Document:

Execution Copy

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                           REVOLVING CREDIT AGREEMENT

                            DATED AS OF JUNE 14, 2005

                                      AMONG

                            NEWKIRK NAVIGATION CORP.

                                       AND

                            FRANKFORT MARITIME CORP.,
                                  AS BORROWERS,

                           TBS INTERNATIONAL LIMITED,

                          TBS WORLDWIDE SERVICES, INC.

                                       AND

                            WESTBROOK HOLDINGS LTD.,

                                 AS GUARANTORS,

                                       AND

                                 CITIBANK, N.A.
                                    AS LENDER

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                                TABLE OF CONTENTS

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Section 1.  DEFINITIONS AND INTERPRETATION.....................................1

   1.1.     Definitions........................................................1
   1.2.     Accounting Terms..................................................16
   1.3.     Interpretation, etc...............................................17

Section 2.  ADVANCES..........................................................17

   2.1.     Advances..........................................................17
   2.2.     Pro Rata Shares...................................................18
   2.3.     Use of Proceeds...................................................18
   2.4.     Evidence of Debt; Lenders' Books and Records; Notes...............18
   2.5.     Interest on Advances..............................................18
   2.6.     Conversion/Continuation...........................................19
   2.7.     Default Interest..................................................20
   2.8.     Fees..............................................................20
   2.9.     Voluntary Repayments/Commitment Reductions........................20
   2.10.    Intentionally Omitted.............................................21
   2.11.    Application of Repayments.........................................21
   2.12.    General Provisions Regarding Payments.............................22
   2.13.    Ratable Sharing...................................................22
   2.14.    Making or Maintaining LIBOR Advances..............................23
   2.15.    Increased Costs; Capital Adequacy.................................25
   2.16.    Taxes; Withholding, etc...........................................26
   2.17.    Obligation to Mitigate............................................27

Section 3.  CONDITIONS PRECEDENT..............................................27

   3.1.     Closing Date......................................................27
   3.2.     Conditions to Each Credit Extension...............................30

Section 4.  REPRESENTATIONS AND WARRANTIES....................................31

   4.1.     Organization; Requisite Power and Authority; Qualification........31
   4.2.     Capital Stock and Ownership.......................................31
   4.3.     Due Authorization.................................................32
   4.4.     No Conflict.......................................................32
   4.5.     Governmental Consents.............................................32
   4.6.     Binding Obligation................................................32
   4.7.     Historical Financial Statements...................................33
   4.8.     Projections.......................................................33
   4.9.     No Material Adverse Change........................................33
   4.10.    Adverse Proceedings, etc..........................................33
   4.11.    Payment of Taxes..................................................33

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   4.12.    Properties........................................................33
   4.13.    No Defaults.......................................................34
   4.14.    Material Contracts................................................34
   4.15.    Governmental Regulation...........................................34
   4.16.    Margin Stock......................................................34
   4.17.    Employee Matters..................................................34
   4.18.    Employee Benefit Plans............................................35
   4.19.    Certain Fees......................................................35
   4.20.    Solvency..........................................................35
   4.21.    Compliance with Statutes, etc.....................................35
   4.22.    Disclosure........................................................36

Section 5.  AFFIRMATIVE COVENANTS.............................................36

   5.1.     Financial Statements and Other Reports............................36
   5.2.     Existence.........................................................39
   5.3.     Payment of Taxes and Claims.......................................39
   5.4.     Maintenance of Properties.........................................39
   5.5.     Insurance.........................................................39
   5.6.     Inspections; Appraisal............................................40
   5.7.     Compliance with Laws..............................................40
   5.8.     Further Assurances................................................40
   5.9.     Clean Up..........................................................40
   5.10.    Mortgage Filings..................................................41
   5.11.    Release of Vessel from Seizure or Attachment......................41

Section 6.  NEGATIVE COVENANTS................................................41

   6.1.     Liens.............................................................41
   6.2.     No Further Negative Pledges.......................................42
   6.3.     Investments.......................................................42
   6.4.     Financial Covenants...............................................42
   6.5.     Fundamental Changes; Disposition of Assets; Acquisitions..........43
   6.6.     Sales and Lease-Backs.............................................44
   6.7.     Conduct of Business...............................................44
   6.8.     Fiscal Year.......................................................44

Section 7.  EVENTS OF DEFAULT.................................................44

   7.1.     Events of Default.................................................44

Section 8.  MISCELLANEOUS.....................................................46

   8.1.     Notices...........................................................46
   8.2.     Expenses..........................................................49
   8.3.     Indemnity.........................................................49
   8.4.     Set-Off...........................................................50
   8.5.     Amendments and Waivers............................................50

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   8.6.     Successors and Assigns; Participations............................51
   8.7.     Independence of Covenants.........................................53
   8.8.     Survival of Representations, Warranties and Agreements............53
   8.9.     No Waiver; Remedies Cumulative....................................53
   8.10.    Marshalling; Payments Set Aside...................................53
   8.11.    Severability......................................................54
   8.12.    Obligations Several; Independent Nature of Lenders' Rights........54
   8.13.    Headings..........................................................54
   8.14.    APPLICABLE LAW....................................................54
   8.15.    CONSENT TO JURISDICTION...........................................54
   8.16.    WAIVER OF JURY TRIAL..............................................55
   8.17.    Confidentiality...................................................55
   8.18.    Usury Savings Clause..............................................56
   8.19.    Counterparts......................................................56
   8.20.    Effectiveness.....................................................56
   8.21.    Patriot Act Notice................................................56

                                       iii

SCHEDULES:        4.1        Jurisdictions of Organization and Qualification
                  4.2        Capital Stock and Ownership
                  4.14       Material Contracts
                  6.1        Existing Liens
                  6.3        Existing Investments

EXHIBITS:         A-1        Funding Notice
                  A-2        Conversion/Continuation Notice
                  B          Note
                  C          Compliance Certificate
                  D          Assignment Agreement
                  E          Closing Date Certificate
                  F          Solvency Certificate

                                       iv

                           REVOLVING CREDIT AGREEMENT

     THIS REVOLVING CREDIT, AGREEMENT (the "AGREEMENT") dated as of June 14,
2005, is entered into by and among NEWKIRK NAVIGATION CORP., a corporation
organized under the laws of the Republic of the Marshall Islands ("NEWKIRK"),
FRANKFORT MARITIME CORP., a corporation organized under the laws of the Republic
of the Marshall Islands ("FRANKFORT" and, together with Newkirk, the
"BORROWERS"), TBS INTERNATIONAL LIMITED, a limited liability company organized
under the laws of Bermuda (the "COMPANY"), WESTBROOK HOLDINGS LTD., a
corporation organized under the laws of the Republic of the Marshall Islands
("WESTBROOK") and TBS WORLDWIDE SERVICES, INC., a corporation organized under
the laws of the Republic of the Marshall Islands ("TBS WW") and Citibank, N.A.,
as the lender hereunder ("CITIBANK") and each other lender that from time to
time may become party hereto (the "LENDERS").

                                    RECITALS:

     WHEREAS, Lenders are willing to make the Advances available to the
Borrowers upon the terms and subject to the conditions set forth herein.

     WHEREAS, the obligations of each Borrower hereunder are guaranteed by each
Credit Party (other than such Borrower).

     WHEREAS, Newkirk and Frankfort (collectively, the "BORROWERS") are willing
to grant to the Lenders a security interest in the Collateral to secure the
loans and other financial accommodations being granted by the Lenders.

     NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and adequacy of which hereby are
acknowledged, Company, Guarantors and Lenders hereby agree as follows:

SECTION 1. DEFINITIONS AND INTERPRETATION

     1.1. Definitions. The following terms used herein, including in the
preamble, recitals, exhibits and schedules hereto, shall have the following
meanings:

          "ADJUSTED LIBOR" means, for any Interest Rate Determination Date with
respect to an Interest Period for a LIBOR Advance, the rate per annum obtained
by dividing (and rounding upward to the next whole multiple of 1/16 of 1%) (i)
(a) the rate per annum (rounded to the nearest 1/100 of 1%) equal to the rate
determined by Citibank to be the offered rate which appears on the page of the
Telerate Screen which displays an average British Bankers Association Interest
Settlement Rate (such page currently being page number 3740 or 3750, as
applicable) for deposits (for delivery on the first day of such period) with a
term equivalent to such period in Dollars, determined as of approximately 11:00
a.m. (London, England time) on such Interest Rate Determination Date, or (b) in
the event the rate referenced in the preceding clause (a) does not appear on
such page or service or if such page or service shall cease to be available, the
rate per annum (rounded to the nearest 1/100 of 1%) equal to the rate determined
by Citibank to be the offered rate on such other page or other service which
displays an average British Bankers Association Interest Settlement Rate for
deposits (for delivery on the first day of

such period) with a term equivalent to such period in Dollars, determined as of
approximately 11:00 a.m. (London, England time) on such Interest Rate
Determination Date, or (c) in the event the rates referenced in the preceding
clauses (a) and (b) are not available, the rate per annum (rounded to the
nearest 1/100 of 1%) equal to the offered quotation rate to first class banks in
the London interbank market by Citibank for deposits (for delivery on the first
day of the relevant period) in Dollars of amounts in same day funds comparable
to the principal amount of the applicable Advance of Citibank, in its capacity
as a Lender, for which Adjusted LIBOR is then being determined with maturities
comparable to such period as of approximately 11:00 a.m. (London, England time)
on such Interest Rate Determination Date, by (ii) an amount equal to (a) one
minus (b) the Applicable Reserve Requirement.

          "ADVANCE" means an Advance made by a Lender to a Borrower pursuant to
Section 2.1(a) (Commitments).

          "ADVANCE EXPOSURE" means, with respect to any Lender, as of any date
of determination, the outstanding principal amount of the Advances of such
Lender; provided, at any time prior to the making of the Advances, the Advance
Exposure of any Lender shall be equal to its Commitment.

          "ADVERSE PROCEEDING" means any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration (whether or not purportedly on behalf of Company or any of its
Subsidiaries) at law or in equity, or before or by any Governmental Authority,
domestic or foreign, whether pending or, to the knowledge of Company or any of
its Subsidiaries, threatened against or affecting Company or any of its
Subsidiaries or any property of Company or any of its Subsidiaries.

          "AFFECTED LENDER" as defined in Section 2.14(b) (Illegality or
Impracticality of LIBOR Advances).

          "AFFECTED ADVANCES" as defined in Section 2.14(b) (Illegality or
Impracticality of LIBOR Advances).

          "AFFILIATE" means, as applied to any Person, any other Person directly
or indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power (i) to vote 5% or more of the Securities having
ordinary voting power for the election of directors of such Person or (ii) to
direct or cause the direction of the management and policies of that Person,
whether through the ownership of voting securities or by contract or otherwise.

          "AGGREGATE AMOUNTS DUE" as defined in Section 2.13 (Ratable Sharing).

          "AGREEMENT" means this Revolving Credit Agreement, dated as of June
14, 2005, as it may be amended, supplemented or otherwise modified from time to
time.

          "APPLICABLE RESERVE REQUIREMENT" means, at any time, for any LIBOR
Advance, the maximum rate, expressed as a decimal, at which reserves (including,
without

                                       2

limitation, any basic marginal, special, supplemental, emergency or other
reserves) are required to be maintained with respect thereto against
"Eurocurrency liabilities" (as such term is defined in Regulation D) under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System or other applicable banking regulator. Without limiting the
effect of the foregoing, the Applicable Reserve Requirement shall reflect any
other reserves required to be maintained by such member banks with respect to
(i) any category of liabilities which includes deposits by reference to which
the applicable Adjusted LIBOR or any other interest rate of an Advance is to be
determined, or (ii) any category of extensions of credit or other assets which
include LIBOR Advances. A LIBOR Advance shall be deemed to constitute
Eurocurrency liabilities and as such shall be deemed subject to reserve
requirements without benefits of credit for proration, exceptions or offsets
that may be available from time to time to the applicable Lender. The rate of
interest on LIBOR Advances shall be adjusted automatically on and as of the
effective date of any change in the Applicable Reserve Requirement.

          "ASSET SALE" means a sale, lease or sub-lease (as lessor or
sublessor), sale and leaseback, assignment, conveyance, transfer or other
disposition to, or any exchange of property with, any Person (other than a
Credit Party), in one transaction or a series of transactions, of all or any
part of a Credit Party's businesses, assets or properties of any kind, whether
real, personal, or mixed and whether tangible or intangible, whether now owned
or hereafter acquired, including, without limitation, the Capital Stock of any
of its Subsidiaries, other than inventory (or other assets) sold or leased in
the ordinary course of business (excluding any such sales by operations or
divisions discontinued or to be discontinued).

          "ASSIGNMENT AGREEMENT" means an Assignment and Assumption Agreement
substantially in the form of Exhibit D, with such amendments or modifications as
may be approved by Citibank.

          "AUTHORIZED OFFICER" means, as applied to any Person, any individual
holding the position of chairman of the board (if an officer), chief executive
officer, president or one of its vice presidents (or the equivalent thereof),
and such Person's chief financial officer or treasurer.

          "BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy," as now and hereafter in effect, or any successor statute.

          "BASE RATE" shall mean a fluctuating interest rate per annum which
shall at all times be equal to the higher of (a) the rate of interest announced
publicly by Citibank in New York, New York, from time to time, as Citibank's
base rate; or (b) the sum (adjusted to the nearest 1/4 of one percent or, if
there is no nearest 1/4 of one percent, to the next higher 1/4 of one percent)
of (i) 1/2 of one percent per annum, plus (ii) the rate per annum obtained by
dividing (A) the latest three-week moving average of secondary market morning
offering rates in the United States for three-month certificates of deposit of
major United States money market banks, such three-week moving average being
determined weekly on each Monday (or, if any such day is not a Business Day, on
the next succeeding Business Day) for the three-week period ending on the
previous Friday by Citibank on the basis of such rates reported by certificate
of deposit dealers to and published by the Federal Reserve Bank of New York, or
if such publication shall be suspended or terminated on the basis of quotations
for such rates received by Citibank from

                                       3

three New York certificate of deposit dealers of recognized standing selected by
Citibank, by (B) a percentage equal to 100% minus the average of the daily
percentages specified during such three-week period by the Board of Governors of
the Federal Reserve System (or any successor) for determining the maximum
reserve requirement (including, without limitation, any emergency, supplemental
or other marginal reserve requirement) for Citibank in respect of liabilities
consisting of or including (among other liabilities) three-month United States
dollar nonpersonal time deposits in the United States, plus (iii) the average
during such three-week period of the annual assessment rates estimated by
Citibank for determining the then current annual assessment payable by Citibank
to the Federal Deposit Insurance Corporation (or any successor) for insuring
United States dollar deposits of the Bank in the United States.

          "BASE RATE ADVANCE" means an Advance bearing interest at a rate
determined by reference to the Base Rate.

          "BORROWERS" is defined in the preamble hereto.

          "BUSINESS DAY" means (i) any day excluding Saturday, Sunday and any
day which is a legal holiday under the laws of the State of New York or is a day
on which banking institutions located in such state are authorized or required
by law or other governmental action to close and (ii) with respect to all
notices, determinations, fundings and payments in connection with Adjusted LIBOR
or any LIBOR Advances, the term "Business Day" shall mean any day which is a
Business Day described in clause (i) and which is also a day for trading by and
between banks in Dollar deposits in the London interbank market.

          "CAPITAL LEASE" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is or should be accounted for as a capital lease on the
balance sheet of that Person.

          "CAPITAL STOCK" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation),
including, without limitation, partnership interests and membership interests,
and any and all warrants, rights or options to purchase or other arrangements or
rights to acquire any of the foregoing.

          "CASH" means money, currency or a credit balance in any demand or
deposit account.

          "CASH EQUIVALENTS" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed as
to interest and principal by the United States Government or (b) issued by any
agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing within one year
after such date; (ii) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such state or any
public instrumentality thereof, in each case maturing within one year after such
date and having, at the time of the acquisition thereof, a rating of at least
A-1 from S&P or at least P-1 from Moody's; (iii) commercial paper maturing no
more than one year from the date of creation thereof and having, at the time of
the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from

                                       4

Moody's; (iv) certificates of deposit or bankers' acceptances maturing within
one year after such date and issued or accepted by any Lender or by any
commercial bank organized under the laws of the United States of America or any
state thereof or the District of Columbia that (a) is at least "adequately
capitalized" (as defined in the regulations of its primary Federal banking
regulator) and (b) has Tier 1 capital (as defined in such regulations) of not
less than $100,000,000; and (v) shares of any money market mutual fund that (a)
has substantially all of its assets invested continuously in the types of
investments referred to in clauses (i) and (ii) above, (b) has net assets of not
less than $500,000,000, and (c) has the highest rating obtainable from either
S&P or Moody's.

          "CHANGE OF CONTROL" means, at any time, (i) any Person or "group"
(within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act) (a) shall
have acquired beneficial ownership of 51% or more on a fully diluted basis of
the voting and/or economic interest in the Capital Stock of Company or (b) shall
have obtained the power (whether or not exercised) to elect a majority of the
members of the board of directors (or similar governing body) of Company; (ii)
Company shall cease to beneficially own and control 100% on a fully diluted
basis of the economic and voting interest in the Capital Stock of each Borrower
and the other Guarantors; or (iii) the majority of the seats (other than vacant
seats) on the board of directors (or similar governing body) of Company cease to
be occupied by Persons who either (a) were members of the board of directors of
Company on the Closing Date or (b) were nominated for election by the board of
directors of Company, a majority of whom were directors on the Closing Date or
whose election or nomination for election was previously approved by a majority
of such directors.

          "CLOSING DATE" means the date on which the initial Advance is made and
all of the conditions precedent to closing set forth in Section 3 are satisfied
or waived.

          "CLOSING DATE CERTIFICATE" means a Closing Date Certificate
substantially in the form of Exhibit F-1.

          "COLLATERAL" means, collectively, all of the real, personal and mixed
property (including Capital Stock) in which Liens are purported to be granted
pursuant to the Collateral Documents as security for the Obligations.

          "COLLATERAL DOCUMENTS" means the Security Agreement, the Mortgages,
and all other instruments, documents and agreements delivered by any Credit
Party pursuant to this Agreement or any of the other Credit Documents in order
to grant to the Lenders, a Lien on any real, personal or mixed property of that
Credit Party as security for the Obligations.

          "COMPANY" as defined in the preamble hereto.

          "COMMITMENT" means the commitment of a Lender to make or otherwise
fund any Advance and "Commitments" means such commitments of all Lenders in the
aggregate. The aggregate amount of Citibank's Commitment as of the Closing Date
is $12,000,000.

          "COMMITMENT PERIOD" means the period from the Closing Date to but
excluding the Commitment Termination Date.

                                       5

          "COMMITMENT TERMINATION DATE" means the earliest to occur of (i) May
31, 2006, (ii) the date the Commitments are permanently reduced to zero pursuant
to Section 2.9(b) (Voluntary Commitment Reductions), and (iii) the date of the
termination of the Commitments pursuant to Section 7.1 (Events of Default).

          "COMPLIANCE CERTIFICATE" means a Compliance Certificate substantially
in the form of Exhibit C.

          "CONSOLIDATED ADJUSTED EBITDA" means, for any period, an amount
determined for Company and its Subsidiaries on a consolidated basis equal to (i)
the sum, without duplication, of the amounts for such period of (a) Consolidated
Net Income, (b) Consolidated Interest Expense, (c) provisions for taxes based on
income, (d) total depreciation expense, (e) total amortization expense, and (f)
other non-Cash items reducing Consolidated Net Income (excluding any such
non-Cash item to the extent that it represents an accrual or reserve for
potential Cash items in any future period or amortization of a prepaid Cash item
that was paid in a prior period), minus (ii) other non-Cash items increasing
Consolidated Net Income for such period (excluding any such non-Cash item to the
extent it represents the reversal of an accrual or reserve for potential Cash
item in any prior period).

          "CONSOLIDATED INTEREST EXPENSE" means, for any period, total interest
expense (including that portion attributable to Capital Leases in accordance
with GAAP and capitalized interest) of Company and its Subsidiaries on a
consolidated basis with respect to all outstanding Indebtedness of Company and
its Subsidiaries, including all commissions, discounts and other fees and
charges owed with respect to letters of credit and net costs under interest rate
agreements, but excluding, however, any fees payable to Citibank on or before
the Closing Date.

          "CONSOLIDATED NET INCOME" means, for any period, (i) the net income
(or loss) of Company and its Subsidiaries on a consolidated basis for such
period taken as a single accounting period determined in conformity with GAAP,
minus (ii) (a) the income (or loss) of any Person (other than a Subsidiary of
Company) in which any other Person (other than Company or any of its
Subsidiaries) has a joint interest, except to the extent of the amount of
dividends or other distributions actually paid to Company or any of its
Subsidiaries by such Person during such period, (b) the income (or loss) of any
Person accrued prior to the date it becomes a Subsidiary of Company or is merged
into or consolidated with Company or any of its Subsidiaries or that Person's
assets are acquired by Company or any of its Subsidiaries, (c) the income of any
Subsidiary of Company to the extent that the declaration or payment of dividends
or similar distributions by that Subsidiary of that income is not at the time
permitted by operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation applicable to
that Subsidiary, (d) any after-tax gains or losses attributable to Asset Sales
or returned surplus assets of any Pension Plan, and (e) (to the extent not
included in clauses (a) through (d) above) any net extraordinary gains or net
extraordinary losses.

          "CONSOLIDATED TOTAL DEBT" means, as at any date of determination, the
aggregate stated balance sheet amount of all Indebtedness of Company and its
Subsidiaries determined on a consolidated basis in accordance with GAAP.

                                       6

          "CONSOLIDATED TOTAL DEBT TO EBITDA" means the ratio as of the last day
of any Fiscal Quarter of (i) Consolidated Total Debt to (ii) Consolidated
Adjusted EBITDA for the four-Fiscal Quarter Period then ending.

          "CONTRACTUAL OBLIGATION" means, as applied to any Person, any
provision of any Security issued by that Person or of any indenture, mortgage,
deed of trust, contract, undertaking, agreement or other instrument to which
that Person is a party or by which it or any of its properties is bound or to
which it or any of its properties is subject.

          "CONVERSION/CONTINUATION DATE" means the effective date of a
continuation or conversion, as the case may be, as set forth in the applicable
Conversion/Continuation Notice.

          "CONVERSION/CONTINUATION NOTICE" means a Conversion/Continuation
Notice substantially in the form of Exhibit A-2.

          "CREDIT DATE" means the date of a Credit Extension.

          "CREDIT DOCUMENT" means any of this Agreement, the Guaranty, the
Notes, the Collateral Documents, and all other documents, instruments or
agreements executed and delivered by a Credit Party for the benefit of any
Lender in connection herewith.

          "CREDIT EXTENSION" means the making of an Advance.

          "CREDIT PARTY" means each Person (other than any Lender or any other
representative thereof) from time to time party to a Credit Document.

          "DEBT SERVICE" means, for any period, the sum, without duplication, of
the amounts determined for Company and its Subsidiaries on a consolidated basis
equal to (i) Consolidated Interest Expense, and (ii) scheduled payments of
principal on Consolidated Total Debt.

          "DEBT SERVICE COVERAGE RATIO" means, for any period, the ratio of (a)
Consolidated Adjusted EBITDA for such period, to (b) Debt Service for such
period.

          "DEFAULT" means a condition or event that, after notice or lapse of
time or both, would constitute an Event of Default.

          "DOLLARS" and the sign "$" mean the lawful money of the United States
of America.

          "EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as defined
in Section 3(3) of ERISA which is or was sponsored, maintained or contributed to
by, or required to be contributed by, Company, any of its Subsidiaries or any of
their respective ERISA Affiliates.

          "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor thereto.

                                       7

          "ERISA AFFILIATE" means, as applied to any Person, (i) any corporation
which is a member of a controlled group of corporations within the meaning of
Section 414(b) of the Internal Revenue Code of which that Person is a member;
(ii) any trade or business (whether or not incorporated) which is a member of a
group of trades or businesses under common control within the meaning of Section
414(c) of the Internal Revenue Code of which that Person is a member; and (iii)
any member of an affiliated service group within the meaning of Section 414(m)
or (o) of the Internal Revenue Code of which that Person, any corporation
described in clause (i) above or any trade or business described in clause (ii)
above is a member. Any former ERISA Affiliate of Company or any of its
Subsidiaries shall continue to be considered an ERISA Affiliate of Company or
any such Subsidiary within the meaning of this definition with respect to the
period such entity was an ERISA Affiliate of Company or such Subsidiary and with
respect to liabilities arising after such period for which Company or such
Subsidiary could be liable under the Internal Revenue Code or ERISA.

          "ERISA EVENT" means (i) a "reportable event" within the meaning of
Section 4043 of ERISA and the regulations issued thereunder with respect to any
Pension Plan (excluding those for which the provision for 30-day notice to the
PBGC has been waived by regulation); (ii) the failure to meet the minimum
funding standard of Section 412 of the Internal Revenue Code with respect to any
Pension Plan (whether or not waived in accordance with Section 412(d) of the
Internal Revenue Code) or the failure to make by its due date a required
installment under Section 412(m) of the Internal Revenue Code with respect to
any Pension Plan or the failure to make any required contribution to a
Multiemployer Plan; (iii) the provision by the administrator of any Pension Plan
pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate such
plan in a distress termination described in Section 4041(c) of ERISA; (iv) the
withdrawal by Company, any of its Subsidiaries or any of their respective ERISA
Affiliates from any Pension Plan with two or more contributing sponsors or the
termination of any such Pension Plan resulting in liability to Company, any of
its Subsidiaries or any of their respective Affiliates pursuant to Section 4063
or 4064 of ERISA; (v) the institution by the PBGC of proceedings to terminate
any Pension Plan, or the occurrence of any event or condition which might
constitute grounds under ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan; (vi) the imposition of liability on
Company, any of its Subsidiaries or any of their respective ERISA Affiliates
pursuant to Section 4062(e) or 4069 of ERISA or by reason of the application of
Section 4212(c) of ERISA; (vii) the withdrawal of Company, any of its
Subsidiaries or any of their respective ERISA Affiliates in a complete or
partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from
any Multiemployer Plan if there is any potential liability therefore, or the
receipt by Company, any of its Subsidiaries or any of their respective ERISA
Affiliates of notice from any Multiemployer Plan that it is in reorganization or
insolvency pursuant to Section 4241 or 4245 of ERISA, or that it intends to
terminate or has terminated under Section 4041A or 4042 of ERISA; (viii) the
occurrence of an act or omission which could give rise to the imposition on
Company, any of its Subsidiaries or any of their respective ERISA Affiliates of
fines, penalties, taxes or related charges under Chapter 43 of the Internal
Revenue Code or under Section 409, Section 502(c), (i) or (l), or Section 4071
of ERISA in respect of any Employee Benefit Plan; (ix) the assertion of a
material claim (other than routine claims for benefits) against any Employee
Benefit Plan other than a Multiemployer Plan or the assets thereof, or against
Company, any of its Subsidiaries or any of their respective ERISA Affiliates in
connection with any Employee Benefit Plan; (x) receipt from the Internal Revenue
Service of notice of the failure of any Pension Plan (or any other

                                       8

Employee Benefit Plan intended to be qualified under Section 401(a) of the
Internal Revenue Code) to qualify under Section 401(a) of the Internal Revenue
Code, or the failure of any trust forming part of any Pension Plan to qualify
for exemption from taxation under Section 501(a) of the Internal Revenue Code;
or (xi) the imposition of a Lien pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or pursuant to ERISA with respect to any Pension Plan.

          "EVENT OF DEFAULT" means each of the conditions or events set forth in
Section 7.1 (Events of Default).

          "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.

          "FEDERAL FUNDS EFFECTIVE RATE" means for any day, the rate per annum
(expressed, as a decimal, rounded upwards, if necessary, to the next higher
1/100 of 1%) equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published by the Federal Reserve Bank of
New York on the Business Day next succeeding such day; provided, (i) if such day
is not a Business Day, the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Business Day as so published on the next
succeeding Business Day, and (ii) if no such rate is so published on such next
succeeding Business Day, the Federal Funds Rate for such day shall be the
average rate charged to Citibank, in its capacity as a Lender, on such day on
such transactions as determined by Citibank.

          "FINANCIAL OFFICER CERTIFICATION" means, with respect to the financial
statements for which such certification is required, the certification of the
chief financial officer of Company that such financial statements fairly
present, in all material respects, the financial condition of Company and its
Subsidiaries as at the dates indicated and the results of their operations and
their cash flows for the periods indicated, subject to changes resulting from
audit and normal year-end adjustments.

          "FIRST PRIORITY" means, with respect to any Lien purported to be
created in any Collateral pursuant to any Collateral Document, that such Lien is
the only Lien to which such Collateral is subject, other than Permitted Liens
arising by operation of law.

          "FISCAL QUARTER" means a fiscal quarter of any Fiscal Year.

          "FISCAL YEAR" means the fiscal year of Company and its Subsidiaries
ending on December 31 of each calendar year.

          "FUNDING NOTICE" means a notice substantially in the form of Exhibit
A-1.

          "GAAP" means, subject to the limitations on the application thereof
set forth in Section 1.2 (Accounting Terms), United States generally accepted
accounting principles in effect as of the date of determination thereof.

          "GOVERNMENTAL ACTS" means any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto government or
Governmental Authority.

                                        9

          "GOVERNMENTAL AUTHORITY" means any federal, state, municipal, national
or other government, governmental department, commission, board, bureau, court,
agency or instrumentality or political subdivision thereof or any entity or
officer exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to any government or any court, in
each case whether associated with a state of the United States, the United
States, or a foreign entity or government.

          "GOVERNMENTAL AUTHORIZATION" means any permit, license, authorization,
plan, directive, consent order or consent decree of or from any Governmental
Authority.

          "GRANTOR" as defined in the Security Agreement.

          "GUARANTOR" means, with respect to any Borrower, each Credit Party
other than such Borrower.

          "GUARANTY" means each Guaranty dated as of the date hereof by each
Guarantor.

          "HIGHEST LAWFUL RATE" means the maximum lawful interest rate, if any,
that at any time or from time to time may be contracted for, charged, or
received under the laws applicable to any Lender which are presently in effect
or, to the extent allowed by law, under such applicable laws which may hereafter
be in effect and which allow a higher maximum nonusurious interest rate than
applicable laws now allow.

          "HISTORICAL FINANCIAL STATEMENTS" means as of the Closing Date, (i)
the audited financial statements of Company and its Subsidiaries, for the
immediately preceding three Fiscal Years, consisting of balance sheets and the
related consolidated statements of income, stockholders' equity and cash flows
for such Fiscal Years, and (ii) the unaudited financial statements of Company
and its Subsidiaries as at the most recently ended Fiscal Quarter, consisting of
a balance sheet and the related consolidated statements of income, stockholders'
equity and cash flows for the three-, six-or nine-month period, as applicable,
ending on such date, and, in the case of clauses (i) and (ii), certified by the
chief financial officer of Company that they fairly present, in all material
respects, the financial condition of Company and its Subsidiaries as at the
dates indicated and the results of their operations and their cash flows for the
periods indicated, subject to changes resulting from audit and normal year-end
adjustments.

          "INDEBTEDNESS", as applied to any Person, means, without duplication,
(i) all indebtedness for borrowed money; (ii) that portion of obligations with
respect to Capital Leases that is properly classified as a liability on a
balance sheet in conformity with GAAP; (iii) notes payable and drafts accepted
representing extensions of credit whether or not representing obligations for
borrowed money; (iv) any obligation owed for all or any part of the deferred
purchase price of property or services (excluding any such obligations incurred
under ERISA), which purchase price is (a) due more than six months from the date
of incurrence of the obligation in respect thereof or (b) evidenced by a note or
similar written instrument; (v) all indebtedness secured by any Lien on any
property or asset owned or held by that Person regardless of whether the
indebtedness secured thereby shall have been assumed by that Person or is
nonrecourse to the credit of that Person; (vi) the face amount of any letter of
credit issued for the account of that Person or as to which that Person is
otherwise liable for reimbursement of

                                       10

drawings; (vii) the direct or indirect guaranty, endorsement (otherwise than for
collection or deposit in the ordinary course of business), co-making,
discounting with recourse or sale with recourse by such Person of the obligation
of another; (viii) any obligation of such Person the primary purpose or intent
of which is to provide assurance to an obligee that the obligation of the
obligor thereof will be paid or discharged, or any agreement relating thereto
will be complied with, or the holders thereof will be protected (in whole or in
part) against loss in respect thereof; and (ix) any liability of such Person for
the obligation of another through any agreement (contingent or otherwise) (a) to
purchase, repurchase or otherwise acquire such obligation or any security
therefor, or to provide funds for the payment or discharge of such obligation
(whether in the form of loans, advances, stock purchases, capital contributions
or otherwise) or (b) to maintain the solvency or any balance sheet item, level
of income or financial condition of another if, in the case of any agreement
described under subclauses (a) or (b) of this clause (ix), the primary purpose
or intent thereof is as described in clause (viii) above; and (x) obligations of
such Person in respect of any exchange traded or over the counter derivative
transaction.

          "INDEMNIFIED LIABILITIES" means, collectively, any and all
liabilities, obligations, losses, damages (including natural resource damages),
penalties, claims, costs, expenses and disbursements of any kind or nature
whatsoever (including the reasonable fees and disbursements of counsel for
Indemnitees in connection with any investigative, administrative or judicial
proceeding commenced or threatened by any Person, whether or not any such
Indemnitee shall be designated as a party or a potential party thereto, and any
fees or expenses incurred by Indemnitees in enforcing this indemnity), whether
direct, indirect or consequential and whether based on any federal, state or
foreign laws, statutes, rules or regulations (including securities and
commercial laws, statutes and rules or regulations), on common law or equitable
cause or on contract or otherwise, that may be imposed on, incurred by, or
asserted against any such Indemnitee, in any manner relating to or arising out
of (i) this Agreement or the other Credit Documents or the transactions
contemplated hereby or thereby (including Lenders' agreement to make Credit
Extensions or the use or intended use of the proceeds thereof, or any
enforcement of any of the Credit Documents (including any sale of, collection
from, or other realization upon any of the Collateral or the enforcement of the
Guaranty)); or (ii) the statements contained in the commitment letter delivered
by any Lender to Company with respect to the transactions contemplated by this
Agreement.

          "INDEMNITEE" as defined in Section 8.3 (Indemnity).

          "INTEREST COVERAGE RATIO" means the ratio as of the last day of any
Fiscal Quarter of (i) Consolidated Adjusted EBITDA for the four-Fiscal Quarter
Period then ended, to (ii) Consolidated Interest Expense for such four-Fiscal
Quarter Period.

          "INTEREST PAYMENT DATE" means with respect to (i) any Base Rate
Advance, each March 31, June 30, September 30 and December 31 of each year,
commencing on the first such date to occur after the Closing Date and the final
maturity date of such Advance; and (ii) any LIBOR Advance, the last day of each
Interest Period applicable to such Advance; provided, in the case of each
Interest Period of longer than three months "Interest Payment Date" shall also
include each date that is three months, or an integral multiple thereof, after
the commencement of such Interest Period.

                                       11

          "INTEREST PERIOD" means, in connection with a LIBOR Advance, an
interest period of one-, two-, three- or six-months, as selected by a Borrower
in the applicable Funding Notice or Conversion/Continuation Notice, (i)
initially, commencing on the Credit Date or Conversion/Continuation Date
thereof, as the case may be; and (ii) thereafter, commencing on the day on which
the immediately preceding Interest Period expires; provided, (a) if an Interest
Period would otherwise expire on a day that is not a Business Day, such Interest
Period shall expire on the next succeeding Business Day unless no further
Business Day occurs in such month, in which case such Interest Period shall
expire on the immediately preceding Business Day; (b) any Interest Period that
begins on the last Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (c) of this definition, end on the
last Business Day of a calendar month; and (c) no Interest Period with respect
to any portion of the Advances shall extend beyond the Commitment Termination
Date.

          "INTEREST RATE DETERMINATION DATE" means, with respect to any Interest
Period, the date that is two Business Days prior to the first day of such
Interest Period.

          "INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter, and any successor
statute.

          "INVESTMENT" means (i) any direct or indirect purchase or other
acquisition by any Credit Party of, or of a beneficial interest in, any of the
Securities of any other Person (other than a Credit Party); (ii) any direct or
indirect redemption, retirement, purchase or other acquisition for value, by any
Subsidiary of Company from any Person (other than a Credit Party), of any
Capital Stock of such Person; and (iii) any direct or indirect loan, advance
(other than advances to employees for moving, entertainment and travel expenses,
drawing accounts and similar expenditures in the ordinary course of business) or
capital contribution by a Credit Party to any other Person (other than a Credit
Party), including all indebtedness and accounts receivable from that other
Person that are not current assets or did not arise from sales to that other
Person in the ordinary course of business. The amount of any Investment shall be
the original cost of such Investment plus the cost of all additions thereto,
without any adjustments for increases or decreases in value, or write-ups,
write-downs or write-offs with respect to such Investment.

          "JOINT VENTURE" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form; provided, in
no event shall any corporate Subsidiary of any Person be considered to be a
Joint Venture to which such Person is a party.

          "LENDER" means each financial institution listed on the signature
pages hereto as a Lender, and any other Person that becomes a party hereto
pursuant to an Assignment Agreement.

          "LIBOR ADVANCE" means an Advance bearing interest at a rate determined
by reference to Adjusted LIBOR.

          "LIEN" means (i) any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any agreement to give any
of the foregoing, any

                                       12

conditional sale or other title retention agreement, and any lease in the nature
thereof) and any option, trust or other preferential arrangement having the
practical effect of any of the foregoing and (ii) in the case of Securities, any
purchase option, call or similar right of a third party with respect to such
Securities.

          "LOAN TO VALUE RATIO" means the ratio of (i) the aggregate
Commitments, to (ii) value of the Ships as determined by the most recent
appraisals (that are in form and substance satisfactory to the Lenders)
delivered to the Lenders.

          "MARGIN STOCK" as defined in Regulation U of the Board of Governors of
the Federal Reserve System as in effect from time to time.

          "MATERIAL ADVERSE EFFECT" means a material adverse effect on and/or
material adverse developments with respect to (i) the business operations,
properties, assets, condition (financial or otherwise) or prospects of the
Borrowers and the Guarantors, taken as a whole, or the Company and its
Subsidiaries, taken as a whole; (ii) a significant portion of the industry or
business segment in which Company or its Subsidiaries operate or rely upon;
(iii) the ability of any Credit Party to fully and timely perform its
Obligations; (iv) the legality, validity, binding effect or enforceability
against a Credit Party of a Credit Document to which it is a party; or (iv) the
rights, remedies and benefits available to, or conferred upon, any Lender under
any Credit Document.

          "MATERIAL CONTRACT" means any contract or other arrangement (other
than charter parties that have a term of two years or less) to which Company or
any of its Subsidiaries is a party (other than the Credit Documents) for which
breach, nonperformance, cancellation or failure to renew could reasonably be
expected to have a Material Adverse Effect.

          "MORTGAGE" means each Mortgage dated as of the date hereof by each
Borrower, as it may be amended, supplemented or otherwise modified from time to
time.

          "MULTIEMPLOYER PLAN" means any Employee Benefit Plan which is a
"multiemployer plan" as defined in Section 3(37) of ERISA.

          "NAIC" means The National Association of Insurance Commissioners, and
any successor thereto.

          "NARRATIVE REPORT" means, with respect to the financial statements for
which such narrative report is required, a narrative report describing the
operations of Company and its Subsidiaries in the form prepared for presentation
to senior management thereof for the applicable month, Fiscal Quarter or Fiscal
Year and for the period from the beginning of the then current Fiscal Year to
the end of such period to which such financial statements relate.

          "NOTE" means a promissory note in the form of Exhibit B, as it may be
amended, supplemented or otherwise modified from time to time.

          "NOTICE" means a Funding Notice or a Conversion/Continuation Notice.

                                       13

          "OBLIGATIONS" means all obligations of every nature of each Credit
Party from time to time owed to the Lenders or any of them, under any Credit
Document, whether for principal, interest (including interest which, but for the
filing of a petition in bankruptcy with respect to such Credit Party, would have
accrued on any Obligation, whether or not a claim is allowed against such Credit
Party for such interest in the related bankruptcy proceeding), fees, expenses,
indemnification or otherwise.

          "ORGANIZATIONAL DOCUMENTS" means (i) with respect to any corporation,
its certificate or articles of incorporation or organization, as amended, and
its by-laws, as amended, (ii) with respect to any limited partnership, its
certificate of limited partnership, as amended, and its partnership agreement,
as amended, (iii) with respect to any general partnership, its partnership
agreement, as amended, and (iv) with respect to any limited liability company,
its articles of organization, as amended, and its operating agreement, as
amended. In the event any term or condition of this Agreement or any other
Credit Document requires any Organizational Document to be certified by a
secretary of state or similar governmental official, the reference to any such
"Organizational Document" shall only be to a document of a type customarily
certified by such governmental official.

          "PATRIOT ACT" means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub.
L. 107-56, signed into law October 26, 2001.

          "PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.

          "PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code
or Section 302 of ERISA.

          "PERMITTED ACQUISITION" means any acquisition by Company or any of its
wholly-owned Subsidiaries, whether by purchase, merger or otherwise, of all or
substantially all of the assets of, all of the Capital Stock of, or a business
line or unit or a division of, any Person; provided:

               (i) immediately prior to, and after giving effect thereto, no
     Default or Event of Default shall have occurred and be continuing or would
     result therefrom;

               (ii) all transactions in connection therewith shall be
     consummated, in all material respects, in accordance with all applicable
     laws and in conformity with all applicable Governmental Authorizations;

               (iii) in the case of the acquisition of Capital Stock, all of the
     Capital Stock (except for any such Securities in the nature of directors'
     qualifying shares required pursuant to applicable law) acquired or
     otherwise issued by such Person or any newly formed Subsidiary of Company
     in connection with such acquisition shall be owned directly or indirectly
     100% by a Credit Party; and

               (iv) the Company and its Subsidiaries shall be in compliance with
     the financial covenants set forth in Section 6.4 on a pro forma basis after
     giving effect to

                                       14

     such acquisition as of the last day of the Fiscal Quarter most recently
     ended, (as determined in accordance with Section 6.8(d)).

          "PERMITTED LIENS" means each of the Liens permitted pursuant to
Section 6.1 (Liens).

          "PERSON" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and Governmental Authorities.

          "PROJECTIONS" as defined in Section 4.8 (Projectsion).

          "PRO RATA SHARE" means the percentage obtained by dividing (a) the
Advance Exposure of that Lender by (b) the aggregate Advance Exposure of all
Lenders.

          "REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.

          "S&P" means Standard & Poor's Ratings Group, a division of The McGraw
Hill Corporation.

          "SECURITIES" means any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing. "Securities
Act" means the Securities Act of 1933, as amended from time to time, and any
successor statute.

          "SECURITY AGREEMENT" means the Security Agreement dated as of the date
hereof by each Borrower, as it may be amended, supplemented or otherwise
modified from time to time.

          "SHIPS" mean the vessels owned by Newkirk and Frankfort, respectively,
called the Dakota Belle and the Shawnee Princess.

          "SOLVENCY CERTIFICATE" means a Solvency Certificate of the chief
financial officer of Company substantially in the form of Exhibit F-2.

          "SOLVENT" means, with respect to any Credit Party, that as of the date
of determination both (i) (a) the sum of such Credit Party's debt (including
contingent liabilities) does not exceed the present fair saleable value of such
Credit Party's present assets; (b) such Credit Party's capital is not
unreasonably small in relation to its business as contemplated on the Closing
Date and reflected in the Projections or with respect to any transaction
contemplated or undertaken after the Closing Date; and (c) such Person has not
incurred and does not intend to incur, or believe (nor should it reasonably
believe) that it will incur, debts beyond its ability to

                                       15

pay such debts as they become due (whether at maturity or otherwise); and (ii)
such Person is "solvent" within the meaning given that term and similar terms
under applicable laws relating to fraudulent transfers and conveyances. For
purposes of this definition, the amount of any contingent liability at any time
shall be computed as the amount that, in light of all of the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability (irrespective of whether
such contingent liabilities meet the criteria for accrual under Statement of
Financial Accounting Standard No.5).

          "SUBJECT TRANSACTION" as defined in Section 6.4(e) (Financial
Covenants).

          "SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, limited liability company, association, joint venture or other
business entity of which more than 50% of the total voting power of shares of
stock or other ownership interests entitled (without regard to the occurrence of
any contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar functions)
having the power to direct or cause the direction of the management and policies
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof; provided, in determining the percentage of ownership interests of any
Person controlled by another Person, no ownership interest in the nature of a
"qualifying share" of the former Person shall be deemed to be outstanding.

          "TAX" means any present or future tax, levy, impost, duty, assessment,
charge, fee, deduction or withholding of any nature and whatever called, by
whomsoever, on whomsoever and wherever imposed, levied, collected, withheld or
assessed; provided, "Tax on the overall net income" of a Person shall be
construed as a reference to a tax imposed by the jurisdiction in which that
Person is organized or in which that Person's applicable principal office
(and/or, in the case of a Lender, its lending office) is located or in which
that Person (and/or, in the case of a Lender, its lending office) is deemed to
be doing business on all or part of the net income, profits or gains (whether
worldwide, or only insofar as such income, profits or gains are considered to
arise in or to relate to a particular jurisdiction, or otherwise) of that Person
(and/or, in the case of a Lender, its applicable lending office).

          "TYPE OF ADVANCE" means a Base Rate Advance or a LIBOR Advance.

          "UCC" means the Uniform Commercial Code (or any similar or equivalent
legislation) as in effect in any applicable jurisdiction.

          "UNADJUSTED LIBOR COMPONENT" means that component of the interest
costs to a Borrower in respect of a LIBOR Advance that is based upon the rate
obtained pursuant to clause (i) of the definition of Adjusted LIBOR.

     1.2. ACCOUNTING TERMS. Except as otherwise expressly provided herein, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Company to Lenders pursuant to Section 5.1(a)
(Quarterly Financial Statements) and 5.1(b) (Annual Financial Statements) shall
be prepared in accordance with GAAP as in effect at the time of such preparation
(and delivered together with the reconciliation statements provided for

                                       16

in Section 5.1(d) (Reconciliation), if applicable). Subject to the foregoing,
calculations in connection with the definitions, covenants and other provisions
hereof shall utilize accounting principles and policies in conformity with those
used to prepare the Historical Financial statements.

     1.3. INTERPRETATION, ETC. Any of the terms defined herein may, unless the
context otherwise requires, be used in the singular or the plural, depending on
the reference. References herein to any Section, Appendix, Schedule or Exhibit
shall be to a Section, an Appendix, a Schedule or an Exhibit, as the case may
be, hereof unless otherwise specifically provided. The use herein of the word
"include" or "including", when following any general statement, term or matter,
shall not be construed to limit such statement, term or matter to the specific
items or matters set forth immediately following such word or to similar items
or matters, whether or not nonlimiting language (such as "without limitation" or
"but not limited to" or words of similar import) is used with reference thereto,
but rather shall be deemed to refer to all other items or matters that fall
within the broadest possible scope of such general statement, term or matter.

SECTION 2. ADVANCES

     2.1. ADVANCES.

          (a) Commitments. During the Commitment Period, subject to the terms
and conditions hereof, each Lender severally agrees to make Advances to the
Borrowers in the aggregate amount up to but not exceeding such Lender's
Commitment; provided, after giving effect to the making of any Advances in no
event shall the aggregate principal amount of all outstanding Advances exceeds
the Commitments then in effect and provided, further, that Fankfort shall not
individually borrow an amount in excess of $9,000,000 and Newkirk shall not
individually borrow an amount in excess of $3,000,000. Amounts borrowed pursuant
to this Section 2.1(a) may be repaid and reborrowed during the Commitment
Period. Each Lender's Commitment shall expire on the Commitment Termination Date
and all Advances and all other amounts owed hereunder with respect to the
Advances and the Commitments shall be paid in full no later than such date.

          (b) Borrowing Mechanics for Advances.

               (i) Except pursuant to 2.4(d), Advances that are Base Rate
     Advances shall be made in an aggregate minimum amount of $100,000 and
     integral multiples of $100,000 in excess of that amount, and Advances that
     are LIBOR Advances shall be in an aggregate minimum amount of $100,000 and
     integral multiples of $100,000 in excess of that amount.

               (ii) Whenever a Borrower desires that Lenders make Advances, such
     Borrower shall deliver to Lenders a fully executed and delivered Funding
     Notice no later than 10:00 a.m. (New York City time) at least three
     Business Days in advance of the proposed Credit Date in the case of a LIBOR
     Advance, and at least one Business Day in advance of the proposed Credit
     Date in the case of an Advance that is a Base Rate Advance. Except as
     otherwise provided herein, a Funding Notice for an Advance that is a LIBOR
     Advance shall be irrevocable on and after the related Interest Rate

                                       17

     Determination Date, and such Borrower shall be bound to make a borrowing in
     accordance therewith.

               (iii) Except as provided herein, upon satisfaction or waiver of
     the conditions precedent specified herein, the Lenders shall make the
     proceeds of such Advances available to the applicable Borrower on the
     applicable Credit Date by causing an amount of same day funds in Dollars to
     be credited to the account that such Borrower maintains with Citibank or
     such other account as may be designated in writing to the Lenders by such
     Borrower.

     2.2. PRO RATA SHARES All Advances shall be made by Lenders simultaneously
and proportionately to their respective Pro Rata Shares, it being understood
that no Lender shall be responsible for any default by any other Lender in such
other Lender's obligation to make an Advance requested hereunder nor shall any
Commitment of any Lender be increased or decreased as a result of a default by
any other Lender in such other Lender's obligation to make an Advance requested
hereunder.

     2.3. USE OF PROCEEDS. The proceeds of the Advances made after the Closing
Date shall be applied by the Borrowers for working capital and general corporate
purposes of the Credit Parties, including Permitted Acquisitions by the Company
or any of its Subsidiaries. No portion of the proceeds of any Credit Extension
shall be used in any manner that causes or might cause such Credit Extension or
the application of such proceeds to violate Regulation T, Regulation U or
Regulation X of the Board of Governors of the Federal Reserve System or any
other regulation thereof or to violate the Exchange Act.

     2.4. EVIDENCE OF DEBT; LENDERS' BOOKS AND RECORDS; NOTES.

          (a) Lenders' Evidence of Debt. Each Lender shall maintain on its
internal records an account or accounts evidencing the Indebtedness of each
Borrower to such Lender, including the amounts of the Advances made by it and
each repayment and prepayment in respect thereof. Any such recordation shall be
conclusive and binding on Company, absent manifest error; provided, failure to
make any such recordation, or any error in such recordation, shall not affect
any Lender's Commitments or a Borrower's Obligations in respect of any
applicable Advances.

          (b) Notes. Each Borrower shall execute and deliver to such Lender
(and/or, if applicable and if so specified in such notice, to any Person who is
an assignee of such Lender pursuant to Section 8.6 (Successors and Assigns))
promptly after such Borrower's receipt of such notice a Note or Notes to
evidence such Lender's Commitment.

     2.5. INTEREST ON ADVANCES.

          (a) Except as otherwise set forth herein, each Advance shall bear
interest on the unpaid principal amount thereof from the date made through
repayment (whether by acceleration or otherwise) thereof as follows:

               (i) if a Base Rate Advance, at the Base Rate; or

                                       18

               (ii) if a LIBOR Advance, at Adjusted LIBOR plus 2.00%;

          (b) The basis for determining the rate of interest with respect to any
Advance, and the Interest Period with respect to any LIBOR Advance, shall be
selected by a Borrower and notified to the Lenders pursuant to the applicable
Funding Notice or Conversion/Continuation Notice, as the case may be. If on any
day an Advance is outstanding with respect to which a Funding Notice or
Conversion/Continuation Notice has not been delivered to the Lenders in
accordance with the terms hereof specifying the applicable basis for determining
the rate of interest, then for that day such Advance shall be a Base Rate
Advance.

