement, the following capitalized defined terms shall
have the following meanings:

     "1933 ACT" shall mean the Securities Act of 1933, as amended from time to
time.

     "1934 ACT" shall mean the Securities Exchange Act of 1934, as amended from
time to time.

     "ADDITIONAL INTEREST" shall have the meaning assigned to it in Section
2(e).

     "BUSINESS DAY" shall mean any day other than a Saturday or Sunday or a day
on which banking institutions in The City of New York are authorized or required
by law or executive order to remain closed.

     "CLOSING DATE" shall mean the Closing Date as defined in the Purchase
Agreement.

     "COMPANY" shall have the meaning set forth in the preamble to this
Agreement and shall also include the Company's successors.

     "EFFECTIVENESS DEADLINE" shall have the meaning set forth in Section 2(a)
hereof.

     "EXCHANGE OFFER" shall mean the exchange offer by the Company of Exchange
Securities for Registrable Securities pursuant to Section 2(a) hereof.

     "EXCHANGE OFFER REGISTRATION" shall mean a registration under the 1933 Act
effected pursuant to Section 2(a) hereof.

                                       1
<PAGE>

     "EXCHANGE OFFER REGISTRATION STATEMENT" shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another appropriate
form) and all amendments and supplements to such registration statement, in each
case including the Prospectus contained therein, all exhibits thereto and all
material incorporated or deemed to be incorporated by reference therein.

     "EXCHANGE SECURITIES" shall mean securities issued by the Company under the
Indenture containing terms identical to the Securities (except that (i) interest
thereon shall accrue from the last date on which interest was paid on the
Securities or, if no such interest has been paid, from October 22, 2001 and (ii)
the Exchange Securities will not contain restrictions on transfer or bear a
restrictive legend) and to be offered to Holders of Securities in exchange for
Securities pursuant to the Exchange Offer.

         "HOLDER" shall mean the Initial Purchasers, for so long as they own any
Registrable Securities, and each of their respective successors, assigns and
direct and indirect transferees who become registered owners of Registrable
Securities under the Indenture; provided that for purposes of Sections 4 and 5
of this Agreement, the term "HOLDER" shall include Participating Broker-Dealers.

     "INDENTURE" shall mean the Indenture relating to the Securities dated as of
April 1, 1986, as amended and supplemented by the First Supplemental Indenture
dated as of February 15, 1991, the Second Supplemental Indenture dated as of
February 1, 1993 and the Third Supplemental Indenture dated as of October 22,
2001, each between the Company and The Chase Manhattan Bank (formerly Chemical
Bank), as trustee, and as the same may be further amended or supplemented from
time to time in accordance with the terms thereof.

     "INITIAL PURCHASERS" shall have the meaning set forth in the preamble to
this Agreement.

     "MAJORITY HOLDERS" shall mean the Holders of a majority of the aggregate
principal amount of outstanding Registrable Securities; provided that whenever
the consent or approval of Holders of a specified percentage of Registrable
Securities is required hereunder, Registrable Securities held by the Company or
any of its "affiliates" (as such term is defined in Rule 144 under the 1933 Act)
(other than the Initial Purchasers, it being understood and agreed that none of
the Initial Purchasers nor any of their respective subsidiaries, parents or
affiliates shall be deemed affiliates of the Company for purposes of this
definition, and other than subsequent holders of Registrable Securities if such
subsequent holders are deemed to be such affiliates solely by reason of their
holding of such Registrable Securities) shall not be counted in determining
whether such consent or approval was given by the Holders of such required
percentage or amount. In cases where this Agreement shall permit or require any
action or determination to be made by, for example, a majority in principal
amount of Registrable Securities being sold or included in a Shelf Registration
or offering or affected by an amendment, the procedures specified in the proviso
to the foregoing sentence shall be applied.

     "PARTICIPATING BROKER-DEALER" shall have the meaning specified in Section
4(a) of this Agreement.

                                       2
<PAGE>

     "PERSON" shall mean an individual, partnership, limited liability company,
corporation, trust or unincorporated organization or other entity, or a
government or agency or political subdivision thereof.

     "PROSPECTUS" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a prospectus
supplement with respect to the terms of the offering of any portion of the
Registrable Securities covered by a Shelf Registration Statement, and by all
other amendments and supplements to such prospectus, and in each case including
all material incorporated or deemed to be incorporated by reference therein.

     "PURCHASE AGREEMENT" shall have the meaning set forth in the preamble to
this Agreement.

     "REGISTRABLE SECURITIES" shall mean the Securities; provided, however, that
the Securities shall cease to be Registrable Securities (i) when a Registration
Statement with respect to such Securities shall have been declared effective
under the 1933 Act and such Securities shall have been disposed of pursuant to
such Registration Statement, (ii) when such Securities have been sold to the
public pursuant to Rule 144(k) (or any similar provision then in force, but not
Rule 144A) under the 1933 Act or (iii) when such Securities shall have ceased to
be outstanding.

     "REGISTRATION EXPENSES" shall mean all expenses incident to performance of
or compliance by the Company with this Agreement, including without limitation:
(i) all SEC, stock exchange or National Association of Securities Dealers, Inc.
registration and filing fees, (ii) all fees and expenses incurred in connection
with compliance with state securities or blue sky laws (including reasonable
fees and disbursements of counsel for any underwriters or Holders in connection
with blue sky qualification of any of the Exchange Securities or Registrable
Securities), (iii) all expenses of any Persons in preparing or assisting in
preparing, word processing, printing and distributing any Registration
Statement, any Prospectus, any amendments or supplements thereto, any
underwriting agreements, securities sales agreements and other documents
relating to the performance of and compliance with this Agreement, (iv) all
rating agency fees, (v) all fees and disbursements relating to the qualification
of the Indenture under applicable securities laws, (vi) the fees and
disbursements of the Trustee and its counsel, (vii) the fees and disbursements
of counsel for the Company and, in the case of a Shelf Registration Statement,
the fees and disbursements of one counsel for the Holders (which counsel shall
be selected by the Representatives or, if the Representatives elect not to
select such counsel, by the Majority Holders and which counsel may also be
counsel for the Initial Purchasers) and (viii) the fees and disbursements of the
independent public accountants of the Company and of any other Person or
business whose financial statements are included or incorporated or deemed to be
incorporated by reference in a Registration Statement, including the expenses of
any special audits or "cold comfort" or similar letters required by or incident
to such performance and compliance. Notwithstanding the foregoing, Holders shall
be responsible for fees and expenses of counsel to the underwriters (other than
fees and expenses set forth in clauses (ii) and (vii) above) or the Holders and
underwriting discounts and commissions and transfer taxes, if any, relating to
the sale or disposition of Registrable Securities by a Holder.

