Document:

exv4w13

 

GOLDCORP INC.

- and -

CIBC MELLON TRUST COMPANY

COMMON SHARE PURCHASE WARRANT INDENTURE

Providing for the Issue of

64,136,974 Series “B” Common Share Purchase Warrants

April 15, 2005

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	ARTICLE 1 INTERPRETATION
	 	 	3	 
	1.1 Definitions
	 	 	3	 
	1.2 Words Importing the Singular
	 	 	7	 
	1.3 Interpretation not Affected by Headings
	 	 	7	 
	1.4 Day not a Business Day
	 	 	7	 
	1.5 Time of the Essence
	 	 	7	 
	1.6 Governing Law
	 	 	7	 
	1.7 Meaning of “outstanding” for Certain Purposes
	 	 	7	 
	1.8 Currency
	 	 	7	 
	1.9 Termination
	 	 	8	 
	ARTICLE 2 ISSUE OF WARRANTS
	 	 	8	 
	2.1 Issue of Warrants
	 	 	8	 
	2.2 Form and Terms of Warrants
	 	 	8	 
	2.3 Signing of Warrant Certificates
	 	 	9	 
	2.4 Certification by the Warrant Agent
	 	 	9	 
	2.5 Warrantholder not a Shareholder, etc.
	 	 	9	 
	2.6 Issue in Substitution for Lost Warrant Certificates
	 	 	9	 
	2.7 Warrants to Rank Pari Passu
	 	 	10	 
	2.8 Registration and Transfer of Warrants
	 	 	10	 
	2.9 Registers Open for Inspection
	 	 	11	 
	2.10 Exchange of Warrants
	 	 	12	 
	2.11 Ownership of Warrants
	 	 	12	 
	2.12 Adjustment of Exchange Basis
	 	 	12	 
	2.13 Rules Regarding Calculation of Adjustment of Exchange Basis
	 	 	16	 
	2.14 Postponement of Subscription
	 	 	18	 
	2.15 Notice of Adjustment
	 	 	19	 
	2.16 No Action after Notice
	 	 	19	 
	2.17 Purchase of Warrants for Cancellation
	 	 	19	 
	2.18 Optional Purchases by the Company
	 	 	20	 
	2.19 Protection of Warrant Agent
	 	 	20	 
	2.20 Legended Warrant Certificates
	 	 	20	 
	ARTICLE 3 EXERCISE OF WARRANTS
	 	 	22	 
	3.1 Method of Exercise of Warrants
	 	 	22	 
	3.2 No Fractional Shares
	 	 	23	 
	3.3 Effect of Exercise of Warrants
	 	 	24	 
	3.4 Cancellation of Warrant Certificates
	 	 	24	 
	3.5 Subscription for less than Entitlement
	 	 	24	 
	3.6 Expiration of Warrant
	 	 	25	 
	ARTICLE 4 COVENANTS FOR WARRANTHOLDERS’ BENEFIT
	 	 	25	 
	4.1 General Covenants of the Company
	 	 	25	 
	4.2 Securities Qualification Requirements
	 	 	26	 
	4.3 Warrant Agent’s Remuneration and Expenses
	 	 	26	 
	4.4 Performance of Covenants by Warrant Agent
	 	 	26	 
	ARTICLE 5 ENFORCEMENT
	 	 	27	 
	5.1 Suits by Warrantholders
	 	 	27	 
	5.2 Limitation of Liability
	 	 	27	 

 

 

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	ARTICLE 6 MEETINGS OF WARRANTHOLDERS
	 	 	28	 
	6.1 Right to Convene Meetings
	 	 	28	 
	6.2 Notice
	 	 	28	 
	6.3 Chairman
	 	 	28	 
	6.4 Quorum
	 	 	28	 
	6.5 Power to Adjourn
	 	 	29	 
	6.6 Show of Hands
	 	 	29	 
	6.7 Poll and Voting
	 	 	29	 
	6.8 Regulations
	 	 	30	 
	6.9 Company, Warrant Agent and Counsel may be Represented
	 	 	30	 
	6.10 Powers Exercisable by Extraordinary Resolution
	 	 	30	 
	6.11 Meaning of “Extraordinary Resolution”
	 	 	31	 
	6.12 Powers Cumulative
	 	 	32	 
	6.13 Minutes
	 	 	32	 
	6.14 Instruments in Writing
	 	 	32	 
	6.15 Binding Effect of Resolutions
	 	 	33	 
	6.16 Holdings by the Company or Subsidiaries of the Company Disregarded
	 	 	33	 
	ARTICLE 7 SUPPLEMENTAL INDENTURES AND SUCCESSOR COMPANIES
	 	 	34	 
	7.1 Provision for Supplemental Indentures for Certain Purposes
	 	 	34	 
	7.2 Successor Companies
	 	 	35	 
	ARTICLE 8 CONCERNING THE WARRANT AGENT
	 	 	35	 
	8.1 Trust Indenture Legislation
	 	 	35	 
	8.2 Rights and Duties of Warrant Agent
	 	 	35	 
	8.3 Evidence, Experts and Advisers
	 	 	36	 
	8.4 Securities, Documents and Monies Held by Warrant Agent
	 	 	38	 
	8.5 Actions by Warrant Agent to Protect Interests
	 	 	38	 
	8.6 Warrant Agent not Required to Give Security
	 	 	38	 
	8.7 Protection of Warrant Agent
	 	 	38	 
	8.8 Replacement of Warrant Agent
	 	 	39	 
	8.9 Conflict of Interest
	 	 	40	 
	8.10 Acceptance of Trusts
	 	 	40	 
	8.11 Warrant Agent not to be Appointed Receiver
	 	 	41	 
	8.12 Authorization to Carry on Business
	 	 	41	 
	ARTICLE 9 GENERAL
	 	 	41	 
	9.1 Notice to the Company and the Warrant Agent
	 	 	41	 
	9.2 Notice to the Warrantholders
	 	 	43	 
	9.3 Discretion of Directors
	 	 	43	 
	9.4 Satisfaction and Discharge of Indenture
	 	 	43	 
	9.5 Provisions of Indenture and Warrants for the Sole Benefit of Parties and Warrantholders
	 	 	44	 
	9.6 Counterparts and Formal Date
	 	 	45	 
	 
	 	 	 	 
	SCHEDULE “A” — FORM OF WARRANT CERTIFICATE
	 	 	A-1	 

 

 

	 	 	 	 	 
	SCHEDULE “B” — FORM OF DECLARATION FOR REMOVAL OF LEGEND
	 	 	B-1	 

 

 

     THIS WARRANT INDENTURE dated as of April 15, 2005,

B E T W E E N:

	   	GOLDCORP INC.,

a corporation incorporated under the laws of
the Province of Ontario,
	 
	   	(hereinafter called the “Company”),

A N D

	   	CIBC MELLON TRUST COMPANY,

a trust company incorporated under the laws
of Canada,
	 
	   	(hereinafter called the “Warrant Agent”).

RECITALS

WHEREAS:

	 	A.  	Wheaton River Minerals Ltd. (“Wheaton”) and the Warrant Agent executed a common share
purchase warrant indenture dated August 25, 2003, providing for the issuance of 23,809,524
Series “B” Common Share Purchase Warrants (the “Wheaton Warrants”), a supplemental
indenture dated October 14, 2003 providing for the issuance of an additional 19,050,000
Wheaton Warrants and a supplemental indenture dated January 8, 2004 providing for the
issuance of an additional 21,516,000 Wheaton Warrants;
	 
	 	B.  	The Company together with Goldcorp Acquisition ULC (“Goldcorp ULC”), a wholly-owned
subsidiary of the Company, acquired approximately 82% of the common shares of Wheaton
pursuant to a formal take-over bid made by the Company and Goldcorp ULC on December 29,
2004 which expired on February 28, 2004 (the “Goldcorp Offer”);
	 
	 	C.  	On March 14, 2005, Wheaton, the Company and Goldcorp ULC entered into an arrangement
agreement providing for the acquisition by the Company of all common shares of Wheaton not
acquired under the Goldcorp Offer by way of a plan of arrangement (the “Plan of
Arrangement”) pursuant to section 182 of the Business Corporations Act (the “OBCA”)
involving Wheaton, Wheaton shareholders, the Company and Goldcorp Acquisition (Wheaton)
Ltd. (“Goldcorp Subco”), a wholly-owned subsidiary of Goldcorp;

 

 

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	 	D.  	The Plan of Arrangement provides that all of the issued and outstanding Wheaton
Warrants will be cancelled and the Company will issue to each holder thereof one common
share purchase warrant of the Company exercisable for 0.25 of a common share of the Company
for each of such holder’s Wheaton Warrants so cancelled at a price of $3.10 per 0.25 of a
share at any time prior to 5:00 p.m. (Toronto time) on August 25, 2008, all upon the terms
and conditions herein set forth (the “Series B Warrants” or the “Warrants”);
	 
	 	E.  	Goldcorp ULC transferred all of its assets and liabilities, including any acquired
Wheaton common shares, to the Company on March 21, 2005 and
Goldcorp ULC was dissolved effective as of April 12, 2005;
	 
	 	F.  	Effective the date hereof, the Plan of Arrangement was completed and Goldcorp Subco and
Wheaton were amalgamated under the provisions of subsection 177(1) of the OBCA (the
resulting entity hereinafter referred to as “Amalgamated Wheaton”);
	 
	 	G.  	On the date hereof, Amalgamated Wheaton transferred all of its assets and liabilities
to the Company and the dissolution of Amalgamated Wheaton was commenced under the
provisions of the OBCA;
	 
	 	H.  	The Company is duly authorized to create and issue the Warrants to be issued under the
Plan of Arrangement as herein provided;
	 
	 	I.  	All things necessary have been done and performed to make the Warrants, when certified
by the Warrant Agent and issued as provided in this indenture, legal, valid and binding
upon the Company with the benefits of and subject to the terms of this indenture;
	 
	 	J.  	The foregoing recitals are made as statements of fact by the Company and not by the
Warrant Agent;
	 
	 	K.  	The Warrant Agent has agreed to enter into this indenture and to hold all rights,
interests and benefits contained herein for and on behalf of those persons who become
holders of Warrants issued pursuant to this indenture from time to time on the terms and
conditions set forth herein;

          NOW THEREFORE THIS INDENTURE WITNESSES that for good and valuable consideration mutually given
and received, the receipt and sufficiency of which are hereby acknowledged, it is hereby agreed and
declared as follows:

 

 

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ARTICLE 1

INTERPRETATION

	1.1  	Definitions

          In this indenture, unless there is something in the subject matter or context inconsistent
therewith:

	   	“Applicable Legislation” means the provisions of the statutes of Canada and its provinces
and the regulations under those statutes relating to trust indentures and/or the rights,
duties or obligations of corporations and trustees under trust indentures as are from time
to time in force and applicable to this indenture;
	 
	   	“Business Day” means a day that is not a Saturday, Sunday, a day on which banks are closed
in the City of Toronto, Ontario or civic or statutory holiday in the City of Toronto,
Ontario;
	 
	   	“Capital Reorganization” has the meaning ascribed thereto in subsection 2.12(4);
	 
	   	“Common Shares” means fully paid and non-assessable common shares without nominal or par
value in the capital of the Company;
	 
	   	“Common Share Reorganization” has the meaning ascribed thereto in subsection 2.12(1);
	 
	   	“Company” means Goldcorp Inc., a corporation incorporated under the laws of the Province of
Ontario, and its lawful successors from time to time;
	 
	   	“Company’s Auditors” means the chartered accountant or firm of chartered accountants duly
appointed as auditor or auditors of the Company from time to time;
	 
	   	“counsel” means a barrister, solicitor or attorney (who may be an employee of the Company)
or a firm of barristers and solicitors or attorneys (who may be counsel for the Company), in
both cases acceptable to the Warrant Agent;
	 
	   	“Current Market Price” at any date, means the weighted average price per share at which the
Common Shares have traded:

	 	(i)  	on the TSX;
	 
	 	(ii)  	if the Common Shares are not listed on the TSX, on any stock exchange upon
which the Common Shares are listed as may be selected for this purpose by the
directors, acting reasonably; or

 

 

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	 	(iii)  	if the Common Shares are not listed on any stock exchange, on any
over-the-counter market;

	   	during the 20 consecutive trading days (on each of which at least 500 Common Shares are
traded in board lots) ending the 2nd trading day before such date and the weighted average
price shall be determined by dividing the aggregate sale price of all Common Shares sold in
board lots on the exchange or market, as the case may be, during the 20 consecutive trading
days by the number of Common Shares sold or, if not traded on any recognized market or
exchange, as determined by the directors of the Company acting reasonably;
	 
	   	“director” means a member of the board of directors of the Company for the time being, and
unless otherwise specified herein, reference to “action by the board of directors” means
action by the board of directors of the Company as a board or, whenever duly empowered,
action by a committee of the board;
	 
	   	“Dividends Paid in Ordinary Course” means cash dividends declared payable on the Common
Shares in any fiscal year of the Company to the extent that such cash dividends do not
exceed, 5% of the Exercise Price and for such purpose the amount of any dividend paid in
shares shall be the aggregate stated capital of such shares and the amount of any dividend
paid in other than cash or shares shall be the fair market value of such dividend as
determined by resolution passed by the board of directors of the Company, subject, if
applicable, to the prior consent of any stock exchange or any other over-the-counter market
on which the Common Shares are traded and for such purpose the amount of any dividends paid
in other than cash or shares shall be the fair market value of such dividend as determined
by the directors;
	 
	   	“Exchange Basis” means, as at any time, the number of Common Shares or other classes of
shares or securities which a Warrantholder is entitled to receive upon the exercise of the
rights attached to the Warrants pursuant to the provisions of this indenture and which, as
at the date hereof, is equal to 0.25 of a Common Share per Warrant;
	 
	   	“Exercise Date” with respect to any Warrant means the date on which such Warrant is
surrendered for exercise in accordance with the provisions of Article 3;
	 
	   	“Exercise Price” means $3.10 for each 0.25 of a Common Share, subject to adjustment in
accordance with the provisions of this indenture;
	 
	   	“extraordinary resolution” has the meaning ascribed thereto in sections 6.11 and 6.14;
	 
	   	"NYSE” means the New York Stock Exchange;
	 
	   	“person” means an individual, a corporation, a partnership, a syndicate, a trustee or any
unincorporated organization and words importing persons are intended to have a similarly
extended meaning;

 

 

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	   	“Regulation S” means Regulation S under the Securities Act;
	 
	   	“Rights Offering” has the meaning ascribed thereto in subsection 2.12(2);
	 
	   	“Rights Offering Price” has the meaning ascribed thereto in subsection 2.13(2);
	 
	   	“Rights Period” has the meaning ascribed thereto in subsection 2.12(2);
	 
	   	“Securities Act” means the Securities Act of 1933, as amended, of the United States;
	 
	   	"Securities Laws” means, as applicable, the securities laws, regulations, rules, rulings and
orders in each of the each of the provinces of British Columbia, Alberta, Saskatchewan,
Manitoba, Ontario, Québec, Nova Scotia, New Brunswick, Prince Edward Island and Newfoundland
and Labrador, provided that a holder of Warrant is located in such province, and the United
States and each of the states of the United States, the applicable policy statements issued
by the securities regulators in each of the provinces and territories of Canada and the
United States and each of the states of the United States, and the rules of the TSX and the
NYSE;
	 
	   	“Series B Warrants” means the Series B common share purchase warrants issued hereunder
entitling the holders thereof to purchase Common Shares on the basis of 0.25 of a Common
Share for each whole Share Purchase Warrant upon payment of the Exercise Price; provided
that in each case the number and/or class of shares or securities receivable on the exercise
of the Series B Warrants may be subject to increase or decrease or change in accordance with
the terms and provisions hereof;
	 
	   	“Special Distribution” has the meaning ascribed thereto in subsection 2.12(3);
	 
	   	“shareholder” means an owner of record of one or more Common Shares or shares of any other
class or series in the capital of the Company;
	 
	   	“Subject Securities” means the Common Shares issuable upon exercise of the Warrants and the
Common Shares or other securities or property issuable upon the exercise of the Warrants as
a result of any adjustment to the subscription rights pursuant to Article 2 hereof;
	 
	   	“subsidiary of the Company” or “Subsidiary” means a corporation, a majority of the
outstanding voting shares of which is owned, directly or indirectly, by the Company or by
one or more subsidiaries of the Company and, as used in this definition, “voting shares”
means shares of a class or classes ordinarily entitled to vote for the election of the
majority of the directors of a corporation irrespective of whether or not shares of any
other class or classes shall have or might have the right to vote for directors by reason of
the happening of any contingency;

 

 

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	   	“this Warrant Indenture”, “this indenture”, “herein”, “hereby”, and similar expressions mean
and refer to this Warrant Indenture and any indenture, deed or instrument supplemental or
ancillary hereto; and the expressions “Article”, “section” or “subsection” followed by a
number or letter mean and refer to the specified Article, section or subsection of this
indenture;
	 
	   	“Time of Expiry” means, in respect of the Warrants, 5:00 p.m. (Toronto time) on August 25,
2008;
	 
	   	“trading day” means a day on which the TSX (or such other exchange on which the Common
Shares are listed and which forms the primary trading market for such shares) is open for
trading, and if the Common Shares are not listed on a stock exchange, a day on which an
over-the-counter market where such shares are traded is open for business;
	 
	   	“Transfer Agent” means the transfer agent or agents for the time being of the Common Shares;
	 
	   	"TSX” means the Toronto Stock Exchange;
	 
	   	“U.S. Person” means a U.S. person as that term is defined in Regulation S;
	 
	   	“United States” means the United States as that term is defined in Regulation S;
	 
	   	“Warrant Agent” means CIBC Mellon Trust Company, a trust company incorporated under the laws
of Canada, or any lawful successor thereto including through operation of section 8.8;
	 
	   	“Warrant Certificates” means the certificates representing the Warrants substantially in the
form attached as Schedule “A” hereto or such other form as may be approved under section
2.6, evidencing Warrants;
	 
	   	“Warrantholders” or “holders” means the persons whose names are entered for the time being
in the register maintained pursuant to section 2.8;
	 
	   	“Warrantholders’ Request” means an instrument, signed in one or more counterparts by
Warrantholders entitled to acquire, in the aggregate, at least 25% of the aggregate number
of all Warrants then outstanding, which requests the Warrant Agent to take some action or
proceeding specified therein;
	 
	   	“Warrants” means the Series B Warrants; and
	 
	   	“written order of the Company”, “written request of the Company”, “written consent of the
Company”, “certificate of the Company” and any other document required to be signed by the
Company, means, respectively, a written order, request, consent, certificate or other
document signed in the name of the Company by any officer and director of the Company, and
may consist of one or more instruments so executed.

 

 

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	1.2  	Words Importing the Singular

          Unless elsewhere otherwise expressly provided or unless the context otherwise requires, words
importing the singular include the plural and vice versa and words importing the masculine gender
include the feminine and neuter genders.

	1.3  	Interpretation not Affected by Headings

          The division of this indenture into Articles, sections, subsections and paragraphs, the
provision of a table of contents and the insertion of headings are for convenience of reference
only and shall not affect the construction or interpretation of this indenture.

	1.4  	Day not a Business Day

          In the event that any day on or before which any action is required or permitted to be taken
hereunder is not a Business Day, then such action shall be required or permitted to be taken on or
before the requisite time on the next succeeding day that is a Business Day.

	1.5  	Time of the Essence

          Time shall be of the essence in all respects in this indenture, the Warrants and the Warrant
Certificates.

	1.6  	Governing Law

          This indenture, the Warrants and the Warrant Certificates shall be construed and enforced in
accordance with the laws of the Province of Ontario and the federal laws of Canada applicable
therein and shall be treated in all respects as Ontario contracts.

	1.7  	Meaning of “outstanding” for Certain Purposes

          Every Warrant represented by a Warrant Certificate certified and delivered by the Warrant
Agent hereunder shall be deemed to be outstanding until it shall be cancelled or delivered to the
Warrant Agent for cancellation or until the Time of Expiry; provided that where a new Warrant
Certificate has been issued pursuant to section 2.6 hereof to replace one which is lost, mutilated,
stolen or destroyed, the Warrants represented by only one of such Warrant Certificates shall be
counted for the purpose of determining the aggregate number of Warrants outstanding.

	1.8  	Currency

          Unless otherwise stated, all dollar amounts referred to in this indenture are in Canadian
dollars.

 

 

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	1.9  	Termination

          This indenture shall continue in full force and effect until the earlier of: (a) the Time of
Expiry; and (b) the date that no Warrants are outstanding hereunder; provided that this indenture
shall continue in effect thereafter, if applicable, until the Company and the Warrant Agent have
fulfilled all of their respective obligations under this indenture.

ARTICLE 2

ISSUE OF WARRANTS

	2.1  	Issue of Warrants

          A total of 64,136,974 Series B Warrants entitling the registered holders thereof to acquire an
aggregate of 16,034,243 Common Shares are hereby created and authorized to be issued hereunder at
the Exercise Price upon the terms and conditions herein set forth and shall be executed by the
Company and certified by or on behalf of the Warrant Agent upon the written order of the Company
and delivered by the Company in accordance with sections 2.3 and 2.4.

	2.2  	Form and Terms of Warrants

     (1) The Warrant Certificates for the Warrants shall be substantially in the form attached as
Schedule “A” hereto, subject to the provisions of this indenture, with such additions, variations
and changes as may be required or permitted by the terms of this Indenture, and which may from time
to time be agreed upon by the Warrant Agent and the Company, and shall have such legends,
distinguishing letters and numbers as the Company may, with the approval of the Warrant Agent,
prescribe. Except as hereinafter provided in this Article 2, all Series B Warrants shall, save as
to denominations, be of like tenor and effect. The Warrant Certificates may be engraved, printed,
lithographed, photocopied or be partially in one form or another, as the Company may determine. No
change in the form of the Warrant Certificate shall be required by reason of any adjustment made
pursuant to this Article 2 in the number and/or class of securities or type of securities which may
be acquired pursuant to the Warrants.

     (2) Each Warrant authorized to be issued hereunder shall entitle the registered holder thereof
to acquire (subject to sections 2.12 and 2.13) upon due exercise and upon the due execution of the
subscription form endorsed on the reverse side of the Warrant Certificate or other instrument of
subscription in such form as the Warrant Agent and/or the Company may from time to time prescribe
and upon payment of the Exercise Price, 0.25 of a Common Share or such other kind and amount of
shares or securities or property, calculated pursuant to the provisions of sections 2.12 and 2.13,
as the case may be, at any time after the date of issuance of such Warrants and prior to the Time
of Expiry, in accordance with the provisions of this indenture.

 

 

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     (3) Fractional Warrants shall not be issued or otherwise provided for.

	2.3  	Signing of Warrant Certificates

          The Warrant Certificates shall be signed by any one of the directors or officers of the
Company and may, but need not be under the corporate seal of the Company or a reproduction thereof.
The signature of any such director or officer may be mechanically reproduced in facsimile and
Warrant Certificates bearing such facsimile signatures shall be binding upon the Company as if they
had been manually signed by such director or officer. Notwithstanding that the person whose manual
or facsimile signature appears on any Warrant Certificate as a director or officer may no longer
hold office at the date of issue of the Warrant Certificate or at the date of certification or
delivery thereof, any Warrant Certificate signed as aforesaid shall, subject to section 2.4 be
valid and binding upon the Company and the registered holder thereof will be entitled to the
benefits of this indenture.

	2.4  	Certification by the Warrant Agent

     (1) No Warrant Certificate shall be issued or, if issued, shall be valid for any purpose or
entitle the registered holder to the benefits hereof or thereof until it has been certified by
manual signature by or on behalf of the Warrant Agent and such certification by the Warrant Agent
upon any Warrant Certificate shall be conclusive evidence as against the Company that the Warrant
Certificate so certified has been duly issued hereunder and the holder is entitled to the benefits
hereof.

     (2) The certification of the Warrant Agent on the Warrant Certificates issued hereunder shall
not be construed as a representation or warranty by the Warrant Agent as to the validity of this
indenture or the Warrants (except the due certification thereof) and the Warrant Agent shall in no
respect be liable or answerable for the use made of the Warrants or any of them or of the
consideration therefor except as otherwise specified herein.

	2.5  	Warrantholder not a Shareholder, etc.

          Nothing in this indenture or the holding of a Warrant evidenced by a Warrant Certificate shall
be construed as conferring upon a Warrantholder any right or interest whatsoever as a shareholder,
including but not limited to the right to vote at, to receive notice of, or to attend meetings of
shareholders or any other proceedings of the Company, nor entitle the holder to any right or
interest in respect thereof except as herein and in the Warrants expressly provided.

	2.6  	Issue in Substitution for Lost Warrant Certificates

     (1) In the event that any Warrant Certificates issued and certified under this indenture shall
become mutilated or be lost, destroyed or stolen, the Company, subject to applicable law, and
subsection 2.6(2), shall issue and thereupon the Warrant Agent shall certify and deliver a new
Warrant Certificate of like denomination, date and tenor as the one mutilated, lost, destroyed or
stolen in exchange for, in place of and upon

 

 

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cancellation of such mutilated Warrant Certificate, or in lieu of and in substitution for such
lost, destroyed or stolen Warrant Certificate, and the substituted Warrant Certificate shall be in
a form approved by the Warrant Agent and Warrants evidenced by it will entitle the holder thereof
to the benefits hereof and shall rank equally in accordance with its terms with all other Warrant
Certificates issued or to be issued hereunder.

     (2) The applicant for the issue of a new Warrant Certificate pursuant to this section 2.6
shall bear the cost of the issue thereof and in the case of mutilation shall as a condition
precedent to the issue thereof, deliver to the Warrant Agent the mutilated Warrant Certificate, and
in the case of loss, destruction or theft shall, as a condition precedent to the issue thereof,
furnish to the Company and to the Warrant Agent such evidence of ownership and of the loss,
destruction or theft of the Warrant Certificate so lost, destroyed or stolen as shall be
satisfactory to the Company and to the Warrant Agent in their sole discretion, and such applicant
shall be required to furnish an indemnity or security in amount and form satisfactory to the
Company and the Warrant Agent in their sole discretion and shall pay the reasonable charges of the
Company and the Warrant Agent in connection therewith.

	2.7  	Warrants to Rank Pari Passu

          Except as specifically provided in subsections 2.2(3) and 2.12(6) hereof, all Warrants shall
rank pari passu, whatever may be the actual date of issue or the class of same.

	2.8  	Registration and Transfer of Warrants

     (1) The Company will cause to be kept by the Warrant Agent at the principal stock transfer
offices of the Warrant Agent in the cities of Toronto, Ontario and Vancouver, British Columbia:

	 	(a)  	a register of holders in which shall be entered in alphabetical
order the names and addresses of the holders of Warrants and particulars of the
Warrants held by them and the Warrant Agent shall be entitled to rely on such
register in connection with the exchange, transfer, exercise or deemed exercise
of any Warrant or Warrants pursuant to the terms of this indenture or the terms
thereof; and
	 
	 	(b)  	a register of transfers in which all transfers of Warrants and
the date and other particulars of each such transfer shall be entered.

     (2) No transfer of any Warrant will be valid unless entered on the register of transfers
referred to in subsection 2.8(1) hereof, upon surrender to the Warrant Agent of the Warrant
Certificate evidencing such Warrant, and a duly completed and executed Transfer of Warrants form
attached to the Warrant Certificate executed by the registered holder or his executors,
administrators or other legal representatives or his or their attorney duly appointed by an
instrument in writing in form and execution

 

 

- 11 -

satisfactory to the Warrant Agent, and, upon compliance with such requirements and such other
reasonable requirements as the Warrant Agent may prescribe, such transfer will be recorded on the
register of transfers by the Warrant Agent.

     (3) The transferee of any Warrant will, after surrender to the Warrant Agent of the Warrant
Certificate evidencing such Warrant as required by subsection 2.8(2) hereof and upon compliance
with all other conditions in respect thereof required by this indenture or by law, be entitled to
be entered on the register of holders referred to in subsection 2.8(1) hereof, as the owner of such
Warrant free from all equities or rights of set-off or counterclaim between the Company and the
transferor or any previous holder of such Warrant, except in respect of equities of which the
Company is required to take notice by statute or by order of a court of competent jurisdiction.

     (4) The Company will be entitled, and may direct the Warrant Agent, to refuse to recognize any
transfer, or enter the name of any transferee, of any Warrant on the registers referred to in
subsection 2.8(1) hereof, if such transfer would constitute a violation of the securities laws of
any jurisdiction or the rules, regulations or policies of any regulatory authority having
jurisdiction. The Warrant Agent is entitled to assume compliance with all applicable securities
legislation unless otherwise notified in writing by the Company. No duty shall rest with the
Warrant Agent to determine compliance of the transferee or transferor of any Warrant with
applicable securities legislation.

     (5) Any Warrant Certificate issued to a transferee in transfers contemplated by this section
2.8 shall bear the appropriate legend as set forth in subsection 2.20(b).

     (6) If a Warrant Certificate tendered for transfer bears the legend set forth in section 2.20,
the Warrant Agent shall not register such transfer unless the transferor has provided the Warrant
Agent with the Warrant Certificate and: (A) an effective registration statement under the
Securities Act and applicable United States state securities laws covering any such transaction has
been filed, or (B) the Company has received an acceptable legal opinion stating that such
transaction is exempt from registration, or (C) the Company otherwise satisfies itself that such
transaction is exempt from registration.

     (7) If a Warrant Certificate tendered for transfer does not bear the legend set forth in
section 2.20 and such transfer is not otherwise exempt, the Warrant Agent shall not register such
transfer unless the transferor has provided the Warrant Agent with the Warrant Certificate and a
duly executed and completed Transfer of Warrants form attached to the Warrant Certificate, and the
offer of the securities being transferred was made to a person not in the United States and that is
not a U.S. Person.

	2.9  	Registers Open for Inspection

          The registers referred to in subsection 2.8(1) shall be open at all reasonable times during
business hours on a Business Day for inspection by the Company, the Warrant Agent or any
Warrantholder. The Warrant Agent shall, from time to time when requested to do so in writing by
the Company, furnish the Company with a

 

 

- 12 -

list of the names and addresses of holders of Warrants entered in the register of holders kept
by the Warrant Agent and showing the number of Subject Securities which might then be acquired upon
the exercise of the Warrants held by each such holder.

	2.10  	Exchange of Warrants

     (1) Warrant Certificates may, upon compliance with the reasonable requirements of the Warrant
Agent, be exchanged for Warrant Certificates in any other authorized denomination representing in
the aggregate an equal number of Warrants as the number of Warrants represented by the Warrant
Certificates being exchanged. The Company shall sign and the Warrant Agent shall certify, in
accordance with sections 2.3 and 2.4, all Warrant Certificates necessary to carry out the exchanges
contemplated herein.

     (2) Warrant Certificates may be exchanged only at the principal stock transfer offices of the
Warrant Agent in the cities of Toronto, Ontario or Vancouver, British Columbia or at any other
place that is designated by the Company with the approval of the Warrant Agent. Any Warrant
Certificates tendered for exchange shall be surrendered to the Warrant Agent and cancelled.

     (3) Except as otherwise herein provided, the Warrant Agent may charge Warrantholders
requesting an exchange a reasonable sum for each Warrant Certificate issued; and payment of such
charges and reimbursement of the Warrant Agent or the Company for any and all taxes or governmental
or other charges required to be paid shall be made by the party requesting such exchange as a
condition precedent to such exchange.

	2.11  	Ownership of Warrants

          The Company and the Warrant Agent and their respective agents may deem and treat the holder of
any Warrant Certificate as the absolute owner of that Warrant represented thereby for all purposes
and the Company and the Warrant Agent and their respective agents shall not be affected by any
notice or knowledge to the contrary. The holder of any Warrant shall be entitled to the rights
evidenced by that Warrant free from all equities or rights of set-off or counterclaim between the
Company and the original or any intermediate holder thereof and all persons may act accordingly and
the receipt from any holder for the Common Shares or monies obtainable pursuant thereto shall be a
good discharge to the Company and the Warrant Agent for the same and neither the Company nor the
Warrant Agent shall be bound to inquire into the title of any holder.

	2.12  	Adjustment of Exchange Basis

          The Exchange Basis shall be subject to adjustment from time to time in the events and in the
manner provided as follows:

     (1) If and whenever at any time after the date hereof and prior to the Time of Expiry the
Company shall:

 

 

- 13 -

	 	(a)  	issue Common Shares or securities exchangeable for or
convertible into Common Shares to all or substantially all the holders of the
Common Shares as a stock dividend or other distribution (other than as a
Dividend Paid in the Ordinary Course or a distribution of Common Shares upon
exercise of the Warrants or pursuant to the exercise of directors, officers or
employee stock options granted under stock option plans of the Company), or
	 
	 	(b)  	subdivide, redivide or change its then outstanding Common
Shares into a greater number of shares, or
	 
	 	(c)  	reduce, combine or consolidate its then outstanding Common
Shares into a lesser number of shares,

	 	   	(any of such events in these clauses (a), (b) or (c) being called a “Common Share
Reorganization”), then the Exchange Basis in effect on the effective date of such
subdivision or consolidation, or on the record date of such stock dividend or other
distribution, as the case may be, shall be adjusted by multiplying the Exchange
Basis in effect immediately prior to such effective or record date by a fraction:
(i) the numerator of which shall be the total number of Common Shares outstanding on
such date immediately after giving effect to such Common Share Reorganization
(including, in the case where securities exchangeable for or convertible into Common
Shares are distributed, the number of Common Shares that would have been outstanding
had such securities been exchanged for or converted into Common Shares on such
record date, assuming in any case where such securities are not then convertible or
exchangeable but subsequently become so, that they were convertible or exchangeable
on the record date on the basis upon which they first become convertible or
exchangeable), and (ii) the denominator of which shall be the total number of Common
Shares outstanding on such date before giving effect to such Common Share
Reorganization. The resulting product, adjusted to the nearest 1/100th, shall
thereafter be the Exchange Basis until further adjusted as provided in this Article
2.

     (2) If and whenever at any time after the date hereof and prior to the Time of Expiry, the
Company fixes a record date for the distribution to all or substantially all of the holders of
Common Shares of rights, options or warrants entitling them for a period expiring not more than 45
days after such record date (the “Rights Period”), to subscribe for or purchase Common Shares, or
securities exchangeable for or convertible into Common Shares, at a price per share to the holder
(or at an exchange or conversion price per share) of less than 95% of the Current Market Price for
the Common Shares on such record date (any of such events being called a “Rights Offering”), then
the Exchange Basis shall be adjusted effective immediately after such record date for the Rights
Offering by multiplying the Exchange Basis in effect immediately prior to such record date by a
fraction:

 

 

- 14 -

	 	(a)  	the numerator of which shall be the number of Common Shares
which would be outstanding after giving effect to the Rights Offering (assuming
the exercise of all of the rights, warrants or options under the Rights
Offering and assuming the exchange or conversion into Common Shares of all
exchangeable or convertible securities issued upon exercise of such rights,
warrants or options, if any), and
	 
	 	(b)  	the denominator of which shall be the aggregate of:

	 	(i)  	the total number of Common Shares outstanding
as of the record date for the Rights Offering, and
	 
	 	(ii)  	a number of Common Shares arrived at by
dividing

	 	(A)  	the amount equal to the aggregate
consideration payable on the exercise of all of the rights,
warrants and options under the Rights Offering plus the
aggregate consideration, if any, payable on the exchange or
conversion of the exchangeable or convertible securities issued
upon exercise of such rights, warrants or options (assuming the
exercise of all rights, warrants and options under the Rights
Offering and assuming the exchange or conversion into Common
Shares of all exchangeable or convertible securities issued upon
exercise of such rights, warrants and options);

	 	   	by

	 	(B)  	the Current Market Price of the
Common Shares as of the record date for the Rights Offering.

The resulting product, adjusted to the nearest 1/100th, shall thereafter be the Exchange Basis
until further adjusted in accordance with this Article 2. Any Common Shares owned by or held for
the account of the Company or any of its subsidiaries or a partnership in which the Company is
directly or indirectly a party to will be deemed not to be outstanding for the purpose of any
computation. If, at the date of expiry of the rights, options or warrants subject to the Rights
Offering, less than all the rights, options or warrants have been exercised, then the Exchange
Basis shall be readjusted effective immediately after the date of expiry to the Exchange Basis
which would have been in effect on the date of expiry if only the rights, options or warrants
issued had been those exercised. If at the date of expiry of the rights of exchange or conversion
of any securities issued pursuant to the Rights Offering less than all of such securities have been
exchanged or converted into Common Shares, then the Exchange Basis shall be readjusted effective
immediately after the date of expiry to the Exchange Basis which would have been in effect on the
date of expiry if only the exchangeable or convertible

 

 

- 15 -

securities issued had been those securities actually exchanged for or converted into Common Shares.

     (3) If and whenever at any time after the date hereof and prior to the Time of Expiry the
Company shall fix a record date for the issue or distribution to all or substantially all the
holders of its outstanding Common Shares of:

	 	(a)  	shares of the Company of any class other than Common Shares; or
	 
	 	(b)  	rights, options or warrants (other than rights, options or
warrants issued pursuant to a Rights Offering) to acquire Common Shares or
securities exchangeable for or convertible into Common Shares; or
	 
	 	(c)  	evidences of indebtedness; or
	 
	 	(d)  	cash, securities or any property or other assets,

and if such issuance or distribution does not constitute a Dividend Paid in the Ordinary Course, a
Common Share Reorganization or a Rights Offering (any of such non-excluded events being herein
called a “Special Distribution”), the Exchange Basis shall be adjusted effective immediately after
the record date for the Special Distribution by multiplying the Exchange Basis in effect on such
record date by a fraction:

	 	(i)  	the numerator of which shall be the number of
Common Shares outstanding on such record date multiplied by the Current
Market Price of the Common Shares on such record date, and
	 
	 	(ii)  	the denominator of which shall be:

	 	(A)  	the product of the number of
Common Shares outstanding on such record date and the Current
Market Price of the Common Shares on such record date, less
	 
	 	(B)  	the fair market value, as
determined by action by the directors acting reasonably and in
good faith (whose determination shall be conclusive), to the
holders of the Common Shares of the shares, rights, options,
warrants, evidences or indebtedness or property or other assets
issued or distributed in the Special Distribution, provided that no such adjustment shall be made if the result of such adjustment would be to
decrease the Exchange Basis in effect immediately before such record date. The resulting product,
adjusted to the nearest 1/100th, shall thereafter be the Exchange Basis until further adjusted as
provided in this Article 2. Any shares owned by or held for the account of the Company or its
subsidiaries or a partnership of which the Company is

 

 

- 16 -

directly or indirectly a party to shall be deemed not to be outstanding for the purpose of any such
computation.

     (4) If and whenever at any time after the date hereof and prior to the Time of Expiry there
shall be a reclassification of Common Shares at any time outstanding or change of the Common Shares
into other shares or into other securities (other than a Common Share Reorganization), or a
consolidation, amalgamation or merger of the Company with or into any other corporation or other
entity (other than a consolidation, amalgamation or merger which does not result in any
reclassification of the outstanding Common Shares or a change of the Common Shares into other
shares), or a transfer (other than to a Subsidiary) of the undertaking or assets of the Company as
an entirety or substantially as an entirety to another corporation or other entity (any of such
events being herein called a “Capital Reorganization”), any Warrantholder who thereafter shall
exercise his right to receive Common Shares pursuant to Warrant(s) shall be entitled to receive,
and shall accept in lieu of the number of Subject Securities to which such holder was theretofore
entitled upon such exercise, the aggregate number of shares, other securities or other property
which such holder would have been entitled to receive as a result of such Capital Reorganization
if, on the effective date or record date thereof, as the case may be, the Warrantholder had been
the registered holder of the number of Subject Securities to which such holder was theretofore
entitled upon exercise. If appropriate, adjustments shall be made as a result of any such Capital
Reorganization in the application of the provisions set forth in this Article 2 with respect to the
rights and interests thereafter of Warrantholders to the end that the provisions set forth in this
Article 2 shall thereafter correspondingly be made applicable as nearly as may reasonably be in
relation to any shares, other securities or other property thereafter deliverable upon the exercise
of any Warrant. Any such adjustment shall be made by and set forth in an indenture supplemental
hereto approved by the directors and by the Warrant Agent and entered into pursuant to the
provisions of this indenture and shall for all purposes be conclusively deemed to be an appropriate
adjustment.

     (5) Forthwith upon the occurrence of any of the events referred to in the preceding
subsections above, the Company shall:

	 	(a)  	file with the Warrant Agent a certificate of the Company
specifying the required adjustment; and
	 
	 	(b)  	give notice to the Warrantholders of the required adjustment.

     (6) Any adjustment to the Exchange Basis as set forth herein shall also include a
corresponding adjustment to the Exercise Price which shall be calculated by multiplying the
Exercise Price by a fraction: (i) the numerator of which shall be the Exchange Basis prior to the
adjustment, and (ii) the denominator of which shall be the Exchange Basis after the adjustment.

	2.13  	Rules Regarding Calculation of Adjustment of Exchange Basis
	 
	   	For the purposes of section 2.12:

 

 

- 17 -

     (1) The adjustments provided for in section 2.12 shall be cumulative and such adjustments
shall be made successively whenever an event referred to therein shall occur, subject to the
following subsections of this section 2.13.

     (2) If the purchase price provided for in any Rights Offering (the “Rights Offering Price”) is
decreased, the Exchange Basis shall forthwith be changed so as to increase the Exchange Basis to
such Exchange Basis as would have been obtained had the adjustment to the Exchange Basis made
pursuant to subsection 2.12(2) upon the issuance of such Rights Offering been made upon the basis
of the Rights Offering Price as so decreased, provided that the provisions of this subsection shall
not apply to any decrease in the Rights Offering Price resulting from provisions in any such Rights
Offering designed to prevent dilution if the event giving rise to such decrease in the Rights
Offering Price itself requires an adjustment to the Exchange Basis pursuant to the provisions of
section 2.12.

     (3) No adjustment in the Exchange Basis shall be required unless such adjustment would result
in a change of at least one-one hundredth of a Common Share based on the prevailing Exchange Basis
provided, however, that any adjustments which, except for the provisions of this subsection would
otherwise have been required to be made, shall be carried forward and taken into account in any
subsequent adjustment.

     (4) No adjustment in the Exchange Basis shall be made in respect of any event described in
section 2.12, other than the events referred to in paragraphs (b) and (c) of subsection (1)
thereof, if Warrantholders are entitled to participate in such event on the same terms, mutatis
mutandis, as if Warrantholders had exercised their Warrants prior to or on the effective date or
record date of such event, any such participation being subject to regulatory approval.

     (5) No adjustment in the Exchange Basis shall be made pursuant to section 2.12 in respect of
the issue from time to time of Common Shares purchasable on exercise of the Warrants or in respect
of the issue from time to time of a Dividend Paid in the Ordinary Course of Common Shares to
holders of Common Shares who exercise an option or election to receive substantially equivalent
dividends in Common Shares in lieu of receiving a cash dividend, and any such issue shall be deemed
not to be a Common Share Reorganization.

     (6) If a dispute shall at any time arise with respect to adjustments provided for in section
2.12, such dispute shall, absent manifest error, be conclusively determined by the Company’s
Auditors, or if they are unable or unwilling to act, by such other firm of independent chartered
accountants as may be selected by the directors and any further determination, absent manifest
error, shall be binding upon the Company, the Warrant Agent and the Warrantholders.

     (7) If the Company shall set a record date to determine the holders of the Common Shares for
the purpose of entitling them to receive any dividend or distribution or any subscription or
purchase rights and shall, thereafter and before the distribution to

 

 

- 18 -

such shareholders of any such dividend, distribution, or subscription or purchase rights,
legally abandon its plan to pay or deliver such dividend, distribution, or subscription or purchase
rights, then no adjustment in the Exchange Basis shall be required by reason of the setting of such
record date.

     (8) In the absence of a resolution of the directors fixing a record date for a Rights Offering
or Special Distribution, the Company shall be deemed to have fixed as the record date therefor the
date on which the Rights Offering or Special Distribution is effected.

     (9) As a condition precedent to the taking of any action which would require any adjustment in
any of the subscription rights pursuant to any of the Warrants, including the Exchange Basis, the
Company shall take any corporate action which may, in the opinion of counsel, be necessary in order
that the Company have unissued and reserved in its authorized capital and may validly and legally
issue as fully paid and non-assessable all the shares or other securities which all the holders of
such Warrants are entitled to receive on the exercise of all the subscription rights attaching
thereto in accordance with the provisions thereof.

     (10) In case the Company, after the date hereof, shall take any action affecting any Common
Shares, other than action described in section 2.12, which in the opinion of the directors acting
reasonably and in good faith would materially affect the rights of Warrantholders, the Exchange
Basis shall be adjusted in such manner, if any, and at such time, as the directors, in their sole
discretion acting reasonably and in good faith, may reasonably determine to be equitable in the
circumstances. Failure of the taking of action by the directors so as to provide for an adjustment
in the Exchange Basis prior to the effective date of any action by the Company affecting the Common
Shares shall be conclusive evidence that the directors have determined that it is equitable to make
no adjustment in the circumstances.

     (11) The Warrant Agent shall be entitled to act and rely on any adjustment calculations by the
Company or the Company’s Auditors.

	2.14  	Postponement of Subscription

          In any case where the application of section 2.12 results in an increase in the number of
Subject Securities which are issuable upon exercise of the Warrants taking effect immediately after
the record date for a specific event, if any Warrant is exercised after that record date and prior
to completion of the event, the Company may postpone the issuance to the holder of the Warrant of
the Subject Securities to which he is entitled by reason of such adjustment but such Subject
Securities shall be so issued and delivered to that holder upon completion of that event, with the
number of such Subject Securities calculated on the basis of the number of Subject Securities on
the date that the Warrant was exercised adjusted for completion of that event and the Company shall
deliver to the person or persons in whose name or names the Subject Securities are to be issued an
appropriate instrument evidencing the right of such person or persons to receive such Subject Securities and the right to receive any

 

 

- 19 -

dividends or other distributions which, but for the provisions of this section, such person or persons would
have been entitled to receive in respect of such Subject Securities from and after the date that
the Warrant was exercised in respect thereof.

	2.15  	Notice of Adjustment

     (1) At least 14 days prior to the effective date or record date, as the case may be, of any
event which requires or might require adjustment pursuant to section 2.12, the Company shall:

	 	(a)  	file with the Warrant Agent a certificate of the Company
specifying the particulars of such event (including the record date or the
effective date for such event) and, if determinable, the required adjustment
and the computation of such adjustment; and
	 
	 	(b)  	give notice to the Warrantholders of the particulars of such
event (including the record date or the effective date for such event) and, if
determinable, the required adjustment.

     (2) In case any adjustment for which a notice in subsection 2.15(1) has been given is not then
determinable, the Company shall promptly after such adjustment is determinable:

	 	(a)  	file with the Warrant Agent a computation of such adjustment;
and
	 
	 	(b)  	give notice to the Warrantholders of the adjustment.

     (3) The Warrant Agent may, absent manifest error, act and rely upon certificates and other
documents filed by the Company pursuant to this section for all purposes of the adjustment.