          (c) In connection with LIBOR Advances there shall be no more than
three (3) Interest Periods outstanding at any time. In the event that a Borrower
fails to specify between a Base Rate Advance or a LIBOR Advance or fails to
specify an Interest Period for any LIBOR Advance in the applicable Funding
Notice or Conversion/Continuation Notice, the Borrower shall be deemed to have
selected an Interest Period that is the same as the Interest Period then ending
(or in the case of an Advance under a Funding Notice, a three month Interest
Period). As soon as practicable after 10:00 a.m. (New York City time) on each
Interest Rate Determination Date, the Lenders shall determine (which
determination shall, absent manifest error, be final, conclusive and binding
upon all parties) the interest rate that shall apply to the LIBOR Advances for
which an interest rate is then being determined for the applicable Interest
Period and shall promptly give notice thereof (in writing or by telephone
confirmed in writing) to the applicable Borrower.

          (d) Interest payable pursuant to Section 2.5(a) shall be computed (i)
in the case of Base Rate Advances on the basis of a 365-day or 366-day year, as
the case may be, and (ii) in the case of LIBOR Advances, on the basis of a
360-day year, in each case for the actual number of days elapsed in the period
during which it accrues. In computing interest on any Advance, the date of the
making of such Advance or the first day of an Interest Period applicable to such
Advance or, with respect to a Base Rate Advance being converted from a LIBOR
Advance, the date of conversion of such LIBOR Advance to such Base Rate Advance,
as the case may be, shall be included, and the date of payment of such Advance
or the expiration date of an Interest Period applicable to such Advance or, with
respect to a Base Rate Advance being converted to a LIBOR Advance, the date of
conversion of such Base Rate Advance to such LIBOR Advance, as the case may be,
shall be excluded; provided, if an Advance is repaid on the same day on which it
is made, one day's interest shall be paid on that Advance.

          (e) Except as otherwise set forth herein, interest on each Advance
shall be payable in arrears on and to (i) each Interest Payment Date applicable
to that Advance; (ii) upon any repayment of that Advance, whether voluntary or
mandatory, to the extent accrued on the amount being prepaid; and (iii) at
maturity, including final maturity.

     2.6. CONVERSION/CONTINUATION.

          (a) Subject to Section 2.14 (Making or Maintaining LIBOR Advance), a
Borrower shall have the option:

                                       19

               (i) to convert at any time all or any part of any Advance equal
     to $100,000 and integral multiples of $100,000 in excess of that amount
     from one Type of Advance to another Type of Advance; provided, a LIBOR
     Advance may only be converted on the expiration of the Interest Period
     applicable to such LIBOR Advance unless the applicable Borrower shall pay
     all amounts due under Section 2.14 (Making or Maintaining LIBOR Advance) in
     connection with any such conversion; or

               (ii) upon the expiration of any Interest Period applicable to any
     LIBOR Advance, to continue all or any portion of such Advance equal to
     $100,000 and integral multiples of $100,000 in excess of that amount as a
     LIBOR Advance.

          (b) A Borrower shall deliver a Conversion/Continuation Notice to the
Lenders no later than 10:00 a.m. (New York City time) at least one Business Day
in advance of the proposed conversion date (in the case of a conversion to a
Base Rate Advance) and at least three Business Days in advance of the proposed
conversion/continuation date (in the case of a conversion to, or a continuation
of, a LIBOR Advance). Except as otherwise provided herein, a
Conversion/Continuation Notice for conversion to, or continuation of, any LIBOR
Advances (or telephonic notice in lieu thereof) shall be irrevocable on and
after the related Interest Rate Determination Date, and the Borrowers shall be
bound to effect a conversion or continuation in accordance therewith.

     2.7. DEFAULT INTEREST. Upon the occurrence and during the continuance of an
Event of Default, the principal amount of all Advances outstanding and, to the
extent permitted by applicable law, any interest payments on the Advances or any
fees or other amounts owed hereunder, shall thereafter bear interest (including
post-petition interest in any proceeding under the Bankruptcy Code or other
applicable bankruptcy laws) payable on demand at a rate that is 2% per annum in
excess of the interest rate otherwise payable hereunder with respect to the
applicable Advances (or, in the case of any such fees and other amounts, at a
rate which is 2% per annum in excess of the interest rate otherwise payable
hereunder for Base Rate Advances). Payment or acceptance of the increased rates
of interest provided for in this Section 2.7 is not a permitted alternative to
timely payment and shall not constitute a waiver of any Event of Default or
otherwise prejudice or limit any rights or remedies of any Lender.

     2.8. FEES.

          (a) The Borrowers agree to pay to Lenders commitment fees equal to (i)
the average of the daily difference between (a) the Commitments, and (b) the
aggregate principal amount of outstanding Advances times (ii) 0.25%.

          (b) All fees referred to in this Section 2.8 shall be calculated on
the basis of a 360-day year and the actual number of days elapsed and shall be
payable quarterly in arrears on March 31, June 30, September 30 and December 31
of each year during the Commitment Period, commencing on the first such date to
occur after the Closing Date, and on the Commitment Termination Date.

     2.9. VOLUNTARY REPAYMENTS/COMMITMENT REDUCTIONS.

          (a) Repayments.

                                       20

               (i) Any time and from time to time without premium or penalty:

                    (1) with respect to Base Rate Advances, a Borrower may repay
          any such Advances on any Business Day in whole or, in an aggregate
          minimum amount of $100,000 and integral multiples of $100,000 in
          excess of that amount, in part;

                    (2) with respect to LIBOR Advances, a Borrower may repay any
          such Advances on any Business Day in whole or, in an aggregate minimum
          amount of $100,000 and integral multiples of $100,000 in excess of
          that amount, in part; and

               (ii) All such repayments shall be made:

                    (1) upon not less than one Business Day's prior written or
          telephonic notice in the case of Base Rate Advances; and

                    (2) upon not less than three Business Days' prior written or
          telephonic notice in the case of LIBOR Advances;

in each case given to the Lenders, as the case may be, by 12:00 p.m. (New York
City time) on the date required and, if given by telephone, promptly confirmed
in writing to the Lenders. Upon the giving of any such notice, the principal
amount of the Advances specified in such notice shall become due and payable on
the repayment date specified therein.

          (b) Voluntary Commitment Reductions.

               (i) A Borrower may, upon not less than three Business Days' prior
     written or telephonic notice confirmed in writing to the Lenders at any
     time and from time to time terminate in whole or permanently reduce in
     part, without premium or penalty, the Commitments in an amount up to the
     amount by which the Commitments exceed the aggregate principal amount of
     all outstanding Advances at the time of such proposed termination or
     reduction; provided, any such partial reduction of the Commitments shall be
     in an aggregate minimum amount of $100,000 and integral multiples of
     $100,000 in excess of that amount.

               (ii) A Borrower's notice to the Lenders shall designate the date
     (which shall be a Business Day) of such termination or reduction and the
     amount of any partial reduction, and such termination or reduction of the
     Commitments shall be effective on the date specified in Borrower's notice
     and shall reduce the Commitment of each Lender proportionately to its Pro
     Rata Share thereof.

     2.10. INTENTIONALLY OMITTED.

     2.11. APPLICATION OF REPAYMENTS. Any prepayment thereof shall be applied
first to Base Rate Advances to the full extent thereof before application to
LIBOR Advances, in each case in a manner which minimizes the amount of any
payments required to be made by the Borrowers pursuant to Section 2.14(c)
(Breakage Costs).

                                       21

     2.12. GENERAL PROVISIONS REGARDING PAYMENTS.

          (a) All payments by a Borrower of principal, interest, fees and other
Obligations shall be made in Dollars in same day funds, without defense, setoff
or counterclaim, free of any restriction or condition, and delivered to the
Lenders not later than 12:00 p.m. (New York City time) on the date due at the
Lenders' lending office; funds received by a Lender after that time on such due
date shall be deemed to have been paid by a Borrower on the next succeeding
Business Day.

          (b) All payments in respect of the principal amount of any Advance
shall include payment of accrued interest on the principal amount being repaid
or prepaid, and all such payments (and, in any event, any payments in respect of
any Advance on a date when interest is due and payable with respect to such
Advance) shall be applied to the payment of interest before application to
principal.

          (c) Subject to the provisos set forth in the definition of "Interest
Period", whenever any payment to be made hereunder shall be stated to be due on
a day that is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest hereunder or of the Commitment fees
hereunder.

          (d) The Lenders shall deem any payment by or on behalf of a Borrower
hereunder that is not made in same day funds prior to 12:00 p.m. (New York City
time) to be a non-conforming payment. Any such payment shall not be deemed to
have been received by a Lender until the later of (i) the time such funds become
available funds, and (ii) the applicable next Business Day. Such Lender may, but
shall not be obligated to give prompt telephonic notice to a Borrower (confirmed
in writing) if any payment is non-conforming. Any non-conforming payment may
constitute or become a Default or Event of Default in accordance with the terms
of Section 7.1(a) (Payment Default). Interest shall continue to accrue on any
principal as to which a non-conforming payment is made until such funds become
available funds (but in no event less than the period from the date of such
payment to the next succeeding applicable Business Day) at the rate determined
pursuant to Section 2.7 (Default Interest) from the date such amount was due and
payable until the date such amount is paid in full.

     2.13. RATABLE SHARING. Lenders hereby agree among themselves that, except
as otherwise provided in the Collateral Documents with respect to amounts
realized from the exercise of rights with respect to Liens on the Collateral, if
any of them shall, whether by voluntary payment (other than a voluntary
repayment of Advances made and applied in accordance with the terms hereof),
through the exercise of any right of set-off or banker's lien, by counterclaim
or cross action or by the enforcement of any right under the Credit Documents or
otherwise, or as adequate protection of a deposit treated as cash collateral
under the Bankruptcy Code, receive payment or reduction of a proportion of the
aggregate amount of principal, interest, amounts payable in respect of fees and
other amounts then due and owing to such Lender hereunder or under the other
Credit Documents (collectively, the "AGGREGATE AMOUNTS DUE" to such Lender)
which is greater than the proportion received by any other Lender in respect of
the Aggregate Amounts Due to such other Lender, then the Lender receiving such
proportionately greater payment shall (a) notify each other Lender of the
receipt of such

                                       22

payment and (b) apply a portion of such payment to purchase participations
(which it shall be deemed to have purchased from each seller of a participation
simultaneously upon the receipt by such seller of its portion of such payment)
in the Aggregate Amounts Due to the other Lenders so that all such recoveries of
Aggregate Amounts Due shall be shared by all Lenders in proportion to the
Aggregate Amounts Due to them; provided, if all or part of such proportionately
greater payment received by such purchasing Lender is thereafter recovered from
such Lender upon the bankruptcy or reorganization of a Borrower or otherwise,
those purchases shall be rescinded and the purchase prices paid for such
participations shall be returned to such purchasing Lender ratably to the extent
of such recovery, but without interest. Each Borrower expressly consents to the
foregoing arrangement and agrees that any holder of a participation so purchased
may exercise any and all rights of banker's lien, set-off or counterclaim with
respect to any and all monies owing by a Borrower to that holder with respect
thereto as fully as if that holder were owed the amount of the participation
held by that holder.

     2.14. MAKING OR MAINTAINING LIBOR AdvanceS.

          (a) Inability to Determine Applicable Interest Rate. In the event that
any Lender shall have determined (which determination shall, absent manifest
error, be final and conclusive and binding upon all parties hereto), on any
Interest Rate Determination Date with respect to any LIBOR Advances, that by
reason of circumstances affecting the London interbank market adequate and fair
means do not exist for ascertaining the interest rate applicable to such
Advances on the basis provided for in the definition of Adjusted LIBOR, such
Lender shall on such date give notice (by facsimile, electronic mail or by
telephone confirmed in writing) to the applicable Borrower of such
determination, whereupon (i) no Advances by such Lender may be made as, or
converted to, LIBOR Advances until such time as such Lender notifies such
Borrower that the circumstances giving rise to such notice no longer exist, and
(ii) any Funding Notice or Conversion/Continuation Notice given by a Borrower
with respect to the Advances in respect of which such determination was made
shall be deemed to be rescinded by such Borrower.

          (b) Illegality or Impracticability of LIBOR Advances. In the event
that on any date any Lender shall have determined (which determination shall,
absent manifest error, be final and conclusive and binding upon all parties
hereto but shall be made only after consultation with the Borrowers) that the
making, maintaining or continuation of its LIBOR Advances (i) has become
unlawful as a result of compliance by such Lender in good faith with any law,
treaty, governmental rule, regulation, guideline or order (or would conflict
with any such treaty, governmental rule, regulation, guideline or order not
having the force of law even though the failure to comply therewith would not be
unlawful), or (ii) has become impracticable, as a result of contingencies
occurring after the date hereof which materially and adversely affect the London
interbank market or the position of such Lender in that market, then, and in any
such event, such Lender shall be an "AFFECTED LENDER" and it shall on that day
give notice (by facsimile, electronic mail or by telephone confirmed in writing)
to Borrowers of such determination. Thereafter (1) the obligation of the
Affected Lender to make Advances as, or to convert Advances to, LIBOR Advances
shall be suspended until such notice shall be withdrawn by the Affected Lender,
(2) to the extent such determination by the Affected Lender relates to a LIBOR
Advance then being requested by a Borrower pursuant to a Funding Notice or a
Conversion/Continuation Notice, the Affected Lender shall make such Advance as
(or continue

                                       23

such Advance as or convert such Advance to, as the case may be) a Base Rate
Advance, (3) the Affected Lender's obligation to maintain its outstanding LIBOR
Advances (the "AFFECTED ADVANCES") shall be terminated at the earlier to occur
of the expiration of the Interest Period then in effect with respect to the
Affected Advances or when required by law, and (4) the Affected Advances shall
automatically convert into Base Rate Advances on the date of such termination.
Notwithstanding the foregoing, to the extent a determination by an Affected
Lender as described above relates to a LIBOR Advance then being requested by a
Borrower pursuant to a Funding Notice or a Conversion/Continuation Notice, such
Borrower shall have the option, subject to the provisions of Section 2.14(c)
(Breakage Costs), to rescind such Funding Notice or Conversion/Continuation
Notice as to all Lenders by giving notice (by facsimile, electronic mail or by
telephone confirmed in writing) to the Lenders of such rescission on the date on
which the Affected Lender gives notice of its determination as described above.
Except as provided in the immediately preceding sentence, nothing in this
Section 2.14(b) shall affect the obligation of any Lender other than an Affected
Lender to make or maintain Advances as, or to convert Advances to, LIBOR
Advances in accordance with the terms hereof.

          (c) Compensation for Breakage or Non-Commencement of Interest Periods.
Each Borrower shall compensate each Lender, upon written request by such Lender
(which request shall set forth the basis for requesting such amounts), for all
reasonable losses, expenses and liabilities (including any interest paid by such
Lender to lenders of funds borrowed by it to make or carry its LIBOR Advances
and any loss, expense or liability sustained by such Lender in connection with
the liquidation or re-employment of such funds but excluding loss of anticipated
profits) which such Lender may sustain: (i) if for any reason (other than a
default by such Lender) a borrowing of any LIBOR Advance does not occur on a
date specified therefor in a Funding Notice or a telephonic request for
borrowing, or a conversion to or continuation of any LIBOR Advance does not
occur on a date specified therefor in a Conversion/Continuation Notice or a
telephonic request for conversion or continuation; (ii) if any prepayment or
other principal payment or any conversion of any of its LIBOR Advances occurs on
a date prior to the last day of an Interest Period applicable to that Advance;
or (iii) if any repayment of any of its LIBOR Advances is not made on any date
specified in a notice of prepayment given by any Borrower.

          (d) Booking of LIBOR Advances. Any Lender may make, carry or transfer
LIBOR Advances at, to, or for the account of any of its branch offices or the
office of an Affiliate of such Lender.

          (e) Assumptions Concerning Funding of LIBOR Advances. Calculation of
all amounts payable to a Lender under this Section 2.14 and under Section 2.15
(Increased Costs; Capital Adequacy) shall be made as though such Lender had
actually funded each of its relevant LIBOR Advances through the purchase of a
Eurodollar deposit bearing interest at the rate obtained pursuant to clause (i)
of the definition of Adjusted LIBOR in an amount equal to the amount of such
LIBOR Advance and having a maturity comparable to the relevant Interest Period
and through the transfer of such Eurodollar deposit from an offshore office of
such Lender to a domestic office of such Lender in the United States of America;
provided, however, each Lender may fund each of its LIBOR Advances in any manner
it sees fit and the foregoing assumptions shall be utilized only for the
purposes of calculating amounts payable under this Section 2.14 and under
Section 2.15 (Increased Costs; Capital Adequacy).

                                       24

     2.15. INCREASED COSTS; CAPITAL ADEQUACY.

          (a) Compensation For Increased Costs and Taxes. Subject to the
provisions of Section 2.16 (Taxes) (which shall be controlling with respect to
the matters covered thereby), in the event that any Lender shall determine
(which determination shall, absent manifest error, be final and conclusive and
binding upon all parties hereto) that any law, treaty or governmental rule,
regulation or order, or any change therein or in the interpretation,
administration or application thereof (including the introduction of any new
law, treaty or governmental rule, regulation or order), or any determination of
a court or governmental authority, in each case that becomes effective after the
date hereof, or compliance by such Lender with any guideline, request or
directive issued or made after the date hereof by any central bank or other
governmental or quasi-governmental authority (whether or not having the force of
law): (i) subjects such Lender (or its applicable lending office) to any
additional Tax (other than any Tax on the overall net income of such Lender)
with respect to this Agreement or any of the other Credit Documents or any of
its obligations hereunder or thereunder or any payments to such Lender (or its
applicable lending office) of principal, interest, fees or any other amount
payable hereunder; (ii) imposes, modifies or holds applicable any reserve
(including any marginal, emergency, supplemental, special or other reserve),
special deposit, compulsory loan, FDIC insurance or similar requirement against
assets held by, or deposits or other liabilities in or for the account of, or
advances or loans by, or other credit extended by, or any other acquisition of
funds by, any office of such Lender (other than any such reserve or other
requirements with respect to LIBOR Advances that are reflected in the definition
of Adjusted LIBOR); or (iii) imposes any other condition (other than with
respect to a Tax matter) on or affecting such Lender (or its applicable lending
office) or its obligations hereunder or the London interbank market; and the
result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining Advances hereunder or to reduce any
amount received or receivable by such Lender (or its applicable lending office)
with respect thereto; then, in any such case, the applicable Borrower shall
promptly pay to such Lender, upon receipt of the statement referred to in the
next sentence, such additional amount or amounts (in the form of an increased
rate of, or a different method of calculating, interest or otherwise as such
Lender in its sole discretion shall determine) as may be necessary to compensate
such Lender for any such increased cost or reduction in amounts received or
receivable hereunder. Such Lender shall deliver to such Borrower a written
statement, setting forth in reasonable detail the basis for calculating the
additional amounts owed to such Lender under this Section 2.15(a), which
statement shall be conclusive and binding upon all parties hereto absent
manifest error.

          (b) Capital Adequacy Adjustment. In the event that any Lender shall
have determined that the adoption, effectiveness, phase-in or applicability
after the Closing Date of any law, rule or regulation (or any provision thereof)
regarding capital adequacy, or any change therein or in the interpretation or
administration thereof by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Lender (or its applicable lending office) with any guideline, request or
directive regarding capital adequacy (whether or not having the force of law) of
any such Governmental Authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on the capital of such Lender or
any corporation controlling such Lender as a consequence of, or with reference
to, such Lender's Advances or Commitments, or participations therein or other
obligations hereunder with respect to the Advances to a level

                                       25

below that which such Lender or such controlling corporation could have achieved
but for such adoption, effectiveness, phase-in, applicability, change or
compliance (taking into consideration the policies of such Lender or such
controlling corporation with regard to capital adequacy), then from time to
time, within five Business Days after receipt by a Borrower from such Lender of
the statement referred to in the next sentence, such Borrower shall pay to such
Lender such additional amount or amounts as will compensate such Lender or such
controlling corporation on an after-tax basis for such reduction. Such Lender
shall deliver to such Borrower a written statement, setting forth in reasonable
detail the basis for calculating the additional amounts owed to Lender under
this Section 2.15(b), which statement shall be conclusive and binding upon all
parties hereto absent manifest error.

     2.16. TAXES; WITHHOLDING, ETC.

          (a) Payments to Be Free and Clear. All sums payable by any Credit
Party hereunder and under the other Credit Documents shall (except to the extent
required by law) be paid free and clear of, and without any deduction or
withholding on account of, any Tax (other than a Tax on the overall net income
of any Lender) imposed, levied, collected, withheld or assessed by or within the
United States of America or any political subdivision in or of the United States
of America or any other jurisdiction from or to which a payment is made by or on
behalf of any Credit Party or by any federation or organization of which the
United States of America or any such jurisdiction is a member at the time of
payment.

          (b) Withholding of Taxes. If any Credit Party or any other Person is
required by law to make any deduction or withholding on account of any such Tax
from any sum paid or payable by any Credit Party to any Lender under any of the
Credit Documents: (i) the Borrowers shall notify the Lenders of any such
requirement or any change in any such requirement as soon as a Credit Party
becomes aware of it; (ii) the Borrowers shall pay any such Tax before the date
on which penalties attach thereto, such payment to be made (if the liability to
pay is imposed on any Credit Party) for its own account or (if that liability is
imposed on such Lender) on behalf of and in the name of such Lender; (iii) the
sum payable by such Credit Party in respect of which the relevant deduction,
withholding or payment is required shall be increased to the extent necessary to
ensure that, after the making of that deduction, withholding or payment, such
Lender receives on the due date a net sum equal to what it would have received
had no such deduction, withholding or payment been required or made; and (iv)
within thirty (30) days after paying any sum from which it is required by law to
make any deduction or withholding, and within thirty (30) days after the due
date of payment of any Tax which it is required by clause (ii) above to pay, the
Borrower shall deliver to such Lender evidence satisfactory to the other
affected parties of such deduction, withholding or payment and of the remittance
thereof to the relevant taxing or other authority; provided, no such additional
amount shall be required to be paid to any Lender under clause (iii) above
except to the extent that any change after the date hereof (in the case of each
Lender listed on the signature pages hereof on the Closing Date) or after the
effective date of the Assignment Agreement pursuant to which such Lender became
a Lender (in the case of each other Lender) in any such requirement for a
deduction, withholding or payment as is mentioned therein shall result in an
increase in the rate of such deduction, withholding or payment from that in
effect at the date hereof or at the date of such Assignment Agreement, as the
case may be, in respect of payments to such Lender.

                                       26

     2.17. OBLIGATION TO MITIGATE. Each Lender agrees that, as promptly as
practicable after the officer of such Lender responsible for administering its
Advances becomes aware of the occurrence of an event or the existence of a
condition that would cause such Lender to become an Affected Lender or that
would entitle such Lender to receive payments under Section 2.14 (Making or
Maintaining LIBOR Advances), 2.15 (Increased Costs; Capital Adequacy) or 2.16
(Taxes), it will, to the extent not inconsistent with the internal policies of
such Lender and any applicable legal or regulatory restrictions, use reasonable
efforts to (a) make, issue, fund or maintain its Credit Extensions, including
any Affected Advances, through another office of such Lender, or (b) take such
other measures as such Lender may deem reasonable, if as a result thereof the
circumstances which would cause such Lender to be an Affected Lender would cease
to exist or the additional amounts which would otherwise be required to be paid
to such Lender pursuant to Section 2.14 (Making or Maintaining LIBOR Advances),
2.15 (Increased Costs; Capital Adequacy) or 2.16 (Taxes) would be materially
reduced and if, as determined by such Lender in its sole discretion, the making,
issuing, funding or maintaining of such Commitments or Advances through such
other office or in accordance with such other measures, as the case may be,
would not otherwise adversely affect such Commitments or Advances or the
interests of such Lender; provided, such Lender will not be obligated to utilize
such other office pursuant to this Section 2.17 unless the Borrowers agree to
pay all incremental expenses incurred by such Lender as a result of utilizing
such other office as described in clause (i) above. A certificate as to the
amount of any such expenses payable by the Borrowers pursuant to this Section
2.17 (setting forth in reasonable detail the basis for requesting such amount)
submitted by such Lender to the Borrowers shall be conclusive absent manifest
error.

SECTION 3. CONDITIONS PRECEDENT

     3.1. CLOSING DATE. The obligation of any Lender to make a Credit Extension
on the Closing Date is subject to the satisfaction, or waiver of the following
conditions on or before the Closing Date:

          (a) Credit Documents. Citibank shall have received a copy of each
Credit Document originally executed and delivered by each applicable Credit
Party.

          (b) Organizational Documents; Incumbency. Citibank shall have received
(i) a copy of each Organizational Document executed and delivered by each Credit
Party, as applicable, and, to the extent applicable, certified as of a recent
date by the appropriate governmental official, each dated the Closing Date or a
recent date prior thereto; (ii) signature and incumbency certificates of the
officers of such Person executing the Credit Documents to which it is a party;
(iii) resolutions of the Board of Directors or similar governing body of each
Credit Party approving and authorizing the execution, delivery and performance
of this Agreement and the other Credit Documents to which it is a party or by
which it or its assets may be bound as of the Closing Date, certified as of the
Closing Date by its secretary or an assistant secretary as being in full force
and effect without modification or amendment; (iv) a good standing certificate
from the applicable Governmental Authority of each Credit Party's jurisdiction
of incorporation, organization or formation and in each jurisdiction in which it
is qualified as a foreign corporation or other entity to do business, each dated
a recent date prior to the Closing Date; and (v) such other documents as
Citibank may reasonably request.

                                       27

          (c) Organizational and Capital Structure. The organizational structure
and capital structure of Company and its Subsidiaries, shall be as set forth on
Schedule 4.1.

          (d) Transaction Costs. On or prior to the Closing Date, Company shall
have paid all fees, costs and expenses of Lender payable by Company or any of
Company's Subsidiaries on or before the Closing Date in connection with the
transactions contemplated by the Credit Documents.

          (e) Governmental Authorizations and Consents. Each Credit Party shall
have obtained all Governmental Authorizations and all consents of other Persons,
in each case that are necessary or advisable in connection with the transactions
contemplated by the Credit Documents and each of the foregoing shall be in full
force and effect and in form and substance reasonably satisfactory to Citibank.
All applicable waiting periods shall have expired without any action being taken
or threatened by any competent authority which would restrain, prevent or
otherwise impose adverse conditions on the transactions contemplated by the
Credit Documents and no action, request for stay, petition for review or
rehearing, reconsideration, or appeal with respect to any of the foregoing shall
be pending, and the time for any applicable agency to take action to set aside
its consent on its own motion shall have expired.

          (f) Ships. In order to create in favor of the Lenders a valid and
perfected and enforceable First Preferred Mortgages on the Ships on the Closing
Date (subject to any filing and/or recording referred to herein), each Borrower
shall have delivered to Citibank copies of all documents necessary to record
and/or file the Mortgages with the Panamanian registry, the country of registry
of the Ships, in the Consulate of Panama in New York on the Closing Date and
subsequently, in Panama City, Panama, including those items listed below and
each Borrower shall have taken all such actions to so record and/or file the
Mortgages with the Panamanian registry in the Consulate of Panama in New York on
the Closing Date:

               (i) the results of a recent search, by a Person satisfactory to
     Citibank, of all effective mortgages made with respect to the Ships in the
     relevant jurisdictions, together with copies of all such filings disclosed
     by such search, and (B) termination statements (or similar documents) duly
     executed by all applicable Persons for filing in all applicable
     jurisdictions as may be necessary to terminate any effective mortgages
     disclosed in such search;

               (ii) fully executed and notarized Mortgages encumbering the
     Ships, in proper form for recording in Panama which shall be validly
     recorded and/or filed with the Panamanian Consulate in New York and written
     confirmation by the Borrower that such preliminary filing has been
     adequately completed by the Borrower;

               (iii) a fully executed and notarized power of attorney for each
     Borrower's counsel acting in connection with the recording of the
     Mortgages;

               (iv) Citibank shall be satisfied with the collateral arrangements
     relating to the Ships, including the country of registry for the Ships;

               (v) an opinion of counsel (which counsel shall be reasonably
     satisfactory to Citibank) in each jurisdiction in which a Ship is with
     respect to the

                                       28

     enforceability of the form of Mortgages to be recorded in the Panamanian
     Consulate in New York and in Panama and such other matters as Citibank may
     reasonably request, in each case in form and substance reasonably
     satisfactory to Citibank.

          (g) Personal Property Collateral. In order to create in favor of the
Lenders a valid, perfected First Priority security interest in the personal
property Collateral, Citibank shall have received:

               (i) evidence satisfactory to the Citibank of the compliance by
     each Borrower of their obligations under the Security Agreement and the
     other Collateral Documents (including, without limitation, their
     obligations to execute and deliver UCC financing statements).

               (ii) the results of a recent search, by a Person satisfactory to
     Citibank, of all effective UCC financing statements (or equivalent filings)
     made with respect to any personal or mixed property of any Borrower in the
     relevant jurisdictions, together with copies of all such filings disclosed
     by such search, and (B) UCC termination statements (or similar documents)
     duly executed by all applicable Persons for filing in all applicable
     jurisdictions as may be necessary to terminate any effective UCC financing
     statements (or equivalent filings) disclosed in such search (other than any
     such financing statements in respect of Permitted Liens);

               (iii) opinions of counsel (which counsel shall be reasonably
     satisfactory to Citibank) with respect to the creation and perfection of
     the security interests in favor of the Lenders in such Collateral and such
     other matters governed by the laws of each jurisdiction in which any Credit
     Party or any personal property Collateral is located as Citibank may
     reasonably request, in each case in form and substance reasonably
     satisfactory to Citibank; and

               (iv) evidence that each Credit Party shall have taken or caused
     to be taken any other action, executed and delivered or caused to be
     executed and delivered any other agreement, document and instrument
     (including without limitation a collateral assignment of earnings executed
     by each third party and by the applicable Credit Party) and made or caused
     to be made any other filing and recording (other than as set forth herein)
     reasonably required by Citibank.

          (h) Financial Statements; Projections. Citibank shall have received
from Company the Historical Financial Statements, and (ii) the Projections.

          (i) Evidence of Insurance. Citibank shall have received a certificate
from Company's insurance broker or other evidence satisfactory to it that all
insurance required to be maintained pursuant to Section 5.5 (Insurance) is in
full force and effect and that the Lenders have been named as additional insured
and loss payee thereunder to the extent required under Section 5.5 (Insurance).

          (j) Opinions of Counsel to Credit Parties. Lenders and their
respective counsel shall have received originally executed copies of the
favorable written opinions New York, Panama and Bermuda counsel for Credit
Parties, in the form and substance satisfactory to

                                       29

Citibank and as to such other matters as Citibank may reasonably request, dated
as of the Closing Date and otherwise in form and substance reasonably
satisfactory to Citibank (and each Credit Party hereby instructs such counsel to
deliver such opinions to the Lenders).

          (k) Solvency Certificate. On the Closing Date, Citibank shall have
received a Solvency Certificate from (or on behalf of) Company and each
Borrower.

          (l) Closing Date Certificate. Company shall have delivered to Citibank
an originally executed Closing Date Certificate, together with all attachments
thereto.

          (m) No Litigation. There shall not exist any action, suit,
investigation, litigation or proceeding or other legal or regulatory
developments, pending or threatened in any court or before any arbitrator or
Governmental Authority that, in the reasonable opinion of Citibank, singly or in
the aggregate, materially impairs the transactions contemplated by the Credit
Documents or that could have a Material Adverse Effect.

          (n) Completion of Proceedings. All partnership, corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not previously found
acceptable by Citibank and its counsel shall be satisfactory in form and
substance to Citibank and such counsel, and Citibank and such counsel shall have
received all such counterpart originals or certified copies of such documents as
Citibank may reasonably request.

          (o) Appraisals. Citibank shall have received appraisals with respect
to the Ships in form and substance satisfactory to Citibank.

          (p) Other Information. Company and Borrowers shall have delivered to
Citibank information pertaining to the Ships, including tonnage, maintenance,
next major maintenance, existing employment, revenue per vessel, operating
expenses, maintenance expense and daily running expenses and net cash flow per
vessel, to the satisfaction of Citibank.

          (q) Deposit Account. Company shall, prior to or on the Closing Date,
have established a deposit relationship with Citibank.

     3.2. CONDITIONS TO EACH CREDIT EXTENSION.

          (a) Conditions Precedent. The obligation of each Lender to make any
Advance on any Credit Date, including the Closing Date, are subject to the
satisfaction, or waiver of the following conditions precedent:

               (i) each Lender shall have received a fully executed and
     delivered Funding Notice or Issuance Notice by the applicable Borrower, as
     the case may be;

               (ii) after making the Credit Extensions requested on such Credit
     Date, the aggregate principal amount of all outstanding Advances shall not
     exceed the Commitments then in effect;

                                       30

               (iii) as of such Credit Date, the representations and warranties
     contained herein and in the other Credit Documents shall be true and
     correct in all material respects on and as of that Credit Date to the same
     extent as though made on and as of that date, except to the extent such
     representations and warranties specifically relate to an earlier date, in
     which case such representations and warranties shall have been true and
     correct in all material respects on and as of such earlier date; and

               (iv) as of such Credit Date, no event shall have occurred and be
     continuing or would result from the consummation of the applicable Credit
     Extension that would constitute an Event of Default or a Default.

Any Lender shall be entitled, but not obligated to, request and receive, prior
to the making of any Credit Extension, additional information reasonably
satisfactory to the requesting party confirming the satisfaction of any of the
foregoing if, in the good faith judgment of such Lender such request is
warranted under the circumstances.

          (b) Notices. Any Notice shall be executed by an Authorized Officer in
a writing delivered to each Lender. In lieu of delivering a Notice, a Borrower
may give each Lender telephonic notice by the required time of any proposed
borrowing, conversion/continuation, as the case may be; provided each such
notice shall be promptly confirmed in writing by delivery of the applicable
Notice to such Lender on or before the applicable date of borrowing,
continuation/conversion or issuance. No Lender shall incur any liability to a
Borrower in acting upon any telephonic notice referred to above that such Lender
believes in good faith to have been given by a duly authorized officer or other
person authorized on behalf of a Borrower or for otherwise acting in good faith.

SECTION 4. REPRESENTATIONS AND WARRANTIES

     In order to induce Lenders to enter into this Agreement and to make each
Credit Extension to be made thereby, each Credit Party represents and warrants
to each Lender on the Closing Date and on each Credit Date, that the following
statements are true and correct:

     4.1. ORGANIZATION; REQUISITE POWER AND AUTHORITY; QUALIFICATION. Each such
Credit Party (a) is duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization as identified in Schedule 4.1, (b)
has all requisite power and authority to own and operate its properties, to
carry on its business as now conducted and as proposed to be conducted, to enter
into the Credit Documents to which it is a party and to carry out the
transactions contemplated thereby, and (c) is qualified to do business and in
good standing in every jurisdiction where its assets are located and wherever
necessary to carry out its business and operations, except in jurisdictions
where the failure to be so qualified or in good standing has not had, and could
not be reasonably expected to have, a Material Adverse Effect.

     4.2. CAPITAL STOCK AND OWNERSHIP. The Capital Stock of each of the Credit
Parties has been duly authorized and validly issued and is fully paid and
non-assessable. Except as set forth on Schedule 4.2, as of the date hereof,
there is no existing option, warrant, call, right, commitment or other agreement
to which any Credit Party is a party requiring, and there is no membership
interest or other Capital Stock of any Credit Party outstanding which upon

                                       31

conversion or exchange would require, the issuance by such Credit Party of any
additional membership interests or other Capital Stock of a Credit Party or
other Securities convertible into, exchangeable for or evidencing the right to
subscribe for or purchase, a membership interest or other Capital Stock of any
Credit Party. Schedule 4.2 correctly sets forth the ownership interest of Credit
Party in their respective Subsidiaries as of the Closing Date.

     4.3. DUE AUTHORIZATION. The execution, delivery and performance of the
Credit Documents have been duly authorized by all necessary action on the part
of each Credit Party that is a party thereto.

     4.4. NO CONFLICT. The execution, delivery and performance by each Credit
Parties of the Credit Documents to which it is party and the consummation of the
transactions contemplated by the Credit Documents do not and will not:

          (a) violate any provision of any law or any governmental rule or
regulation applicable to such Credit Party, any of the Organizational Documents
of such Credit Party, or any order, judgment or decree of any court or other
agency of government binding on such Credit Party except to the extent such
violation could not be reasonably expected to have a Material Adverse Effect;

          (b) conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any Contractual Obligation of
such Credit Party except to the extent such conflict, breach or default could
not reasonably be expected to have a Material Adverse Effect;

          (c) result in or require the creation or imposition of any Lien upon
any of the properties or assets of such Credit Party (other than any Liens
created under any of the Credit Documents in favor of the Lenders); or

          (d) require any approval of stockholders, members or partners or any
approval or consent of any Person under any Contractual Obligation of such
Credit Party, except for such approvals or consents which will be obtained on or
before the Closing Date and disclosed in writing to Lenders and except for any
such approvals or consents the failure of which to obtain will not have a
Material Adverse Effect.

     4.5. GOVERNMENTAL CONSENTS. The execution, delivery and performance by
Credit Parties of the Credit Documents to which they are parties and the
consummation of the transactions contemplated by the Credit Documents do not and
will not require any registration with, consent or approval of, or notice to, or
other action to, with or by, any Governmental Authority except for filings and
recordings with respect to the Collateral to be made, or otherwise delivered to
the Lenders for filing and/or recordation, as of the Closing Date.

     4.6. BINDING OBLIGATION. Each Credit Document has been duly executed and
delivered by each Credit Party that is a party thereto and is the legally valid
and binding obligation of such Credit Party, enforceable against such Credit
Party in accordance with its respective terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors' rights generally or by equitable principles relating to
enforceability.

                                       32

     4.7. HISTORICAL FINANCIAL STATEMENTS. The Historical Financial Statements
were prepared in conformity with GAAP and fairly present, in all material
respects, the financial position, on a consolidated basis, of the Persons
described in such financial statements as at the respective dates thereof and
the results of operations and cash flows, on a consolidated basis, of the
entities described therein for each of the periods then ended, subject, in the
case of any such unaudited financial statements, to changes resulting from audit
and normal year-end adjustments. As of the Closing Date, neither Company nor any
of its Subsidiaries has any contingent liability or liability for taxes,
long-term lease or unusual forward or long-term commitment that is not reflected
in the Historical Financial Statements or the notes thereto and which in any
such case is material in relation to the business, operations, properties,
assets, condition (financial or otherwise) or prospects of Company and any of
its Subsidiaries, taken as a whole.

     4.8. PROJECTIONS. On and as of the Closing Date, the Projections of Company
and its Subsidiaries for the period Fiscal Year 2005 through and including
Fiscal Year 2006 (the "PROJECTIONS") are based on good faith estimates and
assumptions made by the management of Company; provided, the Projections are not
to be viewed as facts and that actual results during the period or periods
covered by the Projections may differ from such Projections and that the
differences may be material; provided further, as of the Closing Date,
management of Company believed that the Projections were reasonable and
attainable.

     4.9. NO MATERIAL ADVERSE CHANGE. Since December 31, 2004 no event,
circumstance or change has occurred that has caused or evidences, either in any
case or in the aggregate, a Material Adverse Effect.

     4.10. ADVERSE PROCEEDINGS, ETC. There are no Adverse Proceedings,
individually or in the aggregate, that could reasonably be expected to have a
Material Adverse Effect. No Credit Party (a) is in violation of any applicable
laws that, individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect, or (b) is subject to or in default with respect
to any final judgments, writs, injunctions, decrees, rules or regulations of any
court or any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.

     4.11. PAYMENT OF TAXES. Except as otherwise permitted under Section 5.3
(Taxes), all tax returns and reports of the Credit Parties required to be filed
by any of them have been timely filed, and all taxes shown on such tax returns
to be due and payable and all assessments, fees and other governmental charges
upon the Credit Parties and upon their respective properties, assets, income,
businesses and franchises which are due and payable have been paid when due and
payable. No Credit Party knows of any proposed tax assessment against any Credit
Party which is not being actively contested by such Credit Party in good faith
and by appropriate proceedings; provided, such reserves or other appropriate
provisions, if any, as shall be required in conformity with GAAP shall have been
made or provided therefor.

     4.12. PROPERTIES. Each of Company and its Subsidiaries has (i) good,
sufficient and legal title to (in the case of fee interests in real property),
(ii) valid leasehold interests in (in the case of leasehold interests in real or
personal property), and (iii) good title to (in the case of all other personal
property), all of their respective properties and assets reflected in their
respective

                                       33

Historical Financial Statements referred to in Section 4.7 (Historical Financial
Statements) and in the most recent financial statements delivered pursuant to
Section 5.1 (Financial Statements and Other Reports), in each case except for
assets disposed of since the date of such financial statements in the ordinary
course of business or as otherwise permitted under Section 6.5 (Fundamental
Changes). Except as permitted by this Agreement, all such properties and assets
are free and clear of Liens.

     4.13. NO DEFAULTS. Neither Company nor any of its Subsidiaries is in
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any of its Contractual Obligations, and no
condition exists which, with the giving of notice or the lapse of time or both,
could constitute such a default, except where the consequences, direct or
indirect, of such default or defaults, if any, could not reasonably be expected
to have a Material Adverse Effect.

     4.14. MATERIAL CONTRACTS. Schedule 4.14 contains a true, correct and
complete list of all the Material Contracts of the Borrowers in effect on the
Closing Date, and except as described thereon, all such Material Contracts are
in full force and effect and no defaults currently exist thereunder.

     4.15. GOVERNMENTAL REGULATION. Neither Company nor any of its Subsidiaries
is subject to regulation under the Public Utility Holding Company Act of 1935,
the Federal Power Act or the Investment Company Act of 1940 or under any other
federal or state statute or regulation which may limit its ability to incur
Indebtedness or which may otherwise render all or any portion of the Obligations
unenforceable. Neither Company nor any of its Subsidiaries is a "registered
investment company" or a company "controlled" by a "registered investment
company" or a "principal underwriter" of a "registered investment company" as
such terms are defined in the Investment Company Act of 1940.

     4.16. MARGIN STOCK. Neither Company nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock. No part of
the proceeds of the Advances made to such Credit Party will be used to purchase
or carry any such margin stock or to extend credit to others for the purpose of
purchasing or carrying any such margin stock or for any purpose that violates,
or is inconsistent with, the provisions of Regulation T, U or X of said Board of
Governors.

     4.17. EMPLOYEE MATTERS. Neither Company nor any of its Subsidiaries is
engaged in any unfair labor practice that could reasonably be expected to have a
Material Adverse Effect. There is (a) no unfair labor practice complaint pending
against Company or any of its Subsidiaries, or to the best knowledge of Company,
threatened against any of them before the National Labor Relations Board and no
grievance or arbitration proceeding arising out of or under any collective
bargaining agreement that is so pending against Company or any of its
Subsidiaries or to the best knowledge of Company, threatened against any of
them, (b) no strike or work stoppage in existence or threatened involving
Company or any of its Subsidiaries that could reasonably be expected to have a
Material Adverse Effect, and (c) to the best knowledge of Company, no union
representation question existing with respect to the employees of Company or any
of its Subsidiaries and, to the best knowledge of Company, no union organization
activity

                                       34

that is taking place, except (with respect to any matter specified in clause
(a), (b) or (c) above, either individually or in the aggregate) such as is not
reasonably likely to have a Material Adverse Effect.

     4.18. EMPLOYEE BENEFIT PLANS. Company, each of its Subsidiaries and each of
their respective ERISA Affiliates are in compliance with all applicable
provisions and requirements of ERISA and the Internal Revenue Code and the
regulations and published interpretations thereunder with respect to each
Employee Benefit Plan, and have performed all their obligations under each
Employee Benefit Plan. Each Employee Benefit Plan which is intended to qualify
under Section 401(a) of the Internal Revenue Code has received a favorable
determination letter from the Internal Revenue Service indicating that such
Employee Benefit Plan is so qualified and nothing has occurred subsequent to the
issuance of such determination letter which would cause such Employee Benefit
Plan to lose its qualified status. No liability to the PBGC (other than required
premium payments), the Internal Revenue Service, any Employee Benefit Plan or
any trust established under Title IV of ERISA has been or is expected to be
incurred by Company, any of its Subsidiaries or any of their ERISA Affiliates.
No ERISA Event has occurred or is reasonably expected to occur. Except to the
extent required under Section 4980B of the Internal Revenue Code or similar
state laws, no Employee Benefit Plan provides health or welfare benefits
(through the purchase of insurance or otherwise) for any retired or former
employee of Company, any of its Subsidiaries or any of their respective ERISA
Affiliates. The present value of the aggregate benefit liabilities under each
Pension Plan sponsored, maintained or contributed to by Company, any of its
Subsidiaries or any of their ERISA Affiliates, (determined as of the end of the
most recent plan year on the basis of the actuarial assumptions specified for
funding purposes in the most recent actuarial valuation for such Pension Plan),
did not exceed the aggregate current value of the assets of such Pension Plan.
As of the most recent valuation date for each Multiemployer Plan for which the
actuarial report is available, the potential liability of Company, its
Subsidiaries and their respective ERISA Affiliates for a complete withdrawal
from such Multiemployer Plan (within the meaning of Section 4203 of ERISA), when
aggregated with such potential liability for a complete withdrawal from all
Multiemployer Plans, based on information available pursuant to Section 4221(e)
of ERISA. is zero. Company, each of its Subsidiaries and each of their ERISA
Affiliates have complied with the requirements of Section 515 of ERISA with
respect to each Multiemployer Plan and are not in material "default" (as defined
in Section 4219(c)(5) of ERISA) with respect to payments to a Multiemployer
Plan.

     4.19. CERTAIN FEES. No broker's or finder's fee or commission will be
payable with respect hereto or any of the transactions contemplated hereby.

     4.20. SOLVENCY. Each Credit Party is and, upon the incurrence of any
Obligation by such Credit Party on any date on which this representation and
warranty is made, will be, Solvent.

     4.21. COMPLIANCE WITH STATUTES, ETC. Each of Company and its Subsidiaries
is in compliance with all applicable statutes, regulations and orders of, and
all applicable restrictions imposed by, all Governmental Authorities, in respect
of the conduct of its business and the ownership of its property (including
compliance with all laws governing its business and the requirements of any
Governmental Authorizations in respect of the operations of Company or

                                       35

any of its Subsidiaries), except such non-compliance that, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect.

     4.22. DISCLOSURE. No representation or warranty of any Credit Party
contained in any Credit Document or in any other documents, certificates or
written statements furnished to Lenders by or on behalf of Company or any of its
Subsidiaries for use in connection with the transactions contemplated hereby
contains any untrue statement of a material fact or omits to state a material
fact (known to any Credit Party, in the case of any document not furnished by
any of them) necessary in order to make the statements contained herein or
therein not misleading in light of the circumstances in which the same were
made. Any projections and pro forma financial information contained in such
materials are based upon good faith estimates and assumptions believed by the
Credit Parties to be reasonable at the time made, it being recognized by Lenders
that such projections as to future events are not to be viewed as facts and that
actual results during the period or periods covered by any such projections may
differ from the projected results. There are no facts known (or which should
upon the reasonable exercise of diligence be known) to any Credit Party (other
than matters of a general economic nature) that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect
and that have not been disclosed herein or in such other documents, certificates
and statements furnished to Lenders for use in connection with the transactions
contemplated hereby.

SECTION 5. AFFIRMATIVE COVENANTS

     Each Credit Party covenants and agrees that so long as any Commitment is in
effect and until payment in full of all Obligations, each Credit Party shall
perform, and shall cause each of its Subsidiaries to perform, all covenants in
this Section 5.

     5.1. FINANCIAL STATEMENTS AND OTHER REPORTS. Company will deliver to each
Lender:

          (a) Quarterly Financial Statements. As soon as available, and in any
event within forty five (45) days after the end of each of the first three
Fiscal Quarters of each Fiscal Year, the consolidated and consolidating balance
sheets of Company and its Subsidiaries as at the end of such Fiscal Quarter and
the related consolidated (and with respect to statements of income,
consolidating) statements of income, stockholders' equity and cash flows of
Company and its Subsidiaries for such Fiscal Quarter and for the period from the
beginning of the then current Fiscal Year to the end of such Fiscal Quarter,
setting forth in each case in comparative form the corresponding figures for the
corresponding periods of the previous Fiscal Year and the corresponding figures
from the financial plan for the current Fiscal Year, all in reasonable detail,
together with a Financial Officer Certification and a Narrative Report with
respect thereto;

          (b) Annual Financial Statements. As soon as available, and in any
event within ninety (90) days after the end of each Fiscal Year, (i) the
consolidated and consolidating balance sheets of Company and its Subsidiaries as
at the end of such Fiscal Year and the related consolidated (and with respect to
statements of income, consolidating) statements of income, stockholders' equity
and cash flows of Company and its Subsidiaries for such Fiscal Year, setting
forth in each case in comparative form the corresponding figures for the
previous Fiscal Year and the corresponding figures from the financial plan for
the Fiscal Year covered by such

                                       36

financial statements, in reasonable detail, together with a Financial Officer
Certification and a Narrative Report with respect thereto; and (ii) with respect
such consolidated financial statements a report thereon of PriceWaterhouse
Cooper or other independent certified public accountants of recognized national
standing selected by Company, and reasonably satisfactory to Lenders (which
report shall be unqualified as to going concern and scope of audit, and shall
state that such consolidated financial statements fairly present, in all
material respects, the consolidated financial position of Company and its
Subsidiaries as at the dates indicated and the results of their operations and
their cash flows for the periods indicated in conformity with GAAP applied on a
basis consistent with prior years (except as otherwise disclosed in such
financial statements) and that the examination by such accountants in connection
with such consolidated financial statements has been made in accordance with
generally accepted auditing standards) together with a written statement by such
independent certified public accountants stating (1) that their audit
examination has included a review of the terms of the Credit Documents, (2)
whether, in connection therewith, any condition or event that constitutes a
Default or an Event of Default has come to their attention and, if such a
condition or event has come to their attention, specifying the nature and period
of existence thereof, and (3) that nothing has come to their attention that
causes them to believe that the information contained in any Compliance
Certificate is not correct or that the matters set forth in such Compliance
Certificate are not stated in accordance with the terms hereof;

          (c) Compliance Certificate. Together with each delivery of financial
statements of Company and its Subsidiaries pursuant to Sections 5.1(a) and
5.1(b), a duly executed and completed Compliance Certificate;

          (d) Statements of Reconciliation after Change in Accounting
Principles. If, as a result of any change in accounting principles and policies
from those used in the preparation of the Historical Financial Statements, the
consolidated financial statements of Company and its Subsidiaries delivered
pursuant to Section 5.1(a) or 5.1(b) will differ in any material respect from
the consolidated financial statements that would have been delivered pursuant to
such subdivisions had no such change in accounting principles and policies been
made, then, together with the first delivery of such financial statements after
such change, one or more a statements of reconciliation for all such prior
financial statements in form and substance satisfactory to Lenders;

          (e) Notice of Default. Promptly upon any officer of any Credit Party
obtaining knowledge (i) of any condition or event that constitutes a Default or
an Event of Default or that notice has been given to a Credit Party with respect
thereto; (ii) that any Person has given any notice to a Credit Party or taken
any other action with respect to any event or condition set forth in Section
7.1(b) (Default in Other Agreements); or (iii) of the occurrence of any event or
change that has caused or evidences, either in any case or in the aggregate, a
Material Adverse Effect, a certificate of its Authorized Officers specifying the
nature and period of existence of such condition, event or change, or specifying
the notice given and action taken by any such Person and the nature of such
claimed Event of Default, Default, default, event or condition, and what action
Company has taken, is taking and proposes to take with respect thereto;

                                       37

          (f) Notice of Litigation. Promptly upon any officer of any Credit
Party obtaining knowledge of (i) the institution of, or non-frivolous threat of,
any Adverse Proceeding not previously disclosed in writing by a Credit Party to
Lenders, or (ii) any material development in any Adverse Proceeding that, in the
case of either (i) or (ii) if adversely determined, could be reasonably expected
to have a Material Adverse Effect, or seeks to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain relief as a result of, the
transactions contemplated hereby, written notice thereof together with such
other information as may be reasonably available to a Credit Party to enable
Lenders and their counsel to evaluate such matters;

          (g) ERISA. (i) Promptly upon becoming aware of the occurrence of or
forthcoming occurrence of any ERISA Event, a written notice specifying the
nature thereof, what action Company, any of its Subsidiaries or any of their
respective ERISA Affiliates has taken, is taking or proposes to take with
respect thereto and, when known, any action taken or threatened by the Internal
Revenue Service, the Department of Labor or the PBGC with respect thereto; and
(ii) with reasonable promptness, copies of (1) each Schedule B (Actuarial
Information) to the annual report (Form 5500 Series) filed by Company, any of
its Subsidiaries or any of their respective ERISA Affiliates with the Internal
Revenue Service with respect to each Pension Plan; (2) all notices received by
Company, any of its Subsidiaries or any of their respective ERISA Affiliates
from a Multiemployer Plan sponsor concerning an ERISA Event; and (3) copies of
such other documents or governmental reports or filings relating to any Employee
Benefit Plan as the Lenders shall reasonably request;

          (h) Notice Regarding Material Contracts. Promptly, and in any event
within ten (10) Business Days (i) after any Material Contract of Company or any
of its Subsidiaries is terminated or amended in a manner that is materially
adverse to Company or such Subsidiary, as the case may be, or (ii) any new
Material Contract is entered into, a written statement describing such event,
with copies of such material amendments or new contracts, delivered to the
Lenders (to the extent such delivery is permitted by the terms of any such
Material Contract, provided, no such prohibition on delivery shall be effective
if it were bargained for by Company or its applicable Subsidiary with the intent
of avoiding compliance with this Section 5.1(h)), and an explanation of any
actions being taken with respect thereto;

          (i) Information Regarding Collateral. (a) The Credit Parties will
furnish to the Lenders prompt written notice of any change (i) in any Borrower's
corporate name, (ii) in any Borrower's identity or corporate structure or (iii)
in any Borrower's Federal Taxpayer Identification Number. The Credit Parties
agree not to effect or permit any change referred to in the preceding sentence
unless all filings have been made under the Uniform Commercial Code or otherwise
that are required in order for the Lenders to continue at all times following
such change to have a valid, legal and perfected security interest in all the
Collateral and for the Collateral at all times following such change to have a
valid, legal and perfected security interest as contemplated in the Collateral
Documents. The Credit Parties also agree promptly to notify the Lenders if any
material portion of the Collateral is damaged or destroyed.