                                       3
<PAGE>

     "REGISTRATION STATEMENT" shall mean any registration statement of the
Company that covers any of the Exchange Securities or Registrable Securities
pursuant to the provisions of this Agreement and all amendments and supplements
to any such Registration Statement, including post-effective amendments, in each
case including the Prospectus contained therein, all exhibits thereto and all
material incorporated or deemed to be incorporated by reference therein.

     "REPRESENTATIVES" shall have the meaning set forth in the preamble to this
Agreement.

     "SEC" shall mean the Securities and Exchange Commission.

     "SECURITIES" shall have the meaning set forth in the preamble to this
Agreement.

     "SHELF REGISTRATION" shall mean a registration effected pursuant to Section
2(b) hereof.

     "SHELF REGISTRATION STATEMENT" shall mean a "shelf" registration statement
of the Company pursuant to the provisions of Section 2(b) of this Agreement
which covers all of the Registrable Securities (but no other securities unless
approved by the Holders whose Registrable Securities are covered by such Shelf
Registration Statement) on an appropriate form under Rule 415 under the 1933
Act, or any similar rule that may be adopted by the SEC, and all amendments and
supplements to such registration statement, including post-effective amendments,
in each case including the Prospectus contained therein, all exhibits thereto
and all material incorporated or deemed to be incorporated by reference therein.

     "TRUSTEE" shall mean the trustee with respect to the Securities under the
Indenture.

     "UNDERWRITER" shall have the meaning set forth in the last paragraph of
Section 3 of this Agreement.

     "UNDERWRITTEN REGISTRATION" or "UNDERWRITTEN OFFERING" shall mean a
registration in which Registrable Securities are sold to an Underwriter or
Underwriters for reoffering to the public.

     "VOLUNTARY SUSPENSION NOTICE" shall have the meaning set forth in Section
2(b) hereof.

     2.   Registration Under the 1933 Act.

     (a)  To the extent not prohibited by any applicable law or applicable
interpretation of the Staff of the SEC, the Company shall (A) use its reasonable
best efforts to prepare and, as soon as practicable but not later than 120 days
following the Closing Date, file with the SEC an Exchange Offer Registration
Statement on an appropriate form under the 1933 Act with respect to a proposed
Exchange Offer and the issuance and delivery to the Holders, in exchange for the
Registrable Securities, of a like principal amount of Exchange Securities, (B)
use its reasonable best efforts to cause the Exchange Offer Registration
Statement to be declared effective under the 1933 Act not later than 180 days of
the Closing Date (the "EFFECTIVENESS DEADLINE"), (C) use its reasonable best
efforts to keep the Exchange Offer Registration Statement effective until the
closing of the Exchange Offer and (D) use its reasonable best efforts to cause
the Exchange Offer to be consummated as promptly as practicable, but in any not
later than the date that is 30 Business Days after the Effectiveness Deadline.
The Company shall commence the Exchange

                                       4
<PAGE>

Offer by mailing the related exchange offer Prospectus and accompanying
documents to each Holder stating, in addition to such other disclosures as are
required by applicable law:

               (i)  that the Exchange Offer is being made pursuant to this
          Registration Rights Agreement and that all Registrable Securities
          validly tendered and not withdrawn will be accepted for exchange;

               (ii) the dates of acceptance for exchange (which shall be a
          period of at least 20 Business Days from the date such notice is
          mailed) (the "EXCHANGE DATES");

               (iii) that any Registrable Security not tendered will remain
          outstanding and continue to accrue interest, but will not thereafter
          be entitled to receive any Additional Interest or be entitled to any
          registration rights under this Agreement;

               (iv) that Holders electing to have a Registrable Security
          exchanged pursuant to the Exchange Offer will be required to surrender
          such Registrable Security, together with the enclosed letter of
          transmittal, to the institution and at the address (located in the
          Borough of Manhattan, The City of New York) specified in the exchange
          offer Prospectus or the accompanying documents prior to the time the
          Exchange Offer terminates (which shall not be earlier than 5:00 p.m.,
          New York City time) on the last Exchange Date; and

               (v)  that Holders will be entitled to withdraw their election,
          not later than the time the Exchange Offer terminates (which shall not
          be earlier than 5:00 p.m., New York City time) on the last Exchange
          Date, by sending to the institution and at the address (located in the
          Borough of Manhattan, The City of New York) specified in the exchange
          offer Prospectus or the accompanying documents a telegram, telex,
          facsimile transmission or letter setting forth the name of such
          Holder, the principal amount of Registrable Securities delivered for
          exchange and a statement that such Holder is withdrawing his election
          to have such Securities exchanged.

     As soon as reasonably practicable after the last Exchange Date, the Company
shall:

               (i)  accept for exchange all Registrable Securities or portions
          thereof validly tendered and not withdrawn pursuant to the Exchange
          Offer; and

               (ii) deliver, or cause to be delivered, to the Trustee for
          cancellation all Registrable Securities or portions thereof so
          accepted for exchange by the Company and issue, and cause the Trustee
          to promptly authenticate and mail to each Holder, an Exchange Security
          equal in principal amount to the principal amount of the Registrable
          Securities surrendered by such Holder.

     The Company shall use its reasonable best efforts to complete the Exchange
Offer as provided above and shall comply with the applicable requirements of the
1933 Act, the 1934 Act and other applicable laws and regulations in connection
with the Exchange Offer. The Exchange Offer shall not be subject to any
conditions, other than that the Exchange Offer does not violate

                                       5
<PAGE>

applicable law or any applicable interpretation of the Staff of the SEC. The
Company shall inform the Representatives of the names and addresses of the
Holders to whom the Exchange Offer is made, and the Representatives shall have
the right, subject to applicable law, to contact such Holders and otherwise
facilitate the tender of Registrable Securities in the Exchange Offer.

     Each Holder participating in the Exchange Offer shall be required to
represent to the Company that at the time of the consummation of the Exchange
Offer (i) any Exchange Securities received by such Holder will be acquired in
the ordinary course of business, (ii) such Holder has no arrangement or
understanding with any person to participate in the distribution of the
Securities or the Exchange Securities within the meaning of the Securities Act,
(iii) such Holder is not an "affiliate," as defined in Rule 405 of the
Securities Act, of the Company or, if it is such affiliate, such Holder will
comply with the registration and prospectus delivery requirements of the
Securities Act to the extent applicable, (iv) if such Holder is not a
broker-dealer, that it is not engaged in, and does not intend to engage in, the
distribution of the Exchange Securities within the meaning of the 1933 Act and
(v) if such Holder is a broker-dealer, that it will receive Exchange Securities
in exchange for Securities that were acquired for its own account as a result of
market-making activities or other trading activities and that it will be
required to acknowledge that it will deliver a prospectus in connection with any
resale of such Exchange Securities.