	2.16  	No Action after Notice

          The Company covenants with the Warrant Agent that it will not take any other corporate action
which might deprive the holder of a Warrant of the opportunity of exercising the rights of
acquisition pursuant thereto during the period of 14 days after the giving of the notice set forth
in subparagraph (1)(b) of section 2.15 hereof.

	2.17  	Purchase of Warrants for Cancellation

          The Company may, at any time and from time to time, purchase Warrants by invitation for
tender, by private contract or otherwise (which shall include a purchase through an investment
dealer or firm holding membership on a Canadian stock exchange) on such terms as the Company may
determine. All Warrants purchased pursuant to the provisions of this section 2.17 shall be
forthwith delivered to, cancelled and destroyed by the Warrant Agent and shall not be reissued. If
required by the Company, the Warrant Agent shall furnish the Company with a certificate as to such
destruction.

 

 

- 20 -

	2.18  	Optional Purchases by the Company

          Subject to applicable law, the Company may from time to time purchase on any stock exchange,
in the open market, by private agreement or otherwise any of the Warrants. Any such purchase shall
be made at the lowest price or prices at which, in the opinion of the directors, such Warrants are
then obtainable, plus reasonable costs of purchase, and may be made in such manner, from such
persons, and on such other terms as the Company in its sole discretion may determine. The Warrant
Certificates representing the Warrants purchased pursuant to this section 2.18 shall forthwith be
delivered to and cancelled by the Warrant Agent.

	2.19  	Protection of Warrant Agent

          The Warrant Agent shall not:

	 	(a)  	at any time be under any duty or responsibility to any
registered holder of Warrants to determine whether any facts exist which may
require any adjustment contemplated by this Article 2, nor to verify the nature
and extent of any such adjustment when made or the method employed in making
the same;
	 
	 	(b)  	be accountable with respect to the validity or value or the
kind or amount of any Subject Securities which may at any time be issued or
delivered upon the exercise of the Warrants;
	 
	 	(c)  	be responsible for any failure of the Company to make any cash
payment or to issue, transfer or deliver the Subject Securities or certificates
evidencing the same upon the surrender of any Warrants for the purpose of the
exercise of such rights or to comply with any of the covenants contained in
this Article 2; or
	 
	 	(d)  	incur any liability or responsibility whatsoever or be in any
way responsible for the consequence of any breach on the part of the Company of
any of the representations, warranties or covenants of the Company or any acts
or deeds of the agents or servants of the Company.

	2.20  	Legended Warrant Certificates

	 	(a)  	The Warrant Agent understands and acknowledges that the
Warrants have not been, and will not be, registered under the Securities Act;

	 	(b)  	Each Warrant Certificate originally issued to a U.S. Person or
a person in the United States, and all certificates issued in exchange therefor
or in substitution thereof, shall bear the following legend:

 

 

- 21 -

“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”) OR ANY STATE SECURITIES LAWS. THE HOLDER HEREOF,
BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF THE COMPANY
THAT SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED
ONLY (A) TO THE COMPANY, (B) OUTSIDE THE UNITED STATES IN ACCORDANCE
WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (C) WITHIN
THE UNITED STATES IN ACCORDANCE WITH THE EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT PROVIDED BY RULES 144 OR 144A THEREUNDER,
IF AVAILABLE, AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES
LAWS, OR (D) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION
UNDER THE SECURITIES ACT OR APPLICABLE STATE SECURITIES LAWS, AND
THE SELLER HAS FURNISHED TO THE COMPANY AN OPINION TO SUCH EFFECT
FROM COUNSEL OF RECOGNIZED STANDING REASONABLY SATISFACTORY TO THE
COMPANY PRIOR TO SUCH OFFER, SALE OR TRANSFER. THE SECURITIES
REPRESENTED BY THIS CERTIFICATE ARE LISTED ON THE TORONTO STOCK
EXCHANGE (THE “TSX”); HOWEVER, THE SAID SECURITIES CANNOT BE TRADED
THROUGH THE FACILITIES OF THE TSX SINCE THEY ARE NOT FREELY
TRANSFERABLE AND CONSEQUENTLY ANY CERTIFICATE REPRESENTING SUCH
SECURITIES IS NOT “GOOD DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON
TSX. A NEW CERTIFICATE BEARING NO LEGEND MAY BE OBTAINED FROM CIBC
MELLON TRUST COMPANY, AS REGISTRAR AND TRANSFER AGENT OF THE
COMPANY, UPON DELIVERY OF THIS CERTIFICATE AND A DULY EXECUTED
DECLARATION, IN A FORM SATISFACTORY TO CIBC MELLON TRUST COMPANY AND
THE COMPANY, TO THE EFFECT THAT SUCH SALE IS BEING MADE IN
ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT.”;

provided that, if Warrants are being sold in compliance with the
requirements of Rule 904 of Regulation S of the Securities Act and in
compliance with Canadian local laws and regulations, any such legend may be
removed by providing a declaration to the Transfer Agent to the effect set
forth in Schedule “B” hereto, along with an

 

 

- 22 -

 accompanying letter from the
broker executing the sale of the Warrants indicating such broker’s
compliance with the requirements of Rule 904 of Regulation S of the
Securities Act and by delivery of an opinion or memorandum of U.S. counsel
(as required by the Transfer Agent, addressed to the Transfer Agent
permitting removal of resale restrictions for resales of Warrants by
investors in the United States through the facilities of the TSX in reliance
upon Rule 904 of Regulation S under the U.S. Securities Act; and provided,
further, that, if any such Warrants are being sold pursuant to Rule 144 of
the Securities Act, the legend may be removed by delivery to the Transfer
Agent and the Company of an opinion of counsel, of recognized standing
reasonably satisfactory to the Company, that such legend is no longer
required under applicable requirements of the Securities Act or state
securities laws. The Warrant Agent shall, upon receipt of the executed form
of “Declaration for Removal of Legend” as set forth in Schedule “B” hereto,
issue a new Warrant Certificate within three Business Days thereof;

	 	(c)  	If a Warrant Certificate issued with respect to an exercise of
Warrants is tendered for transfer and bears the legend set forth in paragraph
2.20(b) hereof and the holder thereof has not obtained the prior written
consent of the Company, the Warrant Agent shall not register such transfer
unless the holder complies with the requirements of the said paragraph 2.20(b)
hereof; and
	 
	 	(d)  	If a Warrant Certificate issued with respect to an exercise of
Warrants is tendered for transfer and does not bear the legend set forth in
paragraph 2.20(b) hereof, the Warrant Agent shall not register such transfer if
it has reason to believe that the transferee is a U.S. Person, is in the United
States or is acquiring the Warrants evidenced thereby for the account or
benefit of a U.S. Person or a person in the United States.

ARTICLE 3

EXERCISE OF WARRANTS

	3.1  	Method of Exercise of Warrants

     (1) The registered holder of any Warrant may exercise the rights thereby conferred on him to
acquire all or any part of the Subject Securities to which such Warrant entitles the holder, by surrendering the Warrant Certificate representing such
Warrants to the Warrant Agent at any time on or before the Time of Expiry at its principal stock
transfer offices in the cities of Toronto, Ontario or Vancouver, British Columbia (or at such
additional place or places as may be decided by the Company from time to time with the approval of
the Warrant Agent), with (i) a duly completed and

 

 

- 23 -

executed subscription of the registered holder or his executors, or administrators or other legal representative or his attorney duly appointed by an
instrument in writing in the form and manner satisfactory to the Warrant Agent, substantially in
the form set out in Schedule “A” attached hereto specifying the number of Common Shares subscribed
for; and (ii) a certified cheque, bank draft or money order in lawful money of Canada, payable to
or to the order of the Company in an amount equal to the Exercise Price multiplied by the number of
Subject Securities subscribed for. A Warrant Certificate with the duly completed and executed
subscription and payment of the Exercise Price shall be deemed to be surrendered only upon personal
delivery thereof to or, if sent by mail or other means of transmission, upon actual receipt thereof
by the Warrant Agent.

     (2) Any subscription referred to in subsection 3.1(1) shall be signed by the Warrantholder,
shall specify the person(s) in whose name such Subject Securities are to be issued, the address(es)
of such person(s) and the number of Subject Securities to be issued to each person, if more than
one is so specified. If any of the Subject Securities subscribed for are to be issued to a
person(s) other than the Warrantholder, the signatures set out in the subscription referred to in
subsection 3.1(1) shall be guaranteed by a Canadian chartered bank, a Canadian trust company or by
a medallion signature guaranteed from a member of a recognized Signature Medallion Guarantee
Program and the Warrantholder shall pay to the Company or the Warrant Agent all applicable transfer
or similar taxes and the Company shall not be required to issue or deliver certificates evidencing
Subject Securities unless or until such Warrantholder shall have paid to the Company or the Warrant
Agent on behalf of the Company the amount of such tax or shall have established to the satisfaction
of the Company that such tax has been paid or that no tax is due.

     (3) If, at the time of exercise of the Warrants, in accordance with the provisions of
subsection 3.1(1), there are any trading restrictions on the Subject Securities pursuant to
applicable securities legislation or stock exchange requirements, the Company shall, on the advice
of counsel, endorse any certificates representing the Subject Securities to such effect. The
Warrant Agent is entitled to assume compliance with all applicable securities legislation unless
otherwise notified in writing by the Company.

	3.2  	No Fractional Shares

          Under no circumstances shall the Company be obliged to issue any fractional Common Shares or
any cash or other consideration in lieu thereof upon the exercise of one or more Warrants. To the
extent that the holder of one or more Warrants would otherwise have been entitled to receive on the
exercise or partial exercise thereof a fraction of a Common Share, that holder may exercise that
right in respect of the fraction only in combination with another Warrant or Warrants that in the
aggregate entitle the holder to purchase a whole number of Common Shares.

 

 

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	3.3  	Effect of Exercise of Warrants

     (1) Upon compliance by the Warrantholder with the provisions of section 3.1, the Subject
Securities subscribed for shall be deemed to have been issued and the person to whom such Subject
Securities are to be issued shall be deemed to have become the holder of record of such Subject
Securities on the Exercise Date unless the transfer registers of the Company for the Common Shares
shall be closed on such date, in which case the Subject Securities subscribed for shall be deemed
to have been issued and such person shall be deemed to have become the holder of record of such
Subject Securities on the date on which such transfer registers are reopened.

     (2) Within three Business Days following the due exercise of a Warrant pursuant to section 3.1
and forthwith after the Time of Expiry, the Warrant Agent shall deliver to the Company a notice
setting forth the particulars of all Warrants exercised, if any, and the persons in whose names the
Subject Securities are to be issued (as applicable) and the addresses of such holders of the
Subject Securities.

     (3) Within five Business Days of the due exercise of a Warrant pursuant to section 3.1, the
Company shall mail to the person in whose name the Subject Securities so subscribed for are to be
issued, as specified in the subscription completed on the Warrant Certificate, at the address
specified in such subscription, or, if so specified in such subscription, a certificate or
certificates for the Subject Securities to which the Warrantholder is entitled and, if applicable,
shall cause the Warrant Agent to mail a Warrant Certificate representing any Warrants not then
exercised.

	3.4  	Cancellation of Warrant Certificates

          All Warrant Certificates surrendered to the Warrant Agent pursuant to sections 2.6, 2.8(2),
2.10 or 3.1 shall be cancelled by the Warrant Agent and the Warrant Agent shall record the
cancellation of such Warrant Certificates on the register of holders maintained by the Warrant
Agent pursuant to subsection 2.8(1). The Warrant Agent shall, if required by the Company, furnish
the Company with a certificate identifying the Warrant Certificates so cancelled. All Warrants
represented by Warrant Certificates which have been duly cancelled shall be without further force
or effect whatsoever.

	3.5  	Subscription for less than Entitlement

          The holder of any Warrant may subscribe for and purchase a whole number of Subject Securities
which is less than the number which the holder is entitled to purchase pursuant to a surrendered
Warrant Certificate. In such event, the holder thereof shall be entitled to receive a new Warrant
Certificate in respect of the balance of Subject Securities which such holder was entitled to
purchase pursuant to the surrendered Warrant Certificate and which were not then purchased, such
new Warrant Certificate to contain the same legend as provided for in section 2.20, if applicable.

 

 

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	3.6  	Expiration of Warrant

          After the Time of Expiry, all rights under any Warrant in respect of which the right of
subscription and purchase herein and therein provided for shall not theretofore have been exercised
shall wholly cease and terminate and such Warrant shall be void and of no effect.

ARTICLE 4

COVENANTS FOR WARRANTHOLDERS’ BENEFIT

	4.1  	General Covenants of the Company

          The Company covenants with the Warrant Agent for the benefit of the Warrant Agent and the
Warrantholders that so long as any Warrants remain outstanding:

     (1) The Company will at all times maintain its existence and will carry on and conduct its
business in a prudent manner in accordance with industry standards and good business practice, will
keep or cause to be kept proper books of account in accordance with applicable law and will, if and
whenever required in writing by the Warrant Agent, file with the Warrant Agent copies of all annual
statements of the Company furnished to its shareholders during the term of this indenture.

     (2) The Company will use its commercially reasonable best efforts to maintain the listing of
the Common Shares on the TSX and the NYSE and to have the Common Shares issued pursuant to the
exercise of the Purchase Warrants listed and posted for trading on the TSX and the NYSE as
expeditiously as possible.

     (3) The Company will reserve and keep available a sufficient number of Subject Securities for
issuance upon the exercise of Warrants issued by the Company.

     (4) The Company will cause the Subject Securities from time to time subscribed for pursuant to
the Warrants issued by the Company hereunder, in the manner herein provided, to be duly issued in
accordance with the Warrants and the terms hereof.

     (5) The Company will cause the certificates representing the Subject Securities from time to
time to be acquired pursuant to the Warrants in the manner herein provided, to be duly issued and
delivered in accordance with the Warrants and the terms hereof.

     (6) All Subject Securities that shall be issued by the Company upon exercise of the rights
provided for herein, upon payment of the Exercise Price, shall be issued as fully paid and
non-assessable common shares.

 

 

- 26 -

     (7) The Company will use its best efforts to maintain its status as a “reporting issuer” or
reporting company not in default of the requirements of applicable Securities Laws until the Time
of Expiry.

     (8) The Company will well and truly perform and carry out all the acts and things to be done
by it as provided in this indenture.

     (9) The Company will provide to each Warrantholder copies of all financial statements sent to
registered shareholders from the date hereof and while any Warrants remain outstanding.

     (10) The Company will promptly advise the Warrant Agent and the Warrantholders in writing of
any default under the terms of this indenture.

	4.2  	Securities Qualification Requirements

     (1) If, in the opinion of counsel, any instrument is required to be filed with, or any
permission, order or ruling is required to be obtained from, any securities administrator,
regulator, agency or governmental authority or any other step is required under any federal or
provincial law of Canada or federal or State law in the United States before the Subject Securities
may be issued or delivered to a Warrantholder or resold by such Warrantholder, the Company
covenants that it will use its best efforts to file such instrument, obtain such permission, order
or ruling or take all such other actions, at its expense, as is required or appropriate in the
circumstances.

     (2) The Company or upon the written direction of the Company, the Warrant Agent will give
written notice of the issue of Subject Securities pursuant to the exercise of Warrants, in such
detail as may be required, to each securities administrator in each jurisdiction in which there is
legislation requiring the giving of any such notice.

	4.3  	Warrant Agent’s Remuneration and Expenses

          The Company covenants that it will pay to the Warrant Agent from time to time reasonable
remuneration for its services hereunder and will pay or reimburse the Warrant Agent upon its
request for all reasonable expenses and disbursements of the Warrant Agent in the administration or
execution of the trusts hereby created (including the reasonable compensation and the disbursements
of its counsel and all other advisers, experts, accountants and assistants not regularly in its
employ) both before any default hereunder and thereafter until all duties of the Warrant Agent
hereunder shall be finally and fully performed, except any such expense or disbursement in
connection with or related to or required to be made as a result of the gross negligence, wilful
misconduct or bad faith of the Warrant Agent.

	4.4  	Performance of Covenants by Warrant Agent

	   	      Subject to section 8.7, if the Company shall fail to perform any of its covenants contained in
this indenture and the Company has not rectified such failure within 25 Business Days after
receiving written notice from the Warrant Agent of such

 

 

- 27 -

failure, the Warrant Agent may notify the Warrantholders of such failure on the part of the
Company or may itself perform any of the said covenants capable of being performed by it, but shall
be under no obligation to perform said covenants or to notify the Warrantholders. All reasonable
sums expended or disbursed by the Warrant Agent in so doing shall be repayable as provided in
section 4.3. No such performance, expenditure or advance by the Warrant Agent shall be deemed to
relieve the Company of any default hereunder or of its continuing obligations under the covenants
herein contained.

ARTICLE 5

ENFORCEMENT

	5.1  	Suits by Warrantholders

          Subject to section 6.10, all or any of the rights conferred upon a Warrantholder by the terms
of the Warrants held by such Warrantholder and/or this indenture may be enforced by such
Warrantholder by appropriate legal proceedings but without prejudice to the right that is hereby
conferred upon the Warrant Agent to proceed in its own name to enforce each and all of the
provisions herein contained for the benefit of the holders of the Warrants from time to time
outstanding. The Warrant Agent shall also have the power at any time and from time to time to
institute and to maintain such suits and proceedings as it may reasonably be advised shall be
necessary or advisable to preserve and protect its interests and the interests of the
Warrantholders.

          Subject to applicable law, the Warrant Agent and, by acceptance of the Warrant Certificates
and as part of the consideration for the issue of the Warrants, the Warrantholders hereby waive and
release any right, cause of action or remedy now or hereafter existing in any jurisdiction against
any person in its capacity as an incorporator or any past, present or future shareholder, director,
officer, employee or agent of the Company for the creation and issue of the Subject Securities
pursuant to any Warrant or any covenant, agreement, representation or warranty by the Company
herein or contained in the Warrant Certificates.

	5.2  	Limitation of Liability

          The obligations hereunder (including without limitation under subsection 8.7(5)) are not
personally binding upon, nor shall resort hereunder be had to, the private property of any of the
past, present or future directors or shareholders of the Company or any of the past, present or
future officers, employees or agents of the Company, but only the property of the Company (or any
successor person) shall be bound in respect hereof.

 

 

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ARTICLE 6

MEETINGS OF WARRANTHOLDERS

	6.1  	Right to Convene Meetings

          The Warrant Agent may at any time and from time to time, and shall on receipt of a written
request of the Company or of a Warrantholders’ Request, convene a meeting of the Warrantholders
provided that the Warrant Agent has been provided with sufficient funds and is indemnified to its
reasonable satisfaction by the Company or by the Warrantholders signing such Warrantholders’
Request against the costs, charges, expenses and liabilities which may be incurred in connection
with the calling and holding of such meeting. If within 15 Business Days after the receipt of a
written request of the Company or a Warrantholders’ Request, funding and indemnity given as
aforesaid the Warrant Agent fails to give the requisite notice specified in section 6.2 to convene
a meeting , the Company or such Warrantholders, as the case may be, may convene such meeting.
Every such meeting shall be held in the City of Toronto, Ontario or at such other place as may be
approved or determined by the Warrant Agent.

	6.2  	Notice

          At least 14 days prior notice of any meeting of Warrantholders shall be given to the
Warrantholders at the expense of the Company in the manner provided for in section 9.2 and a copy
of such notice shall be delivered to the Warrant Agent unless the meeting has been called by it,
and to the Company unless the meeting has been called by it. Such notice shall state the time and
place of the meeting, the general nature of the business to be transacted and shall contain such
information as is reasonably necessary to enable the Warrantholders to make a reasoned decision on
the matter, but it shall not be necessary for any such notice to set out the terms of any
resolution to be proposed or any of the provisions of this Article 6. The notice convening any
such meeting may be signed by an appropriate officer of the Warrant Agent or of the Company or the
person designated by such Warrantholders, as the case may be.

	6.3  	Chairman

          The Warrant Agent may nominate in writing an individual (who need not be a Warrantholder) to
be chairman of the meeting and if no individual is so nominated, or if the individual so nominated
is not present within 15 minutes after the time fixed for the holding of the meeting, the
Warrantholders present in person or by proxy shall appoint an individual present to be chairman of
the meeting. The chairman of the meeting need not be a Warrantholder.

	6.4  	Quorum

          Subject to the provisions of section 6.11, at any meeting of the Warrantholders a quorum shall
consist of two Warrantholders present in person or represented by proxy and representing at least
10% of the aggregate number of

 

 

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Warrants then outstanding. If a quorum of the Warrantholders shall not be present within
one-half hour from the time fixed for holding any meeting, the meeting, if summoned by the
Warrantholders or on a Warrantholders’ Request, shall be dissolved; but in any other case the
meeting shall be adjourned to the same day in the next week (unless such day is not a Business Day
in which case it shall be adjourned to the next following Business Day) at the same time and place
to the extent possible and, subject to the provisions of section 6.11, no notice of the adjournment
need be given. Any business may be brought before or dealt with at an adjourned meeting which
might have been dealt with at the original meeting in accordance with the notice calling the same.
At the adjourned meeting the Warrantholders present in person or represented by proxy shall form a
quorum and may transact the business for which the meeting was originally convened, notwithstanding
that they may not represent at least 10% of the aggregate number of Warrants then unexercised and
outstanding. No business shall be transacted at any meeting unless a quorum is present at the
commencement of business.

	6.5  	Power to Adjourn

          The chairman of any meeting at which a quorum of the Warrantholders is present may, with the
consent of the meeting, adjourn any such meeting, and no notice of such adjournment need be given
except such notice, if any, as the meeting may prescribe.

	6.6  	Show of Hands

          Every question submitted to a meeting shall be decided in the first place by a majority of the
votes given on a show of hands except that votes on an extraordinary resolution shall be given in
the manner hereinafter provided. At any such meeting, unless a poll is duly demanded as herein
provided, a declaration by the chairman that a resolution has been carried or carried unanimously
or by a particular majority or lost or not carried by a particular majority shall be conclusive
evidence of the fact.

	6.7  	Poll and Voting

          On every extraordinary resolution, and when demanded by the chairman or by one or more of the
Warrantholders acting in person or by proxy on any other question submitted to a meeting and after
a vote by show of hands, a poll shall be taken in such manner as the chairman shall direct.
Questions other than those required to be determined by extraordinary resolution shall be decided
by a majority of the votes cast on the poll. On a show of hands, every person who is present and
entitled to vote, whether as a Warrantholder or as proxy for one or more absent Warrantholders, or
both, shall have one vote. On a poll, each Warrantholder present in person or represented by a
proxy duly appointed by instrument in writing shall be entitled to one vote in respect of each
whole Warrant then held by him. A proxy need not be a Warrantholder. The chairman of any meeting
shall be entitled, both on a show of hands and on a poll, to vote in respect of the Warrants, if
any, held or represented by him.

 

 

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	6.8  	Regulations

          Subject to the provisions of this indenture, the Warrant Agent or the Company with the
approval of the Warrant Agent may from time to time make and from time to time vary such
regulations as it shall consider necessary or appropriate:

	 	(a)  	for the deposit of instruments appointing proxies at such place
and time as the Warrant Agent, the Company or the Warrantholders convening the
meeting, as the case may be, may in the notice convening the meeting direct;
	 
	 	(b)  	for the deposit of instruments appointing proxies at some
approved place other than the place at which the meeting is to be held and
enabling particulars of such instruments appointing proxies to be mailed,
faxed, cabled or telegraphed before the meeting to the Company or to the
Warrant Agent at the place where the same is to be held and for the voting of
proxies so deposited as though the instruments themselves were produced at the
meeting;
	 
	 	(c)  	for the form of instrument appointing a proxy and the manner in
which the form of proxy may be executed; and
	 
	 	(d)  	generally for the calling of meetings of Warrantholders and the
conduct of business thereat including setting a record date for Warrantholders
entitled to receive notice of or to vote at such meeting.

          Any regulations so made shall be binding and effective and the votes given in accordance
therewith shall be valid and shall be counted. Save as such regulations may provide, the only
persons who shall be recognized at any meeting as a Warrantholder, or be entitled to vote or be
present at the meeting in respect thereof (subject to section 6.9), shall be Warrantholders or
persons holding proxies of Warrantholders.

	6.9  	Company, Warrant Agent and Counsel may be Represented

          The Company and the Warrant Agent, by their respective directors, officers and employees and
the counsel for each of the Company, the Warrantholders and the Warrant Agent may attend any
meeting of the Warrantholders and speak thereat but shall not be entitled to vote as such unless in
their capacities as Warrantholders.

	6.10  	Powers Exercisable by Extraordinary Resolution

          In addition to all other powers conferred upon them by any other provisions of this indenture
or by law, the Warrantholders at a meeting shall have the power, exercisable from time to time by
extraordinary resolution:

 

 

- 31 -

	 	(a)  	to agree with the Company to any modification, alteration,
compromise or arrangement of the rights of Warrantholders and/or the Warrant
Agent in its capacity as Warrant Agent hereunder (subject to the Warrant
Agent’s approval) or on behalf of the Warrantholders against the Company,
whether such rights arise under this indenture or the Warrants or otherwise;
	 
	 	(b)  	to amend or repeal any extraordinary resolution previously
passed or sanctioned by the Warrantholders;
	 
	 	(c)  	to direct or authorize the Warrant Agent (subject to the
Warrant Agent receiving funding and indemnity) to enforce any of the covenants
on the part of the Company contained in this indenture or the Warrants or to
enforce any of the rights of the Warrantholders in any manner specified in such
extraordinary resolution or to refrain from enforcing any such covenant or
right;
	 
	 	(d)  	to waive, authorize and direct the Warrant Agent to waive any
default on the part of the Company in complying with any provisions of this
indenture or the Warrants either unconditionally or upon any conditions
specified in such extraordinary resolution;
	 
	 	(e)  	to restrain any Warrantholder from taking or instituting any
suit, action or proceeding against the Company for the enforcement of any of
the covenants on the part of the Company contained in this indenture or the
Warrants or to enforce any of the rights of the Warrantholders; and
	 
	 	(f)  	to direct any Warrantholder who, as such, has brought any suit,
action or proceeding to stay or discontinue or otherwise deal with any such
suit, action or proceeding, upon payment of the costs, charges and expenses
reasonably and properly incurred by such Warrantholder in connection therewith.

	6.11  	Meaning of “Extraordinary Resolution”

     (1) The expression “extraordinary resolution” when used in this indenture means, subject as
hereinafter in this section 6.11 and in section 6.14 provided, a resolution proposed at a meeting
of Warrantholders duly convened for that purpose and held in accordance with the provisions of this
Article 6 at which there are present in person or by proxy Warrantholders representing at least 10%
of the aggregate number of all the then outstanding Warrants and passed by the affirmative votes of
Warrantholders representing not less than 66 2/3% of the aggregate number of all the then
outstanding Warrants represented at the meeting and voted on the poll upon such resolution.

     (2) If, at any meeting called for the purpose of passing an extraordinary resolution,
Warrantholders representing at least 10% of the aggregate number of all the

 

 

- 32 -

then outstanding Warrants are not present in person or by proxy within one-half hour after the
time appointed for the meeting, then the meeting, if convened by Warrantholders or on a
Warrantholders’ Request, shall be dissolved; but in any other case it shall stand adjourned to such
day, being not less than 10 Business Days later, and to such place and time as may be appointed by
the chairman. Not less than three Business Days prior notice shall be given of the time and place
of such adjourned meeting in the manner provided in sections 9.1, 9.2 and 9.3. Such notice shall
state that at the adjourned meeting the Warrantholders present in person or represented by proxy
shall form a quorum but it shall not be necessary to set forth the purposes for which the meeting
was originally called or any other particulars. At the adjourned meeting the Warrantholders
present in person or represented by proxy shall form a quorum and may transact the business for
which the meeting was originally convened and a resolution proposed at such adjourned meeting and
passed by the requisite vote as provided in subsection 6.11(1) shall be an extraordinary resolution
within the meaning of this indenture notwithstanding that Warrantholders representing at least 10%
of all the then outstanding Warrants are not present in person or represented by proxy at such
adjourned meeting.

     (3) Votes on an extraordinary resolution shall always be given on a poll and no demand for a
poll on an extraordinary resolution shall be necessary.

	6.12  	Powers Cumulative

          It is hereby declared and agreed that any one or more of the powers or any combination of the
powers in this indenture stated to be exercisable by the Warrantholders by extraordinary resolution
or otherwise may be exercised from time to time and the exercise of any one or more of such powers
or any combination of powers from time to time shall not be deemed to exhaust the right of the
Warrantholders to exercise such powers or combination of powers then or thereafter from time to
time.

	6.13  	Minutes

          Minutes of all resolutions and proceedings at every meeting of Warrantholders as aforesaid
shall be made and duly entered in books to be provided for that purpose by the Warrant Agent at the
expense of the Company and any minutes as aforesaid, if signed by the chairman of the meeting at
which resolutions were passed or proceedings held, or by the chairman of the next succeeding
meeting of the Warrantholders, shall be prima facie evidence of the matters therein stated and,
until the contrary is proved, every meeting, in respect of the proceedings of which minutes shall
have been made, shall be deemed to have been duly convened and held, and all resolutions passed
thereat or proceedings taken, to have been duly passed and taken.

	6.14  	Instruments in Writing

          All actions which may be taken and all powers that may be exercised by the Warrantholders at a
meeting held as provided in this Article 6 also may be taken and exercised by Warrantholders
representing at least 66 2/3% of the aggregate

 

 

- 33 -

number of all the then outstanding Warrants by an instrument in writing signed in one or more
counterparts by such Warrantholders in person or by attorney duly appointed in writing, and the
expression “extraordinary resolution” when used in this indenture shall include an instrument so
signed.

	6.15  	Binding Effect of Resolutions

          Every resolution and every extraordinary resolution passed in accordance with the provisions
of this Article 6 at a meeting of Warrantholders shall be binding upon all the Warrantholders,
whether present at or absent from such meeting, and every instrument in writing signed by
Warrantholders in accordance with section 6.14 shall be binding upon all the Warrantholders,
whether signatories thereto or not, and each and every Warrantholder and the Warrant Agent (subject
to the provisions for indemnity herein contained) shall be bound to give effect accordingly to
every such resolution and instrument in writing. In the case of an instrument in writing, the
Warrant Agent shall give notice in the manner contemplated in sections 9.1 and 9.2 of the effect of
the instrument in writing to all Warrantholders and the Company as soon as is reasonably
practicable.

	6.16  	Holdings by the Company or Subsidiaries of the Company Disregarded

     (1) In determining whether Warrantholders are present at a meeting of Warrantholders for the
purpose of determining a quorum or have concurred in any consent, waiver, extraordinary resolution,
Warrantholders’ Request or other action under this indenture, Warrants owned legally or
beneficially by the Company or any subsidiary of the Company or in partnership of which the Company
is directly or indirectly a party to shall be disregarded.

     (2) For the purposes of disregarding any Warrants owned legally or beneficially by the Company
or any Subsidiary or any partnership of which the Company is directly or indirectly a party to or
any other affiliate of the Company in subsection 6.16(1), the Company shall provide to the Warrant
Agent, from time to time and upon request, a certificate of the Company setting forth as at the
date of such certificate:

	 	(a)  	the names (other than the name of the Company) of the
registered holders of Warrants of which, to the knowledge of the Company, are
owned by or held for the account of the Company or any Subsidiary or a
partnership of which the Company is directly or indirectly a party to or any
other affiliate of the Company; and
	 
	 	(b)  	the number of Warrants owned legally and beneficially by the
Company or any Subsidiary or a partnership of which the Company is directly or
indirectly a party to or any other affiliate of the Company;

and the Warrant Agent in making the determination in subsection 6.16(1) shall be entitled to rely
on such certificate.

 

 

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ARTICLE 7

SUPPLEMENTAL INDENTURES AND SUCCESSOR COMPANIES

7.1 Provision for Supplemental Indentures for Certain Purposes

          From time to time the Company (if properly authorized by its directors) and the Warrant Agent
may, subject to the provisions of this indenture, and they shall, when so directed hereby, execute
and deliver by their proper officers, indentures or instruments supplemental hereto, which
thereafter shall form part hereof, for any one or more or all of the following purposes:

	 	(a)  	providing for the issuance of additional Warrants hereunder and
any consequential amendments hereto as may be required by the Warrant Agent,
relying on the advice of counsel;
	 
	 	(b)  	setting forth adjustments in the application of Article 2;
	 
	 	(c)  	adding to the provisions hereof such additional covenants and
enforcement provisions as, in the opinion of counsel are necessary or
advisable, provided that the same are not in the opinion of the Warrant Agent,
relying on the advice of counsel, prejudicial to the interests of the
Warrantholders as a group;
	 
	 	(d)  	giving effect to any extraordinary resolution passed as
provided in Article 6;
	 
	 	(e)  	making such provisions not inconsistent with this indenture as
may be necessary or desirable with respect to matters or questions arising
hereunder provided that such provisions are not, in the opinion of the Warrant
Agent, relying on the advice of counsel, prejudicial to the interests of the
Warrantholders as a group;
	 
	 	(f)  	adding to or amending the provisions hereof in respect of the
transfer of Warrants, making provision for the exchange of Warrants and making
any modification in the form of the Warrant Certificate which does not affect
the substance thereof;
	 
	 	(g)  	amending any of the provisions of this indenture or relieving
the Company from any of the obligations, conditions or restrictions herein
contained, provided that no such amendment or relief shall be or become
operative or effective if, in the opinion of the Warrant Agent, relying on the
advice of counsel, such amendment or relief impairs any of the rights of the
Warrantholders as a group or of the Warrant Agent, and provided further that
the Warrant Agent may in its sole discretion decline to enter into any
supplemental indenture which in its opinion may not afford adequate protection
to the Warrant Agent when the same shall become operative; and

 

 

- 35 -

	 	(h)  	for any other purpose not inconsistent with the terms of this
indenture, including the correction or rectification of any ambiguities,
defective or inconsistent provisions, errors or omissions herein, provided
that, in the opinion of the Warrant Agent, relying on the advice of counsel,
the rights of the Warrant Agent and the Warrantholders as a group are in no way
prejudiced thereby.

	7.2  	Successor Companies

          In the case of the amalgamation, consolidation, merger or transfer of the undertaking or
assets of the Company as an entirety or substantially as an entirety to another person (a
“successor company”), the successor company resulting from the amalgamation, consolidation, merger
or transfer (if not the Company) shall be bound by the provisions hereof and all obligations for
the due and punctual performance and observance of each and every covenant and obligation contained
in this indenture to be performed by the Company and the successor company shall by supplemental
indenture satisfactory in form to the Warrant Agent and executed and delivered to the Warrant
Agent, expressly assume those obligations.

ARTICLE 8

CONCERNING THE WARRANT AGENT

8.1 Trust Indenture Legislation

     (1) If and to the extent that any provision of this indenture limits, qualifies or conflicts
with a mandatory requirement of Applicable Legislation, such mandatory requirement shall prevail.

     (2) The Company and the Warrant Agent agree that each will at all times in relation to this
indenture and any action to be taken hereunder observe and comply with and be entitled to the
benefit of Applicable Legislation.

8.2 Rights and Duties of Warrant Agent

     (1) In the exercise of the rights and duties prescribed or conferred by the terms of this
indenture, the Warrant Agent shall act honestly and in good faith with a view to the best interests
of the Warrantholders and shall exercise the degree of care, diligence and skill that a reasonably
prudent trustee would exercise in comparable circumstances. No provision of this indenture shall
be construed to relieve the Warrant Agent from, or require any other person to indemnify the
Warrant Agent against liability for its own negligence, wilful misconduct or bad faith.

     (2) The Warrant Agent shall not be bound to do or take any act, action or proceeding for the
enforcement of any of the obligations of the Company under this indenture unless and until it shall
have received a Warrantholders’ Request specifying

 

 

- 36 -

the act, action or proceeding which the Warrant Agent is requested to take. The obligation of
the Warrant Agent to commence or continue any act, action or proceeding for the purpose of
enforcing any rights of the Warrant Agent or the Warrantholders hereunder shall be conditional upon
the Warrantholders furnishing, when required by notice in writing by the Warrant Agent, sufficient
funds to commence or continue such act, action or proceeding and an indemnity reasonably
satisfactory to the Warrant Agent and its counsel to protect and hold harmless the Warrant Agent,
its officers, directors, employees and agents against the costs, charges and expenses and
liabilities to be incurred thereby and any loss and damage it may suffer by reason thereof. None
of the provisions contained in this indenture shall require the Warrant Agent to expend or risk its
own funds or otherwise incur financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers unless indemnified and funded as aforesaid.

     (3) The Warrant Agent may, before commencing any act, action or proceeding, or at any time
during the continuance thereof require the Warrantholders at whose instance it is acting to deposit
with the Warrant Agent the Warrant Certificates held by them, for which Warrant Certificates the
Warrant Agent shall issue receipts.

     (4) Every provision of this indenture that, by its terms, relieves the Warrant Agent of
liability or entitles it to rely upon any evidence submitted by it is subject to the provisions of
Applicable Legislation, of this section 8.2 and of section 8.3.

     (5) The Warrant Agent shall not be bound to give any notice or do or take any act, action or
proceeding by virtue of the powers conferred on it hereunder unless and until it shall have been
required to do so under the terms hereof; nor shall the Warrant Agent be required to take notice of
any default hereunder, unless and until notified in writing of such default, which notice shall
specifically set out the default desired to be brought to the attention of the Warrant Agent and in
the absence of such notice the Warrant Agent may for all purposes of this indenture conclusively
assume that no default has occurred or been made in the performance or observance of the
representations, warranties and covenants, agreements or conditions herein contained. Any such
notice shall in no way limit any discretion herein given to the Warrant Agent to determine whether
or not the Warrant Agent shall take action with respect to any default.

     (6) In this indenture, whenever confirmations or instructions are required to be given to the
Warrant Agent, in order to be valid, such confirmations and instructions shall be in writing.

8.3 Evidence, Experts and Advisers

     (1) In addition to the reports, certificates, opinions and other evidence required by this
indenture, the Company shall furnish to the Warrant Agent such additional evidence of compliance
with any provision hereof and in such form as may be prescribed by Applicable Legislation or as the
Warrant Agent may reasonably require by written notice to the Company.

 

 

- 37 -

     (2) In the exercise of its rights and duties hereunder, the Warrant Agent may, if it is acting
in good faith, act and rely absolutely as to the truth of the statements and the accuracy of the
opinions expressed therein, upon statutory declarations, opinions, reports, written requests,
consents, or orders of the Company, certificates of the Company or other evidence furnished to the
Warrant Agent pursuant to any provision hereof or of Applicable Legislation or pursuant to a
request of the Warrant Agent.

     (3) The Warrant Agent shall be under no responsibility in respect of the validity of this
indenture or the execution and delivery hereof by or on behalf of the Company or in respect of the
validity or the execution of any Warrant Certificate by the Company and issued hereunder, nor shall
it be responsible for any breach by the Company of any covenant or condition contained in this
indenture or in any such Warrant Certificate; nor shall it by any act hereunder be deemed to make
any representation or warranty as to the authorization or reservation of any securities to be
issued upon the right to acquire provided for in this indenture and/or in any Warrant Certificate
or as to whether any securities will when issued be duly authorized or be validly issued and fully
paid and non-assessable.

     (4) Whenever Applicable Legislation requires that evidence referred to in subsection 8.3(1) be
in the form of a statutory declaration, the Warrant Agent may accept the statutory declaration in
lieu of a certificate of the Company required by any provision hereof. Any such statutory
declaration may be made by one or more of the directors or officers of the Company and may be
relied upon by the Warrant Agent in good faith without further inquiry.

     (5) Proof of the execution of an instrument in writing, including a Warrantholders’ Request,
by any Warrantholder may be made by a certificate of a notary public or other person with similar
powers that the person signing such instrument acknowledged to him the execution thereof, or by an
affidavit of a witness to such execution or in any other manner which the Warrant Agent may
consider adequate and in respect of a corporate Warrantholder, shall include a certificate of
incumbency of such Warrantholder together with a certified resolution authorizing the person who
signs such instrument to sign such instrument.

     (6) The Warrant Agent may act and rely and shall be protected in acting and relying upon any
resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order,
letter, telegram, cablegram or other paper document believed by it to be genuine and to have been
signed, sent or presented by or on behalf of the proper party or parties.

     (7) The Warrant Agent may employ or retain such counsel, accountants, engineers, appraisers or
other experts or advisers as it may reasonably require for the purpose of determining and
discharging its duties hereunder and may pay reasonable remuneration for all services so performed
by any of them, without taxation of costs of any counsel and shall not be responsible for any
misconduct on the part of any of them who has been selected with due care by the Warrant Agent. Any
reasonable

 

 

- 38 -

remuneration paid by the Warrant Agent shall be paid by the Company in accordance with section
4.3.

     (8) The Warrant Agent may, as a condition precedent to any action to be taken by it under this
indenture, require such opinions, statutory declarations, reports, certificates or other evidence
as it, acting reasonably, considers necessary or advisable in the circumstances.

8.4 Securities, Documents and Monies Held by Warrant Agent

          Any securities, documents of title, monies or other instruments that may at any time be held
by the Warrant Agent subject to the trusts hereof may be placed in the deposit vaults of the
Warrant Agent or of any Schedule 1 Canadian chartered bank for safekeeping with any such bank or
the Warrant Agent. All interest or other income received by the Warrant Agent in respect of such
deposits and investments shall, subject to section 4.4, belong to the Company and shall be paid to
the Company upon discharge of this indenture.

8.5 Actions by Warrant Agent to Protect Interests

          Subject to the provisions of this indenture and Applicable Legislation, the Warrant Agent
shall have the power to institute and to maintain such actions and proceedings as it may consider
necessary or expedient to preserve, protect or enforce its interests and the interests of the
Warrantholders.

8.6 Warrant Agent not Required to Give Security

          The Warrant Agent shall not be required to give any bond or security in respect of the
execution of the trusts and powers of this indenture or otherwise, subject to section 8.8.

8.7 Protection of Warrant Agent

          By way of supplement to the provisions of any law for the time being relating to trustees, it
is expressly declared and agreed as follows:

     (1) The Warrant Agent shall not be liable for or by reason of any representations, statements
of fact or recitals in this indenture or in the Warrants (except the representation contained in
section 8.9 or in the certificate of the Warrant Agent on the Warrants) or be required to verify
the same and all such statements of fact or recitals are and shall be deemed to be made by the
Company (except the representation contained in section 8.9 or in the certificate of the Warrant
Agent on the Warrants).

     (2) Nothing herein contained shall impose any obligation on the Warrant Agent to see to or to
require evidence of the registration or filing (or renewal thereof) of this indenture or any
instrument ancillary or supplemental hereto.

 

 

- 39 -

     (3) The Warrant Agent shall not be bound to give notice to any person or persons of the
execution hereof.

     (4) The Warrant Agent shall not incur any liability or responsibility whatsoever or be in any
way responsible for the consequence of any breach on the part of the Company of any of the
covenants or warranties herein contained or of any acts of any directors, officers, employees,
agents or servants of the Company.

     (5) Without limiting any protection or indemnity of the Warrant Agent under any other
provision hereof, or otherwise at law, the Company hereby agrees to indemnify and hold harmless the
Warrant Agent and its directors, officers, agents and employees from and against any and all
liabilities, losses, damages, penalties, claims, actions, suits, costs, expenses and disbursements,
including reasonable legal or advisor fees and disbursements, of whatever kind and nature which may
at any time be imposed on, incurred by or asserted against the Warrant Agent in connection with the
performance of its duties and obligations hereunder, other than such liabilities, losses, damages,
penalties, claims, actions, suits, costs, expenses and disbursements arising by reason of the gross
negligence, fraud or wilful misconduct of the Warrant Agent. This provision shall survive the
resignation or removal of the Warrant Agent, or the termination of this indenture. The Warrant
Agent shall not be under any obligation to prosecute or defend any action or suit in respect of
this indenture which, in the opinion of its counsel, may involve it in expense or liability, unless
the Company shall, so often as required, furnish the Warrant Agent with satisfactory indemnity and
funding against such expense or liability.

8.8 Replacement of Warrant Agent

     (1) The Warrant Agent may resign its trust and be discharged from all further duties and
liabilities hereunder by giving to the Company not less than 60 days prior notice in writing or
such shorter prior notice as the Company may accept as sufficient. The Warrantholders by
extraordinary resolution shall have the power at any time to remove the existing Warrant Agent and
to appoint a new Warrant Agent. In the event of the Warrant Agent resigning or being removed as
aforesaid or being dissolved, becoming bankrupt, going into liquidation or otherwise becoming
incapable of acting hereunder, the Company shall forthwith appoint a new Warrant Agent unless a new
Warrant Agent has already been appointed by the Warrantholders; failing such appointment by the
Company, the retiring Warrant Agent or any Warrantholder may apply to a justice of the Ontario
Superior Court of Justice at the Company’s expense, on such notice as such justice may direct, for
the appointment of a new Warrant Agent; but any new Warrant Agent so appointed by the Company or by
the Court shall be subject to removal as aforesaid by the Warrantholders. Any new Warrant Agent
appointed under any provision of this section 8.8 shall be a corporation authorized to carry on the
business of a trust company in the Province of Ontario and, if required by Applicable Legislation
of any other province, in such other province. On any such appointment the new Warrant Agent shall
be vested with the same powers, rights, duties and responsibilities as if it had been originally
named herein as Warrant Agent without any further assurance, conveyance, act or deed; but there
shall be immediately executed, at

 

 

- 40 -

the expense of the Company, all such conveyances or other instruments as may, in the opinion
of counsel, be necessary or advisable for the purpose of assuring the same to the new Warrant
Agent, provided that any resignation or removal of the Warrant Agent and appointment of a successor
Warrant Agent shall not become effective until the successor Warrant Agent shall have executed an
appropriate instrument accepting such appointment and, at the request of the Company, the
predecessor Warrant Agent, upon payment of its outstanding remuneration and expenses, shall execute
and deliver to the successor Warrant Agent an appropriate instrument transferring to such successor
Warrant Agent all rights and powers of the Warrant Agent hereunder and all securities, documents of
title and other instruments and all monies and properties held by the Warrant Agent hereunder.

     (2) Upon the appointment of a successor warrant agent, the Company shall promptly notify the
Warrantholders thereof in the manner provided for in section 9.2.

     (3) Any corporation into or with which the Warrant Agent may be merged or consolidated or
amalgamated, or any corporation succeeding to the stock transfer business of the Warrant Agent,
shall be the successor to the Warrant Agent hereunder without any further act on its part or of any
of the parties hereto, provided that such corporation would be eligible for appointment as a new
warrant agent under subsection 8.8(1).

     (4) Any Warrants certified but not delivered by a predecessor Warrant Agent may be certified
by the new or successor warrant agent in the name of the predecessor or the new or successor
warrant agent.

8.9 Conflict of Interest

     (1) The Warrant Agent represents to the Company that at the time of execution and delivery
hereof no material conflict of interest exists which is it aware of in the Warrant Agent’s role as
a fiduciary hereunder and agrees that in the event of a material conflict of interest arising which
it becomes aware of hereafter it will, within 90 days after ascertaining that it has such a
material conflict of interest, either eliminate the same or resign its trust hereunder. If any
such material conflict of interest exists or hereafter shall exist, the validity and enforceability
of this indenture and the Warrants shall not be affected in any manner whatsoever by reason
thereof.