          (j) Ship Information. Each year, at the time of delivery of quarterly
financial statements with respect to the preceding Fiscal Quarter pursuant to
Section 5.1(a) (Quarterly Financial Statements), Company shall deliver to the
Lenders reports of the number of ships

                                       38

owned or bareboat chartered by the Company's subsidiaries, and other financings
of the Credit Parties.

          (k) Other Information. (A) Promptly upon their becoming available,
copies of (i) all financial statements, reports, notices and proxy statements
sent or made available generally by Company to its security holders acting in
such capacity or by any Subsidiary of Company to its security holders other than
Company or another Subsidiary of Company, (ii) all regular and periodic reports
and all registration statements and prospectuses, if any, filed by Company or
any of its Subsidiaries with any securities exchange or with the Securities and
Exchange Commission or any governmental or private regulatory authority, (iii)
all press releases and other statements made available generally by Company or
any of its Subsidiaries to the public concerning material developments in the
business of Company or any of its Subsidiaries, and (B) such other information
and data with respect to Company or any of its Subsidiaries as from time to time
may be reasonably requested by any Lender.

     5.2. EXISTENCE. Except as otherwise permitted under Section 6.5
(Fundamental Changes), each Credit Party will, and will cause each of its
Subsidiaries to, at all times preserve and keep in full force and effect its
existence and all rights and franchises, licenses and Governmental
Authorizations material to its business; provided, no Credit Party or any of its
Subsidiaries shall be required to preserve any such existence, right or
franchise, licenses and Governmental Authorizations if such Person's board of
directors (or similar governing body) shall determine that the preservation
thereof is no longer desirable in the conduct of the business of such Person,
and that the loss thereof is not disadvantageous in any material respect to such
Person or to Lenders.

     5.3. PAYMENT OF TAXES AND CLAIMS. Each Credit Party will pay all Taxes
imposed upon it or any of its properties or assets or in respect of any of its
income, businesses or franchises before any penalty or fine accrues thereon, and
all claims (including claims for labor, services, materials and supplies) for
sums that have become due and payable and that by law have or may become a Lien
upon any of its properties or assets, prior to the time when any penalty or fine
shall be incurred with respect thereto; provided, no such Tax or claim need be
paid if it is being contested in good faith by appropriate proceedings promptly
instituted and diligently conducted, so long as (a) adequate reserve or other
appropriate provision, as shall be required in conformity with GAAP shall have
been made therefor, and (b) in the case of a Tax or claim which has or may
become a Lien against any of the Collateral, such contest proceedings
conclusively operate to stay the sale of any portion of the Collateral to
satisfy such Tax or claim. No Credit Party will, nor will it permit any of its
Subsidiaries to, file or consent to the filing of any consolidated income tax
return with any Person (other than Company or any of its Subsidiaries).

     5.4. MAINTENANCE OF PROPERTIES. Each Credit Party will maintain or cause to
be maintained in good repair, working order and condition, ordinary wear and
tear excepted, all material properties used or useful in the business of such
Credit Party and from time to time will make or cause to be made all appropriate
repairs, renewals and replacements thereof.

     5.5. INSURANCE. Each Credit Party will maintain or cause to be maintained,
with financially sound and reputable insurers, such public liability insurance,
third party property

                                       39

damage insurance, business interruption insurance and casualty insurance with
respect to liabilities, losses or damage in respect of the assets, properties
and businesses of such Persons as may customarily be carried or maintained under
similar circumstances by Persons of established reputation engaged in similar
businesses, in each case in such amounts (giving effect to self-insurance), with
such deductibles, covering such risks and otherwise on such terms and conditions
as shall be customary for such Persons. Without limiting the generality of the
foregoing, each Borrower will maintain or cause to be maintained (i) hull
insurance for an amount no less than the full commercial value of the vessel and
in no event for an amount, together with the insured value of all other vessels
mortgaged to the Lenders, less than 120% of the unpaid principal amount of the
Advances that may be outstanding from time to time, and (ii) protection and
indemnity liability insurance, including pollution liability, in such amounts,
and under such policies or contracts of insurance, and with such insurance
companies and/or protection and indemnity clubs or associations, and covering
such marine and non-marine risks, including pollution liability, as are at all
times carried or maintained under similar circumstances by Persons of
established reputation owning and/or operating vessels similar to the Ships.
Each such policy or contract of insurance shall (i) name the Lenders as an
additional insureds thereunder as its interests may appear and (ii) in the case
of each policy or contract affording hull insurance, contain a loss payable
clause or endorsement, satisfactory in form and substance to the Lenders, that
names the Lenders as the loss payee thereunder and provides for at least thirty
(30) days' prior written notice to the Lenders of any modification or
cancellation of such policy.

     5.6. INSPECTIONS; APPRAISAL. Each Credit Party will permit any authorized
representatives designated by any Lender to visit and inspect any of the
properties of any Credit Party and any of its respective Subsidiaries, to
inspect, copy and take extracts from its and their financial and accounting
records, and to discuss its and their affairs, finances and accounts with its
and their officers and independent public accountants, all upon reasonable
notice and at such reasonable times during normal business hours and as often as
may reasonably be requested. Not more than once during any Fiscal Year, the
Lenders may request, and the Credit Parties shall provide promptly thereafter,
appraisals of the Ships, such appraisals to be in form and substance
satisfactory to the Lenders.

     5.7. COMPLIANCE WITH LAWS. Each Credit Party will comply, and shall cause
each of its Subsidiaries to comply, with the requirements of all applicable
laws, rules, regulations and orders of any Governmental Authority, noncompliance
with which could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.

     5.8. FURTHER ASSURANCES. At any time or from time to time upon the request
of the Lenders, each Credit Party will, at its expense, promptly execute,
acknowledge and deliver such further documents and do such other acts and things
as the Lenders may reasonably request in order to effect fully the purposes of
the Credit Documents. In furtherance and not in limitation of the foregoing,
each Credit Party shall take such actions as the Lenders may reasonably request
from time to time to ensure that the Obligations are guarantied by the
Guarantors and are secured by substantially all of the assets of the Borrowers.

     5.9. CLEAN UP. Repay, prepay or not borrow Advances so that, for a period
of at least thirty (30) consecutive days within each calendar year, the
Borrowers collectively shall not have any outstanding Advances hereunder.

                                       40

     5.10. MORTGAGE FILINGS. Following the Closing Date each Borrower shall take
every step necessary to record the Mortgages in the Panamanian flag registry in
Panama City, Panama within a reasonable time after the Closing Date and, upon
such filing, shall provide written confirmation that such filing has been
adequately completed.

     5.11. Release of Vessel from Seizure or ATTACHMENT. In the event a Ship is
seized or attached by a claimant asserting a lien on the Ship or a claim against
the Borrower then the Borrower shall immediately secure the release of the Ship
from the seizure or the attachment by a protection-and-indemnity club letter of
undertaking or other suitable bond sufficient to release the Ship from the lien
or claim said to justify the seizure or attachment. In the event a Ship has been
seized or attached and has not been released within forty-eight hours of the
seizure or attachment then the Borrower shall immediately notify the Lenders.

SECTION 6. NEGATIVE COVENANTS

     Each Credit Party covenants and agrees that, so long as any Commitment is
in effect and until payment in full of all Obligations, such Credit Party shall
perform, all covenants in this Section 6.

     6.1. LIENS. None of Company or any Borrower shall directly or indirectly,
create, incur, assume or permit to exist any Lien on or with respect to any
property or asset of any kind (including any document or instrument in respect
of goods or accounts receivable) of such Person, whether now owned or hereafter
acquired, or any income or profits therefrom, or file or permit the filing of,
or permit to remain in effect, any financing statement or other similar notice
of any Lien with respect to any such property, asset, income or profits under
the UCC of any State or under any similar recording or notice statute or under
any law of any jurisdiction, except:

          (a) Liens in favor of the Lenders granted pursuant to any Credit
Document;

          (b) Liens for Taxes if obligations with respect to such Taxes are
being contested in good faith by appropriate proceedings promptly instituted and
diligently conducted;

          (c) statutory Liens of landlords, banks (and rights of set-off), of
carriers, warehousemen, mechanics, repairmen, workmen and materialmen, and other
Liens imposed by law, in each case incurred in the ordinary course of business
(i) for amounts not yet overdue or (ii) for amounts that are overdue and that
(in the case of any such amounts overdue for a period in excess of five days)
are being contested in good faith by appropriate proceedings, so long as such
reserves or other appropriate provisions, if any, as shall be required by GAAP
shall have been made for any such contested amounts;

          (d) Liens incurred in the ordinary course of business in connection
with workers' compensation, unemployment insurance and other types of social
security, or to secure the performance of tenders, statutory obligations, surety
and appeal bonds, bids, leases, government contracts, trade contracts,
performance and return-of-money bonds and other similar obligations (exclusive
of obligations for the payment of borrowed money or other Indebtedness), so long
as no foreclosure, sale or similar proceedings have been commenced with respect
to any portion of the Collateral on account thereof;

                                       41

          (e) Liens solely on any cash earnest money deposits made by Company or
any Borrower in connection with any letter of intent or purchase agreement
permitted hereunder;

          (f) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods; and

          (g) Liens described in Schedule 6.1.

     6.2. NO FURTHER NEGATIVE PLEDGES. Except with respect to (a) specific
property encumbered to secure payment of particular Indebtedness or to be sold
pursuant to an executed agreement with respect to a permitted Asset Sale and (b)
restrictions by reason of customary provisions restricting assignments,
subletting or other transfers contained in leases, licenses and similar
agreements entered into in the ordinary course of business (provided that such
restrictions are limited to the property or assets secured by such Liens or the
property or assets subject to such leases, licenses or similar agreements, as
the case may be) no Borrower shall enter into any agreement prohibiting the
creation or assumption of any Lien upon any of its properties or assets, whether
now owned or hereafter acquired.

     6.3. INVESTMENTS. No Credit Party shall directly or indirectly, make or own
any Investment in any Person, including without limitation any Joint Venture,
except:

          (a) Cash Equivalents;

          (b) equity Investments owned as of the Closing Date in any Subsidiary
and Investments made after the Closing Date in wholly-owned Subsidiaries of
Company;

          (c) Investments (i) in any Securities received in satisfaction or
partial satisfaction thereof from financially troubled account debtors and (ii)
deposits, prepayments and other credits to suppliers made in the ordinary course
of business consistent with the past practices of such Credit Party;

          (d) intercompany loans;

          (e) capital expenditures;

          (f) loans and advances to employees of Company and its Subsidiaries
made in the ordinary course of business in an aggregate principal amount not to
exceed $1,000,000 in the aggregate;

          (g) Investments made in connection with Permitted Acquisitions
permitted pursuant to Section 6.5 (Fundamental Changes); and

          (h) Investments described in Schedule 6.3.

     6.4. FINANCIAL COVENANTS.

          (a) Minimum Debt Service Coverage Ratio. Company shall not permit the
Debt Service Coverage as of the last day of any Fiscal Quarter, to be less than
2.00 to 1.00.

                                       42

          (b) Maximum Consolidated Total Debt to EBITDA Ratio. Company shall not
permit the Consolidated Total Debt to EBITDA Ratio as of the last day of any
Fiscal Quarter, to exceed 3.00 to 1.00.

          (c) Minimum Interest Coverage Ratio. Company shall not permit the
Interest Coverage Ratio as of the last day of any Fiscal Quarter, to be less
than 3.00 to 1.00.

          (d) Maximum Loan to Value Ratio. Company shall not permit the Loan to
Value Ratio as of the date of delivery of the Financial Statements required to
be delivered under Section 5.1(b) (Annual Financial Statements), to exceed 0.80.

          (e) Certain Calculations. With respect to any period during which a
Permitted Acquisition or an Asset Sale has occurred (each, a "SUBJECT
TRANSACTION"), for purposes of determining compliance with the financial
covenants set forth in this Section 6.4, Consolidated Adjusted EBITDA shall be
calculated with respect to such period on a pro forma basis (including pro forma
adjustments arising out of events which are directly attributable to a specific
transaction, are factually supportable and are expected to have a continuing
impact, in each case determined on a basis consistent with Article 11 of
Regulation S-X promulgated under the Securities Act and as interpreted by the
staff of the Securities and Exchange Commission, which would include cost
savings resulting from head count reduction, closure of facilities and similar
restructuring charges, which pro forma adjustments shall be certified by the
chief financial officer of Company) using the historical audited financial
statements of any business so acquired or to be acquired or sold or to be sold
and the consolidated financial statements of Company and its Subsidiaries which
shall be reformulated as if such Subject Transaction, and any Indebtedness
incurred or repaid in connection therewith, had been consummated or incurred or
repaid at the beginning of such period (and assuming that such Indebtedness
bears interest during any portion of the applicable measurement period prior to
the relevant acquisition at the weighted average of the interest rates
applicable to outstanding Advances incurred during such period).]

     6.5. FUNDAMENTAL CHANGES; DISPOSITION OF ASSETS; ACQUISITIONS. No Credit
Party shall enter into any transaction of merger or consolidation, or liquidate,
wind-up or dissolve itself (or suffer any liquidation or dissolution), or
convey, sell, lease or sub-lease (as lessor or sublessor), transfer or otherwise
dispose of, in one transaction or a series of transactions, all or any part of
its business, assets or property of any kind whatsoever, whether real, personal
or mixed and whether tangible or intangible, whether now owned or hereafter
acquired, or acquire by purchase or otherwise (other than purchases or other
acquisitions of inventory, materials and equipment in the ordinary course of
business) the business, property or fixed assets of, or stock or other evidence
of beneficial ownership of, any Person or any division or line of business or
other business unit of any Person, except:

          (a) any Credit Party may be merged with or into a Credit Party, or be
liquidated, wound up or dissolved, or all or any part of its business, property
or assets may be conveyed, sold, leased, transferred or otherwise disposed of,
in one transaction or a series of transactions, to a Credit Party; provided, in
the case of such a merger, a Credit Party shall be the continuing or surviving
Person;

          (b) sales or other dispositions of assets that do not constitute Asset
Sales;

                                       43

          (c) Asset Sales by Credit Parties other than the Borrowers (other than
any sale by a Credit Party of the Capital Stock of any Borrower);

          (d) disposals of obsolete, worn out or surplus property;

          (e) Permitted Acquisitions; and

          (f) Investments made in accordance with Section 6.3 (Investments).

     6.6. SALES AND LEASE-BACKS. No Borrower shall, directly or indirectly,
become or remain liable as lessee or as a guarantor or other surety with respect
to any lease of any property (whether real, personal or mixed), whether now
owned or hereafter acquired, which such Borrower (a) has sold or transferred or
is to sell or to transfer to any other Person, or (b) intends to use for
substantially the same purpose as any other property which has been or is to be
sold or transferred by such Borrower to any Person in connection with such
lease.

     6.7. CONDUCT OF BUSINESS. From and after the Closing Date, no Credit Party
shall engage in any business other than (i) the businesses engaged in by such
Credit Party on the Closing Date and similar or related businesses and (ii) such
other lines of business as may be consented to by the Lenders.

     6.8. FISCAL YEAR. No Credit Party shall change its Fiscal Year-end from
December 31.

SECTION 7. EVENTS OF DEFAULT

     7.1. EVENTS OF DEFAULT. If any one or more of the following conditions or
events shall occur:

          (a) Failure to Make Payments When Due. Failure by any Borrower to pay
(i) when due any principal of any Advance, whether at stated maturity, by
acceleration, by notice of voluntary repayment, by mandatory prepayment or
otherwise; or (ii) any interest on any Advance or any fee or any other amount
due hereunder within five (5) days after the date due; or

          (b) Default in Other Agreements. (i) Failure of any Credit Party to
pay when due any principal of or interest on or any other amount payable in
respect of one or more items of Indebtedness (other than Indebtedness referred
to in Section 7.1(a) (Payment Default)) in an individual or aggregate principal
amount of $1,000,000 or more beyond the grace period, if any, provided therefor;
or (ii) breach or default by any Credit Party with respect to any other material
term of (1) one or more items of Indebtedness in the individual or aggregate
principal amounts referred to in clause (i) above or (2) any loan agreement,
mortgage, indenture or other agreement relating to such item(s) of Indebtedness,
in each case beyond the grace period, if any, provided therefor, if the effect
of such breach or default is to cause, or to permit the holder or holders of
that Indebtedness (or a trustee on behalf of such holder or holders), to cause,
that Indebtedness to become or be declared due and payable (or redeemable) prior
to its stated maturity or the stated maturity of any underlying obligation, as
the case may be; or

                                       44

          (c) Breach of Certain Covenants. Failure of any Credit Party to
perform or comply with any term or condition contained in Section 2.6 (Use of
Proceeds), Section 5.2 (Existence), Section 5.10 (Mortgage Filings) or Section 6
(Negative Covenants); or

          (d) Breach of Representations, etc. Any representation, warranty,
certification or other statement made or deemed made by any Credit Party in any
Credit Document or in any statement or certificate at any time given by any
Credit Party or any of its Subsidiaries in writing pursuant hereto or thereto or
in connection herewith or therewith shall be false in any material respect as of
the date made or deemed made; or

          (e) Other Defaults Under Credit Documents. Any Credit Party shall
default in the performance of or compliance with any term contained herein or
any of the other Credit Documents, other than any such term referred to in any
other Section of this Section 7.1, and such default shall not have been remedied
or waived within thirty (30) days after the earlier of (i) an officer of such
Credit Party becoming aware of such default or (ii) receipt by Company of notice
from any Lender of such default; or

          (f) Involuntary Bankruptcy; Appointment of Receiver, etc. (i) A court
of competent jurisdiction shall enter a decree or order for relief in respect of
any Credit Party in an involuntary case under the Bankruptcy Code or under any
other applicable bankruptcy, insolvency or similar law now or hereafter in
effect, which decree or order is not stayed; or any other similar relief shall
be granted under any applicable federal or state law; or (ii) an involuntary
case shall be commenced against any Credit Party under the Bankruptcy Code or
under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect; or a decree or order of a court having jurisdiction in the
premises for the appointment of a receiver, liquidator, sequestrator, trustee,
custodian or other officer having similar powers over any Credit Party, or over
all or a substantial part of its property, shall have been entered; or there
shall have occurred the involuntary appointment of an interim receiver, trustee
or other custodian of any Credit Party for all or a substantial part of its
property; or a warrant of attachment, execution or similar process shall have
been issued against any substantial part of the property of any Credit Party,
and any such event described in this clause (ii) shall continue for sixty (60)
days without having been dismissed, bonded or discharged; or

          (g) Voluntary Bankruptcy; Appointment of Receiver, etc. (i) Any Credit
Party shall have an order for relief entered with respect to it or shall
commence a voluntary case under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in effect, or
shall consent to the entry of an order for relief in an involuntary case, or to
the conversion of an involuntary case to a voluntary case, under any such law,
or shall consent to the appointment of or taking possession by a receiver,
trustee or other custodian for all or a substantial part of its property; or any
Credit Party shall make any assignment for the benefit of creditors; or (ii) any
Credit Party shall be unable, or shall fail generally, or shall admit in writing
its inability, to pay its debts as such debts become due; or the board of
directors (or similar governing body) of any Credit Party (or any committee
thereof) shall adopt any resolution or otherwise authorize any action to approve
any of the actions referred to herein or in Section 7.1(f) (Involuntary
Proceeding); or

                                       45

          (h) Judgments and Attachments. Any money judgment, writ or warrant of
attachment or similar process involving in any individual case or in the
aggregate in an amount in excess of $1,000,000 (to the extent not adequately
covered by insurance as to which a solvent and unaffiliated insurance company
has acknowledged coverage) shall be entered or filed against any Credit Party or
any of their respective assets and shall remain undischarged, unvacated,
unbonded or unstayed for a period of sixty (60) days (or in any event later than
five days prior to the date of any proposed sale thereunder); or

          (i) Dissolution. Any order, judgment or decree shall be entered
against any Credit Party decreeing the dissolution or split up of such Credit
Party and such order shall remain undischarged or unstayed for a period in
excess of thirty (30) days; or

          (j) Change of Control. A Change of Control shall occur; or

          (k) Guaranties, Collateral Documents and other Credit Documents. At
any time after the execution and delivery thereof, (i) the Guaranty for any
reason, other than the satisfaction in full of all Obligations, shall cease to
be in full force and effect (other than in accordance with its terms) or shall
be declared to be null and void or any Guarantor shall repudiate its obligations
thereunder, (ii) this Agreement or any Collateral Document ceases to be in full
force and effect (other than by reason of a release of Collateral in accordance
with the terms hereof or thereof or the satisfaction in full of the Obligations
in accordance with the terms hereof) or shall be declared null and void, or the
Lenders shall not have or shall cease to have a valid and perfected Lien in any
Collateral purported to be covered by the Collateral Documents with the priority
required by the relevant Collateral Document, in each case for any reason other
than the failure of any Lender to take any action within its control, or (iii)
any Credit Party shall contest the validity or enforceability of any Credit
Document in writing or deny in writing that it has any further liability,
including with respect to future advances by Lenders, under any Credit Document
to which it is a party;

THEN, (1) upon the occurrence of any Event of Default described in Section
7.1(f) (Involuntary Proceeding) or 8.1(g) (Voluntary Proceeding), automatically,
and (2) upon the occurrence of any other Event of Default, at the request of (or
with the consent of) the Lenders, upon notice to tge Borrowers by the Lenders,
(A) the Commitments, if any, of each Lender shall immediately terminate; (B)
each of the following shall immediately become due and payable, in each case
without presentment, demand, protest or other requirements of any kind, all of
which are hereby expressly waived by each Credit Party: (I) the unpaid principal
amount of and accrued interest on the Advances, and (II) all other Obligations;
and (C) the Lenders may enforce any and all Liens and security interests created
pursuant to Collateral Documents.

SECTION 8. MISCELLANEOUS

     8.1. NOTICES. Any communications between the parties hereto or notices
provided herein to be given shall be given to the following addresses:

                                       46

If to Citibank             Citibank, N.A.
                           450 Mamaroneck Avenue
                           Harrison, NY 10528
                           Attention:  John V. Raleigh
                           Tel:  914.899.7347
                           Email:  john.v.raleigh@citigroup.com
                                   ----------------------------

                           with a copy to:

                           DLA Piper Rudnik Gray Cary US LLP
                           1251 Avenue of the Americas
                           New York, NY 10020
                           Attention: Richard Fries
                           Tel: 212.835.6215
                           Email: Richard.fries@dlapiper.com

                                       47

If to the Company, the     c/o TBS International Limited
Borrowers or any other     Suite 306
Credit Party:              Commerce Building
                           One Chancery Lane
                           Hamilton HM 12
                           Bermuda

                           Mailing Address:

                           P. O. Box HM 2522
                           Hamilton HMGX
                           Bermuda

                           Attention: William J. Carr
                           Telephone: 1441 295 9230
                           Fax: 1441 295 4957

                           with a copy to:

                           TBS Shipping Services Inc.
                           612 East Grassy Sprain Road
                           Yonkers, NY 10710 USA

                           Attention: Ferdinand Lepere
                           Telephone: 914.961.1000
                           Fax: 914.961.5121

                           And

                           Cardillo & Corbett
                           29 Broadway
                           New York, NY 10006 USA
                           Attention: Tulio R. Prieto
                           Telephone: 212.344.0464
                           Fax: 212.797.1212

All notices or other communications required or permitted to be given hereunder
shall be in writing and shall be considered as properly given (a) if delivered
in person, (b) if sent by overnight delivery service (including Federal Express,
ETA, Emery, DHL, AirBorne and other similar overnight delivery services), (c) if
mailed by first class United States Mail, postage prepaid, registered or
certified with return receipt requested or (d) if sent by facsimile. Notice so
given shall be effective upon receipt by the addressee, except that
communication or notice so transmitted by direct written electronic means shall
be deemed to have been validly and effectively given on the day (if a Business
Day and, if not, on the next following Business Day) on which it is transmitted
if transmitted before 4:00 p.m. (New York time), recipient's time, and if
transmitted after that time, on the next following Business Day; provided,
however, that if any

                                       48

notice is tendered to an addressee and the delivery thereof is refused by such
addressee, such notice shall be effective upon such tender. Any party shall have
the right to change its address for notice hereunder to any other location
within the continental United States by giving of 30 days' notice to the other
parties in the manner set forth above.

     8.2. EXPENSES. Whether or not the transactions contemplated hereby shall be
consummated, the Borrowers agree to pay promptly (a) all the actual and
reasonable costs and expenses of preparation of the Credit Documents and any
consents, amendments, waivers or other modifications thereto; (b) all the costs
of furnishing all opinions by counsel for Company and the other Credit Parties;
(c) the reasonable fees, expenses and disbursements of counsel to the Lenders
(in each case including allocated costs of internal counsel) in connection with
the negotiation, preparation, execution and administration of the Credit
Documents and any consents, amendments, waivers or other modifications thereto
and any other documents or matters requested by Company; (d) all the actual
costs and reasonable expenses of creating and perfecting Liens in favor of the
Lenders pursuant hereto, including filing and recording fees, expenses and
taxes, stamp or documentary taxes, search fees, title insurance premiums and
reasonable fees, expenses and disbursements of counsel to the Lenders and of
counsel providing any opinions that any Lender may request in respect of the
Collateral or the Liens created pursuant to the Collateral Documents; (e) all
the actual costs and reasonable fees, expenses and disbursements of any
auditors, accountants, consultants or appraisers; (f) all the actual costs and
reasonable expenses (including the reasonable fees, expenses and disbursements
of any appraisers, consultants, advisors and agents employed or retained by the
Lenders and their counsel) in connection with the custody or preservation of any
of the Collateral; (g) all other actual and reasonable costs and expenses
incurred by each Lender in connection with the negotiation, preparation and
execution of the Credit Documents and any consents, amendments, waivers or other
modifications thereto and the transactions contemplated thereby; and (h) after
the occurrence of a Default or an Event of Default, all costs and expenses,
including reasonable attorneys' fees (including allocated costs of internal
counsel) and costs of settlement, incurred by any Lender in enforcing any
Obligations of or in collecting any payments due from any Credit Party hereunder
or under the other Credit Documents by reason of such Default or Event of
Default (including in connection with the sale of, collection from, or other
realization upon any of the Collateral or the enforcement of the Guaranty) or in
connection with any refinancing or restructuring of the credit arrangements
provided hereunder in the nature of a "work-out" or pursuant to any insolvency
or bankruptcy cases or proceedings.

     8.3. INDEMNITY.

          (a) In addition to the payment of expenses pursuant to Section 8.2
(Expenses), whether or not the transactions contemplated hereby shall be
consummated, each Credit Party agrees to defend (subject to Indemnitees'
selection of counsel), indemnify, pay and hold harmless, each Lender and the
officers, partners, directors, trustees, employees, agents and Affiliates of
each Lender (each, an "INDEMNITEE"), from and against any and all Indemnified
Liabilities; provided, no Credit Party shall have any obligation to any
Indemnitee hereunder with respect to any Indemnified Liabilities to the extent
such Indemnified Liabilities arise from the gross negligence or willful
misconduct of that Indemnitee. To the extent that the undertakings to defend,
indemnify, pay and hold harmless set forth in this Section 8.3 may be
unenforceable in whole or in part because they are violative of any law or
public policy, the applicable Credit

                                       49

Party shall contribute the maximum portion that it is permitted to pay and
satisfy under applicable law to the payment and satisfaction of all Indemnified
Liabilities incurred by Indemnitees or any of them. To the extent permitted by
applicable law, no Credit Party shall assert, and each hereby waives, any claim
against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, any Credit Document or
any agreement or instrument or transaction contemplated hereby.

          (b) To the extent permitted by applicable law, neither Company nor any
of its Subsidiaries or Affiliates shall assert, and hereby waives, any claim
against any Lender or any of their Affiliates, directors, employees, attorneys
or agents, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) (whether or not the
claim therefor is based on contract, tort or duty imposed by any applicable
legal requirement) arising out of, in connection with, arising out of, as a
result of, or in any way related to, this Agreement or any Credit Document or
any agreement or instrument contemplated hereby or thereby, the transactions
contemplated hereby or thereby, any Advance or the use of the proceeds thereof
or any act or omission or event occurring in connection therewith, and Company
hereby waives, releases and agrees not to sue upon any such claim or any such
damages, whether or not accrued and whether or not known or suspected to exist
in its favor.

     8.4. SET-OFF. In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence of any Event of Default each Lender is hereby authorized by each
Credit Party at any time or from time to time subject to the consent of the
Lenders (such consent not to be unreasonably withheld or delayed), without
notice to any Credit Party or to any other Person, any such notice being hereby
expressly waived, to set off and to appropriate and to apply any and all
deposits (general or special, including Indebtedness evidenced by certificates
of deposit, whether matured or unmatured, but not including trust accounts) and
any other Indebtedness at any time held or owing by such Lender to or for the
credit or the account of any Credit Party against and on account of the
obligations and liabilities of any Credit Party to such Lender hereunder and
under the other Credit Documents, including all claims of any nature or
description arising out of or connected hereto or with any other Credit
Document, irrespective of whether or not (a) such Lender shall have made any
demand hereunder or (b) the principal of or the interest on the Advances or any
other amounts due hereunder shall have become due and payable pursuant to
Section 2 and although such obligations and liabilities, or any of them, may be
contingent or unmatured. Each Credit Party hereby further grants to each Lender
a security interest in all deposit accounts maintained with such Lender as
security for the Obligations.

     8.5. AMENDMENTS AND WAIVERS.

          (a) Lenders' Consent. No amendment, modification, termination or
waiver of any provision of the Credit Documents, or consent to any departure by
any Credit Party therefrom, shall in any event be effective without the written
concurrence of the Lenders.

          (b) Execution of Amendments, etc. Any waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it was given. No notice to or demand on any Credit Party in any case shall
entitle any Credit Party to any other or further

                                       50

notice or demand in similar or other circumstances. Any amendment, modification,
termination, waiver or consent effected in accordance with this Section 8.5
shall be binding upon each Lender at the time outstanding, each future Lender
and, if signed by a Credit Party, on such Credit Party.

     8.6. SUCCESSORS AND ASSIGNS; PARTICIPATIONS.

          (a) Generally. This Agreement shall be binding upon the parties hereto
and their respective successors and assigns and shall inure to the benefit of
the parties hereto and the successors and assigns of Lenders. No Credit Party's
rights or obligations hereunder nor any interest therein may be assigned or
delegated by any Credit Party without the prior written consent of all Lenders.
Nothing in this Agreement, expressed or implied, shall be construed to confer
upon any Person (other than the parties hereto, their respective successors and
assigns permitted hereby and, to the extent expressly contemplated hereby,
Affiliates of each of the Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.

          (b) Right to Assign. Each Lender shall have the right at any time to
sell, assign or transfer all or a portion of its rights and obligations under
this Agreement, including, without limitation, all or a portion of its
Commitment, Advances or other Obligation owing to it (provided, however, that
each such assignment shall be of a uniform, and not varying, percentage of all
rights and obligations under and in respect of any Advance and any related
Commitments) and shall be consented to by each of the Borrowers and Citibank
(such consent not to be (x) unreasonably withheld or delayed or, (y) in the case
of the Borrowers, required at any time an Event of Default shall have occurred
and then be continuing); provided, further, each such assignment pursuant to
this Section 8.6(b) shall be in an aggregate amount of not less than $1,000,000
(or such lesser amount as may be agreed to by the Borrowers and Citibank or as
shall constitute the aggregate amount of the Commitments and Advances of the
assigning Lender) with respect to the assignment of the Commitments and
Advances.

          (c) Mechanics. The assigning Lender and the assignee thereof shall
execute and deliver to the Borrowers an Assignment Agreement, together with such
forms, certificates or other evidence, if any, with respect to United States
federal income tax withholding matters as the assignee under such Assignment
Agreement may be required to deliver to the Borrowers pursuant to Section 2.16
(Taxes; Withholding).

          (d) Representations and Warranties of Assignee. Each Lender, upon
execution and delivery hereof or upon executing and delivering an Assignment
Agreement, as the case may be, represents and warrants as of the Closing Date or
as of the applicable Effective Date (as defined in the applicable Assignment
Agreement) that (i) it is an Eligible Assignee; (ii) it has experience and
expertise in the making of or investing in commitments or loans such as the
applicable Commitments or Advances, as the case may be; and (iii) it will make
or invest in, as the case may be, its Commitments or Advances for its own
account in the ordinary course of its business and without a view to
distribution of such Commitments or Advances within the meaning of the
Securities Act or the Exchange Act or other federal securities laws (it being
understood that, subject to the provisions of this Section 8.6, the disposition
of such Commitments or Advances or any interests therein shall at all times
remain within its exclusive control).

                                       51

          (e) Effect of Assignment. Subject to the terms and conditions of this
Section 8.6, as of the "Effective Date" specified in the applicable Assignment
Agreement: (i) the assignee thereunder shall have the rights and obligations of
a "Lender" hereunder to the extent such rights and obligations hereunder have
been assigned to it pursuant to such Assignment Agreement and shall thereafter
be a party hereto and a "Lender" for all purposes hereof; (ii) the assigning
Lender thereunder shall, to the extent that rights and obligations hereunder
have been assigned thereby pursuant to such Assignment Agreement, relinquish its
rights (other than any rights which survive the termination hereof under Section
8.8 (Survival)) and be released from its obligations hereunder (and, in the case
of an Assignment Agreement covering all or the remaining portion of an assigning
Lender's rights and obligations hereunder, such Lender shall cease to be a party
hereto; provided, anything contained in any of the Credit Documents to the
contrary notwithstanding, such assigning Lender shall continue to be entitled to
the benefit of all indemnities hereunder as specified herein with respect to
matters arising out of the prior involvement of such assigning Lender as a
Lender hereunder); (iii) the Commitments shall be modified to reflect the
Commitment of such assignee and any Commitment of such assigning Lender, if any;
and (iv) if any such assignment occurs after the issuance of any Note hereunder,
the assigning Lender shall, upon the effectiveness of such assignment or as
promptly thereafter as practicable, surrender its applicable Notes to the
Borrowers for cancellation, and thereupon each Borrower shall issue and deliver
new Notes to such assignee and/or to such assigning Lender, with appropriate
insertions, to reflect the new Commitments and/or outstanding Advances of the
assignee and/or the assigning Lender.

          (f) Participations. Each Lender shall have the right at any time to
sell one or more participations to any Person (other than Company, any of its
Subsidiaries or any of its Affiliates) in all or any part of its Commitments,
Advances or in any other Obligation. The holder of any such participation, other
than an Affiliate of the Lender granting such participation, shall not be
entitled to require such Lender to take or omit to take any action hereunder
except with respect to any amendment, modification or waiver that would (i)
extend the final scheduled maturity of any Advance or Note in which such
participant is participating, or reduce the rate or extend the time of payment
of interest or fees thereon (except in connection with a waiver of applicability
of any post-default increase in interest rates) or reduce the principal amount
thereof, or increase the amount of the participant's participation over the
amount thereof then in effect (it being understood that a waiver of any Default
or Event of Default or of a mandatory reduction in the Commitment shall not
constitute a change in the terms of such participation, and that an increase in
any Commitment or Advance shall be permitted without the consent of any
participant if the participant's participation is not increased as a result
thereof), (ii) consent to the assignment or transfer by any Credit Party of any
of its rights and obligations under this Agreement or (iii) release all or
substantially all of the Collateral under the Collateral Documents (except as
expressly provided in the Credit Documents) supporting the Advances hereunder in
which such participant is participating. The Borrowers agree that each
participant shall be entitled to the benefits of Sections 2.14(c) (Breakage
Costs), 2.15 (Increased Costs; Capital Adequacy) and 2.16 (Taxes; Withholding)
to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (c) of this Section; provided, a participant
shall not be entitled to receive any greater payment under Section 2.15
(Increased Costs; Capital Adequacy) or 2.16 (Taxes; Withholding) than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such participant, unless the sale of the participation to
such participant is made with a Borrower's prior written consent . To the

                                       52

extent permitted by law, each participant also shall be entitled to the benefits
of Section 8.4 as though it were a Lender, provided such Participant agrees to
be subject to Section 2.13 (Ratable Sharing) as though it were a Lender.

          (g) Certain Other Assignments. In addition to any other assignment
permitted pursuant to this Section 8.6, (i) any Lender may assign and/or pledge
all or any portion of its Advances, the other Obligations owed by or to such
Lender, and its Notes, if any, to secure obligations of such Lender including,
without limitation, any Federal Reserve Bank as collateral security pursuant to
Regulation A of the Board of Governors of the Federal Reserve System and any
operating circular issued by such Federal Reserve Bank; provided, no Lender, as
between any Credit Party and such Lender, shall be relieved of any of its
obligations hereunder as a result of any such assignment and pledge, and
provided further, in no event shall the applicable Federal Reserve Bank or
trustee be considered to be a "Lender" or be entitled to require the assigning
Lender to take or omit to take any action hereunder.

     8.7. INDEPENDENCE OF COVENANTS. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or would otherwise be within the limitations of, another covenant shall not
avoid the occurrence of a Default or an Event of Default if such action is taken
or condition exists.

     8.8. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. All
representations, warranties and agreements made herein shall survive the
execution and delivery hereof and the making of any Credit Extension.
Notwithstanding anything herein or implied by law to the contrary, the
agreements of each Credit Party set forth in Sections 2.14(c) (Breakage Costs),
2.15 (Increased Costs; Capital Adequacy), 2.16 (Taxes; Withholding), 8.2
(Expenses), 8.3 (Indemnity) and 8.4 (Set-Off) and the agreements of Lenders set
forth in Sections 2.13 (Ratable Sharing) shall survive the payment of the
Advances and the termination hereof.

     8.9. NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the part of any
Lender in the exercise of any power, right or privilege hereunder or under any
other Credit Document shall impair such power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor shall any
single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other power, right or privilege. The
rights, powers and remedies given to each Lender hereby are cumulative and shall
be in addition to and independent of all rights, powers and remedies existing by
virtue of any statute or rule of law or in any of the other Credit Documents.
Any forbearance or failure to exercise, and any delay in exercising, any right,
power or remedy hereunder shall not impair any such right, power or remedy or be
construed to be a waiver thereof, nor shall it preclude the further exercise of
any such right, power or remedy.

     8.10. MARSHALLING; PAYMENTS SET ASIDE. No Lender shall be under any
obligation to marshal any assets in favor of any Credit Party or any other
Person or against or in payment of any or all of the Obligations. To the extent
that any Credit Party makes a payment or payments to Lenders, or Lenders enforce
any security interests or exercise their rights of setoff, and such payment or
payments or the proceeds of such enforcement or setoff or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be

                                       53

repaid to a trustee, receiver or any other party under any bankruptcy law, any
other state or federal law, common law or any equitable cause, then, to the
extent of such recovery, the obligation or part thereof originally intended to
be satisfied, and all Liens, rights and remedies therefor or related thereto,
shall be revived and continued in full force and effect as if such payment or
payments had not been made or such enforcement or setoff had not occurred.

     8.11. SEVERABILITY. In case any provision in or obligation hereunder or any
Note shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

     8.12. OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS. The
obligations of Lenders hereunder are several and no Lender shall be responsible
for the obligations or Commitment of any other Lender hereunder. Nothing
contained herein or in any other Credit Document, and no action taken by Lenders
pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out hereof and it shall not be necessary for any other Lender to
be joined as an additional party in any proceeding for such purpose.

     8.13. HEADINGS. Section headings herein are included herein for convenience
of reference only and shall not constitute a part hereof for any other purpose
or be given any substantive effect.

     8.14. APPLICABLE LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS
OF LAW PRINCIPLES THEREOF.

     8.15. CONSENT TO JURISDICTION. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY
CREDIT PARTY ARISING OUT OF OR RELATING HERETO OR ANY OTHER CREDIT DOCUMENT, OR
ANY OF THE OBLIGATIONS, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK. BY EXECUTING
AND DELIVERING THIS AGREEMENT, EACH CREDIT PARTY, FOR ITSELF AND IN CONNECTION
WITH ITS PROPERTIES, IRREVOCABLY (A) ACCEPTS GENERALLY AND UNCONDITIONALLY THE
NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (B) WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS; (C) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, TO THE APPLICABLE CREDIT PARTY AT ITS ADDRESS PROVIDED IN
ACCORDANCE WITH SECTION 8.1 (NOTICES); (D) AGREES THAT SERVICE AS PROVIDED IN
CLAUSE (C) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER THE
APPLICABLE CREDIT PARTY IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND

                                       54

OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND (E)
AGREES AGENTS AND LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST ANY CREDIT PARTY IN THE COURTS
OF ANY OTHER JURISDICTION.

     8.16. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY AGREES TO
WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING HEREUNDER OR UNDER ANY OF THE OTHER CREDIT DOCUMENTS OR
ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN
TRANSACTION OR THE LENDER/COMPANY RELATIONSHIP THAT IS BEING ESTABLISHED. THE
SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES
THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS
TRANSACTION, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND
ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT
THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT
EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT
EACH WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS. EACH
PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER
WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING
(OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION
8.16 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO
ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO OR ANY
OF THE OTHER CREDIT DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING
TO THE LOANS MADE HEREUNDER. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE
FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

     8.17. CONFIDENTIALITY. Each Lender shall hold all non-public information
regarding Company and its business identified as such by Company and obtained by
such Lender pursuant to the requirements hereof in accordance with such Lender's
customary procedures for handling confidential information of such nature, it
being understood and agreed by Company that, in any event, a Lender may make (i)
disclosures of such information to Affiliates of such Lender and to their agents
and advisors (and to other persons authorized by a Lender to organize, present
or disseminate such information in connection with disclosures otherwise made in
accordance with this Section 8.17), (ii) disclosures of such information
reasonably required by any bona fide or potential assignee, transferee or
participant in connection with the contemplated assignment, transfer or
participation by such Lender of any Advances or any participations therein,
(iii) disclosure to any rating agency when required by it, provided that, prior
to any disclosure, such rating agency shall undertake in writing to preserve the
confidentiality of any confidential

                                       55

information relating to the Credit Parties received by it from any Lender, and
(iv) disclosures required or requested by any governmental agency or
representative thereof or by the NAIC or pursuant to legal or judicial process;
provided, unless specifically prohibited by applicable law or court order, each
Lender shall make reasonable efforts to notify Company of any request by any
governmental agency or representative thereof (other than any such request in
connection with any examination of the financial condition or other routine
examination of such Lender by such governmental agency) for disclosure of any
such non-public information prior to disclosure of such information.

     8.18. USURY SAVINGS CLAUSE. Notwithstanding any other provision herein, the
aggregate interest rate charged with respect to any of the Obligations,
including all charges or fees in connection therewith deemed in the nature of
interest under applicable law shall not exceed the Highest Lawful Rate. If the
rate of interest (determined without regard to the preceding sentence) under
this Agreement at any time exceeds the Highest Lawful Rate, the outstanding
amount of the Advances made hereunder shall bear interest at the Highest Lawful
Rate until the total amount of interest due hereunder equals the amount of
interest which would have been due hereunder if the stated rates of interest set
forth in this Agreement had at all times been in effect. In addition, if when
the Advances made hereunder are repaid in full the total interest due hereunder
(taking into account the increase provided for above) is less than the total
amount of interest which would have been due hereunder if the stated rates of
interest set forth in this Agreement had at all times been in effect, then to
the extent permitted by law, the Borrowers shall pay to the Lenders an amount
equal to the difference between the amount of interest paid and the amount of
interest which would have been paid if the Highest Lawful Rate had at all times
been in effect. Notwithstanding the foregoing, it is the intention of Lenders
and the Borrowers to conform strictly to any applicable usury laws. Accordingly,
if any Lender contracts for, charges, or receives any consideration which
constitutes interest in excess of the Highest Lawful Rate, then any such excess
shall be cancelled automatically and, if previously paid, shall at such Lender's
option be applied to the outstanding amount of the Advances made hereunder or be
refunded to a Borrower.

     8.19. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument.

     8.20. EFFECTIVENESS. This Agreement shall become effective upon the
execution of a counterpart hereof by each of the parties hereto and receipt by
each Credit Party and each Lender of written or telephonic notification of such
execution and authorization of delivery thereof.

     8.21. PATRIOT ACT NOTICE. Each Lender hereby notifies the Credit Parties
that pursuant to the requirements of the Patriot Act, it is required to obtain,
verify and record information that identifies each Credit Party, which
information includes the name and address of such Credit Party and other
information that will allow such Lender to identify such Credit Party in
accordance with the Patriot Act. Each Credit Party shall provide, to the extent
commercially reasonable, such information and take such actions as are
reasonably requested by any Lenders in order to assist the Lenders in
maintaining compliance with the Patriot Act.

                  [Remainder of page intentionally left blank]

                                       56

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.

                                                TBS INTERNATIONAL LIMITED

                                                By: /s/ Tara C. DeMakes
                                                    ----------------------------
                                                    Name: Tara C. DeMakes
                                                    Title: Attorney-in-Fact

                                                NEWKIRK NAVIGATION CORP.

                                                By: /s/ Tara C. DeMakes
                                                    ----------------------------
                                                    Name: Tara C. DeMakes
                                                    Title: Attorney-in-Fact

                                                FRANKFORT MARITIME CORP.

                                                By: /s/ Tara C. DeMakes
                                                    ----------------------------
                                                    Name: Tara C. DeMakes
                                                    Title: Attorney-in-Fact

                                                WESTBROOK HOLDINGS LTD.

                                                By: /s/ Tara C. DeMakes
                                                    ----------------------------
                                                    Name: Tara C. DeMakes
                                                    Title: Attorney-in-Fact

                                                TBS WORLDWIDE SERVICES, INC.