     (b)  In the event that (i) the Company determines that the Exchange Offer
Registration provided for in Section 2(a) above is not available or the Exchange
Offer may not be consummated as soon as practicable after the last Exchange Date
because it would violate applicable law or the applicable interpretations of the
Staff of the SEC, (ii) the Exchange Offer is for any other reason not
consummated within 30 Business Days following the Effectiveness Deadline, or
(iii) the Exchange Offer has been completed and the Representatives have
determined, based upon the opinion of legal counsel, that a Registration
Statement must be filed or a Prospectus must be delivered by the Initial
Purchasers in connection with any offering or sale of Registrable Securities,
the Company shall use its reasonable best efforts to cause to be filed as soon
as reasonably practicable after such determination, date or date that notice of
such determination by the Representatives is given to the Company, as the case
may be, a Shelf Registration Statement providing for the sale by the Holders of
all of the Registrable Securities and to use its reasonable best efforts to have
such Shelf Registration Statement declared effective by the SEC as soon as
reasonably practicable. In the event the Company is required to file a Shelf
Registration Statement solely as a result of the matters referred to in clause
(iii) of the preceding sentence, the Company shall use its reasonable best
efforts to file and have declared effective by the SEC both an Exchange Offer
Registration Statement pursuant to Section 2(a) with respect to all Registrable
Securities and a Shelf Registration Statement (which may be a combined
Registration Statement with the Exchange Offer Registration Statement) with
respect to offers and sales of Registrable Securities held by the Initial
Purchasers after completion of the Exchange Offer. The Company agrees to use its
reasonable best efforts to keep the Shelf Registration Statement continuously
effective and to keep the related Prospectus current until the expiration of the
period referred to in Rule 144(k) with respect to the Registrable Securities or
such shorter period that will terminate when all of the Registrable Securities
covered by the Shelf Registration Statement have been sold pursuant to the Shelf
Registration Statement or shall have been sold to the public pursuant to Rule
144(k) (or similar provision then in force, but not Rule 144A) under the 1933
Act or shall have ceased to be outstanding; provided, however, that if there

                                       6
<PAGE>

is a possible acquisition or business combination or other transaction, business
development or event involving the Company that would require disclosure in the
Shelf Registration Statement or the documents incorporated or deemed to be
incorporated by reference therein or the related Prospectus and the Company
determines in the exercise of its reasonable judgment that such disclosure is
not in the best interests of the Company and its stockholders or obtaining any
financial statements relating to an acquisition or business combination required
to be included in the Shelf Registration Statement or the documents incorporated
or deemed to be incorporated by reference therein or the related Prospectus
would be impracticable, the Company shall give the Holders notice (a "Voluntary
Suspension Notice") to suspend use of the Prospectus relating to the Shelf
Registration Statement, and the Holders hereby agree to suspend use of such
Prospectus until the Company has amended or supplemented such Prospectus or has
notified the Holders that use of the then current Prospectus may be resumed as
provided in the penultimate paragraph of Section 3. In the case of any Voluntary
Suspension Notice, the Company shall not be required to disclose in such notice
the possible acquisition or business combination or other transaction, business
development or event as a result of which such notice shall have been given if
the Company determines in good faith that such acquisition or business
combination or other transaction, business development or event should remain
confidential and, while such Voluntary Suspension Notice is in effect, the
Company shall not be required to amend or supplement the Shelf Registration
Statement, the documents incorporated or deemed to be incorporated by reference
therein or the related Prospectus to reflect such possible acquisition or
business combination or other transaction, business development or event, but
shall use its reasonable best efforts to maintain the effectiveness of such
Shelf Registration Statement. Upon the abandonment, consummation, termination or
public announcement or other public disclosure of the possible acquisition or
business combination or other transaction, or if the applicable business
development or event shall cease to exist or shall be publicly disclosed, then
the Company shall promptly comply with this Section 2(b) and Sections 3(b),
3(e)(iv) (if applicable), 3(i) (if applicable) and the penultimate paragraph in
Section 3 hereof and notify the Holders that disposition of Registrable
Securities may resume; provided that, if Section 3(i) shall require an amendment
or supplement to the Shelf Registration Statement or the related Prospectus,
then such resumption shall not occur until the Company shall have delivered
copies of the supplemented or amended Prospectus contemplated by Section 3(i) to
the applicable Holders. Anything herein to the contrary notwithstanding, the
right of the Company to suspend use of the Prospectus pursuant to this paragraph
shall be subject to the limitation set forth in the last sentence of the
penultimate paragraph of Section 3. The Company further agrees to supplement or
amend the Shelf Registration Statement and/or the related Prospectus if required
by the rules, regulations or instructions applicable to the registration form
used by the Company for such Shelf Registration Statement or by the 1933 Act or
by any other rules and regulations thereunder for shelf registration or if
reasonably requested by a Holder with respect to information relating to such
Holder, and to use its reasonable best efforts to cause any such amendment to
become effective and such Shelf Registration Statement and/or the related
Prospectus to become usable as soon as thereafter reasonably practicable,
subject to the right of the Company, on the terms and subject to the conditions
described elsewhere in this Section 2(b), to suspend its obligation to amend or
supplement the Shelf Registration Statement and/or the related Prospectus by
giving a Voluntary Suspension Notice. The Company agrees to furnish to the
Holders of Registrable Securities copies of any such supplement or amendment
promptly after its being used or filed with the SEC.

                                       7
<PAGE>

     (c)  The Company shall pay all Registration Expenses in connection with the
registration pursuant to Section 2(a) and Section 2(b) including, but not
limited to, the fees and expenses of one counsel to be selected by the
Representatives or, if the Representatives elect not to select such counsel, by
the Majority Holders and which counsel may also be counsel for the Initial
Purchasers. Each Holder shall pay all underwriting discounts and commissions and
transfer taxes, if any, relating to the sale or disposition of such Holder's
Registrable Securities pursuant to the Shelf Registration Statement.