     (2) Subject to subsection 8.9(1), the Warrant Agent, in its personal or any other capacity,
may buy, lend upon and deal in securities of the Company and generally may contract and enter into
financial transactions with the Company or any Subsidiary without being liable to account for any
profit made thereby.

8.10 Acceptance of Trusts

          The Warrant Agent hereby accepts the trusts in this indenture declared and provided for and
agrees to perform the same upon the terms and conditions herein set forth.

 

 

- 41 -

8.11 Warrant Agent not to be Appointed Receiver

          The Warrant Agent and any person related to the Warrant Agent shall not be appointed a
receiver or receiver and manager or liquidator of all or any part of the assets or undertaking of
the Company or any Subsidiary or any partnership of which the Company is directly or indirectly
involved.

8.12 Authorization to Carry on Business

          The Warrant Agent represents to the Company that it is registered to carry on the business of
a trust company in each of the provinces of Canada.

ARTICLE 9

GENERAL

9.1 Notice to the Company and the Warrant Agent

     (1) Unless herein otherwise expressly provided, any notice to be given hereunder to the
Company or the Warrant Agent shall be deemed to be validly given if delivered, if sent by
registered letter, postage prepaid or if transmitted by telecopier:

	 	(a)  	If to the Company, to:

	 	   	Goldcorp Inc.

Waterfront Centre

200 Burrard Street,

Suite 1560

Vancouver, British Columbia V6C 3L6

	 
	 	   	Attention: Chief Executive Officer

Fax.: (604) 696-3001

	 	   	with a copy to:

	 	   	Cassels Brock & Blackwell LLP

Scotia Plaza

40 King Street West, Suite 2100

Toronto, Ontario M5H 3C2

	 
	 	   	Attention: Mark T. Bennett

Fax: (416) 360-8877

 

 

- 42 -

	 	   	and to:
	 
	 	   	Dorsey & Whitney LLP

TD Canada Trust Tower

BCE Place, 161 Bay Street

Suite 4310

Toronto, ON M5J 2S1
	 
	 	   	Attention: Gil Cornblum

Fax No.: (416) 367-7371

	 	(b)  	If to the Warrant Agent, to:

	 	   	CIBC Mellon Trust Company

320 Bay Street, Ground Floor

P.O. Box 1

Toronto, Ontario M5H 4A6

	 
	 	   	Attention: Assistant Vice President, Client Services

Fax: (416) 643-5570

and any notice given in accordance with the foregoing shall be deemed to have been received on the
date of delivery if that date is a Business Day or, if mailed, on the fifth Business Day following
the date of the postmark on such notice or, if transmitted by telecopier, on the day following the
transmission.

     (2) The Company or the Warrant Agent, as the case may be, may from time to time notify the
other in the manner provided in subsection 9.1(1) of a change of address which, from the effective
date of such notice and until changed by like notice, shall be the address of the Company or the
Warrant Agent, as the case may be, for all purposes of this indenture. A copy of any notice of
change of address given pursuant to this subsection 9.1(2) shall be available for inspection at the
principal stock transfer offices of the Warrant Agent in the cities of Toronto, Ontario and
Vancouver, British Columbia by Warrantholders during normal business hours.

     (3) If, by reason of a strike, lockout or other work stoppage, actual or threatened, involving
postal employees, any notice to be given to the Warrant Agent or to the Company hereunder could
reasonably be considered unlikely to reach its destination, the notice shall be valid and effective
only if it is delivered to an officer of the party to which it is addressed or if it is delivered
to that party at the appropriate address provided in subsection 9.1(1) by cable, telegram, telex,
telecopier or other means of prepaid, transmitted or recorded communication and any notice
delivered in accordance with the foregoing shall be deemed to have been received on the date of
delivery to the officer or if delivered by cable, telegram, telex, telecopier or other means of
prepaid, transmitted, recorded communication on the third Business Day following the date of the
sending of the notice by the person giving the notice.

 

 

- 43 -

9.2 Notice to the Warrantholders

     (1) Any notice to the Warrantholders under the provisions of this indenture shall be deemed to
be validly given if the notice is sent by prepaid mail or, if delivered by hand, to the holders at
their addresses appearing in the register of holders. Any notice so delivered shall be deemed to
have been received on the date of delivery if that date is a Business Day or the business day
following the date of delivery if such date is not a Business Day. All notices may be given to
whichever one of the Warrantholders (if more than one) is named first in the appropriate register
hereinbefore mentioned, and any notice so given shall be sufficient notice to all Warrantholders
and any other persons (if any) interested in such Warrants.

     (2) If, by reason of strike, lockout or other work stoppage, actual or threatened, involving
postal employees, any notice to be given to the Warrantholders could reasonably be considered
unlikely to reach its destination, the notice may be published or distributed once in the Report on
Business section of the national edition of The Globe and Mail newspaper or, in the event of a
disruption in the circular of that newspaper, once in a daily newspaper in the English language of
general circulation in the Cities of Toronto, Ontario and Vancouver, British Columbia; provided
that in the case of a notice convening a meeting of the holders of Warrants, the Warrant Agent may
require such additional publications of that notice, in the same or in other cities or both, as it
may deem necessary for the reasonable protection of the holders of Warrants or to comply with any
applicable requirement of law or any stock exchange. Any notice so given shall be deemed to have
been given on the day on which it has been published in all of the cities in which publication was
required (or first published in a city if more than one publication in that city is required). In
determining under any provision hereof, the date when notice of any meeting or other event must be
given, the date of giving notice shall be included and the date of the meeting or other event shall
be excluded.

9.3 Discretion of Directors

          Any matter provided herein to be determined by the directors of the Company in their sole
discretion and determination so made will be conclusive.

9.4 Satisfaction and Discharge of Indenture

          Upon the date by which there shall have been delivered to the Warrant Agent for exercise or
destruction in accordance with the provisions hereof of all Warrants theretofore certified
hereunder, this indenture, except to the extent that Common Shares and certificates therefor have
not been issued and delivered hereunder or the Company has not performed any of its obligations
hereunder, shall cease to be of further effect in respect of the Company, and the Warrant Agent, on
written demand of and at the cost and expense of the Company, and upon delivery to the Warrant
Agent of a certificate of the Company stating that all conditions precedent to the satisfaction and
discharge of this indenture have been complied with and upon payment to the Warrant Agent of the
expenses, fees and other remuneration payable to the Warrant Agent, shall execute proper
instruments acknowledging satisfaction of and

 

 

- 44 -

discharging this indenture; provided that if the Warrant Agent has not then performed any of
its obligations hereunder any such satisfaction and discharge of the Company’s obligations
hereunder shall not affect or diminish the rights of any Warrantholder or the Company against the
Warrant Agent.

	9.5  	Provisions of Indenture and Warrants for the Sole Benefit of Parties and
Warrantholders

          Nothing in this indenture or the Warrants, expressed or implied, shall give or be construed to
give to any person other than the parties hereto and the holders from time to time of the Warrants
any legal or equitable right, remedy or claim under this indenture, or under any covenant or
provision therein contained, all such covenants and provisions being for the sole benefit of the
parties hereto and the Warrantholders.

 

 

- 45 -

9.6 Counterparts and Formal Date

          This indenture may be simultaneously executed in several counterparts, each of which when so
executed shall be deemed to be an original and such counterparts together shall constitute one and
the same instrument and notwithstanding their date of execution shall be deemed to bear the date
set out at the top of the first page of this indenture.

          IN WITNESS WHEREOF the parties hereto have executed this indenture under the hands of their
proper officers in that behalf.

	 	 	 	 	 
	 	 	GOLDCORP INC.
	 
	 	 	 	 
	

	 	 	 	c/s
	

	 	Per:	 	 
	

	 	 	 	 
	

	 	 	 	Authorized Signing Officer
	 
	 	 	 	 
	 	 	CIBC MELLON TRUST COMPANY
	 
	 	 	 	 
	

	 	 	 	c/s
	

	 	Per:	 	 
	

	 	 	 	 
	

	 	 	 	Authorized Signing Officer
	

	 	 	 	c/s
	 
	 	 	 	 
	

	 	Per:	 	 
	

	 	 	 	 
	

	 	 	 	Authorized Signing Officer

 

 

SCHEDULE “A”

FORM OF WARRANT CERTIFICATE

[For U.S. Persons, persons in the United States or persons for the account or benefit of a U.S.
Person or a person in the United States, the following legend is applied]

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”) OR ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING SUCH
SECURITIES, AGREES FOR THE BENEFIT OF THE COMPANY THAT SUCH SECURITIES MAY BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH
RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (C) WITHIN THE UNITED STATES IN ACCORDANCE WITH
THE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULES 144 OR 144A THEREUNDER,
IF AVAILABLE, AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS, OR (D) IN A TRANSACTION
THAT DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT OR APPLICABLE STATE SECURITIES LAWS,
AND THE SELLER HAS FURNISHED TO THE COMPANY AN OPINION TO SUCH EFFECT FROM COUNSEL OF RECOGNIZED
STANDING REASONABLY SATISFACTORY TO THE COMPANY PRIOR TO SUCH OFFER, SALE OR TRANSFER. THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE LISTED ON THE TORONTO STOCK EXCHANGE (THE “TSX”);
HOWEVER, THE SAID SECURITIES CANNOT BE TRADED THROUGH THE FACILITIES OF THE TSX SINCE THEY ARE NOT
FREELY TRANSFERABLE AND CONSEQUENTLY ANY CERTIFICATE REPRESENTING SUCH SECURITIES IS NOT “GOOD
DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON TSX. A NEW CERTIFICATE BEARING NO LEGEND MAY BE
OBTAINED FROM CIBC MELLON TRUST COMPANY, AS REGISTRAR AND TRANSFER AGENT OF THE COMPANY, UPON
DELIVERY OF THIS CERTIFICATE AND A DULY EXECUTED DECLARATION, IN A FORM SATISFACTORY TO CIBC MELLON
TRUST COMPANY AND THE COMPANY, TO THE EFFECT THAT SUCH SALE IS BEING MADE IN ACCORDANCE WITH RULE
904 OF REGULATION S UNDER THE SECURITIES ACT.

	 	 	 
	CUSIP No. 380956 15 1
	 	 
	Warrant Certificate No. W                    

	 	Representing                                         
	

	 	Series B Warrants to acquire
	

	 	Common Shares

SERIES “B” COMMON SHARE PURCHASE WARRANTS

OF

GOLDCORP INC.

 

 

- 2 -

          THIS CERTIFIES that, for value received, the registered holder hereof, (the “holder”) is
entitled at any time prior to 5:00 p.m. (Toronto time) on August 25, 2008, to subscribe for the
number of Common Shares specified above of Goldcorp Inc. (the “Company”), by surrendering to CIBC
Mellon Trust Company (the “Warrant Agent”) at its principal stock transfer offices in the cities of
Toronto, Ontario or Vancouver, British Columbia, this Warrant Certificate with a subscription in
the form of the attached Subscription Form duly completed and executed and accompanied by payment
of $3.10 per 0.25 of a Common Share, subject to adjustment in certain events, (the “Exercise
Price”) by certified cheque, bank draft or money order in lawful money of Canada payable to or to
the order of the Company at par in the City of Toronto, Ontario. The holder of this Warrant
Certificate may purchase less than the number of Common Shares which he is entitled to purchase on
the exercise of the Warrants represented by this certificate, in which event a new Warrant
Certificate representing the Warrants not then exercised will be issued to the holder.

          Upon acceptance hereof the holder hereby expressly waives the right to receive any fractional
Common Shares upon the exercise hereof in full or in part and further waives the right to receive
any cash or other consideration in lieu thereof. The Warrants represented by this certificate
shall be deemed to have been surrendered, and payment by certified cheque, bank draft or money
order shall be deemed to have been made only upon personal delivery thereof or, if sent by post or
other means of transmission, upon actual receipt thereof by the Warrant Agent at its principal
stock transfer offices in the cities of Toronto, Ontario and Vancouver, British Columbia.

          Upon due exercise of the Warrants represented by this Warrant Certificate and payment of the
Exercise Price, the Company shall cause to be issued to the person(s) in whose name(s) the Common
Shares so subscribed for are to be issued (provided that if the Common Shares are to be issued to a
person other than the registered holder of this Warrant Certificate, the holder’s signature on the
Subscription Form herein shall be guaranteed by a Canadian chartered bank, by a Canadian trust
company or by a medallion signature guarantee from a member of a recognized Signature Medallion
Guarantee Program and the holder shall pay to the Company or the Warrant Agent all applicable
transfer or similar taxes and the Company shall not be required to issue or deliver certificates
evidencing the Common Shares unless or until the holder shall have paid the Company or the Warrant
Agent the amount of such tax or shall have satisfied to the satisfaction of the Company that such
tax has been paid or that no tax is due) the number of Common Shares to be issued to such person(s)
and such person(s) shall become a holder in respect of such Common Shares with effect from the date
of such exercise and upon due surrender of this Warrant Certificate the Warrant Agent shall issue a
certificate(s) representing such Common Shares to be issued within five Business Days after the
exercise of the Warrants represented by this certificate.

          This Warrant Certificate represents Warrants issued or issuable under the provisions of the
Warrant Indenture (which indenture together with all other instruments

 

 

- 3 -

supplemental or ancillary thereto is herein referred to as the “Warrant Indenture”) dated as
of April 15, 2005 between the Company and the Warrant Agent, as warrant agent, which contains
particulars of the rights of the holders of the Warrants and the Company and of the Warrant Agent
in respect thereof and the terms and conditions upon which the Warrants are issued and held, all to
the same effect as if the provisions of the Warrant Indenture were herein set forth, to all of
which the holder of this Warrant Certificate by acceptance hereof assents. A copy of the Warrant
Indenture will be available for inspection at the principal office of the Warrant Agent in the City
of Vancouver, British Columbia. Capitalized terms used in this Warrant Certificate and not
otherwise defined shall have the meanings ascribed thereto in the Warrant Indenture.

          No transfer of any Warrant will be valid unless entered on the register of transfers, upon
surrender to the Warrant Agent of the Warrant Certificate evidencing such Warrant, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to the Warrant Agent
executed by the registered holder or his executors, administrators or other legal representatives
or his or their attorney duly appointed by an instrument in writing in form and execution
satisfactory to the Warrant Agent. Subject to the provisions of the Share Purchase Warrant
Indenture and upon compliance with the reasonable requirements of the Warrant Agent, Warrant
certificates may be exchanged for Warrant Certificates entitling the holder thereof to acquire an
equal aggregate number of Common Shares subject to adjustment as provided for in the Warrant
Indenture. The Company and the Warrant Agent may treat the registered holder of this Warrant
Certificate for all purposes as the absolute owner hereof. The holding of the Share Purchase
Warrants represented by this certificate shall not constitute the holder hereof a holder of Common
Shares nor entitle him to any right or interest in respect thereof except as herein and in the
Warrant Indenture expressly provided.

          The Warrant Indenture provides for adjustment in the number of Common Shares to be delivered
upon exercise of the right of purchase hereby granted and to the exercise price in certain events
therein set forth.

          The Warrant Indenture contains provisions making binding upon all holders of Warrants
outstanding thereunder resolutions passed at meetings of such holders held in accordance with such
provisions and instruments in writing signed by Warrantholders holding a specified percentage of
Warrants outstanding.

          The Warrants and the Warrant Indenture shall be governed by and performed, construed and
enforced in accordance with the laws of the Province of Ontario and the federal laws applicable
therein and shall be treated in all respects as Ontario contracts. Time shall be of the essence
hereof and of the Warrant Indenture.

          The Company may from time to time and at any time prior to 5:00 p.m. (Toronto time) on August
25, 2008, purchase any of the Warrants by private agreement or otherwise on such terms and
conditions and at such price as the Company may in its sole discretion determine.

 

 

- 4 -

          This Warrant Certificate shall not be valid for any purpose until it has been certified by or
on behalf of the Warrant Agent for the time being under the Warrant Indenture.

          IN WITNESS WHEREOF the Company has caused this Warrant certificate to be signed by its duly
authorized officer as of the ___day of ___, ___.

	 	 	 	 	 
	 	 	GOLDCORP INC.
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	 
	

	 	 	 	Authorized Signing Officer

This Warrant Certificate represents Warrants referred to in the Warrant Indenture within mentioned.

Countersigned by:

CIBC MELLON TRUST COMPANY

	 	 	 	 	 
	By:
	 	 	 	 
	

	 	 	 	 
	

	 	Authorized Signing Officer	 	 
	 
	 	 	 	 
	Date:
	 	 	 	 
	

	 	 	 	 

 

 

TRANSFER OF WARRANTS

     THE WARRANTS REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A U.S. PERSON OR TO ANY
PERSON IN THE UNITED STATES (AS DEFINED IN RULE 902(k) OF REGULATION S UNDER THE SECURITIES ACT OF
1933, AS AMENDED) OR TO ANY PERSON FOR THE ACCOUNT OR BENEFIT OF A U.S. PERSON OR A PERSON IN THE
UNITED STATES, EXCEPT IN LIMITED CIRCUMSTANCES SPECIFIED IN THE WARRANT INDENTURE.

          FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:

	 	 	 
	 
	(name)
	 
	 	 
	 
	(address)

<> of the Warrants registered in the name of the undersigned represented by the within
certificate.

          DATED this                      day of                                         ,                                         .

	 	 	 
	

	 	Signature of Warrantholder
	 
	 	 
	

	 	 
	 
	 	 
	 
	 	 
	

	 	guaranteed by:
	 
	 	 
	

	 	 
	 
	 	 
	 
	 	 
	

	 	 
	

	 	Authorized Signature Number

NOTE: (1) The signature to this transfer must correspond with the name as recorded on the Warrants
in every particular without alteration or enlargement or any change whatever. The signature of the
person executing this transfer must be guaranteed by an authorized officer of a Canadian chartered
bank or of a major Canadian trust company or by a medallion signature guarantee from a member
recognized under the Signature Medallion Guarantee Program or from a similar entity in the United
States, if this transfer is executed in the United States, or in accordance with industry
standards.

 

 

- 2 -

          (2) If the transfer is to a U.S. Person as defined in Rule 902(k) of Regulation S under the
Securities Act of 1933, as amended, special restrictions apply as set out in the Warrant Indenture
governing these Warrants.

	 	 	 	 	 
	By Hand or Courier:

	 	 	 	By Mail:
	 
	 	 	 	 
	Toronto
	 	 	 	 
	 
	 	 	 	 
	CIBC Mellon Trust Company
	 	 	 	 
	Commerce Court West

	 	 	 	CIBC Mellon Trust Company
	199 Bay Street

	 	 	 	P.O. Box 1036
	Securities Level

	 	 	 	Adelaide Street Postal Station
	Toronto, ON M5L 1G9

	 	 	 	Toronto, ON M5C 2K4
	 
	 	 	 	 
	Vancouver
	 	 	 	 
	 
	 	 	 	 
	CIBC Mellon Trust Company
	 	 	 	 
	1600 — 1066 West Hastings Street
	 	 	 	 
	Vancouver, BC V6E 3X1
	 	 	 	 

 

 

SUBSCRIPTION FORM

TO: GOLDCORP INC.

	 	 	 	 	 
	By Hand or Courier:

	 	 	 	By Mail:
	 
	 	 	 	 
	Toronto
	 	 	 	 
	 
	 	 	 	 
	CIBC Mellon Trust Company
	 	 	 	 
	Commerce Court West

	 	 	 	CIBC Mellon Trust Company
	199 Bay Street

	 	 	 	P.O. Box 1036
	Securities Level

	 	 	 	Adelaide Street Postal Station
	Toronto, ON M5L 1G9

	 	 	 	Toronto, ON M5C 2K4
	 
	 	 	 	 
	Vancouver
	 	 	 	 
	 
	 	 	 	 
	CIBC Mellon Trust Company
	 	 	 	 
	1600 — 1066 West Hastings Street
	 	 	 	 
	Vancouver, BC V6E 3X1
	 	 	 	 

          The undersigned holder of the within Warrants hereby irrevocably subscribes for
___Common Shares of Goldcorp Inc. at the Exercise Price referred to in the attached
Warrant Certificate on the terms and conditions set forth in such certificate and the Warrant
Indenture and encloses herewith a certified cheque, bank draft or money order payable at par in the
City of Toronto, Ontario to the order of Goldcorp Inc. in payment in full of the subscription price
for the Common Shares hereby subscribed for.

          The undersigned hereby irrevocably directs that the said Common Shares be issued and delivered
as follows:

	 	 	 	 	 	 	 	 	 
	Name(s) in Full	 	Address(es)	 	 	Number of Common Shares	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 

(Please print in full the name in which certificates are to be issued. If any of the securities
are to be issued to a person or persons other than the registered Warrantholder, the Transfer of
Warrants Form must be completed, the Warrantholder must pay to the Warrant Agent any and all
exigible transfer taxes or other government charges and the signature of the holder must be
guaranteed by a Canadian chartered bank, a Canadian trust company or by a medallion signature
guarantee from a member of a recognized Signature Medallion Guarantee Program or in accordance with
industry standards.)

 

 

- 2 -

          DATED this                      day of                                         ,                                         .

	 	 	 
	 

	 	 
	Witness

	 	Signature of Registered Warrantholder
	 
	 	 
	Witness

	 	Name of Registered Warrantholder
	 
	 	 
	

	 	 
	

	 	Address of Registered Warrantholder
	 
	 	 
	

	 	 
	

	 	Social Insurance Number of Registered Warrantholder

	ÿ  	 Please check box if the certificates are to be delivered to the office where this Warrant
Certificate is surrendered, failing which the certificates will be mailed to the address shown
on the register.

     (The Warrant Agent may require that the signature above be guaranteed, in which event the
following must be completed.)

	 	 	 
	
	 	Signature of Warrantholder
	 
	
	 	 

 

 

SCHEDULE “B”

FORM OF DECLARATION FOR REMOVAL OF LEGEND

	 	 	 
	TO:

	 	CIBC Mellon Trust Company
	

	 	as registrar and transfer agent
	

	 	for Warrants of Goldcorp Inc.

The undersigned (a) acknowledges that the sale of the securities of Goldcorp Inc. (the “Company”)
to which this declaration relates was made in reliance on Rule 904 of Regulation S under the
Securities Act of 1933, as amended (the “Securities Act”) and (b) certifies that (1) the
undersigned is not an affiliate of the Company as that term is defined in Rule 405 of the
Securities Act, (2) the offer of such securities was not made to a person in the United States and
either (A) at the time the buy order was originated, the buyer was outside the United States, or
the seller and any person acting on its behalf reasonably believed that the buyer was outside the
United States, or (B) the transaction was executed in, on or through the facilities of the Toronto
Stock Exchange or any other designated offshore securities market as defined in Regulation S under
the Securities Act and neither the seller nor any person acting on its behalf knows that the
transaction has been prearranged with a buyer in the United States, (3) neither the seller nor any
affiliate of the seller nor any person acting on any of their behalf has engaged or will engage in
any directed selling efforts in the United States in connection with the offer and sale of such
securities, (4) the sale is bona fide and not for the purpose of “washing off” the resale
restrictions imposed because the securities are “restricted securities” (as such term is defined in
Rule 144(a)(3) under the Securities Act), (5) the seller does not intend to replace the securities
sold in reliance on Rule 904 of the Securities Act with fungible unrestricted securities and (6)
the contemplated sale is not a transaction, or part of a series of transactions which, although in
technical compliance with Regulation S, is part of a plan or scheme to evade the registration
provisions of the Securities Act. Terms used herein have the meanings given to them by Regulation
S.

	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	Name of Seller
	 
	 	 	 	 	 	 
	

	 	 	 	By:	 	 
	

	 	 	 	 	 	 
	

	 	 	 	 	 	Name:
	

	 	 	 	 	 	Title:EXHIBIT 4.1

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

                         POOLING AND SERVICING AGREEMENT

                          Dated as of __________, 200_

                                  by and among

                      HSI Asset Securitization Corporation
                                   (Depositor)

                                       and

                    ----------------------------------------
                                  (Transferor)

                    ----------------------------------------
                                (Master Servicer)

                                       and

                    ----------------------------------------
                                    (Trustee)

                       _______ Home Equity Trust 200_ - _

                 _______ Home Equity Asset Backed Certificates,
                                 Series 200_ - _

                               Class _ and Class _

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

<PAGE>

                                TABLE OF CONTENTS

                                                                            Page

                                    ARTICLE I

                                   DEFINITIONS

Section 1.1   Certain Defined Terms..........................................1
Section 1.2   Provisions Of General Application.............................26

                                   ARTICLE II

                           ESTABLISHMENT OF THE TRUST;
                        SALE AND CONVEYANCE OF TRUST FUND

Section 2.1   Sale And Conveyance Of Trust Fund; Priority And
               Subordination Of Ownership Interests; Establishment Of
               The Trust....................................................27
Section 2.2   Possession Of Mortgage Files; Access To Mortgage Files........27
Section 2.3   Delivery Of Mortgage Loan Documents...........................28
Section 2.4   Acceptance By Trustee Of The Trust Fund; Certain
               Substitutions; Certification By Trustee......................30
Section 2.5   Designations Under REMIC Provisions; Designation Of
               Startup Date.................................................32
Section 2.6   Execution Of Certificates.....................................32
Section 2.7   Application Of Principal And Interest.........................33
Section 2.8   Grant Of Security Interest....................................33
Section 2.9   Further Assurances; Powers Of Attorney........................33

                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

Section 3.1   Representations Of The Master Servicer........................35
Section 3.2   Representations, Warranties And Covenants Of The Depositor....36
Section 3.3   Purchase And Substitution.....................................37
Section 3.4   Master Servicer Covenants.....................................38

                                   ARTICLE IV

                                THE CERTIFICATES

Section 4.1   The Certificates..............................................40
Section 4.2   Registration Of Transfer And Exchange Of Certificates.........40
Section 4.3   Mutilated, Destroyed, Lost Or Stolen Certificates.............45
Section 4.4   Persons Deemed Owners.........................................46

                                    ARTICLE V

               ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS

Section 5.1   Appointment Of The Master Servicer............................47
Section 5.2   Subservicing Agreements Between The Master Servicer And
               Subservicers.................................................49
Section 5.3   Collection Of Certain Mortgage Loan Payments; Collection
               Account......................................................50
Section 5.4   Permitted Withdrawals From The Collection Account And
               Trustee Collection Account...................................52
Section 5.5   Payment Of Taxes, Insurance And Other Charges.................53
Section 5.6   Maintenance Of Casualty Insurance.............................54
Section 5.7   Master Servicer Account.......................................55
Section 5.8   Fidelity Bond; Errors And Omissions Policy....................55
Section 5.9   Collection Of Taxes, Assessments And Other Items..............56
Section 5.10  Periodic Filings With The Securities And Exchange
               Commission; Additional Information...........................56
Section 5.11  Enforcement Of Due-On-Sale Clauses; Assumption Agreements.....56
Section 5.12  Realization Upon Defaulted Mortgage Loans.....................57
Section 5.13  Trustee To Cooperate; Release Of Mortgage Files...............59
Section 5.14  Servicing Fee; Servicing Compensation.........................60
Section 5.15  Reports To The Trustee; Collection Account Statements.........61
Section 5.16  Annual Statement As To Compliance.............................61
Section 5.17  Annual Independent Public Accountants' Servicing Report.......61
Section 5.18  Reports To Be Provided By The Master Servicer.................62
Section 5.19  Adjustment Of Servicing Compensation In Respect Of
               Prepaid Mortgage Loans.......................................63
Section 5.20  Periodic Advances.............................................63
Section 5.21  Indemnification; Third Party Claims...........................63
Section 5.22  Maintenance Of Corporate Existence And Licenses; Merger
               Or Consolidation Of The Master Servicer......................64
Section 5.23  Assignment Of Agreement By Master Servicer; Master
               Servicer Not To Resign.......................................65

                                   ARTICLE VI

                           DISTRIBUTIONS AND PAYMENTS

Section 6.1   Establishment Of Certificate Account, Deposits To The
               Certificate Account..........................................66
Section 6.2   Permitted Withdrawals From The Certificate Account............66
Section 6.3   Collection Of Money...........................................67
[Section 6.4  The certificate insurance policy..............................67
Section 6.5   Distributions.................................................68
Section 6.6   Investment Of Accounts........................................70
Section 6.7   Reports By Trustee............................................71
Section 6.8   Additional Reports By Trustee And By Master Servicer..........73
Section 6.9   Compensating Interest.........................................74
[Section 6.10 Effect Of Payments By The Certificate Insurer; Subrogation....74

                                   ARTICLE VII

                                     DEFAULT

Section 7.1   Events Of Default.............................................75
Section 7.2   Trustee To Act; Appointment Of Successor......................76
Section 7.3   Waiver Of Defaults............................................78
Section 7.4   Mortgage Loans, Trust Fund And Accounts Held For Benefit
               Of The Certificate Insurer...................................78

                                  ARTICLE VIII

                                   TERMINATION

Section 8.1   Termination...................................................79
Section 8.2   Additional Termination Requirements...........................80
Section 8.3   Accounting Upon Termination Of Master Servicer................81

                                   ARTICLE IX

                                   THE TRUSTEE

Section 9.1   Duties Of Trustee.............................................81
Section 9.2   Certain Matters Affecting The Trustee.........................86
Section 9.3   Not Liable For Certificates Or Mortgage Loans.................88
Section 9.4   Trustee May Own Certificates..................................88
Section 9.5   Trustee's Fees And Expenses; Indemnity........................88
Section 9.6   Eligibility Requirements For Trustee..........................88
Section 9.7   Resignation And Removal Of The Trustee........................89
Section 9.8   Successor Trustee.............................................89
Section 9.9   Merger Or Consolidation Of Trustee............................90
Section 9.10  Appointment Of Co-Trustee Or Separate Trustee.................90
Section 9.11  Tax Returns; OID Interest Reporting...........................91
[Section 9.12 Retirement Of Certificates....................................91

                                    ARTICLE X

                            MISCELLANEOUS PROVISIONS

Section 10.1  Limitation On Liability Of The Depositor And The Master
               Servicer.....................................................92
Section 10.2  Acts Of Certificateholders; Certificateholders' Rights........92
Section 10.3  Amendment Or Supplement.......................................93
Section 10.4  Recordation Of Agreement......................................94
Section 10.5  Duration Of Agreement.........................................94
Section 10.6  Notices.......................................................94
Section 10.7  Severability Of Provisions....................................94
Section 10.8  No Partnership................................................95
Section 10.9  Counterparts..................................................95
Section 10.10 Successors And Assigns........................................95
Section 10.11 Headings......................................................95
[Section 10.12 The Certificate Insurer Default..............................95
Section 10.13 Third Party Beneficiary.......................................95
Section 10.14 Intent Of The Parties.........................................95
Section 10.15 Appointment Of Tax Matters Person.............................95
Section 10.16 Governing Law Consent To Jurisdiction; Waiver of Jury
               Trial........................................................95

EXHIBITS

[EXHIBIT A Specimen Certificate Insurance Policy]

EXHIBIT B-1 Specimen Class A-1 Certificate

EXHIBIT B-2 Specimen Class A-2 Certificate

EXHIBIT B-3 Specimen Class A-3 Certificate

EXHIBIT B-4 Specimen Class A-4 Certificate

EXHIBIT B-5 Specimen Class A-5 Certificate

EXHIBIT B-6 Specimen Class R Certificate

EXHIBIT C Contents of Mortgage File

EXHIBIT D Mortgage Loan Schedule

EXHIBIT E Trustee's Certificate as to Mortgage Files

EXHIBIT F Form of Initial Certification of Trustee

EXHIBIT G Form of Final Certification of Trustee

EXHIBIT H Form of Request for Release of Mortgage Files

EXHIBIT I Form of Transfer Affidavit and Agreement

EXHIBIT J Form of Certificate to Be Delivered by Transferring Holder

EXHIBIT K Form of ERISA Investment Representation Letter

EXHIBIT L Form of Officer's Certificate of the Transferor: Prepaid Loans

EXHIBIT M Form of Transferee's Letter

<PAGE>

            This Pooling and Servicing Agreement, relating to _______ Home
Equity Trust 200_ - _ (the "Trust"), dated as of __________, 200_ by and among
HSI Asset Securitization Corporation, as depositor of the Trust (the
"Depositor"), __________________, as Transferor (the "Transferor"),
____________________, as Master Servicer, (the "Master Servicer"), and
____________________, in its capacity as trustee (the "Trustee").

                             W I T N E S S E T H:

            WHEREAS, the Depositor wishes to establish a trust which provides
for the allocation and sale of the beneficial interests therein and the
maintenance and distribution of the trust estate;

            WHEREAS, the Master Servicer has agreed to service the Mortgage
Loans, which constitute the principal assets of the trust estate;

            WHEREAS, ____________________, is willing to serve in the capacity
of Trustee hereunder; and

            [WHEREAS, ____________________ (the "Certificate Insurer") is
intended to be a third-party beneficiary of this Agreement and is hereby
recognized by the parties hereto to be a third-party beneficiary of this
Agreement.]

            NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the Depositor, the Transferor, the Master Servicer
and the Trustee hereby agree as follows:

                                   ARTICLE I

                                   DEFINITIONS

            Section 1.1 Certain Defined Terms. Whenever used herein the
following words and phrases, unless the context otherwise requires, shall have
the following meanings.

            "200_ - _REMIC" shall mean the segregated pool of assets in the
Trust Fund, consisting of: (i) the Mortgage Loans which are from time to time
subject to this Agreement, together with the Mortgage Files relating thereto and
all collections thereon and proceeds thereof, (ii) such assets as from time to
time are identified as REO Property of the 200_ - _ REMIC and collections
thereon and proceeds thereof, (iii) assets deposited in the Certificate Account
including any such amounts on deposit in the Certificate Account invested in
Permitted Investments, (iv) the Trustee's rights with respect to the Mortgage
Loans under all insurance policies [(other than the Certificate Insurance
Policy)] required to be maintained pursuant to this Agreement and any Insurance
Proceeds, (v) Liquidation Proceeds, and (vi) Released Mortgaged Property
Proceeds.

            "Accepted Servicing Practices" shall mean the Master Servicer's
normal servicing practices in servicing and administering mortgage loans for its
own account, which will not be

<PAGE>

less stringent than the mortgage servicing practices of prudent mortgage lending
institutions which service for their own account mortgage loans of the same type
as the Mortgage Loans in the jurisdictions in which the related Mortgaged
Properties are located and will give due consideration to [the Certificate
Insurer's and] the Certificateholders' reliance on the Master Servicer.

            "Account" shall mean any Eligible Account established hereunder.

            "Accrual Period" shall mean (i) with respect to the Class A-1
Certificates and any Remittance Date, the period commencing on the immediately
preceding Remittance Date or, in the case of the first Remittance Date, the
Closing Date, and ending on the day preceding such Remittance Date and (ii) with
respect to the Certificates other than the Class A-1 Certificates and any
Remittance Date, the period commencing on the ___ day of the month immediately
preceding the month in which such Remittance Date occurs and ending on the last
day of the month immediately preceding the month in which such Remittance Date
occurs.

            "Adverse Remic Event" shall have the meaning set forth in Section
5.1(c).

            "Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
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" shall mean this Pooling and Servicing Agreement,
including the Exhibits hereto, as amended or supplemented from time to time in
accordance herewith.

            "Aggregate Principal Balance" shall mean the aggregated sum of the
principal balances of each of the Mortgage Loans as of any date of
determination.

            "Appraised Value" shall mean the appraised value of any Mortgaged
Property, based upon the appraisal or other property valuation made at the time
the related Mortgage Loan is originated; provided that if no such appraisal was
required to be made in accordance with the Underwriting Guidelines, Appraised
Value shall mean the stated value of the Mortgaged Property as set forth in the
loan application submitted by the related Mortgagor.

            "Assignment Of Mortgage" shall mean, with respect to each Mortgage
Loan, an assignment of the Mortgage, notice of transfer or equivalent instrument
(which may be in blank) sufficient under the laws of the jurisdiction wherein
the related Mortgaged Property is located to reflect of record the sale of the
Mortgage to the Trustee for the benefit of the Certificateholders [and the
Certificate Insurer].

            "Authorized Denominations" shall mean, in the case of the Class A
Certificates, $1,000 or integral multiples of $1,000 in excess thereof;
provided, however, that one Class A-1 Certificate, one Class A-2 Certificate,
one Class A-3 Certificate, one Class A-4 Certificate and one Class A-5
Certificate each is issuable in a denomination equal to an amount less than
$1,000 such that the aggregate denomination of all Class A-1 Certificates, Class
A-2 Certificates, Class

                                      -2-
<PAGE>

A-3 Certificates, Class A-4 Certificates or Class A-5 Certificates, as the case
may be, shall be equal to the applicable Original Class A-1 Principal Balance,
Original Class A-2 Principal Balance, Original Class A-3 Principal Balance,
Original Class A-4 Principal Balance or Original Class A-5 Principal Balance.

            "Available Amount" shall mean for any Remittance Date, the (i) the
Master Servicer Remittance Amount for such Remittance Date minus (ii) the
Proportional Share of the Trustee Fee [and the Certificate Insurance Premium
Amount].

            "Base Principal Distribution Amount" shall mean, with respect to the
Class A-1 Certificates, the Class A-2 Certificates, the Class A-3 Certificates
and the Class A-4 Certificates for any Remittance Date, (A) the sum of the
amounts referred to in clauses (i), (ii), (iii), (iv), (vi) and (vii) of clause
(b) of the definition of Principal Distribution Amount for such Remittance Date
minus (B) any overcollateralization release amount and such Remittance Date.

            "Business Day" shall mean any day other than (i) a Saturday or
Sunday, or (ii) a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to be closed.

            "Certificate" shall mean any Series 200_ - _ Class A Certificate or
Series 200_ - _ Class R Certificate executed by the Trustee on behalf of the
Trust Fund and authenticated by the Trustee.

            "Certificate Account" shall mean the Certificate Account established
in accordance with Section 6.1(a) hereof and maintained by the Trustee.

            "Certificateholder" shall mean, except as provided in Article X,
each Person in whose name a Certificate is registered in the Certificate
Register, except that, solely for the purposes of giving any consent (except any
consent required to be obtained pursuant to Section 10.2), waiver, requestor
demand pursuant to this Agreement, any Certificate registered in the name of the
Master Servicer or any Subservicer or the Transferor, or any Affiliate of any of
them, shall be deemed not to be outstanding and the undivided interest in the
Trust Fund evidenced thereby shall not be taken into account in determining
whether the requisite percentage of Certificates necessary to effect any such
consent, waiver, request or demand has been obtained. For purposes of any
consent, waiver, request or demand of Certificateholders pursuant to this
Agreement, upon the Trustee's request, the Master Servicer and the Transferor
shall provide to the Trustee a notice identifying any of their respective
Affiliates or the Affiliates of any Subservicer that is a Certificateholder as
of the date(s) specified by the Trustee in such request. [Any Certificates on
which payments are made under the Certificate Insurance Policy shall be deemed
to be outstanding and held by the Certificate Insurer to the extent of such
payment.]

            ["Certificate Insurance Policy" shall mean the certificate guaranty
insurance policy no. _________, and all endorsements thereto dated the Closing
Date, issued by the Certificate Insurer for the benefit of the Class A
Certificateholders, a copy of which is attached hereto as Exhibit A.]

                                      -3-
<PAGE>

            ["Certificate Insurance Premium Amount" shall mean the product of
the premium percentage and the Certificate Principal Balance for the related
Remittance Date.]

            ["Certificate Insurer" shall mean ____________________, a
_______________ organized and created under the laws of the State of __________,
and any successors thereto.

            ["Certificate Insurer Default" shall mean the existence and
continuance of any of the following: (i) a failure by the Certificate Insurer to
make a payment required under a Certificate Insurance Policy in accordance with
its terms; (ii) the entry of a decree or order of a court or agency having
jurisdiction in respect of the Certificate Insurer in an involuntary case under
any present or future federal or state bankruptcy, insolvency or similar law
appointing a conservator or receiver or liquidator or other similar official of
the Certificate Insurer or of any substantial part of its property, or the
entering of an order for the winding up or liquidation of the affairs of the
Certificate Insurer and the continuance of any such decree or order undischarged
or unstayed and in force for a period of 90 consecutive days; (iii) the
Certificate Insurer shall consent to the appointment of a conservator or
receiver or liquidator or other similar proceedings or of relating to the
Certificate Insurer or of or relating to all or substantially all of its
property; or (iv) the Certificate Insurer shall admit in writing its inability
to pay its debts generally as they become due, file a petition to take advantage
of or otherwise voluntarily commence a case or proceeding under any applicable
bankruptcy, insolvency, reorganization or other similar statute, make an
assignment for the benefit of its creditors, or voluntarily suspend payment of
its obligations.]

            "Certificate Principal Balance" shall mean the sum of the Class A-1
Principal Balance, the Class A-2 Principal Balance, the Class A-3 Principal
Balance, the Class A-4 Principal Balance and the Class A-5 Principal Balance.

            "Certificate Register" shall have the meaning described in Section
4.2(a).

            "Civil Relief Act" shall mean the Servicemembers Civil Relief Act or
any similar state statutes.

            "Class" shall mean any designated Class of Certificates of this
Series or of any new Series issued hereunder.

            "Class A Certificate" shall mean any Class A-1 Certificate, any
Class A-2 Certificate, any Class A-3 Certificate, any Class A-4 Certificate or
any Class A-5 Certificate.

            "Class A Certificateholder" shall mean a Holder of a Class A-1
Certificate, a Class A-2 Certificate, a Class A-3 Certificate, a Class A-4
Certificate or a Class A-5 Certificate.

            "Class A-1 Certificate" shall mean any Certificate designated as a
"Class A-1 Certificate" on the face thereof, in the form of Exhibit B-1 hereto,
and authenticated by the Trustee in accordance with the procedures set forth
herein.

            "Class A-1 Certificateholder" shall mean a Holder of a Class A-1
Certificate.

                                      -4-
<PAGE>

            "Class A-1 Interest Distribution Amount" shall mean, with respect to
the Class A-1 Certificates for any Remittance Date an amount equal to the
aggregate of interest accrued at the Class A-1 Pass-Through Rate during the
Accrual Period on the Class A-1 Principal Balance excluding (i) any Mortgage
Loan Interest Shortfall and (ii) any reductions in interest resulting from the
application of the Civil Relief Act, in each case allocable to the Class A-1
Certificates and as of such Remittance Date.

            "Class A-1 Pass-Through Rate" with respect to any Remittance Date,
will be equal to a per annum rate (calculated on the basis of actual days
elapsed divided by 360) equal to the lesser of (i) the sum of (a) LIBOR on the
Interest Determination Date plus (b) ____% per annum and (ii) the Weighted
Average Rate Cap.

            "Class A-1 Principal Balance" shall mean, as of any date of
determination, the Original Class A-1 Principal Balance less any Principal
Distribution Amount distributed on the Class A-1 Certificates on all prior
Remittance Dates.

            "Class A-2 Certificate" shall mean any Certificate designated as a
"Class A-2 Certificate" on the face thereof, in the form of Exhibit B-2 hereto,
and authenticated by the Trustee in accordance with the procedures set forth
herein.

            "Class A-2 Certificateholder" shall mean a Holder of a Class A-2
Certificate.

             "Class A-2 Interest Distribution Amount" shall mean, with respect
to the Class A-2 Certificates for any Remittance Date an amount equal to the
aggregate of interest accrued at the Class A-2 Pass-Through Rate during the
Accrual Period on the Class A-2 Principal Balance excluding (i) any Mortgage
Loan Interest Shortfall and (ii) any reductions in interest resulting from the
application of the Civil Relief Act, in each case allocable to the Class A-2
Certificates and as of such Remittance Date.

            "Class A-2 Pass-Through Rate" with respect to any Remittance Date,
will be equal to a ____% per annum rate (calculated on the basis of an assumed
month of 30 days and an assumed year of 360 days).

            "Class A-2 Principal Balance" shall mean, as of any date of
determination, the Original Class A-2 Principal Balance less any Principal
Distribution Amount distributed on the Class A-2 Certificates on all prior
Remittance Dates.

            "Class A-3 Certificate" shall mean any Certificate designated as a
"Class A-3 Certificate" on the face thereof, in the form of Exhibit B-3 hereto,
and authenticated by the Trustee in accordance with the procedures set forth
herein.

            "Class A-3 Certificateholder" shall mean a Holder of a Class A-3
Certificate.

             "Class A-3 Interest Distribution Amount" shall mean, with respect
to the Class A-3 Certificates for any Remittance Date an amount equal to the
aggregate of interest accrued at the Class A-3 Pass-Through Rate during the
Accrual Period on the Class A-3 Principal Balance excluding (i) any Mortgage
Loan Interest Shortfall and (ii) any reductions in interest resulting

                                      -5-
<PAGE>

from the application of the Civil Relief Act, in each case allocable to the
Class A-3 Certificates and as of such Remittance Date.

            "Class A-3 Pass-Through Rate" with respect to any Remittance Date,
will be equal to a ____% per annum rate (calculated on the basis of an assumed
month of 30 days and an assumed year of 360 days).

            "Class A-3 Principal Balance" shall mean, as of any date of
determination, the Original Class A-3 Principal Balance less any Principal
Distribution Amounts distributed on the Class A-3 Certificates on all prior
Remittance Dates.

            "Class A-4 Certificate" shall mean any Certificate designated as a
"Class A-4 Certificate" on the face thereof, in the form of Exhibit B-4 hereto,
and authenticated by the Trustee in accordance with the procedures set forth
herein.

            "Class A-4 Certificateholder" shall mean a Holder of a Class A-4
Certificate.

            "Class A-4 Interest Distribution Amount" shall mean, with respect to
the Class A-4 Certificates for any Remittance Date an amount equal to the
aggregate of interest accrued at the Class A-4 Pass-Through Rate during the
Accrual Period on the Class A-4 Principal Balance excluding (i) any Mortgage
Loan Interest Shortfall and (ii) any reductions in interest resulting from the
application of the Civil Relief Act, in each case allocable to the Class A-4
Certificates and as of such Remittance Date.

            "Class A-4 Pass-Through Rate" with respect to any Remittance Date
prior to the Optional Termination Date, will be equal to a ____% per annum rate
and with respect to any other Remittance Date, will be equal to a ____% per
annum rate (in each case calculated on the basis of an assumed month of 30 days
and an assumed year of 360 days).

            "Class A-4 Principal Balance" shall mean, as of any date of
determination, the Original Class A-4 Principal Balance less any Principal
Distribution Amounts distributed on the Class A-4 Certificates on all prior
Remittance Dates.

            "Class A-5 Base Principal Distribution Amount" shall mean, with
respect to the Class A-5 Certificates for any Remittance Date, (A) the sum of
the amounts referred to in clauses (i), (ii), (iii), (iv), (vi) and (vii) of
clause (b) of the definition of Class A-5 Principal Distribution Amount for such
Remittance Date minus (B) any overcollateralization release amount for such
Remittance Date.

            "Class A-5 Certificate" shall mean any Certificate designated as a
"Class A-5 Certificate" on the face thereof, in the form of Exhibit B-5 hereto,
and authenticated by the Trustee in accordance with the procedures set forth
herein.

            "Class A-5 Certificateholder" shall mean a Holder of a Class A-5
Certificate.