                                                By: /s/ Tara C. DeMakes
                                                    ----------------------------
                                                    Name: Tara C. DeMakes
                                                    Title: Attorney-in-Fact

                                                CITIBANK, N.A.,
                                                as Lender

                                                By: /s/ John Raleigh
                                                    ----------------------------
                                                    Authorized Signatory

                                                                     EXHIBIT A-1
                                                         TO THE CREDIT AGREEMENT

                                     FORM OF
                                 FUNDING NOTICE

--------------------------------------------------------------------------------
                                                                     EXHIBIT A-2
                                                         TO THE CREDIT AGREEMENT
                                     FORM OF
                         CONVERSION/CONTINUATION NOTICE

--------------------------------------------------------------------------------
                                                                       EXHIBIT B
                                                         TO THE CREDIT AGREEMENT

                                      NOTE

--------------------------------------------------------------------------------
                                                                       EXHIBIT C
                                                         TO THE CREDIT AGREEMENT

                                     FORM OF
                             COMPLIANCE CERTIFICATE

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

                                                                       EXHIBIT D
                                                         TO THE CREDIT AGREEMENT

                       ASSIGNMENT AND ASSUMPTION AGREEMENT

--------------------------------------------------------------------------------
                                                                       EXHIBIT E
                                                         TO THE CREDIT AGREEMENT

                                     FORM OF
                            CLOSING DATE CERTIFICATE

--------------------------------------------------------------------------------
                                                                       EXHIBIT F
                                                         TO THE CREDIT AGREEMENT

                                     FORM OF
                              SOLVENCY CERTIFICATE

--------------------------------------------------------------------------------Exhibit 4.1
================================================================================

                        ASSET BACKED FUNDING CORPORATION,
                                    DEPOSITOR

                          AMERIQUEST MORTGAGE COMPANY,
                                    SERVICER

                                       AND

                      DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                     TRUSTEE

                         POOLING AND SERVICING AGREEMENT

                            DATED AS OF JUNE 1, 2005

                               ABFC 2005-AQ1 TRUST

                   ASSET-BACKED CERTIFICATES, SERIES 2005-AQ1

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

                                TABLE OF CONTENTS

<TABLE>

                                                                                                  Page
                                                                                                  ----

ARTICLE I DEFINITIONS                                                                                5

   Section 1.01    Defined Terms.....................................................................5
   Section 1.02    Accounting.......................................................................47
   Section 1.03    Rights of the NIMS Insurer.......................................................47

ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES                          48

   Section 2.01    Conveyance of Mortgage Loans.....................................................48
   Section 2.02    Acceptance by Trustee............................................................50
   Section 2.03    Repurchase of Mortgage Loans by the Originator or the Seller.....................52
   Section 2.04    Execution of Yield Maintenance Agreement.........................................55
   Section 2.05    Representations, Warranties and Covenants of the Servicer........................55
   Section 2.06    Representations and Warranties of the Depositor..................................57
   Section 2.07    Issuance of Certificates and the Uncertificated Regular Interests................59

ARTICLE III ADMINISTRATION AND SERVICING OF THE TRUST FUND                                          60

   Section 3.01    Servicer to Act as Servicer......................................................60
   Section 3.02    Collection of Mortgage Loan Payments.............................................62
   Section 3.03    Realization Upon Defaulted Mortgage Loans........................................62
   Section 3.04    Collection Accounts, Distribution Account and Reserve Accounts...................63
   Section 3.05    Permitted Withdrawals From the Collection Accounts...............................67
   Section 3.06    Establishment of Escrow Accounts; Deposits in Escrow Accounts....................68
   Section 3.07    Permitted Withdrawals From Escrow Account........................................69
   Section 3.08    Payment of Taxes, Insurance and Other Charges; Collections Thereunder............70
   Section 3.09    Transfer of Accounts.............................................................70
   Section 3.10    Maintenance of Hazard Insurance..................................................70
   Section 3.11    Maintenance of Mortgage Impairment Insurance Policy..............................71
   Section 3.12    Fidelity Bond, Errors and Omissions Insurance....................................72
   Section 3.13    Title, Management and Disposition of REO Property................................72
   Section 3.14    Due-on-Sale Clauses; Assumption and Substitution Agreements......................75
   Section 3.15    [Reserved].......................................................................76
   Section 3.16    Optional Purchases of Mortgage Loans by Servicer.................................76
   Section 3.17    Trustee to Cooperate; Release of Files...........................................76
   Section 3.18    Servicing Compensation...........................................................78
   Section 3.19    Annual Statement as to Compliance................................................78
   Section 3.20    Annual Independent Certified Public Accountants' Reports.........................79
   Section 3.21    Access to Certain Documentation and Information Regarding the Mortgage Loans.....79
   Section 3.22    [Reserved].......................................................................80
   Section 3.23    Obligations of the Servicer in Respect of Compensating Interest..................80
</TABLE>

                                       -i-

<TABLE>

   Section 3.24    [Reserved].......................................................................80
   Section 3.25    Investment of Funds in the Collection Accounts...................................80
   Section 3.26    Liability of Servicer; Indemnification...........................................81
   Section 3.27    Reports of Foreclosure and Abandonment of Mortgaged Properties...................82
   Section 3.28    Protection of Assets.............................................................82
   Section 3.29    [Reserved].......................................................................82
   Section 3.30    [Reserved].......................................................................82
   Section 3.31    Periodic Filings.................................................................82
   Section 3.32    Credit Reporting; Gramm-Leach-Bliley Act.........................................85
   Section 3.33    Advance Facility.................................................................85

ARTICLE IV FLOW OF FUNDS                                                                            87

   Section 4.01    Interest Distributions...........................................................87
   Section 4.02    Distributions of Principal and Monthly Excess Cashflow Amounts...................88
   Section 4.03    Allocation of Losses.............................................................94
   Section 4.04    Method of Distribution...........................................................94
   Section 4.05    Distributions on Book-Entry Certificates.........................................94
   Section 4.06    Statements.......................................................................94
   Section 4.07    Remittance Reports; Advances.....................................................98
   Section 4.08    REMIC Distributions and Allocation of Losses.....................................99

ARTICLE V THE CERTIFICATES                                                                         102

   Section 5.01    The Certificates................................................................102
   Section 5.02    Registration of Transfer and Exchange of Certificates...........................103
   Section 5.03    Mutilated, Destroyed, Lost or Stolen Certificates...............................107
   Section 5.04    Persons Deemed Owners...........................................................108
   Section 5.05    Appointment of Paying Agent.....................................................108

ARTICLE VI THE SERVICER AND THE DEPOSITOR                                                          108

   Section 6.01    Liability of the Servicer and the Depositor.....................................108
   Section 6.02    Merger or Consolidation of, or Assumption of the Obligations of, the
                      Servicer or the Depositor.                                                   109
   Section 6.03    Limitation on Liability of the Servicer and Others..............................109
   Section 6.04    Servicer Not to Resign..........................................................110
   Section 6.05    Rights of the Depositor and Others in Respect of the Servicer...................111
   Section 6.06    Sub-Servicing Agreements Between the Servicer and Sub-Servicers.................111
   Section 6.07    Successor Sub-Servicers.........................................................112
   Section 6.08    Liability of the Servicer.......................................................113
   Section 6.09    No Contractual Relationship Between Sub-Servicers and the NIMS Insurer, the
                      Trustee or Certificateholders.                                               113
   Section 6.10    Assumption or Termination of Sub-Servicing Agreements by Trustee................113
   Section 6.11    Sub-Servicing Accounts..........................................................114
</TABLE>

                                      -ii-

<TABLE>

ARTICLE VII DEFAULT                                                                                114

   Section 7.01    Servicer Events of Termination..................................................114
   Section 7.02    Trustee to Act; Appointment of Successor........................................116
   Section 7.03    Waiver of Defaults..............................................................118
   Section 7.04    Notification to Certificateholders..............................................118
   Section 7.05    Survivability of Servicer Liabilities...........................................119

ARTICLE VIII THE TRUSTEE                                                                           119

   Section 8.01    Duties of Trustee...............................................................119
   Section 8.02    Certain Matters Affecting the Trustee...........................................121
   Section 8.03    Trustee Not Liable for Certificates or Mortgage Loans...........................122
   Section 8.04    Trustee May Own Certificates....................................................123
   Section 8.05    Trustee Fees and Expenses.......................................................123
   Section 8.06    Eligibility Requirements for Trustee............................................123
   Section 8.07    Resignation or Removal of Trustee...............................................124
   Section 8.08    Successor Trustee...............................................................124
   Section 8.09    Merger or Consolidation of Trustee..............................................125
   Section 8.10    Appointment of Co-Trustee or Separate Trustee...................................125
   Section 8.11    Limitation of Liability.........................................................126
   Section 8.12    Trustee May Enforce Claims Without Possession of Certificates...................127
   Section 8.13    Suits for Enforcement...........................................................127
   Section 8.14    Waiver of Bond Requirement......................................................127
   Section 8.15    Waiver of Inventory, Accounting and Appraisal Requirement.......................127

ARTICLE IX REMIC AND GRANTOR TRUST ADMINISTRATION                                                  128

   Section 9.01    REMIC Administration............................................................128
   Section 9.02    Prohibited Transactions and Activities..........................................130
   Section 9.03    Indemnification with Respect to Certain Taxes and Loss of REMIC Status..........130
   Section 9.04    REO Property....................................................................131
   Section 9.05    Grantor Trust Administration....................................................131

ARTICLE X TERMINATION                                                                              132

   Section 10.01   Termination.....................................................................132
   Section 10.02   Additional Termination Requirements.............................................134

ARTICLE XI MISCELLANEOUS PROVISIONS                                                                134

   Section 11.01   Amendment.......................................................................134
   Section 11.02   Recordation of Agreement; Counterparts..........................................136
   Section 11.03   Limitation on Rights of Certificateholders......................................136
   Section 11.04   Governing Law; Jurisdiction.....................................................137
   Section 11.05   Notices.........................................................................137
   Section 11.06   Severability of Provisions......................................................137
   Section 11.07   Article and Section References..................................................138
</TABLE>

                                      -iii-

<TABLE>

   Section 11.08   Notice to the Rating Agencies and the NIMS Insurer..............................138
   Section 11.09   Further Assurances..............................................................139
   Section 11.10   Third Party Beneficiary.........................................................139
   Section 11.11   Acts of Certificateholders......................................................139
</TABLE>

                                      -iv-

                                    EXHIBITS:

<TABLE>

Exhibit A-1A   Form of Class A-1A Certificate
Exhibit A-1B   Form of Class A-1B Certificate
Exhibit A-2    Form of Class A-2 Certificate
Exhibit A-3    Form of Class A-3 Certificate
Exhibit A-4    Form of Class A-4 Certificate
Exhibit A-5    Form of Class A-5 Certificate
Exhibit A-6    Form of Class A-6 Certificate
Exhibit B-1    Form of Class M-1 Certificate
Exhibit B-2    Form of Class M-2 Certificate
Exhibit B-3    Form of Class M-3 Certificate
Exhibit B-4    Form of Class M-4 Certificate
Exhibit B-5    Form of Class M-5 Certificate
Exhibit B-6    Form of Class M-6 Certificate
Exhibit B-7    Form of Class B-1 Certificate
Exhibit B-8    Form of Class B-2 Certificate
Exhibit C-1    Form of Class CE Certificate
Exhibit C-2    Form of Class P Certificate
Exhibit C-3    Form of Class R Certificate
Exhibit D      Mortgage Loan Schedule
Exhibit E      Form of Request for Release of Documents
Exhibit F-1    Form of Trustee's Initial Certification
Exhibit F-2    Form of Trustee's Final Certification
Exhibit F-3    Form of Receipt of Mortgage Note
Exhibit G      Mortgage Loan Purchase Agreement
Exhibit H      Form of Lost Note Affidavit
Exhibit I      Form of ERISA Representation
Exhibit J      Form of Investment Letter
Exhibit K      Form of Class R Certificate Transfer Affidavit
Exhibit L      Form of Transferor Certificate
Exhibit M      Form of Remittance Report
Exhibit N      Form of Yield Maintenance Agreement relating to the Class A-1A Certificates
Exhibit O      Form of Certification
Exhibit P-1    Form of Certification to be Provided by the Trustee to the Depositor
Exhibit P-2    Form of Certification to be Provided by the Servicer to the Depositor
</TABLE>

                                       -v-

          ASSET BACKED FUNDING CORPORATION, as depositor (the "Depositor"),
AMERIQUEST MORTGAGE COMPANY, as servicer (the "Servicer"), and DEUTSCHE BANK
NATIONAL TRUST COMPANY, as trustee (the "Trustee"), are entering into this
Pooling and Servicing Agreement, dated as of June 1, 2005 (the "Agreement").

                              PRELIMINARY STATEMENT

          The Depositor intends to sell pass-through certificates (collectively,
the "Certificates"), to be issued hereunder in multiple Classes, which in the
aggregate will evidence the entire beneficial ownership interest in the Trust
Fund created hereunder. The Certificates will consist of eighteen Classes of
Certificates, designated as (i) the Class A-1A, Class A-1B, Class A-2, Class
A-3, Class A-4, Class A-5 and Class A-6 Certificates, (ii) the Class M-1, Class
M-2, Class M-3, Class M-4, Class M-5 and Class M-6 Certificates, (iii) the Class
B-1 and Class B-2 Certificates, (iv) the Class CE Certificates, (v) the Class P
Certificates and (vi) the Class R Certificate.

                                     REMIC 1

          As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the Mortgage Loans and certain other
related assets subject to this Agreement (but exclusive of the Yield Maintenance
Agreement, the Reserve Account, the Cap Carryover Amounts and the Servicer
Prepayment Charge Payment Amounts) as a real estate mortgage investment conduit
(a "REMIC") for federal income tax purposes, and such segregated pool of assets
will be designated as "REMIC 1." The Class R-1 Interest will represent the sole
class of "residual interests" in REMIC 1 for purposes of the REMIC Provisions.
The following table irrevocably sets forth the designation, the Uncertificated
REMIC 1 Pass-Through Rate, the initial Uncertificated Principal Balance, and
solely for purposes of satisfying Treasury Regulations Section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for each of the REMIC 1
Regular Interests. None of the REMIC 1 Regular Interests will be certificated.

<TABLE>

======================================================================================
                 Uncertificated
              REMIC Pass-Through    Initial Uncertificated    Latest Possible Maturity
Designation          Rate                 Balance                     Date(1)
--------------------------------------------------------------------------------------

   LT1AA          Variable(2)           801,796,864.51              May 25, 2035
--------------------------------------------------------------------------------------
  LT1A1A          Variable(2)             1,036,380.00              May 25, 2035
--------------------------------------------------------------------------------------
  LT1A1B          Variable(2)             1,000,000.00              May 25, 2035
--------------------------------------------------------------------------------------
   LT1A2          Variable(2)             2,066,690.00              May 25, 2035
--------------------------------------------------------------------------------------
   LT1A3          Variable(2)               424,060.00              May 25, 2035
--------------------------------------------------------------------------------------
   LT1A4          Variable(2)             1,658,050.00              May 25, 2035
--------------------------------------------------------------------------------------
   LT1A5          Variable(2)               522,910.00              May 25, 2035
--------------------------------------------------------------------------------------
   LT1A6          Variable(2)               745,340.00              May 25, 2035
--------------------------------------------------------------------------------------
   LT1M1          Variable(2)               368,180.00              May 25, 2035
--------------------------------------------------------------------------------------
   LT1M2          Variable(2)               134,990.00              May 25, 2035
--------------------------------------------------------------------------------------
   LT1M3          Variable(2)                32,730.00              May 25, 2035
--------------------------------------------------------------------------------------
   LT1M4          Variable(2)                28,630.00              May 25, 2035
--------------------------------------------------------------------------------------
   LT1M5          Variable(2)                28,640.00              May 25, 2035
--------------------------------------------------------------------------------------
   LT1M6          Variable(2)                32,730.00              May 25, 2035
--------------------------------------------------------------------------------------
   LT1B1          Variable(2)                32,720.00              May 25, 2035
--------------------------------------------------------------------------------------
   LT1B2          Variable(2)                36,820.00              May 25, 2035
--------------------------------------------------------------------------------------
   LT1ZZ          Variable(2)             8,214,331.32              May 25, 2035
--------------------------------------------------------------------------------------
   LT1P           Variable(2)                   100.00              May 25, 2035
======================================================================================
</TABLE>

(1)  Solely for purposes of Treasury Regulations Section 1.860G-1(a)(4)(iii),
     the Distribution Date in the month following the maturity date for the
     Mortgage Loan with the latest maturity date has been designated as the
     "latest possible maturity date" for each REMIC 1 Regular Interest.

(2)  Calculated in accordance with the definition of "Uncertificated REMIC 1
     Pass-Through Rate" herein.

          The foregoing REMIC structure is intended to cause all the cash from
the Mortgage Loans to flow through REMIC 2 as cash flow on a Regular
Certificate, without creating any shortfall, actual or potential (other than for
losses), to any Regular Certificate. To the extent that the structure is
believed to diverge from such intention, the party identifying such ambiguity or
drafting error shall notify the other parties hereto, and the parties hereto
shall attempt to resolve such ambiguity or drafting error in accordance with
Section 11.01 herein.

                                      -2-

                                     REMIC 2

          As provided herein, the Trustee shall make an election to treat the
segregated pool of assets consisting of the REMIC 1 Regular Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC 2." The Class R-2 Interest represents the sole class of
"residual interests" in REMIC 2 for purposes of the REMIC Provisions.

          The following table sets forth (or describes) the Class designation,
Certificate Interest Rate and Original Class Certificate Principal Balance for
each Class of Certificates comprising the interests in the Trust Fund created
hereunder:

==========================================================================
            Original Class
        Certificate Principal    Certificate Interest      Assumed Final
Class          Balance                   Rate           Maturity Dates(18)
--------------------------------------------------------------------------
A-1A         $103,638,000                (1)             January 25, 2019
--------------------------------------------------------------------------
A-1B         $100,000,000        4.250% per annum (2)    January 25, 2019
--------------------------------------------------------------------------
A-2          $206,669,000        4.300% per annum (3)     August 25, 2027
--------------------------------------------------------------------------
A-3          $ 42,406,000        4.420% per annum (4)     March 25, 2029
--------------------------------------------------------------------------
A-4          $165,805,000        5.010% per annum (5)    January 25, 2034
--------------------------------------------------------------------------
A-5          $ 52,291,000        5.320% per annum (6)     March 25, 2035
--------------------------------------------------------------------------
A-6          $ 74,534,000        4.780% per annum (7)    January 25, 2035
--------------------------------------------------------------------------
M-1          $ 36,818,000        5.240% per annum (8)    November 25, 2034
--------------------------------------------------------------------------
M-2          $ 13,499,000        5.440% per annum (9)      July 25, 2034
--------------------------------------------------------------------------
M-3          $  3,273,000       5.740% per annum (10)    February 25, 2034
--------------------------------------------------------------------------
M-4          $  2,863,000       5.750% per annum (11)    November 25, 2033
--------------------------------------------------------------------------
M-5          $  2,864,000       5.750% per annum (12)     August 25, 2033
--------------------------------------------------------------------------
M-6          $  3,273,000       5.750% per annum (13)     April 25, 2033
--------------------------------------------------------------------------
B-1          $  3,272,000       5.750% per annum (14)      July 25, 2032
--------------------------------------------------------------------------
B-2          $  3,682,000       5.750% per annum (15)    February 25, 2031
--------------------------------------------------------------------------
CE                   (16)               (16)                   N/A
--------------------------------------------------------------------------

                                       -3-

=========================================================================
            Original Class
        Certificate Principal   Certificate Interest     Assumed Final
Class         Balance                    Rate          Maturity Dates(18)
-------------------------------------------------------------------------
P(17)          $100.00                   N/A                   N/A
-------------------------------------------------------------------------
R                N/A                     N/A                   N/A
=========================================================================

(1)  Interest will accrue on the Class A-1A Certificates during each Interest
     Accrual Period at a rate equal to the lesser of: (i) the Class A-1
     Pass-Through Rate and (ii) the Pool Cap for such Distribution Date.

(2)  Interest will accrue on the Class A-1B Certificates at the indicated fixed
     rate (increased to 4.750% per annum for Interest Accrual Periods relating
     to Distribution Dates after the Optional Termination Date) subject to the
     Pool Cap for such Distribution Date.

(3)  Interest will accrue on the Class A-2 Certificates at the indicated fixed
     rate (increased to 4.800% per annum for Interest Accrual Periods relating
     to Distribution Dates after the Optional Termination Date) subject to the
     Pool Cap for such Distribution Date.

(4)  Interest will accrue on the Class A-3 Certificates at the indicated fixed
     rate (increased to 4.920% per annum for Interest Accrual Periods relating
     to Distribution Dates after the Optional Termination Date) subject to the
     Pool Cap for such Distribution Date.

(5)  Interest will accrue on the Class A-4 Certificates at the indicated fixed
     rate (increased to 5.510% per annum for Interest Accrual Periods relating
     to Distribution Dates after the Optional Termination Date) subject to the
     Pool Cap for such Distribution Date.

(6)  Interest will accrue on the Class A-5 Certificates at the indicated fixed
     rate (increased to 5.820% per annum for Interest Accrual Periods relating
     to Distribution Dates after the Optional Termination Date) subject to the
     Pool Cap for such Distribution Date.

(7)  Interest will accrue on the Class A-6 Certificates at the indicated fixed
     rate (increased to 5.280% per annum for Interest Accrual Periods relating
     to Distribution Dates after the Optional Termination Date) subject to the
     Pool Cap for such Distribution Date.

(8)  Interest will accrue on the Class M-1 Certificates at the indicated fixed
     rate (increased to 5.740% per annum for Interest Accrual Periods relating
     to Distribution Dates after the Optional Termination Date) subject to the
     Pool Cap for such Distribution Date.

(9)  Interest will accrue on the Class M-2 Certificates at the indicated fixed
     rate (increased to 5.940% per annum for Interest Accrual Periods relating
     to Distribution Dates after the Optional Termination Date) subject to the
     Pool Cap for such Distribution Date.

(10) Interest will accrue on the Class M-3 Certificates at the indicated fixed
     rate (increased to 6.240% per annum for Interest Accrual Periods relating
     to Distribution Dates after the Optional Termination Date) subject to the
     Pool Cap for such Distribution Date.

(11) Interest will accrue on the Class M-4 Certificates at the indicated fixed
     rate (increased to 6.250% per annum for Interest Accrual Periods relating
     to Distribution Dates after the Optional Termination Date) subject to the
     Pool Cap for such Distribution Date.

(12) Interest will accrue on the Class M-5 Certificates at the indicated fixed
     rate (increased to 6.250% per annum for Interest Accrual Periods relating
     to Distribution Dates after the Optional Termination Date) subject to the
     Pool Cap for such Distribution Date.

(13) Interest will accrue on the Class M-6 Certificates at the indicated fixed
     rate (increased to 6.250% per annum for Interest Accrual Periods relating
     to Distribution Dates after the Optional Termination Date) subject to the
     Pool Cap for such Distribution Date.

(14) Interest will accrue on the Class B-1 Certificates at the indicated fixed
     rate (increased to 6.250% per annum for Interest Accrual Periods relating
     to Distribution Dates after the Optional Termination Date) subject to the
     Pool Cap for such Distribution Date.

(15) Interest will accrue on the Class B-2 Certificates at the indicated fixed
     rate (increased to 6.250% per annum for Interest Accrual Periods relating
     to Distribution Dates after the Optional Termination Date) subject to the
     Pool Cap for such Distribution Date.

(16) The Class CE Certificates (i) will have an Original Class Certificate
     Principal Balance equal to the Initial Overcollateralization Amount and
     (ii) will bear interest at its Pass-Through Rate on the Notional Amount of
     the Class CE Certificates.

(17) The Class P Certificate will not bear interest.

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

          As of the Cut-off Date, the Mortgage Loans had an aggregate scheduled
Principal Balance equal to $818,160,165.83.

                                       -4-

                                    ARTICLE I

                                   DEFINITIONS

          Section 1.01 Defined Terms.

          Whenever used in this Agreement or in the Preliminary Statement, the
following words and phrases, unless the context otherwise requires, shall have
the meanings specified in this Article. Interest on all Classes of REMIC 1
Regular Interests and the Fixed-Rate Certificates will be calculated on the
basis of a 360-day year consisting of twelve 30-day months. Interest on the
Class A-1A Certificates will be calculated on the basis of the actual number of
days in the related Interest Accrual Period and a 360-day year.

          "1933 Act": The Securities Act of 1933, as amended.

          "60+ Day Delinquent Loan": Each Mortgage Loan (including each Mortgage
Loan in foreclosure and each Mortgage Loan for which the Mortgagor has filed for
bankruptcy after the Closing Date) with respect to which any portion of a
Monthly Payment is, as of the last day of the prior Collection Period, two
months or more past due (measured under the OTS delinquency calculation
methodology) and each Mortgage Loan relating to an REO Property.

          "Account": Any of the Collection Account, the Distribution Account,
the Reserve Account or the Escrow Account.

          "Accrued Certificate Interest": With respect to each Distribution Date
and each Class of Class A, Class M and Class B Certificates, an amount equal to
the interest accrued at the Certificate Interest Rate of such Class during the
related Interest Accrual Period on the Certificate Principal Balance of such
Class of Certificates, reduced by such Class' Interest Percentage of Prepayment
Interest Shortfalls (not covered by Compensating Interest) and Relief Act
Interest Shortfalls for such Distribution Date allocated to such class pursuant
to Section 4.01.

          "Advance": As to any Mortgage Loan, any advance made by the Servicer
in respect of any Distribution Date pursuant to Section 4.07.

          "Adverse REMIC Event": As defined in Section 9.01(f) hereof.

          "Affiliate": With respect to any Person, any other Person controlling,
controlled by or under common control with such Person. For purposes of this
definition, "control" means the power to direct the management and policies of a
Person, directly or indirectly, whether through ownership of voting securities,
by contract or otherwise and "controlling" and "controlled" shall have meanings
correlative to the foregoing.

          "Aggregate Overcollateralization Release Amount": With respect to any
Distribution Date, the lesser of (i) the Principal Remittance Amount and (ii)
the Overcollateralization Release Amount.

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

                                      -5-

          "Applicable Regulations": As to any Mortgage Loan, all federal, state
and local laws, statutes, rules and regulations applicable thereto.

          "Applied Realized Loss Amount": With respect to each Distribution
Date, the excess, if any, of (a) the aggregate of the Certificate Principal
Balances of the Class A, Class M, Class B and Class P Certificates (after giving
effect to the distribution of the Principal Distribution Amount on such
Distribution Date and any increase in any Certificate Principal Balance as a
result of Subsequent Recoveries) over (b) the Pool Balance as of the end of the
related Collection Period.

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

          "Assignment, Assumption and Recognition Agreement": The Assignment,
Assumption and Recognition Agreement, dated June 7, 2005, among the Depositor,
the Seller and the Originator.

          "Assumed Final Maturity Date": As to each Class of Certificates, the
date set forth as such in the Preliminary Statement.

          "Available Funds": As to any Distribution Date, an amount equal to the
excess of (i) the sum of (a) the aggregate of the Monthly Payments due during
the related Collection Period and received on or prior to the related
Determination Date by the Servicer, (b) Liquidation Proceeds, Insurance
Proceeds, Condemnation Proceeds, Principal Prepayments, the Purchase Price for
any repurchased Mortgage Loan, the Termination Price with respect to the
termination of the Trust pursuant to Section 10.01 hereof and other unscheduled
recoveries of principal and interest (excluding Prepayment Charges, Servicer
Prepayment Charge Payment Amounts and Prepayment Interest Excess) in respect of
the Mortgage Loans during the related Prepayment Period, (c) the aggregate of
any amounts received in respect of an REO Property deposited in the Collection
Account for such Distribution Date, (d) any Compensating Interest for such
Distribution Date, (e) the aggregate of any Advances made by the Servicer for
such Distribution Date and (f) any Reimbursement Amount or Subsequent Recovery
deposited into the Collection Account during the related Prepayment Period over
(ii) the sum of (a) amounts reimbursable or payable to the Servicer pursuant to
Sections 3.05 or 6.03, (b) amounts reimbursable or payable to the Trustee
pursuant to Section 8.05 or Section 9.01(c), (c) Stayed Funds, (d) the Servicing
Fee and (e) amounts deposited in the Collection Account or the Distribution
Account, as the case may be, in error.

          "Balloon Mortgage Loan": Each of the Mortgage Loans having an original
term to maturity that is shorter than the related amortization term.

          "Bankruptcy Code": Title 11 of the United States Code, as amended.

          "Book-Entry Certificates": Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the ownership of which
is reflected on the books of the

                                      -6-

Depository or on the books of a Person maintaining an account with the
Depository (directly, as a "Depository Participant," or indirectly, as an
indirect participant in accordance with the rules of the Depository and as
described in Section 5.02 hereof). On the Closing Date, the Class A-1A, Class
A-1B, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class M-1, Class
M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1 and Class B-2
Certificates shall be Book-Entry Certificates.

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

          "Cap Carryover Amount": If on any Distribution Date, the Accrued
Certificate Interest for the Class A-1A Certificates is based upon the Pool Cap,
the excess of (i) the amount of interest such Certificates would have been
entitled to receive on such Distribution Date based on the related Pass-Through
Rate, over (ii) the amount of interest such Certificates received on such
Distribution Date based on the Pool Cap, together with the unpaid portion of any
such excess from prior Distribution Dates (and interest accrued thereon at the
then applicable Pass-Through Rate on such Class of Certificates).

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

          "Certificate Custodian": Initially, Deutsche Bank National Trust
Company; thereafter any other Certificate Custodian acceptable to the Depository
and selected by the Trustee.

          "Certificate Interest Rate": With respect to each Distribution Date
during the Interest Accrual Period and (a) the Class A-1A Certificates, a per
annum rate equal to the lesser of (i) the related Pass-Through Rate and (ii) the
Pool Cap for such Distribution Date, (b) each Class of Fixed-Rate Certificates,
a per annum rate equal to the lesser of (i) the related Fixed Rate and (ii) the
Pool Cap for such Distribution Date and (c) the Class CE Certificates, the
related Pass-Through Rate.

          "Certificate Owner": With respect to each Book-Entry Certificate, any
beneficial owner thereof.

          "Certificate Principal Balance": With respect to any Class of
Certificates (other than the Class CE and Class R Certificates) and any
Distribution Date, the Original Class Certificate Principal Balance (a) reduced
by the sum of (i) all amounts actually distributed in respect of principal of
such Class on all prior Distribution Dates and (ii) Applied Realized Loss
Amounts allocated thereto for previous Distribution Dates and (b) increased by
any Subsequent Recoveries allocated to such Class for previous Distribution
Dates. The Class R Certificates do not have a Certificate Principal Balance.
With respect to the Class CE Certificate and any Distribution Date, the excess,
if any, of the then aggregate Uncertificated Principal Balances of the REMIC 1
Regular Interests over the aggregate Certificate Principal Balance of the Class
A Certificates, the Class M Certificates, the Class B Certificates and the Class
P Certificates then outstanding. With respect to any Regular Certificate of a
Class and any Distribution Date, the

                                      -7-

portion of the Certificate Principal Balance of such Class represented by such
Regular Certificate equal to the product of the Percentage Interest evidenced by
such Regular Certificate and the Certificate Principal Balance of such Class.

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

          "Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in the Certificate Register, except that a
Disqualified Organization or non-U.S. Person shall not be a Holder of the Class
R Certificate for any purpose hereof.

          "Certification": As defined in Section 3.31(b) hereof.

          "Class": Collectively, Certificates or REMIC 1 Regular Interests which
have the same priority of payment and bear the same class designation and the
form of which is identical except for variation in the Percentage Interest
evidenced thereby.

          "Class A Certificate": Any one of the Certificates with an "A"
designated on the face thereof substantially in the form annexed hereto as
Exhibits A-1A, A-1B, A-2, A-3, A-4, A-5 and A-6, executed by the Trustee on
behalf of the Trust and authenticated and delivered by the Certificate
Registrar, representing the right to distributions as set forth herein and
therein and representing a regular interest in REMIC 2 for purposes of the REMIC
Provisions.

          "Class A Certificateholders": Collectively, the Holders of the Class A
Certificates.

          "Class A-1A Certificate Margin": For each Distribution Date (i) on or
prior to the Optional Termination Date, 0.120% per annum, and (ii) following the
Optional Termination Date, 0.240% per annum.

          "Class A-1A Pass-Through Rate": For each Distribution Date, a rate per
annum equal to the lesser of (a) One-Month LIBOR as of the related LIBOR
Determination Date, plus the Class A-1A Certificate Margin and (b) the Maximum
Rate Cap.

          "Class A-1B Fixed Rate": A fixed coupon rate of 4.25% per annum (or
4.75% for Interest Accrual Periods relating to Distribution Dates after the
Optional Termination Date).

          "Class A-2 Fixed Rate": A fixed coupon rate of 4.30% per annum (or
4.80% for Interest Accrual Periods relating to Distribution Dates after the
Optional Termination Date).

          "Class A-3 Fixed Rate": A fixed coupon rate of 4.42% per annum (or
4.92% for Interest Accrual Periods relating to Distribution Dates after the
Optional Termination Date).

          "Class A-4 Fixed Rate": A fixed coupon rate of 5.01% per annum (or
5.51% for Interest Accrual Periods relating to Distribution Dates after the
Optional Termination Date).

          "Class A-5 Fixed Rate": A fixed coupon rate of 5.32% per annum (or
5.82% for Interest Accrual Periods relating to Distribution Dates after the
Optional Termination Date).

                                      -8-

          "Class A-6 Fixed Rate": A fixed coupon rate of 4.78% per annum (or
5.28% for Interest Accrual Periods relating to Distribution Dates after the
Optional Termination Date).

          "Class A-6 Lockout Certificate Percentage": For the Class A-6
Certificates and any Distribution Date, the percentage equal to the Certificate
Principal Balance of the Class A-6 Certificates immediately prior to such
Distribution Date divided by the aggregate Certificate Principal Balance of the
Class A Certificates immediately prior to such Distribution Date.

          "Class A-6 Lockout Distribution Percentage": For the Class A-6
Certificates and any Distribution Date, the product of (a) the Class A-6 Lockout
Certificate Percentage for such Distribution Date and (b) the applicable
percentage indicated below:

DISTRIBUTION DATE OCCURRING IN
------------------------------
July 2005 through June 2008        0%

July 2008 through June 2010       45%

July 2010 through June 2011       80%

July 2011 through June 2012      100%

July 2012 and thereafter         300%

          "Class B Certificate": Any one of the Certificates with a "B"
designated on the face thereof substantially in the form annexed hereto as
Exhibit B-7 and Exhibit B-8, executed by the Trustee on behalf of the Trust and
authenticated and delivered by the Certificate Registrar, representing the right
to distributions as set forth herein and therein.

          "Class B Certificateholders": Collectively, the Holders of the Class B
Certificates.

          "Class B-1 Fixed Rate": A fixed coupon rate of 5.750% per annum (or
6.250% for Interest Accrual Periods relating to Distribution Dates after the
Optional Termination Date).

          "Class B-1 Principal Distribution Amount": As of any Distribution Date
on or after the Stepdown Date and as long as a Trigger Event is not in effect,
the excess of (x) the sum of (i) the sum of the Certificate Principal Balances
of the Class A Certificates (after taking into account the payment of the Senior
Principal Distribution Amount on such Distribution Date), (ii) the Certificate
Principal Balance of the Class M-1 Certificates (after taking into account the
payment of the Class M-1 Principal Distribution Amount on such Distribution
Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates
(after taking into account the payment of the Class M-2 Principal Distribution
Amount on such Distribution Date), (iv) the Certificate Principal Balance of the
Class M-3 Certificates (after taking into account the payment of the Class M-3
Principal Distribution Amount on such Distribution Date), (v) the Certificate
Principal Balance of the Class M-4 Certificates (after taking into account the
payment of the Class M-4 Principal Distribution Amount on such Distribution
Date), (vi) the Certificate Principal Balance of the Class M-5 Certificates
(after taking into account the payment of the Class M-5 Principal Distribution
Amount on such Distribution Date), (vii) the Certificate Principal Balance of
the Class M-6 Certificates (after taking into account the payment of the Class
M-6 Principal Distribution Amount on such Distribution Date) and (viii) the
Certificate Principal Balance of

                                      -9-

the Class B-1 Certificates immediately prior to such Distribution Date over (y)
the lesser of (A) the product of (i) 98.30% and (ii) the Pool Balance as of the
last day of the related Collection Period and (B) the Pool Balance as of the
last day of the related Collection Period minus the product of 0.40% and the
Pool Balance as of the Cut-off Date.

          "Class B-1 Realized Loss Amortization Amount": As to the Class B-1
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the B-1 Certificates as of such Distribution Date and
(y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum of
the amounts described in Section 4.02(b)(i) through (xxii) hereof, in each case
for such Distribution Date.

          "Class B-2 Fixed Rate": A fixed coupon rate of 5.500% per annum (or
6.000% for Interest Accrual Periods relating to Distribution Dates after the
Optional Termination Date).

          "Class B-2 Principal Distribution Amount": As of any Distribution Date
on or after the Stepdown Date and as long as a Trigger Event is not in effect,
the excess of (x) the sum of (i) the sum of the Certificate Principal Balances
of the Class A Certificates (after taking into account the payment of the Senior
Principal Distribution Amount on such Distribution Date), (ii) the Certificate
Principal Balance of the Class M-1 Certificates (after taking into account the
payment of the Class M-1 Principal Distribution Amount on such Distribution
Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates
(after taking into account the payment of the Class M-2 Principal Distribution
Amount on such Distribution Date), (iv) the Certificate Principal Balance of the
Class M-3 Certificates (after taking into account the payment of the Class M-3
Principal Distribution Amount on such Distribution Date), (v) the Certificate
Principal Balance of the Class M-4 Certificates (after taking into account the
payment of the Class M-4 Principal Distribution Amount on such Distribution
Date), (vi) the Certificate Principal Balance of the Class M-5 Certificates
(after taking into account the payment of the Class M-5 Principal Distribution
Amount on such Distribution Date), (vii) the Certificate Principal Balance of
the Class M-6 Certificates (after taking into account the payment of the Class
M-6 Principal Distribution Amount on such Distribution Date), (viii) the
Certificate Principal Balance of the Class B-1 Certificates (after taking into
account the payment of the Class B-1 Principal Distribution Amount on such
Distribution Date) and (ix) the Certificate Principal Balance of the Class B-2
Certificates immediately prior to such Distribution Date over (y) the lesser of
(A) the product of (i) 99.20% and (ii) the Pool Balance as of the last day of
the related Collection Period and (B) the Pool Balance as of the last day of the
related Collection Period minus the product of 0.40% and the Pool Balance as of
the Cut-off Date.

          "Class B-2 Realized Loss Amortization Amount": As to the Class B-2
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the B-2 Certificates as of such Distribution Date and
(y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum of
the amounts described in Section 4.02(b)(i) through (xxv) hereof, in each case
for such Distribution Date.

          "Class CE Certificates": Any one of the Class CE Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit C-1, executed by the Trustee on behalf of the Trust and authenticated
and delivered by the Certificate Registrar, representing

                                      -10-

the right to distributions as set forth herein and therein and representing a
regular interest in REMIC 2 for purposes of the REMIC Provisions.

          "Class CE Distributable Amount": With respect to any Distribution
Date, the sum of (i) the interest accrued on such Class CE Certificate at its
Pass-Through Rate calculated on its Notional Amount less the amount (without
duplication) of Cap Carryover Amounts paid pursuant to Section 4.02(b)(xxviii),
(ii) any remaining Aggregate Overcollateralization Release Amounts and (iii) the
aggregate of amounts remaining in the Reserve Account after the distributions in
Section 3.04(g)(i)(A), as specified in Section 3.04(g)(i)(B).

          "Class M Certificate": Any one of the Certificates with an "M"
designated on the face thereof substantially in the form annexed hereto as
Exhibit B-1, Exhibit B-2, Exhibit B-3, Exhibit B-4, Exhibit B-5 and Exhibit B-6,
executed by the Trustee on behalf of the Trust and authenticated and delivered
by the Certificate Registrar, representing the right to distributions as set
forth herein and therein and representing a regular interest in REMIC 2 for
purposes of the REMIC Provisions.

          "Class M Certificateholders": Collectively, the Holders of the Class M
Certificates.

          "Class M-1 Fixed Rate": A fixed coupon rate of 5.240% per annum (or
5.940% for Interest Accrual Periods relating to Distribution Dates after the
Optional Termination Date).

          "Class M-1 Principal Distribution Amount": As of any Distribution Date
on or after the Stepdown Date and as long as a Trigger Event is not in effect,
the excess of (x) the sum of (i) the sum of the Certificate Principal Balances
of the Class A Certificates (after taking into account the payment of the Senior
Principal Distribution Amount on such Distribution Date) and (ii) the
Certificate Principal Balance of the Class M-1 Certificates immediately prior to
such Distribution Date over (y) the lesser of (A) the product of (i) 91.20% and
(ii) the Pool Balance as of the last day of the related Collection Period and
(B) the Pool Balance as of the last day of the related Collection Period minus
the product of 0.40% and the Pool Balance as of the Cut-off Date.

          "Class M-1 Realized Loss Amortization Amount": As to the Class M-1
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-1 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (iv) hereof, in each case
for such Distribution Date.

          "Class M-2 Fixed Rate": A fixed coupon rate of 5.440% per annum (or
5.940% for Interest Accrual Periods relating to Distribution Dates after the
Optional Termination Date).

          "Class M-2 Principal Distribution Amount": As of any Distribution Date
on or after the Stepdown Date and as long as a Trigger Event is not in effect,
the excess of (x) the sum of (i) the sum of the Certificate Principal Balances
of the Class A Certificates (after taking into account the payment of the Senior
Principal Distribution Amount on such Distribution Date), (ii) the Certificate
Principal Balance of the Class M-1 Certificates (after taking into account the
payment of the Class M-1 Principal Distribution Amount on such Distribution
Date) and (iii) the

                                      -11-

Certificate Principal Balance of the Class M-2 Certificates immediately prior to
such Distribution Date over (y) the lesser of (A) the product of (i) 94.50% and
(ii) the Pool Balance as of the last day of the related Collection Period and
(B) the Pool Balance as of the last day of the related Collection Period minus
the product of 0.40% and the Pool Balance as of the Cut-off Date.

          "Class M-2 Realized Loss Amortization Amount": As to the Class M-2
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-2 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (vii) hereof, in each
case for such Distribution Date.

          "Class M-3 Fixed Rate": A fixed coupon rate of 5.740% per annum (or
6.240% for Interest Accrual Periods relating to Distribution Dates after the
Optional Termination Date).

          "Class M-3 Principal Distribution Amount": As of any Distribution Date
on or after the Stepdown Date and as long as a Trigger Event is not in effect,
the excess of (x) the sum of (i) the sum of the Certificate Principal Balances
of the Class A Certificates (after taking into account the payment of the Senior
Principal Distribution Amount on such Distribution Date), (ii) the Certificate
Principal Balance of the Class M-1 Certificates (after taking into account the
payment of the Class M-1 Principal Distribution Amount on such Distribution
Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates
(after taking into account the payment of the Class M-2 Principal Distribution
Amount on such Distribution Date), and (iv) the Certificate Principal Balance of
the Class M-3 Certificates immediately prior to such Distribution Date over (y)
the lesser of (A) the product of (i) 95.30% and (ii) the Pool Balance as of the
last day of the related Collection Period and (B) the Pool Balance as of the
last day of the related Collection Period minus the product of 0.40% and the
Pool Balance as of the Cut-off Date.

          "Class M-3 Realized Loss Amortization Amount": As to the Class M-3
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-3 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (x) hereof, in each case
for such Distribution Date.

          "Class M-4 Fixed Rate": A fixed coupon rate of 5.750% per annum (or
6.250% for Interest Accrual Periods relating to Distribution Dates after the
Optional Termination Date).

          "Class M-4 Principal Distribution Amount": As of any Distribution Date
on or after the Stepdown Date and as long as a Trigger Event is not in effect,
the excess of (x) the sum of (i) the sum of the Certificate Principal Balances
of the Class A Certificates (after taking into account the payment of the Senior
Principal Distribution Amount on such Distribution Date), (ii) the Certificate
Principal Balance of the Class M-1 Certificates (after taking into account the
payment of the Class M-1 Principal Distribution Amount on such Distribution
Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates
(after taking into account the payment of the Class M-2 Principal Distribution
Amount on such Distribution Date), (iv) the Certificate Principal Balance of the
Class M-3 Certificates (after taking into account the payment of the Class M-3
Principal Distribution Amount on such Distribution Date) and (v) the Certificate
Principal Balance of the Class M-4 Certificates immediately prior to such
Distribution Date over

                                      -12-

(y) the lesser of (A) the product of (i) 96.00% and (ii) the Pool Balance as of
the last day of the related Collection Period and (B) the Pool Balance as of the
last day of the related Collection Period minus the product of 0.40% and the
Pool Balance as of the Cut-off Date.

          "Class M-4 Realized Loss Amortization Amount": As to the Class M-4
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-4 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (xiii) hereof, in each
case for such Distribution Date.

          "Class M-5 Fixed Rate": A fixed coupon rate of 5.750% per annum (or
6.250% for Interest Accrual Periods relating to Distribution Dates after the
Optional Termination Date).

          "Class M-5 Principal Distribution Amount": As of any Distribution Date
on or after the Stepdown Date and as long as a Trigger Event is not in effect,
the excess of (x) the sum of (i) the sum of the Certificate Principal Balances
of the Class A Certificates (after taking into account the payment of the Senior
Principal Distribution Amount on such Distribution Date), (ii) the Certificate
Principal Balance of the Class M-1 Certificates (after taking into account the
payment of the Class M-1 Principal Distribution Amount on such Distribution
Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates
(after taking into account the payment of the Class M-2 Principal Distribution
Amount on such Distribution Date), (iv) the Certificate Principal Balance of the
Class M-3 Certificates (after taking into account the payment of the Class M-3
Principal Distribution Amount on such Distribution Date), (v) the Certificate
Principal Balance of the Class M-4 Certificates (after taking into account the
payment of the Class M-4 Principal Distribution Amount on such Distribution
Date) and (vi) the Certificate Principal Balance of the Class M-5 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 96.70% and (ii) the Pool Balance as of the last day of the
related Collection Period and (B) the Pool Balance as of the last day of the
related Collection Period minus the product of 0.40% and the Pool Balance as of
the Cut-off Date.

          "Class M-5 Realized Loss Amortization Amount": As to the Class M-5
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-5 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (xvi) hereof, in each
case for such Distribution Date.

          "Class M-6 Fixed Rate": A fixed coupon rate of 5.750% per annum (or
6.250% for Interest Accrual Periods relating to Distribution Dates after the
Optional Termination Date).

          "Class M-6 Principal Distribution Amount": As of any Distribution Date
on or after the Stepdown Date and as long as a Trigger Event is not in effect,
the excess of (x) the sum of (i) the sum of the Certificate Principal Balances
of the Class A Certificates (after taking into account the payment of the Senior
Principal Distribution Amount on such Distribution Date), (ii) the Certificate
Principal Balance of the Class M-1 Certificates (after taking into account the
payment of the Class M-1 Principal Distribution Amount on such Distribution
Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates
(after taking into account the payment of the Class M-2 Principal Distribution
Amount on such Distribution Date), (iv) the Certificate

                                      -13-

Principal Balance of the Class M-3 Certificates (after taking into account the
payment of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date), (vi) the Certificate Principal Balance of the
Class M-5 Certificates (after taking into account the payment of the Class M-5
Principal Distribution Amount on such Distribution Date) and (vii) the
Certificate Principal Balance of the Class M-6 Certificates immediately prior to
such Distribution Date over (y) the lesser of (A) the product of (i) 97.50% and
(ii) the Pool Balance as of the last day of the related Collection Period and
(B) the Pool Balance as of the last day of the related Collection Period minus
the product of 0.40% and the Pool Balance as of the Cut-off Date.

          "Class M-6 Realized Loss Amortization Amount": As to the Class M-6
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-6 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (xix) hereof, in each
case for such Distribution Date.

          "Class P Certificate": Any one of the Certificates with a "P"
designated on the face thereof substantially in the form annexed hereto as
Exhibit C-2, executed by the Trustee on behalf of the Trust and authenticated
and delivered by the Certificate Registrar, representing the right to
distributions as set forth herein and therein and representing a regular
interest in REMIC 2 for purposes of the REMIC Provisions.

          "Class R Certificate": The Class R Certificate executed by the Trustee
on behalf of the Trust, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit C-3 and
evidencing the ownership of the Residual Interest in each of REMIC 1 and REMIC
2. The Class R Certificate represents the ownership of the Class R-1 Interest
and the Class R-2 Interest.

          "Class R-1 Interest": The uncertificated Residual Interest in REMIC 1
for purposes of the REMIC Provisions.

          "Class R-2 Interest": The uncertificated Residual Interest in REMIC 2
for purposes of the REMIC Provisions.

          "Closing Date": June 7, 2005.

          "Code": The Internal Revenue Code of 1986, as it may be amended from
time to time.

          "Collection Account": The account or accounts created and maintained
by the Servicer pursuant to Section 3.04 shall be entitled "Collection Account,
Ameriquest Mortgage Company, as Servicer for the Trust under the Pooling and
Servicing Agreement dated as of June 1, 2005, among Asset Backed Funding
Corporation, as Depositor, Ameriquest Mortgage Company, as Servicer, and
Deutsche Bank National Trust Company, as Trustee, in trust for registered
Holders of ABFC 2005-AQ1 Trust, Asset-Backed Certificates, Series 2005-AQ1."

                                      -14-

          "Collection Period": With respect to any Distribution Date, the period
from the second day of the calendar month preceding the month in which such
Distribution Date occurs through the first day of the month in which such
Distribution Date occurs.

          "Compensating Interest": As defined in Section 3.23 hereof.

          "Condemnation Proceeds": All awards or settlements in respect of a
taking of a Mortgaged Property by exercise of the power of eminent domain or
condemnation.

          "Corporate Trust Office": The principal corporate trust office of the
Trustee at which at any particular time its corporate trust business in
connection with this Agreement shall be administered, which office at the date
of the execution of this instrument is located at 1761 East St. Andrew Place,
Santa Ana, California 92705-4934, Attention: Trust Administration-BA05Q1 or at
such other address as the Trustee may designate from time to time by notice to
the Certificateholders, the Depositor and the Servicer.

          "Corresponding Classes": With respect to REMIC 1 and REMIC 2, the
following Classes shall be Corresponding Classes:

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

CORRESPONDING REMIC 1 CLASSES   CORRESPONDING REMIC 2 CLASSES
-------------------------------------------------------------
LT1A1A                          Class A-1A Certificates
-------------------------------------------------------------
LT1A1B                          Class A-1B Certificates
-------------------------------------------------------------
LT1A2                           Class A-2 Certificates
-------------------------------------------------------------
LT1A3                           Class A-3 Certificates
-------------------------------------------------------------
LT1A4                           Class A-4 Certificates
-------------------------------------------------------------
LT1A5                           Class A-5 Certificates
-------------------------------------------------------------
LT1A6                           Class A-6 Certificates
-------------------------------------------------------------
LT1M1                           Class M-1 Certificates
-------------------------------------------------------------
LT1M2                           Class M-2 Certificates
-------------------------------------------------------------
LT1M3                           Class M-3 Certificates
-------------------------------------------------------------
LT1M4                           Class M-4 Certificates
-------------------------------------------------------------
LT1M5                           Class M-5 Certificates
-------------------------------------------------------------
LT1M6                           Class M-6 Certificates
-------------------------------------------------------------

                                      -15-

-------------------------------------------------------------
LT1B1                           Class B-1 Certificates
-------------------------------------------------------------
LT1B2                           Class B-2 Certificates
-------------------------------------------------------------
LT1P                            Class P Certificate
-------------------------------------------------------------

          "Cumulative Loss Percentage": With respect to any Distribution Date,
the percentage equivalent of a fraction, the numerator of which is the aggregate
of Realized Losses incurred from the Cut-off Date to the last day of the
preceding calendar month (reduced by the aggregate amount of Subsequent
Recoveries received from the Cut-off Date through the last day of the related
Due Period) and the denominator of which is the aggregate Principal Balance of
the Mortgage Loans as of the Cut-off Date.

          "Cut-off Date": June 1, 2005.

          "Cut-off Date Aggregate Principal Balance": The aggregate of the
Cut-off Date Principal Balances of the Mortgage Loans.

          "Cut-off Date Principal Balance": With respect to any Mortgage Loan,
the unpaid principal balance thereof as of the Cut-off Date after application of
funds received or advanced on or before such date.

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

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

          "Definitive Certificates": As defined in Section 5.02(c) hereof.

          "Delinquent": Any Mortgage Loan with respect to which the Monthly
Payment due on a Due Date is not made by the close of business on the next
scheduled Due Date for such Mortgage Loan.

          "Depositor": Asset Backed Funding Corporation, a Delaware corporation,
or any successor in interest.

          "Depository": The initial depository shall be The Depository Trust
Company, whose nominee is Cede & Co., or any other organization registered as a
"clearing agency" pursuant to Section 17A of the Exchange Act. The Depository
shall initially be the registered Holder of the Book-Entry Certificates. The
Depository shall at all times be a "clearing corporation" as defined in Section
8-102(3) of the Uniform Commercial Code of the State of New York.

                                      -16-

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

          "Determination Date": With respect to any Distribution Date, the 10th
day of the calendar month in which such Distribution Date occurs or, if such
10th day is not a Business Day, the Business Day immediately preceding such 10th
day.

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

          "Disqualified Organization": A "disqualified organization" under
Section 860E of the Code, which as of the Closing Date is any of: (i) the United
States, any state or political subdivision thereof, any possession of the United
States, any foreign government, any international organization, or any agency or
instrumentality of any of the foregoing, (ii) any organization (other than a
cooperative described in Section 521 of the Code) which is exempt from the tax
imposed by Chapter 1 of the Code unless such organization is subject to the tax
imposed by Section 511 of the Code, (iii) any organization described in Section
1381(a)(2)(C) of the Code, or (iv) any other Person so designated by the Trustee
based upon an Opinion of Counsel provided by nationally recognized counsel to
the Trustee that the holding of an ownership interest in the Class R Certificate
by such Person may cause the Trust Fund or any Person having an ownership
interest in any Class of Certificates (other than such Person) to incur
liability for any federal tax imposed under the Code that would not otherwise be
imposed but for the transfer of an ownership interest in the Class R Certificate
to such Person. A corporation will not be treated as an instrumentality of the
United States or of any state or political subdivision thereof if all of its
activities are subject to tax and a majority of its board of directors is not
selected by a governmental unit. The term "United States," "state" and
"international organization" shall have the meanings set forth in Section 7701
of the Code.

          "Distribution Account": The trust account or accounts created and
maintained by the Trustee pursuant to Section 3.04(b) which shall be entitled
"Distribution Account, Deutsche Bank National Trust Company, as Trustee, in
trust for the registered Holders of ABFC 2005-AQ1 Trust, Asset-Backed
Certificates, Series 2005-AQ1" and which must be an Eligible Account.

          "Distribution Date": The 25th day of any calendar month, or if such
25th day is not a Business Day, the Business Day immediately following such 25th
day, commencing in July 2005.

          "Distribution Date Statement": As defined in Section 4.06(a) hereof.