     (d)  An Exchange Offer Registration Statement pursuant to Section 2(a)
hereof or a Shelf Registration Statement pursuant to Section 2(b) hereof will
not be deemed to have become effective unless it has been declared effective by
the SEC; provided, however, that, if, after it has been declared effective, the
offering of Registrable Securities pursuant to a Shelf Registration Statement is
interfered with by any stop order, injunction or other order or requirement of
the SEC or any other governmental agency or court, such Registration Statement
will be deemed not to have become effective during the period of such
interference until the offering of Registrable Securities pursuant to such
Registration Statement may legally resume.

     (e)  Additional cash interest (the "ADDITIONAL INTEREST") shall be payable
by the Company in respect of the Securities as follows:

               (i)  If an Exchange Offer Registration Statement or Shelf
          Registration Statement is not filed within 120 days following the
          Closing Date, then commencing on and including the 121st day after the
          Closing Date, in addition to the interest otherwise payable on the
          Securities, Additional Interest will accrue and be payable on the
          Securities at the rate of 0.25% per annum; and

               (ii) If an Exchange Offer Registration Statement or Shelf
          Registration Statement is not declared effective within 180 days
          following the Closing Date, then commencing on and including the 181st
          day after the Closing Date, in addition to the interest otherwise
          payable on the Securities, Additional Interest will accrue and be
          payable on the Securities at the rate of 0.25% per annum; and

               (iii) If either (A) the Company has not exchanged Exchange
          Securities for all Securities validly tendered and not withdrawn in
          accordance with the terms of the Exchange Offer on or prior to the
          date that is 30 Business Days after the Effectiveness Deadline, or (B)
          if applicable, the Shelf Registration Statement has been declared
          effective but such Shelf Registration Statement ceases to be effective
          at any time prior to the expiration of the holding period referred to
          in Rule 144(k) or, if earlier, such time as all of the Registrable
          Securities covered by the Shelf Registration Statement have been
          disposed of pursuant to such Shelf Registration Statement or sold to
          the public pursuant to Rule 144(k) (or any similar provision then in
          force, but not Rule 144A) under the 1933 Act or shall have ceased to
          be outstanding, then, in addition to the interest otherwise payable on
          the Securities, Additional Interest will accrue and be payable on the
          Securities at the rate of 0.25% per annum from and including (x) the
          day (whether or not a Business Day) immediately succeeding the 30th
          Business Day after the

                                       8
<PAGE>

          Effectiveness Deadline, in the case of (A) above, or (y) the day such
          Shelf Registration Statement ceases to be effective, in the case of
          (B) above;

provided, however, that the Additional Interest rate on the Securities may in no
event exceed 0.25% per annum; and provided, further, that (1) upon the filing of
the Exchange Offer Registration Statement or Shelf Registration Statement (in
the case of (i) above), (2) upon the effectiveness of the Exchange Offer
Registration Statement or the Shelf Registration Statement (in the case of (ii)
above), or (3) upon the exchange of Exchange Securities for all Registrable
Securities validly tendered and not withdrawn in the Exchange Offer or upon the
effectiveness of the Shelf Registration Statement that had ceased to remain
effective prior to the expiration of the holding period referred to in Rule
144(k) or, if earlier, such time as all of the Registrable Securities covered by
the Shelf Registration Statement have been disposed of pursuant to such Shelf
Registration Statement or sold to the public pursuant to Rule 144(k) (or any
similar provision then in force, but not Rule 144A) under the 1933 Act or shall
have ceased to be outstanding (in the case of (iii) above), Additional Interest
on the Securities as a result of such clause (i), (ii) or (iii), respectively,
shall cease to accrue.

     Any amount of Additional Interest due pursuant to clauses (i), (ii) or
(iii) of the preceding paragraph will be payable in cash and will be payable on
the same dates on which interest is otherwise payable on the Securities and to
the same Persons who are entitled to receive those payments of interest on the
Securities. The amount of Additional Interest payable for any period will be
determined by multiplying the Additional Interest rate, which will be 0.25% per
annum, by the principal amount of the Securities and then multiplying the
product by a fraction, the numerator of which is the number of days that the
Additional Interest rate was applicable during such period (determined on the
basis of a 360-day year comprised of twelve 30-day months) and the denominator
of which is 360.

     (f)  Without limiting the remedies available to the Initial Purchasers and
the Holders, the Company acknowledges that any failure by the Company to comply
with its obligations under Section 2(a) and Section 2(b) hereof may result in
material irreparable injury to the Initial Purchasers or the Holders for which
there is no adequate remedy at law, that it will not be possible to measure
damages for such injuries precisely and that, in the event of any such failure,
any Initial Purchaser or any Holder may obtain such relief as may be required to
specifically enforce the Company's obligations under Section 2(a) and Section
2(b) hereof, provided that, without limiting the ability of any Initial
Purchaser or any Holder to specifically enforce such obligations, in the case of
any terms of this Agreement for which Additional Interest pursuant to 2(e) is
expressly provided as a remedy for a violation of such terms, such Additional
Interest shall be the sole monetary damages for such a violation.

     3.   Registration Procedures.

     In connection with the obligations of the Company with respect to the
Registration Statements pursuant to Section 2(a) and Section 2(b) hereof, the
Company shall as expeditiously as reasonably practicable:

     (a)  prepare and file with the SEC a Registration Statement on the
appropriate form under the 1933 Act, which form (x) shall be selected by the
Company and (y) shall, in the case of

                                       9
<PAGE>

a Shelf Registration, be available for the sale of the Registrable Securities by
the selling Holders thereof and (z) shall comply as to form in all material
respects with the requirements of the applicable form and include all financial
statements required by the SEC to be filed therewith, and use its reasonable
best efforts to cause such Registration Statement to become effective and remain
effective in accordance with Section 2 hereof;

     (b)  prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary to keep such
Registration Statement effective for the applicable period and, subject to the
Company's rights to suspend the use of the Prospectus relating to the Shelf
Registration Statement pursuant to Section 2(b) of this Agreement on the terms
and subject to the conditions set forth in such Section 2(b), cause each
Prospectus to be supplemented by any required prospectus supplement and, as so
supplemented, to be filed pursuant to Rule 424 under the 1933 Act if required by
such Rule and to keep each Prospectus current during the period described under
Section 4(3) and Rule 174 under the 1933 Act that is applicable to transactions
by brokers or dealers with respect to the Registrable Securities or Exchange
Securities;

     (c)  in the case of a Shelf Registration, furnish to each Holder of
Registrable Securities, to counsel for the Initial Purchasers, to counsel for
the Holders and to each Underwriter of an Underwritten Offering of Registrable
Securities, if any, without charge, as many copies of each Prospectus, including
each preliminary prospectus, and any amendment or supplement thereto and such
other documents as such Holder, counsel or Underwriter may reasonably request,
in order to facilitate the public sale or other disposition of the Registrable
Securities; and the Company consents to the use of such Prospectus and any
amendment or supplement thereto in accordance with applicable law by each of the
selling Holders of Registrable Securities and any such Underwriter in connection
with the offering and sale of the Registrable Securities covered by and in the
manner described in such Prospectus or any amendment or supplement thereto in
accordance with applicable law;