            "Class A-5 Interest Distribution Amount" shall mean, with respect to
the Class A-5 Certificates for any Remittance Date an amount equal to the
aggregate of interest accrued at the Class A-5 Pass-Through Rate during the
Accrual Period on the Class A-5 Principal Balance

                                      -6-
<PAGE>

excluding (i) any Mortgage Loan Interest Shortfall and (ii) any reductions in
interest resulting from the application of the Civil Relief Act, in each case
allocable to the Class A-5 Certificates and as of such Remittance Date.

            "Class A-5 Pass-Through Rate" with respect to any Remittance Date
prior to the Optional Termination Date, will be equal to a ____% per annum rate
and with respect to any other Remittance Date, will be equal to a ____% per
annum rate (in each case calculated on the basis of an assumed month of 30 days
and an assumed year of 360 days).

            "Class A-5 Principal Balance" shall mean, as of any date of
determination, the Original Class A-5 Principal Balance less any Class A-5
Principal Distribution Amounts distributed on the Class A-5 Certificates on all
prior Remittance Dates.

            "Class A-5 Principal Distribution Amount" shall mean, with respect
to the Class A-5 Certificates for any Remittance Date, the lesser of:

            (a) the excess of (1) the sum of the Available Amount, any Excess
Spread and the applicable portion of any Insured Payment over (2) the Class A-5
Interest Distribution Amount; and

            (b) the sum, without duplication, of:

            (i) that portion of all scheduled installments of principal in
respect of the Mortgage Loans which is received (or advanced) during the related
Due Period together with all unscheduled recoveries of principal (including
Principal Prepayments, Curtailments and Deficient Valuations) on such Mortgage
Loans actually collected by the Master Servicer during the prior calendar month;

            (ii) the principal balance of each Mortgage Loan that either was,
effective on such Remittance Date, repurchased by the Transferor or by the
Depositor or purchased by the Master Servicer during the preceding Due Period,
but only to the extent the amount equal to such principal balance is actually
received by the Trustee;

            (iii) any Substitution Adjustment amounts delivered by the Depositor
on the related Remittance Date in connection with a substitution of a Mortgage
Loan, to the extent such Substitution Adjustments are actually received by the
Trustee;

            (iv) with respect to each Mortgage Loan that became a Liquidated
Mortgage Loan during the prior calendar month, the principal balance of such
Mortgage Loan immediately prior to the time when such Mortgage Loan became a
Liquidated Mortgage Loan;

            (v) any Overcollateralization Increase Amount;

            (vi) to the extent of any Subordination Deficit the excess, if any
of the Class A-5 Principal Balance over the Aggregate Principal Balance of the
Mortgage Loans;

            (vii) the portion of the proceeds relating to the Mortgage Loans
received by the Trust Fund following any termination of the 200_ - _ REMIC
carried out in accordance with a

                                      -7-
<PAGE>

plan of complete liquidation pursuant to Section 8.2 hereof or pursuant to the
optional termination of either of the Trust Fund or the 200_ - _ REMIC by either
the Master Servicer [or Certificate Insurer] in accordance with Section 8.1
hereof, up to the then outstanding Class A-5 Principal Balance; minus

            (viii) any overcollateralization release amount.

            "Class R Certificate" shall mean any Certificate denominated as a
Class R Certificate and subordinate to the Class A Certificates in right of
payment to the extent set forth herein, which Certificate shall be in the form
of Exhibit B-6 hereto.

            "Class R Certificateholder" shall mean a Holder of a Class R
Certificate.

            "Closing Date" shall mean __________, 200_.

            "Code" shall mean the Internal Revenue Code of 1986, as amended.

            "Collection Account" shall mean the Eligible Account established and
maintained by the Master Servicer for the benefit of the Certificateholders [and
the Certificate Insurer] pursuant to Section 5.3(a) hereof.

            "Combined Loan-To-Value Ratio" shall mean with respect to any
Mortgage Loan, (i) the sum of (x) the outstanding principal balance of any
mortgage loan senior to such Mortgage Loan and secured by the related Mortgaged
Property as of the date of origination of the related Mortgage Loan, plus (y)
the principal balance of the related Mortgage Loan as of the Cut-Off Date,
divided by (ii) the Appraised Value of such Mortgaged Property.

            "Commission" shall mean the Securities and Exchange Commission.

            "Compensating Interest" shall have the meaning defined in Section
6.9 hereof.

            "Curtailment" shall mean, with respect to a Mortgage Loan, any
payment of principal received during a Due Period as part of a payment that is
in excess of the amount of the Monthly Payment due for such Due Period and which
is neither intended to satisfy the Mortgage Loan in full, intended as an advance
payment of an amount due in a subsequent Due Period, nor intended to cure a
delinquency.

            "Custodian" shall have the meaning defined in Section 2.2(c).

            "Cut-Off Date" shall mean the close of business on __________, 200_.

            "Deficient Valuation" shall mean, 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
United States Bankruptcy Code.

            "Deleted Mortgage Loan" shall mean a Mortgage Loan replaced by a
Qualified Substitute Mortgage Loan or repurchased pursuant to Sections 2.4(c) or
3.3 hereof.

                                      -8-
<PAGE>

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

            "Depositor" shall mean HSI Asset Securitization Corporation and any
successor thereto.

            "Depository" shall mean the Depository Trust Company, 7 Hanover
Square, New York, New York 10004 and any successor Depository hereafter named.

            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 ____ by _______, ____ by _______ and ____ by _______.

            "Determination Date" shall mean the third Business Day prior to the
Remittance Date.

            "Direct Participant" shall mean any broker-dealer, bank or other
financial institution for which the Depository holds Class A Certificates from
time to time as a securities depositary.

            "Due Date" shall mean, with respect to any Mortgage Loan, the day of
the month upon which payment is due from the related Mortgagor under the terms
of the related Mortgage Note.

            "Due Period" shall mean, with respect to each Remittance Date, the
period beginning on the opening of business on the first day of the calendar
month preceding the calendar month in which such Remittance Date occurs, and
ending at the close of business on the last day of the calendar month preceding
the calendar month in which such Remittance Date occurs.

            "Eligible Account" shall mean either (i) a segregated trust account
or accounts maintained with a depositary institution which is acceptable to the
Certificate Insurer and to each Rating Agency, which institution shall be the
________________ until notice to the contrary is given to the Master Servicer by
the Certificate Insurer and such trust account shall be held in (a) the
corporate trust account department of such depositary institution or (b) an
institution with capital and surplus of not less than $50,000,000, and a minimum
unsecured debt rating of ___ by ____ or ____ by __________; or (ii) an account
or accounts maintained with an institution acceptable to the Certificate Insurer
and whose deposits are insured by the FDIC, the unsecured and uncollateralized
debt obligations of which institution shall be rated ___ or better by ___ and
___ or better by _______ and the highest short-term rating by _______ and
_______, and which

                                      -9-
<PAGE>

is (a) a federal savings and loan association duly organized, validly existing
and in good standing under the federal banking laws, (b) an institution duly
organized, validly existing and in good standing under the applicable banking
laws of any state, (c) a national banking association duly organized, validly
existing and in good standing under the federal banking laws institution
(including the Trustee), (d) a principal subsidiary of a bank holding company,
or (e) approved in writing by [the Certificate Insurer,] _____ and _____, having
capital and surplus of not less than $50,000,000, acting in its fiduciary
capacity.

            "ERISA" shall have the meaning defined in Section 4.2(i)(x) hereof.

            "Event Of Default" shall have the meaning described in Section 7.1.

            "Excess Spread" shall mean the excess, if any, of the Available
Amount over the sum of the Class A-1 Interest Distribution Amount, the Class A-2
Interest Distribution Amount, the Class A-3 Interest Distribution Amount, the
Class A-4 Interest Distribution Amount, the Class A-5 Interest Distribution
Amount and the Base Principal Distribution Amount.

            "FDIC" shall mean the Federal Deposit Insurance Corporation and any
successor thereto.

            "FHLMC" shall mean the Federal Home Loan Mortgage Corporation and
any successor thereto.

            "FNMA" shall mean the Federal National Mortgage Association and any
successor thereto.

            "Foreclosure Profits" shall mean, as to any Remittance Date, the
excess, if any, of (i) Net Liquidation Proceeds in respect of each Mortgage Loan
that became a Liquidated Mortgage Loan during the month immediately preceding
the month of such Remittance Date over (ii) the sum of the unpaid principal
balance of each such Liquidated Mortgage Loan plus accrued and unpaid interest
at the applicable Mortgage Interest Rate on the unpaid principal balance thereof
from the Due Date to which interest was last paid by the Mortgagor (or, in the
case of a Liquidated Mortgage Loan that had been an REO Mortgage Loan, from the
Due Date to which interest was last deemed to have been paid pursuant to Section
5.12) to the first day of the month following the month in which such Mortgage
Loan became a Liquidated Mortgage Loan.

            "Holder" shall mean each Person in whose name a Certificate is
registered in the Certificate Register, except that solely for the purposes of
giving any consent (except any consent required to be obtained pursuant to
Section 10.2), waiver, request or demand pursuant to this Agreement, any
Certificate registered in the name of the Master Servicer or any Subservicer or
the Transferor, or any Affiliate of any of them, shall be deemed not to be
outstanding and in the case of any Certificate, the undivided interest in the
Trust Fund evidenced thereby shall not be taken into account in determining
whether the requisite percentage of Certificates necessary to effect any such
consent, waiver, request or demand has been obtained.

            "Indirect Participant" shall mean any financial institution for whom
any Direct Participant holds an interest in a Class A Certificate.

                                      -10-
<PAGE>

            "Insurance Agreement" shall mean that certain agreement between [the
Certificate Insurer], the Depositor, the Transferor, the Master Servicer,
____________________, as Originator and the Trustee dated as of ___________,
200_.

            "Insurance Proceeds" shall mean proceeds paid by any insurer
pursuant to any insurance policy covering a Mortgage Loan to the extent such
proceeds are not applied to the restoration of the related Mortgaged Property or
released to the related Mortgagor in accordance with Accepted Servicing
Practices. "Insurance Proceeds" do not include "Insured Payments."

            ["Insured Payment" shall have the meaning assigned thereto in the
Certificate Insurance Policy.]

            "Interest Determination Date" shall mean, with respect to any
Accrual Period applicable to the Class A-1 Certificates, the second LIBOR
Business Day preceding the first day of such Accrual Period.

            "Interest Distribution Amount" shall mean for any Remittance Date,
the sum of the Class A-1 Interest Distribution Amount, the Class A-2 Interest
Distribution Amount, the Class A-3 Interest Distribution Amount and the Class
A-4 Interest Distribution Amount.

            "Late Payment Rate" shall have the meaning assigned thereto in the
Insurance Agreement.

            "LIBOR" shall mean, for any Interest Period other than the first
Interest Period, the rate for United States dollar deposits for one month that
appears on the Telerate Page 3750 as of 11:00 a.m., London, England time, on the
second LIBOR Business Day prior to the first day of such Interest Period. With
respect to the first Interest Period, "LIBOR" shall mean the rate for United
States dollar deposits for one month that appears on the Telerate Page 3750 as
of 11:00 a.m., London, England time, two LIBOR Business Days prior to the
Closing Date. If such rate does not appear on such page (or such other page as
may replace such page on such service, or if such service is no longer offered,
such other service for displaying LIBOR or comparable rates as may be reasonably
selected by the Trustee after consultation with the Master Servicer), the rate
will be the Reference Bank Rate. If no such quotations can be obtained and no
Reference Bank Rate is available, LIBOR will be LIBOR applicable to the
preceding Remittance Date.

            The establishment of LIBOR on each Interest Determination Date by
the Trustee and the Trustee's calculation of the rate of interest applicable to
the Class A-1 Certificates for the related Accrual Period shall (in the absence
of manifest error) be final and binding. Each such rate of interest may be
obtained by telephoning the Trustee.

            "LIBOR Business Day" shall mean any day other than (i) a Saturday or
a Sunday or (ii) a day on which banking institutions in the city of London,
England are required or authorized by law to be closed.

            "Liquidated Loan Loss" shall mean, with respect to any Remittance
Date, the aggregate of the amount of losses with respect to each Mortgage Loan
which became a Liquidated Mortgage Loan in the Due Period prior to such
Remittance Date, equal to the excess of (i) the unpaid principal balance of each
such Liquidated Mortgage Loan, plus accrued interest

                                      -11-
<PAGE>

thereon in accordance with the amortization schedule at the time applicable
thereto at the applicable Mortgage Interest Rate from the Due Date as to which
interest was last paid with respect thereto through the last day of the month in
which such Mortgage Loan became a Liquidated Mortgage Loan, over (ii) Net
Liquidation Proceeds with respect to such Liquidated Mortgage Loan.

            "Liquidated Mortgage Loan" shall mean a Mortgage Loan (i) with
respect to which the related Mortgaged Property has been acquired, liquidated
and/or foreclosed upon by the Master Servicer or (ii) which the Master Servicer
has elected to write down the outstanding principal balance of such Mortgage
Loan that has been delinquent for a period equal to or greater than 270 days to
zero and, in either case, with respect to which the Master Servicer determines
that all Liquidation Proceeds which it expects to recover have been recovered.

            "Liquidation Expenses" shall mean expenses incurred by the Master
Servicer in connection with the liquidation of any defaulted Mortgage Loan, REO
Mortgage Loan or REO Property (including, without limitation, legal fees and
expenses, committee or referee fees, and, if applicable, brokerage commissions
and conveyance taxes), any unreimbursed amount expended by the Master Servicer
pursuant to Sections 5.5, 5.6 and 5.12 respecting the related Mortgage Loan and
any unreimbursed expenditures for real property taxes or for property
restoration or preservation of the related Mortgaged Property. Liquidation
Expenses shall not include any previously incurred expenses in respect of an REO
Mortgage Loan which have been netted against related REO Proceeds.

            "Liquidation Proceeds" shall mean amounts received (or, in the case
of Liquidated Mortgage Loans written-down by the Master Servicer, amounts
deposited) by the Master Servicer (including Insurance Proceeds) in connection
with the liquidation of defaulted or written-down Mortgage Loans or property
acquired in respect thereof, whether through foreclosure, sale or otherwise,
including payments in connection with such Mortgage Loans received from the
Mortgagor, other than amounts required to be paid to the Mortgagor pursuant to
the terms of the applicable Mortgage or to be applied otherwise pursuant to law.

            "Loan Repurchase Price" shall have the meaning defined in Section
2.4(c).

            "Majority Certificateholders" shall mean the Holder or Holders of
Class A Certificates evidencing an undivided beneficial ownership interest in
the Class A Certificates in excess of 50% in the aggregate.

            "Master Servicer" shall mean ___________________, an
___________________, or any successor appointed as herein provided.

            "Master Servicer Account" shall mean the account created and
maintained pursuant to Section 5.7.

            "Master Servicer Employees" shall have the meaning as defined in
Section 5.8 hereof.

            "Master Servicer Remittance Amount" shall mean, with respect to any
Determination Date, an amount equal to the sum of (i) all unscheduled
collections of principal

                                      -12-
<PAGE>

and interest on the Mortgage Loans (including Principal Prepayments and any
prepayment penalties received in connection with such Principal Prepayments or
Curtailments, Net REO Proceeds and Net Liquidation Proceeds, if any, and any
amounts deposited in the Collection Account or Certificate Account in connection
with the purchase of the Mortgage Loans) collected by the Master Servicer during
the Due Period and all scheduled Monthly Payments due on the Mortgage Loans on
the Due Date and received by the Master Servicer on or prior to the _____
Business Day preceding the related Determination Date, plus (ii) all Periodic
Advances made by the Master Servicer with respect to payments due to be received
on the Mortgage Loans on the related Due Date plus (iii) the amount of
Compensating Interest due with respect to Mortgage Loans with respect to the
related Due Period, plus (iv) any other amounts required to be placed in the
Collection Account with respect to Mortgage Loans by the Master Servicer
pursuant to this Pooling and Servicing Agreement but excluding, without
duplication, the following:

            (a) amounts received on a particular Mortgage as late payments of
principal or interest and respecting which the Master Servicer has previously
made an unreimbursed Periodic Advance;

            (b) the portion of Liquidation Proceeds used to reimburse any
unreimbursed Periodic Advances by the Master Servicer;

            (c) those portions of each payment of interest on a particular
Mortgage Loan which represent the Servicing Fee;

            (d) that portion of Liquidation Proceeds and REO Proceeds which
represents any unpaid Servicing Fee;

            (e) all income from Permitted Investments that is held in the
Collection Account for the account of the Master Servicer;

            (f) all amounts in respect of late fees, assumption fees, fees
associated with prepayments other than prepayment penalties, demand statement
fees, reconveyance and recording fees and other service related fees;

            (g) all other amounts which are explicitly reimbursable to the
Master Servicer hereunder with respect to the Mortgage Loans, including (1) as
provided in Section 5.4 hereof; and (2) any unreimbursed and accrued Liquidation
Expenses; and

            (h) the portion of Net Foreclosure Profits representing any unpaid
Servicing Fee.

            "Master Servicer Termination Delinquency Rate Trigger" shall have
the meaning assigned thereto in the [Insurance Agreement].

            "Master Servicer Termination Loss Trigger" shall have the meaning
assigned thereto in the [Insurance Agreement.]

            "Monthly Payment" shall mean, as to any Mortgage Loan (including any
REO Mortgage Loan) and any Due Date, the scheduled payment of principal and
interest due thereon

                                      -13-
<PAGE>

by such Due Date (after adjustment for any Curtailments and Deficient Valuations
occurring prior to such Due Date but before any adjustment to such amortization
schedule by reason of any bankruptcy, other than Deficient Valuations or similar
proceeding or any moratorium or similar waiver or grace period).

            "Mortgage" shall mean the mortgage, deed of trust or other
instrument creating a lien on the Mortgaged Property to secure the Mortgage
Loan.

            "Mortgage File" shall include the Mortgage Loan documents described
in Section 2.3 hereof and such documents as are applicable from those listed on
Exhibit C attached hereto.

            "Mortgage Interest Rate" shall mean, as to any Mortgage Loan, the
per annum rate at which interest accrues on the unpaid principal balance thereof
as set forth in the related Mortgage Note.

            "Mortgage Loan" shall mean (i) each mortgage loan identified on the
Mortgage Loan Schedule on the Closing Date secured by a lien on the related
Mortgaged Property, (ii) any additional mortgage loans identified on the
Mortgage Loan Schedule after the Closing Date, as such schedule is amended and
supplemented from time to time to reflect the deletion of the Deleted Mortgage
Loans and the substitution of Qualified Substitute Mortgage Loans for Deleted
Mortgage Loans, (iii) each Mortgage Note evidencing any loan referred to in (i)
or (ii) above, including all amounts now or hereafter due under such Mortgage
Notes, whether relating to such loans or other loans which may be made from time
to time, and (iv) the related Mortgage. Unless otherwise clearly indicated by
the context, Mortgage Loan shall be deemed to refer to the related REO Mortgage
Loan and REO Property.

            "Mortgage Loan Interest Shortfall" shall mean, with respect to any
Remittance Date, as to any Mortgage Loan, any Prepayment Interest Shortfall for
which no payment of Compensating Interest is paid.

            "Mortgage Loan Sale Agreement" shall mean the Mortgage Loan Sale
Agreement dated as of __________, 200_, between ____________________, as seller
thereunder, and ____________________, as purchaser thereunder, as such agreement
may be amended, modified or supplemented from time to time.

            "Mortgage Loan Schedule" shall mean the list of the Mortgage Loans
transferred to the Trustee on the Closing Date as part of the Trust Fund and
attached hereto as Exhibit D (and also provided to the Certificate Insurer and
the Trustee on a computer readable magnetic tape or disk). The Mortgage Loan
Schedule shall set forth at a minimum the following information as to each
Mortgage Loan:

            (a) the Mortgage Loan identifying number;

            (b) the principal balance of the Mortgage Loan;

            (c) the city, state and ZIP code of the Mortgaged Property;

            (d) the type of property;

                                      -14-
<PAGE>

            (e) the current Monthly Payment as of the Cut-Off Date;

            (f) the original number of months to maturity;

            (g) the scheduled maturity date;

            (h) the Combined Loan-to-Value Ratio as of the Cut-Off Date;

            (i) the Mortgage Interest Rate as of the Cut-Off Date;

            (j) the Appraised Value;

            (k) the documentation type (as described in the Underwriting
Guidelines); and

            (l) the loan classification (as described in the Underwriting
Guidelines).

            Such "Mortgage Loan Schedule" may consist of multiple reports that
collectively set forth all of the information required, including the aggregate
number of Mortgage Loans and the Aggregate Principal Balance as of the Cut-Off
Date. In addition, a summary of the information regarding the Mortgage Loans
shall be included as a part of the Mortgage Loan Schedule which summary shall
include such consolidated and aggregated information as may be requested by the
Trustee [or the Certificate Insurer] from time to time.

            "Mortgage Note" shall mean the original, executed note, loan
agreement or other evidence of indebtedness evidencing the indebtedness of a
Mortgagor under a Mortgage Loan.

            "Mortgaged Property" shall mean the underlying property securing a
Mortgage Loan, consisting of a fee simple estate in a single parcel of land
improved by a Residential Dwelling.

            "Mortgagor" shall mean the obligor on a Mortgage Note.

            "Net Foreclosure Profits" shall mean, as to any Remittance Date, the
excess, if any, of (i) the aggregate Foreclosure Profits for such Remittance
Date, over (ii) the Liquidated Loan Loss for such Remittance Date.

            "Net Liquidation Proceeds" shall mean, as to any Liquidated Mortgage
Loan, Liquidation Proceeds net of Liquidation Expenses and net of any
unreimbursed Periodic Advances made by the Master Servicer. For all purposes of
this Agreement, Net Liquidation Proceeds shall be allocated first to accrued and
unpaid interest on the related Mortgage Loan and then to the unpaid principal
balance thereof.

            "Net REO Proceeds" shall mean, as to any REO Mortgage Loan, REO
Proceeds net of any related expenses of the Master Servicer.

            "Nonrecoverable Advance" shall mean, with respect to any Mortgage
Loan, (i) any Periodic Advance previously made and not reimbursed from late
collections pursuant to Section 5.4(a), or (ii) a Periodic Advance proposed to
be made in respect of a Mortgage Loan or

                                      -15-
<PAGE>

REO Property either of which, in the good faith business judgment of the Master
Servicer, as evidenced by an Officer's Certificate delivered to [the Certificate
Insurer and] the Trustee no later than the Business Day following such
determination, would not be ultimately recoverable pursuant to Section 5.4.

            "Officer's Certificate" shall mean a certificate signed by the
Chairman of the Board, the President or a Vice President and the Treasurer, the
Secretary or one of the Assistant Treasurers or Assistant Secretaries of the
Transferor and/or the Master Servicer, or the Depositor, as required by this
Agreement.

            "Opinion Of Counsel" shall mean a written opinion of counsel, who
may, without limitation, be counsel for the Transferor, the Master Servicer, the
Trustee, a Certificateholder or a Certificateholder's prospective transferee [or
the Certificate Insurer] (including, except as otherwise provided herein,
in-house counsel) reasonably acceptable to each addressee of such opinion and
experienced in matters relating to the subject of such opinion; except that any
opinion of counsel relating to (i) the qualification of the 200_ - _ REMIC as a
REMIC, or (ii) compliance with the REMIC Provisions must be an opinion of
counsel who (a) is in fact independent of the Transferor, the Master Servicer
and the Trustee, (b) does not have any direct financial interest or any material
indirect financial interest in the Transferor or the Master Servicer or the
Trustee or in an Affiliate thereof, (c) is not connected with the Transferor or
the Master Servicer or the Trustee as an officer, employee, director or person
performing similar functions, [and (d) is reasonably acceptable to the
Certificate Insurer.] [The Certificate Insurer shall be an addressee on each
Opinion of Counsel relating to, or otherwise affecting, the Series 200_ - _
Certificates].

            "Optional Termination Date" shall mean the first date upon which the
Aggregate Principal Balance is less than __% of the Aggregate Principal Balance
as of the Cut-Off Date.

            "Original Class A-1 Principal Balance" shall mean, as of the Startup
Date and as to the Class A-1 Certificates, $__________.

            "Original Class A-2 Principal Balance" shall mean, as of the Startup
Date and as to the Class A-2 Certificates, $__________.

            "Original Class A-3 Principal Balance" shall mean, as of the Startup
Date and as to the Class A-3 Certificates, $__________.

            "Original Class A-4 Principal Balance" shall mean, as of the Startup
Date and as to the Class A-4 Certificates, $__________.

            "Original Class A-5 Principal Balance" shall mean, as of the Startup
Date and as to the Class A-5 Certificates, $__________.

            "Originator" shall mean _____________________, a __________________.

            "Outstanding Mortgage Loan" shall mean, as to any Due Date, a
Mortgage Loan (including an REO Mortgage Loan) which has not been paid in full
prior to such Due Date,

                                      -16-
<PAGE>

which did not become a Liquidated Mortgage Loan prior to such Due Date and which
was not repurchased by the Transferor prior to such Due Date pursuant to
Sections 2.4 or 3.3.

            "Overcollateralization Amount" shall mean, with respect to any
Remittance Date, the excess, if any, of (i) the Aggregate Principal Balance of
all Mortgage Loans as of the close of business on the last day of the related
Due Period over (ii) (a) the sum of the Class A-1 Principal Balance, Class A-2
Principal Balance, Class A-3 Principal Balance, Class A-4 Principal Balance and
the Class A-5 Principal Balance as of such Remittance Date (after taking into
account Class A-5 Principal Distribution Amount, other than the
Overcollateralization Increase Amount, for such Remittance Date).

            ["Overcollateralization Deficiency Amount" shall mean, with respect
to any date of determination, the excess, if any, of the Overcollateralization
Target Amount over the Overcollateralization Amount.

            "Overcollateralization Increase Amount" shall mean the lesser of (i)
the related Excess Spread and (ii) the related Overcollateralization Deficiency
Amount.

            "Overcollateralization Target Amount" shall have the meaning
assigned thereto in the Insurance Agreement.

            Notwithstanding the above, the Certificate Insurer may, in its sole
discretion, modify the definition of Overcollateralization Target Amount. The
Trustee and the Rating Agencies shall be notified in writing of such
modification prior to the related Remittance Date and any such modification
shall not result in a downgrading of the then-current ratings of any Class A
Certificate without regard to the Certificate Insurance Policy.]

            "Owner-Occupied Mortgaged Property" shall mean a Residential
Dwelling as to which (i) the related Mortgagor represented an intent to occupy
as such Mortgagor's primary, secondary or vacation residence at the origination
of the Mortgage Loan, and (ii) the Transferor has no actual knowledge that such
Residential Dwelling is not so occupied.

            "Ownership Interest" shall mean, 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.

            "Percentage Interest" shall mean, with respect to a Class A-1
Certificate, Class A-2 Certificate, Class A-3 Certificate, Class A-4 Certificate
or Class A-5 Certificate, the portion of the total beneficial ownership interest
in the Mortgage Loans evidenced by such Certificate, expressed as a percentage
rounded to four decimal places, equal to a fraction the numerator of which is
the original denomination of such Certificate and the denominator of which is
the Original Class A-1 Principal Balance, the Original Class A-2 Principal
Balance, the Original Class A-3 Principal Balance or the Original Class A-4
Principal Balance as applicable. With respect to a Class R Certificate, the
portion evidenced thereby as stated on the face of such Certificate.

            "Periodic Advance" shall mean the aggregate of the advances required
to be made by the Master Servicer on any Determination Date pursuant to Section
5.20 hereof, the amount

                                      -17-
<PAGE>

of any such advances being equal to the sum of: (i) all Monthly Payments (net of
the related Servicing Fee and any amount excluded from the Master Servicer
Remittance Amount pursuant to clauses (a)-(h) of the definition of "Master
Servicer Remittance Amount") on the Mortgage Loans that are not received by the
Master Servicer as of the close of business on the second Business Day preceding
the related Determination Date and have not been determined by the Master
Servicer to be Nonrecoverable Advances, plus (ii) with respect to each REO
Property which was acquired during or prior to the related Due Period and as to
which an REO Disposition did not occur during the related Due Period, an amount
equal to the excess, if any, of (a) interest on the principal balance of the
related REO Mortgage Loan at the related Mortgage Interest Rate, net of the
Servicing Fee, for the most recently ended Due Period for the related Mortgage
Loan over (b) the net income from the REO Property transferred to the
Certificate Account for such Remittance Date.

            "Permitted Investments" shall mean 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 Servicer, the Trustee or any of their
respective Affiliates:

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

                  (ii) demand and time deposits in, certificates of deposit of,
            or bankers' acceptances (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 and rated
            ____ by _______, ____ by ______ and ___ by ______;

                  (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
            managed or advised by the Depositor or the Trustee or an Affiliate
            thereof, that have been rated ____ by _______, ____ by ______ and
            ___ by ______; and

                                      -18-
<PAGE>

                  (vii) if previously confirmed in writing to the Trustee, any
            other demand, money market or time deposit, or any other obligation,
            security or investment, as may be acceptable to each of the Rating
            Agencies as a permitted investment of funds backing "____" or "____"
            rated securities;

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.

            "Person" shall mean any individual, corporation, partnership, joint
venture, association, limited liability company, joint-stock company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.

            "Principal Distribution Amount" shall mean, with respect to the
Class A-1 Certificates, the Class A-2 Certificates, the Class A-3 Certificates
and the Class A-4 Certificates, for any Remittance Date, the lesser of:

            (a) the excess of (1) the sum of the Available Amount, any Excess
Spread and the applicable portion of any Insured Payment over (2) the Interest
Distribution Amount; and

            (b) the sum, without duplication, of:

            (i) that portion of all scheduled installments of principal in
respect of the Mortgage Loans which is received (or advanced) during the related
Due Period together with all unscheduled recoveries of principal (including
Principal Prepayments, Curtailments and Deficient Valuations) on such Mortgage
Loans actually collected by the Master Servicer during the prior calendar month,

            (ii) the principal balance of each Mortgage Loan that either was,
effective on such Remittance Date, repurchased by the Transferor or by the
Depositor or purchased by the Master Servicer during the preceding Due Period,
but only to the extent the amount equal to such principal balance is actually
received by the Trustee,

            (iii) any Substitution Adjustment amounts delivered by the Depositor
on the related Remittance Date in connection with a substitution of a Mortgage
Loan, to the extent such Substitution Adjustments are actually received by the
Trustee,

            (iv) with respect to each Mortgage Loan that became a Liquidated
Mortgage Loan during the prior calendar month, the principal balance of such
Mortgage Loan immediately prior to the time when such Mortgage Loan became a
Liquidated Mortgage Loan,

            (v) any Overcollateralization Increase Amount,

            (vi) to the extent of any Subordination Deficit the excess, if any
of the sum of the Class A-1 Principal Balance, Class A-2 Principal Balance,
Class A-3 Principal Balance, Class A-

                                      -19-
<PAGE>

4 Principal Balance and Class A-5 Principal Balance over the Aggregate Principal
Balance of the Mortgage Loans,

            (vii) the portion of the proceeds relating to the Mortgage Loans
received by the Trust Fund following any termination of the 200_ - _ REMIC
carried out in accordance with a plan of complete liquidation pursuant to
Section 8.2 hereof or pursuant to the optional termination of any of the Trust
Fund, the 200_ - _ REMIC Trust Fund by either the Master Servicer [or
Certificate Insurer] in accordance with Section 8.1 hereof, up to the then
outstanding Class A-1 Principal Balance, Class A-2 Principal Balance, Class A-3
Principal Balance and/or Class A-4 Principal Balance, as applicable minus

            (viii) any overcollateralization release amount.

            "Principal Prepayment" shall mean any payment or other recovery of
principal on a Mortgage Loan equal to the outstanding principal balance thereof,
received in advance of the final scheduled Due Date which is not intended as an
advance payment of a scheduled Monthly Payment.

            "Proportional Share" shall mean, (a) the sum of the Class A-1
Principal Balance, Class A-2 Principal Balance, Class A-3 Principal Balance,
Class A-4 Principal Balance and the Class A-5 Principal Balance divided by (b)
the Certificate Principal Balance.

            "Purchase and Sale Agreement" shall mean the Purchase and Sale
Agreement, dated as of the date hereof, between the Transferor and the Depositor
and relating to the sale of the Mortgage Loans to the Depositor.

            "Qualified Mortgage" shall have the meaning set forth from time to
time in the definition of "Qualified Mortgage" at Section 860G(a)(3) of the Code
(or any successor statute thereto).

            "Qualified Substitute Mortgage Loan" shall mean a mortgage loan or
mortgage loans which (i) has or have an interest rate at least equal to the
Deleted Mortgage Loan for which it is to be substituted, (ii) relates or relate
to a detached one-family residence or to the same type of Residential Dwelling
as the Deleted Mortgage Loan for which it is to be substituted and in each case
has or have the same occupancy status or is an Owner-Occupied Mortgaged
Property, (iii) matures or mature no later than (and not more than one year
earlier than) the Deleted Mortgage Loan for which it is to be substituted, (iv)
has or have a Combined Loan-to-Value Ratio or Combined Loan-to-Value Ratios at
the time of such substitution no higher than the Combined Loan-to-Value Ratio of
the Deleted Mortgage Loan for which it is to be substituted, (v) has or have a
principal balance or principal balances (after application of all payments
received on or prior to the date of substitution) not substantially less and not
more than the principal balance of the Deleted Mortgage Loan for which it is to
be substituted as of such date, (vi) satisfies or satisfy the criteria set forth
from time to time in the definition of "qualified replacement mortgage" at
Section 860G(a)(4) of the Code (or any successor statute thereto), (vii) has or
have an applicable borrower or borrowers with the same or better traditionally
ranked credit status as the borrower or borrowers under the Deleted Mortgage
Loan for which it is to be

                                      -20-
<PAGE>

substituted, and (viii) complies or comply as of the date of substitution with
each representation and warranty set forth in Sections 3.1 and 3.2 of the
Purchase and Sale Agreement.

            "Rating Agency" shall mean _______ or _______.

            "Record Date" shall mean, with respect to any Remittance Date other
than the initial Remittance Date, the close of business on the ____ day of the
calendar month immediately preceding the month in which such Remittance Date
occurs and with respect to the initial Remittance Date, the Closing Date.

            "Reference Bank Rate" shall mean, with respect to any Interest
Period, as follows: the arithmetic mean (rounded upwards, if necessary, to the
nearest one sixteenth of one percent) of the offered rates for United States
dollar deposits for one month which are offered by the Reference Banks as of
11:00 a.m., London, England time, on the second LIBOR Business Day prior to the
first day of such Interest Period to prime banks in the London interbank market
for a period of one month in amounts approximately equal to the then outstanding
Certificate Principal Balance; provided, that at least two such Reference Banks
provide such rate. If fewer than two offered rates appear, the Reference Bank
Rate will be the arithmetic mean of the rates quoted by one or more major banks
in New York City, selected by the Trustee after consultation with the Master
Servicer, as of 11:00 a.m., New York time, on such date for loans in U.S.
Dollars to leading European Banks for a period of one month in amounts
approximately equal to the then outstanding Certificate Principal Balance. If no
such quotations can be obtained, the Reference Bank Rate will be the Reference
Bank Rate applicable to the preceding Interest Period.

            "Reference Banks" shall mean _________________, _________________,
_________________ and _________________; provided that if any of the foregoing
banks are not suitable to serve as a Reference Bank, then any leading banks
selected by the Trustee 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, (iii) whose quotations
appear on the Reuters Screen LIBOR Page on the relevant Interest Determination
Date and (iv) which have been designated as such by the Trustee after
consultation with the Master Servicer.

            ["Reimbursement Amount" shall mean, as of any Remittance Date, the
sum of (i) all Insured Payments previously paid by the Certificate Insurer and
in each case not previously repaid to the Certificate Insurer pursuant to
Section 6.5(a)(vii) hereof plus (ii) interest accrued on such Insured Payments
not previously repaid calculated at the Late Payment Rate from the date such
Insured Payment was paid, plus (iii) any amounts then due and owing to the
Certificate Insurer under the Insurance Agreement, as certified to the Trustee
by the Certificate Insurer, plus (iv) interest on such amounts at the Late
Payment Rate. The Certificate Insurer shall notify the Trustee and the Depositor
of the amount of any Reimbursement Amount.]

            "Released Mortgaged Property Proceeds" shall mean, as to any
Mortgage Loan, proceeds received by the Master Servicer in connection with (i) a
taking of an entire Mortgaged Property by exercise of the power of eminent
domain or condemnation or (ii) any release of part of the Mortgaged Property
from the lien of the related Mortgage, whether by partial

                                      -21-
<PAGE>

condemnation, sale or otherwise; which are not released to the Mortgagor in
accordance with applicable law, Accepted Servicing Practices and this Agreement.

            "REMIC" shall mean a "real estate mortgage investment conduit
"within the meaning of Section 860D of the Code.

            "REMIC Change Of Law" shall mean any proposed, temporary or final
regulation, revenue ruling, revenue procedure or other official announcement or
interpretation relating to the REMIC and the REMIC Provisions issued after the
Closing Date.

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

            "Remittance Date" shall mean the ____ day of any month or if such
____ day is not a Business Day, the first Business Day immediately following,
commencing on ________, 200_

            "REO Disposition" shall mean the final sale by the Master Servicer
of a Mortgaged Property acquired by the Master Servicer in foreclosure or by
deed in lieu of foreclosure.

            "REO Mortgage Loan" shall mean any Mortgage Loan that is not a
Liquidated Mortgage Loan and as to which the indebtedness evidenced by the
related Mortgage Note is discharged and the related Mortgaged Property is held
as part of the Trust Fund.

            "REO Proceeds" shall mean proceeds received in respect of any REO
Mortgage Loan (including, without limitation, proceeds from the rental of the
related Mortgaged Property).

            "REO Property" shall have the meaning described in Section 5.12.

            "Representation Letter" shall mean letters to, or agreements with,
the Depository to effectuate a book entry system with respect to the Class A
Certificates registered in the Certificate Register under the nominee name of
the Depository.

            "Request For Release" shall mean a request for release in
substantially the form attached as Exhibit H hereto.

            "Residential Dwelling" shall mean a one- to four-family dwelling, a
unit in a planned unit development, a unit in a condominium development, a
townhouse or a manufactured housing unit.

            "Responsible Officer" shall mean, when used with respect to the
Trustee, any officer assigned to the Corporate Trust Division (or any successor
thereto), including any Vice President, Senior Trust Officer, Trust Officer,
Assistant Trust Officer, any Assistant Secretary, any trust officer or any other
officer of the Trustee customarily performing functions similar to

                                      -22-
<PAGE>

those performed by any of the above designated officers and to whom, with
respect to a particular matter, such matter is referred because of such
officer's knowledge of and familiarity with the particular subject. When used
with respect to the Transferor or the Master Servicer, the President or any Vice
President, Assistant Vice President, or any Secretary or Assistant Secretary.

            "Series" shall mean any designated Series of certificates issued
hereunder and governed by this Agreement. When used herein, "this Series" shall
refer to the _______ Home Equity Asset Backed Certificates, Series 200_ - _.

            "Servicing Advances" shall mean all reasonable and customary
"out-of-pocket" costs and expenses incurred in the performance by the Master
Servicer of its servicing obligations, including, but not limited to, the cost
of (i) the preservation, restoration and protection of the Mortgaged Property,
(ii) any enforcement proceedings, including foreclosures, (iii) expenditures
relating to the purchase or maintenance of a first or second lien not included
in the Trust Fund on the Mortgaged Property, (iv) the management and liquidation
of the REO Property, including reasonable fees paid to any independent
contractor in connection therewith, (v) compliance with the obligations
(including indemnification obligations) under Sections 5.2 (limited solely to
the reasonable and customary out-of-pocket expenses of the Subservicer), 5.5,
5.6 or 5.9, all of which reasonable and customary out-of-pocket costs and
expenses are reimbursable to the Master Servicer to the extent provided in
Section 5.4(a).

            "Servicing Compensation" shall mean the Servicing Fee and other
amounts to which the Master Servicer is entitled pursuant to Section 5.14.

            "Servicing Fee" shall mean, as to each Mortgage Loan, the annual fee
payable to the Master Servicer, which is calculated as an amount equal to the
product of (i) 0.50% per annum in the case of any Mortgage Loan that is first
priority Mortgage Loan as of the Cut-Off Date and ____% in the case of any other
Mortgage Loan, or up to ____% or ____% respectively in the event that
____________________ is succeeded by the Trustee or any other successor Master
Servicer appointed as herein provided, and (ii) the principal balance thereof.
Such fee shall be calculated and payable monthly only on amounts actually
received in respect of interest on such Mortgage Loan and shall be computed on
the basis of the same principal amount and for the period respecting which any
related interest payment on a Mortgage Loan is computed. The Servicing Fee
includes any servicing fees owed or payable to any Subservicer.

            "Servicing Officer" shall mean any officer of the Master Servicer or
the Originator 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 to the Trustee [and the Certificate Insurer] by the
Master Servicer, as such list may from time to time be amended.

            "Startup Date" shall mean the day designated as such pursuant to
Section 2.5 hereof.

            "Subordination Deficit" shall mean, with respect to any Remittance
Date, the excess, if any, of (i) the aggregate of the Certificate Principal
Balance on such Remittance Date,

                                      -23-
<PAGE>

after taking into account the payment of the Principal Distribution Amount on
such Remittance Date [(except for amounts payable under the Certificate
Insurance Policy)] over (ii) the Aggregate Principal Balance as of the end of
the related Due Period.

            "Subservicer" shall mean any Person with whom the Master Servicer
has entered into a Subservicing Agreement and who satisfies the requirements set
forth in Section 5.2(a) hereof in respect of the qualification of a Subservicer.

            "Subservicing Agreement" shall mean any agreement between the Master
Servicer and any Subservicer relating to subservicing and/or administration of
certain Mortgage Loans as provided in Section 5.2(b), a copy of which shall be
delivered, along with any modifications thereto, to the Trustee and the
Certificate Insurer.

            "Substitution Adjustment" shall mean, as to any date on which a
substitution occurs pursuant to Section 2.4 or 3.3, the amount (if any) by which
the aggregate principal balances (after application of principal payments
received on or before the date of substitution of any Qualified Substitute
Mortgage Loans as of the date of substitution) are less than the aggregate of
the principal balances of the related Deleted Mortgage Loans together with 30
days' interest thereon at the Mortgage Interest Rate.

            "Tax Matters Person" shall mean the Person or Persons appointed
pursuant to Section 10.15 from time to time to act as the "tax matters person"
(within the meaning of the REMIC Provisions) of the 200_ - _ REMIC.

            "Tax Return" shall mean the federal income tax return on Internal
Revenue Service Form 1066, "U.S. Real Estate Mortgage Investment Conduit Income
Tax Return," including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of REMIC Taxable Income or Net Loss Allocation, or any successor forms,
to be filed on behalf of the Trust Fund due to 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 provision of federal, state or local tax laws.

            "Telerate Page 3750" shall mean the display page so designated on
the Bridge Telerate Service (or such other page as may replace page 3750 on such
service for the purpose of displaying London interbank offered rates of major
banks). If such rate does not appear on such page (or such other page as may
replace such page on such service, or if such service is no longer offered, such
other service for displaying LIBOR or comparable rates as may be selected by the
Issuer after consultation with the Trustee), the rate will be the Reference Bank
Rate.

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

            "Transfer Affidavit And Agreement" shall have the meaning as defined
in Section 4.2(i)(ii).

            "Transferee" shall mean any Person who is acquiring by Transfer any
Ownership Interest in a Certificate.

                                      -24-
<PAGE>

            "Transferor" shall mean ____________________, a Delaware
corporation.

            "Trust" shall mean _______ Home Equity Trust 200_ - _, the trust
created hereunder.

            "Trust Fund" shall mean (i) each Mortgage transferred to the Trust
pursuant to the provisions hereof, (ii) all rights of or assigned to the
Depositor under the Purchase and Sale Agreement (and exclusive of any of its
obligations), (iii) such assets as from time to time are identified as REO
Property and collections thereon and proceeds thereof, (iv) all assets deposited
in the Accounts, including any amounts on deposit in the Collection Account, the
Trustee Collection Account, and the Certificate Account and all amounts in the
Accounts invested in Permitted Investments, (v) the Trustee's rights with
respect to the Mortgage Loans under all insurance policies (other than the
Certificate Insurance Policy) required to be maintained pursuant to this
Agreement and any Insurance Proceeds, (vi) all Liquidation Proceeds and (vii)
all Released Mortgaged Property Proceeds and (viii) all rights against the
Transferor arising under the Purchase and Sale Agreement.

            "Trustee" shall mean _____________________, or its successor in
interest, or any successor trustee appointed as herein provided.

            "Trustee Collection Account" shall mean any Eligible Account
established and maintained by the Trustee for the benefit of the
Certificateholders pursuant to Section 5.3(a) hereof.

            "Trustee Fee" shall mean, as to any Remittance Date, the fee payable
to the Trustee in respect of its services as Trustee that accrues at a monthly
rate equal to 1/12 of _____% of the Certificate Principal Balance as of such
Remittance Date together with its out-of-pocket expenses, 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 enable the Trustee to service the Mortgage
Loans properly and effectively.

            "Trustee's Mortgage File" shall mean the documents delivered to the
Trustee or its designated agent pursuant to Section 2.3.

            "Trustee's Remittance Report" shall have the meaning as defined in
Section 6.7.

            "Underwriter" shall mean __________________ and __________________.

            "Underwriting Guidelines" shall mean the underwriting guidelines of
the Transferor, ____________________ and of the Originator, a copy of which is
attached as an exhibit to the Purchase and Sale Agreement.

            "United States Person" shall mean a beneficial owner of a
Certificate that is for United States federal income tax purposes (i) a citizen
or resident of the United States, (ii) a corporation, partnership or other
entity created or organized in or under the laws of the United States or of any
political subdivision thereof (other than a partnership that is not treated as a

                                      -25-
<PAGE>

United States person under any applicable Treasury regulations), (iii) an estate
whose income is subject to United States federal income tax regardless of its
source or (iv) 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.

            "Unpaid REO Amortization" shall mean, as to any REO Mortgage Loan
and any month, the aggregate of the installments of principal and accrued
interest deemed to be due in such month and in any prior months that remain
unpaid, calculated in accordance with Section 5.12.

            "Weighted Average Rate Cap" shall mean with respect to the Class A-1
Certificates, on any Remittance Date, that maximum interest rate computed to
equal one-twelfth the weighted average Mortgage Interest Rate for the Mortgage
Loans, net of the premium percentage and] the rates at which the Servicing Fee
and the Trustee's Fee are calculated.

            Section 1.2 Provisions Of General Application.

            (a) All accounting terms not specifically defined herein shall be
construed in accordance with generally accepted accounting principles.

            (b) The terms defined in this Article include the plural as well as
the singular.

            (c) The words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole. All references to Articles
and Sections shall be deemed to refer to Articles and Sections of this
Agreement.

            (d) Reference to statutes are to be construed as including all
statutory provisions consolidating, amending or replacing the statute to which
reference is made and all regulations promulgated pursuant to such statutes.