                                      -17-

          "Due Date": With respect to each Mortgage Loan and any Distribution
Date, the day of the calendar month in which such Distribution Date occurs on
which the Monthly Payment for such Mortgage Loan was due, exclusive of any grace
period.

          "Eligible Account": Any of (i) an account or accounts maintained with
a federal or state chartered depository institution or trust company the
short-term unsecured debt obligations of which (or, in the case of a depository
institution or trust company that is the principal subsidiary of a holding
company, the short-term unsecured debt obligations of such holding company) are
rated "A-1+" by S&P and "F-1+" by Fitch (or comparable ratings if S&P, and Fitch
are not the Rating Agencies) by each of the Rating Agencies at the time any
amounts are held on deposit therein, (ii) an account or accounts the deposits in
which are fully insured by the FDIC, (iii) a trust account or accounts
maintained with the trust department of a federal or state chartered depository
institution, national banking association or trust company acting in its
fiduciary capacity or (iv) an account otherwise acceptable to each Rating Agency
without reduction or withdrawal of their then current ratings of the
Certificates as evidenced by a letter from each Rating Agency to the Trustee and
the NIMS Insurer. Eligible Accounts may bear interest.

          "Eligible Investments": Any one or more of the following obligations
or securities acquired at a purchase price of not greater than par, regardless
of whether issued or managed by the Depositor, the Servicer, the NIMS Insurer,
the Trustee or any of their respective Affiliates or for which an Affiliate of
the Trustee serves as an advisor:

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

          (ii) (A) demand and time deposits in, certificates of deposit of,
     bankers' acceptances issued by or federal funds sold by any depository
     institution or trust company (including the Trustee or its agents acting in
     their respective commercial capacities) incorporated under the laws of the
     United States of America or any state thereof and subject to supervision
     and examination by federal and/or state authorities, so long as, at the
     time of such investment or contractual commitment providing for such
     investment, such depository institution or trust company or its ultimate
     parent has a short-term uninsured debt rating in one of the two highest
     available rating categories of S&P and the highest available rating
     category of Fitch and provided that each such investment has an original
     maturity of no more than 365 days and (B) any other demand or time deposit
     or deposit which is fully insured by the FDIC;

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

                                      -18-

     for the Trustee, in such a manner as to accomplish perfection of a security
     interest in the collateral by possession of certificated securities;

          (iv) securities bearing interest or sold at a discount that are issued
     by any corporation incorporated under the laws of the United States of
     America or any State thereof and that are rated by each Rating Agency 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 in its highest short-term unsecured
     debt rating available at the time of such investment;

          (vi) units of money market funds registered under the Investment
     Company Act of 1940 (including funds managed or advised by the Trustee or
     affiliates thereof) that, if rated by each Rating Agency, are rated in its
     highest rating category (if so rated by such Rating Agency); and

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

provided, 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.

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

          "ERISA-Restricted Certificates": Any of the Class B, Class CE, Class P
and Class R Certificates, and any Class of Certificates that no longer satisfies
the applicable rating requirement of Prohibited Transaction Exemption 2002-41,
67 Fed. Reg. 54487 (August 22, 2002).

          "Escrow Account": The account or accounts created and maintained
pursuant to Section 3.06.

          "Escrow Payments": The amounts constituting taxes, assessments,
mortgage insurance premiums, fire and hazard insurance premiums and other
payments required to be escrowed by the Mortgagor with the mortgagee pursuant to
a voluntary escrow agreement related to any Mortgage Loan.

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

                                      -19-

          "Exchange Act": The Securities Exchange Act of 1934, as amended.

          "Expense Fee Rate": The sum of (i) the Servicing Fee Rate and (ii) the
Trustee Fee Rate.

          "Extended Period": As defined in Section 9.04(b).

          "Extra Principal Distribution Amount": As of any Distribution Date,
the lesser of (x) the Monthly Excess Interest Amount for such Distribution Date
and (y) the Overcollateralization Deficiency for such Distribution Date.

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

          "Fidelity Bond": Shall have the meaning assigned thereto in Section
3.12.

          "Final Recovery Determination": With respect to any defaulted Mortgage
Loan or any REO Property (other than a Mortgage Loan or REO Property (i)
purchased by the Originator or the Seller pursuant to or as contemplated by
Section 2.03, (ii) purchased by the Servicer pursuant to Section 3.16 or (iii)
purchased by the NIMS Insurer, the Majority Class CE Certificateholders or the
Servicer pursuant to Section 10.01), a determination made by the Servicer that
all Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds and other
payments or recoveries which the Servicer, in its reasonable good faith
judgment, expects to be finally recoverable in respect thereof have been so
recovered. The Servicer shall maintain records, prepared by a Servicing Officer,
of each Final Recovery Determination made thereby.

          "Fitch": Fitch Ratings and its successors, and if such company shall
for any reason no longer perform the functions of a securities rating agency,
"Fitch" shall be deemed to refer to any other "nationally recognized statistical
rating organization" as set forth on the most current list of such organizations
released by the Securities and Exchange Commission.

          "Fixed Rate": With respect to each Class of Fixed-Rate Certificates,
the Class A-1B Fixed Rate, the Class A-2 Fixed Rate, the Class A-3 Fixed Rate,
the Class A-4 Fixed Rate, the Class A-5 Fixed Rate, the Class A-6 Fixed Rate,
the Class M-1 Fixed Rate, the Class M-2 Fixed Rate, the Class M-3 Fixed Rate,
the Class M-4 Fixed Rate, the Class M-5 Fixed Rate, the Class M-6 Fixed Rate,
the Class B-1 Fixed Rate and the Class B-2 Fixed Rate, as applicable.

          "Fixed-Rate Certificates": Each of the Class A-1B, Class A-2, Class
A-3, Class A-4, Class A-5, Class A-6, Class M and Class B Certificates.

          "Foreclosure Price": The amount reasonably expected to be received
from the sale of the related Mortgaged Property net of any expenses associated
with foreclosure proceedings.

          "Form 10-K": As defined in Section 3.31(a) hereof.

          "Grantor Trust": That portion of the Trust exclusive of REMIC 1 and
REMIC 2 consisting of (a) any Servicer Prepayment Charge Payment Amounts and the
right of the Class P Certificateholders to receive such Servicer Prepayment
Charge Payment Amounts, (b) the right

                                      -20-

of the Class A-1A Certificates to receive Cap Carryover Amounts, (c) the Yield
Maintenance Agreement, the Reserve Account and the beneficial interest of the
Class CE Certificates with respect thereto and (d) the obligation of the Class
CE Certificates to pay Cap Carryover Amounts.

          "Indenture": An indenture relating to the issuance of net interest
margin notes secured by the Class CE Certificates and the Class P Certificates,
which may or may not be guaranteed by the NIMS Insurer.

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

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

          "Initial Certificate Principal Balance": With respect to any
Certificate of a Class other than a Class CE or Class R Certificate, the amount
designated "Initial Certificate Principal Balance" on the face thereof.

          "Initial Overcollateralization Amount": $3,273,065.83.

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

                                      -21-

          "Interest Accrual Period": With respect to any Distribution Date and
(i) each Class of Class A-1A Certificates, the period from the preceding
Distribution Date to the day prior to the current Distribution Date and (ii)
each Class of Fixed-Rate Certificates, the Class CE Certificates and the REMIC 1
Regular Interests, the calendar month preceding the month in which the related
Distribution Date occurs.

          "Interest Carry Forward Amount": For any Class of Class A, Class M and
Class B Certificates and any Distribution Date, the sum of (a) the excess, if
any, of the Accrued Certificate Interest and any Interest Carry Forward Amount
for the prior Distribution Date, over the amount in respect of interest actually
distributed on such Class on such prior Distribution Date and (b) interest on
such excess at the applicable Certificate Interest Rate for the related Interest
Accrual Period.

          "Interest Percentage": With respect to any Class of Class A, Class M
and Class B Certificates and any Distribution Date, the ratio (expressed as a
decimal carried to six places) of the Accrued Certificate Interest for such
Class to the sum of the Accrued Certificate Interest for all Classes of Class A,
Class M and Class B Certificates, in each case with respect to such Distribution
Date, without regard to Prepayment Interest Shortfalls (not covered by
Compensating Interest payments) and Relief Act Interest Shortfalls.

          "Interest Remittance Amount": As of any Distribution Date, the sum,
without duplication, of (i) all interest due and collected or advanced with
respect to the related Collection Period on the Mortgage Loans received by the
Servicer on or prior to the Determination Date for such Distribution Date (less
(A) the Servicing Fee, (B) amounts available for reimbursement of Advances and
Servicing Advances pursuant to Section 3.05 and (C) expenses reimbursable
pursuant to Section 6.03), (ii) all Compensating Interest paid by the Servicer
on the related Distribution Date with respect to such Mortgage Loans, (iii) the
portion of any payment in connection with any Principal Prepayment (other than
any Prepayment Interest Excess), Purchase Price, Termination Price, Insurance
Proceeds or Net Liquidation Proceeds relating to interest with respect to such
Mortgage Loans received during the related Prepayment Period and (iv) the
portion of any Reimbursement Amount relating to such Mortgage Loans received
during the related Prepayment Period.

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

          "LIBOR Business Day": Any day on which banks in London, England and
The City of New York are open and conducting transactions in foreign currency
and exchange.

          "LIBOR Determination Date": With respect to the Class A-1A
Certificates, (i) for the first Distribution Date, the second LIBOR Business Day
preceding the Closing Date

                                      -22-

and (ii) for each subsequent Distribution Date, the second LIBOR Business Day
prior to the immediately preceding Distribution Date.

          "Liquidated Mortgage Loan": As to any Distribution Date, any Mortgage
Loan in respect of which the Servicer has determined, in accordance with the
servicing procedures specified herein, as of the end of the related Prepayment
Period, that all Liquidation Proceeds, Condemnation Proceeds and Insurance
Proceeds which it expects to recover with respect to the liquidation of the
Mortgage Loan or disposition of the related REO Property have been recovered.

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

          "Liquidation Report": The report with respect to a Liquidated Mortgage
Loan in such form as is agreed to by the Servicer and the Trustee listing (i)
the sale price of the related Mortgaged Property or amount of the REO
Disposition, (ii) the amount of any Realized Loss (or gain) with respect to such
Liquidated Mortgage Loan, (iii) the expenses relating to the liquidation of such
Liquidated Mortgage Loan and (iv) such other information as is agreed to by the
Servicer and the Trustee.

          "Loan-to-Value Ratio": For any Mortgage Loan, the fraction, expressed
as a percentage, the numerator of which is the Principal Balance of the Mortgage
Loan at origination the denominator of which is the Value of the related
Mortgaged Property.

          "Losses": As defined in Section 9.03.

          "Lost Note Affidavit": With respect to any Mortgage Loan as to which
the original Mortgage Note has been permanently lost or destroyed and has not
been replaced, an affidavit from the Seller certifying that the original
Mortgage Note has been lost, misplaced or destroyed (together with a copy of the
related Mortgage Note and indemnifying the Trust against any loss, cost or
liability resulting from the failure to deliver the original Mortgage Note)
substantially in the form of Exhibit H hereto.

          "Majority Certificateholders": The Holders of Certificates evidencing
at least 51% of the Voting Rights.

          "Majority Class CE Certificateholders": The Holders of Class CE
Certificates evidencing at least a 51% Percentage Interest in the Class CE
Certificates.

          "Marker Rate": With respect to the Class CE Certificates and any
Distribution Date, a per annum rate equal to two (2) times the weighted average
of the Uncertificated REMIC 1 Pass-Through Rates for REMIC 1 Regular Interest
LT1A1A, REMIC 1 Regular Interest LT1A1B, REMIC 1 Regular Interest LT1A2, REMIC 1
Regular Interest LT1A3, REMIC 1 Regular Interest LT1A4, REMIC 1 Regular Interest
LT1A5, REMIC 1 Regular Interest LT1A6,

                                      -23-

REMIC 1 Regular Interest LT1M1, REMIC 1 Regular Interest LT1M2, REMIC 1 Regular
Interest LT1M3, REMIC 1 Regular Interest LT1M4, REMIC 1 Regular Interest LT1M5,
REMIC 1 Regular Interest LT1M6, REMIC 1 Regular Interest LT1B1, REMIC 1 Regular
Interest LT1B2 and REMIC 1 Regular Interest LT1ZZ, (i) with the rate on REMIC 1
Regular Interest LT1A1A subject to a cap equal to the Pass-Through Rate on its
Corresponding Class and with the rate on each such other REMIC 1 Regular
Interest (other than REMIC 1 Regular Interest LT1ZZ) subject to a cap equal to
the Fixed Rate of its Corresponding Class (taking into account in determining
any such Pass-through Rate or Fixed Rate the imposition of the Pool Cap on the
Certificate Interest Rate of the Corresponding Certificate) for the purposes of
this calculation and (ii) with the rate on REMIC 1 Regular Interest LT1ZZ
subject to a cap of zero for the purpose of this calculation; provided, however,
that for this purpose, calculations of the Uncertificated REMIC 1 Pass-Through
Rate and the related caps with respect to REMIC 1 Regular Interest LT1A1A shall
be multiplied by a fraction, the numerator of which is the actual number of days
in the Interest Accrual Period and the denominator of which is 30.

          "Maximum LT1ZZ Uncertificated Accrued Interest Deferral Amount": With
respect to any Distribution Date, the excess of (a) accrued interest at the
Uncertificated REMIC 1 Pass-Through Rate applicable to REMIC 1 Regular Interest
LT1ZZ for such Distribution Date on a balance equal to the Uncertificated
Principal Balance of REMIC 1 Regular Interest LT1ZZ minus the REMIC 1
Overcollateralized Amount, in each case for such Distribution Date, over (b)
Uncertificated Accrued Interest on REMIC 1 Regular Interest LT1A1A, REMIC 1
Regular Interest LT1A1B, REMIC 1 Regular Interest LT1A2, REMIC 1 Regular
Interest LT1A3, REMIC 1 Regular Interest LT1A4, REMIC 1 Regular Interest LT1A5,
REMIC 1 Regular Interest LT1A6, REMIC 1 Regular Interest LT1M1, REMIC 1 Regular
Interest LT1M2, REMIC 1 Regular Interest LT1M3, REMIC 1 Regular Interest LT1M4,
REMIC 1 Regular Interest LT1M5, REMIC 1 Regular Interest LT1M6, REMIC 1 Regular
Interest LT1B1 and REMIC 1 Regular Interest LT1B2 with the rate on REMIC 1
Regular Interest LT1A1A subject to a cap equal to the Pass-Through Rate on its
Corresponding Class and with the rate on each such other REMIC 1 Regular
Interest subject to a cap equal to the Fixed Rate of the related Corresponding
Class (taking into account in determining such Pass-Through Rate or Fixed Rate
the imposition of the Pool Cap on the Certificate Interest Rate of its
Corresponding Certificate) for the purposes of this calculation; provided,
however, that for this purpose, calculations of the Uncertificated REMIC 1
Pass-Through Rate and the related caps with respect to Uncertificated Accrued
Interest on REMIC 1 Regular Interest LT1A1A shall be multiplied by a fraction,
the numerator of which is the actual number of days in the Interest Accrual
Period and the denominator of which is 30.

          "Maximum Rate Cap": With respect to any Distribution Date and the
Class A-1A Certificates, a per annum rate (not less than zero), equal to (i) on
or prior to the Distribution Date in September 2006, the greater of (a) the
weighted average of the Net Mortgage Interest Rates of the Mortgage Loans
(subject to adjustment based on the actual number of days elapsed in the related
Interest Accrual Period) and (b) 8.0% and (ii) after the Distribution Date in
September 2006, the weighted average of the Net Mortgage Interest Rates of the
Mortgage Loans (subject to adjustment based on the actual number of days elapsed
in the related Interest Accrual Period).

          "MERS": Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, or any successor to it.

                                      -24-

          "Monthly Excess Cashflow Amount": The sum of the Monthly Excess
Interest Amount, the Overcollateralization Release Amount and (without
duplication) any portion of the Principal Distribution Amount remaining after
principal distributions on the Class A, Class M and Class B Certificates.

          "Monthly Excess Interest Amount": With respect to each Distribution
Date, the amount, if any, by which the Interest Remittance Amount for such
Distribution Date exceeds the aggregate amount distributed on such Distribution
Date pursuant to paragraphs (i) through (xi) under Section 4.01.

          "Monthly Form 8-K": As defined in Section 3.31(a) hereof.

          "Monthly Payment": With respect to any Mortgage Loan, the scheduled
monthly payment of principal and interest on such Mortgage Loan which is payable
by the related Mortgagor from time to time under the related Mortgage Note,
determined: (a) after giving effect to (i) any Deficient Valuation and/or Debt
Service Reduction with respect to such Mortgage Loan and (ii) any reduction in
the amount of interest collectible from the related Mortgagor pursuant to the
Relief Act or similar state laws; (b) without giving effect to any extension
granted or agreed to by the Servicer pursuant to Section 3.01; and (c) on the
assumption that all other amounts, if any, due under such Mortgage Loan are paid
when due.

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

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

          "Mortgage Interest Rate": With respect to each Mortgage Loan, the
annual rate at which interest accrues on such Mortgage Loan from time to time in
accordance with the provisions of the related Mortgage Note, which rate shall
remain constant at the rate set forth in the Mortgage Loan Schedule as the
Mortgage Interest Rate in effect immediately following the Cut-off Date. With
respect to each Mortgage Loan that becomes an REO Property, as of any date of
determination, the annual rate determined in accordance with the immediately
preceding sentence as of the date such Mortgage Loan became an REO Property.

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

          "Mortgage Loan Purchase Agreement": The agreement between the Seller
and the Depositor, dated as of June 7, 2005, regarding the transfer of the
Mortgage Loans by the Seller to or at the direction of the Depositor.

          "Mortgage Loan Schedule": As of any date with respect to the Mortgage
Loans, the lists of such Mortgage Loans included in the Trust Fund on such date,
identifying such Mortgage Loans, attached hereto as Exhibit D. The Mortgage Loan
Schedule shall set forth the following information with respect to each Mortgage
Loan:

                                      -25-

          (1)  the Mortgage Loan identifying number;

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

          (3)  the Mortgagor's FICO Score (the middle of three, the lower of two
               or the one);

          (4)  [Reserved];

          (5)  a code indicating whether the Mortgaged Property is a single
               family residence, a condominium, a 2-4 family residence, a
               planned unit development (attached or detached);

          (6)  the loan type (i.e., fixed, adjustable; 2/28, 2/18, 2/13, 3/27,
               3/17, 3/12, etc);

          (7)  a code indicating the Company's risk grade of the Mortgage Loan;

          (8)  a code indicating the type and term of Prepayment Charge, if any,
               of the Mortgage Loan;

          (9)  the original months to maturity and the remaining months to
               maturity from the related Cut-off Date;

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

          (11) the Appraised Value at origination;

          (12) the Mortgage Interest Rate at origination;

          (13) the first payment date of the Mortgage Loan;

          (14) the stated maturity date;

          (15) the amount of the Monthly Payment;

          (16) the next Due Date of the Mortgage Loan;

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

          (18) the principal balance of the Mortgage Loan as of the close of
               business on the related Cut-off Date, after deduction of payments
               of principal received on or before the related Cut-off Date;

          (19) the Mortgage Loan purpose with respect to each Mortgage Loan;

          (20) the occupancy status of the Mortgaged Property;

                                      -26-

          (21) the total monthly payment (including escrowed taxes and insurance
               premiums);

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

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

          (24) the points and origination fee with respect to a Mortgage Loan;

          (25) the name of the originator of the Mortgage Loan;

          (26) a code indicating whether the Mortgage Loan is a balloon Mortgage
               Loan;

          (27) a code indicating whether there is a second lien mortgage loan
               secured by the same Mortgaged Property originated at the same
               time as the Mortgage Loan;

          (28) a code indicating whether the Mortgage Loan is secured by a
               ground lease;

          (29) the type of appraisal; and

          (30) if the Mortgage Loan was originated pursuant to a "lease option
               purchase".

          The Mortgage Loan Schedule shall set forth the following information,
as of the Cut-off Date, with respect to the Mortgage Loans in the aggregate: (1)
the number of Mortgage Loans; (2) the aggregate outstanding principal balance of
the Mortgage Loans; (3) the weighted average Mortgage Interest Rate of the
Mortgage Loans; and (4) the weighted average months to maturity of the Mortgage
Loans. The Mortgage Loan Schedule shall be amended from time to time in
accordance with the provisions of this Agreement. The Servicer shall cooperate
in providing any information available to it necessary in order to amend the
Mortgage Loan Schedule.

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

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

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

          "Mortgagor": The obligor on a Mortgage Note.

          "Net Liquidation Proceeds": With respect to any Liquidated Mortgage
Loan or any other disposition of related Mortgaged Property (including REO
Property) the related Liquidation Proceeds net of unreimbursed Advances,
unreimbursed Servicing Advances,

                                      -27-

Servicing Fees and any other accrued and unpaid servicing fees received and
retained in connection with the liquidation of such Mortgage Loan or Mortgaged
Property.

          "Net Mortgage Interest Rate": With respect to any Mortgage Loan, the
Mortgage Interest Rate borne by such Mortgage Loan minus the Expense Fee Rate.

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

          "NIMS Insurer": Any insurer that is guaranteeing certain payments
under notes secured by collateral which includes all or a portion of the Class
CE, Class P and Class R Certificates.

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

          "Notional Amount": With respect to the Class CE Certificates, a
notional amount equal to the aggregate principal balance of the REMIC 1 Regular
Interests other than REMIC 1 Regular Interest LT1P.

          "Offered Certificates": The Class A and Class M Certificates.

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

          "One-Month LIBOR": With respect to each Interest Accrual Period, the
rate determined by the Trustee on the related LIBOR Determination Date on the
basis of the offered rate for one-month United States dollar deposits, as such
rate appears on the Telerate Page 3750, as of 11:00 a.m. (London time) on such
LIBOR Determination Date. If no such quotations are available on an LIBOR
Determination Date, One-Month LIBOR for the related Interest Accrual Period will
be established by the Trustee as follows:

          (i) If on such LIBOR Determination Date two or more Reference Banks
     provide such offered quotations, One-Month LIBOR for the related Interest
     Accrual Period shall be the arithmetic mean of such offered quotations
     (rounded upwards if necessary to the nearest whole multiple of 0.001%);

          (ii) If on such LIBOR Determination Date fewer than two Reference
     Banks provide such offered quotations, One-Month LIBOR for the related
     Interest Accrual Period shall 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 Depositor and the NIMS Insurer, as of 11:00 A.M., New
     York City time, on such date for loans in U.S.

                                      -28-

     Dollars to leading European banks for a period of one month in an amount
     approximately equal to the aggregate Certificate Principal Balance of the
     Class A-1A Certificates; and

          (iii) If no such quotations can be obtained, One-Month LIBOR for the
     related Interest Accrual Period shall be One-Month LIBOR for the prior
     Distribution Date.

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

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

          "Optional Termination Date": The first Distribution Date on which the
NIMS Insurer, if there is a NIMS Insurer, the Majority Class CE
Certificateholders or, if such Majority Class CE Certificateholder is the Seller
or is an affiliate of the Seller, the Servicer, may opt to terminate the
Mortgage Pool pursuant to Section 10.01.

          "Original Class Certificate Principal Balance": With respect to each
Class of Certificates, the Certificate Principal Balance thereof on the Closing
Date, as set forth opposite such Class in the Preliminary Statement, except with
respect to (i) the Class R Certificates, which have an Original Class
Certificate Principal Balance of zero and (ii) the Class CE Certificates, which,
solely for REMIC purposes, have an Original Class Certificate Principal Balance
equal to the Initial Overcollateralization Amount.

          "Originator": Ameriquest Mortgage Company and its successors.

          "Originator Mortgage Loan Purchase Agreement": The Master Mortgage
Loan Purchase Agreement, dated as of May 27, 2005, by and between the Seller, as
purchaser, and Ameriquest Mortgage Company, as seller, as such agreement is
modified pursuant to the Assignment, Assumption and Recognition Agreement.

          "Overcollateralization Amount": As of any Distribution Date, the
excess, if any, of (x) the Pool Balance as of the last day of the related
Collection Period over (y) the aggregate Certificate Principal Balance of the
Class A, Class M, Class B and Class P Certificates (after taking into account
all distributions of principal on such Distribution Date and the increase of any
Certificate Principal Balance as a result of Subsequent Recoveries).

          "Overcollateralization Deficiency": As of any Distribution Date, the
excess, if any, of (x) the Targeted Overcollateralization Amount for such
Distribution Date over (y) the Overcollateralization Amount for such
Distribution Date, calculated for this purpose after taking into account the
reduction on such Distribution Date of the Certificate Principal Balances of all
Classes of Class A, Class M, Class B and Class P Certificates resulting from the
distribution of the Principal Distribution Amount (but not the Extra Principal
Distribution Amount) on such

                                      -29-

Distribution Date, but prior to taking into account any Applied Realized Loss
Amount on such Distribution Date.

          "Overcollateralization Release Amount": With respect to any
Distribution Date after the Stepdown Date on which a Trigger Event is not in
effect, the lesser of (x) the Principal Remittance Amount for such Distribution
Date and (y) the excess, if any, of (i) the Overcollateralization Amount for
such Distribution Date, assuming that 100% of the Principal Remittance Amount is
applied as a principal payment on the Class A, Class M and Class B Certificates
on such Distribution Date, over (ii) the Targeted Overcollateralization Amount
for such Distribution Date. With respect to any Distribution Date on which a
Trigger Event is in effect, the Overcollateralization Release Amount will be
zero.

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

          "Pass-Through Rate": The Class A-1 Pass-Through Rate.

          With respect to the Class CE Certificates and any Distribution Date, a
per annum rate equal to the percentage equivalent of a fraction, the numerator
of which is the sum of the amounts calculated pursuant to clauses (A) through
(R) below, and the denominator of which is the aggregate of the Uncertificated
Principal Balances of REMIC 1 Regular Interest LT1AA, REMIC 1 Regular Interest
LT1A1A, REMIC 1 Regular Interest LT1A1B, REMIC 1 Regular Interest LT1A2, REMIC 1
Regular Interest LT1A3, REMIC 1 Regular Interest LT1A4, REMIC 1 Regular Interest
LT1A5, REMIC 1 Regular Interest LT1A6, REMIC 1 Regular Interest LT1M1, REMIC 1
Regular Interest LT1M2, REMIC 1 Regular Interest LT1M3, REMIC 1 Regular Interest
LT1M4, REMIC 1 Regular Interest LT1M5, REMIC 1 Regular Interest LT1M6, REMIC 1
Regular Interest LT1B1, REMIC 1 Regular Interest LT1B2 and REMIC 1 Regular
Interest LT1ZZ. For purposes of calculating the Pass-Through Rate for the Class
CE Certificates, the numerator is equal to the sum of the following components:

          (A) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1AA minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1AA;

          (B) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1A1 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1A1A;

          (C) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1A1B minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1A1B;

          (D) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1A2 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1A2;

                                      -30-

          (E) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1A3 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1A3;

          (F) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1A4 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1A4;

          (G) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1A5 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1A5;

          (H) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1A6 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1A6;

          (I) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1M1 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1M1;

          (J) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1M2 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1M2;

          (K) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1M3 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1M3;

          (L) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1M4 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1M4;

          (M) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1M5 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1M5;

          (N) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1M6 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1M6;

          (O) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1B1 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1B1;

          (P) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1B2 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1B2;

                                      -31-

          (Q) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1ZZ minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1ZZ; and

          (R) 100% of the Interest on REMIC 1 Regular Interest LT1P.

          "Paying Agent": Any paying agent appointed pursuant to Section 5.05.

          "Percentage Interest": With respect to any Certificate (other than a
Class CE or Class R Certificate), a fraction, expressed as a percentage, the
numerator of which is the Initial Certificate Principal Balance, as the case may
be, represented by such Certificate and the denominator of which is the Original
Class Certificate Principal Balance of the related Class. With respect to a
Class CE Certificate, the portion of the Class evidenced thereby, expressed as a
percentage, as stated on the face of such Certificate; provided, however, that
the sum of all such percentages for each such Class totals 100%. With respect to
the Class R Certificate, 100%.

          "Permitted Transferee": Any transferee of a Class R Certificate other
than a Disqualified Organization, a non-U.S. Person or a U.S. Person with
respect to whom income on the Class R Certificate is attributable to a foreign
permanent establishment or fixed base, within the meaning of an applicable
income tax treaty, of such Person or any other U.S. Person.

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

          "Pool Balance": As of any date of determination, the aggregate
Principal Balance of the Mortgage Loans.

          "Pool Cap": As of any Distribution Date, a per annum rate, adjusted by
multiplying such rate by a fraction equal to 30 over the actual number of days
in the related Interest Accrual Period for the Class A-1A Certificates, equal to
the weighted average of the Net Mortgage Interest Rates of the Mortgage Loans,
weighted on the basis of the Principal Balances of the Mortgage Loans as of the
first day of the related Collection Period.

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

          "Prepayment Interest Excess": With respect to any Distribution Date,
for each Mortgage Loan that was the subject of a Principal Prepayment in full
during the portion of the related Prepayment Period beginning on the first day
of the calendar month in which such Distribution Date occurs through the
Determination Date of the calendar month in which such Distribution Date occurs,
an amount equal to interest (to the extent received) at the applicable Mortgage
Interest Rate (net of the Servicing Fee Rate) on the amount of such Principal
Prepayment for the number of days commencing on the first day of the calendar
month in which

                                      -32-

such Distribution Date occurs and ending on the date on which such prepayment is
so applied. The Servicer may withdraw such Prepayment Interest Excess from the
Collection Account in accordance with Section 3.05(g).

          "Prepayment Interest Shortfall": With respect to any Distribution
Date, for each Mortgage Loan that was the subject of a Principal Prepayment
during the portion of the related Prepayment Period occurring in the prior
calendar month that was applied by the Servicer to reduce the outstanding
Principal Balance of such Mortgage Loan on a date preceding the related Due
Date, an amount equal to interest at the applicable Mortgage Interest Rate (net
of the Servicing Fee Rate) on the amount of such Principal Prepayment for the
number of days commencing on the date on which the Principal Prepayment is
applied and ending on the last day of the related calendar month in which such
Principal Prepayment was received.

          "Prepayment Period": With respect to any Distribution Date and a
Mortgage Loan, the period commencing on the day after the Determination Date in
the calendar month preceding the calendar month in which such Distribution Date
occurs (or, in the case of the first Distribution Date, commencing on June 1,
2005) and ending on the Determination Date in the calendar month in which such
Distribution Date occurs.

          "Principal Balance": As to any Mortgage Loan and any day, other than a
Liquidated Mortgage Loan, the related Cut-off Date Principal Balance, minus the
sum of (i) all collections and other amounts credited against the principal
balance of any such Mortgage Loan, (ii) the principal portion of Advances, (iii)
any Deficient Valuation and (iv) any principal reduction resulting from a
Servicer Modification. For purposes of this definition, a Liquidated Mortgage
Loan shall be deemed to have a Principal Balance equal to the Principal Balance
of the related Mortgage Loan as of the final recovery of related Liquidation
Proceeds and a Principal Balance of zero thereafter. As to any REO Property and
any day, the Principal Balance of the related Mortgage Loan immediately prior to
such Mortgage Loan becoming REO Property minus any REO Principal Amortization
received with respect thereto on or prior to such day.

          "Principal Distribution Amount": As to any Distribution Date, the sum
of (i) the Principal Remittance Amount minus the Overcollateralization Release
Amount, if any, and (ii) the Extra Principal Distribution Amount, if any.

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

          "Principal Remittance Amount": With respect to any Distribution Date,
to the extent of funds available therefor, the amount equal to the sum (less
amounts available for reimbursement of Advances and Servicing Advances pursuant
to Section 3.05 and expenses reimbursable pursuant to Section 6.03) of: (i) each
payment of principal on a Mortgage Loan due during the related Collection Period
and received by the Servicer on or prior to the related Determination Date, and
any Advances with respect thereto, (ii) all full and partial Principal
Prepayments of Mortgage Loans received by the Servicer during the related
Prepayment Period, (iii) Insurance Proceeds, Subsequent Recoveries and Net
Liquidation Proceeds allocable to

                                      -33-

principal actually collected by the Servicer during the related Prepayment
Period with respect to the Mortgage Loans, (iv) the portion of the Purchase
Price allocable to principal of all repurchased Mortgage Loans with respect to
such Prepayment Period and (v) on the Distribution Date on which the Trust is to
be terminated in accordance with Section 10.01 hereof, that portion of the
Termination Price in respect of principal.

          "Private Certificates": Any of the Class B-1, Class B-2, Class CE,
Class P and Class R Certificates.

          "Private Placement Memorandum": That certain Private Placement
Memorandum dated June 7, 2005 relating to the private offering of the Class B-1
and Class B-2 Certificates.

          "Prospectus Supplement": That certain Prospectus Supplement dated June
3, 2005 relating to the public offering of the Offered Certificates.

          "Purchase Price": With respect to any Mortgage Loan or REO Property to
be purchased pursuant to or as contemplated by Section 2.03 or 10.01, an amount
equal to the sum of (i) 100% of the Principal Balance thereof as of the date of
purchase (or such other price as provided in Section 10.01), (ii) in the case of
(x) a Mortgage Loan, accrued interest on such Principal Balance at the
applicable Mortgage Interest Rate in effect from time to time from the Due Date
as to which interest was last covered by a payment by the Mortgagor or an
Advance by the Servicer, which payment or Advance had as of the date of purchase
been distributed pursuant to Section 4.01, through the end of the calendar month
in which the purchase is to be effected, and (y) an REO Property, accrued
interest at the applicable Mortgage Interest Rate on its fair market value,
determined in good faith by the Servicer, (iii) any unreimbursed Servicing
Advances and Advances and any unpaid Servicing Fees allocable to such Mortgage
Loan or REO Property, (iv) any amounts previously withdrawn from the Collection
Account in respect of such Mortgage Loan or REO Property pursuant to Section
3.13, (v) in the case of a Mortgage Loan required to be purchased pursuant to
Section 2.03, expenses reasonably incurred or to be incurred by the Servicer or
the Trustee in respect of the breach or defect giving rise to the purchase
obligation, and (vi) any costs and damages incurred by the Trust in connection
with any violation by such Mortgage Loan of any predatory or abusive lending
law.

          "Rating Agency or Rating Agencies": Fitch and S&P, or their respective
successors. If such agencies or their successors are no longer in existence,
"Rating Agencies" shall be such nationally recognized statistical rating
organizations as set forth on the most current list of such organizations
released by the Securities and Exchange Commission and designated by the
Depositor, notice of which designation shall be given to the Trustee and the
Servicer.

          "Realized Loss": With respect to a Liquidated Mortgage Loan, the
amount by which the remaining unpaid principal balance of the Mortgage Loan
exceeds the amount of Net Liquidation Proceeds applied to the principal balance
of the related Mortgage Loan. With respect to any Mortgage Loan, a Deficient
Valuation or a reduction in the Principal Balance thereof resulting from a
Servicer Modification.

                                      -34-

          "Realized Loss Amortization Amount": Any of the Class M-1 Realized
Loss Amortization Amount, the Class M-2 Realized Loss Amortization Amount, the
Class M-3 Realized Loss Amortization Amount, the Class M-4 Realized Loss
Amortization Amount, the Class M-5 Realized Loss Amortization Amount, the Class
M-6 Realized Loss Amortization Amount, the Class B-1 Realized Loss Amortization
Amount and the Class B-2 Realized Loss Amortization Amount.

          "Record Date": With respect to the Class A-1A Certificates, the
Business Day immediately preceding such Distribution Date; provided, however,
that if such Class A-1A Certificates become Definitive Certificates, the Record
Date for such Class A-1A Certificates shall be the last Business Day of the
month immediately preceding the month in which the related Distribution Date
occurs. With respect to the Fixed-Rate Certificates and Class CE, Class P and
Class R Certificates, the last Business Day of the month immediately preceding
the month in which the related Distribution Date occurs.

          "Reference Banks": Those banks (i) with an established place of
business in London, England, (ii) not controlling, under the control of or under
common control with the Depositor or the Trustee, (iii) whose quotations appear
on the Telerate Page 3750 on the relevant LIBOR Determination Date and (iv)
which have been designated as such by the Trustee (after consultation with the
Depositor); provided, however, that if fewer than two of such banks provide a
One-Month LIBOR rate, then any leading banks selected by the Trustee (after
consultation with the Depositor) which are engaged in transactions in United
States dollar deposits in the international Eurocurrency market.

          "Regular Certificate": Any of the Class A Certificates, Class M
Certificates, Class B Certificates, Class CE Certificates and Class P
Certificates.

          "Reimbursement Amount": With respect to any Mortgage Loan, any costs
or damages incurred by the Trust in connection with a breach of (i) the
Originator's representations set forth in Section 3.03(g), 3.03(bb), 3.03(ss)
and 3.03(tt) of the Originator Mortgage Loan Purchase Agreement or (ii) the
Seller's representations set forth in Sections 3.01(i), 3.01(ii) and 3.01(iii)
of the Mortgage Loan Purchase Agreement.

          "Related Documents": With respect to any Mortgage Loan, the related
Mortgage Notes, Mortgages and other related documents.

          "Relief Act": The Servicemembers Civil Relief Act, as it may be
amended from time to time.

          "Relief Act Interest Shortfall": With respect to any Distribution
Date, for any Mortgage Loan with respect to which there has been a reduction in
the amount of interest collectible thereon for the most recently ended
Collection Period as a result of the application of the Relief Act or similar
state or local laws, the amount by which (i) interest collectible on such
Mortgage Loan during such Collection Period is less than (ii) one month's
interest on the Principal Balance of such Mortgage Loan at the Mortgage Interest
Rate for such Mortgage Loan before giving effect to the application of the
Relief Act or similar state or local laws.

                                      -35-

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

          "REMIC 1 Interest Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to (a) the product of (i) the sum of the
aggregate Principal Balance of the Mortgage Loans and related REO Properties
then outstanding and (ii) the Uncertificated REMIC 1 Pass-Through Rate for REMIC
1 Regular Interest LT1AA minus the Marker Rate, divided by (b) 12.

          "REMIC 1 Overcollateralization Target Amount": 1.0% of the Targeted
Overcollateralization Amount.

          "REMIC 1 Overcollateralized Amount": With respect to any date of
determination, (i) the aggregate Uncertificated Principal Balances of the REMIC
1 Regular Interests minus (ii) the aggregate of the Uncertificated Principal
Balances of REMIC 1 Regular Interest LT1A1A, REMIC 1 Regular Interest LT1A1B,
REMIC 1 Regular Interest LT1A2, REMIC 1 Regular Interest LT1A3, REMIC 1 Regular
Interest LT1A4, REMIC 1 Regular Interest LT1A5, REMIC 1 Regular Interest LT1A6,
REMIC 1 Regular Interest LT1M1, REMIC 1 Regular Interest LT1M2, REMIC 1 Regular
Interest LT1M3, REMIC 1 Regular Interest LT1M4, REMIC 1 Regular Interest LT1M5,
REMIC 1 Regular Interest LT1M6, REMIC 1 Regular Interest LT1B1, REMIC 1 Regular
Interest LT1B2 and REMIC 1 Regular Interest LT1P, in each case as of such date
of determination.

          "REMIC 1 Principal Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to the product of (i) the aggregate Principal
Balance of the Mortgage Loans and related REO Properties then outstanding and
(ii) 1 minus a fraction, the numerator of which is two times the aggregate of
the Uncertificated Principal Balances of REMIC 1 Regular Interest LT1A1A, REMIC
1 Regular Interest LT1A1B, REMIC 1 Regular Interest LT1A2, REMIC 1 Regular
Interest LT1A3, REMIC 1 Regular Interest LT1A4, REMIC 1 Regular Interest LT1A5,
REMIC 1 Regular Interest LT1A6, REMIC 1 Regular Interest LT1M1, REMIC 1 Regular
Interest LT1M2, REMIC 1 Regular Interest LT1M3, REMIC 1 Regular Interest LT1M4,
REMIC 1 Regular Interest LT1M5, REMIC 1 Regular Interest LT1M6, REMIC 1 Regular
Interest LT1B1 and REMIC 1 Regular Interest LT1B2 and the denominator of which
is the aggregate of the Uncertificated Principal Balances of REMIC 1 Regular
Interest LT1A1A, REMIC 1 Regular Interest LT1A1B, REMIC 1 Regular Interest
LT1A2, REMIC 1 Regular Interest LT1A3, REMIC 1 Regular Interest LT1A4, REMIC 1
Regular Interest LT1A5, REMIC 1 Regular Interest LT1A6, REMIC 1 Regular Interest
LT1M1, REMIC 1 Regular Interest LT1M2, REMIC 1 Regular Interest LT1M3, REMIC 1
Regular Interest LT1M4, REMIC 1 Regular Interest LT1M5, REMIC 1 Regular Interest
LT1M6, REMIC 1 Regular Interest LT1B1, REMIC 1 Regular Interest LT1B2 and REMIC
1 Regular Interest LT1ZZ.

          "REMIC 1 Regular Interest LT1AA": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
regular interest in REMIC 1 for purposes of the REMIC Provisions. REMIC 1
Regular Interest LT1AA shall accrue interest at the related Uncertificated REMIC
1 Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof,

                                      -36-

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

          "REMIC 1 Regular Interest LT1A1A": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a regular interest in REMIC 1 for purposes of the REMIC
Provisions. REMIC 1 Regular Interest LT1A1A shall accrue interest at the related
Uncertificated REMIC 1 Pass-Through Rate in effect from time to time, and shall
be entitled to distributions of principal, subject to the terms and conditions
hereof, in an aggregate amount equal to its initial Uncertificated Principal
Balance as set forth in the Preliminary Statement hereto.

          "REMIC 1 Regular Interest LT1A1B": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a regular interest in REMIC 1 for purposes of the REMIC
Provisions. REMIC 1 Regular Interest LT1A1B shall accrue interest at the related
Uncertificated REMIC 1 Pass-Through Rate in effect from time to time, and shall
be entitled to distributions of principal, subject to the terms and conditions
hereof, in an aggregate amount equal to its initial Uncertificated Principal
Balance as set forth in the Preliminary Statement hereto.

          "REMIC 1 Regular Interest LT1A2": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
regular interest in REMIC 1 for purposes of the REMIC Provisions. REMIC 1
Regular Interest LT1A2 shall accrue interest at the related Uncertificated REMIC
1 Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.

          "REMIC 1 Regular Interest LT1A3": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
regular interest in REMIC 1 for purposes of the REMIC Provisions. REMIC 1
Regular Interest LT1A3 shall accrue interest at the related Uncertificated REMIC
1 Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.

          "REMIC 1 Regular Interest LT1A4": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
regular interest in REMIC 1 for purposes of the REMIC Provisions. REMIC 1
Regular Interest LT1A4 shall accrue interest at the related Uncertificated REMIC
1 Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.

          "REMIC 1 Regular Interest LT1A5": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
regular interest in REMIC 1 for purposes of the REMIC Provisions. REMIC 1
Regular Interest LT1A5 shall accrue interest at the related Uncertificated REMIC
1 Pass-Through Rate in effect from time to

                                      -37-

time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

          "REMIC 1 Regular Interest LT1A6": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
regular interest in REMIC 1 for purposes of the REMIC Provisions. REMIC 1
Regular Interest LT1A6 shall accrue interest at the related Uncertificated REMIC
1 Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.

          "REMIC 1 Regular Interest LT1M1": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
regular interest in REMIC 1 for purposes of the REMIC Provisions. REMIC 1
Regular Interest LT1M1 shall accrue interest at the related Uncertificated REMIC
1 Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.

          "REMIC 1 Regular Interest LT1M2": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
regular interest in REMIC 1 for purposes of the REMIC Provisions. REMIC 1
Regular Interest LT1M2 shall accrue interest at the related Uncertificated REMIC
1 Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.

          "REMIC 1 Regular Interest LT1M3": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
regular interest in REMIC 1 for purposes of the REMIC Provisions. REMIC 1
Regular Interest LT1M3 shall accrue interest at the related Uncertificated REMIC
1 Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.

          "REMIC 1 Regular Interest LT1M4": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
regular interest in REMIC 1 for purposes of the REMIC Provisions. REMIC 1
Regular Interest LT1M4 shall accrue interest at the related Uncertificated REMIC
1 Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.

          "REMIC 1 Regular Interest LT1M5": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
regular interest in REMIC 1 for purposes of the REMIC Provisions. REMIC 1
Regular Interest LT1M5 shall

                                      -38-

accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.

          "REMIC 1 Regular Interest LT1M6": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
regular interest in REMIC 1 for purposes of the REMIC Provisions. REMIC 1
Regular Interest LT1M6 shall accrue interest at the related Uncertificated REMIC
1 Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.

          "REMIC 1 Regular Interest LT1B1": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
regular interest in REMIC 1 for purposes of the REMIC Provisions. REMIC 1
Regular Interest LT1B1 shall accrue interest at the related Uncertificated REMIC
1 Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.

          "REMIC 1 Regular Interest LT1B2": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
regular interest in REMIC 1 for purposes of the REMIC Provisions. REMIC 1
Regular Interest LT1B2 shall accrue interest at the related Uncertificated REMIC
1 Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.

          "REMIC 1 Regular Interest LT1P": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
regular interest in REMIC 1 for purposes of the REMIC Provisions. REMIC 1
Regular Interest LT1P shall accrue interest at the related Uncertificated REMIC
1 Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.

          "REMIC 1 Regular Interest LT1ZZ": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
regular interest in REMIC 1 for purposes of the REMIC Provisions. REMIC 1
Regular Interest LT1ZZ shall accrue interest at the related Uncertificated REMIC
1 Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.

          "REMIC 1 Regular Interests": REMIC 1 Regular Interest LT1AA, REMIC 1
Regular Interest LT1A1A, REMIC 1 Regular Interest LT1A1B, REMIC 1 Regular
Interest

                                      -39-

LT1A2, REMIC 1 Regular Interest LT1A3, REMIC 1 Regular Interest LT1A4, REMIC 1
Regular Interest LT1A5, REMIC 1 Regular Interest LT1A6, REMIC 1 Regular Interest
LT1M1, REMIC 1 Regular Interest LT1M2, REMIC 1 Regular Interest LT1M3, REMIC 1
Regular Interest LT1M4, REMIC 1 Regular Interest LT1M5, REMIC 1 Regular Interest
LT1M6, REMIC 1 Regular Interest LT1B1, REMIC 1 Regular Interest LT1B2, REMIC 1
Regular Interest LT1P and REMIC 1 Regular Interest LT1ZZ.

          "REMIC Provisions": Provisions of the federal income tax law relating
to real estate mortgage investment conduits which appear at Section 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
regulations and rulings promulgated thereunder, as the foregoing may be in
effect from time to time.

          "Remittance Report": A report or reports prepared by the Servicer and
delivered on a magnetic disc or tape to the Trustee and the NIMS Insurer
pursuant to Section 4.07 substantially in the form attached hereto as Exhibit M.

          "Rents from Real Property": With respect to any REO Property, gross
income of the character described in Section 856(d) of the Code.

          "REO Disposition": The sale or other disposition of an REO Property on
behalf of the Trust.

          "REO Imputed Interest": As to any REO Property, for any Collection
Period, an amount equivalent to interest (at the Net Mortgage Interest Rate that
would have been applicable to the related Mortgage Loan had it been outstanding)
for such Collection Period on the unpaid Principal Balance of the Mortgage Loan
as of the date of acquisition.

          "REO Principal Amortization": With respect to any REO Property, for
any calendar month, the aggregate of all amounts received in respect of such REO
Property during such calendar month, whether in the form of rental income, sale
proceeds (including, without limitation, that portion of the Termination Price
paid in connection with a purchase of all of the Mortgage Loans and REO
Properties pursuant to Section 10.01 that is allocable to such REO Property) or
otherwise, net of any portion of such amounts (i) payable pursuant to Section
3.13 in respect of the proper operation, management and maintenance of such REO
Property or (ii) payable or reimbursable to the Servicer pursuant to Section
3.13 for unpaid Servicing Fees in respect of the related Mortgage Loan and
unreimbursed Servicing Advances and Advances in respect of such REO Property or
the related Mortgage Loan.

          "REO Property": A Mortgaged Property acquired by the Servicer on
behalf of the Trust through foreclosure or deed-in-lieu of foreclosure, as
described in Section 3.13.

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

          "Reserve Account": The trust account created and maintained by the
Trustee pursuant to Section 3.04(g), which shall be entitled "Reserve Account,
Deutsche Bank National Trust Company, as Trustee, in trust for registered
Holders of the Class A-1A Certificates of the ABFC 2005-AQ1 Trust, Asset-Backed
Certificates, Series 2005-AQ1" and which must be an

                                      -40-

Eligible Account. Amounts on deposit in the Reserve Account shall not be
invested. The Reserve Account shall not be an asset of any REMIC formed under
this Agreement.

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

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

          "Responsible Officer": When used with respect to the Trustee, any
officer assigned to the Corporate Trust Division (or any successor thereto),
including any Vice President, Assistant Vice President, Trust Officer, any
Assistant Secretary, any trust officer or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and in each case having direct responsibility for the
administration of this Agreement.

          "S&P": Standard & Poor's, a division of The McGraw-Hill Companies,
Inc., and its successors, and if such company shall for any reason no longer
perform the functions of a securities rating agency, "S&P" shall be deemed to
refer to any other "nationally recognized statistical rating organization" as
set forth on the most current list of such organizations released by the
Securities and Exchange Commission.

          "Seller": Bank of America, National Association, or its successor in
interest, in its capacity as seller under the Mortgage Loan Purchase Agreement.

          "Senior Certificates": The Class A-1A, Class A-1B, Class A-2, Class
A-3, Class A-4, Class A-5 and Class A-6 Certificates.

          "Senior Enhancement Percentage": For any Distribution Date, the
percentage obtained by dividing (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class M and Class B Certificates and (ii) the
Overcollateralization Amount, in each case before taking into account payments
of principal on the Mortgage Loans and the distribution of the Principal
Distribution Amount on such Distribution Date by (y) the Pool Balance as of the
last day of the related Collection Period.

          "Senior Principal Distribution Amount": For any Distribution Date (i)
before the Stepdown Date and as long as a Trigger Event is not in effect, the
lesser of (a) the aggregate Certificate Principal Balance of the Class A
Certificates immediately prior to such Distribution Date and (b) the Principal
Distribution Amount and (ii) on or after the Stepdown Date and as long as a
Trigger Event is not in effect the excess of (a) the aggregate Certificate
Principal Balance of the Class A Certificates immediately prior to such
Distribution Date over (b) the lesser of (x) the product of (1) 82.20% and (2)
the Pool Balance as of the last day of the related Collection Period and (y) the
amount by which the Pool Balance as of the last day of the related Collection
Period exceeds the product of (1) 0.40% and (2) the Pool Balance as of the
Cut-off Date.

                                      -41-

          "Senior Specified Enhancement Percentage": On any date of
determination thereof, 17.80%.

          "Servicer": Ameriquest Mortgage Company, a corporation organized under
the laws of the State of Delaware, or any successor servicer appointed as herein
provided, in its capacity as Servicer hereunder.

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

          "Servicer Modification": A modification to the terms of a Mortgage
Loan, in accordance with the terms of Section 3.01, as to which the Mortgagor is
in default or as to which, in the judgment of the Servicer, default is
reasonably foreseeable.

          "Servicer Prepayment Charge Payment Amount": The amount payable by the
Servicer in respect of any waived or uncollected Prepayment Charges pursuant to
Section 2.03(b)(ii), which amount shall be equal to the difference between the
amount of Prepayment Charge due by a Mortgagor before any waiver and the actual
amount of the Prepayment Charge that was paid by the Mortgagor, which amounts
shall not be a part of any REMIC formed hereunder.

          "Servicer Remittance Date": With respect to any Distribution Date, one
Business Day prior to such Distribution Date.

          "Servicer Reporting Date": With respect to any Distribution Date, the
18th day of the calendar month in which such Distribution Date occurs or, if
such 18th day is not a Business Day, the Business Day immediately succeeding
such 18th day.