     (d)  use its reasonable best efforts to register or qualify the Registrable
Securities under all applicable state securities or "blue sky" laws of such
jurisdictions as any Holder of Registrable Securities covered by a Registration
Statement shall reasonably request in writing by the time the applicable
Registration Statement is declared effective by the SEC, to cooperate with such
Holders in connection with any filings required to be made with the National
Association of Securities Dealers, Inc. and do any and all other acts and things
which may be reasonably necessary or advisable to enable such Holder to
consummate the disposition in each such jurisdiction of such Registrable
Securities owned by such Holder; provided, however, that the Company shall not
be required to (i) qualify as a foreign corporation or as a dealer in securities
in any jurisdiction where it would not otherwise be required to qualify but for
this Section 3(d), (ii) file any general consent to service of process or (iii)
subject itself to taxation in any such jurisdiction if it is not so subject;

     (e)  in the case of a Shelf Registration, notify each Holder of Registrable
Securities, counsel for the Holders and counsel for the Initial Purchasers
promptly and, if requested by any such Holder or counsel, confirm such advice in
writing (i) when a Registration Statement has become effective and when any
post-effective amendment thereto has been filed and becomes effective, (ii) of
any request by the SEC or any state securities authority for amendments and

                                       10
<PAGE>

supplements to a Registration Statement and Prospectus or for additional
information after the Registration Statement has become effective, (iii) of the
issuance by the SEC or any state securities authority of any stop order
suspending the effectiveness of a Registration Statement or the initiation of
any proceedings for that purpose, (iv) of the happening of any event during the
period a Shelf Registration Statement is effective which makes any statement
made in such Registration Statement or the related Prospectus untrue in any
material respect or as a result of which the Shelf Registration Statement or the
related Prospectus contains an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading or which requires the making of any changes in such
Registration Statement or Prospectus in order to make the statements therein not
misleading (but subject to the right of the Company, under the circumstances set
forth in Section 2(b) of this Agreement, not to disclose the nature of such
event) and (v) of any determination by the Company that a post-effective
amendment to a Registration Statement would be appropriate;

     (f)  use reasonable best efforts to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement as soon as reasonably
possible and provide notice as promptly as practicable to each Holder of the
withdrawal of any such order;

     (g)  in the case of a Shelf Registration, furnish to each Holder of
Registrable Securities, without charge, one conformed copy of each Registration
Statement and any post-effective amendment thereto (without documents
incorporated therein by reference or exhibits thereto, unless requested);

     (h)  in the case of a Shelf Registration, cooperate with the selling
Holders of Registrable Securities to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold and not
bearing any restrictive legends and enable such Registrable Securities to be in
such denominations (consistent with the provisions of the Indenture) and
registered in such names as the selling Holders may reasonably request at least
one business day prior to the closing of any sale of Registrable Securities;

     (i)  in the case of a Shelf Registration, upon the occurrence of any event
contemplated by Section 3(e)(iv) hereof but subject to the Company's right to
suspend the use of the related Prospectus pursuant to Section 2(b) on the terms
and subject to the conditions set forth in such Section 2(b), use its reasonable
best efforts to prepare and file with the SEC a supplement or post-effective
amendment to a Registration Statement or the related Prospectus or any document
incorporated therein by reference or file any other required document so that,
as thereafter delivered to the purchasers of the Registrable Securities, such
Prospectus will not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Company agrees to
notify the Holders to suspend use of the Prospectus as promptly as practicable
after the occurrence of such an event, and the Holders hereby agree to suspend
use of the Prospectus until the Company has amended or supplemented the
Prospectus to correct such misstatement or omission;

     (j)  a reasonable time prior to the filing of any Registration Statement,
any Prospectus, any amendment to a Registration Statement or amendment or
supplement to a

                                       11
<PAGE>

Prospectus, provide copies of such document to the Representatives and their
counsel (and, in the case of a Shelf Registration Statement, the Holders and
their counsel), and the Company shall not at any time file or make any amendment
to the Registration Statement, any Prospectus or any amendment of or supplement
to a Registration Statement or a Prospectus of which the Representatives and
counsel to the Initial Purchasers (and, in the case of a Shelf Registration
Statement, the Holders and their counsel) shall not have previously been advised
and furnished a copy or to which the Representatives or counsel to the Initial
Purchasers (and, in the case of a Shelf Registration Statement, the Holders or
their counsel) shall reasonably object.

     (k)  obtain a CUSIP number for all Exchange Securities or Registrable
Securities, as the case may be, not later than the effective date of a
Registration Statement;

     (l)  cause the Indenture to be qualified under the Trust Indenture Act of
1939, as amended (the "TIA"), in connection with the registration of the
Exchange Securities or Registrable Securities, as the case may be, cooperate
with the Trustee and the Holders to effect such changes to the Indenture as may
be required for the Indenture to be so qualified in accordance with the terms of
the TIA and execute, and use its best efforts to cause the Trustee to execute,
all documents as may be required to effect such changes and all other forms and
documents required to be filed with the SEC to enable the Indenture to be so
qualified in a timely manner;

     (m)  in the case of a Shelf Registration, make available for inspection by
a representative of the Holders of the Registrable Securities, any Initial
Purchaser participating in any disposition pursuant to such Shelf Registration
Statement, and attorneys and accountants designated by the Holders and
reasonably acceptable to the Company and in a manner that is reasonable and
customary for shelf offerings by companies regularly filing reports under the
Securities Exchange Act of 1934, as amended, all material financial and other
pertinent records and documents of the Company, cause the appropriate officers
of the Company to make themselves reasonably available for "due diligence"
conferences of the nature customary in connection with shelf offerings by
companies regularly filing reports under the Securities Exchange Act of 1934, as
amended, and cause the officers, directors and employees of the Company to
supply all material information reasonably requested by any such representative
of the Holders, Initial Purchaser, attorney or accountant in connection with a
Shelf Registration Statement;

     (n)  use its reasonable best efforts to cause the Exchange Securities or
Registrable Securities, as the case may be, to be rated by two nationally
recognized statistical rating organizations (as such term is defined in Rule
436(g)(2) under the 1933 Act);