            (e) All calculations of interest relating to the Class A-1
Certificates (other than with respect to the Mortgage Loans, or as otherwise
specifically set forth herein) provided for herein shall be made on the basis of
actual days elapsed divided by a year comprised of 360 days. All calculations of
interest relating to the Class A-2 Certificates, Class A-3 Certificates, Class
A-4 Certificates or Class A-5 Certificates (other than with respect to the
Mortgage Loans, or as otherwise specifically set forth herein) provided for
herein, shall be made on the basis of an assumed year of 360 days consisting of
twelve 30 day months. All calculations of interest with respect to any Mortgage
Loan provided for herein shall be made in accordance with the terms of the
related Mortgage Note and Mortgage or, if such documents do not specify the
basis upon which interest accrues thereon, on the basis of dividing actual days
elapsed by a 365-day year.

            (f) Any Mortgage Loan payment is deemed to be received on the date
such payment is actually received by the Master Servicer; provided, however,
that for purposes of calculating distributions on the Certificates prepayments
with respect to any Mortgage Loan are deemed to be received on the date they are
applied in accordance with customary servicing practices consistent with the
terms of the related Mortgage Note and Mortgage to reduce the outstanding
principal balance of such Mortgage Loan on which interest accrues.

                                      -26-
<PAGE>

                                   ARTICLE II

                           ESTABLISHMENT OF THE TRUST;
                        SALE AND CONVEYANCE OF TRUST FUND

            Section 2.1 Sale And Conveyance Of Trust Fund; Priority And
Subordination Of Ownership Interests; Establishment Of The Trust.

            (a) The Depositor does hereby sell, transfer, assign, set over and
convey to the Trust for the benefit of the Certificateholders [and the
Certificate Insurer] without recourse but subject to the provisions in this
Section 2.1 and the other terms and provisions of this Agreement, all of the
right, title and interest of the Depositor in and to the Trust Fund, exclusive
of the obligations of the Depositor, Transferor or any other party with respect
to the Mortgage Loans. In connection with such transfer and assignment, and
pursuant to Section 2.5 of the Purchase and Sale Agreement, the Depositor does
hereby also irrevocably transfer, assign, set over and otherwise convey to the
Trustee all of its rights (exclusive of its obligations) under the Purchase and
Sale Agreement, including, without limitation, its right to exercise the
remedies created by Section 3.4 of the Purchase and Sale Agreement for breaches
of representations and warranties, agreements and covenants of the Transferor
contained in Sections 3.1 and 3.2 of the Purchase and Sale Agreement.

            (b) The rights of the Certificateholders to receive payments with
respect to the Mortgage Loans in respect of the Certificates and all ownership
interests of the Certificateholders, shall be as set forth in this Agreement. In
this regard, all rights of the Class R Certificateholders to receive payments in
respect of the Class R Certificates, are subject and subordinate to the
preferential rights of the Class A Certificateholders to receive payments in
respect of the Class A Certificates and to the Certificate Insurer's rights to
receive the Reimbursement Amount.

            (c) The Depositor does hereby establish, pursuant to the further
provisions of this Agreement and the laws of the State of New York, an express
trust to be known, for convenience, as "_______ HOME EQUITY TRUST 200_ - _" and
does hereby appoint ____________________ as Trustee in accordance with the
provisions of this Agreement.

            Section 2.2 Possession Of Mortgage Files; Access To Mortgage Files.

            (a) Upon the issuance of the Certificates, the ownership of each
Mortgage Note, the Mortgage and the contents of the related Mortgage File
related to each Mortgage Loan shall be vested in the Trustee for the benefit of
the Certificateholders [and the Certificate Insurer, as their respective
interests may appear].

            (b) Pursuant to Section 2.4 of the Mortgage Loan Sale Agreement,
____________________ has delivered or caused to be delivered the Trustee's
Mortgage File related to each Mortgage Loan to the Trustee.

            (c) The Trustee may enter into a custodial agreement pursuant to
which the Trustee will appoint a custodian (a "Custodian") to hold the Mortgage
Files in trust for the benefit of the Trustee; provided, however, that the
custodian so appointed shall in no event be the

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Depositor, the Transferor or the Master Servicer or any Person known to a
Responsible Officer of the Trustee to be an Affiliate of any of them.

            (d) The Custodian shall afford the Depositor[, the Certificate
Insurer and] the Master Servicer reasonable access to all records and
documentation regarding the Mortgage Loans relating to this Agreement, such
access being afforded at customary charges, upon reasonable request and during
normal business hours at the offices of the Custodian.

            Section 2.3 Delivery Of Mortgage Loan Documents.

            (a) In connection with each conveyance pursuant to Section 2.1 or
2.2 hereof, the Depositor has delivered or does hereby agree to deliver or cause
to be delivered to the Trustee [the Certificate Insurance Policy and] each of
the following documents for each Mortgage Loan sold by the Transferor to the
Depositor and sold by the Depositor to the Trust Fund:

            (i) The original Mortgage Note, endorsed by the holder of record
      without recourse in the following form: "Pay to the order of ___________,
      without recourse" and signed by manual or facsimile signature in the name
      of an authorized officer of the holder of record, ____________________,
      and if by the Transferor, by an authorized officer;

            (ii) The original Mortgage with evidence of recording indicated
      thereon; provided, however, that if such Mortgage has not been returned
      from the applicable recording office, then such recorded Mortgage shall be
      delivered when so returned;

            (iii) An assignment of the original Mortgage, in suitable form for
      recordation in the jurisdiction in which the related Mortgaged Property is
      located, in the name of the holder of record of the Mortgage Loan by an
      authorized officer (with evidence of submission for recordation of such
      assignment in the appropriate real estate recording office for such
      Mortgaged Property to be received by the Trustee within 60 days of the
      Closing Date); provided, however, that Assignments of Mortgages shall not
      be required to be submitted for recording with respect to any Mortgage
      Loan which relates to the Trustee's Mortgage File if the Trustee, each of
      the Rating Agencies [and the Certificate Insurer] shall have received an
      opinion of counsel satisfactory to the Trustee, each of the Rating
      Agencies [and the Certificate Insurer] stating that, in such counsel's
      opinion, the failure to record such Assignment of Mortgage shall not have
      a materially adverse effect on the security interest of the Trustee in the
      Mortgage); provided, further, that any Assignment of Mortgage for which an
      opinion has been delivered shall be recorded by the Master Servicer upon
      the earlier to occur of (a) [receipt by the Trustee of the Certificate
      Insurer's written direction to record such Mortgage,] (b) the occurrence
      of any Event of Default, as such term is defined in this Agreement, or (c)
      a bankruptcy or insolvency proceeding involving the Mortgagor is initiated
      or foreclosure proceedings are initiated against the Mortgaged Property as
      a consequence of an event of default under the Mortgage Loan; provided,
      however, that if the related Mortgage has not been returned from the
      applicable recording office within 120 days of the Closing Date, then such
      assignment shall be delivered when so returned (and a blanket assignment
      with respect to each unrecorded Mortgage shall be delivered on the Closing
      Date);

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            (iv) Any recorded intervening Assignments of the Mortgage with
      evidence of recording thereon; and

            (v) Any assumption, modification, consolidation or extension
      agreements;

provided, however, that in the case of any Mortgage Loans which have been
prepaid in full after the Cut-Off Date and prior to the date of the execution of
this Agreement, the Depositor, in lieu of delivering the above documents, hereby
delivers to the Trustee a certification of an officer of the Transferor of the
nature set forth in Exhibit M attached hereto; and provided, further, however,
that as to certain Mortgages or assignments thereof which have been delivered or
are being delivered to recording offices for recording and have not been
returned to the Transferor in time to permit their delivery hereunder at the
time of such transfer, in lieu of delivering such original documents, the
Depositor is delivering to the Trustee a true copy thereof with a certification
by the Transferor on the face of such copy substantially as follows: "certified
true and correct copy of original which has been transmitted for recordation."
The Transferor has agreed pursuant to the Purchase and Sale Agreement that it
will deliver such original documents on behalf of the Depositor to the Trustee
promptly after they are received, and no later than 90 days after the Closing
Date; provided, however, that in those instances where the public recording
office retains the original Mortgage or Assignment of Mortgage after it has been
recorded or such original document has been lost by the recording office, the
Transferor shall be deemed to have satisfied its obligations hereunder if it
shall have delivered to the Trustee a copy of such original Mortgage or
Assignment of Mortgage certified by the public recording office to be a true
copy of the recorded original thereof. The Transferor has agreed pursuant to the
Purchase and Sale Agreement, at its own expense, to record (or to provide the
Trustee with evidence of recordation thereof) each assignment within 60 days of
the Closing Date in the appropriate public office for real property records,
provided that such assignments are redelivered by the Trustee to the Transferor
upon the Transferor's written request and at the Transferor's expense, unless
the Transferor (at its expense) furnishes to the Trustee[, the Certificate
Insurer] and the Rating Agencies an unqualified Opinion of Counsel reasonably
acceptable to the Trustee to the effect that recordation of such assignment is
not necessary under applicable state law to preserve the Trustee's interest in
the related Mortgage Loan against the claim of any subsequent transferee of such
Mortgage Loan or any successor to, or creditor of, the Transferor.

            On or prior to the Closing Date the Master Servicer, at its own
expense shall complete the endorsement of each Mortgage Note such that the final
endorsement appears in the following form:

            "Pay to the order of _________, without recourse,
___________________."

            The Master Servicer, at its own expense shall also complete each
Assignment of Mortgage either in blank or such that the final Assignment of
Mortgage appears in the following form:

            "____________________, as Trustee for _______ Home Equity Trust 200_
- _ formed pursuant to the Pooling and Servicing Agreement dated as of
__________, 200_, among

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HSI Asset Securitization Corporation, as Depositor, ____________________, as
Transferor, ____________________, as Master Servicer and ____________________,
as Trustee"

            (b) Without diminution of the requirements of Sections 2.2(c) and
this Section 2.3, all original documents relating to the Mortgage Loans that are
not delivered to the Trustee shall be delivered to the Master Servicer by the
Transferor on behalf of the Depositor pursuant to the Purchase and Sale
Agreement, and shall be held by the Master Servicer in trust for the benefit of
the Trustee on behalf of the Certificateholders and the Certificate Insurer. In
the event that any such original document is required pursuant to the terms of
this Section 2.3 to be a part of a Mortgage File, the Master Servicer shall
promptly deliver such original document to the Trustee. In acting as custodian
of any such original document, the Master Servicer agrees further that it does
not and will not have or assert any beneficial ownership interest in the
Mortgage Loans or the Mortgage Files. Promptly upon the Depositor's and the
Trust's acquisition thereof and the Master Servicer's receipt thereof, the
Master Servicer on behalf of the Trust shall mark conspicuously each original
document not delivered to the Trustee, and the Transferor's master data
processing records evidencing each Mortgage Loan with a legend, acceptable to
the Trustee [and the Certificate Insurer], evidencing that the Trust has
purchased the Mortgage Loans and all right and title thereto and interest
therein pursuant to the Purchase and Sale Agreement and this Agreement.

            (c) In the event that any Mortgage Note required to be delivered
pursuant to this Section 2.3 is conclusively determined by any of the
Transferor, the Master Servicer, the Custodian or the Trustee to be lost, stolen
or destroyed, the Transferor shall, within 14 days of the Closing Date or the
later date upon which such Mortgage Note has been conclusively determined to be
lost, deliver to the Trustee a "lost note affidavit" in form and substance
acceptable to the Trustee, and shall simultaneously therewith request the
obligor on such Mortgage Note to execute and return a replacement Mortgage Note,
and shall further agree to hold the Trustee [and the Certificate Insurer]
harmless from any loss or damage resulting from any action taken in reliance on
the delivery and possession by the Trustee of such lost note affidavit. Upon the
receipt of such replacement Mortgage Note, the Trustee shall return the lost
note affidavit. Delivery by the Transferor of such lost note affidavit shall not
affect the obligations of the Transferor under the Purchase and Sale Agreement
with respect to the related Mortgage Loan.

            Section 2.4 Acceptance By Trustee Of The Trust Fund; Certain
Substitutions; Certification By Trustee.

            (a) The Trustee agrees to execute and deliver to the Depositor[, the
Certificate Insurer], the Master Servicer and the Transferor on or prior to the
Closing Date [an acknowledgment of receipt of [the Certificate Insurance Policy
and,] with respect to each initial Mortgage Loan, the original Mortgage Note
(with any exceptions noted), in the form attached as Exhibit E hereto and
declares that it will hold such documents and any amendments, replacements or
supplements thereto, as well as any other assets included in the definition of
Trust Fund and delivered to the Trustee, as Trustee in trust upon and subject to
the conditions set forth herein for the benefit of the Certificateholders [and
the Certificate Insurer].

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(b) The Trustee agrees, for the benefit of the Certificateholders [and the
Certificate Insurer], to review (or cause to be reviewed) each Trustee's
Mortgage File within 45 Business Days after the Closing Date and to deliver to
the Transferor, the Master Servicer, the Depositor [and the Certificate Insurer]
a certification in the form attached hereto as Exhibit F to the effect that, as
to each Mortgage Loan listed in Mortgage Loan Schedule (other than any Mortgage
Loan paid in full or any Mortgage Loan specifically identified in such
certification as not covered by such certification), (1) all documents required
to be delivered to it pursuant to Section 2.3 hereof and the Purchase and Sale
Agreement are in its possession, (2) each such document has been reviewed by it,
has been, to the extent required, executed and has not been mutilated, damaged,
torn or otherwise physically altered (handwritten additions, changes or
corrections shall not constitute physical alteration if initialed by the
Mortgagor), appears regular on its face and relates to such Mortgage Loan. The
Trustee shall be under no duty or obligation to (1) inspect, review or examine
any such documents, instruments, certificates or other papers to determine that
they are genuine, enforceable, or appropriate for the represented purpose or
that they are other than what they purport to be on their face or (2) determine
whether any Trustee's Mortgage File should contain any of the documents referred
to in Section 2.3(a)(v).

            On or prior to the first anniversary of the Closing Date, the
Trustee shall deliver (or cause to be delivered) to the Master Servicer, the
Transferor, the Depositor [and the Certificate Insurer] a final certification in
the form attached hereto as Exhibit G to the effect 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 such certification as not
covered by such certification), and as to any document noted in an exception
included in the Trustee's initial certification, (i) all documents required to
be delivered to it pursuant to Section 2.3 hereof and the Purchase and Sale
Agreement are in its possession, (ii) each such document has been reviewed by
it, has been, to the extent required, executed and has not been mutilated,
damaged, torn or otherwise physically altered (handwritten additions, changes or
corrections shall not constitute physical alteration if initialed by the
Mortgagor), appears regular on its face and relates to such Mortgage Loan.

            (c) If [the Certificate Insurer or] the Trustee during the process
of reviewing the Trustee's Mortgage Files finds any document constituting a part
of a Trustee's Mortgage File which is not executed, has not been received, is
unrelated to the Mortgage Loan identified in the related Mortgage Loan Schedule,
or does not conform to the requirements of Section 2.3 or the description
thereof as set forth in the related Mortgage Loan Schedule, the Trustee [or the
Certificate Insurer, as applicable,] shall promptly so notify the Master
Servicer, the Transferor, [the Certificate Insurer] and the Trustee. In
performing any such review, the Trustee may conclusively rely on the Transferor
as to the purported genuineness of any such document and any signature thereon.
It is understood that the scope of the Trustee's review of the Mortgage Files is
limited solely to confirming that the documents listed in Section 2.3 have been
executed and received and relate to the Mortgage Files identified in the related
Mortgage Loan Schedule. Pursuant to the Purchase and Sale Agreement, the
Transferor has agreed to use reasonable efforts to cause to be remedied a
material defect in a document constituting part of a Mortgage File of which it
is so notified by the Trustee. If, however, within 120 days after the Trustee's
notice to it respecting such defect the Transferor has not caused to be remedied
the defect and the defect materially and adversely affects the interest of the
Certificateholders in the related Mortgage Loan [or the interests of the
Certificate Insurer (in either case in the reasonable determination of

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the Certificate Insurer)], the Trustee shall enforce the Transferor's obligation
pursuant to the Purchase and Sale Agreement to either (1) substitute in lieu of
such Mortgage Loan a Qualified Substitute Mortgage Loan in the manner and
subject to the conditions set forth in Section 3.3 hereof or (2) purchase such
Mortgage Loan at a purchase price equal to the outstanding principal balance of
such Mortgage Loan as of the date of purchase, plus the greater of (x) all
accrued and unpaid interest thereon and (y) 30 days' interest thereon, computed
at the related Mortgage Interest Rate, plus the amount of any unreimbursed
Servicing Advances made by the Master Servicer with respect to such Mortgage
Loan, which purchase price shall be deposited in the Certificate Account prior
to the next succeeding Determination Date, after deducting therefrom any amounts
received in respect of such repurchased Mortgage Loan or Loans and being held in
the Collection Account or Trustee Collection Account for future distribution to
the extent such amounts have not yet been applied to principal or interest on
such Mortgage Loan (the "Loan Repurchase Price"); provided, however, that the
Transferor may not, pursuant to clause (2) preceding, purchase the principal
balance of any Mortgage Loan that is not in default or as to which no default is
imminent unless the Transferor has theretofore delivered an Opinion of Counsel
knowledgeable in federal income tax matters which states that such a purchase
would not constitute a prohibited transaction under the Code.

            (d) Upon receipt by the Trustee of a certification of a Servicing
Officer of such substitution or purchase and, in the case of a substitution,
upon receipt of the related Trustee's Mortgage File, and the deposit of the
amounts described above into the Certificate Account (which certification shall
be in the form of Exhibit H hereto), the Trustee shall release to the Master
Servicer for release to the Transferor the related Trustee's Mortgage File and
shall execute, without recourse, and deliver such instruments of transfer
furnished by the Transferor as may be necessary to transfer such Mortgage Loan
to the Transferor. [The Trustee shall notify the Certificate Insurer if the
Transferor fails to repurchase or substitute for a Mortgage Loan in accordance
with the foregoing.]

            Section 2.5 Designations Under REMIC Provisions; Designation Of
Startup Date.

            (a) The Class A Certificates are hereby designated as the "regular
interests", and the Class R Certificates are designated the single Class of
"residual interests" in the 200_ - _ REMIC for the purposes of the REMIC
Provisions. The 200_ - _ REMIC shall be designated as the "_______ HOME EQUITY
TRUST 200_ - _ REMIC."

            (b) The Closing Date will be the "startup day" of the 200_ - _ REMIC
within the meaning of Section 860G(a)(9) of the Code (the "Startup Date").

            Section 2.6 Execution Of Certificates. The Trustee acknowledges the
assignment to it of the Mortgage Loans and the delivery to it of the Trustee's
Mortgage Files relating thereto and, concurrently with such delivery, has
executed, authenticated and delivered to or upon the order of the Depositor, in
exchange for the Mortgage Loans, the Trustee's Mortgage Files and the other
assets included in the definition of Trust Fund, Certificates duly authenticated
by the Trustee, and, in the case of the Class A Certificates, in Authorized
Denominations, evidencing the entire beneficial ownership interest in the Trust
Fund.

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            Section 2.7 Application Of Principal And Interest. In the event that
Net Liquidation Proceeds on a Liquidated Mortgage Loan are less than the
outstanding principal balance of the related Mortgage Loan plus accrued interest
thereon, or any Mortgagor makes a partial payment of any Monthly Payment due on
a Mortgage Loan, such Net Liquidation Proceeds or partial payment shall be
applied to payment of the related Mortgage Note as provided therein, and if not
so provided, first to interest accrued at the Mortgage Interest Rate, then to
the principal owed on such Mortgage Loan.

            Section 2.8 Grant Of Security Interest.

            (a) It is the intention of the parties hereto that the conveyance by
the Depositor of the Trust Fund to the Trustee on behalf of the Trust shall
constitute a purchase and sale of such Trust Fund and not a loan. In the event,
however, that a court of competent jurisdiction were to hold that the
transaction evidenced hereby constitutes a loan and not a purchase and sale, it
is the intention of the parties hereto that this Agreement shall constitute a
security agreement under applicable law, and that the Depositor shall be deemed
to have granted and hereby grants to the Trustee, on behalf of the Trust, a
first priority perfected security interest in all of the Depositor's right,
title and interest in, to and under the Trust Fund to secure a loan in an amount
equal to the purchase price of the Mortgage Loans. The conveyance by the
Depositor of the Trust Fund to the Trustee on behalf of the Trust shall not
constitute and is not intended to result in an assumption by the Trustee[, the
Certificate Insurer] or any Certificateholder of any obligation of the
Transferor, _______________________ or any other Person in connection with the
Trust Fund.

            (b) The Depositor and the Master Servicer shall take no action
inconsistent with the Trust's ownership of the Trust Fund and shall indicate or
shall cause to be indicated in its records and records held on its behalf that
ownership of each Mortgage Loan and the assets in the Trust Fund are held by the
Trustee on behalf of the Trust. In addition, the Depositor and the Master
Servicer shall respond to any inquiries from third parties with respect to
ownership of a Mortgage Loan or any other asset in the Trust Fund by stating
that it is not the owner of such asset and that ownership of such Mortgage Loan
or other Trust Fund asset is held by the Trustee on behalf of the Trust.

            Section 2.9 Further Assurances; Powers Of Attorney.

            (a) The Master Servicer agrees that, from time to time, at its
expense, it shall cause the Transferor (and the Depositor also agrees that it
shall), promptly to execute and deliver all further instruments and documents,
and take all further action, that may be necessary or appropriate, or that the
Master Servicer or the Trustee may reasonably request, in order to perfect,
protect or more fully evidence the transfer of ownership of the Trust Fund or to
enable the Trustee to exercise or enforce any of its rights hereunder. Without
limiting the generality of the foregoing, the Master Servicer and the Depositor
will, upon the request of the Master Servicer or of the Trustee execute and file
(or cause to be executed and filed) such real estate filings, financing or
continuation statements, or amendments thereto or assignments thereof, and such
other instruments or notices, as may be necessary or appropriate.

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            (b) In the event that the Depositor in unable to fulfill its
obligations in subsection (a) above, the Depositor hereby grants to the Master
Servicer and the Trustee powers of attorney to execute all documents on its
behalf under this Agreement and the Purchase and Sale Agreement as may be
necessary or desirable to effectuate the foregoing.

                [Remainder of this page intentionally left blank]

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                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

            Section 3.1 Representations Of The Master Servicer. The Master
Servicer hereby represents and warrants to the Trustee, the Depositor[, the
Certificate Insurer] and the Certificateholders as of the Closing Date and
during the term of this Agreement:

            (a) the Master Servicer is a ______ duly organized, validly existing
and in good standing under the laws of the State of _______, and has full power
and authority to own its assets and to transact the business in which it is
currently engaged. The Master Servicer is duly qualified to do business and is
in good standing in each jurisdiction in which the character of the business
transacted by it or properties owned or leased by it requires such qualification
and in which the failure to so qualify would have a material adverse effect on
the business, properties, assets or condition (financial or otherwise) of the
Master Servicer;

            (b) the Master Servicer has full power and authority to make,
execute, deliver and perform this Agreement and all of the transactions
contemplated hereunder, and has taken all necessary corporate action to
authorize the execution, delivery and performance of this Agreement;

            (c) the Master Servicer is not required to obtain the consent of any
other Person or any consent, license, approval or authorization from, or
registration or declaration with, any governmental authority, bureau or agency
in connection with the execution, delivery, performance, validity or
enforceability of this Agreement, except for such consent, license, approval or
authorization or registration or declaration as shall have been obtained or
filed, as the case may be;

            (d) the execution and delivery of this Agreement and the performance
of the transactions contemplated hereby by the Master Servicer will not violate
any material provision of any existing law or regulation or any order or decree
of any court applicable to the Master Servicer or any provision of the articles
or bylaws of the Master Servicer, or constitute a material breach of any
mortgage, indenture, contract or other agreement to which the Master Servicer is
a party or by which it may be bound; and

            (e) no suit in equity, action at law or other judicial or
administrative proceeding of or before any court, tribunal or governmental body
is currently pending or, to the knowledge of the Master Servicer, threatened
against the Master Servicer or any of its properties or with respect to this
Agreement or the Certificates that in the opinion of the Master Servicer has a
reasonable likelihood of resulting in a material adverse effect on the
transactions contemplated by this Agreement.

It is understood and agreed that the representations, warranties and covenants
set forth in this Section 3.1 shall survive the delivery of the respective
Mortgage Files to the Trustee or to a custodian, as the case may be, and inure
to the benefit of the Trustee [and the Certificate Insurer].

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            Section 3.2 Representations, Warranties And Covenants Of The
Depositor. The Depositor hereby represents, warrants and covenants to the
Trustee that as of the date of this Agreement or as of such date specifically
provided herein:

            (a) The Depositor is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware;

            (b) The Depositor has the power and authority to convey the Mortgage
Loans and to execute, deliver and perform, and to enter into and consummate
transactions contemplated by, this Agreement;

            (c) This Agreement has been duly and validly authorized, executed
and delivered by the Depositor, all requisite company action having been taken,
and, assuming the due authorization, execution and delivery hereof by the Master
Servicer and the Trustee, constitutes or will constitute the legal, valid and
binding agreement of the Depositor, enforceable against the Depositor in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights of creditors generally, and by general
equity principles (regardless of whether such enforcement is considered in a
proceeding in equity or at law);

            (d) No consent, approval, authorization or order of, or registration
or filing with, or notice to, any governmental authority or court is required
for the execution, delivery and performance of or compliance by the Depositor
with this Agreement or the consummation by the Depositor of any of the
transactions contemplated hereby, except as have been received or obtained on or
prior to the Closing Date;

            (e) None of the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby or thereby, or the
fulfillment of or compliance with the terms and conditions of this Agreement,
(1) conflicts or will conflict with or results or will result in a breach of, or
constitutes or will constitute a default or results or will result in an
acceleration under (i) the certificate of incorporation or bylaws of the
Depositor, or (ii) of any term, condition or provision of any material
indenture, deed of trust, contract or other agreement or instrument to which the
Depositor or any of its subsidiaries is a party or by which it or any of its
subsidiaries is bound; (2) results or will result in a violation of any law,
rule, regulation, order, judgment or decree applicable to the Depositor of any
court or governmental authority having jurisdiction over the Depositor or its
subsidiaries; or (3) results in the creation or imposition of any lien, charge
or encumbrance which would have a material adverse effect upon the Mortgage
Loans or any documents or instruments evidencing or securing the Mortgage Loans;

            (f) There are no actions, suits or proceedings before or against or
investigations of, the Depositor pending, or to the knowledge of the Depositor,
threatened, before any court, administrative agency or other tribunal, and no
notice of any such action, which, in the Depositor's reasonable judgment, might
materially and adversely affect the performance by the Depositor of its
obligations under this Agreement, or the validity or enforceability of this
Agreement; and

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            (g) The Depositor is not in default with respect to any order or
decree of any court or any order, regulation or demand of any federal, state,
municipal or governmental agency that would materially and adversely affect its
performance hereunder.

            It is understood and agreed that the representations, warranties and
covenants set forth in this Section 3.2 shall survive delivery of the respective
Mortgage Files to the Trustee or to a custodian, as the case maybe, and shall
inure to the benefit of the Trustee [and the Certificate Insurer].

            Section 3.3 Purchase And Substitution.

            (a) It is understood and agreed that the representations and
warranties set forth in Sections 3.1 and 3.2 of the Purchase and Sale Agreement
shall survive delivery of the Certificates to the Certificateholders. Pursuant
to the Purchase and Sale Agreement, with respect to any representation or
warranty contained in Sections 3.1 or 3.2 of the Purchase and Sale Agreement
that is made to the best of the Transferor's knowledge, if it is discovered by
the Master Servicer, any Subservicer, the Trustee[, the Certificate Insurer] or
any Certificateholder that the substance of such representation and warranty was
inaccurate as of the Closing Date and such inaccuracy materially and adversely
affects the value of the related Mortgage Loan, then notwithstanding the
Transferor's lack of knowledge with respect to the inaccuracy at the time the
representation or warranty was made, such inaccuracy shall be deemed a breach of
the applicable representation or warranty. Upon discovery by the Transferor, the
Master Servicer, any Subservicer, the Trustee [or the Certificate Insurer] of a
breach of any of such representations and warranties which materially and
adversely affects the value of the Mortgage Loans or the interest of the
Certificateholders, or which materially and adversely affects the interests of
the [Certificate Insurer or the] Certificateholders in the related Mortgage Loan
in the case of a representation and warranty relating to a particular Mortgage
Loan (notwithstanding that such representation and warranty was made to the
Transferor's best knowledge), the party discovering such breach shall give
prompt written notice to the others. Subject to the last paragraph of this
Section 3.3, within 60 days of the earlier of its discovery or its receipt of
notice of any breach of a representation or warranty, pursuant to the Purchase
and Sale Agreement, the Transferor shall be required to (1) promptly cure such
breach in all material respects, (2) purchase such Mortgage Loan in the manner
and at the price specified in Section 2.4(c) (in which case the Mortgage Loan
shall become a Deleted Mortgage Loan), or (3) remove such Mortgage Loan from the
Trust Fund (in which case the Mortgage Loan shall become a Deleted Mortgage
Loan) and substitute one or more Qualified Substitute Mortgage Loans; provided,
that, such substitution is effected not later than the date which is two years
after the Startup Date or at such later date, if the Trustee [and the
Certificate Insurer] receive an Opinion of Counsel to the effect that such
substitution will not constitute a prohibited transaction for the purposes of
the REMIC provisions of the Code or cause the 200_ - _ REMIC to fail to qualify
as a REMIC at any time any Certificates are outstanding. Pursuant to the
Purchase and Sale Agreement, any such substitution shall be accompanied by
payment by the Transferor of the Substitution Adjustment, if any, to the Master
Servicer to be deposited in the Certificate Account.

            (b) As to any Deleted Mortgage Loan for which the Transferor
substitutes a Qualified Substitute Mortgage Loan or Loans, the Transferor shall
be required pursuant to the Purchase and Sale Agreement to effect such
substitution by delivering to the Trustee a

                                      -37-
<PAGE>

certification in the form attached hereto as Exhibit H, executed by a Servicing
Officer and the documents described in Sections 2.3(a)(i)-(v) for such Qualified
Substitute Mortgage Loan or Loans.

            (c) The Master Servicer shall deposit in the Collection Account all
payments received in connection with such Qualified Substitute Mortgage Loan or
Loans after the date of such substitution. Monthly Payments received with
respect to Qualified Substitute Mortgage Loans on or before the date of
substitution will be retained by the Transferor. The Trust Fund will own all
payments received on the Deleted Mortgage Loan on or before the date of
substitution, and the Transferor shall thereafter be entitled to retain all
amounts subsequently received in respect of such Deleted Mortgage Loan. The
Master Servicer shall give written notice to the Trustee [and the Certificate
Insurer] that such substitution has taken place and 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. Upon such substitution, such Qualified Substitute Mortgage Loan
or Loans shall be subject to the terms of this Agreement in all respects.

            (d) It is understood and agreed that the obligation of the
Transferor set forth in Section 3.4 of the Purchase and Sale Agreement to cure,
purchase, substitute or otherwise pay amounts to the Trust [or the Certificate
Insurer] for a defective Mortgage Loan as provided in such Section 3.4
constitutes the sole remedies of the Trustee[, the Certificate Insurer] and the
Certificateholders with respect to a breach of the representations and
warranties of the Transferor set forth in Sections 3.1 and 3.2 of the Purchase
and Sale Agreement. The Trustee shall give prompt written notice to the
[Certificate Insurer,] _______ and _______ of any repurchase or substitution
made pursuant to Section 3.3 or Section 2.4(b) hereof.

            (e) Upon discovery by the Master Servicer, the Trustee[, the
Certificate Insurer] or any Certificateholder that any Mortgage Loan does not
constitute a Qualified Mortgage, the Person discovering such fact shall promptly
(and in any event within 5 days of the discovery) give written notice thereof to
the others of such Persons. In connection therewith, pursuant to the Purchase
and Sale Agreement, the Transferor shall be required to repurchase or substitute
a Qualified Substitute Mortgage Loan for the affected Mortgage Loan within 60
days of the earlier of such discovery by any of the foregoing parties, or the
Trustee's or the Transferor's receipt of notice, in the same manner as it would
a Mortgage Loan for a breach of representation or warranty contained in Section
3.1 or 3.2 of the Purchase and Sale Agreement. The Trustee shall reconvey to the
Transferor 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 contained in Section 3.1 or 3.2 of
the Purchase and Sale Agreement.

            Section 3.4 Master Servicer Covenants. The Master Servicer hereby
covenants to the Trustee, the Depositor [and the Certificate Insurer] and the
Certificateholders that as of the Closing Date and during the term of this
Agreement:

            (a) The Master Servicer shall deliver on the Closing Date an opinion
from the general counsel or the corporate counsel of the Master Servicer as to
general corporate matters in

                                      -38-
<PAGE>

form and substance reasonably satisfactory to Underwriter's counsel [and counsel
to the Certificate Insurer]; and

            (b) The Master Servicer may in its discretion (1) waive any
prepayment penalty or other charge, assumption fee, late payment charge or other
charge in connection with a Mortgage Loan, and (2) arrange a schedule, running
for no more than 180 days after the Due Date for payment of any installment on
any Mortgage Note, for the liquidation of delinquent items; provided, that the
Master Servicer shall not agree to the modification or waiver of any provision
of a Mortgage Loan at a time when such Mortgage Loan is not in default or such
default is not imminent, if such modification or waiver would be treated as a
taxable exchange under Code Section 1001, unless such exchange would not be
considered a "prohibited transaction" under the REMIC Provisions.

It is understood and agreed that the covenants set forth in this Section 3.4
shall survive the delivery of the respective Mortgage Files to the Trustee or to
a custodian, as the case may be, and inure to the benefit of the Trustee [and
the Certificate Insurer].

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                                      -39-
<PAGE>

                                   ARTICLE IV

                                THE CERTIFICATES

            Section 4.1 The Certificates. The Certificates shall be
substantially in the forms annexed hereto as, in the case of the Class A-1
Certificate, Exhibit B-1, in the case of the Class A-2 Certificate, Exhibit B-2,
in the case of the Class A-3 Certificate, Exhibit B-3, in the case of the Class
A-4 Certificate, Exhibit B-4, in the case of the Class A-5 Certificate, Exhibit
B-5 and in the case of the Class R Certificate, Exhibit B-6. All Certificates
shall be executed by manual or facsimile signature on behalf of the Trustee by
an authorized officer and authenticated by the manual or facsimile signature of
an authorized officer. Any Certificates bearing the signatures of individuals
who were at the time of the execution thereof the authorized 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 delivery of such Certificates
or did not hold such offices at the date of such Certificates. All Certificates
issued hereunder shall be dated the date of their authentication.

            Section 4.2 Registration Of Transfer And Exchange Of Certificates.

            (a) The Trustee, as registrar, shall cause to be kept a register
(the "Certificate Register") in which, subject to such reasonable regulations as
it may prescribe, the Trustee shall provide for the registration of Certificates
and the registration of transfer of Certificates. The Trustee is hereby
appointed registrar for the purpose of registering and transferring
Certificates, as herein provided. The [Certificate Insurer and the] Master
Servicer shall be entitled to inspect and copy the Certificate Register and the
records of the Trustee relating to the Certificates during normal business hours
upon reasonable notice.

            (b) All Certificates issued upon any registration of transfer or
exchange of Certificates shall be valid evidence of the same ownership interests
in the Trust and entitled to the same benefits under this Agreement as the
Certificates surrendered upon such registration of transfer or exchange.

            (c) Every Certificate presented or surrendered for registration of
transfer or exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Trustee duly executed by the
Holder or holder thereof or his attorney duly authorized in writing. [Every
Certificate shall include a statement of insurance provided by the Certificate
Insurer.]

            (d) No service charge shall be made to a Holder or holder for any
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 registration of transfer or
exchange of Certificates; any other expenses in connection with such transferor
exchange shall be an expense of the Trust.

            (e) It is intended that the Class A Certificates be registered so as
to participate in a global book-entry system with the Depository, as set forth
herein. The Class A-1

                                      -40-
<PAGE>

Certificates shall, except as otherwise provided in the next paragraph, be
initially issued in the form of a single fully registered Class A-1 Certificate
with a denomination equal to the Original Class A-1 Principal Balance. The Class
A-2 Certificates shall, except as otherwise provided in the next paragraph, be
initially issued in the form of a single fully registered Class A-2 Certificate
with a denomination equal to the Original Class A-2 Principal Balance. The Class
A-3 Certificates shall, except as otherwise provided in the next paragraph, be
initially issued in the form of a single fully registered Class A-3 Certificate
with a denomination equal to the Original Class A-3 Principal Balance. The Class
A-4 Certificates shall, except as otherwise provided in the next paragraph, be
initially issued in the form of a single fully registered Class A-4 Certificate
with a denomination equal to the Original Class A-4 Principal Balance. The Class
A-5 Certificates shall, except as otherwise provided in the next paragraph, be
initially issued in the form of a single fully registered Class A-5 Certificate
with a denomination equal to the Original Class A-5 Principal Balance. Upon
initial issuance, the ownership of each such Class A Certificate shall be
registered in the Certificate Register in the name of Cede & Co., or any
successor thereto, as nominee for the Depository. The Depositor and the Trustee
are hereby authorized to execute and deliver the Representation Letter with the
Depository. With respect to Class A Certificates registered in the Certificate
Register in the name of Cede & Co., as nominee of the Depository, the Depositor,
the Transferor, the Master Servicer, the Trustee [and the Certificate Insurer]
shall have no responsibility or obligation to Direct or Indirect Participants or
beneficial owners for which the Depository holds Class A Certificates from time
to time as a Depository. Without limiting the immediately preceding sentence,
the Depositor, the Transferor, the Master Servicer, the Trustee [and the
Certificate Insurer] shall have no responsibility or obligation with respect to
(1) the accuracy of the records of the Depository, Cede & Co., or any Direct or
Indirect Participant with respect to any Ownership Interest, (2) the delivery to
any Direct or Indirect Participant or any other Person, other than a
Certificateholder, of any notice with respect to the Class A Certificates or (3)
the payment to any Direct or Indirect Participant or any other Person, other
than a Certificateholder, of any amount with respect to any distribution of
principal or interest on the Class A Certificates. No Person other than a
Certificateholder shall receive a certificate evidencing such Class A
Certificate. Upon delivery by the Depository to the Trustee of written notice to
the effect that the Depository has determined to substitute a new nominee in
place of Cede & Co., and subject to the provisions hereof with respect to the
payment of interest by the mailing of checks or drafts to the Certificateholders
appearing as Certificateholders at the close of business on a Record Date, the
name "Cede &Co." in this Agreement shall refer to such new nominee of the
Depository.

            (f) In the event that (1) the Depository or the Master Servicer
advises the Trustee in writing that the Depository is no longer willing or able
to discharge properly its responsibilities as nominee and depository with
respect to the Class A Certificates and the Master Servicer or the Depository is
unable to locate a qualified successor or (2) the Master Servicer at its sole
option elects to terminate the book-entry system through the Depository, the
Class A Certificates shall no longer be restricted to being registered in the
Certificate Register in the name of Cede & Co. (or a successor nominee) as
nominee of the Depository. At that time, the Master Servicer may determine that
the Class A Certificates shall be registered in the name of and deposited with a
successor depository operating a global book-entry system, as may be acceptable
to the Master Servicer, or such depository's agent or designee but, if the
Master Servicer does not select such alternative global book-entry system, then
the Class A Certificates may be registered in whatever name or names
Certificateholders transferring Class A Certificates

                                      -41-
<PAGE>

shall designate, in accordance with the provisions hereof; provided, however,
that any such reregistration shall be at the expense of the Master Servicer.

            (g) Notwithstanding any other provision of this Agreement to the
contrary, so long as any Class A Certificate is registered in the name of Cede &
Co., as nominee of the Depository, all distributions of principal or interest on
such Class A Certificates as the case may be and all notices with respect to
such Class A Certificates as the case may be shall be made and given,
respectively, in the manner provided in the Representation Letter.

            (h) No transfer, sale, pledge or other disposition of any Class R
Certificate shall be made unless such disposition is made pursuant to an
effective registration statement under the Securities Act of 1933 and effective
registration or qualification under applicable state securities laws or "Blue
Sky" laws, or is made in a transaction that does not require such registration
or qualification. None of the Master Servicer, the Depositor, the Transferor or
the Trustee is obligated under this Agreement to register the Certificates under
the Securities Act of 1933, as amended or any other securities law or to take
any action not otherwise required under this Agreement to permit the transfer of
the Class R Certificates without such registration or qualification. Any such
Certificateholder desiring to effect such transfer shall, and does hereby agree
to, indemnify the Trustee, the Depositor, the Transferor, the Master Servicer
[and the Certificate Insurer] against any liability that may result if the
transfer is not exempt or is not made in accordance with such applicable federal
and state laws. Promptly after receipt by an indemnified party under this
paragraph of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this paragraph, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under this paragraph. In case any such action is brought against
any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to appoint counsel
reasonably satisfactory to such indemnified party to represent the indemnified
party in such action; provided, however, that if the defendants in any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are in conflict
with or contrary to the interests of the indemnifying party, the indemnified
party or parties shall have the right to select separate counsel to defend such
action on behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of its election so to
appoint counsel to defend such action and approval by the indemnified party of
such counsel, the indemnifying party will not be liable to such indemnified
party under this paragraph for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof unless (1) the
indemnified party shall have employed separate counsel in accordance with the
proviso of the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel for any indemnified party), (2) the indemnifying party shall
not have employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement of the
action or (3) the indemnifying party has authorized the employment of counsel
for the indemnified party at the expense of the indemnifying party. Under no
circumstances shall the indemnified party enter into a settlement

                                      -42-
<PAGE>

agreement with respect to any lawsuit, claim or other proceeding without the
prior written consent of the indemnifying party.

            (i) Each Person who has or who acquires any Ownership Interest in a
Class R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions and to
have irrevocably appointed the Master Servicer or its designee as its
attorney-in-fact to negotiate the terms of any mandatory sale under subclause
(vii) below and to execute all instruments of transfer and to do all other
things necessary in connection with any such sale, and the rights of each Person
acquiring any Ownership Interest in a Class R Certificate are expressly subject
to the following provisions:

            (i) Each Person holding or acquiring any Ownership Interest in a
      Class R Certificate shall be a Permitted Transferee and a United States
      Person and shall promptly notify the Trustee of any change or impending
      change in its status as either a United States Person or a Permitted
      Transferee;

            (ii) In connection with any proposed Transfer of any Ownership
      Interest in a Class R Certificate, the Trustee shall require delivery to
      it, and shall not register the Transfer of any Class R Certificate until
      its receipt of, an affidavit and agreement (a "Transfer Affidavit and
      Agreement") attached hereto as Exhibit I from the proposed Transferee,
      representing and warranting, among other things, that such Transferee is a
      Permitted Transferee, that it is not acquiring its Ownership Interest in
      the Class R Certificate that is the subject of the proposed Transfer as a
      nominee, trustee or agent for any Person that is not a Permitted
      Transferee, that for so long as it retains its Ownership Interest in a
      Class R Certificate, it will endeavor to remain a Permitted Transferee,
      and that it has reviewed the provisions of this Section 4.2(i) and agrees
      to be bound by them;

            (iii) Notwithstanding the delivery of a Transfer Affidavit and
      Agreement by a proposed Transferee under clause (ii) above, if a
      Responsible Officer of the Trustee has actual knowledge that the proposed
      Transferee is not a Permitted Transferee, no Transfer of an Ownership
      Interest in a Class R Certificate to such proposed Transferee shall be
      effected;

            (iv) Each Person holding or acquiring any Ownership Interest in a
      Class R 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 Class R Certificate and (y) not to transfer
      its Ownership Interest unless it provides a certificate (attached hereto
      as Exhibit J) to the Trustee stating that, among other things, it has no
      actual knowledge that such other Person is not a Permitted Transferee;

            (v) Each Person holding or acquiring an Ownership Interest in a
      Class R 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 Class R Certificate, if it is, or is holding an
      Ownership Interest in a Class R Certificate on behalf of, a "pass-through
      interest holder";

                                      -43-
<PAGE>

            (vi) The Trustee will register the Transfer of any Class R
      Certificate only if it shall have received the Transfer Affidavit and
      Agreement. In addition, no Transfer of a Class R Certificate shall be made
      unless the Trustee shall have received a representation letter, the form
      of which is attached hereto as Exhibit I from the Transferee of such
      Certificate to the effect that such Transferee is a United States Person
      and is not a "disqualified organization" (as defined in Section 860E(e)(5)
      of the Code)(such Person, a "Permitted Transferee");

            (vii) Any attempted or purported transfer of any Ownership Interest
      in a Class R Certificate in violation of the provisions of this Section
      4.2 shall be absolutely null and void and shall vest no rights in the
      purported transferee. If any purported transferee shall become a Holder of
      a Class R Certificate in violation of the provisions of this Section 4.2,
      then the last preceding Permitted Transferee shall be restored to all
      rights as Holder thereof retroactive to the date of registration of
      transfer of such Class R Certificate. The Trustee shall notify the Master
      Servicer upon receipt of written notice or discovery by a Responsible
      Officer that the registration of transfer of a Class R Certificate was not
      in fact permitted by this Section 4.2. Knowledge shall not be imputed to
      the Trustee with respect to an impermissible transfer in the absence of
      such a written notice or discovery by a Responsible Officer. The Trustee
      shall be under no liability to any Person for any registration of transfer
      of a Class R Certificate that is in fact not permitted by this Section 4.2
      or for making any payments due on such Certificate to the Holder thereof
      or taking any other action with respect to such Holder under the
      provisions of this Agreement so long as the transfer was registered after
      receipt of the related Transfer Affidavit and Transfer Certificate. The
      Trustee shall be entitled, but not obligated to recover from any Holder of
      a Class R Certificate that was in fact not a Permitted Transferee at the
      time it became a Holder or, at such subsequent time as it became other
      than a Permitted Transferee, all payments made on such Class R Certificate
      at and after either such time. Any such payments so recovered by the
      Trustee shall be paid and delivered by the Trustee to the last preceding
      Holder of such Certificate;

            (viii)If any purported transferee shall become a Holder of a Class R
      Certificate in violation of the restrictions in this Section 4.2, then the
      Master Servicer or its designee shall have the right, without notice to
      the Holder or any prior Holder of such Class R Certificate, to sell such
      Class R Certificate to a purchaser selected by the Master Servicer or its
      designee on such reasonable terms as the Master Servicer or its designee
      may choose. Such purchaser may be the Master Servicer itself or any
      Affiliate of the Master Servicer. The proceeds of such sale, net of
      commissions, expenses and taxes due, if any, will be remitted by the
      Master Servicer to the last preceding purported transferee of such Class R
      Certificate, except that in the event that the Master Servicer determines
      that the Holder or any prior Holder of such Class R Certificate may be
      liable for any amount due under this Section 4.2 or any other provision of
      this Agreement, the Master Servicer may withhold a corresponding amount
      from such remittance as security for such claim. The terms and conditions
      of any sale under this subclause (viii) shall be determined in the sole
      discretion of the Master Servicer or its designee, and it shall not be
      liable to any Person having an Ownership Interest in a Class R Certificate
      as a result of its exercise of such discretion;

                                      -44-
<PAGE>

            (ix) The provisions of Section 4.2(i) may be modified, added to or
      eliminated (solely to amend the transfer restrictions contained in this
      Section), provided that there shall have been delivered to the Trustee
      [and the Certificate Insurer] an Opinion of Counsel to the effect that
      such modification of, addition to or elimination of such provisions will
      not cause the 200_ - _ REMIC to cease to qualify as a REMIC and will not
      cause (x) the 200_ - _ REMIC to be subject to an entity-level tax caused
      by the Transfer of any Ownership Interest in a Class R 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-related tax caused by the
      Transfer of an Ownership Interest in a Class R Certificate to a Person
      that is not a Permitted Transferee;

            (x) No transfer of a Class R Certificate or any interest therein
      shall be made to any employee benefit plan or other retirement
      arrangement, including individual retirement accounts and annuities, Keogh
      plans and collective investment funds and separate accounts in which such
      plans, accounts or arrangements are invested, that is subject to Title I
      of the Employee Retirement Income Security Act of 1974, as amended
      ("ERISA"), Section 4975 of the Code or any provision of applicable
      federal, state or local law materially similar to the foregoing provisions
      of ERISA or the Code (each, a "Plan"). The Trustee and the Master Servicer
      shall require the prospective transferee of any Class R Certificate to
      certify (in the form of Exhibit K hereto) that it is neither (i) a Plan
      nor (ii) a Person who is directly or indirectly purchasing a Class R
      Certificate on behalf of, as named fiduciary of, as trustee of, or with
      assets, of a Plan; and

            (xi) Subject to the restrictions set forth in this Agreement, upon
      surrender for registration of transfer of any Certificate at the Corporate
      Trust Office of the Trustee, the Trustee shall execute, authenticate and
      deliver in the name of the designated transferee or transferees, a new
      Certificate of the same Class and evidencing, in the case of a Class A-1
      Certificate, Class A-2 Certificate, Class A-3 Certificate, Class A-4
      Certificate or Class A-5 Certificate, the same Percentage Interest, and in
      any other case, the equivalent undivided beneficial ownership interest in
      the 200_ - _ REMIC and dated the date of authentication by the Trustee. At
      the option of the Certificateholders, Certificates may be exchanged for
      other Certificates of Authorized Denominations of a like aggregate
      undivided beneficial ownership interest, upon surrender of the
      Certificates to be exchanged at such office.