          "Servicer Termination Test": With respect to any Distribution Date,
the Servicer Termination Test shall be failed if the Cumulative Loss Percentage
exceeds 4.0%.

          "Servicing Advances": All customary, reasonable and necessary "out of
pocket" costs and expenses incurred by the Servicer (including reasonable
attorneys' fees and disbursements) in the performance of its servicing
obligations, including, but not limited to, the cost of (i) the preservation,
restoration, inspection and protection of the Mortgaged Property, (ii) any
enforcement or judicial proceedings, including foreclosures, (iii) the
management and liquidation of the REO Property and (iv) compliance with the
obligations under Section 3.08. The Servicer shall not be required to make any
Servicing Advances in respect of a Mortgage Loan or REO Property that, in the
good faith business judgment of the Servicer, would not be ultimately
recoverable from related Insurance Proceeds or Liquidation Proceeds on such
Mortgage Loan or REO Property as provided herein.

          "Servicing Fee": With respect to each Mortgage Loan (including each
REO Property) and for any calendar month, an amount equal to one month's
interest (or in the event of any payment of interest which accompanies a
Principal Prepayment in full made by the Mortgagor during such calendar month,
interest for the number of days covered by such payment of interest) at the
Servicing Fee Rate on the same principal amount on which interest on such
Mortgage Loan accrues for such calendar month. The Servicing Fee shall be
payable monthly

                                      -42-

and shall be prorated on a per diem basis for any portion of a month during
which such Mortgage Loan is serviced hereunder.

          "Servicing Fee Rate": With respect to each Mortgage Loan, 0.50% per
annum.

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

          "Servicing Standard": The standards set forth in Section 3.01.

          "Similar Law": As defined in Section 5.02(d) hereof.

          "Startup Day": As defined in Section 9.01(b) hereof.

          "Stayed Funds": Any payment required to be made under the terms of the
Certificates and this Agreement but which is not remitted by the Servicer
because the Servicer is the subject of a proceeding under the Bankruptcy Code
and the making of such remittance is prohibited by Section 362 of the Bankruptcy
Code.

          "Stepdown Date": The earlier to occur of (i) the Distribution Date on
which the aggregate Certificate Principal Balance of the Class A Certificates is
reduced to zero and (ii) the later to occur of (x) the Distribution Date in July
2008 and (y) the first Distribution Date on which the Senior Enhancement
Percentage is greater than or equal to the Senior Specified Enhancement
Percentage.

          "Sub-Servicer": Any Person with which the Servicer has entered into a
Sub-Servicing Agreement and which meets the qualifications of a Sub-Servicer
pursuant to Section 6.06.

          "Sub-Servicing Account": An account established by a Sub-Servicer
which meets the requirements set forth in Section 6.11 and is otherwise
acceptable to the Servicer.

          "Sub-Servicing Agreement": The written contract between the Servicer
and a Sub-Servicer relating to servicing and administration of certain Mortgage
Loans as provided in Section 6.06.

          "Subordinated Certificates": The Class M-1, Class M-2, Class M-3,
Class M-4, Class M-5, Class M-6, Class B-1, Class B-2, Class CE and Class R
Certificates.

          "Subsequent Recovery": As of any Distribution Date, any amount (net of
reimbursable expenses) received on a Mortgage Loan subsequent to such Mortgage
Loan being determined to be a Liquidated Mortgage Loan that resulted in a
Realized Loss prior to the related Prepayment Period.

          "Targeted Overcollateralization Amount": As of any Distribution Date,
(x) prior to the Stepdown Date, 0.40% of the Pool Balance as of the Cut-off Date
and (y) on and after the

                                      -43-

Stepdown Date, (i) if a Trigger Event has not occurred, the greater of (A) 0.80%
of the Pool Balance as of the last day of the related Collection Period and (B)
0.40% of the Pool Balance as of the Cut-off Date and (ii) if a Trigger Event has
occurred, the Targeted Overcollateralization Amount for the immediately
preceding Distribution Date.

          "Tax Matters Person": The tax matters person appointed pursuant to
Section 9.01(e) hereof.

          "Tax Returns": The federal income tax returns 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 the REMIC Taxable Income or Net Loss Allocation, or any successor
forms, to be filed on behalf of the Trust for each of the two REMICs created
pursuant to this Agreement under the REMIC Provisions, together with any and all
other information reports or returns that may be required to be furnished to the
Certificateholders or filed with the Internal Revenue Service or any other
governmental taxing authority under any applicable provisions of federal, state
or local tax laws.

          "Telerate Page 3750": The display page currently so designated on the
Moneyline Telerate Service (or such other page as may replace the Telerate Page
3750 page on that service for the purpose of displaying London interbank offered
rates of major banks).

          "Termination Price": As defined in Section 10.01(a) hereof.

          "Trigger Event": With respect to any Distribution Date, if (i) the
three-month rolling average of 60+ Day Delinquent Loans equals or exceeds 50.00%
of the Senior Enhancement Percentage or (ii) the aggregate amount of Realized
Losses incurred since the Cut-off Date through the last day of the related
Collection Period (reduced by the aggregate amount of Subsequent Recoveries
received since the Cut-off Date through the last day of the related Collection
Period) divided by the Cut-off Date Aggregate Principal Balance exceeds the
applicable percentages set forth below with respect to such Distribution Date:

DISTRIBUTION DATE OCCURRING IN                PERCENTAGE
------------------------------                ----------
July 2008 through June 2009      2.20% for the first month, plus an
                                 additional 1/12th of 0.75% for each
                                 month thereafter
July 2009 through June 2010      2.95% for the first month, plus an
                                 additional 1/12th of 0.55% for each
                                 month thereafter
July 2010 through June 2011      3.50% for the first month, plus an
                                 additional 1/12th of 0.20% for each
                                 month thereafter
July 2011 and thereafter         3.70%

          "Trust": ABFC 2005-AQ1 Trust, the trust created hereunder.

          "Trust Fund": The segregated pool of assets subject hereto,
constituting the primary trust created hereby and to be administered hereunder,
with respect to a portion of which two REMIC elections are to be made, such
entire Trust Fund consisting of: (i) such Mortgage

                                      -44-

Loans as from time to time are subject to this Agreement, together with the
Mortgage Files relating thereto, and together with all collections thereon and
proceeds thereof (other than scheduled payments due on the Mortgage Loans prior
to the Cut-off Date), (ii) any REO Property, together with all collections
thereon and proceeds thereof, (iii) the Trustee's rights with respect to the
Mortgage Loans under all insurance policies required to be maintained pursuant
to this Agreement and any proceeds thereof, (iv) the Depositor's rights under
the Originator Mortgage Loan Purchase Agreement, the Assignment, Assumption and
Recognition Agreement and the Mortgage Loan Purchase Agreement (including any
security interest created thereby), (v) the Trustee's rights under the Yield
Maintenance Agreement and (vi) the Collection Accounts, the Distribution Account
and the Reserve Account and such assets that are deposited therein from time to
time and any investments thereof, together with any and all income, proceeds and
payments with respect thereto.

          "Trustee": Deutsche Bank National Trust Company, a national banking
association organized under the laws of the United States, or any successor
Trustee appointed as herein provided.

          "Trustee Fee": With respect to any Distribution Date, the product of
(x) one-twelfth of the Trustee Fee Rate and (y) the aggregate of the Principal
Balances of all Mortgage Loans as of the opening of business on the first day of
the related Collection Period.

          "Trustee Fee Rate": With respect to any Distribution Date, 0.0025% per
annum.

          "Uncertificated Accrued Interest": With respect to each REMIC 1
Regular Interest on each Distribution Date, an amount equal to one month's
interest at the related Uncertificated REMIC 1 Pass-Through Rate on the
Uncertificated Principal Balance of such REMIC 1 Regular Interest. In each case,
Uncertificated Accrued Interest will be reduced by any Prepayment Interest
Shortfalls and Relief Act Interest Shortfalls (allocated to such REMIC 1 Regular
Interests based on their respective entitlements to interest irrespective of any
Prepayment Interest Shortfalls and Relief Act Interest Shortfalls for such
Distribution Date).

          "Uncertificated Principal Balance": The amount of any REMIC 1 Regular
Interest outstanding as of any date of determination. As of the Closing Date,
the Uncertificated Principal Balance of each REMIC 1 Regular Interest shall
equal the amount set forth in the Preliminary Statement hereto as its initial
uncertificated balance. On each Distribution Date, the Uncertificated Principal
Balance of each REMIC 1 Regular Interest shall be reduced by all distributions
of principal made on such REMIC 1 Regular Interest on such Distribution Date
pursuant to Section 4.08 and, if and to the extent necessary and appropriate,
shall be further reduced on such Distribution Date by Realized Losses as
provided in Section 4.08(b) or increased by Subsequent Recoveries through
Available Funds. The Uncertificated Balance of REMIC 1 Regular Interest LT1ZZ
shall be increased by interest deferrals as provided in Section 4.08(a)(i). The
Uncertificated Balance of each REMIC 1 Regular Interest shall never be less than
zero.

          "Uncertificated REMIC 1 Pass-Through Rate": With respect to each REMIC
1 Regular Interest, the Weighted Average Net Mortgage Rate of the Mortgage
Loans.

                                      -45-

          "United States Person" or "U.S. Person": (i) A citizen or resident of
the United States, (ii) a corporation, partnership or other entity treated as a
corporation or partnership for United States federal income tax purposes
organized in or under the laws of the United States or any state thereof or the
District of Columbia (unless, in the case of a partnership, Treasury Regulations
provide otherwise), (iii) an estate the income of which is includible in gross
income for United States tax purposes, 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
authority to control all substantial decisions of the trust. Notwithstanding the
preceding sentence, to the extent provided in Treasury Regulations, certain
Trusts in existence on August 20, 1996, and treated as United States persons
prior to such date, that elect to continue to be treated as United States
persons will also be a U.S. Person; provided, that for purposes of the
definition of a "Permitted Transferee," a U.S. Person shall not include any
person whose income is attributable to a foreign permanent establishment or
fixed base, within the meaning of an applicable income tax treaty, of such
Person or any other U.S. Person.

          "Unpaid Realized Loss Amount": For any of the Class M and Class B
Certificates and as to any Distribution Date, the excess of (x) the aggregate
Applied Realized Loss Amounts allocated to such Class for all prior Distribution
Dates over (y) the sum of (a) the cumulative amount of any Subsequent Recoveries
allocated to such Class and (b) the aggregate Realized Loss Amortization Amounts
with respect to such Class for all prior Distribution Dates.

          "Value": With respect to any Mortgaged Property, the lesser of (a) an
amount determined by an appraisal or other valuation done at origination of the
Mortgage Loan and (b) the purchase price paid for the related Mortgaged Property
by the Mortgagor with the proceeds of the Mortgage Loan; provided, however, that
in the case of a refinanced Mortgage Loan, the value of the Mortgaged Property
is based solely upon clause (a) above.

          "Voting Rights": The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. The Voting Rights allocated
among Holders of the Class A, Class M and Class B Certificates shall be 98%, and
shall be allocated among each such Class according to the fraction, expressed as
a percentage, the numerator of which is the aggregate Certificate Principal
Balance of all the Certificates of such Class then outstanding and the
denominator of which is the aggregate Certificate Principal Balance of all the
Class A, Class M and Class B Certificates then outstanding. The Voting Rights
allocated to each such Class of Certificates shall be allocated among all
holders of each such Class in proportion to the outstanding Certificate
Principal Balance of such Certificates; provided, however, that any Certificate
registered in the name of the Servicer, the Depositor or the Trustee or any of
their respective affiliates shall not be included in the calculation of Voting
Rights; provided that only such Certificates as are known by a Responsible
Officer of the Trustee to be so registered will be so excluded. One percent of
all the Voting Rights will be allocated to the Holders of each of the Class CE
and Class P Certificates. The Class R Certificates shall have no Voting Rights.

          "Weighted Average Net Mortgage Rate": The weighted average (based on
Principal Balance as of the first day of the related Collection Period or, in
the case of the first Distribution Date, the Cut-off Date) of the Net Mortgage
Interest Rates of the Mortgage Loans, expressed for each such Mortgage Loan as
an annual rate and calculated on the basis of twelve months consisting of 30
days each and a 360-day year.

                                      -46-

          "Written Order to Authenticate": A written order by which the
Depositor directs the Trustee to execute, authenticate and deliver the
Certificates.

          "Yield Maintenance Agreement": The interest rate cap agreement between
the Trustee, on behalf of the Trust, and the Yield Maintenance Agreement
Provider substantially in the form attached hereto as Exhibit N. The Yield
Maintenance Agreement shall not be an asset of any REMIC formed under this
Agreement.

          "Yield Maintenance Agreement Payment": On each Distribution Date
through the Distribution Date in September 2006, the amount equal to the product
of (a) the excess of the lesser of (i) One-Month LIBOR and (ii) the applicable
ceiling rate over the applicable strike rate for such Distribution Date, in each
case as set forth on the schedule attached to the confirmation to the Yield
Maintenance Agreement for such Distribution Date, (b) the lesser of (y) the
related cap notional amount as set forth on the schedule attached to the
confirmation to the Yield Maintenance Agreement for such Distribution Date and
(z) the aggregate Certificate Principal Balance of the Class A-1A Certificates
immediately prior to such Distribution Date and (c) a fraction, the numerator of
which is the actual number of days elapsed since the previous Distribution Date
(or the Closing Date, in the case of the first Distribution Date) to but
excluding the current Distribution Date and the denominator of which is 360.

          "Yield Maintenance Agreement Provider": Swiss Re Financial Products
Corporation and any successors thereto.

          Section 1.02 Accounting.

          Unless otherwise specified herein, for the purpose of any definition
or calculation, whenever amounts are required to be netted, subtracted or added
or any distributions are taken into account such definition or calculation and
any related definitions or calculations shall be determined without duplication
of such functions.

          Section 1.03 Rights of the NIMS Insurer.

          Each of the rights of the NIMS Insurer set forth in this Agreement
shall exist so long as (i) the NIMS Insurer has undertaken to guarantee certain
payments of notes issued pursuant to the Indenture and (ii) any series of notes
issued pursuant to the Indenture remains outstanding or the NIMS Insurer is owed
amounts in respect of its guarantee of payment on such notes; provided, however,
the NIMS Insurer shall not have any rights hereunder (except pursuant to Section
11.01 in the case of clause (ii) below) during the period of time, if any, that
(i) the NIMS Insurer has not undertaken to guarantee certain payments of notes
issued pursuant to the Indenture or (ii) any default has occurred and is
continuing under the insurance policy issued by the NIMS Insurer with respect to
such notes.

                                      -47-

                                   ARTICLE II

                          CONVEYANCE OF MORTGAGE LOANS;
                        ORIGINAL ISSUANCE OF CERTIFICATES

          Section 2.01 Conveyance of Mortgage Loans.

          The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey to the Trustee, on
behalf of the Trust, without recourse for the benefit of the Certificateholders
all of the right, title and interest of the Depositor, including any security
interest therein for the benefit of the Depositor, in and to (i) each Mortgage
Loan identified on the Mortgage Loan Schedule, including the related Cut-off
Date Principal Balance, all interest accruing thereon after the Cut-off Date and
all collections in respect of interest and principal due after the Cut-off Date;
(ii) property which secured each such Mortgage Loan and which has been acquired
by foreclosure or deed in lieu of foreclosure; (iii) its interest in any
insurance policies in respect of the Mortgage Loans; (iv) all other assets
included or to be included in the Trust Fund; (v) all proceeds of any of the
foregoing; (vi) the rights of the Depositor under the Originator Mortgage Loan
Purchase Agreement, the Assignment, Assumption and Recognition Agreement and the
Mortgage Loan Purchase Agreement and (vii) all proceeds of any of the foregoing.
Such assignment includes all interest and principal due to the Depositor or the
Servicer after the Cut-off Date with respect to the Mortgage Loans.

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

     (a)  the original Mortgage Note including any riders thereto, endorsed
          either (A) in blank or (B) in the following form: "Pay to the order of
          Deutsche Bank National Trust Company, as Trustee under the Pooling and
          Servicing Agreement, dated as of June 1, 2005, among Asset Backed
          Funding Corporation, Ameriquest Mortgage Company and Deutsche Bank
          National Trust Company, ABFC 2005-AQ1 Trust, Asset-Backed
          Certificates, Series 2005-AQ1, without recourse," or with respect to
          any lost Mortgage Note, an original Lost Note Affidavit, together with
          a copy of the related Mortgage Note;

     (b)  the original Mortgage with evidence of recording thereon including any
          riders thereto, and the original recorded power of attorney, if the
          Mortgage was executed pursuant to a power of attorney, with evidence
          of recording thereon or, if such Mortgage or power of attorney has
          been submitted for recording but has not been returned from the
          applicable public recording office, has been lost or is not otherwise
          available, a copy of such Mortgage or power of attorney, as the case
          may be, certified to be a true and complete copy of the original
          submitted for recording;

     (c)  except with respect to each MERS Mortgage Loan, an original
          Assignment, in form and substance acceptable for recording. The
          Mortgage shall be assigned either (A) in blank or (B) to "Deutsche
          Bank National Trust Company, as Trustee under the Pooling and
          Servicing Agreement, dated as of June 1, 2005, among Asset Backed
          Funding

                                      -48-

          Corporation, Ameriquest Mortgage Company, ABFC 2005-AQ1 Trust,
          Asset-Backed Certificates, Series 2005-AQ1, without recourse";

     (d)  the originals of all recorded or unrecorded intervening Assignments
          (if any) evidencing a complete chain of assignment from the applicable
          originator to the last endorsee;

     (e)  the original or a certified copy of lender's title insurance policy or
          an attorney's opinion of title or similar guarantee of title
          acceptable to mortgage lenders generally in the jurisdiction where the
          Mortgaged Property is located, together with all endorsements or
          riders which were issued with or subsequent to the issuance of such
          policy, or in the event such original title policy is unavailable, a
          written commitment or uniform binder or preliminary report of title
          issued by the title insurance or escrow company; and

     (f)  the original or copies of each assumption, modification, written
          assurance or substitution agreement, if any.

          The Trustee agrees to execute and deliver to the Depositor on or prior
to the Closing Date an acknowledgment of receipt of the original Mortgage Notes
(with any exceptions noted), substantially in the form attached as Exhibit F-3
hereto.

          If any of the documents referred to in Section 2.01(b), (c) or (d)
above has as of the Closing Date been submitted for recording but either (x) has
not been returned from the applicable public recording office or (y) has been
lost or such public recording office has retained the original of such document,
the obligations of the Depositor to deliver such documents shall be deemed to be
satisfied upon (1) delivery to the Trustee no later than the Closing Date, of a
copy of each such document certified by the Seller or the Originator in the case
of (x) above or the applicable public recording office in the case of (y) above
to be a true and complete copy of the original that was submitted for recording
and (2) if such copy is certified by the Seller or the Originator, delivery to
the Trustee, promptly upon receipt thereof of either the original or a copy of
such document certified by the applicable public recording office to be a true
and complete copy of the original. If the original lender's title insurance
policy was not delivered pursuant to Section 2.01(e) above, the Seller shall
deliver or cause to be delivered to the Trustee, a written commitment or interim
binder or preliminary report of title issued by the title insurance or escrow
company, with the original to be delivered to the Trustee, promptly upon receipt
thereof. The Depositor shall deliver or cause to be delivered to the Trustee
promptly upon receipt thereof any other documents constituting a part of a
Mortgage File received with respect to any Mortgage Loan, including, but not
limited to, any original documents evidencing an assumption or modification of
any Mortgage Loan.

          The Servicer (in its capacity of Originator) shall promptly (and in no
event later than thirty (30) Business Days, subject to extension upon a mutual
agreement between the Servicer and the Trustee, following the later of (i) the
Closing Date, (ii) the date on which the Seller receives the Assignment from the
Trustee and (iii) the date of receipt by the Servicer of the recording
information for a Mortgage) submit or cause to be submitted for recording, at no
expense to the Trust Fund or the Trustee, in the appropriate public office for
real property records, each Assignment referred to in Sections 2.01(c) and (d)
above. In the event that any such Assignment is lost or returned unrecorded
because of a defect therein, the Servicer (in its

                                      -49-

capacity as Seller) shall promptly prepare or cause to be prepared a substitute
Assignment or cure or cause to be cured such defect, as the case may be, and
thereafter cause each such Assignment to be duly recorded.

          Notwithstanding the foregoing, however, for administrative convenience
and facilitation of servicing and to reduce closing costs, the Assignments shall
not be required to be submitted for recording unless such failure to record
would result in a withdrawal or a downgrading by any Rating Agency of the rating
on any Class of Certificates; provided further, however, each Assignment shall
be submitted for recording by the Servicer (in its capacity as Originator) in
the manner described above, at no expense to the Trust Fund or the Trustee, upon
the earliest to occur of: (i) reasonable direction by Holders of Certificates
entitled to at least 25% of the Voting Rights or the NIMS Insurer, (ii) failure
of the Servicer Termination Test, (iii) the occurrence of a bankruptcy or
insolvency relating to the Originator, (iv) the occurrence of a servicing
transfer as described in Section 7.02 hereof and (v) if the Originator is not a
Servicer and with respect to any one Assignment or Mortgage, the occurrence of a
bankruptcy, insolvency or foreclosure relating to the Mortgagor under the
related Mortgage. Notwithstanding the foregoing, if the Servicer is unable to
pay the cost of recording the Assignments, such expense shall be paid by the
Trustee from the Distribution Account.

          Upon discovery or receipt of notice of any materially defective
document in, or that a document is missing from, a Mortgage File, the Seller
shall have 120 days to cure such defect or 150 days following the Closing Date,
in the case of missing Mortgages or Assignments or deliver such missing document
to the Trustee. If the Seller (or if applicable, the Originator) does not cure
such defect or deliver such missing document within such time period, the Seller
shall repurchase such Mortgage Loan in accordance with Section 2.03.

          The Depositor herewith delivers to the Trustee executed copies of the
Originator Mortgage Loan Purchase Agreement, the Assignment, Assumption and
Recognition Agreement and the Mortgage Loan Purchase Agreement.

          It is agreed and understood by the parties hereto that it is not
intended that any mortgage loan be included in the Trust that is a "High-Cost
Home Loan" as defined in any of (i) the New Jersey Home Ownership Act effective
November 27, 2003, (ii) the New Mexico Home Loan Protection Act effective
January 1, 2004, (iii) the Massachusetts Predatory Home Loan Practices Act
effective November 7, 2004 or (iv) the Indiana Home Loan Practices Act,
effective January 1, 2005.

          Section 2.02 Acceptance by Trustee.

          The Trustee acknowledges the receipt of, subject to the provisions of
Section 2.01 and subject to the review described below and any exceptions noted
on the exception report described in the next paragraph below, the documents
referred to in Section 2.01 above and all other assets included in the
definition of "Trust Fund" and declares that it holds and will hold such
documents and the other documents delivered to it constituting a Mortgage File,
and that it holds or will hold all such assets and such other assets included in
the definition of "Trust Fund" in trust for the exclusive use and benefit of all
present and future Certificateholders.

                                      -50-

          The Trustee reviewed, for the benefit of the Certificateholders, each
Mortgage File prior to the Closing Date (or, with respect to any document
delivered after the Startup Day, within 60 days of receipt) and will certify in
substantially the form attached hereto as Exhibit F-1 that, as to each Mortgage
Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in
full or any Mortgage Loan specifically identified in the exception report
annexed thereto as not being covered by such certification), (i) all documents
required to be delivered to it pursuant to Section 2.01 of this Agreement are in
its possession, (ii) such documents have been reviewed by it and have not been
mutilated, damaged or torn and relate to such Mortgage Loan and (iii) based on
its examination and only as to the foregoing, the information set forth in the
Mortgage Loan Schedule that corresponds to items (1), (2), (12), (13), (14) and
(17) of the definition of "Mortgage Loan Schedule" accurately reflects
information set forth in the Mortgage File. It is herein acknowledged that, in
conducting such review, the Trustee is under no duty or obligation to 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 have actually been recorded or that they are
other than what they purport to be on their face.

          Prior to the first anniversary date of this Agreement the Trustee
shall deliver to the Depositor, the Servicer and the NIMS Insurer a final
certification in the form annexed hereto as Exhibit F-2 evidencing the
completeness of the Mortgage Files, with any applicable exceptions noted
thereon. Upon request by the Servicer, any exception report shall be provided in
an electronic computer readable format as mutually agreed upon by the Servicer
and the Trustee.

          If in the process of reviewing the Mortgage Files and making or
preparing, as the case may be, the certifications referred to above, the Trustee
finds any document or documents constituting a part of a Mortgage File to be
missing or not in compliance with such review criteria, at the conclusion of its
review the Trustee shall so notify the Seller, the Depositor, the NIMS Insurer
and the Servicer. In addition, upon the discovery by the Originator, the Seller,
the Depositor, the NIMS Insurer, the Trustee or the Servicer (or upon receipt by
the Trustee of written notification of such breach) of a breach of any of the
representations and warranties made by the Originator in the Originator Mortgage
Loan Purchase Agreement or the Seller in the Mortgage Loan Purchase Agreement in
respect of any Mortgage Loan which materially adversely affects such Mortgage
Loan or the interests of the related Certificateholders in such Mortgage Loan,
the party discovering such breach shall give prompt written notice to the other
parties.

          The Depositor and the Trustee intend that the assignment and transfer
herein contemplated constitute a sale of the Mortgage Loans and the Related
Documents, conveying good title thereto free and clear of any liens and
encumbrances, from the Depositor to the Trustee and that such property not be
part of the Depositor's estate or property of the Depositor in the event of any
insolvency by the Depositor. In the event that such conveyance is deemed to be,
or to be made as security for, a loan, the parties intend that the Depositor
shall be deemed to have granted and does hereby grant 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 and to the Mortgage Loans and the
Related Documents, and that this Agreement shall constitute a security agreement
under applicable law.

                                      -51-

          Section 2.03 Repurchase of Mortgage Loans by the Originator or the
Seller.

          (a) Upon discovery that any document does not satisfy, or is not in
compliance with the review criteria or receipt of written notice of any
materially defective document in, or that a document is missing from, a Mortgage
File or that any document in a Mortgage File is materially inconsistent with the
Mortgage Loan Schedule or of the breach by the Originator or the Seller of any
representation or warranty under the Originator Mortgage Loan Purchase Agreement
or the Mortgage Loan Purchase Agreement, as applicable, in respect of any
Mortgage Loan which materially adversely affects the value of such Mortgage
Loan, Prepayment Charge or the interest therein of the Certificateholders, the
Trustee shall promptly notify the Originator or the Seller, as the case may be,
the Servicer and the NIMS Insurer of such defect, missing document or breach and
request that, in the case of a defective or missing document, the Seller (or if
an obligation of the Originator under the Originator Mortgage Loan Purchase
Agreement, the Originator) shall cure such defect or deliver such missing
document within 120 days from the date the Seller or the Originator was notified
of such missing document or defect or, in the case of a breach of a
representation or warranty, request the Originator or the Seller, as applicable,
cure such breach within 90 days from the date the Originator or the Seller, as
the case may be, was notified of such breach. If the Originator or the Seller,
as applicable, does not deliver such missing document or cure such defect or
does not cure such breach in all material respects during such period, the
Trustee shall enforce the Originator's or the Seller's obligation, as the case
may be, under the Originator Mortgage Loan Purchase Agreement or the Mortgage
Loan Purchase Agreement, as applicable, and cause the Originator or the Seller,
as applicable, to repurchase such Mortgage Loan from the Trust Fund at the
Purchase Price on or prior to the Determination Date following the expiration of
such period (subject to Section 2.03(c)). The Purchase Price for the repurchased
Mortgage Loan shall be deposited in the Collection Account, and the Trustee,
upon receipt of written notice from the Servicer of such deposit, shall release
to the Originator or the Seller, as applicable, the related Mortgage File and
shall execute and deliver such instruments of transfer or assignment, in each
case without recourse, as the Originator or the Seller, as applicable, shall
furnish to it and as shall be necessary to vest in the Originator or the Seller,
as the case may be, any Mortgage Loan released pursuant hereto and the Trustee
shall have no further responsibility with regard to such Mortgage File.

          It is understood and agreed that the representations and warranties
set forth in the Originator Mortgage Loan Purchase Agreement and the Mortgage
Loan Purchase Agreement shall survive delivery of the Mortgage Files to the
Trustee and the Closing Date and shall inure to the benefit of the
Certificateholders notwithstanding any restrictive or qualified endorsement or
assignment. It is understood and agreed that the obligations of the Originator
and the Seller set forth in this Section 2.03(a) to cure or repurchase a
Mortgage Loan pursuant to the Originator Mortgage Loan Purchase Agreement or the
Mortgage Loan Purchase Agreement, as applicable, and to pay the Reimbursement
Amount constitute the sole remedies available to the Certificateholders and to
the Trustee on their behalf respecting a breach of the representations and
warranties contained in the Originator Mortgage Loan Purchase Agreement and the
Mortgage Loan Purchase Agreement. The preceding sentence shall not, however,
limit any remedies available to the Certificateholders, the Depositor or the
Trustee on behalf of the Certificateholders pursuant to the Originator Mortgage
Loan Purchase Agreement signed by the Servicer in its capacity as Originator,
respecting a breach of the representations, warranties and

                                      -52-

covenants of the Servicer in its capacity as Originator contained in the
Originator Mortgage Loan Purchase Agreement.

          Claims with respect to the breaches of representations and warranties
of the Originator relating to the Mortgage Loans in the Originator Mortgage Loan
Purchase Agreement, which have been assigned to the Trustee hereunder, may not
be made on or after May 27, 2008. To the extent that any fact, condition or
event with respect to a Mortgage Loan constitutes a breach of both (i) a
representation or warranty of the Originator under the Originator Mortgage Loan
Purchase Agreement and (ii) a representation or warranty of the Seller under the
Mortgage Loan Purchase Agreement (other than Seller's representations with
respect to predatory and abusive lending laws in Sections 3.01(i), 3.01(ii) and
3.01(iii) of the Mortgage Loan Purchase Agreement), the only right or remedy of
the Trustee or of any Certificateholder for claims made prior to May 27, 2008
shall be the Trustee's right to enforce the obligations of the Originator with
respect to a breach of the applicable representation or warranty made by it. The
Trustee acknowledges that prior to May 27, 2008 the Seller shall have no
obligation or liability with respect to any breach of a representation or
warranty made by it with respect to the Mortgage Loans (except as otherwise set
forth in this paragraph) if the fact, condition or event constituting such
breach also constitutes a breach of a representation or warranty made by the
Originator in the Originator Mortgage Loan Purchase Agreement, without regard to
whether the Originator fulfills its contractual obligations in respect of such
representation or warranty. In addition, to the extent that any fact, condition
or event with respect to a Mortgage Loan constitutes a breach (regardless of the
date of such breach) of both (x) the Originator's representations with respect
to predatory and abusive lending laws in Section 3.03(g), (bb), (ss) and (tt) of
the Originator Mortgage Loan Purchase Agreement and (y) the Seller's
representations with respect to predatory and abusive lending laws in Section
3.01(i), 3.01(ii) or 3.01(iii) of the Mortgage Loan Purchase Agreement, the
Originator shall be obligated to pay the Reimbursement Amount relating to such
Mortgage Loan to the extent provided in the Originator Mortgage Loan Purchase
Agreement. To the extent the Originator fails or is not obligated to pay the
Reimbursement Amount, the Trustee shall be entitled to enforce the Seller's
obligation to pay such Reimbursement Amount. In any event, the Reimbursement
Amount shall be delivered to the Servicer for deposit into the Collection
Account within ten (10) days from the date the Originator or the Seller, as
applicable, was notified by the Trustee of the Reimbursement Amount.

          (b) (i) Within 90 days of the earlier of discovery by the Servicer or
receipt of notice by the Servicer of the breach of any representation, warranty
or covenant of the Servicer set forth in Section 2.05 which materially and
adversely affects the interests of the Certificateholders in any Mortgage Loan,
the Servicer shall cure such breach in all material respects.

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

               (A) on the later of (x) the Servicer Remittance Date next
          following the earlier of discovery by the Servicer or receipt of
          notice by the Servicer of the breach of the representation made by the
          Servicer in Section 2.05(x), which breach materially and adversely
          affects the interests of the Holders of the Class P Certificates to
          any Prepayment Charge and (y) the Servicer Remittance Date next
          following the Prepayment Period relating to such a breach, the
          Servicer shall

                                      -53-

          deposit into the Collection Account the amount of the scheduled
          Prepayment Charge, less any amount collected and deposited by the
          Servicer into the Collection Account in respect of such Prepayment
          Charge; and

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

          (iii) If with respect to any Prepayment Period,

               (A) the dollar amount of Prepayment Charges that are the subject
          of breaches by the Servicer of the covenant made by the Servicer in
          Section 2.05(xiii), which breaches materially and adversely affect the
          interest of the Holders of the Class P Certificates to such Prepayment
          Charges, exceeds

               (B) 5% of the total dollar amount of Prepayment Charges payable
          by Mortgagors in connection with Principal Prepayments on the related
          Mortgage Loans that occurred during such Prepayment Period,

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

          (iv) The right of the Holders of the Class P Certificates to any
     Servicer Prepayment Charge Payment Amounts as described in this section
     2.03(b) shall not be an asset of any REMIC.

          (c) Upon discovery by the Originator, the Seller, the Servicer, the
NIMS Insurer or the Trustee that any Mortgage Loan does not constitute a
"qualified mortgage" within the meaning of Section 860G(a)(3) of the Code, the
party discovering such fact shall within two

                                      -54-

Business Days (or in the case of the Originator, such other timeframe required
pursuant to the Originator Mortgage Loan Purchase Agreement) give written notice
thereof to the other parties. In connection therewith, the Originator or the
Seller, as applicable, shall repurchase the affected Mortgage Loan within 90
days of the earlier of discovery or receipt of such notice with respect to such
affected Mortgage Loan. In addition, upon discovery that a Mortgage Loan is
defective in a manner that would cause it to be a "defective obligation" within
the meaning of Treasury Regulations relating to REMICs, the Originator or the
Seller, as the case may be, shall cure the defect or make the required purchase
no later than 90 days after the discovery of the defect. Any such repurchase
shall be made in the same manner as set forth in Section 2.03(a). The Trustee
shall reconvey to the Originator or the Seller, as applicable, the Mortgage Loan
to be released pursuant hereto in the same manner, and on the same terms and
conditions, as it would a Mortgage Loan repurchased for breach of a
representation or warranty.

          Section 2.04 Execution of Yield Maintenance Agreement.

          The Depositor hereby directs the Trustee to enter into and execute the
Yield Maintenance Agreement on the Closing Date on behalf of the Trust for the
benefit of the Holders of the Class A-1A Certificates. The Depositor, the
Servicer and the Holders of the Class A-1A Certificates (by their acceptance of
such Certificates) acknowledge that Deutsche Bank National Trust Company is
entering into the Yield Maintenance Agreement solely in its capacity as Trustee
of the Trust Fund and not in its individual capacity.

          Section 2.05 Representations, Warranties and Covenants of the
Servicer.

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

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

          (ii) The consummation of the transactions contemplated by this
     Agreement are in the ordinary course of business of the Servicer and will
     not result in the breach of any term or provision of the organizational
     documents of the Servicer or result in the breach of any term or provision
     of, or conflict with or constitute a default under or result in the
     acceleration of any obligation under, any material agreement, indenture or
     loan or credit agreement or other instrument to which the Servicer or its
     property is subject, or result in the violation of any law, rule,
     regulation, order, judgment or decree to which the Servicer or its property
     is subject;

                                      -55-

          (iii) The Servicer is an approved seller/servicer of conventional
     residential mortgage loans for Fannie Mae or Freddie Mac. The Servicer is a
     HUD approved mortgagee pursuant to Section 203 of the National Housing Act
     and is in good standing to sell mortgage loans to and service mortgage
     loans for Fannie Mae or Freddie Mac;

          (iv) This Agreement, and all documents and instruments contemplated
     hereby which are executed and delivered by the Servicer, constitute and
     will constitute valid, legal and binding obligations of the Servicer,
     enforceable in accordance with their respective terms, except as the
     enforcement thereof may be limited by applicable bankruptcy, insolvency,
     reorganization, moratorium or other similar laws affecting the enforcement
     of creditors' rights generally (whether considered in a proceeding at law
     or in equity);

          (v) Except as disclosed in the Prospectus Supplement, no litigation is
     pending or, to its knowledge, threatened against the Servicer that, either
     individually or in the aggregate, may result in any material adverse change
     in the business, operations, financial condition, properties or assets of
     the Servicer, or in any material impairment of the right or ability of the
     Servicer to carry on its business substantially as now conducted, or in any
     material liability on the part of the Servicer, or that would draw into
     question the validity or enforceability of this Agreement or of any action
     taken or to be taken in connection with the obligations of the Servicer
     contemplated herein, or that would be likely to impair materially the
     ability of the Servicer to perform under the terms of this Agreement;

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

          (vii) The initial electronic data tape and the monthly Remittance
     Reports provided to the Trustee or any of its Affiliates shall be true and
     correct in all material respects;

          (viii) The Servicer has fully furnished, and shall continue to fully
     furnish for so long as it is servicing the Mortgage Loans hereunder, in
     accordance with the Fair Credit Reporting Act and its implementing
     regulations, accurate and complete information on the Mortgagor credit
     files to Equifax, Experian and Trans Union Credit Information Company on a
     monthly basis;

          (ix) The Servicer acknowledges and agrees that the Servicing Fee
     represents reasonable compensation for performing such services and that
     the entire Servicing Fee shall be treated by the Servicer, for accounting
     and tax purposes, as compensation for the servicing and administration of
     the Mortgage Loans pursuant to this Agreement;

          (x) Each Prepayment Charge is permissible and enforceable in
     accordance with its terms (except to the extent that (i) the enforceability
     thereof may be limited by

                                      -56-

     bankruptcy, insolvency, moratorium, receivership and other similar laws
     relating to creditors' rights generally and (ii) the collectability thereof
     may be limited due to acceleration in connection with a foreclosure or
     other involuntary payment); and

          (xi) The Servicer shall not waive any Prepayment Charge or part of a
     Prepayment Charge unless, (i) the enforceability thereof shall have been
     limited by bankruptcy, insolvency, moratorium, receivership and other
     similar laws relating to creditors' rights generally, (ii) the
     collectability thereof shall have been limited due to acceleration in
     connection with a foreclosure or other involuntary payment or (iii) in the
     Servicer's reasonable judgment as described in Section 3.01 hereof, (x)
     such waiver relates to a default or a reasonably foreseeable default, (y)
     such waiver would maximize recovery of total proceeds taking into account
     the value of such Prepayment Charge and related Mortgage Loan and (z) doing
     so is standard and customary in servicing similar Mortgage Loans (including
     any waiver of a Prepayment Charge in connection with a refinancing of a
     Mortgage Loan that is related to a default or a reasonably foreseeable
     default). In no event shall the Servicer waive a Prepayment Charge in
     connection with a refinancing of a Mortgage Loan that is not related to a
     default or a reasonably foreseeable default.

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

          Section 2.06 Representations and Warranties of the Depositor.

          The Depositor represents and warrants to the Trust and the Trustee on
behalf of the Certificateholders and to the Servicer and the NIMS Insurer as
follows:

          (i) This agreement constitutes a legal, valid and binding obligation
     of the Depositor, enforceable against the Depositor in accordance with its
     terms, except as

                                      -57-

     enforceability may be limited by applicable bankruptcy, insolvency,
     reorganization, moratorium or other similar laws now or hereafter in effect
     affecting the enforcement of creditors' rights in general and except as
     such enforceability may be limited by general principles of equity (whether
     considered in a proceeding at law or in equity);

          (ii) Immediately prior to the sale and assignment by the Depositor to
     the Trustee on behalf of the Trust of each Mortgage Loan, the Depositor had
     good and marketable title to each Mortgage Loan subject to no prior lien,
     claim, participation interest, mortgage, security interest, pledge, charge
     or other encumbrance or other interest of any nature;

          (iii) As of the Closing Date, the Depositor has transferred all right,
     title interest in the Mortgage Loans to the Trustee on behalf of the Trust;

          (iv) The Depositor has not transferred the Mortgage Loans to the
     Trustee on behalf of the Trust with any intent to hinder, delay or defraud
     any of its creditors;

          (v) The Depositor has been duly incorporated and is validly existing
     as a corporation in good standing under the laws of the State of Delaware,
     with full corporate power and authority to own its assets and conduct its
     business as presently being conducted;

          (vi) The Depositor is not in violation of its certificate of
     incorporation or by-laws or in default in the performance or observance of
     any material obligation, agreement, covenant or condition contained in any
     contract, indenture, mortgage, loan agreement, note, lease or other
     instrument to which the Depositor is a party or by which it or its
     properties may be bound, which default might result in any material adverse
     changes in the financial condition, earnings, affairs or business of the
     Depositor or which might materially and adversely affect the properties or
     assets, taken as a whole, of the Depositor;

          (vii) The execution, delivery and performance of this Agreement by the
     Depositor, and the consummation of the transactions contemplated thereby,
     do not and will not result in a material breach or violation of any of the
     terms or provisions of, or, to the knowledge of the Depositor, constitute a
     default under, any indenture, mortgage, deed of trust, loan agreement or
     other agreement or instrument to which the Depositor is a party or by which
     the Depositor is bound or to which any of the property or assets of the
     Depositor is subject, nor will such actions result in any violation of the
     provisions of the certificate of incorporation or by-laws of the Depositor
     or, to the best of the Depositor's knowledge without independent
     investigation, any statute or any order, rule or regulation of any court or
     governmental agency or body having jurisdiction over the Depositor or any
     of its properties or assets (except for such conflicts, breaches,
     violations and defaults as would not have a material adverse effect on the
     ability of the Depositor to perform its obligations under this Agreement);

          (viii) To the best of the Depositor's knowledge without any
     independent investigation, no consent, approval, authorization, order,
     registration or qualification of or

                                      -58-

     with any court or governmental agency or body of the United States or any
     other jurisdiction is required for the issuance of the Certificates, or the
     consummation by the Depositor of the other transactions contemplated by
     this Agreement, except such consents, approvals, authorizations,
     registrations or qualifications as (a) may be required under State
     securities or Blue Sky laws, (b) have been previously obtained or (c) the
     failure of which to obtain would not have a material adverse effect on the
     performance by the Depositor of its obligations under, or the validity or
     enforceability of, this Agreement; and

          (ix) There are no actions, proceedings or investigations pending
     before or, to the Depositor's knowledge, threatened by any court,
     administrative agency or other tribunal to which the Depositor is a party
     or of which any of its properties is the subject: (a) which if determined
     adversely to the Depositor would have a material adverse effect on the
     business, results of operations or financial condition of the Depositor;
     (b) asserting the invalidity of this Agreement or the Certificates; (c)
     seeking to prevent the issuance of the Certificates or the consummation by
     the Depositor of any of the transactions contemplated by this Agreement, as
     the case may be; (d) which might materially and adversely affect the
     performance by the Depositor of its obligations under, or the validity or
     enforceability of, this Agreement.

          Section 2.07 Issuance of Certificates and the Uncertificated Regular
Interests.

          The Trustee acknowledges the assignment to it of the Mortgage Loans
and the delivery to it of the Mortgage Files, subject to the provisions of
Sections 2.01 and 2.02, and the Trustee acknowledges the assignment to it of all
other assets included in the Trust Fund, receipt of which is hereby
acknowledged. Concurrently with such assignment and delivery and in exchange
therefor, the Trustee, pursuant to the Written Order to Authenticate executed by
an officer of the Depositor, has executed, and the Certificate Registrar has
authenticated and delivered to or upon the order of the Depositor, the
Certificates (other than the Class CE, Class P and Class R Certificates) in
minimum dollar denominations of $25,000 and integral dollar multiples of $1 in
excess thereof or in the case of the Class P Certificates, in minimum
denominations of $20 and integral multiples of $20 in excess thereof. The Class
CE Certificates are issuable only in minimum Percentage Interests of 10%. The
Class R Certificate is issuable only as a single certificate. The Trustee
acknowledges the issuance of the uncertificated REMIC 1 Regular Interests and
declares that it hold such regular interests as assets of REMIC 2. The Trustee
acknowledges the obligation of the Class CE Certificates to pay Cap Carryover
Amounts, and declares that it hold the same as assets of the Grantor Trust on
behalf of the Holders of the Class A-1A Certificates, which shall be treated as
beneficially owning the right to receive the Cap Carryover Amounts from the
Grantor Trust. In addition to the assets described in the preceding sentence,
the assets of the Grantor Trust shall also include (i) any Servicer Prepayment
Charge Payment Amounts and the beneficial interest of the Class P Certificates
with respect thereto and (ii) the Yield Maintenance Agreement, the Reserve
Account and the beneficial interest of the Class CE Certificates with respect
thereto, subject to the obligation to pay Cap Carryover Amounts. The interests
evidenced by the Certificates constitute the entire beneficial ownership
interest in the Trust Fund.

                                      -59-

                                   ARTICLE III

                          ADMINISTRATION AND SERVICING
                                OF THE TRUST FUND

          Section 3.01 Servicer to Act as Servicer.

          The Servicer shall service and administer the Mortgage Loans on behalf
of the Trust and in the best interests of and for the benefit of the
Certificateholders in accordance with this Agreement and the normal and usual
standards of practice of prudent mortgage servicers servicing similar mortgage
loans and, to the extent consistent with such terms, in the same manner in which
it services and administers similar mortgage loans for its own portfolio, and
shall have full power and authority, acting alone, to do or cause to be done any
and all things in connection with such servicing and administration which the
Servicer may deem necessary or desirable and consistent with the terms of this
Agreement (the "Servicing Standard").

          Consistent with the terms of this Agreement, the Servicer may waive,
modify or vary any term of any Mortgage Loan or consent to the postponement of
strict compliance with any such term or in any manner grant indulgence to any
Mortgagor if in the Servicer's reasonable and prudent determination such waiver,
modification, postponement or indulgence is not materially adverse to the
Certificateholders; provided, however, that the Servicer shall not make future
advances and, except as set forth in the following sentence or Section 3.03, the
Servicer shall not permit any modification with respect to any Mortgage Loan
that would (i) change the Mortgage Interest Rate, defer or forgive the payment
thereof of any principal or interest payments, reduce the outstanding principal
amount (except for actual payments of principal) or extend the final maturity
date with respect to such Mortgage Loan or (ii) cause an Adverse REMIC Event.
Notwithstanding anything to the contrary contained in this Agreement, in the
event that any Mortgage Loan is in default or, if such default is reasonably
foreseeable, the Servicer, consistent with the standards set forth in this
Section 3.01, may also waive, modify or vary any term of such Mortgage Loan
(including modifications that would change the Mortgage Rate, forgive the
payment of principal or interest, extend the final maturity date of such
Mortgage Loan (including modifications that would change the Mortgage Rate,
forgive the payment of principal or interest, extend the final maturity date of
such Mortgage Loan or waive, in whole or in part, a Prepayment Charge)), accept
payment from the related Mortgagor of an amount less than the unpaid Principal
Balance in final satisfaction of such Mortgage Loan, or consent to the
postponement of strict compliance with any such term or otherwise grant
indulgence to any Mortgagor (any and all such waivers, modifications, variances,
forgiveness of principal or interest, postponements, or indulgences collectively
referred to herein as "forbearance"); provided, however, that the final maturity
date of any Mortgage Loan may not be extended beyond the latest Assumed Final
Distribution Date. The Servicer's analysis supporting any forbearance and the
conclusion that any forbearance meets the standards of this Section 3.01 shall
be reflected in writing in the Servicing File. Notwithstanding the foregoing,
the Servicer shall not permit any modification with respect to any Mortgage Loan
that would both (x) effect an exchange or reissuance of such Mortgage Loan under
Section 1.860G-2(b) of the Treasury Regulations and (y) cause an Adverse REMIC
Event. The NIMS Insurer's prior written consent shall be required for any
modification, waiver or amendment if the aggregate number of outstanding
Mortgage Loans which have been modified, waived or amended exceeds 5% of the

                                      -60-

number of Mortgage Loans as of the Cut-off Date. Without limiting the generality
of the foregoing, the Servicer shall continue, and is hereby authorized and
empowered to execute and deliver on behalf of itself, and the Trustee, 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 Property. The Servicer shall make all
required Servicing Advances and shall service and administer the Mortgage Loans
in accordance with Applicable Regulations, and shall provide to the Mortgagor
any reports required to be provided to them thereby. The Trustee shall execute
and deliver to the Servicer within at least fifteen (15) Business Days of
receipt, upon request, any powers of attorney furnished to it in the Trustee's
standard and customary form by the Servicer empowering the Servicer to execute
and deliver instruments of satisfaction or cancellation, or of partial or full
release or discharge, and to foreclose upon or otherwise liquidate any Mortgaged
Property, and to appeal, prosecute or defend in any court action relating to the
Mortgage Loans or the Mortgaged Properties, in accordance with this Agreement,
and the Trustee shall execute and deliver such other documents as the Servicer
may request, necessary or appropriate to enable the Servicer to service and
administer the Mortgage Loans and carry out its duties hereunder, in each case
in accordance with Servicing Standard (and the Trustee shall have no liability
for misuse of any such powers of attorney by the Servicer). Notwithstanding
anything contained herein to the contrary, the Servicer shall not without the
Trustee's written consent: (i) initiate any action, suit or proceeding solely
under the Trustee's name without indicating the Servicer's representative
capacity or (ii) take any action with the intent to cause, and which results in,
the Trustee being registered to do business in any state.

          In servicing and administering the Mortgage Loans, the Servicer shall
employ procedures including collection procedures and exercise the same care
that it customarily employs and exercises in servicing and administering
mortgage loans for its own account giving due consideration to accepted mortgage
servicing practices of prudent lending institutions and the Certificateholders'
reliance on the Servicer.

          The Servicer shall give prompt notice to the Trustee in the event it
has been served with respect to any action (i) asserting a claim against the
Trust Fund or (ii) asserting jurisdiction over the Trust Fund.

          To the extent consistent with the terms of this Agreement, including
Section 2.03 and Section 2.05, the Servicer may waive (or permit a subservicer
to waive) a Prepayment Charge only under the following circumstances: (i) such
waiver is standard and customary in servicing similar Mortgage Loans and (ii)
such waiver relates to a default or a reasonably foreseeable default and would,
in the reasonable judgment of the Servicer, maximize recovery of total proceeds
taking into account the value of such Prepayment Charge and the related Mortgage
Loan. If the Servicer has waived or does not collect all or a portion of a
Prepayment Charge relating to a voluntary Principal Prepayment in full due to
any action or omission of the Servicer, other than as provided above, the
Servicer shall, on the date on which the Principal Prepayment is remitted to the
Trustee, deliver to the Trustee the Servicer Prepayment Charge Amount with
respect to such Mortgage Loan for distribution in accordance with the terms of
this Agreement.

                                      -61-

          Section 3.02 Collection of Mortgage Loan Payments.

          Continuously from the date hereof until the principal and interest on
all Mortgage Loans are paid in full or as long as the Mortgage Loan remains
subject to this Agreement, the Servicer will diligently collect all payments due
under each Mortgage Loan when the same shall become due and payable and shall,
to the extent such procedures shall be consistent with this Agreement and
Applicable Regulations, follow such collection procedures as it follows with
respect to mortgage loans comparable to the Mortgage Loans and held for its own
account. Further, the Servicer will take special care in ascertaining and
estimating on escrowed Mortgage Loans annual taxes, fire and hazard insurance
premiums, mortgage insurance premiums, and all other charges that, as provided
in the Mortgage, will become due and payable to that end that the installments
payable by the Mortgagors will be sufficient to pay such charges as and when
they become due and payable.

          Section 3.03 Realization Upon Defaulted Mortgage Loans.