     (o)  if reasonably requested by any Holder of Registrable Securities
covered by a Registration Statement, (i) promptly incorporate in a Prospectus
supplement or post-effective amendment such information with respect to such
Holder as such Holder reasonably requests to be included therein and (ii) make
all required filings of such Prospectus supplement or such post-effective
amendment as soon as reasonably practicable after the Company has received
notification of the matters to be incorporated in such filing; and

                                       12
<PAGE>

     (p)  in the case of a Shelf Registration, enter into such customary
agreements and take all such other actions in connection therewith (including
those requested by the Holders of a majority of the Registrable Securities being
sold) in order to expedite or facilitate the disposition of such Registrable
Securities including, but not limited to, an Underwritten Offering and in such
connection, (i) to the extent possible, make such representations and warranties
to the Holders and any Underwriters of such Registrable Securities with respect
to the business of the Company and its subsidiaries, the Registration Statement,
Prospectus and documents incorporated by reference or deemed incorporated by
reference, if any, in each case, in form, substance and scope as are customarily
made by issuers to underwriters in underwritten offerings and confirm the same
if and when requested, (ii) obtain opinions of counsel to the Company (which
counsel and opinions, in form, scope and substance, shall be reasonably
satisfactory to the Holders and such Underwriters and their respective counsel)
addressed to each selling Holder and Underwriters of Registrable Securities,
covering the matters customarily covered in opinions requested in underwritten
offerings, (iii) obtain "cold comfort" letters from the independent certified
public accountants of the Company (and, if necessary, any other certified public
accountant of any subsidiary of the Company, or of any Person or business
acquired by the Company for which financial statements and financial data are or
are required to be included in the Registration Statement or in the documents
incorporated or deemed to be incorporated therein) addressed to each selling
Holder and Underwriter of Registrable Securities, such letters to be in
customary form and covering matters of the type customarily covered in "cold
comfort" letters in connection with underwritten offerings, and (iv) deliver
such documents and certificates as may be reasonably requested by the Holders of
a majority in principal amount of the Registrable Securities being sold or the
Underwriters, and which are customarily delivered in underwritten offerings to
evidence the continued validity of the representations and warranties of the
Company made pursuant to clause (i) above and to evidence compliance with any
customary conditions contained in an underwriting agreement.

     In the case of a Shelf Registration Statement, the Company may require each
Holder of Registrable Securities to furnish to the Company such information
regarding the Holder and the proposed distribution by such Holder of such
Registrable Securities as the Company may from time to time reasonably request
in writing and the Company may exclude from such Shelf Registration Statement
the Securities of any Holders that refuse to comply with such request.

     In the case of a Shelf Registration Statement, each Holder agrees that,
upon receipt of any notice from the Company of the happening of any event of the
kind described in Section 3(e)(iv) hereof or upon receipt of any Voluntary
Suspension Notice pursuant to Section 2(b) hereof, such Holder will forthwith
discontinue disposition of Registrable Securities pursuant to such Shelf
Registration Statement until either (x) such Holder's receipt of the copies of
the supplemented or amended Prospectus contemplated by Section 3(i) hereof or
(y) solely in the case of a Voluntary Suspension Notice, the Company shall have
notified such Holder that disposition of Registrable Securities may be resumed
using the then current Prospectus, and, if so directed by the Company in the
case of clause (x), such Holder will deliver to the Company (at its expense) all
copies in its possession, other than permanent file copies then in such Holder's
possession, of the Prospectus covering such Registrable Securities current at
the time of receipt of such notice. If the Company shall give any such notice to
suspend the disposition of Registrable Securities pursuant to a Registration
Statement, the Company shall extend the period during which the Registration
Statement shall be maintained effective pursuant to this Agreement by the number
of days during

                                       13
<PAGE>

the period from and including the date of the giving of such notice to and
including the date when the Holders shall have received copies of the
supplemented or amended Prospectus necessary to resume such dispositions or the
Holders shall have received notice that disposition of Registrable Securities
may be resumed using the then current Prospectus as the case may be. Anything
herein to the contrary notwithstanding, the Company will not be entitled to
require Holders to discontinue the sale or other disposition of Registrable
Securities pursuant to a Shelf Registration Statement or to suspend the use of
the related Prospectus for more than 120 days (whether or not consecutive) in
any period of 12 consecutive months.

     The Holders of Registrable Securities covered by a Shelf Registration
Statement who desire to do so may sell such Registrable Securities in an
Underwritten Offering. In any such Underwritten Offering, the investment banker
or investment bankers and manager or managers (the "UNDERWRITERS") that will
administer the offering will be selected by the Majority Holders of the
Registrable Securities included in such offering.

     4.   Participation of Broker-Dealers in Exchange Offer.

     (a)  The Staff of the SEC has taken the position that any broker-dealer
that receives Exchange Securities in the Exchange Offer in exchange for
Securities that were acquired by such broker-dealer for its own account as a
result of market-making or other trading activities (a "PARTICIPATING
BROKER-DEALER"), may be deemed to be an "underwriter" within the meaning of the
1933 Act and must deliver a prospectus meeting the requirements of the 1933 Act
in connection with any resale of such Exchange Securities.

     The Company understands that it is the Staff's position that if the
Prospectus contained in the Exchange Offer Registration Statement includes a
plan of distribution containing a statement to the above effect and the means by
which Participating Broker-Dealers may resell the Exchange Securities, without
naming the Participating Broker-Dealers or specifying the amount of Exchange
Securities owned by them, such Prospectus may be delivered by Participating
Broker-Dealers to satisfy their prospectus delivery obligation under the 1933
Act in connection with resales of Exchange Securities for their own accounts, so
long as the Prospectus otherwise meets the requirements of the 1933 Act.