            Whenever any Certificates are so surrendered for exchange, the
      Trustee shall execute, authenticate and deliver the Certificates which the
      Certificateholder making the exchange is entitled to receive. No service
      charge 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. All Certificates surrendered for transfer and
      exchange shall be canceled by the Trustee.

            Section 4.3 Mutilated, Destroyed, Lost Or Stolen Certificates. (i)
If any mutilated Certificate is surrendered to the Trustee, or the Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Certificate, and (ii) there is delivered to the Master Servicer[, the
Certificate Insurer] and the Trustee such security or indemnity as may

                                      -45-
<PAGE>

reasonably be required by each of them to save each of them harmless, then, in
the absence of notice to the Master Servicer[, the Certificate Insurer] and the
Trustee that such Certificate has been acquired by a bona fide purchaser, the
Trustee shall execute, authenticate and deliver, in exchange for or in lieu of
any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of
like tenor and representing an equivalent beneficial ownership interest, but
bearing a number not contemporaneously outstanding. Upon the issuance of any new
Certificate under this Section 4.3, the Master Servicer and 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 their fees and expenses
connected therewith. Any duplicate Certificate issued pursuant to this Section
4.3 shall constitute complete and indefeasible evidence of ownership in the
Trust Fund, as if originally issued, whether or not the mutilated, destroyed,
lost or stolen Certificate shall be found at any time.

            Section 4.4 Persons Deemed Owners. Prior to due presentation of a
Certificate for registration of transfer and subject to the provisions of
Section 4.2 and Article X, the Master Servicer, the Depositor, the Transferor[,
the Certificate Insurer] and the Trustee may treat the Person in whose name any
Certificate is registered as the owner of such Certificate for the purpose of
receiving remittances pursuant to Section 6.5 and for all other purposes
whatsoever, and the Master Servicer, the Depositor, the Transferor[, the
Certificate Insurer] and the Trustee shall not be affected by notice to the
contrary.

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                                      -46-
<PAGE>

                                   ARTICLE V

               ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS

            Section 5.1 Appointment Of The Master Servicer.

            (a) _______________________ agrees to act as the Master Servicer and
to perform all servicing duties under this Agreement subject to the terms
hereof.

            (b) The Master Servicer shall service and administer the Mortgage
Loans on behalf of the Trustee [and the Certificate Insurer] and shall have full
power and authority, acting alone or through one or more Subservicers, to do 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 the name of a Subservicer, may, and is
hereby authorized and empowered by the Trustee to, execute and deliver, on
behalf of itself, the Certificateholders[, the Certificate Insurer] and the
Trustee or any of them, any and all instruments of satisfaction or cancellation,
or of partial or full release or discharge and all other comparable instruments,
with respect to the Mortgage Loans, the insurance policies and accounts related
thereto and the properties subject to the Mortgages. Upon the execution and
delivery of this Agreement, and from time to time as may be required thereafter,
the Trustee shall furnish the Master Servicer or its Subservicers with any
powers of attorney and such other documents (that have been prepared by the
Master Servicer for execution by the Trustee) as may be necessary or appropriate
to enable the Master Servicer to carry out its servicing and administrative
duties hereunder.

            In servicing and administering the Mortgage Loans, the Master
Servicer shall employ procedures consistent with Accepted Servicing Practices
and in a manner consistent with recovery under any insurance policy required to
be maintained by the Master Servicer pursuant to this Agreement.

            Costs incurred by the Master Servicer in effectuating the timely
payment of taxes and assessments on the property securing a Mortgage Note and
foreclosure costs may be added by the Master Servicer to the amount owing under
such Mortgage Note where the terms of such Mortgage Note so permit; provided,
however, that the addition of any such cost shall not be taken into account for
purposes of calculating the principal amount of the Mortgage Note and the
Mortgage Loan secured by the Mortgage Note or distributions to be made to
Certificateholders. Such costs shall be recoverable by the Master Servicer
pursuant to Section 5.4. Notwithstanding any other provision of this Agreement,
the Master Servicer shall at all times service the Mortgage Loans in a manner
consistent with the provisions of Sections 5.1(b) and 5.1(c).

            (c) It is intended that the 200_ - _ REMIC formed hereunder shall
constitute, and that the affairs of the 200_ - _ REMIC shall be conducted so as
to qualify it as, a "real estate mortgage investment conduit" ("REMIC") as
defined in and in accordance with the REMIC Provisions. In furtherance of such
intentions, the Master Servicer covenants and agrees that it shall not take any
action or omit to take any action reasonably within the Master Servicer's
control and the scope of its duties more specifically set forth herein that
would (1) result in a

                                      -47-
<PAGE>

taxable event to the Holders of the Certificates or endanger the REMIC status of
the 200_ - _ REMIC or (2) result in the imposition on the 200_ - _ REMIC or the
Trust Fund of a tax on "prohibited transactions" (either clause (1) or (2) shall
be an "Adverse REMIC Event"); provided, however, that the Master Servicer may
allow reductions in the rate of interest on any Mortgage Loan so long as the
amount of any such reduction does not exceed the greater of (i) ____% and (ii)
__% of the total coupon on such Mortgage Loan. The Master Servicer shall not
take any action or fail to take any action (whether or not authorized hereunder)
as to which the Trustee has advised it in writing that it has received an
Opinion of Counsel to the effect that an Adverse REMIC Event could occur with
respect to such action, and the Master Servicer shall have no liability
hereunder for any action taken by it in accordance with the written instructions
of the Trustee. In addition, prior to taking any action with respect to the
Trust Fund that is not expressly permitted under the terms of this Agreement
(other than interest rate modifications referred to in the provision to the
second preceding sentence),the Master Servicer will consult with the Trustee or
its designee [and the Certificate Insurer], in writing, with respect to whether
such action could cause an Adverse REMIC Event to occur. The Trustee may consult
with counsel to make such written advice, and the cost of same shall be borne by
the party seeking to take the action not permitted by this Agreement. At all
times as may be required by the Code, the Master Servicer shall use its best
efforts to ensure that substantially all of the assets of the Trust 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. In the
event any specified time period or other requirement set forth in this Agreement
in respect of compliance with the REMIC Provisions becomes inconsistent with the
REMIC Provisions as the same may be amended, such specified time period or other
requirement shall also be deemed amended to comply with the requirements of this
Section, unless such amended time period or other requirements shall be less
protective of the interests of the Certificateholders [and the Certificate
Insurer], in which case, to the extent consistent with the REMIC Provisions, the
former time period or requirement shall continue in force.

            (d) Subject to Section 5.12, the Master Servicer is hereby
authorized and empowered to execute and deliver on behalf of the Trustee and
each Certificateholder, all instruments of satisfaction or cancellation, or of
partial or full release, discharge and all other comparable instruments, with
respect to the Mortgage Loans and with respect to the Mortgaged Properties. If
reasonably required by the Master Servicer, each Certificateholder and the
Trustee shall execute any powers of attorney furnished to the Trustee by the
Master Servicer and other documents necessary or appropriate to enable the
Master Servicer to carry out its servicing and administrative duties under this
Agreement.

            (e) On and after such time as the Trustee receives the resignation
of, or notice of the removal of, the Master Servicer from its rights and
obligations under this Agreement, and with respect to resignation pursuant to
Section 5.23, after receipt by the Trustee [and the Certificate Insurer] of the
Opinion of Counsel required pursuant to Section 5.23, the Trustee [or its
designee approved by the Certificate Insurer] shall, within a period not to
exceed 90 days, assume all of the rights and obligations of the Master Servicer,
subject to Section 7.2 hereof. The Master Servicer shall, upon request of the
Trustee but at the expense of the Master Servicer, deliver to the Trustee all
documents and records relating to the Mortgage Loans and an accounting of
amounts collected and held by the Master Servicer and otherwise use its best

                                      -48-
<PAGE>

efforts to effect the orderly and efficient transfer of servicing rights and
obligations to the assuming party.

            (f) The Master Servicer shall deliver a list of Servicing Officers
to the Trustee [and the Certificate Insurer] by the Closing Date, which list
may, from time to time, be amended, modified or supplemented by the subsequent
delivery to the Trustee [and the Certificate Insurer] of any superseding list of
Servicing Officers.

            Section 5.2 Subservicing Agreements Between The Master Servicer And
Subservicers.

            (a) The Master Servicer may[, subject to the prior written approval
of the Certificate Insurer,] enter into Subservicing Agreements with
Subservicers for the servicing and administration of the Mortgage Loans and for
the performance of any and all other activities of the Master Servicer
hereunder. The [Certificate Insurer,] Trustee and Depositor acknowledge that the
Master Servicer has the authority to appoint the Originator as Subservicer. Each
Subservicer shall be either (1) a depository institution the accounts of which
are insured by the FDIC or (2) another entity that engages in the business of
originating, acquiring or servicing loans, and in either case shall be
authorized to transact business in the state or states where the related
Mortgaged Properties it is to service are situated if state law requires such
authorization. In addition, each Subservicer will obtain and preserve its
qualifications 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 and any of the Mortgage Loans
and to perform or cause to be performed its duties under the related
Subservicing Agreement which shall provide that the Subservicer's rights shall
automatically terminate upon the termination, resignation or other removal of
the Master Servicer under this Agreement. Each account used by any Subservicer
for the deposit of payments on any of the Mortgage Loans shall be an Eligible
Account.

            (b) Notwithstanding any Subservicing Agreement, any of the
provisions of this Agreement relating to agreements or arrangements between the
Master Servicer and a Subservicer or reference to actions taken through a
Subservicer or otherwise, the Master Servicer shall remain obligated and
primarily liable to the Trustee[, the Certificate Insurer] and the
Certificateholders for the servicing and administering of the Mortgage Loans in
accordance with the provisions of this Agreement without diminution of such
obligation or liability by virtue of such Subservicing Agreements or
arrangements or by virtue of indemnification from the Subservicer and to the
same extent and under the same terms and conditions as if the Master Servicer
alone were servicing and administering the Mortgage Loans. For purposes of this
Agreement, the Master Servicer shall be deemed to have received payments on
Mortgage Loans when the Subservicer has received such payments.

            In the event the Master Servicer shall for any reason no longer be
the Master Servicer (including by reason of an Event of Default), the Trustee or
its designee may[, with the prior written consent of the Certificate Insurer, or
shall, at the direction of the Certificate Insurer,] either (i) assume all of
the rights and obligations of the Master Servicer under each Subservicing
Agreement that the Master Servicer may have entered into or (ii) notwithstanding

                                      -49-
<PAGE>

anything to the contrary contained in each such Subservicing Agreement,
terminate the related Subservicer without being required to pay any fee in
connection therewith.

            Section 5.3 Collection Of Certain Mortgage Loan Payments; Collection
Account.

            (a) The Master Servicer shall use its best 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
any applicable primary mortgage insurance policy, follow such collection
procedures as shall constitute Accepted Servicing Practices.

            The Master Servicer shall establish and maintain in the name of the
Trustee one or more Collection Accounts (collectively, the "Collection
Account"), in trust for the benefit of the Holders of the Certificates [and the
Certificate Insurer], one of which may be established and maintained with the
Trustee (the "Trustee Collection Account"). The Master Servicer shall promptly
provide notice to [the Certificate Insurer,] the Trustee and each Rating Agency
of any creation and establishment of a Collection Account hereunder. Each
Collection Account shall be established and maintained as an Eligible Account,
and one Collection Account may be maintained at the _______________. [The
Certificate Insurer, in its sole discretion, may direct the Master Servicer to
close such Collection Account and to establish and maintain a replacement
Collection Account that is an Eligible Account.]

            (b) On the Closing Date, the Master Servicer shall deposit in the
Collection Account any amounts representing the principal portion of Monthly
Payments on the Mortgage Loans made in respect of any Due Date occurring in
_________, 200_ that are received on or prior to the Cut-Off Date and were not
reflected in the Cut-Off Date principal balance of the related Mortgage Loan. On
the third Business Day prior to the first Remittance Date, the Master Servicer
shall have deposited into the Certificate Account all of the following
collections and payments received or made by the Master Servicer in respect of
monies due under the Mortgage Loans (other than in respect of interest on the
Mortgage Loans accrued on or before the Due Date immediately preceding the
Cut-Off Date), and shall, on a daily basis thereafter (except as otherwise
provided herein), deposit such collections and payments into the Collection
Account:

            (i) all payments received after the Cut-Off Date on account of
      principal on the Mortgage Loans and all Principal Prepayments,
      Curtailments, associated prepayment penalties and all Net REO Proceeds
      collected after the Cut-Off Date;

            (ii) all payments received after the Cut-Off Date on account of
      interest on the Mortgage Loans (other than payments of interest that
      accrued on each Mortgage Loan up to and including the Due Date immediately
      preceding the Cut-Off Date);

            (iii) all Net Liquidation Proceeds;

            (iv) all Insurance Proceeds;

            (v) all Released Mortgaged Property Proceeds;

                                      -50-
<PAGE>

            (vi) any amounts payable in connection with the repurchase of any
      Mortgage Loan and the amount of any Substitution Adjustment pursuant to
      Sections 2.4 and 3.3 hereof; and

            (vii) any amount expressly required to be deposited in the
      Collection Account or Certificate Account in accordance with certain
      provisions of this Agreement, including, without limitation amounts in
      respect of the termination of the Trust Fund (which shall be deposited in
      the Certificate Account), and amounts referenced in Sections 2.4(c),
      3.3(a), 3.3(c), 5.6, and 6.6(b) of this Agreement;

provided, however, that the Master Servicer shall be entitled, at its election,
either (a) to withhold and to pay to itself the applicable Servicing Fee from
any payment on account of interest or other recovery (including Net REO
Proceeds) as received and prior to deposit of such payments in the Collection
Account or (b) to withdraw the applicable Servicing Fee from the Collection
Account after the entire payment or recovery has been deposited therein;
provided, further, that with respect to any payment of interest received by the
Master Servicer in respect of a Mortgage Loan (whether paid by the Mortgagor or
received as Liquidation Proceeds, Insurance Proceeds or otherwise) which is less
than the full amount of interest then due with respect to such Mortgage Loan,
only that portion of such payment that bears the same relationship to the total
amount of such payment of interest as the rate used to determine the Servicing
Fee bears to the Mortgage Interest Rate borne by such Mortgage Loan shall be
allocated to the Servicing Fee with respect to such Mortgage Loan. All other
amounts shall be deposited in the Collection Account not later than the Business
Day following the day of receipt and posting by the Master Servicer.
Notwithstanding any regularly scheduled transfer of funds to the Certificate
Account, the Master Servicer shall, not later than 3 Business Days prior to each
Remittance Date transfer to the Certificate Account all funds in each Collection
Account that are to be included in the Master Servicer Remittance Amount on the
Determination Date immediately preceding the Remittance Date.

            The Master Servicer shall direct, in writing, the institution
maintaining each Collection Account to invest the funds in the Collection
Account only in Permitted Investments. No Permitted Investment shall be sold or
disposed of at a gain prior to maturity unless the Master Servicer has obtained
an Opinion of Counsel (at the Master Servicer's expense) that such sale or
disposition will not cause the Trust Fund to be subject to the tax on income
from prohibited transactions imposed by Code Section 860F(a)(1),otherwise
subject the Trust Fund to tax or cause the 200_ - _ REMIC to fail to qualify as
a REMIC. All income (other than any gain from a sale or disposition of the type
referred to in the preceding sentence) realized from any such Permitted
Investment shall be for the benefit of the Master Servicer as additional
servicing compensation. The amount of any losses incurred in respect of any such
investments shall be deposited in the Collection Account by the Master Servicer
out of its own funds immediately as realized.

            The foregoing requirements for deposit in the Collection Account
shall be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of those described in the
last paragraph of Section 5.14 and payments in the nature of prepayment charges
other than prepayment penalties, late payment charges or assumption fees need
not be deposited by the Master Servicer in the Collection Account.

                                      -51-
<PAGE>

Notwithstanding any provision herein to the contrary, the Master Servicer shall
not deposit in any Collection Account any amount other than amounts required to
be deposited therein in accordance with the terms of this Agreement, and the
Master Servicer shall have the right at all times to transfer funds from the
Collection Account to the Certificate Account. All funds deposited by the Master
Servicer in the Collection Account and the Certificate Account shall be held
therein for the account of the Trustee in trust for the Certificateholders [and
the Certificate Insurer] until disbursed in accordance with Section 6.1 or
withdrawn in accordance with Section 5.4.

            (c) Prior to the time of their required deposit in the Collection
Account, all amounts required to be deposited therein may be deposited in an
account in the name of Master Servicer, provided that such account is an
Eligible Account. All such funds shall be held by the Master Servicer in trust
for the benefit of the Certificateholders [and the Certificate Insurer] pursuant
to the terms hereof.

            (d) The Collection Account may[, upon written notice by the Trustee
to the Certificate Insurer,] be transferred to a different depository so long as
such transfer is to an Eligible Account.

            Section 5.4 Permitted Withdrawals From The Collection Account And
Trustee Collection Account. The Master Servicer is hereby authorized by the
Trustee (such authorization to be revocable by the Trustee at any time), from
time to time, to make withdrawals from the Collection Account or, as applicable,
the Trustee Collection Account but only for the following purposes:

            (a) to reimburse itself from any funds in the Collection Account and
the Trustee Collection Account for any accrued unpaid Servicing Fees and for
unreimbursed Periodic Advances and Servicing Advances. The Master Servicer's
right to reimbursement for unpaid Servicing Fees and unreimbursed Servicing
Advances shall be limited to late collections on the related Mortgage Loan,
including Liquidation Proceeds, Released Mortgaged Property Proceeds, Insurance
Proceeds and such other amounts on deposit in the Collection Account as may be
collected by the Master Servicer from the related Mortgagor or otherwise
relating to the Mortgage Loan in respect of which such unreimbursed amounts are
owed. The Master Servicer's right to reimbursement for unreimbursed Periodic
Advances shall be limited to late collections of interest on any Mortgage Loan
and to Liquidation Proceeds and Insurance Proceeds on related Mortgage Loans;

            (b) to reimburse itself for any Periodic Advances determined in good
faith to have become Nonrecoverable Advances, such reimbursement to be made from
any funds in the Collection Account and the Trustee Collection Account;

            (c) to withdraw from the Collection Account or the Trustee
Collection Account any Preference Amount received from a Mortgagor;

            (d) to withdraw any funds deposited in the Collection Account or
Trustee Collection Account that were mistakenly deposited therein;

                                      -52-
<PAGE>

            (e) to withdraw from the Collection Account or the Trustee
Collection Account any funds needed to pay itself Servicing Compensation
pursuant to Section 5.14 hereof to the extent not retained or paid pursuant to
Section 5.3, 5.4 or 5.14;

            (f) to withdraw from the Collection Account or the Trustee
Collection Account to pay to the Transferor with respect to each Mortgage Loan
or property acquired in respect thereof that has been repurchased or replaced
pursuant to Section 2.4 or 3.3 or to pay to itself with respect to each Mortgage
Loan or property acquired in respect thereof that has been purchased pursuant to
Section 8.1 all amounts received thereon and not required to be deposited into
the Collection Account or the Trustee Collection Account as a result of such
repurchase or replacement;

            (g) subject to the provisions of Section 5.20, to reimburse itself
from the Collection Account or the Trustee Collection Account for (1)
Nonrecoverable Advances that are not, with respect to aggregate Servicing
Advances on any single Mortgage Loan or REO Property, in excess of the principal
balance thereof and (2) for amounts to be reimbursed to the Master Servicer
pursuant to Section 5.21;

            (h) to withdraw from the Collection Account or the Trustee
Collection Account to pay to the Transferor with respect to each Mortgage Loan
the excess, if any, of (1) interest accrued and unpaid on such Mortgage Loan on
the Cut-Off Date, over (2) interest on such Mortgage Loan from the Due Date for
such Mortgage Loan immediately preceding the Cut-Off Date to the Cut-Off Date;

            (i) to transfer funds from the Collection Account into the Trustee
Collection Account and to withdraw funds from the Collection Account and the
Trustee Collection Account necessary to make deposits to the Certificate Account
(which shall include the Trustee Fee) in the amounts and in the manner provided
for in Section 6.1 hereof;

            (j) to pay itself any interest earned on or investment income earned
with respect to funds in the Collection Account or Trustee Collection Account;
or

            (k) to clear and terminate the Collection Account and Trustee
Collection Account upon the termination of this Agreement.

            The Master Servicer shall keep and maintain a separate accounting
for each Mortgage Loan for the purpose of accounting for withdrawals from the
Collection Account pursuant to subclause (a).

            Section 5.5 Payment Of Taxes, Insurance And Other Charges. With
respect to each Mortgage Loan, the Master Servicer shall maintain accurate
records reflecting casualty insurance coverage.

            With respect to each Mortgage Loan as to which the Master Servicer
maintains escrow accounts, the Master Servicer shall maintain accurate records
reflecting the status of ground rents, taxes, assessments, water rates and other
charges which are or may become a lien upon the Mortgaged Property and the
status of primary mortgage guaranty insurance premiums, if any, and casualty
insurance coverage and shall obtain, from time to time, all bills for the

                                      -53-
<PAGE>

payment of such charges (including renewal premiums) and shall effect payment
thereof prior to the applicable penalty or termination date and at a time
appropriate for securing maximum discounts allowable, employing for such purpose
deposits of the Mortgagor in any escrow account which shall have been estimated
and accumulated by the Master Servicer in amounts sufficient for such purposes,
as allowed under the terms of the Mortgage. To the extent that a Mortgage does
not provide for escrow payments, the Master Servicer shall, if it has received
notice of a default or deficiency, monitor such payments to determine if they
are made by the Mortgagor.

            Section 5.6 Maintenance Of Casualty Insurance. For each Mortgage
Loan, the Master Servicer shall maintain or cause to be maintained in accordance
with the Master Servicer's loan servicing policies and procedures and to the
extent required by the related Mortgage Loan to be maintained by the Mortgagor,
fire and casualty insurance with a standard mortgagee clause and extended
coverage in an amount which is not less than the replacement value of the
improvements securing such Mortgage Loan or the unpaid principal balance of such
Mortgage Loan, whichever is less. If, upon origination of the Mortgage Loan, the
Mortgaged Property was in an area identified in the Federal Register by the
Federal Emergency Management Agency as having special flood hazards (and flood
insurance has been made available) the Master Servicer will cause to be
maintained in accordance with the Master Servicer's loan servicing policies and
procedures and to the extent required by the related Mortgage Loan to be
maintained by the Mortgagor, a flood insurance policy meeting the requirements
of the current guidelines of the Federal Insurance Administration with a
generally acceptable insurance carrier, in an amount representing coverage not
less than the least of (i) the unpaid principal balance of the Mortgage Loan,
(ii) the full insurable value of the Mortgaged Property or (iii) the maximum
amount of insurance available under the Flood Disaster Protection Act of 1973.
With respect to each Mortgage Loan, the Master Servicer shall in accordance with
the Master Servicer's loan servicing policies and procedures also maintain fire
insurance with extended coverage and, if applicable, flood insurance on 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 principal balance owing on such Mortgage Loan at the time of such
foreclosure or grant of deed in lieu of foreclosure plus accrued interest and
related Liquidation Expenses. It is understood and agreed that such insurance
shall be with insurers approved by the Master Servicer and that no earthquake or
other additional insurance is to be required of any Mortgagor or to be
maintained on property acquired in respect of a defaulted loan, other than
pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance. The parties acknowledge
that the Master Servicer does not monitor maintenance of insurance with respect
to every Mortgage Loan. Pursuant to Section 5.3, any amounts collected by the
Master Servicer under any insurance policies maintained pursuant to this Section
5.6 (other than amounts to be applied to the restoration or repair of the
related Mortgaged Property or released to the Mortgagor in accordance with
Accepted Servicing Practices) shall be deposited into the Collection Account,
subject to withdrawal pursuant to Section 5.4. Any cost incurred by the Master
Servicer in maintaining any such insurance shall be added to the amount owing
under the Mortgage Loan where the terms of the Mortgage Loan so permit;
provided, however, that the addition of any such cost shall not be taken into
account for purposes of calculating the principal amount of the Mortgage Note or
the Mortgage Loan secured by the Mortgage Note or the distributions to be made
to the Certificateholders. Such costs shall be recoverable by the Master
Servicer pursuant to Section 5.4. In the event that the Master

                                      -54-
<PAGE>

Servicer shall obtain and maintain a blanket policy issued by an insurer that is
acceptable to FNMA or FHLMC, insuring against hazard losses on all of the
Mortgage Loans, it shall conclusively be deemed to have satisfied its obligation
as set forth in the first sentence of this Section 5.6, 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 or acquired property an insurance policy complying with
the first sentence of this Section 5.6 and there shall have been a loss which
would have been covered by such a policy had it been maintained, be required to
deposit from its own funds into the Collection Account the amount not otherwise
payable under the blanket policy because of such deductible clause.

            Section 5.7 Master Servicer Account. In addition to the Collection
Account, the Master Servicer shall be permitted to establish and maintain one or
more Master Servicer Accounts (collectively, the "Master Servicer Account"),
each of which shall be an Eligible Account, in which the Master Servicer may
deposit all payments by, and collections from, the Mortgagors received in
connection with the Mortgage Loans prior to the Master Servicer's deposit of all
such funds required to be deposited into the Collection Account. Withdrawals may
be made out of such collections in the Master Servicer Account to reimburse the
Master Servicer for any advances not otherwise required to be made from the
Collection Account or for any refunds made by the Master Servicer of any sums
determined to be overages, or to pay any interest owed to Mortgagors on such
account to the extent required by law, and in order to terminate and clear the
Master Servicer Account upon the termination of this Agreement upon the
termination of the Trust Fund.

            Section 5.8 Fidelity Bond; Errors And Omissions Policy.

            (a) The Master Servicer shall maintain with a responsible company,
and at its own expense, a blanket fidelity bond (a "Fidelity Bond") and an
errors and omissions insurance policy (an "Errors and Omissions Policy"), in a
minimum amount acceptable to FNMA or otherwise in an amount as is commercially
available at a cost that is not generally regarded as excessive by industry
standards, with broad coverage on all officers, employees or other persons
acting in any capacity requiring such persons to handle funds, money, documents
or papers relating to the Mortgage Loans ("Master Servicer Employees"). Any such
fidelity bond and errors and omissions insurance shall protect and insure the
Master Servicer against losses, including losses resulting from forgery, theft,
embezzlement, fraud, errors and omissions and negligent acts of such Master
Servicer Employees. Such fidelity bond shall also protect and insure the Master
Servicer against losses in connection with the release or satisfaction of a
Mortgage Loan without having obtained payment in full of the indebtedness
secured thereby. No provision of this Section 5.8 requiring such fidelity bond
and errors and omissions insurance shall diminish or relieve the Master Servicer
from its duties and obligations as set forth in this Agreement. Upon the request
of the Trustee[, the Certificate Insurer] or any Certificateholder, the Master
Servicer shall cause to be delivered to the Trustee, such Certificateholder [or
the Certificate Insurer] a certified true copy of such fidelity bond and
insurance policy. On the Closing Date, such bond and insurance is maintained
with certain underwriters as may be specified in writing to [the Certificate
Insurer and] the Trustee, from time to time. Any such fidelity bond or insurance
policy shall not be canceled or modified in a materially adverse manner without
written notice to the Trustee [and the Certificate Insurer].

                                      -55-
<PAGE>

            (b) The Master Servicer shall be deemed to have complied with this
provision if one of its respective Affiliates has such a Fidelity Bond and
Errors and Omissions Policy and, by the terms of such fidelity bond and errors
and omission policy, the coverage afforded thereunder extends to the Master
Servicer. The Master Servicer shall cause each and every Subservicer for it to
maintain a policy of insurance covering errors and omissions and a fidelity bond
which would meet the requirements of Section 5.8(a) hereof. Any such Fidelity
Bond and Errors and Omissions Policy shall not be canceled or modified in a
materially adverse manner without written notice [to the Certificate Insurer].

            Section 5.9 Collection Of Taxes, Assessments And Other Items. The
Master Servicer shall deposit all payments by Mortgagors for taxes, assessments,
primary mortgage or hazard insurance premiums or comparable items in the
Collection Account. Withdrawals from the Collection Account may be made to
effect payment of taxes, assessments, primary mortgage or hazard insurance
premiums or comparable items, to reimburse the Master Servicer out of related
collections for any advances made in the nature of any of the foregoing, to
refund to any Mortgagors any sums determined to be overages, or to pay any
interest owed to Mortgagors on such account to the extent required by law. The
Master Servicer shall advance the payments referred to in the first sentence of
this Section 5.9 that are not timely paid by the Mortgagors on the date when the
tax, premium or other cost for which such payment is intended is due, but the
Master Servicer shall be required to so advance only to the extent that such
advances, in the good faith judgment of the Master Servicer, will be recoverable
by the Master Servicer pursuant to Section 5.3 out of Liquidation Proceeds,
Insurance Proceeds or otherwise.

            Section 5.10 Periodic Filings With The Securities And Exchange
Commission; Additional Information. The Trustee shall prepare or cause to be
prepared for filing with the Commission (other than the Current Report on Form
8-K to be filed by the Depositor in connection with computational materials and
the initial Current Report on Form 8-K to be filed by the Depositor in
connection with the issuance of the Certificates) any and all reports,
statements and information respecting the Trust Fund and/or the Certificates
required to be filed with the Commission pursuant to the Securities Exchange Act
of 1934, and shall solicit any and all proxies of the Certificateholders
whenever such proxies are required to be solicited pursuant to the Securities
Exchange Act of 1934. The Depositor shall promptly file, and exercise its
reasonable best efforts to obtain a favorable response to, no-action requests
with, or other appropriate exemptive relief from, the Commission seeking the
usual and customary exemption from such reporting requirements granted to
issuers of securities similar to the Certificates. Fees and expenses incurred by
the Depositor in connection with this Section shall not be reimbursable from the
Trust Fund.

            The Master Servicer and the Depositor each agree to promptly furnish
the Trustee, from time to time upon request, such further information, reports
and financial statements within their respective 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.

            Section 5.11 Enforcement Of Due-On-Sale Clauses; Assumption
Agreements. The Master Servicer will, to the extent it has knowledge of any
conveyance or prospective

                                      -56-
<PAGE>

conveyance of any Mortgaged Property by any Mortgagor (whether by absolute
conveyance or by contract of sale, and whether or not the Mortgagor remains or
is to remain liable under the Mortgage Note and/or the Mortgage), exercise its
rights to accelerate the maturity of such Mortgage Loan under the "due-on-sale"
clause, if any, applicable thereto; provided, however, that the Master Servicer
shall not be required to take such action if, in its sole business judgment, the
Master Servicer believes it is not in the best interests of the Trust Fund and
shall not exercise any such rights if prohibited by law from doing so. If the
Master Servicer reasonably believes it is unable under applicable law to enforce
such "due-on-sale" clause or if any of the other conditions set forth in the
proviso to the preceding sentence apply, the Master Servicer will enter into
either (i) 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 or (ii)
a substitution agreement as provided in the succeeding sentence. 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. In connection with such assumption or substitution, the
Master Servicer shall apply such underwriting standards and follow such
practices and procedures as shall be normal and usual for mortgage loans similar
to the Mortgage Loans and as it applies to mortgage loans owned solely by it.
The Master Servicer shall notify the Trustee that any such assumption or
substitution agreement has been completed by forwarding to the Trustee the
original copy of such assumption or substitution agreement, which copy shall be
added by the Trustee 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. In connection with any
such assumption or substitution agreement, the Mortgage Interest Rate of the
related Mortgage Note and the payment terms shall not be changed. Any fee
collected by the Master Servicer for entering into an assumption or substitution
of liability agreement will be retained by the Master Servicer as servicing
compensation.

            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 conveyance
by the Mortgagor of the property subject to the Mortgage or any assumption of a
Mortgage Loan by operation of law which the Master Servicer in good faith
determines it may be restricted by law from preventing, for any reason
whatsoever, or if the exercise of such right would impair or threaten to impair
any recovery under any applicable insurance policy or, in the Master Servicer's
judgment, be reasonably likely to result in legal action by the Mortgagor.

            Section 5.12 Realization Upon Defaulted Mortgage Loans. Except as
provided in the last two paragraphs of this Section 5.12, the Master Servicer
shall, on behalf of the Trust, 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 5.1. In connection with
such foreclosure or other conversion, the Master Servicer shall follow Accepted
Servicing Practices. The foregoing is subject to the proviso that the Master
Servicer shall not be required to expend its own funds in connection with any
foreclosure or to restore any damaged property unless it shall determine that
(i) such foreclosure and/or restoration will increase the

                                      -57-
<PAGE>

proceeds of liquidation of the Mortgage Loan to Certificateholders after
reimbursement to itself for such expenses and (ii) such expenses will be
recoverable to it through Liquidation Proceeds (respecting which it shall
reimburse itself for such expense prior to the deposit in the Collection Account
of such proceeds). The Master Servicer shall be entitled to reimbursement of the
Servicing Fee and other amounts due it, if any, to the extent, but only to the
extent, that withdrawals from the Collection Account and the Trustee Collection
Account with respect thereto are permitted under Section 5.3.

            The Master Servicer may foreclose against the Mortgaged Property
securing a defaulted Mortgage Loan either by foreclosure, by sale or by strict
foreclosure, and in the event a deficiency judgment is available against the
Mortgagor or any other person, may proceed for the deficiency.

            In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure (an "REO Property"), the deed or
certificate of sale shall be issued to the Trustee, or to the Master Servicer on
behalf of the Trustee and the Certificateholders. Notwithstanding any such
acquisition of title and cancellation of the related Mortgage Loan, such REO
Mortgage Loan shall be considered to be a Mortgage Loan held in the applicable
REMIC of the Trust Fund until such time as the related Mortgaged Property shall
be sold and such REO Mortgage Loan becomes a Liquidated Mortgage Loan.
Consistent with the foregoing, for purposes of all calculations hereunder, so
long as such REO Mortgage Loan shall be considered to be an Outstanding Mortgage
Loan:

            (a) Notwithstanding that the indebtedness evidenced by the related
Mortgage Note shall have been discharged, such Mortgage Note and the related
amortization schedule in effect at the time of any such acquisition of title
(after giving effect to any previous Curtailments and before any adjustment
thereto by reason of any bankruptcy or similar proceeding or any moratorium or
similar waiver or grace period) shall be assumed to remain in effect, except
that such schedule shall be adjusted to reflect the application of Net REO
Proceeds received in any month pursuant to the succeeding clause.

            (b) Net REO Proceeds received in any month shall be deemed to have
been received first in payment of the accrued interest that remained unpaid on
the date that such Mortgage Loan became an REO Mortgage Loan of the applicable
REMIC of the Trust Fund, with the excess thereof, if any, being deemed to have
been received in respect of the delinquent principal installments that remained
unpaid on such date. Thereafter, Net REO Proceeds received in any month shall be
applied to the payment of installments of principal and accrued interest on such
Mortgage Loan deemed to be due and payable in accordance with the terms of such
Mortgage Note and such amortization schedule. If such Net REO Proceeds exceed
the then Unpaid REO Amortization, the excess shall be treated as a Curtailment
received in respect of such Mortgage Loan.

            (c) The Net REO Proceeds allocated to the payment of a related
Servicing Fee shall be limited to an amount equal to the product of (x) the
total amount of Net REO Proceeds allocable to interest multiplied by (y) the
fraction, the numerator of which is the interest rate at which the Servicing Fee
is determined and the denominator of which is the Mortgage Interest Rate borne
by such Mortgage Loan.

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<PAGE>

            In the event that the 200_ - _ REMIC acquires any Mortgaged Property
as aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, such Mortgaged Property shall be disposed of by or on behalf of
such 200_ - _ REMIC within three years after its acquisition thereby unless (i)
the Master Servicer shall have provided to the Trustee an Opinion of Counsel to
the effect that the holding by such 200_ - _ REMIC of the Trust Fund of such
Mortgaged Property subsequent to three years after its acquisition (and
specifying the period beyond such three-year period for which the Mortgaged
Property may be held) will not cause such 200_ - _ REMIC to be subject to the
tax on prohibited transactions imposed by Code Section 860F(a)(1), otherwise
subject such 200_ - _ REMIC or the Trust Fund to tax or cause the 200_ - _ REMIC
to fail to qualify as a REMIC at any time that any Certificates are outstanding,
or (ii) the Master Servicer or the Trustee (at the Master Servicer's expense)
shall have applied for, at least 60 days prior to the expiration of such
three-year period, an extension of such three-year period in the manner
contemplated by Code Section 856(e)(3), in which case the three-year period
shall be extended by the applicable period. The Master Servicer shall further
ensure that the Mortgaged Property is administered so that it constitutes
"foreclosure property" within the meaning of Code Section 860G(a)(8) at all
times, that the sale of such property does not result in the receipt by the 200_
- _ REMIC of any income from non-permitted assets as described in Code Section
860F(a)(2)(B), and that the 200_ - _ REMIC does not derive any "net income from
foreclosure property" within the meaning of Code Section 860G(c)(2) with respect
to such property.

            In lieu of foreclosing upon any defaulted Mortgage Loan, the Master
Servicer may, in its discretion, permit the assumption of such Mortgage Loan if,
in the Master Servicer's judgment, such default is unlikely to be cured and if
the assuming borrower satisfies the Master Servicer's underwriting guidelines
with respect to mortgage loans owned by the Master Servicer. In connection with
any such assumption, the Mortgage Interest Rate of the related Mortgage Note and
the payment terms shall not be changed. Any fee collected by the Master Servicer
for entering into an assumption agreement will be retained by the Master
Servicer as servicing compensation. Alternatively, the Master Servicer may
encourage the refinancing of any defaulted Mortgage Loan by the Mortgagor.

            Notwithstanding the foregoing, prior to instituting foreclosure
proceedings or accepting a deed-in-lieu of foreclosure with respect to any
Mortgaged Property, the Master Servicer shall make, or cause to be made,
inspection of the Mortgaged Property in accordance with the Accepted Servicing
Practices and, with respect to environmental hazards, such procedures as are
required by the provisions of the FNMA's selling and servicing guide applicable
to single-family homes and in effect on the date hereof. The Master Servicer
shall be entitled to rely upon the results of any such inspection made by
others. In cases where the inspection reveals that such Mortgaged Property is
potentially contaminated with or affected by hazardous wastes or hazardous
substances, the Master Servicer shall promptly give written notice of such fact
to [the Certificate Insurer,] the Trustee and each Class A Certificateholder.
The Master Servicer shall not commence foreclosure proceedings or accept a
deed-in-lieu of foreclosure for such Mortgaged Property [without obtaining the
consent of the Certificate Insurer].

            Section 5.13 Trustee To Cooperate; Release Of Mortgage Files. Upon
the payment in full of any Mortgage Loan, or the receipt by the Master Servicer
of a notification that

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payment in full will be escrowed in a manner customary for such purposes, the
Master Servicer shall (i) immediately deliver to the Trustee two copies of a
notice substantially in the form of the Request for Release attached hereto as
Exhibit H (which request shall include a statement to the effect that all
amounts received in connection with such payment which are required to be
deposited in the Collection Account pursuant to Section 5.3 have been or shall
be so deposited) and executed by a Servicing Officer and (ii) request delivery
to it of the Mortgage File. Upon receipt of such Request for Release, or in a
mutually agreeable electronic format which will, in lieu of a signature on its
face, originate from an authorized officer, the Trustee, or the Custodian on its
behalf, shall promptly release the related Mortgage File to the Master Servicer.
Upon any such payment in full, the Master Servicer is authorized to give, as
agent for the Trustee and the mortgagee under the Mortgage which secured the
Mortgage Loan, an instrument of satisfaction (or assignment of mortgage without
recourse) regarding the property subject to such Mortgage, which instrument of
satisfaction or assignment, as the case may be, shall be delivered to the Person
or Persons entitled thereto against receipt therefor of such payment, it being
understood and agreed that no expenses incurred in connection with such
instrument of satisfaction or assignment, as the case may be, shall be
chargeable to the Collection Account. In connection therewith, the Trustee shall
execute and return to the Master Servicer any required power of attorney
provided to the Trustee by the Master Servicer and other required documentation
in accordance with Section 5.1(d). From time to time and as appropriate for the
servicing or foreclosure of any Mortgage Loan and in accordance with Accepted
Servicing Practices, the Trustee shall, upon request of the Master Servicer and
delivery to the Trustee of a Request for Release signed by a Servicing Officer,
release, or cause the Custodian to release, the related Mortgage File to the
Master Servicer and shall execute such documents as shall be necessary to the
prosecution of any such proceedings. Such Request for Release shall obligate the
Master Servicer to return the Mortgage File to the Trustee when the need
therefor by the Master Servicer no longer exists unless the Mortgage Loan shall
be liquidated, in which case, upon receipt of a certificate of a Servicing
Officer similar to the Request for Release herein above specified, the Mortgage
File shall be delivered by the Trustee to the Master Servicer.

            Section 5.14 Servicing Fee; Servicing Compensation.

            (a) The Master Servicer shall be entitled, at its election, either
(1) to pay itself the Servicing Fee out of any Mortgagor payment on account of
interest or Net REO Proceeds actually collected prior to the deposit of such
payment in the Collection Account or (2) to withdraw from the Collection Account
or Trustee Collection Account such Servicing Fee pursuant to Section 5.4. The
Master Servicer shall also be entitled, at its election, either (i) to pay
itself the Servicing Fee in respect of each delinquent Mortgage Loan out of
Liquidation Proceeds in respect of such Mortgage Loan or other recoveries with
respect thereto to the extent permitted in Section 5.3(a) or (ii) to withdraw
from the Collection Account the Servicing Fee in respect of each such Mortgage
Loan to the extent of such Liquidation Proceeds or other recoveries, to the
extent permitted by Section 5.4(a).

            The aggregate Servicing Fee is reserved for the administration of
the Trust Fund and, in the event of replacement of the Master Servicer as Master
Servicer of the Mortgage Loans, for the payment of other expenses related to
such replacement. The aggregate Servicing Fee shall be offset as provided in
Section 5.19. The Master Servicer shall be required to pay all expenses incurred
by it in connection with its servicing activities hereunder (including

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maintenance of the hazard insurance required by Section 5.5) and shall not be
entitled to reimbursement therefor except as specifically provided herein.

            (b) Servicing compensation in the form of assumption fees, late
payment charges, tax service fees, fees for statement of account or payoff of
the Mortgage Loan (to the extent permitted by applicable law) or otherwise shall
be retained by the Master Servicer and are not required to be deposited in the
Collection Account.

            Section 5.15 Reports To The Trustee; Collection Account Statements.
Not later than 15 days after each Remittance Date, the Master Servicer shall
provide to the Trustee [and the Certificate Insurer] a statement, certified by a
Servicing Officer, setting forth the status of the Collection Account as of the
close of business on the related Determination Date, stating that all
distributions required by this Agreement to be made by the Master Servicer on
behalf of the Trustee have been made (or if any required distribution has not
been made by the Master Servicer, specifying the nature and status thereof) and
showing, for the period covered by such statement, the aggregate of deposits
into and withdrawals from the Collection Account for each category of deposit
specified in Section 5.3 and each category of withdrawal specified in Section
5.4, the allocation of such amounts between principal and interest collected on
the Mortgage Loans and the aggregate of deposits into the Certificate Account as
specified in Section 6.1(c). Such statement shall also state the aggregate
unpaid principal balance of all the Mortgage Loans as of the close of business
on the last day of the month preceding the month in which such Remittance Date
occurs. Copies of such statement shall be provided by the Trustee to any
Certificateholder upon request.

            Section 5.16 Annual Statement As To Compliance. The Master Servicer
will deliver to the Trustee, [the Certificate Insurer,] __________ and _________
on or before ___________ of each calendar year, an Officers' Certificate stating
as to each signer thereof, that (i) a review of the activities of the Master
Servicer during the preceding calendar year and of its performance under this
Agreement has been made under such officer's supervision, and (ii) to the best
of such officer's knowledge, based on such review, the Master Servicer has
fulfilled all 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. The
first such Officers' Certificate shall be delivered in _______ 20__. Such
Officers' Certificate shall be accompanied by the statement described in Section
5.17 of this Agreement. Copies of such statement shall, upon request, be
provided to any Certificateholder by the Master Servicer, or by the Trustee at
the Master Servicer's expense if the Master Servicer shall fail to provide such
copies.