          In the event that any payment due under any Mortgage Loan is not paid
when the same becomes due and payable, or in the event the Mortgagor fails to
perform any other covenant or obligation under the Mortgage Loan and such
failure continues beyond any applicable grace period, the Servicer shall take
such action as it shall deem to be in the best interest of the
Certificateholders; provided, however, that any costs and expenses incurred with
respect thereto shall be recoverable as Servicing Advances by the Servicer as
contemplated in Section 3.05 and Section 3.13. With respect to any defaulted
Mortgage Loan, the Servicer shall have the right to review the status of the
related forbearance plan and, subject to the second paragraph of Section 3.01,
may modify such forbearance plan; including extending the Mortgage Loan
repayment date for a period of one year or reducing the Mortgage Interest Rate
up to 50 basis points.

          In connection with a foreclosure or other conversion, the Servicer
shall exercise such rights and powers vested in it hereunder and use the same
degree of care and skill in its exercise as prudent mortgage servicers would
exercise or use under the circumstances in the conduct of their own affairs and
consistent with Applicable Regulations and the Servicing Standard, including,
without limitation, advancing funds for the payment of taxes and insurance
premiums.

          Notwithstanding the foregoing provisions of this Section 3.03, with
respect to any Mortgage Loan as to which the Servicer has received actual notice
of, or has actual knowledge of, the presence of any toxic or hazardous substance
on the related Mortgaged Property, the Servicer shall not either (i) obtain
title to such Mortgaged Property as a result of or in lieu of foreclosure or
otherwise, or (ii) otherwise acquire possession of, or take any other action
with respect to, such Mortgaged Property if, as a result of any such action, the
Trust would be considered to hold title to, to be a mortgagee-in-possession of,
or to be an owner or operator of such Mortgaged Property within the meaning of
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended from time to time, or any comparable law, unless the Servicer
has received the prior written consent of the NIMS Insurer and has received a
prudent report prepared by a Person who regularly conducts environmental audits
using customary industry standards, that:

                                      -62-

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

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

          The cost of the environmental audit report contemplated by this
Section 3.03 shall be advanced by the Servicer, subject to the Servicer's right
to be reimbursed therefor from the Collection Account as provided in Section
3.05(a)(iv).

          If the Servicer determines, as described above, that it is in the best
economic interest of the Certificateholders to take such actions as are
necessary to bring any such Mortgaged Property into compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials, hazardous
wastes, or petroleum-based materials affecting any such Mortgaged Property, then
the Servicer shall take such action as it deems to be in the best economic
interest of the Certificateholders. The cost of any such compliance,
containment, clean-up or remediation shall be advanced by the Servicer, subject
to the Servicer's right to be reimbursed therefor from the Collection Account as
provided in Section 3.05(a).

          Section 3.04 Collection Accounts, Distribution Account and Reserve
Accounts.

          (a) The Servicer shall segregate and hold all funds collected and
received pursuant to each Mortgage Loan separate and apart from any of its own
funds and general assets and shall establish and maintain one or more Collection
Accounts. Each Collection Account shall be an Eligible Account.

          The Servicer shall deposit or cause to be deposited on a daily basis
and in no event more than two Business Days after receipt thereof in the
clearing account (which must be an Eligible Account) in which it customarily
deposits payments and collections on mortgage loans in connection with its
mortgage loan servicing activities, and shall thereafter deposit in the
Collection Account, in no event more than two Business Days after deposit of
such funds in the clearing account, and retain therein, the following payments
and collections received or made by it after the Cut-off Date with respect to
the Mortgage Loans (other than in respect of principal and interest due on or
before the Cut-off Date):

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

          (ii) all payments on account of interest on the Mortgage Loans,
     adjusted to the Mortgage Interest Rate less the Servicing Fee Rate and any
     Prepayment Interest Excess;

                                      -63-

          (iii) all Liquidation Proceeds and any Subsequent Recoveries;

          (iv) all Insurance Proceeds including amounts required to be deposited
     pursuant to Section 3.10, other than proceeds to be held in the Escrow
     Account and applied to the restoration or repair of the Mortgaged Property
     or released to the Mortgagor in accordance with the Servicer's normal
     servicing procedures, the loan documents or applicable law;

          (v) all Condemnation Proceeds affecting any Mortgaged Property which
     are not released to the Mortgagor in accordance with the Servicer's normal
     servicing procedures, the loan documents or applicable law;

          (vi) any amounts required to be deposited by the Servicer in
     connection with any REO Property pursuant to Section 3.13;

          (vii) all Prepayment Charges collected by the Servicer and all
     Servicer Prepayment Charge Payment Amounts required to be paid by the
     Servicer pursuant to Section 2.03(b)(ii)(A) and pursuant to Section
     2.03(b)(ii)(B) as limited by Section 2.03(b)(iii);

          (viii) all amounts required to be deposited by the Servicer pursuant
     to Section 2.03; and

          (ix) any amount required to be deposited by the Servicer pursuant to
     Section 3.25(b) in connection with any losses realized on Permitted
     Investments with respect to funds held in the Collection Account.

          Any interest paid on funds deposited in the Collection Accounts,
subject to Section 3.25, shall accrue to the benefit of the Servicer and the
Servicer shall be entitled to retain and withdraw such interest from the
Collection Accounts pursuant to Section 3.05(e). The foregoing requirements for
deposit into the Collection Account shall be exclusive, it being understood and
agreed that, without limiting the generality of the foregoing, payments in the
nature of late payment charges, bad check fees, prepayment charges that are not
Prepayment Charges or Servicer Prepayment Charge Payment Amounts, assumption
fees and other similar fees need not be deposited by the Servicer into the
Collection Account. Amounts deposited in the Collection Accounts in error may be
withdrawn by the Servicer at any time.

          (b) On behalf of the Trust Fund, the Trustee shall establish and
maintain one or more accounts (such account or accounts, the "Distribution
Account"), held in trust for the benefit of the Certificateholders. On behalf of
the Trust Fund, the Servicer shall deliver to the Trustee in immediately
available funds for deposit in the Distribution Account by 3:00 p.m. New York
time on the Servicer Remittance Date, (i) that portion of the Available Funds
(calculated without regard to the references in the definition thereof to
amounts that may be deposited to the Distribution Account from a different
source as provided herein) then on deposit in the Collection Accounts and (ii)
the amount of all Prepayment Charges collected by the Servicer and all Servicer
Prepayment Charge Payment Amounts required to be paid by the Servicer then on
deposit in the Collection Account (other than any such Prepayment Charges
received and Servicer Prepayment Charge Payment Amounts paid after the related
Prepayment Period) and

                                      -64-

any amounts reimbursable to an Advancing Person pursuant to Section 3.33 and the
terms of the related Advance Facility. Amounts in the Distribution Account shall
be deemed to be held on behalf of the related REMICs and the Grantor Trust in
accordance with the REMIC distributions set forth in Section 4.08. The Trustee
shall be entitled to withdraw from the Distribution Account any amounts owing to
it pursuant to Section 8.05 and Section 9.01(c) and any amounts owed to the
Trustee which have not been paid or reimbursed pursuant to Section 3.05(h) prior
to the distribution of any amounts on deposit to the Certificateholders;
provided, however, in the case of amounts owing to it other than the Trustee
Fee, the Trustee shall provide the Depositor, the NIMS Insurer and the Servicer
with a written account of such amounts within ten (10) Business Days following
the withdrawal of such funds, provided further, that the Trustee shall not be
entitled to withdraw such amounts for funds on deposit in the Distribution
Account representing Prepayment Charges and Servicer Prepayment Charge Payment
Amounts. In connection with any failure by the Servicer to make any remittance
required to be made by the Servicer to the Trustee for deposit in the
Distribution Account on the day and by the time such remittance is required to
be made under the terms of this Section 3.04(b) (without giving effect to any
grace or cure period), the Servicer shall pay to the Trustee for the account of
the Trustee interest at the prime rate of United States money center commercial
banks as published in The Wall Street Journal on any amount not timely remitted
from and including the day such remittance was required to be made to, but not
including, the day on which such remittance was actually made.

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

          (d) In the event the Servicer shall deliver to the Trustee for deposit
in the Distribution Account any amount not required to be deposited therein, it
may at any time request that the Trustee withdraw such amount from the
Distribution Account and remit to the Servicer any such amount, any provision
herein to the contrary notwithstanding. In addition, the Servicer shall deliver
to the Trustee from time to time for deposit, and the Trustee shall so deposit,
in the Distribution Account in respect of REMIC 1:

          (i) any Advances, as required pursuant to Section 4.07;

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

          (iii) any amounts required to be delivered by the Servicer to the
     Trustee for deposit in the Distribution Account pursuant to Sections 2.03,
     3.04 (except as specified in clause (f) below), 3.13, 3.15, 3.16, 3.23,
     3.24, 4.07 or 10.01; and

          (iv) any amounts required to be deposited by the Servicer pursuant to
     Section 3.11 in connection with the deductible clause in any blanket hazard
     insurance

                                      -65-

     policy, such deposit being made from the Servicer's own funds, without
     reimbursement therefor.

          (e) Promptly upon receipt of any Stayed Funds, whether from the
Servicer, a trustee in bankruptcy, or federal bankruptcy court or other source,
the Trustee shall notify the Servicer of such receipt and deposit such funds in
the Distribution Account, subject to withdrawal thereof as permitted hereunder.
In addition, the Trustee shall deposit in the Distribution Account any amounts
required to be deposited pursuant to Section 3.25(b) in connection with losses
realized on Eligible Investments with respect to funds held in the Distribution
Account.

          (f) Any Servicer Prepayment Charge Payment Amounts deposited pursuant
to Section 3.04(a)(vii) shall not be assets of any REMIC created hereunder, but
shall be considered assets of the Grantor Trust held by the Trustee for the
benefit of the Class P Certificateholders.

          (g) (i) The Trustee shall establish and maintain the Reserve Account,
held in trust for the benefit of the Holders of the Class A-1A Certificates. The
Trustee shall deposit in the Reserve Account on the date received by it, any
Yield Maintenance Agreement Payment received from the Yield Maintenance
Agreement Provider for the related Distribution Date.

          On each Distribution Date, the Trustee shall withdraw from the Reserve
     Account any Yield Maintenance Agreement Payment and apply it in the
     following order of priority:

               (A) to the Class A-1A Certificates from the Reserve Account, any
     remaining unpaid Cap Carryover Amounts for such Distribution Date after
     distributions to the Class A-1A Certificates pursuant to Section
     3.04(g)(iii) hereof; and

               (B) to the Class CE Certificates, any remaining amount on deposit
     in the Reserve Accounts.

          (ii) The Trustee shall account for the Reserve Account as an asset of
     a grantor trust under subpart E, part I of subchapter J of the Code and not
     an asset of any REMIC created pursuant to this Agreement. The Reserve Fund
     will constitute an "outside reserve fund" for purposes of the REMIC
     Provisions. The beneficial owner of the Reserve Account is the Class CE
     Certificateholder. For all federal tax purposes, amounts transferred or
     reimbursed by REMIC 2 to the Reserve Account shall be treated as
     distributions by the Trustee to the Class CE Certificateholder.

          (iii) Any Cap Carryover Amounts (exclusive of payments from the Yield
     Maintenance Agreement) paid by the Trustee pursuant to this Section 3.04(g)
     to the Class A-1A Certificates, shall be accounted for by the Trustee as
     amounts paid first to the Class CE Certificates and then to the Class A-1A
     Certificates from the Grantor Trust. In addition, the Trustee shall account
     for the Class A-1A Certificates' rights to receive payments of Cap
     Carryover Amounts as rights in limited recourse interest rate cap contracts
     written by the Class CE Certificates in favor of the Class A-1A
     Certificates.

                                      -66-

          (iv) For federal tax return and information reporting, the right of
     the Holders of the Class A-1A Certificates to receive payments under the
     Yield Maintenance Agreement shall be assigned a value of zero.

          (v) Amounts in the Reserve Fund shall be held uninvested.

          Section 3.05 Permitted Withdrawals From the Collection Accounts.

          The Servicer may, from time to time, withdraw from the Collection
Account for the following purposes:

          (a) to remit to the Trustee for deposit in the Distribution Account
the amounts required to be so remitted pursuant to Section 3.04(b) or permitted
to be so remitted pursuant to the first sentence of Section 3.04(d);

          (b) to reimburse itself for (i) any unreimbursed Advances to the
extent of amounts received which represent Late Collections (net of the related
Servicing Fees) of Monthly Payments, Liquidation Proceeds and Insurance Proceeds
on Mortgage Loans with respect to which such Advances were made in accordance
with the provisions of Section 4.07; (ii) any unreimbursed Advances that are
Nonrecoverable Advances; or (iii) subject to Section 4.07(b), any unreimbursed
Advances to the extent of funds held in the Collection Account for future
distribution that were not included in Available Funds for the preceding
Distribution Date;

          (c) to reimburse itself for any unreimbursed Servicing Advances with
respect to each Mortgage Loan, but only to the extent of any Late Collections,
Liquidation Proceeds, Insurance Proceeds and condemnation proceeds received with
respect to such Mortgage Loan, or (ii) any Servicing Advances that are
Nonrecoverable Advances;

          (d) to reimburse itself for any amounts paid or expenses incurred
pursuant to Section 3.03 (and not otherwise previously reimbursed);

          (e) to pay to itself as servicing compensation (a) any interest earned
on funds in the Collection Account (all such interest to be withdrawn monthly
not later than each Servicer Remittance Date), and (b) the Servicing Fee from
that portion of any payment or recovery as to interest to a particular Mortgage
Loan to the extent not retained pursuant to Section 3.04(a)(ii);

          (f) to pay or reimburse itself or the Depositor for any amounts
payable or paid pursuant to Section 6.03 (and not otherwise previously
reimbursed);

          (g) to pay to itself any Prepayment Interest Excess on the related
Mortgage Loans to the extent not retained pursuant to Section 3.04(a)(ii);

          (h) to remit to the Trustee any amounts that the Trustee is permitted
to be paid or reimbursed from the assets of the Trust Fund pursuant to the terms
of this Agreement, including the terms of Section 7.01, Section 7.02(a) and
Section 8.05 of this Agreement;

          (i) to reimburse the NIMS Insurer, the Servicer (if the Servicer is
not an Affiliate of the Originator) or the Trustee, as the case may be, for
enforcement expenses

                                      -67-

reasonably incurred in respect of the breach or defect giving rise to the
purchase obligation under Section 2.03 of this Agreement that were included in
the Purchase Price of the Mortgage Loan, including any expenses arising out of
the enforcement of the purchase obligation;

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

          (k) to transfer funds to the Collection Account maintained at a
particular depository to the Collection Account maintained at a different
depository, pursuant to Section 3.09; and

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

          On each Business Day as of the commencement of which the balance on
deposit in the Collection Account exceeds $75,000 following any withdrawals
pursuant to the next succeeding sentence, the amount of such excess shall be
remitted to the Trustee, but only if the Collection Account constitutes an
Eligible Account solely pursuant to clause (ii) of the definition of "Eligible
Account." If the balance on deposit in the Collection Account exceeds $75,000 as
of the commencement of business on any Business Day and the Collection Account
constitutes an Eligible Account solely pursuant to clause (ii) of the definition
of "Eligible Account," the Servicer, shall on or before 3:00 p.m. New York time
on such Business Day, withdraw from the Collection Account any and all amounts
payable or reimbursable to the Depositor, the Servicer, the Trustee or any
Sub-Servicer pursuant to Section 3.05 and shall pay such amounts to the Persons
entitled thereto.

          The foregoing requirements for withdrawal from each of the Collection
Accounts shall be exclusive. In the event the Servicer shall deposit in either
Collection Account any amount not required to be deposited therein, it may at
any time withdraw such amount from such Collection Account, any provision herein
to the contrary notwithstanding.

          The Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Collection Account, to the extent held by or on behalf of
it, pursuant to subclauses (b), (c), (d), (e), (f), (g) and (j) above. The
Servicer shall provide written notification to the Trustee and the NIMS Insurer
on or prior to the next succeeding servicer reporting date, upon making any
withdrawals from the Collection Account pursuant to subclause (f) above.

          Section 3.06 Establishment of Escrow Accounts; Deposits in Escrow
Accounts.

          The Servicer shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan which constitute Escrow Payments separate and
apart from any of its own funds and general assets and shall establish and
maintain one or more Escrow Accounts, in the form of time deposit or demand
accounts. A copy of such letter agreement shall be furnished to the Trustee upon
request. The Escrow Account shall be an Eligible Account.

                                      -68-

          The Servicer shall deposit or cause to be deposited on a daily basis
and in no event more than two Business Days after receipt thereof in the
clearing account (which must be an Eligible Account) in which it customarily
deposits payments and collections on mortgage loans in connection with its
mortgage loan servicing activities, and shall thereafter deposit in the Escrow
Account or Accounts, in no event more than two Business Days after deposit of
such funds in the clearing account, and retain therein, (i) all Escrow Payments
collected on account of the Mortgage Loans, for the purpose of effecting timely
payment of any such items as required under the terms of this Agreement, and
(ii) all Insurance Proceeds which are to be applied to the restoration or repair
of any Mortgaged Property. The Servicer shall make withdrawals therefrom only to
effect such payments as are required under this Agreement, and for such other
purposes as shall be set forth in, or in accordance with, Section 3.07. The
Servicer shall be entitled to retain any interest paid on funds deposited in the
Escrow Account by the depository institution other than interest on escrowed
funds required by law to be paid to the Mortgagor and, to the extent required by
the related Mortgage Loan or Applicable Regulations, the Servicer shall pay
interest on escrowed funds to the Mortgagor notwithstanding that the Escrow
Account is non-interest bearing or that interest paid thereon is insufficient
for such purposes.

          Section 3.07 Permitted Withdrawals From Escrow Account.

          Withdrawals from the Escrow Account may be made by the Servicer (i) to
effect timely payments of ground rents, taxes, assessments, water rates, fire,
flood and hazard insurance premiums and comparable items in a manner and at a
time that assures that the lien priority of the Mortgage is not jeopardized (or,
with respect to the payment of taxes, in a manner and at a time that avoids the
loss of the Mortgaged Property due to a tax sale or the foreclosure as a result
of a tax lien), (ii) to reimburse the Servicer for any Servicing Advance made by
the Servicer with respect to a related Mortgage Loan but only from amounts
received on the related Mortgage Loan which represent late payments or Late
Collections of Escrow Payments thereunder with respect to taxes and assessments
and with respect to hazard insurance, (iii) to refund to the Mortgagor any funds
as may be determined to be overages, (iv) for transfer to the Collection Account
in accordance with the terms of this Agreement, (v) for application to
restoration or repair of the Mortgaged Property, (vi) to pay to the Servicer, or
to the Mortgagor to the extent required by the related Mortgage Loan or
Applicable Regulations, any interest paid on the funds deposited in the Escrow
Account, (vii) to clear and terminate the Escrow Account on the termination of
this Agreement, or (viii) to transfer to the Collection Account any insurance
proceeds. As part of its servicing duties, the Servicer shall pay to the
Mortgagor interest on funds in the Escrow Account, to the extent required by the
related Mortgage Loan or Applicable Regulations, and to the extent that interest
earned on funds in the Escrow Account is insufficient, shall pay such interest
from its own funds, without any reimbursement therefor.

          In the event the Servicer shall deposit in the Escrow Account any
amount not required to be deposited therein, it may at any time withdraw such
amount from the Escrow Account, any provision herein to the contrary
notwithstanding.

                                      -69-

          Section 3.08 Payment of Taxes, Insurance and Other Charges;
Collections Thereunder.

          With respect to each Mortgage Loan that provides for Escrow Payments,
the 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 fire, flood and hazard
insurance coverage and shall obtain, from time to time, all bills for the
payment of such charges (including renewal premiums) and shall effect payment of
taxes, assessments, hazard insurance premiums, and comparable items in a manner
and at a time that assures that the lien priority of the Mortgage is not
jeopardized (or, with respect to the payment of taxes, in a manner and at a time
that avoids the loss of the Mortgaged Property due to a tax sale or the
foreclosure as a result of a tax lien). To the extent that a Mortgage does not
provide for Escrow Payments, the Servicer (i) shall determine whether any such
payments are made by the Mortgagor in a manner and at a time that is necessary
to avoid the loss of the Mortgaged Property due to a tax sale or the foreclosure
as a result of a tax lien and (ii) shall ensure that all insurance required to
be maintained on the Mortgaged Property pursuant to this Agreement is
maintained. If any such payment has not been made and the Servicer receives
notice of a tax lien with respect to the Mortgage Loan being imposed, the
Servicer will, promptly and to the extent required to avoid loss of the
Mortgaged Property, advance or cause to be advanced funds necessary to discharge
such lien on the Mortgaged Property. The Servicer assumes full responsibility
for the payment of all such bills and shall effect payments of all such bills
irrespective of the Mortgagor's faithful performance in the payment of same or
the making of the Escrow Payments and shall make Servicing Advances from its own
funds to effect such payments.

          Section 3.09 Transfer of Accounts.

          The Servicer may transfer the Collection Accounts and the Escrow
Account to a different depository institution from time to time. Upon such
transfer, the Servicer shall deliver to the Trustee, the NIMS Insurer and the
Depositor, a certification or letter agreement, as the case may be, as required
pursuant to Sections 3.04 and 3.06.

          Section 3.10 Maintenance of Hazard Insurance.

          The Servicer shall cause to be maintained for each Mortgage Loan fire
and hazard insurance with extended coverage as is customary in the area where
the Mortgaged Property is located in an amount which is at least equal to the
least of (i) the amount necessary to fully compensate for any damage or loss to
the improvements which are a part of such property on a replacement cost basis,
(ii) the Principal Balance of the Mortgage Loan or (iii) the maximum insurable
value of the improvements that are part of such Mortgaged Property, in each case
in an amount not less than such amount as is necessary to prevent the Mortgagor
and/or the Mortgagee from becoming a co-insurer. If the Mortgaged Property is in
an area identified in the Federal Register by the Flood Emergency Management
Agency as having special flood hazards and flood insurance has been made
available, the Servicer will cause to be maintained 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 Principal Balance of
the Mortgage Loan, (ii) the maximum

                                      -70-

insurable value of the improvements securing such Mortgage Loan plus accrued
interest at the Mortgage Interest Rate and related Servicing Advances (each
measured at the time it became an REO Property) or (iii) the maximum amount of
insurance which is available under the National Flood Insurance Act of 1968, as
amended. The Servicer shall also maintain on the REO Properties for the benefit
of the Certificateholders, (x) fire and hazard insurance with extended coverage
in an amount which is at least equal to the lesser of (i) 100% of the maximum
insurable value of the improvements securing the Mortgage Loan and (ii) the
outstanding Principal Balance of the Mortgage Loan at the time it became an REO
Property, (y) public liability insurance and, (z) to the extent required and
available under the National Flood Insurance Act of 1968, as amended, flood
insurance in an amount as provided above. Any amounts collected by the Servicer
under any such policies other than amounts to be deposited in the Escrow Account
and applied to the restoration or repair of the Mortgaged Property or REO
Property, or released to the Mortgagor in accordance with the Servicer's normal
servicing procedures, shall be deposited in the Collection Account, subject to
withdrawal pursuant to Section 3.05(a). It is understood and agreed that no
earthquake or other additional insurance is required to be maintained by the
Servicer or the Mortgagor or maintained on property acquired in respect of the
Mortgage Loan, other than pursuant to such Applicable Regulations as shall at
any time be in force and as shall require such additional insurance. All such
policies shall be endorsed with standard mortgagee clauses with loss payable to
the Servicer. The Servicer shall not interfere with the Mortgagor's freedom of
choice in selecting either his insurance carrier or agent, provided, however,
that the Servicer shall not accept any such insurance policies from insurance
companies unless such companies currently reflect a general policy rating of A:X
or better in Best's Key Rating Guide and are licensed to do business in the
state wherein the property subject to the policy is located or are otherwise
acceptable to Fannie Mae and Freddie Mac.

          Section 3.11 Maintenance of Mortgage Impairment Insurance Policy.

          In the event that the Servicer shall obtain and maintain a blanket
policy that has a general policy rating of A:V or better in Best's Key Rating
Guide insuring against hazard losses on all of the Mortgage Loans, then, to the
extent such policy provides coverage in an amount equal to the amount required
pursuant to Section 3.10 and otherwise complies with all other requirements of
Section 3.10, it shall conclusively be deemed to have satisfied its obligations
as set forth in Section 3.10, it being understood and agreed that such policy
may contain a deductible clause, in which case the Servicer shall, in the event
that there shall not have been maintained on the related Mortgaged Property or
REO Property a policy complying with Section 3.10, and there shall have been a
loss which would have been covered by such policy, deliver to the Trustee for
deposit in the Distribution Account the amount not otherwise payable under the
blanket policy because of such deductible clause, which amount shall not be
reimbursable to the Servicer from the Trust Fund. In connection with its
activities as servicer of the Mortgage Loans, the Servicer agrees to prepare and
present, on behalf of the Trustee, claims under any such blanket policy in a
timely fashion in accordance with the terms of such policy. Upon request of the
Trustee, the Servicer shall cause to be delivered to the Trustee a certified
true copy of such policy and a statement from the insurer thereunder that such
policy shall in no event be terminated or materially modified without thirty
days prior written notice to the Trustee.

                                      -71-

          Section 3.12 Fidelity Bond, Errors and Omissions Insurance.

          The Servicer shall maintain, at its own expense, a blanket fidelity
bond (the "Fidelity Bond") and an errors and omissions insurance policy, with
broad coverage with financially responsible companies on all officers, employees
or other persons acting in any capacity with regard to the Mortgage Loans to
handle funds, money, documents and papers relating to the Mortgage Loans. The
Fidelity Bond and errors and omissions insurance shall be in the form of the
Mortgage Banker's Blanket Bond and shall protect and insure the Servicer against
losses, including forgery, theft, embezzlement, fraud, errors and omissions and
negligent acts of such persons. Such Fidelity Bond shall also protect and insure
the Servicer against losses in connection with the failure to maintain any
insurance policies required pursuant to this Agreement and the release or
satisfaction of a Mortgage Loan without having obtained payment in full of the
indebtedness secured thereby. No provision of this Section 3.12 requiring the
Fidelity Bond and errors and omissions insurance shall diminish or relieve the
Servicer from its duties and obligations as set forth in this Agreement. The
minimum coverage under any such bond and insurance policy shall be at least
equal to the corresponding amounts required by Fannie Mae in the Fannie Mae MBS
Selling and Servicing Guide or by Freddie Mac in the Freddie Mac Servicer's
Guide, unless the Servicer has obtained a waiver of such requirements from
Fannie Mae or Freddie Mac. The Servicer shall be deemed to have complied with
this provision if an Affiliate of the Servicer has such errors and omissions and
fidelity bond coverage and, by the terms of such insurance policy or fidelity
bond, the coverage afforded thereunder extends to the Servicer. Upon request of
the Trustee or the NIMS Insurer, the Servicer shall cause to be delivered to the
requesting party a true copy of the Fidelity Bond and errors and omissions
insurance policy. Any such errors and omissions policy and fidelity bond shall
by its terms not be cancelable without thirty days' prior written notice to the
Trustee. The Servicer shall also cause each Sub-Servicer to maintain a policy of
insurance covering errors and omissions and a fidelity bond which would meet
such requirements.

          Section 3.13 Title, Management and Disposition of REO Property.

          (a) In the event that title to a Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be taken (pursuant to a limited power of attorney to be provided by the
Trustee to the Servicer) in the name of the Trustee or its nominee, on behalf of
the Certificateholders, or in the event the Trustee is not authorized or
permitted to hold title to real property in the state where the REO Property is
located, or would be adversely affected under the "doing business" or tax laws
of such state by so holding title, the deed or certificate of sale shall be
taken in the name of such Person or Persons as shall be consistent with an
Opinion of Counsel obtained by the Servicer from an attorney duly licensed to
practice law in the state where the REO Property is located. Any Person or
Persons holding such title other than the Trustee shall acknowledge in writing
that such title is being held as nominee for the benefit of the Trustee.

          (b) In the event that the Trust Fund acquires any REO Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Servicer shall dispose of such REO Property before the end of
the third taxable year beginning after the year of its acquisition by the Trust
Fund for purposes of Section 860G(a)(8) of the Code unless the Servicer has
received a grant of extension from the Internal Revenue Service of the
above-

                                      -72-

mentioned grace period such that the holding by the Trust Fund of such REO
Property subsequent to such period will not: (i) result in the imposition of any
tax on "prohibited transactions" as defined in Section 860F of the Code; (ii)
cause any REO Property to fail to qualify as "foreclosure property" within the
meaning of Section 860G(a)(8) of the Code; or (iii) cause any REMIC constituting
any part of the Trust Fund to fail to qualify as a REMIC at any time that any
Certificates are outstanding, in which case the Trust Fund may continue to hold
such REO Property.

          Subject to compliance with applicable laws and regulations as shall at
any time be in force, and notwithstanding any other provisions of this
Agreement, no REO Property acquired by the Trust Fund shall be rented (or
allowed to continue to be rented) or otherwise used by or on behalf of the Trust
Fund in such a manner or pursuant to any terms that would: (i) cause such REO
Property to fail to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code; or (ii) subject any REMIC constituting part of
the Trust Fund to the imposition of any federal or state income taxes on the
income earned from such REO Property, including any taxes imposed by reason of
Sections 860F or 860G(c) of the Code, unless the Servicer has agreed to
indemnify and hold harmless the Trust Fund with respect to the imposition of any
such taxes.

          The Servicer shall manage, conserve, protect and operate each REO
Property for the Certificateholders and the Trust Fund solely for the purpose of
its prompt disposition and sale in a manner which does not cause such REO
Property to fail to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code or result in the receipt by the related REMIC of
any "income from non-permitted assets" within the meaning of Section
860F(a)(2)(B) of the Code, or any "net income from foreclosure property" which
is subject to taxation under the REMIC Provisions. The Servicer shall cause each
REO Property to be inspected promptly upon the acquisition of title thereto and
shall cause each REO Property to be inspected at least annually thereafter. The
Servicer shall make or cause to be made a written or electronic report of each
such inspection. Such reports shall be retained in the Mortgage File and copies
thereof shall be forwarded by the Servicer to the Trustee upon request. The
Servicer shall attempt to sell the same (and may temporarily rent the same) on
such terms and conditions as the Servicer deems to be in the best interest of
the Certificateholders and the Trust Fund.

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

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

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

                                      -73-

          (iii) none of the provisions of this Section 3.13 relating to any such
     contract or to actions taken through any such Independent Contractor shall
     be deemed to relieve the Servicer of any of its duties and obligations to
     the Trustee on behalf of the Certificateholders with respect to the
     operation and management of any such REO Property; and

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

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

          With respect to each REO Property, the Servicer shall account
separately for each REO Property with respect to all funds collected and
received in connection with the operation of such REO Property.

          The income earned from the management of any REO Properties, net of
reimbursement to the Servicer for expenses incurred (including any property or
other taxes) in connection with such management and net of unreimbursed
Servicing Fees, Advances and Servicing Advances related thereto, shall be
applied to the payment of principal of and interest on the related defaulted
Mortgage Loans (with interest accruing as though such Mortgage Loans were still
current) and all such income shall be deemed, for all purposes in this
Agreement, to be payments on account of principal and interest on the related
Mortgage Notes and shall be deposited into the Collection Account. To the extent
the net income received during any calendar month is in excess of the amount on
a daily basis, within two Business Days of receipt attributable to amortizing
principal and accrued interest at the related Mortgage Rate on the related
Mortgage Loan for such calendar month, such excess shall be considered to be a
partial prepayment of principal of the related Mortgage Loan.

          The proceeds from any liquidation of a Mortgage Loan, as well as any
income from an REO Property, will be applied in the following order of priority:
first, to reimburse the Servicer for any related unreimbursed Servicing Advances
and Servicing Fees; second, to reimburse the Servicer for any related
unreimbursed Advances; third, to reimburse the Certificate Account for any
Nonrecoverable Advances (or portions thereof) that were previously withdrawn by
the Servicer pursuant to Section 3.05(b)(ii) and 3.05(c)(ii) that related to
such Mortgage Loan; fourth, to accrued and unpaid interest (to the extent no
Advance has been made for such amount or any such Advance has been reimbursed)
on the Mortgage Loan or related REO Property, at the Mortgage Rate (net of the
Servicing Fee) to the Due Date occurring in the month in which such amounts are
required to be distributed; and fifth, as a recovery of principal of the
Mortgage Loan.

                                      -74-

          The Servicer shall furnish to the Trustee, on each Servicer Reporting
Date, an operating statement for each REO Property covering the operation of
each REO Property for the previous month. Such operating statement shall be
accompanied by such other information as the Trustee shall reasonably request.

          The Servicer shall use its best efforts to dispose of the REO Property
as promptly as is practically consistent with protecting the Certificateholders'
interests.

          Each REO Disposition shall be carried out by the Servicer at such
price and upon such terms and conditions as the Servicer deems to be in the best
interest of the Certificateholders. If as of the date title to any REO Property
was acquired by the Servicer there were outstanding unreimbursed Servicing
Advances, Servicing Fees and Advances with respect to the REO Property, the
Servicer, upon an REO Disposition of such REO Property, shall be entitled to
reimbursement for any related unreimbursed Servicing Advances, Servicing Fees
and Advances from proceeds received in connection with such REO Disposition. The
proceeds from the REO Disposition, net of any payment to the Servicer as
provided above, shall be deposited in the Collection Account for transfer to the
Distribution Account on the succeeding Servicer Remittance Date in accordance
with Section 3.04(a)(vi).

          Any REO Disposition shall be for cash only (unless changes in the
REMIC Provisions made subsequent to the Startup Day allow a sale for other
consideration and an Opinion of Counsel is obtained by the Servicer to the
effect that such sale shall not cause any REMIC constituting part of the Trust
Fund to fail to qualify as a REMIC).

          Section 3.14 Due-on-Sale Clauses; Assumption and Substitution
Agreements.

          When a Mortgaged Property has been or is about to be conveyed by the
Mortgagor, the Servicer shall, to the extent it has knowledge of such conveyance
or prospective conveyance, exercise its rights to accelerate the maturity of the
related Mortgage Loan under any "due-on-sale" clause contained in the related
Mortgage or Mortgage Note; provided, however, that the Servicer shall not
exercise any such right if the "due-on-sale" clause, in the reasonable belief of
the Servicer, is not enforceable under applicable law. In such event, the
Servicer shall make reasonable efforts to enter into an assumption and
modification agreement with the Person to whom such property has been or is
about to be conveyed, pursuant to which such Person becomes liable under the
Mortgage Note and, unless prohibited by applicable law or the Mortgage, the
Mortgagor remains liable thereon. If the foregoing is not permitted under
applicable law, the Servicer is 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 Mortgagor and
becomes liable under the Note; provided that no such substitution will be
permitted unless such person satisfies the underwriting criteria of the
Servicer. The Mortgage Loan, as assumed, shall conform in all respects to the
requirements, representations and warranties of this Agreement. The Servicer
shall not take or enter into any assumption and modification agreement, however,
unless (to the extent practicable under the circumstances) it shall have
received confirmation, in writing, of the continued effectiveness of any
applicable hazard insurance policy or a new policy meeting the requirements of
this Section is obtained. The 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

                                      -75-

or substitution agreement (indicating the Mortgage File to which it relates)
which copy shall be added by the Trustee to the related Mortgage File and which
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 Monthly
Payment on the related Mortgage Loan shall not be changed but shall remain as in
effect immediately prior to the assumption or substitution, the stated maturity
or outstanding principal amount of such Mortgage Loan shall not be changed nor
shall any required monthly payments of principal or interest be deferred or
forgiven. Any fee collected by the Servicer for consenting to any such
conveyance or entering into an assumption or substitution agreement shall be
retained by or paid to the Servicer as additional servicing compensation.

          Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any assumption of a
Mortgage Loan by operation of law or any assumption which the Servicer may be
restricted by law from preventing, for any reason whatsoever. For purposes of
this Section 3.14, the term "assumption" is deemed to include a sale of the
Mortgaged Property subject to the Mortgage that is not accompanied by an
assumption or substitution of liability agreement.

          Section 3.15 [Reserved]

          Section 3.16 Optional Purchases of Mortgage Loans by Servicer.

          The Servicer may, at its option, or, shall, at the direction of the
NIMS Insurer (which shall be at the expense of the NIMS Insurer), purchase a
Mortgage Loan or REO Property which becomes 90 or more days Delinquent or for
which the Servicer has accepted a deed in lieu of foreclosure. Prior to purchase
pursuant to this Section 3.16, the Servicer shall be required to continue to
make Advances pursuant to Section 4.07. The Servicer shall not use any procedure
in selecting Mortgage Loans to be purchased which is materially adverse to the
interests of the Certificateholders. The Servicer shall purchase such Delinquent
Mortgage Loan or REO Property at a price equal to the Purchase Price. The
Servicer will not be entitled to any Servicing Fee with respect to any such
purchased Mortgage Loan. Any such purchase of a Mortgage Loan or REO Property
pursuant to this Section 3.16 shall be accomplished by delivery to the Trustee
for deposit in the Distribution Account of the amount of the Purchase Price. The
Trustee shall immediately effectuate the conveyance of such delinquent Mortgage
Loan or REO Property to the Servicer to the extent necessary, including the
prompt delivery of all documentation to the Servicer.

          Section 3.17 Trustee to Cooperate; Release of Files.

          (a) Upon the payment in full of any Mortgage Loan (including any
liquidation of such Mortgage Loan through foreclosure or otherwise, or the
receipt by the Servicer of a notification that payment in full will be escrowed
in a manner customary for such purposes), the Servicer shall deliver to the
Trustee, in written form (with two executed copies) or electronic form, of a
completed "Request for Release" in the form of Exhibit E or such other form
supplied by the Servicer provided that it does not differ from the substantive
content of Exhibit E (which certification shall include a statement to the
effect that all amounts received or to be received in

                                      -76-

connection with such payment which are required to be deposited in the
Collection Account pursuant to Section 3.04(a) have been or shall be so
deposited). Upon receipt of such Request for Release of Documents, the Trustee
shall promptly release the related Mortgage File within three (3) Business Days,
in trust, to (i) the Servicer, or (ii) such other party identified in the
related Request for Release. No expenses incurred in connection with any
instrument of satisfaction or deed of reconveyance shall be chargeable to the
Collection Account or the Distribution Account but shall be borne by the
Servicer to the extent not reimbursable from the related Mortgagor. Upon any
such payment in full, or the receipt of such notification that such funds have
been placed in escrow, the Trustee hereby authorizes and empowers the Servicer
to execute an instrument of satisfaction (or Assignment without recourse)
regarding the Mortgaged Property relating to such Mortgage, which instrument of
satisfaction or Assignment shall be delivered to the Person or Persons entitled
thereto against receipt therefor of payment in full, it being understood and
agreed that no expense incurred in connection with such instrument of
satisfaction or assignment, as the case may be, shall be chargeable to the
Collection Accounts. In lieu of executing any such satisfaction or assignment,
as the case may be, the Servicer may prepare and submit to the Trustee a
satisfaction (or assignment without recourse, if requested by the Person or
Persons entitled thereto) in form for execution by the Trustee with all
requisite information completed by the Servicer; in such event, the Trustee
shall execute and acknowledge such satisfaction or assignment, as the case may
be, and deliver the same with the related Mortgage File, as aforesaid.

          (b) From time to time and as appropriate in the servicing of any
Mortgage Loan, including, without limitation, foreclosure or other comparable
conversion of a Mortgage Loan or collection under any insurance policy relating
to a Mortgage Loan, the Trustee shall (except in the case of the payment or
liquidation pursuant to which the related Mortgage File is released to an escrow
agent or an employee, agent or attorney of the Trustee), upon written request of
the Servicer and delivery to the Trustee, in written form (with two executed
copies) or electronic form, of a "Request for Release" in the form of Exhibit E
(or such other form supplied by the Servicer provided that it does not differ
from the substantive content of Exhibit E) signed by a Servicing Officer,
release the related Mortgage File to the Servicer within three (3) Business Days
and shall execute such documents as shall be necessary to the prosecution of any
such proceedings, including, without limitation, an assignment without recourse
of the related Mortgage to the Servicer. Such receipt shall obligate the
Servicer to return the Mortgage File to the Trustee when the need therefor by
the Servicer no longer exists unless the Mortgage Loan shall be liquidated, in
which case, upon receipt of a Request for Release evidencing such liquidation,
the receipt shall be released by the Trustee to the Servicer.

          (c) Subject to Section 3.01, the Servicer shall have the right to
accept applications of Mortgagors for consent to (i) partial releases of
Mortgages, (ii) alterations, (iii) removal, demolition or division of properties
subject to Mortgages, (iv) modifications, and (v) second mortgage subordination
agreements. No application for approval shall be considered by the Servicer
unless: (w) it has received an Opinion of Counsel, addressed to the Trustee
(which opinion shall not be an expense of the Trustee or the Trust Fund) that
such sale, disposition, substitution, acquisition or contribution will not
affect adversely the status of any REMIC constituting part of the Trust Fund as
a REMIC or cause any REMIC constituting part of the Trust Fund to be subject to
a tax on "prohibited transactions" or "contributions" pursuant to the REMIC
Provisions; (x) the provisions of the related Note and Mortgage have been
complied

                                      -77-

with; (y) the Loan-to-Value Ratio and debt-to-income ratio after any release
does not exceed the maximum Loan-to-Value Ratio and debt-to-income ratio
established in accordance with the underwriting standards of the Mortgage Loans;
and (z) the lien priority of the related Mortgage is not affected. Upon receipt
by the Trustee of a Servicing Officer's certificate setting forth the action
proposed to be taken in respect of a particular Mortgage Loan and certifying
that the criteria set forth in the immediately preceding sentence have been
satisfied, the Trustee shall execute and deliver to the Servicer the consent or
partial release so requested by the Servicer. A proposed form of consent or
partial release, as the case may be, shall accompany any Servicing Officer's
certificate delivered by the Servicer pursuant to this paragraph.

          Section 3.18 Servicing Compensation.

          As compensation for its activities hereunder, the Servicer shall be
entitled to retain the amount of the Servicing Fee with respect to each Mortgage
Loan (including REO Properties) payable solely from payments of interest in
respect of such Mortgage Loan (including from Insurance Proceeds, Liquidation
Proceeds and Subsequent Recoveries). The Servicer shall be entitled to retain
additional servicing compensation in the form of release fees, bad check
charges, assumption fees, modification or extension fees, late payment charges,
prepayment charges that are not Prepayment Charges or Servicer Prepayment Charge
Payment Amounts, or any other service-related fees and similar items, to the
extent collected from Mortgagors. The Servicer shall also be entitled pursuant
to Section 3.05(e) to withdraw from the Collection Account and pursuant to
Section 3.07(vi) to withdraw from any Escrow Account, as additional servicing
compensation, interest or other income earned on deposits therein, subject to
Section 3.25. In addition, the Servicer shall be entitled to retain or withdraw
from the Collection Account, pursuant to Section 3.05(g), any Prepayment
Interest Excess with respect to the Mortgage Loans as additional servicing
compensation.

          The Servicer shall be required to pay all expenses incurred by it in
connection with its servicing activities hereunder (including payment of
premiums for any blanket policy insuring against hazard losses pursuant to
Section 3.11 and the fees and expenses of independent accountants and any agents
appointed by the Servicer), and shall not be entitled to reimbursement therefor
from the Trust Fund except as specifically provided in Section 3.05.

          Section 3.19 Annual Statement as to Compliance.

          (a) Beginning in 2006, the Servicer, at its own expense, will deliver
to the Trustee, the NIMS Insurer, the Depositor and each Rating Agency, not
later than March 15th of each calendar year, a Servicing Officer's certificate
stating, as to each signer thereof, that (i) a review of the activities of the
Servicer during such preceding fiscal year and of performance under this
Agreement has been made under such officers' supervision, and (ii) to the best
of such officers' knowledge, based on such review, the Servicer has fulfilled
all its obligations under this Agreement for such year, or, if there has been a
default in the fulfillment of all such obligations, specifying each such default
known to such officers and the nature and status thereof including the steps
being taken by the Servicer to remedy such default. Copies of any such statement
shall be provided by the Trustee to any Certificateholder and to any Person
identified to the Trustee as a prospective transferee of a Certificate, upon the
request and at the expense of the requesting party, provided that such statement
is delivered by the Servicer to the Trustee.

                                      -78-

          (b) Delivery of such certificate to the Trustee is for informational
purposes only and their receipt of such shall not constitute constructive notice
of any information contained therein or determinable, from information contained
therein, including the Servicer's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on Officers'
Certificates).

          Section 3.20 Annual Independent Certified Public Accountants' Reports.

          (a) Beginning in 2006, not later than March 15th of each calendar
year, the Servicer, at its expense, shall cause a nationally recognized firm of
independent certified public accountants to furnish to the Servicer and within
such timeframe the Servicer shall furnish to the Trustee, the Depositor, the
NIMS Insurer and each Rating Agency, a report stating that (i) it has obtained a
letter of representation regarding certain matters from the management of the
Servicer which includes an assertion that the Servicer has complied with certain
minimum residential mortgage loan servicing standards, identified in either the
Uniform Single Attestation Program for Mortgage Bankers established by the
Mortgage Bankers Association of America or the Audit Program for Mortgages
serviced by Freddie Mac, with respect to the servicing of residential mortgage
loans during the most recently completed fiscal year and (ii) on the basis of an
examination conducted by such firm in accordance with standards established by
the American Institute of Certified Public Accountants, such representation is
fairly stated in all material respects, subject to such exceptions and other
qualifications that may be appropriate. In rendering its report such firm may
rely, as to matters relating to the direct servicing of residential mortgage
loans by Sub-Servicers, upon comparable reports of firms of independent
certified public accountants rendered on the basis of examinations conducted in
accordance with the same standards (rendered within one year of such report)
with respect to those Sub-Servicers. Copies of such statement shall be provided
by the Trustee to any Certificateholder upon request at the Servicer's expense,
provided that such statement is delivered by the Servicer to the Trustee. In the
event such firm of independent certified public accountants requires the Trustee
to agree to the procedures performed by such firm, the Servicer shall direct the
Trustee in writing to so agree; it being understood and agreed that the Trustee
shall deliver such letter of agreement in conclusive reliance upon the direction
of the Servicer, and the Trustee has not made any independent inquiry or
investigation as to, and shall have no obligation or liability in respect of,
the sufficiency, validity or correctness of such procedures. Copies of such
statement shall be provided by the Trustee to any Certificateholder upon
request, at the Servicer's expense, provided that such statement is delivered by
the Servicer to the Trustee.

          (b) Delivery of such reports to the Trustee is for informational
purposes only and their receipt of such shall not constitute constructive notice
of any information contained therein or determinable from information contained
therein, including the Servicer's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on Officers'
Certificates).

          Section 3.21 Access to Certain Documentation and Information Regarding
the Mortgage Loans.

          (a) The Servicer shall provide to the Depositor, the Trustee,
Certificateholders that are federally insured savings and loan associations, the
Office of Thrift Supervision, the

                                      -79-

Office of the Comptroller of the Currency, the FDIC and the supervisory agents
and examiners of each of the foregoing (which, in the case of supervisory agents
and examiners, may be required by applicable state and federal regulations)
access to the available documentation regarding the Mortgage Loans, such access
being afforded without charge but only upon reasonable advance request and
during normal business hours at the offices of the Servicer designated by it.

          (b) The Servicer shall afford the NIMS Insurer, upon reasonable
advance notice, during normal business hours, access to all records maintained
by the Servicer regarding the Mortgage Loans.

          Section 3.22 [Reserved].

          Section 3.23 Obligations of the Servicer in Respect of Compensating
Interest.

          Not later than the close of business on each Servicer Remittance Date,
the Servicer shall deliver to the Trustee for deposit in the Distribution
Account an amount ("Compensating Interest") from its own funds equal to the
lesser of (A) the aggregate of the Prepayment Interest Shortfalls on the
Mortgage Loans for the related Distribution Date resulting from Principal
Prepayments in full on the Mortgage Loans during the portion of the related
Prepayment Period occurring in the prior calendar month and (B) the sum of its
aggregate Servicing Fee received in the related Collection Period. The Servicer
shall apply Compensating Interest to offset any Prepayment Interest Shortfalls
resulting from Principal Prepayments in full on the Mortgage Loans. The Servicer
shall not have the right to reimbursement for any amounts remitted to the
Trustee in respect of Compensating Interest. Such amounts so remitted shall be
included in the Available Funds and distributed therewith on the next
Distribution Date. The Servicer shall not be obligated to pay Compensating
Interest with respect to Relief Act Interest Shortfalls.

          Section 3.24 [Reserved].

          Section 3.25 Investment of Funds in the Collection Accounts.

          (a) The Servicer may direct any depository institution maintaining one
or more Collection Accounts, to invest the funds in such Collection Account in
one or more Eligible Investments bearing interest or sold at a discount, and
maturing, unless payable on demand, (i) no later than the Business Day
immediately preceding the date on which such funds are required to be withdrawn
from such account pursuant to this Agreement, if a Person other than the Trustee
is the obligor thereon, and (ii) no later than the date on which such funds are
required to be withdrawn from such account pursuant to this Agreement, if the
Trustee is the obligor thereon or if such investment is managed or advised by
the Trustee or an Affiliate of the Trustee. All such Eligible Investments shall
be held to maturity, unless payable on demand. Any investment of funds in a
Collection Account shall be made in the name of the Trustee or the Servicer, as
applicable (in its capacity as such) or in the name of a nominee of the Trustee.
The Trustee shall be entitled to sole possession (except with respect to
investment direction of funds held in the Collection Accounts) over each such
investment and the income thereon, and any certificate or other instrument
evidencing any such investment shall be delivered directly to the

                                      -80-

Trustee or its agent, together with any document of transfer necessary to
transfer title to such investment to the Trustee or its nominee. In the event
amounts on deposit in a Collection Account are at any time invested in an
Eligible Investment payable on demand, the Trustee shall at the direction of the
Servicer:

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

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

          (b) All income and gain realized from the investment of funds in the
Collection Accounts shall be for the benefit of the Servicer. The Servicer shall
deposit in the applicable Collection Account or (to the extent funds in the
Escrow Account are invested if permitted by applicable law) the Escrow Account,
as applicable, from its own funds the amount of any loss incurred in respect of
any such Eligible Investment made with funds in such account immediately upon
realization of such loss. Funds in the Distribution Account shall remain
uninvested.

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

          Section 3.26 Liability of Servicer; Indemnification.

          The Servicer (except the Trustee if it is required to succeed the
Servicer hereunder) indemnifies and holds the Trustee, the Depositor, the NIMS
Insurer and the Trust Fund harmless against any and all claims, losses,
penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments, and any other costs, fees and expenses that the Trustee, the
Depositor, the NIMS Insurer and the Trust Fund may sustain in any way related to
the failure of the Servicer to perform its duties and service the Mortgage Loans
in compliance with the Servicing Standard. The Servicer shall immediately notify
the Trustee, the NIMS Insurer and the Depositor if a claim is made that may
result in such claims, losses, penalties, fines, forfeitures, legal fees or
related costs, judgments, or any other costs, fees and expenses, and the
Servicer shall assume (with notice to the Trustee) the defense of any such claim
and pay all expenses in connection therewith, including reasonable counsel fees,
and promptly pay, discharge and satisfy any judgment or decree which may be
entered against the Servicer, the Trustee, the Depositor, the NIMS Insurer
and/or the Trust Fund in respect of such claim. The provisions of this

                                      -81-

Section 3.26 shall survive the termination of this Agreement and the payment of
the outstanding Certificates.

          Section 3.27 Reports of Foreclosure and Abandonment of Mortgaged
Properties.

          Beginning in 2006, the Servicer shall file the reports of foreclosure
and abandonment of any Mortgaged Property required by Section 6050J of the Code
with the Internal Revenue Service on or before the due date for any such report.
Not later than 90 days following the end of each calendar year, beginning in
2006, the Servicer will deliver an Officer's Certificate to the Trustee and the
NIMS Insurer certifying its compliance with this Section 3.27. The reports from
the Servicer shall be in form and substance sufficient to meet the reporting
requirements imposed by such Section 6050J.