     (b)  In light of the above, notwithstanding the other provisions of this
Agreement, the Company agrees that the provisions of this Agreement as they
relate to a Shelf Registration shall also apply to an Exchange Offer
Registration to the extent, and with such reasonable modifications thereto as
may be reasonably requested by the Representatives or by one or more
Participating Broker-Dealers, in each case as provided in clause (ii) below, in
order to expedite or facilitate the disposition of any Exchange Securities by
Participating Broker-Dealers consistent with the positions of the Staff recited
in Section 4(a) above; provided that:

               (i)  the Company shall not be required to amend or supplement the
          Prospectus contained in the Exchange Offer Registration Statement, as
          would otherwise be contemplated by Section 3(i), for a period
          exceeding 180 days after the last Exchange Date (as such period may be
          extended pursuant to the penultimate paragraph of Section 3 of this
          Agreement) and Participating Broker-Dealers shall not be authorized by
          the Company to deliver and shall not deliver

                                       14
<PAGE>

          such Prospectus after such period in connection with the resales
          contemplated by this Section 4; and

               (ii) the application of the Shelf Registration procedures set
          forth in Section 3 of this Agreement to an Exchange Offer
          Registration, to the extent not required by the positions of the Staff
          of the SEC or the 1933 Act and the rules and regulations thereunder,
          will be in conformity with the reasonable request to the Company by
          the Representatives or with the reasonable request in writing to the
          Company by one or more broker-dealers who certify to the
          Representatives and the Company in writing that they anticipate that
          they will be Participating Broker-Dealers; and provided further that,
          in connection with such application of the Shelf Registration
          procedures set forth in Section 3 to an Exchange Offer Registration,
          the Company shall be obligated (x) to deal only with one of two
          entities representing the Participating Broker-Dealers, which shall be
          Morgan Stanley & Co. Incorporated or J.P. Morgan Securities Inc.
          unless either entity elects not to act as such representative, (y) to
          pay the fees and expenses of only one counsel representing the
          Participating Broker-Dealers, which shall be counsel to the Initial
          Purchasers unless such counsel elects not to so act and (z) to cause
          to be delivered only one, if any, "cold comfort" or similar letter
          relating to the Company (plus only one, if any, "cold comfort" or
          similar letter with respect to any other Person or businesses whose
          financial statements are included or incorporated or deemed to be
          incorporated by reference in the Exchange Offer Registration
          Statement) with respect to the Prospectus in the form existing on the
          last Exchange Date and with respect to each subsequent amendment or
          supplement, if any, effected during the period specified in clause (i)
          above.

     (c)  The Representatives shall have no liability to the Company or any
Holder with respect to any request that it may make pursuant to Section 4(b)
above.

     5.   Indemnification and Contribution.

     (a)  The Company agrees to indemnify and hold harmless the Initial
Purchasers, each Holder and each Person, if any, who controls any Initial
Purchaser or any Holder within the meaning of either Section 15 of the 1933 Act
or Section 20 of the 1934 Act, or is under common control with, or is controlled
by, any Initial Purchaser or any Holder, from and against all losses, claims,
damages and liabilities (including, without limitation but subject to Section
5(c) below, any legal or other expenses reasonably incurred by any Initial
Purchaser, any Holder or any such controlling or affiliated Person in connection
with defending or investigating any such action or claim) caused by any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement (or any amendment thereto) pursuant to which Exchange
Securities or Registrable Securities were registered under the 1933 Act,
including all documents incorporated or deemed to be incorporated therein by
reference, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or caused by any untrue statement or alleged untrue
statement of a material fact contained in any Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact necessary to make the statements

                                       15
<PAGE>

therein, in light of the circumstances under which they were, made not
misleading, except insofar as such losses, claims, damages or liabilities are
caused by any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to the Initial Purchasers or any Holder
furnished to the Company in writing through Morgan Stanley & Co. Incorporated or
any selling Holder, respectively, expressly for use therein; provided, however,
that the foregoing indemnity agreement with respect to any preliminary
Prospectus relating to a Shelf Registration Statement shall not inure to the
benefit of any Holder or Participating Broker-Dealer from whom the Person
asserting any such losses, claims, damages or liabilities purchased Securities,
or any person controlling such Holder or Participating Broker-Dealer, if a copy
of the final Prospectus relating to a Shelf Registration Statement (as then
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such Holder or
Participating Broker-Dealer, as the case may be, to such Person, if required by
law so to have been delivered, at or prior to the written confirmation of the
sale of such Securities to such Person, and if such final Prospectus (as so
amended or supplemented) would have cured the defect giving rise to such losses,
claims, damages or liabilities, unless such failure is the result of
noncompliance by the Company with Section 2(b), 3(e) or 3(i) or the penultimate
paragraph of Section 3 hereof, or unless such defect shall have been cured by a
document incorporated or deemed to be incorporated by reference in the final
Prospectus. In connection with any Underwritten Offering permitted by Section 3,
the Company will also indemnify the Underwriters, if any, selling brokers,
dealers and similar securities industry professionals participating in the
distribution, their officers and directors and each Person who controls any such
Persons (within the meaning of the 1933 Act and the 1934 Act) to the same extent
as provided above with respect to the indemnification of the Holders, if
requested in connection with any Registration Statement.

     (b)  Each Holder agrees, severally and not jointly, to indemnify and hold
harmless the Company, the Initial Purchasers and the other selling Holders, and
each of their respective directors, each of the officers of the Company who sign
the Registration Statement and each Person, if any, who controls the Company,
any Initial Purchaser and any other selling Holder within the meaning of either
Section 15 of the 1933 Act or Section 20 of the 1934 Act to the same extent as
the foregoing indemnity from the Company to the Initial Purchasers and the
Holders, but only with reference to information relating to such Holder
furnished to the Company in writing by such Holder expressly for use in any
Registration Statement (or any amendment thereto) or any Prospectus (or any
amendment or supplement thereto).

     (c)  In case any proceeding (including any governmental investigation)
shall be instituted involving any Person in respect of which indemnity may be
sought pursuant to either paragraph (a) or paragraph (b) above, such Person (the
"INDEMNIFIED PARTY") shall promptly notify the Person against whom such
indemnity may be sought (the "INDEMNIFYING PARTY") in writing and the
Indemnifying Party, upon request of the Indemnified Party, shall retain counsel
reasonably satisfactory to the Indemnified Party to represent the Indemnified
Party and any others the Indemnifying Party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any Indemnified Party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such Indemnified Party unless (i) the Indemnifying Party and the Indemnified
Party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the

                                       16
<PAGE>

Indemnifying Party and the Indemnified Party and representation of both parties
by the same counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the Indemnifying Party shall not,
in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for (a) the fees and expenses of more than one separate
firm (in addition to one firm acting as local counsel) for the Initial
Purchasers and all Persons, if any, who control any Initial Purchasers within
the meaning of either Section 15 of the 1933 Act or Section 20 of the 1934 Act,
(b) the fees and expenses of more than one separate firm (in addition to one
firm acting as local counsel) for the Company, its directors, its officers who
sign the Registration Statement and each Person, if any, who controls the
Company within the meaning of either such Section and (c) the fees and expenses
of more than one separate firm (in addition to one firm acting as local counsel)
for all Holders and all Persons, if any, who control any Holders within the
meaning of either such Section, and that all such fees and expenses shall be
reimbursed as they are incurred. In such case involving the Initial Purchasers
and Persons who control the Initial Purchasers, such firm shall be designated in
writing by Morgan Stanley & Co. Incorporated. In such case involving the Holders
and such Persons who control Holders, such firm shall be designated in writing
by the Majority Holders. In all other cases, such firm shall be designated by
the Company. The Indemnifying Party shall not be liable for any settlement of
any proceeding effected without its written consent but, if settled with such
consent or if there be a final judgment for the plaintiff, the Indemnifying
Party agrees to indemnify the Indemnified Party from and against any loss or
liability by reason of such settlement or judgment. No Indemnifying Party shall,
without the prior written consent of the Indemnified Party, effect any
settlement of any pending or threatened proceeding in respect of which such
Indemnified Party is or could have been a party and indemnity could have been
sought hereunder by such Indemnified Party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability on claims
that are the subject matter of such proceeding.