            Section 5.17 Annual Independent Public Accountants' Servicing
Report. Not later than ______________ of each calendar year, the Master
Servicer, at its expense, shall cause a firm of nationally recognized
independent public accountants to furnish a statement to the Trustee, [the
Certificate Insurer,] _________ and __________ to the effect that, on the basis
of an examination of certain documents and records relating to the servicing of
the mortgage loans being serviced by the Master Servicer under pooling and
servicing agreements similar to this Agreement (which agreements shall be
described in a schedule to such statement), conducted substantially in
compliance with the Uniform Single Attestation Program for Mortgage Bankers,
such firm is of the opinion that such servicing has been conducted in compliance
with the

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<PAGE>

Uniform Single Attestation Program for Mortgage Bankers and that such
examination has disclosed no exceptions or errors relating to the servicing
activities of the Master Servicer (including servicing of Mortgage Loans subject
to this Agreement) that, in the opinion of such firm, are material, except for
such exceptions as shall be set forth in such statement. The first such
statement shall be delivered in _______ 20__. Copies of such statement shall,
upon request, be provided to Certificateholders by the Master Servicer, or by
the Trustee at the Master Servicer's expense if the Master Servicer shall fail
to provide such copies. For purposes of such statement, such firm may
conclusively presume that any pooling and servicing agreement which governs
mortgage pass-through certificates offered by the Depositor (or any predecessor
or successor thereto) in a registration statement under the Securities Act of
1933, as amended, is similar to this Agreement, unless such other pooling and
servicing agreement expressly states otherwise. In the event such firm requires
the Trustee to agree to the procedures performed by such firm, the Master
Servicer shall direct the Trustee in writing to 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 shall not
make 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. Delivery of such reports, information and documents to the
Trustee is for informational purposes only, and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from the information contained therein, including the Master
Servicer's compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on the Officer's Certificates).

            Section 5.18 Reports To Be Provided By The Master Servicer.

            (a) In connection with the transfer of the Certificates, the Trustee
on behalf of any Certificateholder may request that the Master Servicer make
available to any prospective Certificateholder annual unaudited financial
statements of the Master Servicer (or, upon request, audited annual financial
statements of the Master Servicer's ultimate parent corporation) for one or more
of the most recently completed fiscal years for which such statements are
available, which request shall not be unreasonably denied or unreasonably
delayed. [Such annual unaudited financial statements also shall be made
available to the Certificate Insurer upon request.] In the event such firm
requires the Trustee to agree to the procedures performed by such firm, the
Master Servicer shall direct the Trustee in writing to 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
shall not make 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. Delivery of such reports, information and documents to the
Trustee is for informational purposes only, and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from the information contained therein, including the Master
Servicer's compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on the Officer's Certificates).

            (b) The Master Servicer also agrees to make available on a
reasonable basis to [the Certificate Insurer,] the Trustee or any prospective
Certificateholder a knowledgeable financial or accounting officer for the
purpose of answering reasonable questions respecting recent developments
affecting the Master Servicer or the financial statements of the Master Servicer
and to permit [the Certificate Insurer or] any prospective Certificateholder to
inspect the

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<PAGE>

Master Servicer's servicing facilities during normal business hours for the
purpose of satisfying [the Certificate Insurer,] the Trustee or such prospective
Certificateholder that the Master Servicer has the ability to service the
Mortgage Loans in accordance with this Agreement.

            Section 5.19 Adjustment Of Servicing Compensation In Respect Of
Prepaid Mortgage Loans. The aggregate amount of the Servicing Fees that the
Master Servicer shall be entitled to receive with respect to all of the Mortgage
Loans and each Remittance Date shall be offset on such Remittance Date by an
amount equal to the aggregate Prepayment Interest Shortfall with respect to all
Mortgage Loans which were subjects of Principal Prepayments during the Due
Period applicable to such Remittance Date. The amount of any offset against the
aggregate Servicing Fee with respect to any Remittance Date under this Section
5.19 shall be limited to the aggregate amount of the Servicing Fees otherwise
payable to the Master Servicer (without adjustment on account of Prepayment
Interest Shortfalls) with respect to (i) scheduled payments having the Due Date
occurring in the Due Period applicable to such Remittance Date received by the
Master Servicer prior to the Determination Date, and (ii) Principal Prepayments,
Curtailments and Liquidation Proceeds received in the Due Period applicable to
such Remittance Date, and the rights of the Certificateholders to the offset of
the aggregate Prepayment Interest Shortfalls shall not be cumulative.

            Section 5.20 Periodic Advances. If, on the Business Day prior to any
Determination Date, the Master Servicer determines that any Monthly Payments due
on the Due Date immediately preceding such Determination Date have not been
received as of the close of business on the second Business Day preceding such
Determination Date, the Master Servicer shall determine the amount of any
Periodic Advance required to be made with respect to such unpaid Monthly
Payments on the related Determination Date. The Master Servicer shall, on the
Business Day preceding such Determination Date, certify and deliver a magnetic
tape or diskette to the Trustee indicating the payment status of each Mortgage
Loan as of the second Business Day preceding such Determination Date and shall
cause to be deposited in the Collection Account an amount equal to the Periodic
Advance for the related Determination Date, which deposit may be made in whole
or in part from funds in the Collection Account being held for future
distribution or withdrawal on or in connection with Remittance Dates in
subsequent months. Any funds being held for future distribution to
Certificateholders and so used shall be replaced by the Master Servicer from its
own funds by deposit into the Collection Account on or before the Determination
Date corresponding to any such future Determination Date to the extent that
funds in the Collection Account for such future Determination Date shall
otherwise be less than the amount required to be transferred to the Certificate
Account in respect of payments to Certificateholders required to be made on the
Remittance Date related to such future Determination Date.

            The Master Servicer shall designate on its records the specific
Mortgage Loans and related installments (or portions thereof) as to which such
Periodic Advance shall be deemed to have been made, such designation, except in
cases of manifest error, being conclusive for purposes of withdrawals from the
Collection Account or Trustee Collection Account pursuant to Section 5.4.

            Section 5.21 Indemnification; Third Party Claims.

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<PAGE>

            (a) Each of the Master Servicer, the Depositor, and the Transferor
(solely for the purpose of this Section 5.21, the "Indemnifying Parties") agrees
to indemnify and to hold each of the Master Servicer, the Depositor, the
Trustee, the Transferor[, the Certificate Insurer] and each Certificateholder
(solely for the purpose of this Section 5.21, the "Indemnified Parties")
harmless against any and all claims, losses, penalties, fines, forfeitures,
legal fees and related costs, judgments, and any other costs, fees and expenses
that the Indemnified Parties may, respectively, sustain in any way related to
the failure of any one or more of the Indemnifying Parties to perform its
respective duties in compliance with the terms of this Agreement. Each
Indemnified Party and the Master Servicer shall promptly notify the other
Indemnified Parties if a claim is made by a third party with respect to this
Agreement, and the Master Servicer shall [with the consent of the Certificate
Insurer, such consent not to be unreasonably withheld,] assume the defense of
any such claim and pay all expenses in connection therewith, including
reasonable counsel fees [approved by the Certificate Insurer], and promptly pay,
discharge and satisfy any judgment or decree which may be entered against the
Indemnified Parties in respect of such claim. The Trustee shall, out of the
assets of the Trust Fund, reimburse the Master Servicer in accordance with
Section 5.14 hereof for all amounts advanced by it pursuant to the preceding
sentence except when the claim relates directly to the failure of the Master
Servicer to service and administer the Mortgages in compliance with the terms of
this Agreement; provided, that the Master Servicer's indemnity hereunder shall
not be in any manner conditioned on the availability of funds for such
reimbursement.

            (b) The Trustee, at the written request of the Master Servicer
(which the Trustee may conclusively rely on) shall reimburse the Transferor from
amounts otherwise distributable on the Class R Certificates for all amounts
advanced by the Transferor pursuant to the second sentence of Section 4.3 of the
Purchase and Sale Agreement except when the relevant claim relates directly to
the failure of the Transferor to perform its duties in compliance with the terms
of the Purchase and Sale Agreement.

            Section 5.22 Maintenance Of Corporate Existence And Licenses; Merger
Or Consolidation Of The Master Servicer.

            (a) The Master Servicer will keep in full effect its existence,
rights and franchises as a corporation, will obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction
necessary to protect the validity and enforceability of this Agreement or any of
the Mortgage Loans and to perform its duties under this Agreement and will
otherwise operate its business so as to cause the representations and warranties
under Section 3.1 to be true and correct at all times under this Agreement.

            (b) Any Person into which the Master Servicer may be merged or
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Master Servicer shall be a party, or any Person
succeeding to the business of the Master Servicer, shall be an established
mortgage loan servicing institution [acceptable to the Certificate Insurer] that
has a net worth of at least $15,000,000 and is a Permitted Transferee, and in
all events shall be the successor of the Master Servicer 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. The Master Servicer
shall send notice of any such merger or consolidation to the Trustee [and the
Certificate Insurer].

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<PAGE>

            Section 5.23 Assignment Of Agreement By Master Servicer; Master
Servicer Not To Resign. The Master Servicer shall not assign this Agreement nor
resign from the obligations and duties hereby imposed on it except by mutual
written consent of the Master Servicer, the Transferor[, the Certificate
Insurer] and the Trustee or upon the determination that the Master Servicer's
duties hereunder are no longer permissible under applicable law and that such
incapacity cannot be cured by the Master Servicer without the incurrence [, in
the reasonable judgment of the Certificate Insurer,] of unreasonable expense.
Any such determination that the Master Servicer's duties hereunder are no longer
permissible under applicable law permitting the resignation of the Master
Servicer shall be evidenced by a written Opinion of Counsel (who may be counsel
for the Master Servicer) to such effect delivered to the Trustee, the
Transferor, the Depositor [and the Certificate Insurer]. No such resignation
shall become effective until the Trustee or another successor appointed in
accordance with the terms of this Agreement has assumed the Master Servicer's
responsibilities and obligations hereunder in accordance with Section 7.2. The
Master Servicer shall provide the Trustee, _______ and _______ [and the
Certificate Insurer] with 30 days prior written notice of its intention to
resign pursuant to this Section 5.23.

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                                   ARTICLE VI

                           DISTRIBUTIONS AND PAYMENTS

            Section 6.1 Establishment Of Certificate Account, Deposits To The
Certificate Account.

            (a) The Trustee shall establish and maintain the Certificate Account
which shall be titled "Certificate Account, ____________________, as trustee for
the registered holders of _______ Home Equity Asset Backed Certificates, Series
200_ - _, Class A and Class R" and which shall be an Eligible Account. Notice of
the establishment of the Certificate Account shall be promptly provided in
writing to each of the Master Servicer, the Rating Agencies [and the Certificate
Insurer].

            (b) The Trustee shall control and receive the income from the
investment of funds in the Certificate Account. The Trustee shall deposit the
amount of any losses incurred in respect of any such investments in the
Certificate Account out of its own funds immediately as realized.

            (c) On each Determination Date, the Master Servicer shall cause to
be deposited in the Certificate Account from funds on deposit in the Collection
Account, an amount equal to the Master Servicer Remittance Amount (net of the
amount to be deposited pursuant to clause (ii) below) and (ii) from funds on
deposit in the Collection Account or the Trustee Collection Account, the Net
Foreclosure Profits, if any with respect to the related Remittance Date, minus
any portion thereof payable to the Master Servicer pursuant to Section 5.3.

            Section 6.2 Permitted Withdrawals From The Certificate Account. The
Trustee shall, in accordance with the Master Servicer's written directions (in
the case of (a), (b), (d) or (e) below) to the Trustee as described in Section
6.5, withdraw or cause to be withdrawn funds from the Certificate Account for
the following purposes:

            (a) to effect the distributions described in Section 6.5(a);

            (b) to pay to or upon the direction of the Transferor with respect
to each Mortgage Loan or property acquired in respect thereof that has been
repurchased or replaced pursuant to Section 2.4 or 3.3 or to pay to the Master
Servicer with respect to each Mortgage Loan or property acquired in respect
thereof that has been purchased all amounts received thereon deposited in the
Certificate Account that do not constitute property of the Trust Fund;

            (c) to pay the Trustee any interest earned on or investment income
earned with respect to funds in the Certificate Account;

            (d) to return to the Collection Account any amount deposited in the
Certificate Account that was not required to be deposited therein; and

                                      -66-
<PAGE>

            (e) to clear and terminate the Certificate Account upon termination
of the Trust Fund pursuant to Article VIII.

            The Trustee shall keep and maintain a separate accounting for
withdrawals from the Certificate Account pursuant to each of subclauses (a)
through (e) listed above.

            Section 6.3 Collection Of Money. Except as otherwise expressly
provided herein, the Trustee may demand payment or delivery of all money and
other property payable to or receivable by the Trustee pursuant to this
Agreement, including, but not limited to, (i) all payments due from the Master
Servicer or any Subservicer on the Mortgage Loans in accordance with the
respective terms and conditions of such Mortgage Loans and required to be paid
over to the Trustee by the Master Servicer or by any Subservicer [and (ii)
Insured Payments from the Certificate Insurer]. The Trustee shall hold all such
money and property received by it as part of the Trust Fund and shall apply it
as provided in this Agreement.

            [Section 6.4 The certificate insurance policy.

            (a) Not later than two Business Days prior to the Remittance Date,
the Trustee, based on the information provided to it by the Master Servicer
pursuant to Section 6.5 hereof, shall determine with respect to the immediately
following Remittance Date the amount to be on deposit in the Certificate Account
reduced by (x) the sum of the amounts described in clauses (i) and (ii) of
Section 6.5(a) for the related Remittance Date, and further not including (y)
any Insured Payment.

            (b) Not later than 12:00 noon New York City time on the second
Business Day preceding each Remittance Date, the Trustee shall, if the Trustee,
based solely on information provided by the Master Servicer, determines that the
Available Amount for the related Remittance Date is less than the sum of the
Class A-1 Interest Distribution Amount, Class A-2 Interest Distribution Amount,
Class A-3 Interest Distribution Amount, Class A-4 Interest Distribution Amount
and Class A-5 Interest Distribution Amount and any Subordination Deficit for
such Remittance Date, complete a Notice in the form of Exhibit A to the Class A
Certificate Insurance Policy, and submit such notice to the Certificate Insurer
and such notice shall serve as a claim for an Insured Payment in an amount equal
to the Insured Payment due with respect to the Class A Certificates for and on
such Remittance Date. The Insured Payment shall be deposited directly into the
Certificate Account in accordance with the Notice and the Certificate Insurance
Policy.

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

            (d) In the event that the Trustee has received a certified copy of
an order of the appropriate court that any amount distributed on the Class A
Certificates, including any amounts represented by an Insured Payment, has been
voided in whole or in part as a preference payment under applicable bankruptcy
law, the Trustee shall so notify the Certificate Insurer,

                                      -67-
<PAGE>

shall comply with the provisions of the Certificate Insurance Policy to obtain
payment by the Certificate Insurer of such voided amount distributed, and shall,
at the time it provides notice to the Certificate Insurer, notify, by mail to
Certificateholders of the affected Certificates that, in the event any
Certificateholder's amount distributed is so recovered, such Certificateholder
will be entitled to payment pursuant to the Certificate Insurance Policy, a copy
of which shall be made available through the Trustee, the Certificate Insurer or
the Certificate Insurer's fiscal agent, if any, and the Trustee shall furnish to
the Certificate Insurer or its fiscal agent, if any, its records evidencing the
payments which have been made by the Trustee and subsequently recovered from
Certificateholders, and dates on which such payments were made.

            (e) The Trustee shall promptly notify the Certificate Insurer of any
proceeding or the institution of any action, of which a Responsible Officer of
the Trustee has actual knowledge, seeking the avoidance as a preferential
transfer under applicable bankruptcy, insolvency, receivership or similar law (a
"Preference Claim") of any distribution made with respect to the Certificates.
Each Certificateholder, by its purchase of Certificates, the Master Servicer and
the Trustee agree that, the Certificate Insurer (so long as no Certificate
Insurer Default exists) may at any time during the continuation of any
proceeding relating to a Preference Claim direct all matters relating to such
Preference Claim, including, without limitation, (1) the direction of any appeal
of any order relating to such Preference Claim and (2) the posting of any surety
or performance bond pending any such appeal. In addition and without limitation
of the foregoing, the Certificate Insurer shall be subrogated to, and each
Certificateholder, the Master Servicer and the Trustee hereby delegate and
assign to the Certificate Insurer, to the fullest extent permitted by law, the
rights of the Master Servicer, the Trustee and each Certificateholder in the
conduct of any such Preference Claim, including, without limitation, all rights
of any party to any adversary proceeding or action with respect to any court
order issued in connection with any such Preference Claim.]

            Section 6.5 Distributions. No later than 12:00 noon California time
on the Business Day preceding each Determination Date, the Master Servicer shall
deliver to the Trustee and to the Certificate Insurer a report in a mutually
agreed upon format specifying (x) the outstanding principal balances of each of
the Mortgage Loans as of the last day of the calendar month immediately
preceding the Due Period applicable to such Determination Date, (y) such of the
information included in Section 6.7(c) as to the Mortgage Loans as the Trustee
may reasonably require [or the Certificate Insurer may reasonably request] and
(z) such information as to each Mortgage Loan as of the Record Date immediately
preceding such Determination Date and such other information as the Trustee
shall reasonably require [or the Certificate Insurer may reasonably request].
The Master Servicer shall include written direction to the Trustee [(with a copy
delivered to the Certificate Insurer)] specifying the following information
(which need not be in computer-readable form): (i) each amount to be transferred
from the Collection Account to the Certificate Account, including (a) the Master
Servicer Remittance Amount, (b) the Net Foreclosure Profits (net of any portion
payable to the Master Servicer) and (c) the Periodic Advances for the related
Remittance Date; and (ii) instructions to the Trustee specifying the amounts to
be withdrawn from the Certificate Account pursuant to Section 6.2(a) (including
therein an itemization of the amounts to be distributed pursuant to Section
6.2(a)(i) as specified in Sections 6.5(a)(i)-(ix)). The information with respect
to the Remittance Date provided by the Master Servicer to the Trustee [and the
Certificate Insurer] on the Business Day preceding each Determination Date shall
also include the Class A-1 Pass-Through Rate, the premium

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percentage, the Class A-1 Principal Balance, the Class A-2 Principal Balance,
the Class A-3 Principal Balance, the Class A-4 Principal Balance, the Class A-5
Principal Balance, the Aggregate Principal Balance of the Mortgage Loans, the
overcollateralization deficit; the Overcollateralization Increase Amount, the
Overcollateralization Amount; the Overcollateralization Target Amount; and any
Subordinate Deficit. The Master Servicer shall also calculate and provide the
Available Amount, the Excess Spread, and the amount of any Insured Payment.
Simultaneous with the delivery of the foregoing information to the Trustee, the
Master Servicer shall provide the Trustee [and the Certificate Insurer] with a
report including information specified in each of Sections 6.7(a)(i)-(xi) and in
Section 6.7(c)(i)-(vii).

            (a) With respect to the Certificate Account (including, if deposited
into such Certificate Account, any Insured Payments), on each Remittance Date,
the Trustee shall make the following allocations, disbursements and transfers in
the following order of priority, in accordance with the information received
pursuant to the immediately preceding paragraph and each such allocation,
transfer and disbursement shall be treated as having occurred only after all
preceding allocations, transfers and disbursements have occurred:

            (i) from the Master Servicer Remittance Amount, to the Holders of
      the Class R Certificates, any prepayment penalties collected during the
      related Due Period with respect to a Mortgage Loan;

            (ii) from the Master Servicer Remittance Amount, to the Certificate
      Insurer, a Proportional Share of the [Certificate Insurance Premium
      Amount];

            (iii) from the Master Servicer Remittance Amount, to the Trustee, a
      Proportional Share of the Trustee Fees then due to it;

            (iv) from the Available Amount plus any Excess Spread plus the
      applicable portion of any Insured Payment, to the Class A-1
      Certificateholders an amount equal to the Class A-1 Interest Distribution
      Amount, to the Class A-2 Certificateholders an amount equal to the Class
      A-2 Interest Distribution Amount, to the Class A-3 Certificateholders an
      amount equal to the Class A-3 Interest Distribution Amount, to the Class
      A-4 Certificateholders an amount equal to the Class A-4 Interest
      Distribution Amount and to the Class A-5 Certificateholders and amount
      equal to the Class A-5 Interest Distribution Amount, pro rata;

            (v) from the Available Amount plus any Excess Spread plus the
      applicable portion of any Insured Payment, to the Class A-1
      Certificateholders an amount equal to the Principal Distribution Amount
      net of any Overcollateralization Increase Amount included therein until
      the Class A-1 Principal Balance has been reduced to zero, then to the
      Class A-2 Certificateholders an amount equal to the Principal Distribution
      Amount net of any Overcollateralization Increase Amount included therein
      until the Class A-2 Principal Balance has been reduced to zero, then to
      the Class A-3 Certificateholders an amount equal to the remaining
      Principal Distribution Amount net of any Overcollateralization Increase

                                      -69-
<PAGE>

      Amount included therein until the Class A-3 Principal Balance has been
      reduced to zero, to the Class A-4 Certificateholders an amount equal to
      the remaining Principal Distribution Amount net of any
      Overcollateralization Increase Amount included therein until the Class A-4
      Principal Balance has been reduced to zero and finally to the Class A-5
      Certificateholders an amount equal to the remaining Principal Distribution
      Amount net of any Overcollateralization Increase Amount included therein
      until the Class A-5 Principal Balance has been reduced to zero;

            (vi) from the Excess Spread to the Class A-1 Certificateholders,
      Class A-2 Certificateholders, Class A-3 Certificateholders, Class A-4
      Certificateholders or Class A-5 Certificateholders, as applicable, an
      amount equal to the excess of (a) the sum of the Class A-1 Interest
      Distribution Amount, the Class A-2 Interest Distribution Amount, the Class
      A-3 Interest Distribution Amount, the Class A-4 Interest Distribution
      Amount, the Class A-5 Interest Distribution Amount and any Principal
      Distribution Amount net of any Overcollateralization Increase Amount
      included therein over (b) the Available Amount until the Class A-1
      Principal Balance, Class A-2 Principal Balance, Class A-3 Principal
      Balance, Class A-4 Principal Balance or the Class A-5 Principal Balance,
      as applicable, has been reduced to zero;

            [(vii)to the Certificate Insurer the lesser of (x) the excess of (a)
      the amount in the Certificate Account (excluding Insured Payments) over
      (b) the amount of Insured Payments for such Remittance Date and (y) the
      outstanding Reimbursement Amount, if any, as of such Remittance Date;]

            (viii)from the Excess Spread, first to the Class A-1
      Certificateholders an amount equal to any outstanding
      Overcollateralization Increase Amount until the Class A-1 Principal
      Balance has been reduced to zero, next to the Class A-2 Certificateholders
      an amount equal to any outstanding Overcollateralization Increase Amount
      until the Class A-2 Principal Balance has been reduced to zero, next to
      the Class A-3 Certificateholders an amount equal to any outstanding
      Overcollateralization Increase Amount until the Class A-3 Principal
      Balance has been reduced to zero, next to the Class A-4 Certificateholders
      an amount equal to any outstanding Overcollateralization Increase Amount
      until the Class A-4 Principal Balance has been reduced to zero and then to
      the Class A-5 Certificateholders an amount equal to any outstanding
      Overcollateralization Increase Amount until the Class A-5 Principal
      Balance has been reduced to zero; and

            (ix) to the Holders of the Class R Certificates, the remaining
      Available Amount on deposit in the Certificate Account on such Remittance
      Date, if any.

            Notwithstanding the foregoing, the aggregate amounts distributed on
all Remittance Dates to the Holders of the Class A-1 Certificates, the Holders
of the Class A-2 Certificates, the Holders of the Class A-3 Certificates, the
Holders of the Class A-4 Certificates and the Holders of the Class A-5
Certificates on account of principal shall not exceed the Original Class A-1
Principal Balance, Original Class A-2 Principal Balance, Original Class A-3
Principal Balance, Original Class A-4 Principal Balance or Original Class A-5
Principal Balance, as applicable.

            Section 6.6 Investment Of Accounts.

                                      -70-
<PAGE>

            (a) So long as no Event of Default shall have occurred and be
continuing, and consistent with any requirements of the Code, all or a portion
of any Account held by the Trustee may be invested and reinvested by the
Trustee, in one or more Permitted Investments bearing interest or sold at a
discount and maturing not later than the next Remittance Date. [Notwithstanding
anything to the contrary in this Section 6.6(a), all amounts received under the
Certificate Insurance Policy shall remain uninvested.]

            If any amounts are needed for disbursement from any Account held by
the Trustee and sufficient uninvested funds are not available to make such
disbursement, the Trustee shall cause to be sold or otherwise converted to cash
a sufficient amount of the investments in such Account. The Trustee shall be
liable for any investment loss or other charge resulting therefrom.

            (b) So long as no Event of Default shall have occurred and be
continuing, all net income and gain realized from investment of, and all
earnings on, funds deposited in any Collection Account shall be for the benefit
of the Master Servicer as servicing compensation (in addition to the Servicing
Fee). The Master Servicer shall deposit in the related Account the amount of any
loss incurred in respect of any Permitted Investment held therein which is in
excess of the income and gain thereon immediately upon realization of such loss,
without any right to reimbursement therefor from its own funds.

            Section 6.7 Reports By Trustee.

            (a) On each Remittance Date the Trustee shall forward a report
delivered to it by the Master Servicer on the Business Day preceding each
Determination Date, as described in Section 6.5 hereof, to each Holder, [to the
Certificate Insurer,] to the Depositor, to the Master Servicer, to _______ and
to _______ (the "Trustee Remittance Report"). Such report shall set forth the
following information:

            (i) the amount of the distributions made on such Remittance Date
      with respect to the Class A-1 Certificates, the Class A-2 Certificates,
      the Class A-3 Certificates, the Class A-4 Certificates, the Class A-5
      Certificates and the Class R Certificates;

            (ii) the amount of such distributions allocable to principal,
      separately identifying the aggregate amount of any Principal Prepayments
      or other unscheduled recoveries of principal included therein;

            (iii) the amount of such distributions allocable to interest and the
      calculation thereof;

            (iv) the amount of any Net Liquidation Proceeds included in such
      distributions and the calculation thereof;

            (v) the principal amount of the Class A-1 Certificates (based on a
      Certificate in an original principal amount of $1,000), the principal
      amount of the Class A-2 Certificates (based on a Certificate in an
      original

                                      -71-
<PAGE>

      principal amount of $1,000), the principal amount of the Class A-3
      Certificates (based on a Certificate in an original principal amount of
      $1,000), the principal amount of the Class A-4 Certificates (based on a
      Certificate in an original principal amount of $1,000) and the principal
      amount of the Class A-5 Certificates (based on a Certificate in an
      original principal amount of $1,000) then outstanding, and the outstanding
      amount of the principal balances, after giving effect to any principal
      payments made on such Remittance Date;

            (vi) the amount of any Insured Payment included in the amounts
      distributed to the Class A Certificateholders on such Remittance Date;

            (vii) (a) the amount of the Overcollateralization Amount, the
      Overcollateralization Target Amount, the Overcollateralization Increase
      Amount and (b) any Subordination Deficit on such Remittance Date;

            (viii)the total of any Substitution Adjustments and any Loan
      Repurchase Price amounts included in each such distribution; and

            (ix) the amounts, if any, of any related Liquidation Loan Losses for
      the related Due Period.

Items (i), (ii) and (iii) above shall, with respect to the Class A Certificates,
be presented on the basis of a Certificate having a $1,000 denomination. In
addition, by __________ of each calendar year following any year during which
the Certificates are outstanding, the Trustee shall furnish a report to each
Holder of record if so requested in writing at any time during each calendar
year as to the aggregate of amounts reported pursuant to (i), (ii) and (iii)
with respect to the Certificates for such calendar year.

            (b) All distributions made to the Certificateholders according to
Class or type of Certificate on each Remittance Date will be made on a pro rata
basis among the Certificateholders as of the next preceding Record Date based on
the proportional beneficial ownership interest in the 200_ - _ REMIC as are
represented by their respective Certificates, and shall be made by wire transfer
of immediately available funds to the account of such Certificateholder at a
bank or other entity having appropriate facilities therefor, if, in the case of
a Class A Certificateholder, such Certificateholder shall own of record
Certificates of the same Class which have denominations aggregating at least
$5,000,000 appearing in the Certificate Register and shall have provided
complete wiring instructions at least five Business Days prior to the Record
Date, and otherwise by check mailed to the address of such Certificateholder
appearing in the Certificate Register.

            (c) In addition, on each Remittance Date the Trustee will distribute
to each Holder, [to the Certificate Insurer,] to the Underwriter, to the
Depositor, to _______ and to _______, together with the information described in
subsection (a) preceding, the following information with respect to the Mortgage
Loans as of the close of business on the last Business Day of the prior calendar
month (except as otherwise provided in clause (v) below), which is hereby
required to be prepared by the Master Servicer and furnished to the Trustee for
such purpose on or prior to the related Determination Date:

            (i) the total number of Mortgage Loans and the aggregate principal
      balances thereof, together with the number, aggregate principal balances
      of such Mortgage Loans

                                      -72-
<PAGE>

      and the percentage (based on the Aggregate Principal Balances of the
      Mortgage Loans) of the aggregate principal balances of such Mortgage Loans
      to the aggregate Principal Balance of all Mortgage Loans (A) 30-59 days
      Delinquent, (B) 60-89 days Delinquent and (C) 90 or more days Delinquent;

            (ii) the number, Aggregate Principal Balances of all Mortgage Loans
      and percentage (based on the Aggregate Principal Balances of the Mortgage
      Loans) of the aggregate Principal Balances of such Mortgage Loans to the
      Aggregate Principal Balance of all Mortgage Loans in foreclosure
      proceedings and the number, Aggregate Principal Balances of all Mortgage
      Loans and percentage (based on the Aggregate Principal Balances of the
      Mortgage Loans) of any such Mortgage Loans also included in any of the
      statistics described in the foregoing clause (i);

            (iii) the number, Aggregate Principal Balances of all Mortgage Loans
      and percentage (based on the Aggregate Principal Balances of the Mortgage
      Loans) of the aggregate Principal Balances of such Mortgage Loans to the
      Aggregate Principal Balance of all Mortgage Loans relating to Mortgagors
      in bankruptcy proceedings and the number, Aggregate Principal Balances of
      all Mortgage Loans and percentage (based on the Aggregate Principal
      Balances of the Mortgage Loans) of any such Mortgage Loans are also
      included in any of the statistics described in the foregoing clause (i);

            (iv) the number, Aggregate Principal Balances of all Mortgage Loans
      and percentage (based on the Aggregate Principal Balances of the Mortgage
      Loans) of the aggregate Principal Balances of such Mortgage Loans to the
      Aggregate Principal Balance of all Mortgage Loans relating to REO Mortgage
      Loans and the number, Aggregate Principal Balances of all Mortgage Loans
      and percentage (based on the Aggregate Principal Balances of the Mortgage
      Loans) of any such Mortgage Loans that are also included in any of the
      statistics described in the foregoing clause (i);

            (v) the weighted average of the Mortgage Interest Rate for the
      Mortgage Loans on the Due Date occurring in the Due Period related to such
      Remittance Date;

            (vi) the weighted average remaining term to stated maturity of all
      Mortgage Loans; and

            (vii) the book value of any REO Property.

            Section 6.8 Additional Reports By Trustee And By Master Servicer.

            (a) The Trustee shall report to the Depositor, the Master Servicer
[and the Certificate Insurer] with respect to the amount then held in the
Certificate Account (including investment earnings accrued or scheduled to
accrue) held by the Trustee and the identity of the investments included
therein, as the Depositor, the Master Servicer [or the Certificate Insurer] may
from time to time request in writing.

            [(b) From time to time, at the request of the Certificate Insurer,
the Trustee shall report to the Certificate Insurer with respect to its actual
knowledge, without independent investigation, of any breach of any of the
representations or warranties relating to individual

                                      -73-
<PAGE>

Mortgage Loans set forth in the Purchase and Sale Agreement, the Mortgage Loan
Sale Agreement or in Section 3.1 or 3.2 hereof.]

            (c) On each Remittance Date, the Trustee shall forward to Bloomberg
Financial Markets, L.P. ("Bloomberg") and the Underwriter information prepared
by the Master Servicer with respect to the Mortgage Loan and the Certificates as
of such Remittance Date, using a format and media mutually acceptable to the
Trustee, the Underwriter and Bloomberg.

            Section 6.9 Compensating Interest. Not later than the close of
business on the third Business Day prior to the Remittance Date, the Master
Servicer shall remit to the Trustee (without right or reimbursement therefor)
for deposit into the Certificate Account an amount equal to the lesser of (i)
the aggregate of the Prepayment Interest Shortfalls for the related Remittance
Date resulting from Principal Prepayments during the related Due Period and (ii)
its aggregate Servicing Fees received in the related Due Period (the
"Compensating Interest").

            [Section 6.10 Effect Of Payments By The Certificate Insurer;
Subrogation. Anything herein to the contrary notwithstanding, any payment with
respect to principal of or interest on the Certificates which is made with
moneys received pursuant to the terms of the Certificate Insurance Policy shall
not be considered payment of the Certificates from the Trust. The Depositor, the
Master Servicer and the Trustee acknowledge, and each Holder by its acceptance
of a Certificate agrees, that without the need for any further action on the
part of the Certificate Insurer, the Depositor, the Master Servicer, the Trustee
or the Certificate Registrar (i) to the extent the Certificate Insurer makes
payments, directly or indirectly, on account of principal of or interest on the
Certificates to the Holders of such Certificates, the Certificate Insurer will
be fully subrogated to, and each Certificateholder, the Master Servicer and the
Trustee hereby delegate and assign to the Certificate Insurer, to the fullest
extent permitted by law, the rights of such Holders to receive such principal
and interest from the Trust Fund, including, without limitation, any amounts due
to the Certificateholders in respect of securities law violations arising from
the offer and sale of the Certificates, and (ii) the Certificate Insurer shall
be paid such amounts but only from the sources and in the manner provided herein
for the payment of such amounts. The Trustee and the Master Servicer shall
cooperate in all respects with any reasonable request by the Certificate Insurer
for action to preserve or enforce the Certificate Insurer's rights or interests
under this Agreement without limiting the rights or affecting the interests of
the Holders as otherwise set forth herein.]

                [Remainder of this page intentionally left blank]

                                      -74-
<PAGE>

                                  ARTICLE VII

                                     DEFAULT

            Section 7.1 Events Of Default.

            (a) In case one or more of the following Events of Default by the
Master Servicer shall occur and be continuing, that is to say:

            (i) any failure by the Master Servicer to remit to the Trustee any
      payment required to be made by the Master Servicer under the terms of this
      Agreement or to deliver the report required by Section 6.5 of this
      Agreement;

            (ii) the failure by the Master Servicer to make any required
      Servicing Advance or Periodic Advance;

            (iii) any failure on the part of the Master Servicer duly to observe
      or perform in any material respect any other of the covenants or
      agreements on the part of the Master Servicer contained in this Agreement,
      or the breach of any representation and warranty made pursuant to Section
      3.1 to be true and correct which continues unremedied for a period of 30
      days after the date on which written notice of such failure or breach,
      requiring the same to be remedied, shall have been given to the Master
      Servicer, as the case maybe, by the Depositor or the Trustee or to the
      Master Servicer and the Trustee by any Certificateholder [or the
      Certificate Insurer];

            (iv) a decree or order of a court or agency or supervisory authority
      having jurisdiction in an involuntary case under any present or future
      federal or state bankruptcy, insolvency or similar law or for the
      appointment of a conservator or receiver or liquidator in any insolvency,
      readjustment of debt, marshalling of assets and liabilities or similar
      proceedings, or for the winding-up or liquidation of its affairs, shall
      have been entered against the Master Servicer and such decree or order
      shall have remained in force, undischarged or unstayed for a period of 60
      days;

            (v) 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 the Master Servicer's property;

            (vi) the Master Servicer shall admit in writing its inability to pay
      its debts 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

            (vii) the continuation of a Master Servicer Termination Delinquency
      Rate Trigger or a Master Servicer Termination Loss Trigger;

                                      -75-
<PAGE>

then, and in each and every such case, so long as an Event of Default shall not
have been remedied with respect to (i) - (vii) above, the Trustee shall, but
only at the direction of [the Certificate Insurer or] the Majority
Certificateholders [with the consent of the Certificate Insurer], by notice in
writing to the Master Servicer and a Responsible Officer of the Trustee, (x)
remove the Master Servicer, (y) terminate all the rights and obligations of the
Master Servicer under this Agreement and in and to the Mortgage Loans and the
proceeds thereof, as Master Servicer; and (z) with respect to clause (vii)
above, the Trustee shall[, but only at the direction of the Certificate
Insurer,] after notice in writing to the Master Servicer and a Responsible
Officer of the Trustee, terminate all the rights and obligations of the Master
Servicer under this Agreement and in and to the Mortgage Loans and the proceeds
thereof, as Master Servicer. Upon receipt by the Master Servicer and the Trustee
of such written notice, all authority and power of the Master Servicer under
this Agreement, whether with respect to the Mortgage Loans or otherwise, shall,
subject to Section 7.2, pass to and be vested in the Trustee or its designee
[approved by the Certificate Insurer] and the Trustee is hereby authorized and
empowered to execute and deliver, on behalf of the Master Servicer, as
attorney-in-fact or otherwise, at the expense of the Master Servicer, any and
all documents and other instruments and do or cause to be done all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, including, but not limited to, the transfer and endorsement or
assignment of the Mortgage Loans and related documents. The Master Servicer
agrees to cooperate (and pay any related costs and expenses) with the Trustee in
effecting the termination of the Master Servicer's responsibilities and rights
hereunder, including, without limitation, the transfer to the Trustee or its
designee for administration by it of all amounts which shall at the time be
credited by the Master Servicer to the Collection Account or thereafter received
with respect to the Mortgage Loans. The Trustee shall promptly notify [the
Certificate Insurer,] __________ and _________ upon receiving notice of, or its
discovery of, the occurrence of an Event of Default.

            Section 7.2 Trustee To Act; Appointment Of Successor.

            (a) On and after the time the Master Servicer receives a notice of
termination pursuant to Section 7.1, or the Trustee [and the Certificate
Insurer] receive the resignation of the Master Servicer evidenced by an Opinion
of Counsel pursuant to Section 5.23, or the Master Servicer is removed as Master
Servicer pursuant to Article VII, in which event the Trustee shall promptly
notify [the Certificate Insurer], ________ and ________, except as otherwise
provided in Section 7.1, the Trustee or its designee 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
placed on the Master Servicer by the terms and provisions hereof arising on or
after the date of succession; provided, however, that the Trustee shall not be
liable for any actions or the representations and warranties of any Master
Servicer prior to it and including, without limitation, the obligations of the
Master Servicer set forth in Sections 2.4 and 3.3. The parties hereto
acknowledge that during a period not to exceed 90 days, the successor Master
Servicer will not be able to fully service the Mortgage Loans until the
transition of servicing is complete. Such 90-day period shall be extended as
necessary in the event that the Master Servicer does not cooperate with such
successor or the data provided by the Master Servicer is incomplete or faulty.
The Trustee, as successor Master Servicer, or any other successor Master
Servicer shall be obligated to pay Compensating Interest pursuant to Section 6.9
hereof; the Trustee, as successor Master Servicer is obligated to make advances
pursuant to Section 5.20 unless, and

                                      -76-
<PAGE>

only to the extent the Trustee, as successor Master Servicer determines
reasonably and in good faith that such advances would not be recoverable
pursuant to Sections 5.4(b), 5.4(g) or 5.4(j), such determination to be
evidenced by a certification of a Responsible Officer of the Trustee, as
successor Master Servicer [delivered to the Certificate Insurer].

            (b) Notwithstanding the above, the Trustee may, if it shall be
unwilling to so act, or shall, if it is unable to so act or if the Majority
Certificateholders [with the consent of the Certificate Insurer or the
Certificate Insurer] so requests in writing to the Trustee, appoint, pursuant to
the provisions set forth in paragraph (c) below, or petition a court of
competent jurisdiction to appoint, any established mortgage loan servicing
institution [acceptable to the Certificate Insurer] that has a net worth of not
less than $15,000,000 as the successor to the Master Servicer hereunder in the
assumption of all or any part of the responsibilities, duties or liabilities of
the Master Servicer hereunder.

            (c) Any successor Master Servicer shall be entitled to the Servicing
Compensation (including a fee not to exceed the Servicing Fee) and other funds
pursuant to Section 5.14 hereof as the Master Servicer if the Master Servicer
had continued to act as Master Servicer hereunder.

            (d) The Trustee and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession. The Master Servicer agrees to cooperate with the Trustee and any
successor Master Servicer in effecting the termination of the Master Servicer's
servicing responsibilities and rights hereunder and shall promptly provide the
Trustee or such successor Master Servicer, as applicable, at the Master
Servicer's cost and expense, all documents and records reasonably requested by
it to enable it to assume the Master Servicer's functions hereunder and shall
promptly also transfer to the Trustee or such successor Master Servicer, as
applicable, all amounts that then have been or should have been deposited in the
Collection Account by the Master Servicer or that are thereafter received with
respect to the Mortgage Loans. Any collections received by the Master Servicer
after such removal or resignation shall be endorsed by it to the Trustee and
remitted directly to the Trustee or, at the direction of the Trustee, to the
successor Master Servicer. Neither the Trustee nor any other successor Master
Servicer shall be held liable by reason of any failure to make, or any delay in
making, any distribution hereunder or any portion thereof caused by (1) the
failure of the Master Servicer to deliver, or any delay in delivering, cash,
documents or records to it, or (2) restrictions imposed by any regulatory
authority having jurisdiction over the Master Servicer hereunder. No appointment
of a successor to the Master Servicer hereunder shall be effective until the
Trustee [and the Certificate Insurer] shall have consented thereto, and written
notice of such proposed appointment shall have been provided by the Trustee [to
the Certificate Insurer and] to each Certificateholder. The Trustee shall not
resign as Master Servicer until a successor Master Servicer [reasonably
acceptable to the Certificate Insurer] has been appointed.

            (e) Pending appointment of a successor to the Master Servicer
hereunder, the Trustee shall act in such capacity as herein above provided. In
connection with such appointment and assumption, the Trustee may make such
arrangements for the compensation of such successor out of payments on Mortgage
Loans as it and such successor shall agree; provided, however, that no such
compensation shall be in excess of that permitted the Master Servicer pursuant
to Section 5.14, together with other Servicing Compensation. The Master

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<PAGE>

Servicer, the Trustee and such successor shall take such action, consistent with
this Agreement, as shall be necessary to effectuate any such succession.

            Section 7.3 Waiver Of Defaults. The [Certificate Insurer or the]
Majority Certificateholders may, on behalf of all Certificateholders, [and
subject to the consent of the Certificate Insurer,] waive any events permitting
removal of the Master Servicer as Master Servicer pursuant to this Article VII;
provided, however, that the Majority Certificateholders may not waive a default
in making a required distribution on a Certificate without the consent of the
holder of such Certificate. Upon any waiver of a past default, such default
shall cease to exist, and any Event of Default arising therefrom shall be deemed
to have been remedied for every purpose of this Agreement. No such waiver shall
extend to any subsequent or other default or impair any right consequent thereto
except to the extent expressly so waived. Notice of any such waiver shall be
given by the Trustee to _________ and ___________.

            Section 7.4 Mortgage Loans, Trust Fund And Accounts Held For Benefit
Of The Certificate Insurer.

            [(a) The Trustee shall hold the Trust Fund and the Mortgage Files
for the benefit of the Certificateholders [and the Certificate Insurer and all
references in this Agreement and in the Certificates to the benefit of Holders
of the Certificates shall be deemed to include the Certificate Insurer. The
Trustee shall cooperate in all reasonable respects with any reasonable request
by the Certificate Insurer for action to preserve or enforce the Certificate
Insurer's rights or interests under this Agreement and the Certificates unless,
as stated in an Opinion of Counsel addressed to the Trustee and the Certificate
Insurer, such action is adverse to the interests of the Certificateholders or
diminishes the rights of the Certificateholders or imposes additional burdens or
restrictions on the Certificateholders].

            (b) The Master Servicer hereby acknowledges and agrees that it shall
service the Mortgage Loans for the benefit of the Certificateholders [and for
the benefit of the Certificate Insurer, and all references in this Agreement to
the benefit of or actions on behalf of the Certificateholders shall be deemed to
include the Certificate Insurer].

                [Remainder of this page intentionally left blank]

                                      -78-
<PAGE>

                                  ARTICLE VIII

                                   TERMINATION

            Section 8.1 Termination.

            (a) This Agreement shall terminate upon written notice to the
Trustee of either: (1) the later of the distribution to Certificateholders of
the final payment or collection with respect to the last Mortgage Loan (or
Periodic Advances of same by the Master Servicer), or the disposition of all
funds with respect to the last Mortgage Loan and the remittance of all funds due
hereunder and the payment of all amounts due and payable to [the Certificate
Insurer and] the Trustee or (2) mutual consent of the Master Servicer[, the
Certificate Insurer] and all Certificateholders in writing; provided, however,
that in no event shall the Trust established by this Agreement terminate later
than twenty-one years after the death of the last survivor of the descendants of
John D. Rockefeller, alive as of the date hereof.

            (b) In addition, the Master Servicer may, at its option and at its
sole cost and expense [(or, if the Master Servicer does not exercise this
option, the Certificate Insurer may, at its sole cost and expense)], repurchase
all of the Mortgage Loans on the Optional Termination Date, on the next
succeeding Remittance Date, at a price equal to the sum of (1) the greater of
(i) 100% of the principal balance of each outstanding Mortgage Loan and each REO
Mortgage Loan, and (ii) the fair market value (disregarding accrued interest) of
the Mortgage Loans and REO Properties, determined as the average of three
written bids (copies of which shall be delivered to the Trustee [and the
Certificate Insurer] by the Master Servicer and the reasonable cost of which may
be deducted from the final purchase price) made by nationally recognized dealers
and based on a valuation process which would be used to value comparable
mortgage loans and REO property, plus (2) the aggregate amount of accrued and
unpaid interest on the Mortgage Loans through the related Due Period and 30
days' interest thereon at a rate equal to the weighted average of the Mortgage
Interest Rates for the Mortgage Loans, net of the Servicing Fee, plus (3) [any
unreimbursed amounts due to the Certificate Insurer under this Agreement or the
Certificate Insurer Agreement or] any Trustee Fee then due (the "Termination
Price"). Any such purchase shall be accomplished by deposit into the Certificate
Account of the Termination Price. [No such termination is permitted without the
prior written consent of the Certificate Insurer (i) if it would result in a
draw on the Certificate Insurance Policy, or (ii) unless the Master Servicer
shall have delivered to the Certificate Insurer an Opinion of Counsel reasonably
satisfactory to the Certificate Insurer stating that no amounts paid hereunder
are subject to recapture as preferential transfers under the United States
Bankruptcy Code, 11 U.S.C. Sections 101 et seq., as amended.]

            (c) If on any Remittance Date, the Master Servicer determines that
there are no outstanding Mortgage Loans and no other funds or assets in the
Trust Fund other than funds in the Certificate Account, the Master Servicer
shall send a final distribution notice promptly to each such Certificateholder
in accordance with paragraph (d) below.

            (d) Notice of any termination, specifying the Remittance Date upon
which the Trust Fund and the 200_ - _ REMIC will terminate and the
Certificateholders shall surrender

                                      -79-
<PAGE>

their Certificates to the Trustee for payment of the final distribution and
cancellation, shall be given promptly by the Master Servicer by letter to each
of the Certificateholders identified to the Master Servicer by the Trustee as
the Certificateholders of record as of the most recent Record Date, and shall be
mailed during the month of such final distribution before the Determination Date
in such month, specifying (1) the Remittance Date upon which final payment of
such Certificates will be made upon presentation and surrender of Certificates
at the office of the Trustee therein designated, (2) the amount of any such
final payment and (3) that the Record Date otherwise applicable to such
Remittance Date is not applicable, payments being made only upon presentation
and surrender of the Certificates at the office of the Trustee therein
specified. The Master Servicer shall give such notice to the Trustee therein
specified. The Master Servicer shall give such notice to the Trustee at the time
such notice is given to Certificateholders. [The obligations of the Certificate
Insurer hereunder shall terminate upon the deposit by the Master Servicer with
the Trustee of a sum sufficient to purchase all of the Mortgage Loans and REO
Properties as set forth above and when the Class A-1 Principal Balance, Class
A-2 Principal Balance, Class A-3 Principal Balance, Class A-4 Principal Balance
and Class A-5 Principal Balance has been reduced to zero.]

            (e) In the event that all of the Certificateholders shall not
surrender their Certificates for cancellation within six months after the time
specified in the above-mentioned written notice, the Master Servicer shall give
a second written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after the second notice, all of the affected
Certificates shall not have been surrendered for cancellation, the Trustee may
take appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Certificateholders concerning surrender of their
Certificates and the cost thereof shall be paid out of the funds and other
assets which remain subject hereto. If within nine months after the second
notice all the affected Certificates shall not have been surrendered for
cancellation, the Class R Certificateholders shall be entitled to all unclaimed
funds and other assets which remain subject hereto and the Trustee upon transfer
of such funds shall be discharged of any responsibility for such funds and the
Certificateholders shall look only to the Class R Certificateholders for
payment. Such funds shall remain uninvested.

            Section 8.2 Additional Termination Requirements.

            (a) In the event that the Master Servicer exercises its purchase
option as provided in Section 8.1, the 200_ - _ REMIC shall be terminated in
accordance with the following additional requirements, unless the Trustee has
been furnished with an Opinion of Counsel (which shall not be an expense of the
Trustee) to the effect that the failure of the 200_ - _ REMIC (or of any other
REMIC of the Trust Fund) to comply with the requirements of this Section 8.3
will not (1) result in the imposition of taxes on "prohibited transactions" of
such REMIC as defined in Section 860F of the Code or (2) cause such REMIC to
fail to qualify as a REMIC at any time that any Class A Certificates are
outstanding:

            (i) Within 90 days prior to the final Remittance Date the Master
      Servicer shall adopt and the Trustee shall sign, a plan of complete
      liquidation of the 200_ - _ REMIC (or the applicable REMIC of the Trust
      Fund) meeting the requirements of a "Qualified Liquidation" under Section
      860F of the Code and any regulations thereunder;

                                      -80-
<PAGE>

            (ii) At or after the time of adoption of such a plan of complete
      liquidation, which plan shall include a description of the method for such
      liquidation and the price to be conveyed for all of the assets of the 200_
      - _ REMIC at the time of such liquidation, and at or prior to the final
      Remittance Date, the Trustee shall sell all of the assets of the 200_ - _
      REMIC (or the applicable REMIC of the Trust Fund) to the Master Servicer
      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 (a) to the Class A Certificateholders the
      Certificate Principal Balance, plus one month's interest thereon at the
      related Class A Pass-Through Rate, and (b) to the Class R
      Certificateholders, all of such REMIC's cash on hand after such payment to
      the Class A Certificateholders (other than cash retained to meet claims)
      and the 200_ - _ REMIC shall terminate at such time.

            (b) By their acceptance of the Certificates, the Holders thereof
hereby agree to appoint the Master Servicer as their attorney in fact to: (1)
adopt such a plan of complete liquidation (and the Certificateholders hereby
appoint the Trustee as their attorney in fact to sign such plan) as appropriate
[or upon the written request of the Certificate Insurer] and (2) to take such
other action in connection therewith as may be reasonably required to carry out
such plan of complete liquidation all in accordance with the terms hereof.

            Section 8.3 Accounting Upon Termination Of Master Servicer. Upon
termination of the Master Servicer, the Master Servicer shall, at its expense:

            (a) deliver to its successor or, if none shall yet have been
appointed, to the Trustee, the funds in any Account;

            (b) deliver to its successor or, if none shall yet have been
appointed, to the Trustee all Mortgage Files and related documents and
statements held by it hereunder and a Mortgage Loan portfolio computer tape;

            (c) deliver to its successor or, if none shall yet have been
appointed, to the Trustee and, upon request, to the Certificateholders a full
accounting of all funds, including a statement showing the Monthly Payments
collected by it and a statement of monies held in trust by it for the payments
or charges with respect to the Mortgage Loans; and

            (d) execute and deliver such instruments and perform all acts
reasonably requested in order to effect the orderly and efficient transfer of
servicing of the Mortgage Loans to its successor and to more fully and
definitively vest in such successor all rights, powers, duties,
responsibilities, obligations and liabilities of the "Master Servicer" under
this Agreement.

                                   ARTICLE IX

                                   THE TRUSTEE

            Section 9.1 Duties Of Trustee.

                                      -81-
<PAGE>

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

            (b) 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; provided, however,
that the Trustee shall not be responsible for the accuracy or content of any
resolution, certificate, statement, opinion, report, document, order or other
instrument furnished by the Master Servicer or the Transferor hereunder. If any
such instrument is found not to conform on its face to the requirements of this
Agreement, the Trustee shall take 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, at the expense of the Master Servicer notify the
Certificate Insurer and request written instructions as to the action it deems
appropriate to have the instrument corrected, and if the instrument is not so
corrected, the Trustee will provide notice thereof to the Certificate Insurer
who shall then direct the Trustee as to the action, if any, to be taken.]

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

            (i) Prior to the occurrence of an Event of Default, and after the
      curing of all such Events of Default which may have occurred, the duties
      and obligations of the Trustee shall be determined solely by the express
      provisions of this Agreement, the Trustee shall not be liable except for
      the performance of 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 and
      conforming 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 other officers of
      the Trustee, unless it shall be proved that the Trustee was negligent in
      ascertaining the pertinent facts;

            (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 Certificate Insurer or with the
      consent of the Certificate Insurer,] any Class of the Class A
      Certificateholders holding Class A Certificates evidencing Percentage
      Interests of such Class of at least 25%, relating to the time, method and
      place of conducting any

                                      -82-
<PAGE>

      proceeding for any remedy available to the Trustee, or exercising any
      trust or power conferred upon the Trustee, under this Agreement;

            (iv) The Trustee shall not be required to take notice or be deemed
      to have notice or actual knowledge of any default or Event of Default
      (except an Event of Default with respect to the nonpayment of any amount
      described in Section 7.1(a)), unless a Responsible Officer of the Trustee
      shall have received written notice thereof. In the absence of receipt of
      such notice, the Trustee may conclusively assume that there is no default
      or Event of Default (except a failure to make a Periodic Advance);

            (v) The Trustee shall not be required to expend or risk its own
      funds or otherwise incur financial liability for the performance of any of
      its duties hereunder or 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; and

            (vi) Subject to the other provisions of this Agreement and without
      limiting the generality of this Section, the Trustee shall have no duty
      (a) to see to any recording, filing, or depositing of this Agreement or
      any agreement referred to herein or any financing statement or
      continuation statement evidencing a security interest, or to see to the
      maintenance of any such recording or filing or depositing or to any
      rerecording, refiling or redepositing of any thereof, (b) to see to any
      insurance, (c) to see to the payment or discharge of any tax, assessment,
      or other governmental charge or any lien or encumbrance of any kind owing
      with respect to, assessed or levied against, any part of the Trust, the
      Trust Fund, the Certificateholders or the Mortgage Loans, (d) to confirm
      or verify the contents of any reports or certificates of the Master
      Servicer delivered to the Trustee pursuant to this Agreement believed by
      the Trustee to be genuine and to have been signed or presented by the
      proper party or parties.

            (d) It is intended that the 200_ - _ REMIC formed hereunder shall
constitute, and that the affairs of the 200_ - _ REMIC shall be conducted so as
to qualify it as, a REMIC as defined in and in accordance with the REMIC
Provisions. In furtherance of such intention, the Trustee covenants and agrees
that it shall act as agent (and the Trustee is hereby appointed to act as agent)
and as Tax Matters Person on behalf of the 200_ - _ REMIC, and that in such
capacities it shall:

            (i) prepare, sign and file, or cause to be prepared and filed, in a
      timely manner, a U.S. Real Estate Mortgage Investment Conduit Income Tax
      Return (Form 1066) and any other Tax Return required to be filed by the
      200_ - _ REMIC, using a calendar year as the taxable year for the 200_ - _
      REMIC;

                                      -83-
<PAGE>

            (ii) make, or cause to be made, an election, on behalf of the 200_ -
      _ REMIC, to be treated as a REMIC on the federal tax return of the 200_ -
      _ REMIC for its first taxable year;

            (iii) prepare and forward, or cause to be prepared and forwarded, to
      the Trustee, the Certificateholders and to the Internal Revenue Service
      and any other relevant governmental taxing authority all information
      returns or reports as and when required to be provided to them in
      accordance with the REMIC Provisions;

            (iv) to the extent that the affairs of the 200_ - _ REMIC are within
      its control, conduct such affairs of the 200_ - _ REMIC at all times that
      any Certificates are outstanding so as to maintain the status of the 200_
      - _ REMIC as a REMIC under the REMIC Provisions and any other applicable
      federal, state and local laws, including, without limitation, information
      reports relating to "original issue discount," as defined in the Code,
      based upon the prepayment assumption and calculated by using the issue
      price of the Certificates;

            (v) not knowingly or intentionally take any action or omit to take
      any action that would cause the termination of the REMIC status of the
      200_ - _ REMIC;

            (vi) pay the amount of any and all federal, state, and local taxes
      imposed on the Trust Fund, prohibited transaction taxes as defined in
      Section 860F of the Code, other than any amount due as a result of a
      transfer or attempted or purported transfer in violation of Section 4.2,
      imposed on the Trust Fund when and as the same shall be due and payable
      (but such obligation shall not prevent the Trustee or any other
      appropriate Person from contesting any such tax in appropriate proceedings
      and shall not prevent the Trustee from withholding payment of such tax, if
      permitted by law, pending the outcome of such proceedings). The Trustee
      shall be entitled to reimbursement in accordance with Sections 9.1(c) and
      9.5 hereof;

            (vii) ensure that any such returns or reports filed on behalf of the
      Trust Fund by the Trustee are properly executed by the appropriate person
      and submitted in a timely manner;

            (viii)represent the Trust Fund in any administrative or judicial
      proceedings relating to an examination or audit by any governmental taxing
      authority, request an administrative adjustment as to any taxable year of
      the Trust Fund, enter into settlement agreements with any governmental
      taxing agency, extend any statute of limitations relating to any item of
      the Trust Fund and otherwise act on behalf of the Trust Fund in relation
      to any tax matter involving the Trust Fund;

            (ix) as provided in Section 5.18 hereof, make available information
      necessary for the computation of any tax imposed (1) on transferors of
      residual interests to transferees that are not Permitted Transferees or
      (2) on pass-through entities, any interest in which is held by an entity
      which is not a Permitted Transferee. The Trustee covenants and agrees that
      it will cooperate with the Master Servicer in the foregoing matters and
      that it will sign, as Trustee, any and all Tax Returns required to be
      filed by the Trust

                                      -84-
<PAGE>

      Fund. Notwithstanding the foregoing, at such time as the Trustee becomes
      the successor Master Servicer, the holder of the largest percentage of the
      Class R Certificates shall serve as Tax Matters Person until such time as
      an entity is appointed to succeed the Trustee as Master Servicer;

            (x) 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
      Class R Certificate to any Person who is not a Permitted Transferee,
      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 Class R 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 Class R Certificate having
      as among its record holders at anytime any Person that is not a Permitted
      Transferee. Reasonable compensation for providing such information may be
      accepted by the Trustee;

            (xi) pay out of its own funds, without any right of reimbursement
      from the assets of the Trust Fund, any and all tax related expenses of the
      Trust Fund (including, but not limited to, tax return preparation and
      filing expenses and any professional fees or expenses related to audits or
      any administrative or judicial proceedings with respect to the Trust Fund
      that involve the Internal Revenue Service or state tax authorities), other
      than the expense of obtaining any Opinion of Counsel required pursuant to
      Sections 3.3, 5.12 and 8.2 and other than taxes except as specified
      herein;

            (xii) upon filing with the Internal Revenue Service, the Trustee
      shall furnish to the Holders of the Class R Certificates the Form 1066 and
      each Form 1066Q and shall respond promptly to written requests made not
      more frequently than quarterly by any Holder of Class R Certificates with
      respect to the following matters:

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

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

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

                        (4) the original issue discount (or, in the case of the
                  Mortgage Loans, market discount) or premium accrued or
                  amortized through the end of such calendar quarter with
                  respect to the regular or residual interests

                                      -85-
<PAGE>

                  created hereunder and with respect to the Mortgage Loans,
                  together with each constant yield to maturity used in
                  computing the same;

                        (5) the treatment of losses realized with respect to the
                  Mortgage Loans or the regular interests created hereunder,
                  including the timing and amount of any cancellation of
                  indebtedness income of the 200_ - _ REMIC with respect to such
                  regular interests or bad debt deductions claimed with respect
                  to the Mortgage Loans;

                        (6) the amount and timing of any non-interest expenses
                  of the 200_ - _ REMIC; and

                        (7) any taxes (including penalties and interest) imposed
                  on the 200_ - _ REMIC, including, without limitation, taxes on
                  "prohibited transactions," "contributions" or "net income from
                  foreclosure property" or state or local income or franchise
                  taxes; and

            (xiii)make any other required reports in respect of interest
      payments in respect of the Mortgage Loans and acquisitions and
      abandonments or Mortgaged Property to the Internal Revenue Service and/or
      the borrowers, as applicable.

            In the event that any tax is imposed on "prohibited transactions" of
the REMIC as defined in Section 860F(a)(2) of the Code, on the "net income from
foreclosure property" of the REMIC as defined in Section 860G(c) of the Code, on
any contribution to the REMIC after the Startup Date pursuant to Section 860G(d)
of the Code, or any other tax is imposed, such tax shall be paid by (i) the
Trustee, if such tax arises out of or results from a breach by the Trustee of
any of its obligations under this Agreement, (ii) the Master Servicer, if such
tax arises out of or results from a breach by the Master Servicer of any of its
obligations under this Agreement, or otherwise (iii) the holders of the Class R
Certificates in proportion to their undivided beneficial ownership interest in
the related REMIC as are represented by such Class R Certificates. To the extent
such tax is chargeable against the holders of the Class R Certificates,
notwithstanding anything to the contrary contained herein, the Trustee is hereby
authorized to retain from amounts otherwise distributable to the Holders of the
Class R Certificates on any Remittance Date sufficient funds to reimburse the
Trustee for the payment of such tax (to the extent that the Trustee has paid the
tax and not been previously reimbursed or indemnified therefor).

            Section 9.2 Certain Matters Affecting The Trustee.

            (a) Except as otherwise provided in Section 9.1:

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

                                      -86-
<PAGE>

            (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 by litigation hereunder or in relation hereto at the
      request, or direction of [the Certificate Insurer or] any of the
      Certificateholders, pursuant to the provisions of this Agreement, unless
      such Certificateholders [or the Certificate 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;

            (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 an Event of Default hereunder and
      after the curing of all Events of Default which may have occurred, the
      Trustee shall not be bound to make any investigation into the facts or
      matters stated in any resolution, certificate, statement, instrument,
      opinion, report, notice, request, consent, order, approval, bond or other
      paper or document, unless requested in writing to do so by [the
      Certificate Insurer or] Holders of any Class of Class A Certificates
      evidencing Percentage Interests aggregating not less than 25% of such
      class; provided, however, that if the payment within a reasonable time to
      the Trustee of the costs, expenses or liabilities likely to be incurred by
      it in the making of such investigation is, in the opinion of the Trustee,
      not reasonably assured to the Trustee by the security afforded to it by
      the terms of this Agreement, the Trustee may require reasonable indemnity
      against such expense or liability as a condition to taking any such
      action. The reasonable expense of every such examination shall be paid by
      the Master Servicer or, if paid by the Trustee, shall be repaid by the
      Master Servicer upon demand from the Master Servicer's own funds;

            (vi) the right of the Trustee to perform any discretionary act
      enumerated in this Agreement shall not be construed as a duty, and the
      Trustee shall not be answerable for other than its negligence or willful
      misconduct in the performance of such act;

            (vii) the Trustee shall not be required to give any bond or surety
      in respect of the execution of the Trust created hereby or the powers
      granted hereunder; and

            (viii)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.

            (b) Following the Startup Date, the Trustee shall not knowingly
accept any contribution of assets to the Trust Fund, unless the Trustee shall
have received an Opinion of Counsel (at the expense of the Master Servicer) to
the effect that the inclusion of such assets in the Trust Fund will not cause
the 200_ - _ REMIC to fail to qualify as a REMIC at any time that any
Certificates are outstanding or subject the 200_ - _ REMIC to any tax under the
REMIC Provisions or other applicable provisions of federal, state and local law
or ordinances. The

                                      -87-
<PAGE>

Trustee agrees to indemnify the Trust Fund and the Master Servicer for any taxes
and costs, including any attorney's fees, imposed or incurred by the Trust Fund
or the Master Servicer as a result of the breach of the Trustee's covenants set
forth within this subsection (b).

     Section 9.3 Not Liable For Certificates Or Mortgage Loans. The recitals
contained herein (other than the certificate of authentication on the
Certificates) shall be taken as the statements of the Transferor or the Master
Servicer, as the case may be, and the Trustee assumes no responsibility for
their correctness. The Trustee makes no representations as to the validity or
sufficiency of this Agreement or of any Mortgage Loan or related document. The
Trustee shall not be accountable for the use or application of any funds paid to
the Master Servicer in respect of the Mortgage Loans or deposited in or
withdrawn from the Collection Account by the Master Servicer. The Trustee shall
not be responsible for the legality or validity of the Agreement or the
validity, priority, perfection or sufficiency of the security for the
Certificates issued or intended to be issued hereunder.

            Section 9.4 Trustee May Own Certificates. The Trustee in its
individual or any other capacity may become the owner or pledgor of Certificates
with the same rights it would have if it were not Trustee, and may otherwise
deal with the parties hereto.

            Section 9.5 Trustee's Fees And Expenses; Indemnity.

            (a) The Trustee acknowledges that in consideration of the
performance of its duties hereunder it is entitled to receive the Trustee Fee in
accordance with the provision of Section 6.5(a). The Trustee shall not be
entitled to compensation for any expense, disbursement or advance as may arise
from its negligence or bad faith, and, prior to the occurrence of an Event of
Default, the Trustee shall have no lien on the Trust Fund for the payment of its
fees and expenses.

            (b) The Trust Fund, the Trustee and any director, officer, employee
or agent of the Trustee shall be indemnified by the Master Servicer and held
harmless against any loss, liability, claim, damage or expense arising out of,
or imposed upon the Trust or the Trustee, other than any loss, liability or
expense incurred by reason of (i) the acts of the Trustee not authorized or
required pursuant to this Agreement or taken pursuant to written instructions
received from the Master Servicer[, the Certificate Insurer] or the Majority
Holders, or (ii) by reason of the Trustee's reckless disregard of obligations
and duties hereunder. The obligation of the Master Servicer under this Section
9.5 arising prior to any resignation or termination of the Master Servicer
hereunder shall survive termination of the Master Servicer and payment of the
Certificates, and shall extend to any co-trustee appointed pursuant to this
Article IX.

            Section 9.6 Eligibility Requirements For Trustee. The Trustee
hereunder shall at all times be (a) a banking association organized and doing
business under the laws of any state or the United States of America subject to
supervision or examination by federal or state authority, (b) authorized under
such laws to exercise corporate trust powers, including taking title to the
Trust Fund assets on behalf of the Certificateholders (c) having a combined
capital and surplus of at least $50,000,000, (d) whose long-term deposits, if
any, shall be rated at least ____ by _______ and ____ by _______ (except as
provided herein) or such lower long-term deposit [rating as may be approved in
writing by the Certificate Insurer,] [and (e) reasonably

                                      -88-
<PAGE>

acceptable to the Certificate Insurer.] If such banking association publishes
reports of condition at least annually, pursuant to law or to the requirements
of the aforesaid supervising or examining authority, then for the purposes of
this Section shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. In case at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section, the Trustee shall resign immediately in the manner and with the effect
specified in Section 9.7.

            Section 9.7 Resignation And Removal Of The Trustee.

            (a) The Trustee may at any time resign and be discharged from the
trusts hereby created by giving written notice thereof to the Master Servicer[,
the Certificate Insurer] and to all Certificateholders. Upon receiving such
notice of resignation, the Master Servicer shall promptly appoint a successor
trustee by written instrument, in duplicate, which instrument shall be delivered
to the resigning Trustee and to the successor trustee. A copy of such instrument
shall be delivered to the Depositor, the Certificateholders[, the Certificate
Insurer] and the Transferor by the Master Servicer. Unless a 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.

            (b) If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 9.6 and shall fail to resign after
written request therefor by the Master Servicer [or the Certificate 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 Master Servicer [or the Certificate
Insurer] may remove the Trustee, and the Master Servicer shall, within 30 days
after such removal, appoint[, subject to the approval of the Certificate
Insurer, which approval shall not be unreasonably delayed,] a successor trustee
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 Depositor, the Certificateholders[, the Certificate Insurer]
and the Transferor by the Master Servicer.

            (c) If the Trustee fails to perform in accordance with the terms of
this Agreement, the Majority Certificateholders [or the Certificate Insurer] may
remove the Trustee and appoint a successor trustee [acceptable to the
Certificate 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 Master Servicer, one complete set to
the Trustee so removed and one complete set to the successor Trustee so
appointed.

            (d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall become
effective upon acceptance of appointment by the successor trustee as provided in
Section 9.8.

            Section 9.8 Successor Trustee. Any successor trustee appointed as
provided in Section 9.7 shall execute, acknowledge and deliver to the
Depositor[, the Certificate Insurer], the Transferor, the Master Servicer and to
its predecessor trustee an instrument accepting such

                                      -89-
<PAGE>

appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with the
like effect as if originally named as trustee herein. The predecessor trustee
shall deliver to the successor trustee all Mortgage Files and related documents
and statements held by it hereunder, and the Master Servicer 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 9.6. Upon acceptance of appointment by a successor trustee
as provided in this Section, the Master Servicer shall mail notice of the
succession of such trustee hereunder to all Holders of Certificates at their
addresses as shown in the Certificate Register and to _________ and _______. If
the Master Servicer fails to mail such notice within 10 days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be mailed at the expense of the Master Servicer.

            Section 9.9 Merger Or Consolidation Of Trustee. Any Person into
which the Trustee may be merged or converted or with which it may be
consolidated or any corporation or national banking association resulting from
any merger, conversion or consolidation to which the Trustee shall be a party,
or any corporation or national banking association succeeding to the business of
the trustee, shall be the successor of the Trustee hereunder, provided such
corporation or national banking association shall be eligible under the
provisions of Section 9.6, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.

            Section 9.10 Appointment Of Co-Trustee Or Separate Trustee.
Notwithstanding any other provisions hereof, at any time, for the purpose of
meeting any legal requirements of any jurisdiction in which any part of the
Trust Fund 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 to act as co-trustee or co-trustees, jointly with the Trustee, or
separate trustee or separate trustees, of all or any part of the Trust Fund, and
to vest in such Person or Persons, in such capacity, such title to the Trust
Fund, or any part thereof, and, subject to the other provisions of this Section
9.10, such powers, duties, obligations, rights and trusts as the Master Servicer
and the Trustee may consider necessary or desirable. If the Master Servicer
shall not have joined in such appointment within 15 days after the receipt by it
of a request so to do, or in case an Event of Default shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 9.6 hereunder, and no notice to
Holders of Certificates of the appointment of co-trustee(s) or separate
trustee(s) shall be required under Section 9.8 hereof.

            (a) In the case of any appointment of a co-trustee or separate
trustee pursuant to this Section 9.10, all rights, powers, duties and
obligations conferred or imposed upon the Trustee shall be conferred or imposed
upon and exercised or performed by the Trustee and such separate trustee or
co-trustee jointly, except to the extent that under any law of any jurisdiction
in

                                      -90-
<PAGE>

which any particular act or acts are to be performed (whether as Trustee
hereunder or as successor to the Master Servicer hereunder), the Trustee shall
be incompetent or unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations (including the holding of title to the
Trust Fund 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.

            (b) Any notice, request or other writing given to the Trustee shall
be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article IX. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Trustee. Every such instrument shall be filed with the Trustee.

            (c) 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. The Trustee shall not be
responsible for any action or inaction of any such separate trustee or
co-trustee, provided that the Trustee appointed such separate trustee or
co-trustee with due care. 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 9.11 Tax Returns; OID Interest Reporting. The Master
Servicer and the Depositor, as applicable, upon request, will promptly furnish
the Trustee with all such information as may be reasonably required in
connection with the Trustee's preparation of all Tax Returns of the Trust Fund
(including all such loan level information as the Trustee may reasonably
request) or for the purpose of the Trustee responding to reasonable requests for
information made by Certificateholders in connection with tax matters, and, upon
request within seven (7) Business Days after its receipt thereof, the Master
Servicer shall (i) sign on behalf of the Trust Fund any Tax Return that the
Master Servicer is required to sign pursuant to applicable federal, state or
local tax laws, and (ii) cause such Tax Return to have been returned to the
Trustee for filing and for distribution to Certificateholders if required.

            [Section 9.12 Retirement Of Certificates. The Trustee shall, upon
the retirement of the Certificates pursuant hereto or otherwise, furnish to the
Certificate Insurer a notice of such retirement, and, upon retirement of the
Certificates and the expiration of the term of the Certificate Insurance Policy,
shall surrender the Certificate Insurance Policy to the Certificate Insurer for
cancellation.]

                [Remainder of this page intentionally left blank]

                                      -91-
<PAGE>

                                   ARTICLE X

                            MISCELLANEOUS PROVISIONS

            Section 10.1 Limitation On Liability Of The Depositor And The Master
Servicer. Neither the Depositor nor the Master Servicer nor any of the
directors, officers, employees or agents of the Depositor or the Master Servicer
shall be under any liability to the Trust, the Certificateholders [or the
Certificate Insurer] 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 or the
Master Servicer or any such Person against any breach of warranties or
representations made herein, or against any specific liability imposed on each
such party pursuant to this Agreement or against any liability which 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
or duties hereunder. The Depositor or 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 appropriate Person respecting any matters arising
hereunder.

            Section 10.2 Acts Of Certificateholders; Certificateholders' Rights.

            (a) Except as otherwise specifically provided herein, whenever
Certificateholder action, consent or approval is required under this Agreement,
such action, consent or approval shall be deemed to have been taken or given on
behalf of, and shall be binding upon, all Certificateholders if the Majority
Certificateholders [or the Certificate Insurer] agrees to take such action or
give such consent or approval.

            (b) 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 heir 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.

            (c) 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 the Certificates,
be construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability to any third person by reason of any action taken by the parties
to this Agreement pursuant to any provision hereof or thereof.

            (d) The rights of the Certificateholders of Series 200_ - _ will be
determined pursuant to this Agreement. The rights of the Holders of any
certificates or other instruments which may be issued by the Trustee pursuant to
Section 4.2 of this Agreement shall be determined by a supplement with respect
thereto. Such supplement may provide for any other

                                      -92-
<PAGE>

agreements between the parties hereto as long as such agreements do not violate,
as to any Certificate, certificates or other instruments, Section 10.3.

            Section 10.3 Amendment Or Supplement.

            (a) This Agreement may be amended or supplemented from time to time
by the Master Servicer, the Depositor and the Trustee by written agreement[,
upon the prior written consent of the Certificate Insurer (which consent shall
not be withheld if, in the Opinion of Counsel addressed to the Trustee and the
Certificate Insurer, failure to amend would adversely affect the interests of
the Certificateholders and such consent would not adversely affect the interests
of the Certificate Insurer),] without notice to or consent of the
Certificateholders to cure any ambiguity, to correct or supplement any
provisions herein, to comply with any changes in the Code, or to make any other
provisions with respect to matters or questions arising under this Agreement
which shall not be inconsistent with the provisions of this Agreement; provided,
however, that such action shall not, as evidenced by an Opinion of Counsel, at
the expense of the party requesting the change, delivered to the Trustee [and
the Certificate Insurer], adversely affect in any material respect the interests
of any Certificateholder, adversely affect the status of the 200_ - _ REMIC as a
REMIC or cause a tax to be imposed on such REMIC; and provided, further, that no
such amendment shall 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, or change the
rights or obligations of any other party hereto without the consent of such
party; and provided, finally, that any such amendment shall, as evidenced by an
Opinion of Counsel, at the expense of the party requesting the change, delivered
to the Trustee [and the Certificate Insurer], comply with the terms of this
Agreement. The Trustee shall give prompt written notice to _________ and
_________ of any amendment made pursuant to this Section 10.3 or pursuant to
Section 6.10 of the Purchase and Sale Agreement.

            (b) This Agreement may be amended or supplemented from time to time
by the Master Servicer, the Depositor and the Trustee [with the consent of the
Certificate Insurer] (which consent shall not be withheld if, in the Opinion of
Counsel addressed to the Trustee [and the Certificate Insurer,] failure to amend
would adversely affect the interests of the Certificateholders and such consent
would not adversely affect the interests of the Certificate Insurer), the
Majority Certificateholders and the Holders of the majority of the undivided
beneficial ownership interest in the 200_ - _ REMIC as is represented by the
Class R Certificates for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Holders; provided, however, that no
such amendment shall be made unless the Trustee [and the Certificate Insurer]
receive an Opinion of Counsel, at the expense of the party requesting the
change, that such change will not adversely affect the status of the 200_ - _
REMIC as a REMIC or cause a tax to be imposed on such REMIC; and provided,
further, that no such amendment shall 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 or reduce the percentage for the Holders of which are required to
consent to any such amendment without the consent of the Holders of 100% of
Certificates affected thereby; and provided, finally, that any such amendment
shall, as evidenced by an Opinion of Counsel, at the expense of

                                      -93-
<PAGE>

the party requesting the change, delivered to the Trustee [and the Certificate
Insurer], comply with the terms of this Agreement.

            (c) It shall not be necessary for the consent of Holders under this
Section to approve the particular form of any proposed amendment, but it shall
be sufficient if such consent shall approve the substance thereof.

            Section 10.4 Recordation Of Agreement. To the extent permitted by
applicable law, this Agreement, 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 and at the expense of Majority Certificateholders requesting such
recordation, 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 10.5 Duration Of Agreement. This Agreement shall continue in
existence and effect until terminated as herein provided.

            Section 10.6 Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given when
delivered to (i) in the case of the Master Servicer,
________________________________________________________, with a copy to
_______________________________________________________________ (with copies to
the Transferor), (ii) in the case of the Transferor, _____________________
_________________________________, with an additional copy of such notice
simultaneously delivered to the Master Servicer, (iii) in the case of the
Trustee, ________________________
___________________________________________________, _______ Home Equity Trust
200_ - _, (iv) in the case of the Certificateholders, as set forth in the
Certificate Register, (v) in the case of _______,
_______________________________________________________________, (vi) in the
case of _____________________________________________________________, [(vii) in
the case of the Certificate Insurer, ______________________________________
______________, (viii) in the case of HSI Asset Securitization Corporation, 452
Fifth Avenue, New York, New York 10018, Attention: __________. Any such notices
shall be deemed to be effective with respect to any party hereto upon the
receipt of such notice by such party, except that notices to the
Certificateholders shall be effective upon mailing or personal delivery.

            Section 10.7 Severability Of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be held
invalid for any reason whatsoever, 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 covenants, agreements, provisions or terms of this
Agreement.

                                      -94-
<PAGE>

            Section 10.8 No Partnership. Nothing herein contained shall be
deemed or construed to create a partnership or joint venture between the parties
hereto and the services of the Master Servicer shall be rendered as an
independent contractor and not as agent for the Certificateholders.

            Section 10.9 Counterparts. This Agreement 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 agreement.

            Section 10.10 Successors And Assigns. This Agreement shall inure to
the benefit of and be binding upon the Master Servicer, the Depositor, the
Trustee and the Certificateholders and their respective successors and permitted
assigns.

            Section 10.11 Headings. The headings of the various sections of this
Agreement have been inserted for convenience of reference only and shall not be
deemed to be part of this Agreement.

            [Section 10.12 The Certificate Insurer Default. Any right conferred
to the Certificate Insurer shall be suspended during any period in which a
Certificate Insurer Default exists. At such time as the Certificates are no
longer outstanding hereunder, and no amounts owed to the Certificate Insurer
hereunder remain unpaid, the Certificate Insurer's rights hereunder shall
terminate.]

            Section 10.13 Third Party Beneficiary. The parties agree that each
of the Transferor [and the Certificate Insurer] is intended and shall have all
rights of a third-party beneficiary of this Agreement.

            Section 10.14 Intent Of The Parties. It is the intent of the
Depositor and Certificateholders that, for federal income taxes, state and local
income or franchise taxes and other taxes imposed on or measured by income, the
Certificates will be treated as evidencing beneficial ownership interests in a
REMIC. The parties to this Agreement and the holder of each Certificate, by
acceptance of its Certificate, and each beneficial owner thereof, agree to
treat, and to take no action inconsistent with the treatment of, the
Certificates in accordance with the preceding sentence for purposes of federal
income taxes, state and local income and franchise taxes and other taxes imposed
on or measured by income.

            Section 10.15 Appointment Of Tax Matters Person. The Holders of the
Class R Certificates hereby appoint the Trustee to act as the Tax Matters Person
for the 200_ - _ REMIC for all purposes of the Code. The Tax Matters Person will
perform, or cause to be performed, such duties and take, or cause to be taken,
such actions as are required to be performed or taken by the Tax Matters Person
under the code. The Holders of the Class R Certificates may hereafter appoint a
different entity as their agent, or may appoint one of the Class R
Certificateholders to be the Tax Matters Person.

            Section 10.16 Governing Law Consent To Jurisdiction; Waiver of Jury
Trial.

                                      -95-
<PAGE>

            (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS (AS OPPOSED TO CONFLICT OF LAWS PROVISIONS) OF THE STATE
OF NEW YORK.

            (b) THE MASTER SERVICER AND THE TRUSTEE HEREBY SUBMIT TO THE
NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE UNITED
STATES DISTRICT COURT LOCATED IN THE BOROUGH OF MANHATTAN IN NEW YORK CITY, AND
EACH WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT
ALL SUCH SERVICE OF PROCESS BE MADE BY REGISTERED MAIL DIRECTED TO THE ADDRESS
SET FORTH IN SECTION 10.6 HEREOF AND SERVICE SO MADE SHALL BE DEEMED TO BE
COMPLETED FIVE DAYS AFTER THE SAME SHALL HAVE BEEN DEPOSITED IN THE U.S. MAILS,
POSTAGE PREPAID. THE DEPOSITOR, THE MASTER SERVICER AND THE TRUSTEE EACH HEREBY
WAIVE ANY OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE OF
ANY ACTION INSTITUTED HEREUNDER AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT. NOTHING IN THIS SECTION
SHALL AFFECT THE RIGHT OF THE DEPOSITOR, THE MASTER SERVICER OR THE TRUSTEE TO
SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT ANY OF THEIR
RIGHTS TO BRING ANY ACTION OR PROCEEDING IN THE COURTS OF ANY OTHER
JURISDICTION.

            (c) THE DEPOSITOR, THE MASTER SERVICER AND THE TRUSTEE EACH HEREBY
WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT, OR OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED
TO, OR IN CONNECTION WITH THIS AGREEMENT. INSTEAD, ANY DISPUTE WILL BE RESOLVED
IN A BENCH TRIAL WITHOUT A JURY.

                   [End of Agreement - Signature Pages Follow]

                                      -96-
<PAGE>

                                   EXHIBIT B-2

                         (FORM OF CLASS A-1 CERTIFICATE)

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

            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, AS AMENDED (THE "CODE").

Certificate No.:

Cut-off Date:

First Distribution Date:

Pass-Through Rate:

Initial Certificate Principal Balance of this
Certificate ("Denomination"):    $

Initial Certificate Principal Balances of all
Certificates of this Class:      $

CUSIP:

                                     B-2-1-
<PAGE>

                      HSI ASSET SECURITIZATION CORPORATION
              Home Equity Asset Backed Certificates, Series 200_-_
                                    Class A-1

evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to a Trust Fund
consisting primarily of a pool of residential loans (the "Mortgage Loans")
secured by [first liens on one- to four-family residential properties].

            Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance at any time may
be less than the Certificate Principal Balance as set forth herein. This
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer or the Trustee referred to below or
any of their respective affiliates. Neither this Certificate nor the Mortgage
Loans are guaranteed or insured by any governmental agency or instrumentality.

            This certifies that __________ is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
Denomination of this Certificate by the aggregate initial Class Principal
Balances of all Certificates of the Class to which this Certificate belongs) in
certain monthly distributions with respect to a Trust Fund consisting primarily
of the Mortgage Loans deposited by HSI Asset Securitization Corporation (the
"Depositor"). The Trust Fund was created pursuant to a Pooling and Servicing
Agreement dated as of the Cut-off Date specified above (the "Agreement") among
the Depositor, _______________________, as originator and servicer (the
"Servicer"), and ______________________________, as trustee (the "Trustee"). To
the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.

            Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

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

                                     B-2-2-
<PAGE>

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

Dated: ____________, 20__

                                       _____________________________, as Trustee

                                       By:____________________________________

Countersigned:

By: ___________________________________
    Authorized Signatory of

    ___________________________________
    as Trustee

                                     B-2-3-
<PAGE>

                        (Form of Reverse of Certificates)

                      HSI ASSET SECURITIZATION CORPORATION
              Home Equity Asset Backed Certificates, Series 200_-_

            This Certificate is one of a duly authorized issue of Certificates
designated as HSI Asset Securitization Corporation Mortgage Pass-Through
Certificates, of the Series specified on the face hereof (herein collectively
called the "Certificates"), and representing a beneficial ownership interest in
the Trust Fund created by the Agreement.

            The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Certificate Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

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

            Pursuant to the terms of the Agreement, a distribution will be made
on the __th day of each month or, if such __th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
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
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the _____ day of the month next preceding the month of such
Distribution Date.

            Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder 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 Office of the Trustee or such other
location specified in the notice to Certificateholders of such final
distribution.

            The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee with the consent of the Holders
of Certificates affected by such amendment evidencing the requisite Percentage
Interest, as provided in the Agreement. 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 therefor or

                                     B-2-4-
<PAGE>

in lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.

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

            The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and 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, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.

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

            On any Distribution Date on which the pool principal balance is less
than 10% of the aggregate Cut-off Date principal balances of the Mortgage Loans,
the Servicer will have the option to repurchase, in whole, from the Trust Fund
all remaining Mortgage Loans and all property acquired in respect of the
Mortgage Loans at a purchase price determined as provided in the Agreement. In
the event that no such optional termination occurs, the obligations and
responsibilities created by the Agreement will terminate upon the later of the
maturity or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan remaining in the Trust Fund or the disposition of all property in
respect thereof and the distribution to Certificateholders of all amounts
required to be distributed pursuant to the Agreement. In no event, however, will
the trust created by the Agreement continue beyond the expiration of 21 years
from the death of the last survivor of the descendants living at the date of the
Agreement of a certain person named in the Agreement.

            Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.

                                     B-2-5-
<PAGE>

                                   ASSIGNMENT

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

            the Percentage Interest evidenced by the within Certificate and
hereby authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust Fund.

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

Dated:

                                       -----------------------------------------
                                       Signature by or on behalf of assignor

                            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 _____________________________ Statements should be
mailed to ______________________________________________________________________
________________________________________________________________________________
___________________________________________________________

            This information is provided by ___________________________________,
the assignee named above, or __________________________________________________,
as its agent.

                                     B-2-6-
<PAGE>

STATE OF                )
                        )  ss.:
COUNTY OF               )

            On the day of _______, 20__ before me, a notary public in and for
said State, personally appeared ___________________________________, known to me
who, being by me duly sworn, did depose and say that he executed the foregoing
instrument.

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

            [Notarial Seal]

                                     B-2-1-
<PAGE>

                                   EXHIBIT B-6

                          (FORM OF CLASS R CERTIFICATE)

            FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE").

            NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED
UNLESS THE PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN
ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.

            NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED
UNLESS THE TRANSFEREE DELIVERS TO THE TRUSTEE A REPRESENTATION LETTER TO THE
EFFECT THAT SUCH TRANSFEREE IS NOT, AND IS NOT ACTING ON BEHALF OF OR INVESTING
THE ASSETS OF, AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED, TITLE I OF A PLAN SUBJECT TO SECTION
4975 OF THE CODE OR A PLAN SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW ("SIMILAR
LAW") MATERIALLY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE.
NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY PURPORTED TRANSFER OF
THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR
TO THE CODE OR SIMILAR LAW SHALL BE VOID AND OF NO EFFECT.

Certificate No.:

Cut-off Date:

First Distribution Date:

Pass-Through Rate:

Initial Certificate Principal Balance of this
Certificate ("Denomination"):    $

Initial Certificate Principal Balances of all
Certificates of this Class:      $

CUSIP:

                                     B-6-1-
<PAGE>

                      HSI ASSET SECURITIZATION CORPORATION

            Home Equity Asset Backed Certificates, Series 200_-_ evidencing the
distributions allocable to the Class R Certificates with respect to a Trust Fund
consisting primarily of a pool of residential loans (the "Mortgage Loans")
secured by [first liens on one- to four-family residential properties].

            Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance at any time may
be less than the Certificate Principal Balance as set forth herein. This
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates. Neither this Certificate nor the Mortgage
Loans are guaranteed or insured by any governmental agency or instrumentality.

            This certifies that is the registered owner of the Percentage
Interest (obtained by dividing the Denomination of this Certificate by the
aggregate initial Class Principal Balances of all Certificates of the Class to
which this Certificate belongs) in certain monthly distributions with respect to
a Trust Fund consisting of the Mortgage Loans deposited by HSI Asset
Securitization Corporation (the "Depositor"). The Trust Fund was created
pursuant to a Pooling and Servicing Agreement dated as of the Cut-off Date
specified above (the "Agreement") among the Depositor, _______________________,
as originator and servicer (the "Servicer"), and ____________________, as
trustee (the "Trustee"). To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

            Any distribution of the proceeds of any remaining assets of the
Trust Fund will be made only upon presentment and surrender of this Class R
Certificate at the Office of the Trustee or the office or agency maintained by
the Trustee in New York, New York.

            No transfer of a Class R Certificate shall be made unless the
Trustee shall have received a representation letter from the transferee of such
Certificate, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan
subject to Section 406 of ERISA, a plan subject to Section 4975 of the Code or a
plan subject to any federal, state or local law ("Similar Law"), materially
similar to the foregoing provisions of ERISA or the Code, nor a person acting on
behalf of any such plan, which representation letter shall not be an expense of
the Trustee or the Servicer. Notwithstanding anything else to the contrary
herein, any purported transfer of a Class R Certificate to or on behalf of an
employee benefit plan or plan subject to ERISA, Section 4975 of the Code or
Similar Law shall be void and of no effect.

            Each Holder of this Class R Certificate will be deemed to have
agreed to be bound by the restrictions of the Agreement, including but not
limited to the restrictions that (i) each person holding or acquiring any
Ownership Interest in this Class R Certificate must be a Permitted Transferee,
(ii) no Ownership Interest in this Class R Certificate may be transferred

                                     B-6-2-
<PAGE>

without delivery to the Trustee of (a) a transfer affidavit of the proposed
transferee and (b) a transfer certificate of the transferor, each of such
documents to be in the form described in the Agreement, (iii) each person
holding or acquiring any Ownership Interest in this Class R Certificate must
agree to require a transfer affidavit and to deliver a transfer certificate to
the Trustee as required pursuant to the Agreement, (iv) each person holding or
acquiring an Ownership Interest in this Class R Certificate must agree not to
transfer an Ownership Interest in this Class R Certificate if it has actual
knowledge that the proposed transferee is not a Permitted Transferee and (v) any
attempted or purported transfer of any Ownership Interest in this Class R
Certificate in violation of such restrictions will be absolutely null and void
and will vest no rights in the purported transferee.

            Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

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

                                     B-6-3-
<PAGE>

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

Dated: ____________, 20__

                                       _____________________________, as Trustee

                                       By: _____________________________________

Countersigned:

By: ___________________________________
    Authorized Signatory of

_______________________________________,
    as Trustee

                                     B-6-4-
<PAGE>

                        (Form of Reverse of Certificates)

                      HSI ASSET SECURITIZATION CORPORATION
              Home Equity Asset Backed Certificates, Series 200_-_

            This Certificate is one of a duly authorized issue of Certificates
designated as _________ Home Equity Trust, Home Equity Asset Backed
Certificates, of the Series specified on the face hereof (herein collectively
called the "Certificates"), and representing a beneficial ownership interest in
the Trust Fund created by the Agreement.

            The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Certificate Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

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

            Pursuant to the terms of the Agreement, a distribution will be made
on the __th day of each month or, if such __th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
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
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the _______ day of the month next preceding the month of
such Distribution Date.

            Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder 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 Office of the Trustee or such other
location specified in the notice to Certificateholders of such final
distribution.

            The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee with the consent of the Holders
of Certificates affected by such amendment evidencing the requisite Percentage
Interest, as provided in the Agreement. 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 therefor or

                                     B-6-5-
<PAGE>

in lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.

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

            The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and 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, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.

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

            On any Distribution Date on which the pool principal balance is less
than 10% of the aggregate Cut-off Date principal balances of the Mortgage Loans,
the Servicer will have the option to repurchase, in whole, from the Trust Fund
all remaining Mortgage Loans and all property acquired in respect of the
Mortgage Loans at a purchase price determined as provided in the Agreement. In
the event that no such optional termination occurs, the obligations and
responsibilities created by the Agreement will terminate upon the later of the
maturity or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan remaining in the Trust Fund or the disposition of all property in
respect thereof and the distribution to Certificateholders of all amounts
required to be distributed pursuant to the Agreement. In no event, however, will
the trust created by the Agreement continue beyond the expiration of 21 years
from the death of the last survivor of the descendants living at the date of the
Agreement of a certain person named in the Agreement.

            Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.

B-6-6-
<PAGE>

                                   ASSIGNMENT

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

            the Percentage Interest evidenced by the within Certificate and
hereby authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust Fund.

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

Dated:

                                       -----------------------------------------
                                       Signature by or on behalf of assignor

                            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 ______________________
Statements should be mailed to _________________________________________________
________________________________________________________________________________
________________________________________________________________________________

            This information is provided by ___________________________________,
the assignee named above, or __________________________________________________,
as its agent.

                                     B-6-7-
<PAGE>

STATE OF                )
                        )  ss.:
COUNTY OF               )

            On the day of _______, 20__ before me, a notary public in and for
said State, personally appeared ___________________________________, known to me
who, being by me duly sworn, did depose and say that he executed the foregoing
instrument.

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

            [Notarial Seal]

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