     (d)  If the indemnification provided for in paragraph (a) or paragraph (b)
of this Section 5 is unavailable to an Indemnified Party or insufficient in
respect of any losses, claims, damages or liabilities, then each Indemnifying
Party under such paragraph, in lieu of indemnifying such Indemnified Party
thereunder, shall contribute to the amount paid or payable by such Indemnified
Party as a result of such losses, claims, damages or liabilities in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party or Parties on the one hand and of the Indemnified Party or Parties on the
other hand in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the Company and the Holders shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or by the Holders
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Holders'
respective obligations to contribute pursuant to this Section 5(d) are several
in proportion to the respective principal amount of Registrable Securities of
such Holders that were registered pursuant to a Registration Statement.

     (e)  The Company and each Holder agree that it would not be just or
equitable if contribution pursuant to this Section 5 were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in paragraph (d) above. The amount paid
or payable by an Indemnified Party as a result of the

                                       17
<PAGE>

losses, claims, damages and liabilities referred to in paragraph (d) above shall
be deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such Indemnified Party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 5, no Holder shall be required to indemnify or
contribute any amount in excess of the amount by which the total price at which
Registrable Securities were sold by such Holder exceeds the amount of any
damages that such Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the 1933 Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation. The remedies provided for in this
Section 5 are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any Indemnified Party at law or in equity.

     (f)  The indemnity and contribution provisions contained in this Section 5
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
the Initial Purchasers, any Holder or any Person controlling any of the Initial
Purchasers or any Holder, or by or on behalf of the Company, its officers or
directors or any Person controlling the Company, (iii) acceptance of any of the
Exchange Securities and (iv) any sale of Registrable Securities pursuant to a
Shelf Registration Statement.

     6.   Miscellaneous.

     (a)  No Inconsistent Agreements. The Company has not entered into, and on
or after the date of this Agreement will not enter into, any agreement which is
inconsistent with the rights granted to the Holders of Registrable Securities in
this Agreement or otherwise conflicts with the provisions hereof. The rights
granted to the Holders hereunder do not in any way conflict with and are not
inconsistent with the rights granted to the holders of the Company's other
issued and outstanding securities under any such agreements.

     (b)  Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given unless the Company has obtained the written consent of Holders of at least
a majority in aggregate principal amount of the outstanding Registrable
Securities affected by such amendment, modification, supplement, waiver or
consent; provided, however, that no amendment, modification, supplement, waiver
or consent to any departure from the provisions of Section 5 hereof shall be
effective as against any Holder of Registrable Securities unless consented to in
writing by such Holder.

     (c)  Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery (i) if to a Holder, at the most current address given by such Holder to
the Company by means of a notice given in accordance with the provisions of this
Section 6(c), which address initially is, with respect to the Initial
Purchasers, c/o Morgan Stanley & Co. Incorporated, 1585 Broadway, New York, New
York 10036, Attention: Michael Fusco and J.P. Morgan Securities, Inc., 270 Park
Avenue, New York, New York 10017, Attention: Stephen Sheiner; and (ii) if to the
Company, initially at the Company's

                                       18
<PAGE>

address set forth in the Purchase Agreement and thereafter at such other
address, notice of which is given in accordance with the provisions of this
Section 6(c).

     All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt is acknowledged, if telecopied; and on
the next business day if timely delivered to an air courier guaranteeing
overnight delivery.

     Copies of all such notices, demands, or other communications shall be
concurrently delivered by the Person giving the same to the Trustee, at the
address specified in the Indenture.

     (d)  Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors, assigns and transferees of each of the
parties, including, without limitation and without the need for an express
assignment, subsequent Holders; provided that nothing herein shall be deemed to
permit any assignment, transfer or other disposition of Registrable Securities
in violation of the terms of the Purchase Agreement. If any transferee of any
Holder shall acquire Registrable Securities, in any manner, whether by operation
of law or otherwise, such Registrable Securities shall be held subject to all of
the terms of this Agreement, and by taking and holding such Registrable
Securities such Person shall be conclusively deemed to have agreed to be bound
by and to perform all of the terms and provisions of this Agreement and such
Person shall be entitled to receive the benefits hereof. The Representatives and
the Initial Purchasers (in their respective capacities as Representatives and
Initial Purchasers) shall have no liability or obligation to the Company with
respect to any failure by a Holder to comply with, or any breach by any Holder
of, any of the obligations of such Holder under this Agreement.

     (e)  Purchases and Sales of Securities. The Company shall not, and shall
use its best efforts to cause its affiliates (as defined in Rule 405 under the
1933 Act) not to, purchase and then resell or otherwise transfer any Securities.

     (f)  Third Party Beneficiary. The Holders and the Initial Purchasers shall
be third party beneficiaries to the agreements made hereunder between the
Company, on the one hand, and the Representatives, on the other hand, and each
of them shall have the right to enforce such agreements directly to the extent
it deems such enforcement necessary or advisable to protect its rights or the
rights of Holders or Initial Purchasers, respectively hereunder.

     (g)  Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

     (h)  Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

     (i)  Governing Law. This Agreement shall be governed by the laws of the
State of New York.

                                       19
<PAGE>

     (j)  Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.

                                       20
<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.

                                  WEYERHAEUSER COMPANY

                                  By: __________________________________________
                                      Name:
                                      Title:

                                  Confirmed and accepted as of
                                  the date first above written:

                                  MORGAN STANLEY & CO. INCORPORATED
                                  J.P. MORGAN SECURITIES INC.
                                  Acting severally on behalf of themselves
                                  and the several Initial Purchasers named
                                  in the Purchase Agreement.

                                  MORGAN STANLEY & CO. INCORPORATED

                                  By: __________________________________________
                                      Name:
                                      Title:

                                  J.P. MORGAN SECURITIES INC.

                                  By: __________________________________________
                                      Name:
                                      Title:

                                       21

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