          Section 3.28 Protection of Assets.

          (a) Except for transactions and activities entered into in connection
with the securitization that is the subject of this Agreement, the Trust is not
authorized and has no power to:

               (1)  borrow money or issue debt;

               (2)  merge with another entity, reorganize, liquidate or sell
                    assets; or

               (3)  engage in any business or activities.

          (b) Notwithstanding any prior termination of this Agreement, each
party hereto agrees that, until after one year and one day following the payment
in full of the last of the Certificates issued hereunder, it shall not
acquiesce, petition or otherwise invoke or cause the Depositor or the Trust to
invoke the process of any court or government authority for the purpose of
commencing or sustaining a case against the Depositor or the Trust under any
federal or state bankruptcy, insolvency or similar law, or appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Depositor or the Trust or any substantial part of the
property of either, or ordering the winding up or liquidation of the affairs of
the Depositor or the Trust.

          Section 3.29 [Reserved]

          Section 3.30 [Reserved]

          Section 3.31 Periodic Filings.

          (a) The Trustee and the Servicer shall reasonably cooperate with the
Depositor in connection with the Trust's satisfying its reporting requirements
under the Exchange Act. Without limiting the generality of the foregoing, the
Trustee shall prepare, or cause to be prepared, on behalf of the Trust any
monthly Current Reports on Form 8-K (each, a "Monthly Form 8-K") and Annual
Reports on Form 10-K (each, a "Form 10-K") customary for similar securities as
required by the Exchange Act and the rules and regulations of the Securities

                                      -82-

and Exchange Commission thereunder, and the Trustee shall sign (other than any
Form 10-K) and file (via the Securities and Exchange Commission's Electronic
Data Gathering and Retrieval System) such Forms on behalf of the Trust. The
Depositor hereby grants to the Trustee a limited power of attorney to execute
and file each such document on behalf of the Depositor. Such power of attorney
shall continue until either the earlier of (i) receipt by the Trustee from the
Depositor of written termination of such power of attorney and (ii) the
termination of the Trust. Notwithstanding the foregoing, the Depositor shall
sign any Form 10-K with respect to which the Depositor signs a Certification.

          (b) Each Monthly Form 8-K shall be filed by the Trustee within 15 days
after each Distribution Date, including a copy of the Distribution Date
Statement for such Distribution Date as an exhibit thereto. Prior to March 30th
of each year (or such earlier date as may be required by the Exchange Act and
the rules and regulations of the Securities and Exchange Commission), the
Trustee shall file a Form 10-K, in substance as required by applicable law or
applicable Securities and Exchange Commission staff interpretations. Such Form
10-K shall include as exhibits the Servicer's annual statement of compliance
described under Section 3.19 and the accountant's report described under Section
3.20, in each case, to the extent they have been timely delivered to the
Trustee. If they are not so timely delivered, the Trustee shall file an amended
Form 10-K (to the extent permissible) including such documents as exhibits
reasonably promptly after they are delivered to the Trustee. The Trustee shall
have no liability with respect to any failure to properly prepare or file such
periodic reports resulting from or relating to the Trustee's inability or
failure to obtain any information not resulting from its own negligence, willful
misconduct or bad faith. The Form 10-K shall also include a certification in the
form attached hereto as Exhibit O (the "Certification"), which shall be signed
by a senior officer of the Depositor in charge of securitization. The Depositor
shall deliver the Certification to the Trustee prior to March 15th of each year
in which a Form 10-K is required to be filed with respect to the Trust. The
Trustee, the Depositor and the Servicer shall reasonably cooperate to enable the
Securities and Exchange Commission requirements with respect to the Trust to be
met in the event that the Securities and Exchange Commission issues additional
interpretive guidelines or promulgates rules or regulations, or in the event of
any other change of law that would require reporting arrangements or the
allocation of responsibilities with respect thereto, as described in this
Section 3.31, to be conducted or allocated in a different manner.

          (c) Not later than 15 calendar days prior to the latest date on which
the Form 10-K may be timely filed each year, (i) the Trustee shall sign and
deliver to the Depositor a certification (in the form attached hereto as Exhibit
P-1) for the benefit of the Depositor and its officers, directors and Affiliates
(provided, however, that the Trustee shall not undertake an analysis of the
accountant's report attached as an exhibit to the Form 10-K) and (ii) the
Servicer shall sign and deliver to the Depositor a certification (in the form
attached hereto as Exhibit P-2) for the benefit of the Depositor and its
officers, directors and Affiliates. In addition, (i) the Trustee shall also
indemnify and hold harmless the Depositor, each Person, if any, who "controls"
the Depositor within the meaning of the 1933 Act, and its officers, directors
and Affiliates from and against any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments
and other costs and expenses arising out of or based upon any inaccuracy in the
certification provided by the Trustee pursuant to this Section 3.31(c), any
breach of the Trustee's obligations under this Section 3.31(c) or the Trustee's
negligence, bad faith or willful misconduct in connection therewith and (ii) the
Servicer shall

                                      -83-

indemnify and hold harmless the Depositor, the Trustee, each Person, if any, who
"controls" the Depositor or the Trustee within the meaning of the 1933 Act, and
their respective officers, directors and Affiliates from and against any losses,
damages, penalties, fines, forfeitures, reasonable and necessary legal fees and
related costs, judgments and other costs and expenses arising out of or based
upon any inaccuracy in the certification provided by the Servicer pursuant to
this Section 3.31(c), any breach of the Servicer's obligations under this
Section 3.31(c) or the Servicer's negligence, bad faith or willful misconduct in
connection therewith. If the indemnification provided for herein is unavailable
or insufficient to hold harmless the Depositor, each Person, if any, who
"controls" the Depositor within the meaning of the 1933 Act, and its officers,
directors and Affiliates, then (i) the Trustee agrees that it shall contribute
to the amount paid or payable by the Depositor, its officers, directors or
Affiliates as a result of the losses, claims, damages or liabilities of the
Depositor, its officers, directors or Affiliates in such proportion as is
appropriate to reflect the relative fault of the Depositor and its officers,
directors and Affiliates on the one hand and the Trustee on the other in
connection with a breach of the Trustee's obligations under this Section 3.31(c)
or the Trustee's negligence, bad faith or willful misconduct in connection
therewith and (ii) the Servicer agrees that it shall contribute to the amount
paid or payable by the Depositor and/or the Trustee, their respective officers,
directors or Affiliates as a result of the losses, claims, damages or
liabilities of the Depositor and/or the Trustee, their respective officers,
directors or Affiliates in such proportion as is appropriate to reflect the
relative fault of the Depositor or the Trustee, as the case may be, and their
respective officers, directors and Affiliates on the one hand and the Servicer
on the other in connection with a breach of the Servicer's obligations under
this Section 3.31(c) or the Servicer's negligence, bad faith or willful
misconduct in connection therewith. The Servicer hereby acknowledges and agrees
that the Depositor and the Trustee are relying on the Servicer's performance of
its obligations under Sections 3.19 and 3.20 in order to perform their
respective obligations under this Section 3.31.

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

          (e) The obligations set forth in paragraphs (a) through (d) of this
Section shall only apply with respect to periods for which the Trustee is
obligated to file reports on Form 8-K or 10-K pursuant to paragraph (b) of this
Section. Prior to January 30th of the first year in which the Trustee is able to
do so, the Trustee shall prepare, execute and file with the Securities and
Exchange Commission a Form 15 Suspension Notification with respect to the Trust,
and thereafter there shall be no further obligations under paragraphs (a)
through (d) of this Section commencing with the calendar year in which the Form
15 is filed (other than the obligations to be performed in such calendar year
that relate back to the prior calendar year).

          (f) If the Securities and Exchange Commission issues additional
interpretative guidance or promulgates additional rules or regulations, or if
other changes in applicable law occur, which would require the reporting
arrangements, or the allocation of responsibilities with respect thereto,
described in this Section 3.31, to be conducted differently than as described,
the Depositor, the Servicer and the Trustee will reasonably cooperate to amend
the provisions of this Section 3.31 in order to comply with such amended
reporting requirements and such amendment of this Section 3.31. Any such
amendment shall be made in accordance with Section 11.01

                                      -84-

without the consent of the Certificateholders, and may result in a change in the
reports filed by the Trustee on behalf of the Trust under the Exchange Act.
Notwithstanding the foregoing, none of the Depositor, the Servicer or the
Trustee shall be obligated to enter into any amendment pursuant to this Section
3.31 that adversely affects its obligations and immunities under this Agreement.

          Section 3.32 Credit Reporting; Gramm-Leach-Bliley Act.

          (a) With respect to each Mortgage Loan, the Servicer agrees to fully
furnish, in accordance with Fannie Mae Guide Announcement 95-19 and the Fair
Credit Reporting Act and its implementing regulations, accurate and complete
information (e.g., favorable and unfavorable) on its borrower credit files to
Equifax, Experian and TransUnion Credit Information Company (three of the credit
repositories) on a monthly basis and agrees it shall report one of the following
statuses each month as follows: new origination, current, delinquent (30-, 60-,
90-days, etc.), foreclosed, or charged-off.

          (b) The Servicer shall comply with Title V of the Gramm-Leach-Bliley
Act of 1999 and all applicable regulations promulgated thereunder, relating to
the Mortgage Loans and the related borrowers and shall provide all required
notices thereunder.

          Section 3.33 Advance Facility.

          (a) The Servicer and/or the Trustee on behalf of the Trust Fund, in
either case, with the consent of the NIMS Insurer and the Servicer in the case
of the Trustee, is hereby authorized to enter into a facility (an "Advance
Facility") with any Person (an "Advancing Person") (1) under which the Servicer
sells, assigns or pledges to the Advancing person the Servicer's rights under
this Agreement to be reimbursed for any Advances and/or Servicing Advances or
(2) which provides that the Advancing Person may fund Advances and/or Servicing
Advances to the Trust Fund under this Agreement, although no such facility shall
reduce or otherwise affect the Servicer's obligation to fund such Advances
and/or Servicing Advances. If the Servicer enters into such an Advance Facility
pursuant to this Section 3.33, upon reasonable request of the Advancing Person,
the Trustee shall execute a letter of acknowledgment, confirming its receipt of
notice of the existence of such Advance Facility. To the extent that an
Advancing Person funds any Advance or any Servicing Advance or is assigned the
right to be reimbursed for any Advance or Servicing Advance and provides the
Trustee with notice acknowledged by the Servicer that such Advancing Person is
entitled to reimbursement directly from the Trustee pursuant to the terms of the
Advance Facility, such Advancing Person shall be entitled to receive
reimbursement pursuant to this Agreement for such amount to the extent provided
in Section 3.33(b). Such notice from the Advancing Person must specify the
amount of the reimbursement, the Section of this Agreement that permits the
applicable Advance or Servicing Advance to be reimbursed and the section(s) of
the Advance Facility that entitle the Advancing Person to request reimbursement
from the Trustee, rather than the Servicer, and include the Servicer's
acknowledgment thereto or proof of an Event of Default under the Advance
Facility. The Trustee shall have no duty or liability with respect to any
calculation of any reimbursement to be paid to an Advancing Person and shall be
entitled to rely without independent investigation on the Advancing Person's
notice provided pursuant to this Section 3.33. An Advancing Person whose
obligations hereunder are limited to the funding of Advances

                                      -85-

and/or Servicing Advances shall not be required to meet the qualifications of a
Servicer or a Sub-Servicer pursuant to Section 6.06 or Section 7.02 and shall
not be deemed to be a Sub-Servicer under this Agreement. If the terms of a
facility proposed to be entered into with an Advancing Person by the Trust Fund
would not materially and adversely affect the interests of any
Certificateholder, then the NIMS Insurer shall not withhold its consent to the
Trust Fund's entering such facility.

          (b) If, pursuant to the terms of the Advance Facility, an Advancing
Person is entitled to reimbursement directly from the Trustee, then the Servicer
shall not reimburse itself therefor under Section 3.05(b), Section 3.05(c) or
Section 3.05(d) prior to the remittance to the Trust Fund, but instead the
Servicer shall include such amounts in the applicable remittance to the Trustee
made pursuant to Section 3.04(b) to the extent of amounts on deposit in the
Collection Account on the related Servicer Remittance Date. The Trustee is
hereby authorized to pay to the Advancing Person reimbursements for Advances and
Servicing Advances from the Distribution Account, to the extent permitted under
the terms of the Advance Facility, to the same extent the Servicer would have
been permitted to reimburse itself for such Advances and/or Servicing Advances
in accordance with Section 3.05(b), Section 3.05(c) or Section 3.05(d), as the
case may be, had the Servicer itself funded such Advance or Servicing Advance.
The Trustee is hereby authorized to pay directly to the Advancing Person such
portion of the Servicing Fee as the parties to any Advance Facility agree to in
writing delivered to the Trustee. An Advance Facility may provide that the
Servicer will otherwise cause the remittance of Advance and/or Servicing Advance
reimbursement amounts to the Advancing Person, in which case the foregoing
sentences in this Section 3.33(b) shall not apply.

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

          (d) In the event the Servicer is terminated pursuant to Section 7.01,
the Advancing Person shall succeed to the terminated Servicer's right of
reimbursement set forth in Section 7.02(c) to the extent of such Advancing
Person's financing of or receipt of assignment or pledge of the right to be
reimbursed for Advances or Servicing Advances hereunder then remaining
unreimbursed.

          (e) None of the Trust Fund, any party to this Agreement or any other
Person shall have any right or claim (including without limitation any right of
offset or recoupment) to any amounts allocable under this Agreement to the
reimbursement of Advances or Servicing Advances that have been assigned,
conveyed or pledged to an Advancing Person, or that relate to Advances or
Servicing Advances that were funded by an Advancing Person.

          (f) Any amendment to this Section 3.33 or to any other provision of
this Agreement that may be necessary or appropriate to effect the terms of an
Advance Facility as described generally in this Section 3.33, including
amendments to add provisions relating to a successor servicer, may be entered
into by the Trustee and the Servicer without the consent of any
Certificateholder but with the consent of the NIMS Insurer and (i) written
confirmation from each Rating Agency that the amendment shall not result in the
reduction or withdrawal of the then-current ratings of any outstanding Class of
Certificates or any other notes secured by collateral which includes all or a
portion of the Class CE Certificates, the Class P Certificates

                                      -86-

and/or the Residual Certificates, notwithstanding anything to the contrary in
this Agreement and (ii) an Opinion of Counsel that such amendment will not
result in an Adverse REMIC Event.

                                   ARTICLE IV

                                  FLOW OF FUNDS

          Section 4.01 Interest Distributions.

          On each Distribution Date, the Trustee shall withdraw from the
Distribution Account the Interest Remittance Amount and apply it in the
following order of priority (based upon the Mortgage Loan information provided
to it in the Remittance Report, upon which the Trustee may conclusively rely),
and the calculations required to be made by the Trustee, to the extent
available:

          (i) to the Trustee, the Trustee Fee for such Distribution Date;

          (ii) concurrently, to the Class A Certificates, pro rata, the Accrued
     Certificate Interest on each such Class for such Distribution Date;

          (iii) concurrently, to the Class A Certificates, pro rata, the
     Interest Carry Forward Amount on each such Class for such Distribution
     Date;

          (iv) to the Class M-1 Certificates, the Accrued Certificate Interest
     thereon for such Distribution Date;

          (v) to the Class M-2 Certificates, the Accrued Certificate Interest
     thereon for such Distribution Date;

          (vi) to the Class M-3 Certificates, the Accrued Certificate Interest
     thereon for such Distribution Date;

          (vii) to the Class M-4 Certificates, the Accrued Certificate Interest
     thereon for such Distribution Date;

          (viii) to the Class M-5 Certificates, the Accrued Certificate Interest
     thereon for such Distribution Date;

          (ix) to the Class M-6 Certificates, the Accrued Certificate Interest
     thereon for such Distribution Date;

          (x) to the Class B-1 Certificates, the Accrued Certificate Interest
     thereon for such Distribution Date;

          (xi) to the Class B-2 Certificates, the Accrued Certificate Interest
     thereon for such Distribution Date; and

                                      -87-

          (xii) the amount, if any, of the Interest Remittance Amount remaining
     after application with respect to the priorities set forth above will be
     applied as described under Section 4.02(b) hereof.

     On any Distribution Date, any shortfalls resulting from Prepayment Interest
Shortfalls not covered by Compensating Interest payments made by the Servicer or
from the application of the Relief Act or similar state laws will be allocated
as a reduction to the Accrued Certificate Interest for the Offered Certificates
and Class B Certificates on a pro rata basis based on the respective amounts of
interest accrued on those Certificates for that Distribution Date. The holders
of the Offered Certificates and Class B Certificates will not be entitled to
reimbursement on future Distribution Dates of any such Prepayment Interest
Shortfalls or Relief Act Interest Shortfalls following their allocation to such
Certificates.

          Section 4.02 Distributions of Principal and Monthly Excess Cashflow
Amounts.

          (a) On each Distribution Date, the Trustee shall make the following
distributions in the following order of priority (based upon the Mortgage Loan
information provided to it in the Remittance Report and the calculations
required to be made by the Trustee), to the extent of the Principal Distribution
Amount:

          (i) before the Stepdown Date or with respect to which a Trigger Event
     is in effect, sequentially, as follows:

               first, to the Class A-6 Certificates, up to the Class A-6 Lockout
     Distribution Percentage of the Senior Principal Distribution Amount for
     such Distribution Date;

               second, to the Class A-1A and Class A-1B Certificates, pro rata,
     up to the Senior Principal Distribution Amount remaining after priority
     first above, until the aggregate Certificate Principal Balance thereof has
     been reduced to zero;

               third, to the Class A-2 Certificates, up to the Senior Principal
     Distribution Amount remaining after priority first and second above, until
     the Certificate Principal Balance thereof has been reduced to zero;

               fourth, to the Class A-3 Certificates, up to the Senior Principal
     Distribution Amount remaining after priority first, second and third above,
     until the Certificate Principal Balance thereof has been reduced to zero;

               fifth, to the Class A-4 Certificates, up to the Senior Principal
     Distribution Amount remaining after priority first, second, third and
     fourth above, until the Certificate Principal Balance thereof has been
     reduced to zero;

               sixth, to the Class A-5 Certificates, up to the Senior Principal
     Distribution Amount remaining after priority first, second, third, fourth
     and fifth above, until the Certificate Principal Balance thereof has been
     reduced to zero;

                                      -88-

               seventh, to the Class A-6 Certificates, up to the Senior
     Principal Distribution Amount remaining after priority first, second,
     third, fourth, fifth and sixth above, until the Certificate Principal
     Balance thereof has been reduced to zero;

               eighth, to the Class M-1 Certificates, until the Certificate
     Principal Balance thereof has been reduced to zero;

               ninth, to the Class M-2 Certificates, until the Certificate
     Principal Balance thereof has been reduced to zero;

               tenth, to the Class M-3 Certificates, until the Certificate
     Principal Balance thereof has been reduced to zero;

               eleventh, to the Class M-4 Certificates, until the Certificate
     Principal Balance thereof has been reduced to zero;

               twelfth, to the Class M-5 Certificates, until the Certificate
     Principal Balance thereof has been reduced to zero;

               thirteenth, to the Class M-6 Certificates, until the Certificate
     Principal Balance thereof has been reduced to zero;

               fourteenth, to the Class B-1 Certificates, until the Certificate
     Principal Balance thereof has been reduced to zero;

               fifteenth, to the Class B-2 Certificates, until the Certificate
     Principal Balance thereof has been reduced to zero; and

               sixteenth, any remaining Principal Distribution Amount will be
     distributed as part of the Monthly Excess Cashflow Amount as set forth in
     Section 4.02(b).

          (ii) on or after the Stepdown Date and as long as a Trigger Event is
     not in effect:

               first, to the Class A-6 Certificates, up to the Class A-6 Lockout
     Distribution Percentage of the Senior Principal Distribution Amount for
     such Distribution Date;

               second, to the Class A-1A and Class A-1B Certificates, pro rata,
     up to the Senior Principal Distribution Amount remaining after priority
     first above, until the aggregate Certificate Principal Balance thereof has
     been reduced to zero;

               third, to the Class A-2 Certificates, up to the Senior Principal
     Distribution Amount remaining after priority first and second above, until
     the Certificate Principal Balance thereof has been reduced to zero;

                                      -89-

               fourth, to the Class A-3 Certificates, up to the Senior Principal
     Distribution Amount remaining after priority first, second and third above,
     until the Certificate Principal Balance thereof has been reduced to zero;

               fifth, to the Class A-4 Certificates, up to the Senior Principal
     Distribution Amount remaining after priority first, second, third and
     fourth above, until the Certificate Principal Balance thereof has been
     reduced to zero;

               sixth, to the Class A-5 Certificates, up to the Senior Principal
     Distribution Amount remaining after priority first, second, third, fourth
     and fifth above, until the Certificate Principal Balance thereof has been
     reduced to zero;

               seventh, to the Class A-6 Certificates, up to the Senior
     Principal Distribution Amount remaining after priority first, second,
     third, fourth, fifth and sixth above, until the Certificate Principal
     Balance thereof has been reduced to zero;

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

               ninth, to the Class M-2 Certificates, up to the Class M-2
     Principal Distribution Amount, until the Certificate Principal Balance
     thereof has been reduced to zero;

               tenth, to the Class M-3 Certificates, up to the Class M-3
     Principal Distribution Amount, until the Certificate Principal Balance
     thereof has been reduced to zero;

               eleventh, to the Class M-4 Certificates, up to the Class M-4
     Principal Distribution Amount, until the Certificate Principal Balance
     thereof has been reduced to zero;

               twelfth, to the Class M-5 Certificates, up to the Class M-5
     Principal Distribution Amount, until the Certificate Principal Balance
     thereof has been reduced to zero;

               thirteenth, to the Class M-6 Certificates, up to the Class M-6
     Principal Distribution Amount, until the Certificate Principal Balance
     thereof has been reduced to zero;

               fourteenth, to the Class B-1 Certificates, up to the Class B-1
     Principal Distribution Amount, until the Certificate Principal Balance
     thereof has been reduced to zero;

               fifteenth, to the Class B-2 Certificates, up to the Class B-2
     Principal Distribution Amount, until the Certificate Principal Balance
     thereof has been reduced to zero; and

                                      -90-

               sixteenth, any remaining Principal Distribution Amount will be
     distributed as part of the Monthly Excess Cashflow Amount as set forth in
     Section 4.02(b).

          (b) On each Distribution Date, any Monthly Excess Cashflow Amount
shall be distributed, to the extent available, in the following order of
priority on such Distribution Date:

          (i) to pay any remaining Accrued Certificate Interest for such
     Distribution Date, pro rata, on each Class of Class A Certificates;

          (ii) to pay any Interest Carry Forward Amount for such Distribution
     Date, pro rata, for each Class of Class A Certificates;

          (iii) to pay any remaining unpaid Accrued Certificate Interest for
     such Distribution Date on the Class M-1 Certificates;

          (iv) to pay the remaining Interest Carry Forward Amount, if any, for
     the Class M-1 Certificates for such Distribution Date;

          (v) to pay the Class M-1 Realized Loss Amortization Amount for such
     Distribution Date;

          (vi) to pay any remaining unpaid Accrued Certificate Interest for such
     Distribution Date on the Class M-2 Certificates;

          (vii) to pay the remaining Interest Carry Forward Amount, if any, for
     the Class M-2 Certificates for such Distribution Date;

          (viii) to pay the Class M-2 Realized Loss Amortization Amount for such
     Distribution Date;

          (ix) to pay any remaining unpaid Accrued Certificate Interest for such
     Distribution Date on the Class M-3 Certificates;

          (x) to pay the remaining Interest Carry Forward Amount, if any, for
     the Class M-3 Certificates for such Distribution Date;

          (xi) to pay the Class M-3 Realized Loss Amortization Amount for such
     Distribution Date;

          (xii) to pay any remaining unpaid Accrued Certificate Interest for
     such Distribution Date on the Class M-4 Certificates;

          (xiii) to pay the remaining Interest Carry Forward Amount, if any, for
     the Class M-4 Certificates for such Distribution Date;

          (xiv) to pay the Class M-4 Realized Loss Amortization Amount for such
     Distribution Date;

                                      -91-

          (xv) to pay any remaining unpaid Accrued Certificate Interest for such
     Distribution Date on the Class M-5 Certificates;

          (xvi) to pay the remaining Interest Carry Forward Amount, if any, for
     the Class M-5 Certificates for such Distribution Date;

          (xvii) to pay the Class M-5 Realized Loss Amortization Amount for such
     Distribution Date;

          (xviii) to pay any remaining unpaid Accrued Certificate Interest for
     such Distribution Date on the Class M-6 Certificates;

          (xix) to pay the remaining Interest Carry Forward Amount, if any, for
     the Class M-6 Certificates for such Distribution Date;

          (xx) to pay the Class M-6 Realized Loss Amortization Amount for such
     Distribution Date;

          (xxi) to pay any remaining unpaid Accrued Certificate Interest for
     such Distribution Date on the B-1 Certificates;

          (xxii) to pay the remaining Interest Carry Forward Amount, if any, for
     the Class B-1 Certificates for such Distribution Date;

          (xxiii) to pay the Class B-1 Realized Loss Amortization Amount for
     such Distribution Date;

          (xxiv) to pay any remaining unpaid Accrued Certificate Interest for
     such Distribution Date on the B-2 Certificates;

          (xxv) to pay the remaining Interest Carry Forward Amount, if any, for
     the Class B-2 Certificates for such Distribution Date;

          (xxvi) to pay the Class B-2 Realized Loss Amortization Amount for such
     Distribution Date;

          (xxvii) to the Reserve Account, any payment in respect of Cap
     Carryover Amounts for the Class A-1A Certificates;

          (xxviii) to the Class A-1A Certificates, any Cap Carryover Amount for
     such Class; and

          (xxix) to the Class CE Certificates, up to the Class CE Distributable
     Amount for such Distribution Date.

          On each Distribution Date, there shall be distributed to the Holder of
the Class R Certificate in respect of the Class R-2 Interest, any remaining
amount in the Distribution

                                      -92-

Account on such date after the application pursuant to Sections 4.01, 4.02(a)
and 4.02(b)(i)-(xxix).

          (c) On each Distribution Date, the Trustee shall withdraw any amounts
then on deposit in the Distribution Account that represent Prepayment Charges
collected by the Servicer in connection with the Principal Prepayment of any of
the Mortgage Loans, any Servicer Prepayment Charge Payment Amount and shall
distribute such amounts to the Holders of the Class P Certificates. Any such
amounts in respect of Servicer Prepayment Charge Payment Amounts shall be
treated as having been distributed to the Holders of the Class P Certificates
from the Grantor Trust. Such distributions shall not be applied to reduce the
Certificate Principal Balance of the Class P Certificates. On the first
Distribution Date following the expiration of the latest prepayment term with
respect to the related Mortgage Loans and if funds are available on such date,
the Class P Certificates shall be entitled to its outstanding Certificate
Principal Balance prior to any distributions of Monthly Excess Cashflow Amounts
pursuant to Section 4.02(b) on such Distribution Date.

          (d) Any amounts distributed to the Class A-1A Certificates in respect
of interest pursuant to Section 4.02(b)(xxviii) which constitute Cap Carryover
Amounts (excluding amounts paid under the Yield Maintenance Agreement) shall
first be deemed distributed by REMIC 2 as a distribution to the Class CE
Certificates, and then distributed to the Class A-1A Certificates from the
Grantor Trust as payments on notional principal contracts in the nature of cap
contracts. Any remaining amount with respect to the Class CE Certificates or any
remaining Yield Maintenance Agreement Payments shall be treated as having been
distributed to the Holders of the Class CE Certificates from the Grantor Trust.

          (e) On each Distribution Date, following the foregoing distributions,
an amount equal to the amount of Subsequent Recoveries deposited into the
Collection Account pursuant to Section 3.05 and included in the Available Funds
for such Distribution Date shall be applied to increase the Certificate
Principal Balance of the Class of Class M or Class B Certificates then
outstanding with the highest distribution priority up to the extent of the
Applied Realized Loss Amount previously allocated to that Class of Certificates
pursuant to Section 4.03. An amount equal to the amount of any remaining
Subsequent Recoveries shall be applied to increase the Certificate Principal
Balance of the Class of Class M or Class B Certificates then outstanding with
the next highest distribution priority, up to the amount of the Applied Realized
Loss Amount previously allocated to that Class of certificates pursuant to
Section 4.03, and so on. Holders of such Certificates shall not be entitled to
any distribution in respect of interest on the amount of such increases for any
Interest Accrual Period preceding the Distribution Date on which such increase
occurs. Any such increases shall be applied to the Certificate Principal Balance
of each Certificate of such Class in accordance with its respective Percentage
Interest.

          (f) On each Distribution Date, Unpaid Realized Loss Amounts on the
Class M and Class B Certificates will be reduced by the amount of any Subsequent
Recoveries received during the related Prepayment Period in the same order as
Realized Loss Amortization Amounts are paid to the Class M and Class B
Certificates pursuant to Section 4.02(b) above.

                                      -93-

          Section 4.03 Allocation of Losses.

          An Applied Realized Loss Amount for a Distribution Date will be
allocated first against the Class CE Certificates, until the Notional Amount
thereof is reduced to zero and then against the Class B-2, Class B-1, Class M-6,
Class M-5, Class M-4, Class M-3, Class M-2 and Class M-1 Certificates, in that
order and until the respective Certificate Principal Balances thereof are
reduced to zero.

          Section 4.04 Method of Distribution.

          The Trustee shall make distributions in respect of a Distribution Date
to each Certificateholder of record on the related Record Date (other than as
provided in Section 10.01 respecting the final distribution), in the case of
Certificateholders of the Certificates, by wire transfer in immediately
available funds to the account of the Person entitled thereto if such Person
shall have so notified the Trustee in writing at least five Business Days prior
to the Record Date immediately prior to such Distribution Date and is the
registered owner of such Certificates, or by check mailed by first class mail to
the address of the Person entitled thereto, as such name and address shall
appear on the Certificate Register, provided that the Trustee may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Distributions among Certificateholders shall be made in proportion to the
Percentage Interests evidenced by the Certificates held by such
Certificateholders.

          Section 4.05 Distributions on Book-Entry Certificates.

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

          Section 4.06 Statements.

          (a) On each Distribution Date, based on the Mortgage Loan information
contained in the Remittance Report, the Trustee shall prepare and make available
to each Holder of the Regular Certificates and the NIM Insurer, a statement (the
"Distribution Date Statement") on its Internet website as to the distributions
made on such Distribution Date setting forth:

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

                                      -94-

          (ii) the amount of the distribution made on such Distribution Date to
     the Holders of each Class of Certificates allocable to interest or Class CE
     Distributable Amount, separately identified;

          (iii) the Overcollateralization Amount, the Overcollateralization
     Release Amount, the Overcollateralization Deficiency and the Targeted
     Overcollateralization Amount as of such Distribution Date and the Monthly
     Excess Interest Amount and Monthly Excess Cashflow Amount for such
     Distribution Date;

          (iv) the aggregate amount of Servicing Fees received by the Servicer
     during the related Collection Period;

          (v) the aggregate amount of Advances for the related Collection
     Period, cumulative unreimbursed Advances and Servicing Advances and
     cumulative Nonrecoverable Advances;

          (vi) the Pool Balance, at the close of business at the end of the
     related Collection Period;

          (vii) the number, weighted average remaining term to maturity and
     weighted average Mortgage Interest Rate of the Mortgage Loans as of the
     related Due Date;

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

          (ix) with respect to any Mortgage Loan that became an REO Property
     during the preceding calendar month, the loan number of such Mortgage Loan,
     the unpaid Principal Balance of the REO Property as of the close of
     business on the last Business Day of such calendar month and the Principal
     Balance of such Mortgage Loan as of the date it became an REO Property;

          (x) the book value of any REO Property as of the close of business on
     the last Business Day of the calendar month preceding the Distribution
     Date, and, cumulatively, the total number and cumulative principal balance
     of all REO Properties as of the close of business of the last day of the
     preceding Collection Period;

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

          (xii) the aggregate amount of Realized Losses incurred during the
     related Collection Period and the cumulative amount of Realized Losses;

                                      -95-

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

          (xiv) the Accrued Certificate Interest in respect of each Class of
     Certificates for such Distribution Date and any related Cap Carryover
     Amounts in the case of the Class A-1A Certificates, and the respective
     portions thereof, if any, remaining unpaid following the distributions made
     in respect of such Certificates on such Distribution Date;

          (xv) the aggregate amount of any Prepayment Interest Shortfalls for
     such Distribution Date, to the extent not covered by payments by the
     Servicer pursuant to Section 3.23;

          (xvi) the amount of the Trustee Fee paid;

          (xvii) the Cap Carryover Amounts on the Class A-1A Certificates
     distributed on such Distribution Date, the amounts remaining after giving
     effect to distributions thereof on such Distribution Date and the amount of
     all Cap Carryover Amounts on the Class A-1A Certificates covered by
     withdrawals from the Reserve Account on such Distribution Date;

          (xviii) any Overcollateralization Deficiency after giving effect to
     the distribution of principal on such Distribution Date;

          (xix) whether a Trigger Event has occurred and is continuing, and the
     cumulative Realized Losses, as a percentage of the original Pool Balance;

          (xx) the Available Funds;

          (xxi) the rate at which interest accrues for each Class of
     Certificates for such Distribution Date;

          (xxii) the information contained in the Liquidation Report for such
     Distribution Date;

          (xxiii) the aggregate Principal Balance of Mortgage Loans purchased by
     the Servicer, the Originator or the Seller during the related Prepayment
     Period and indicating the section of this Agreement requiring or allowing
     the purchase of each such Mortgage Loan;

          (xxiv) the aggregate Principal Balance of the Mortgage Loans
     repurchased by the Servicer during the related Prepayment Period in
     connection with Section 3.16;

          (xxv) the Mortgage Loan identifying number of each Mortgage Loan with
     a Prepayment Charge that was the subject of a Principal Prepayment in full
     during the related Collection Period, the Prepayment Charge listed on each
     related Mortgage Note

                                      -96-

     and the Prepayment Charge collected or the Servicer Prepayment Charge
     Payment Amount paid by the Servicer with respect to each such Mortgage
     Loan;

          (xxvi) the amount of Subsequent Recoveries received during the related
     Prepayment Period;

          (xxvii) the amount of Prepayment Interest Excess retained by the
     Servicer for the related Prepayment Period; and

          (xxviii) the aggregate amount of Relief Act Interest Shortfalls.

          The Trustee may fully rely upon and shall have no liability with
respect to information with respect to the Mortgage Loans provided by the
Servicer.

          In the case of information furnished pursuant to subclauses (i), (ii)
and (xiii) above, the amounts shall be expressed in a separate section of the
report as a dollar amount for each Class for each $1,000 original dollar amount
as of the Cut-off Date.

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

          (b) Within a reasonable period of time after the end of each calendar
year, the Trustee shall furnish to the NIMS Insurer and each Person who at any
time during the calendar year was a Certificateholder of a Regular Certificate,
if requested in writing by such Person, such information as is reasonably
necessary to provide to such Person a statement containing the information set
forth in subclauses (i), (ii) and (vi) above, aggregated for such calendar year
or applicable portion thereof during which such Person was a Certificateholder.
Such obligation of the Trustee shall be deemed to have been satisfied to the
extent that substantially comparable information shall be prepared and furnished
by the Trustee to Certificateholders pursuant to any requirements of the Code as
are in force from time to time.

          (c) On each Distribution Date, the Trustee shall make available to the
Class R Certificateholder a copy of the reports made available to the Regular
Certificateholders in respect of such Distribution Date with such other
information as the Trustee deems necessary or appropriate. Such obligation of
the Trustee shall be deemed to have been satisfied to the extent that
substantially comparable information shall be prepared and furnished to Class R
Certificateholder by the Trustee pursuant to any requirements of the Code as
from time to time in force.

                                      -97-

          (d) The Trustee shall, upon request, furnish to each Certificateholder
or Certificate Owner and the NIMS Insurer, during the term of this Agreement,
such periodic, special, or other reports or information, whether or not provided
for herein, as shall be reasonable with respect to the Certificateholder or
Certificate Owner, or otherwise with respect to the purposes of this Agreement,
all such reports or information to be provided at the expense of the
Certificateholder or Certificate Owner in accordance with such reasonable and
explicit instructions and directions as the Certificateholder or Certificate
Owner may provide.

          Section 4.07 Remittance Reports; Advances.

          (a) On or prior to the Servicer Reporting Date, the Servicer shall
deliver to the Trustee and the NIMS Insurer by telecopy (or by such other means
as the Servicer, the NIMS Insurer and the Trustee may agree from time to time) a
Remittance Report with respect to the related Distribution Date. On the same
date, the Servicer shall electronically forward to the Trustee in such medium as
may be agreed between the Servicer and the Trustee the information set forth in
such Remittance Report with respect to the related Distribution Date and such
information reasonably available to the Servicer necessary in order for the
Trustee to perform the calculations necessary to make the distributions
contemplated by Section 4.01, 4.02 and 4.03 and to prepare the Distribution Date
Statement. The Trustee shall not be responsible to recompute, recalculate or
verify any information provided to it by the Servicer.

          (b) The amount of Advances to be made by the Servicer for any
Distribution Date shall equal, subject to Section 4.07(d), the sum of (i) the
aggregate amount of Monthly Payments (net of the related Servicing Fee), due
during the related Collection Period in respect of the Mortgage Loans, which
Monthly Payments were delinquent on a contractual basis as of the close of
business on the related Determination Date and (ii) with respect to each REO
Property, which REO Property was acquired during or prior to the related
Collection Period and as to which REO Property an REO Disposition did not occur
during the related Collection Period, an amount equal to the excess, if any, of
the REO Imputed Interest on such REO Property for such Collection Period, over
the net income from such REO Property transferred to the Distribution Account
pursuant to Section 3.13 for distribution on such Distribution Date.

          On or before 3:00 p.m. New York time on the Servicer Remittance Date,
the Servicer shall remit in immediately available funds to the Trustee for
deposit in the Distribution Account an amount equal to the aggregate amount of
Advances, if any, to be made in respect of the Mortgage Loans for the related
Distribution Date either (i) from its own funds or (ii) from the Collection
Account, to the extent of funds held therein for future distribution (in which
case it will cause to be made an appropriate entry in the records of the
Collection Account that amounts held for future distribution have been, as
permitted by this Section 4.07, used by the Servicer in discharge of any such
Advance) or (iii) in the form of any combination of (i) and (ii) aggregating the
total amount of Advances to be made by the Servicer with respect to the Mortgage
Loans. Any amounts held for future distribution and so used shall be
appropriately reflected in the Servicer's records and replaced by the Servicer
by deposit in the Collection Account on or before any future Servicer Remittance
Date to the extent that the Available Funds for the related Distribution Date
(determined without regard to Advances to be made on the Servicer Remittance
Date) shall be less than the total amount that would be distributed to the
Classes of Certificateholders pursuant to Section 4.01 and 4.02 on such
Distribution Date if such amounts

                                      -98-

held for future distributions had not been so used to make Advances. The Trustee
will provide notice to the Servicer and NIMS Insurer by telecopy by the close of
business on any Servicer Remittance Date in the event that the amount remitted
by the Servicer to the Trustee on such date is less than the Advances required
to be made by the Servicer for the related Distribution Date, as set forth in
the related Remittance Report.

          (c) The obligation of the Servicer to make such Advances is mandatory,
notwithstanding any other provision of this Agreement but subject to (d) below,
and, with respect to any Mortgage Loan or REO Property, shall continue until the
earlier of such time as such Mortgage Loan is paid in full by the Mortgagor or
disposed of by the Trust, or until a Final Recovery Determination in connection
therewith.

          (d) Notwithstanding anything herein to the contrary, no Advance or
Servicing Advance shall be required to be made hereunder by the Servicer if such
Advance would, if made, constitute a Nonrecoverable Advance. The determination
by the Servicer that it has made a Nonrecoverable Advance or that any proposed
Advance or Servicing Advance, if made, would constitute a Nonrecoverable
Advance, shall be evidenced by an Officers' Certificate of the Servicer
delivered to the Depositor, the NIMS Insurer and the Trustee. The Trustee shall
be entitled to conclusively rely upon any such determination by the Servicer.

          Section 4.08 REMIC Distributions and Allocation of Losses.

          (a) On each Distribution Date, the Trustee shall cause in the
following order of priority, the following amounts to be distributed by REMIC 1
to REMIC 2 on account of the REMIC 1 Regular Interests or withdrawn from the
Distribution Account and distributed to the Holders of the Class R Certificates
(in respect of the Class R-1 Interest), as the case may be:

          (i) to Holders of REMIC 1 Regular Interest LT1AA, REMIC 1 Regular
     Interest LT1A1A, REMIC 1 Regular Interest LT1A1B, REMIC 1 Regular Interest
     LT1A2, REMIC 1 Regular Interest LT1A3, REMIC 1 Regular Interest LT1A4,
     REMIC 1 Regular Interest LT1A5, REMIC 1 Regular Interest LT1A6, REMIC 1
     Regular Interest LT1M1, REMIC 1 Regular Interest LT1M2, REMIC 1 Regular
     Interest LT1M3, REMIC 1 Regular Interest LT1M4, REMIC 1 Regular Interest
     LT1M5, REMIC 1 Regular Interest LT1M6, REMIC 1 Regular Interest LT1B1,
     REMIC 1 Regular Interest LT1B2, REMIC 1 Regular Interest LT1P and REMIC 1
     Regular Interest LT1ZZ, pro rata, in an amount equal to (A) the
     Uncertificated Accrued Interest for such Distribution Date, plus (B) any
     amounts in respect thereof remaining unpaid from previous Distribution
     Dates. Amounts payable as Uncertificated Accrued Interest in respect of
     REMIC 1 Regular Interest LT1ZZ shall be reduced and deferred when the REMIC
     1 Overcollateralized Amount is less than the REMIC 1 Overcollateralization
     Target Amount, by the lesser of (x) the amount of such difference and (y)
     the Maximum LT1ZZ Uncertificated Accrued Interest Deferral Amount and such
     amount will be payable to the Holders of REMIC 1 Regular Interest LT1A1A,
     REMIC 1 Regular Interest LT1A1B, REMIC 1 Regular Interest LT1A2, REMIC 1
     Regular Interest LT1A3, REMIC 1 Regular Interest LT1A4, REMIC 1 Regular
     Interest LT1A5, REMIC 1 Regular Interest LT1A6, REMIC 1 Regular Interest
     LT1M1, REMIC 1 Regular Interest LT1M2, REMIC 1 Regular Interest LT1M3,
     REMIC 1 Regular Interest LT1M4, REMIC 1 Regular Interest LT1M5, REMIC 1

                                      -99-

     Regular Interest LT1M6, REMIC 1 Regular Interest LT1B1 and REMIC 1 Regular
     Interest LT1B2 in the same proportion as the Overcollateralization
     Deficiency is allocated to the Corresponding Certificates and the
     Uncertificated Principal Balance of REMIC 1 Regular Interest LT1ZZ shall be
     increased by such amount;

          (ii) to the Holders of REMIC 1 Regular Interests, in an amount equal
     to the remainder of the Available Funds for such Distribution Date after
     the distributions made pursuant to clause (i) above, allocated as follows:

          (1)  to REMIC 1 Regular Interest LT1AA, 98.00% of such remainder,
               until the Uncertificated Principal Balance of such Uncertificated
               REMIC 1 Regular Interest is reduced to zero provided, however,
               that REMIC 1 Regular Interest LT1P shall not be reduced until the
               Distribution Date immediately following the expiration of the
               latest Prepayment Charge or any Distribution Date thereafter, at
               which point such amount shall be distributed to REMIC 1 Regular
               Interest LT1P, until $100 has been distributed pursuant to this
               clause;

          (2)  to REMIC 1 Regular Interest LT1A1A, REMIC 1 Regular Interest
               LT1A1B, REMIC 1 Regular Interest LT1A2, REMIC 1 Regular Interest
               LT1A3, REMIC 1 Regular Interest LT1A4, REMIC 1 Regular Interest
               LT1A5, REMIC 1 Regular Interest LT1A6, REMIC 1 Regular Interest
               LT1M1, REMIC 1 Regular Interest LT1M2, REMIC 1 Regular Interest
               LT1M3, REMIC 1 Regular Interest LT1M4, REMIC 1 Regular Interest
               LT1M5, REMIC 1 Regular Interest LT1M6, REMIC 1 Regular Interest
               LT1B1 and REMIC 1 Regular Interest LT1B2, 1.00% of such
               remainder, in the same proportion as principal payments are
               allocated to the Corresponding Certificates, until the
               Uncertificated Principal Balances of such REMIC 1 Regular
               Interests are reduced to zero; then

          (3)  to REMIC 1 Regular Interest LT1ZZ, 1.00% of such remainder, until
               the Uncertificated Principal Balance of such REMIC 1 Regular
               Interest is reduced to zero;

          (4)  any remaining amount to the Holders of the Class R Certificates
               (in respect of the Class R-1 Interest);

     provided, however, that (i) 98.00% and (ii) 2.00% of any principal payments
     that are attributable to an Aggregate Overcollateralization Release Amount
     shall be allocated to (i) REMIC 1 Regular Interest LT1AA and REMIC 1
     Regular Interest LT1P and (ii) REMIC 1 Regular Interest LT1ZZ,
     respectively; and

          (b) The Trustee shall cause the following allocation of losses:

          (i) The aggregate amount of any Prepayment Interest Shortfalls and the
     aggregate amount of any Relief Act Interest Shortfalls incurred in respect
     of the Mortgage Loans for any Distribution Date shall be allocated first,
     to Uncertificated Accrued Interest payable to (i) REMIC 1 Regular Interest
     LT1AA and REMIC 1 Regular

                                      -100-

     Interest LT1P and (ii) REMIC 1 Regular Interest LT1ZZ up to an aggregate
     amount equal to the REMIC 1 Interest Loss Allocation Amount, 98% and 2%,
     respectively, and thereafter among REMIC 1 Regular Interest LT1A1A, REMIC 1
     Regular Interest LT1A1B, REMIC 1 Regular Interest LT1A2, REMIC 1 Regular
     Interest LT1A3, REMIC 1 Regular Interest LT1A4, REMIC 1 Regular Interest
     LT1A5, REMIC 1 Regular Interest LT1A6, REMIC 1 Regular Interest LT1M1,
     REMIC 1 Regular Interest LT1M2, REMIC 1 Regular Interest LT1M3, REMIC 1
     Regular Interest LT1M4, REMIC 1 Regular Interest LT1M5, REMIC 1 Regular
     Interest LT1M6, REMIC 1 Regular Interest LT1B1, REMIC 1 Regular Interest
     LT1B2 and REMIC 1 Regular Interest LT1ZZ pro rata based on, and to the
     extent of, one month's interest at the then applicable respective
     Uncertificated REMIC 1 Pass-Through Rate on the respective Uncertificated
     Principal Balance of each such REMIC 1 Regular Interest;

          (ii) All Realized Losses on the Mortgage Loans shall be allocated by
     the Trustee on each Distribution Date to the following REMIC 1 Regular
     Interests in the specified percentages, as follows: first, to
     Uncertificated Accrued Interest payable to (i) REMIC 1 Regular Interest
     LT1AA and REMIC 1 Regular Interest LT1P and (ii) REMIC 1 Regular Interest
     LT1ZZ up to an aggregate amount equal to the REMIC 1 Interest Loss
     Allocation Amount, 98% and 2%, respectively; second, to the Uncertificated
     Principal Balances of REMIC 1 Regular Interest LT1AA and REMIC 1 Regular
     Interest LT1ZZ up to an aggregate amount equal to the REMIC 1 Principal
     Loss Allocation Amount, 98% and 2%, respectively; third, to the
     Uncertificated Principal Balances of REMIC 1 Regular Interest LT1AA, REMIC
     1 Regular Interest LT1B2, and REMIC 1 Regular Interest LT1ZZ, 98%, 1% and
     1%, respectively, until the Uncertificated Principal Balance of REMIC 1
     Regular Interest LT1B2 has been reduced to zero; fourth, to the
     Uncertificated Principal Balances of REMIC 1 Regular Interest LT1AA, REMIC
     1 Regular Interest LT1B1 and REMIC 1 Regular Interest LT1ZZ, 98%, 1% and
     1%, respectively, until the Uncertificated Principal Balance of REMIC 1
     Regular Interest LT1B1 has been reduced to zero; fifth, to the
     Uncertificated Principal Balances of REMIC 1 Regular Interest LT1AA, REMIC
     1 Regular Interest LT1M6 and REMIC 1 Regular Interest LT1ZZ, 98%, 1% and
     1%, respectively, until the Uncertificated Principal Balance of REMIC 1
     Regular Interest LT1M6 has been reduced to zero; sixth, to the
     Uncertificated Principal Balances of REMIC 1 Regular Interest LT1AA, REMIC
     1 Regular Interest LT1M5 and REMIC 1 Regular Interest LT1ZZ, 98%, 1% and
     1%, respectively, until the Uncertificated Principal Balance of REMIC 1
     Regular Interest LT1M5 has been reduced to zero; seventh, to the
     Uncertificated Principal Balances of REMIC 1 Regular Interest LT1AA, REMIC
     1 Regular Interest LT1M4 and REMIC 1 Regular Interest LT1ZZ, 98%, 1% and
     1%, respectively, until the Uncertificated Principal Balance of REMIC 1
     Regular Interest LT1M4 has been reduced to zero; eighth, to the
     Uncertificated Principal Balances of REMIC 1 Regular Interest LT1AA, REMIC
     1 Regular Interest LT1M3 and REMIC 1 Regular Interest LT1ZZ, 98%, 1% and
     1%, respectively, until the Uncertificated Principal Balance of REMIC 1
     Regular Interest LT1M3 has been reduced to zero; ninth, to the
     Uncertificated Principal Balances of REMIC 1 Regular Interest LT1AA, REMIC
     1 Regular Interest LT1M2 and REMIC 1 Regular Interest LT1ZZ, 98%, 1% and
     1%, respectively, until the Uncertificated Principal Balance of REMIC 1
     Regular Interest LT1M2 has been reduced to zero; and tenth, to the
     Uncertificated Principal Balances of REMIC 1 Regular Interest LT1AA,

                                      -101-

     REMIC 1 Regular Interest LT1M1 and REMIC 1 Regular Interest LT1ZZ, 98%, 1%
     and 1%, respectively, until the Uncertificated Principal Balance of REMIC 1
     Regular Interest LT1M1 has been reduced to zero; and

          (c) On each Distribution Date, all amounts representing Prepayment
Charges will be distributed from REMIC 1 to the holder of the Class P
Certificate. Such amount shall not reduce the Certificate Balance of the Class P
Certificates.

          (d) Notwithstanding anything to the contrary contained herein, the
above distributions in this Section 4.08 (other than on the Certificates are
deemed distributions, and distributions of funds from the Distribution Account
shall be made only in accordance with Sections 4.01 and 4.02 hereof.

                                    ARTICLE V

                                THE CERTIFICATES

          Section 5.01 The Certificates.

          Each of the Class A-1A, Class A-1B, Class A-2, Class A-3, Class A-4,
Class A-5, Class A-6, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5,
Class M-6, Class B-1, Class B-2, Class CE, Class P and Class R Certificates
shall be substantially in the forms annexed hereto as exhibits, and shall, on
original issue, be executed by the Trustee and authenticated and delivered by
the Certificate Registrar to or upon the receipt of a Written Order to
Authenticate from the Depositor concurrently with the sale and assignment to the
Trustee of the Trust Fund. Each Class of the Offered Certificates and Class B
Certificates shall be initially evidenced by one or more Certificates
representing a Percentage Interest with a minimum dollar denomination of $25,000
and integral multiples of $1 in excess thereof. The Class P Certificates shall
be initially evidenced by one or more Certificates representing a Percentage
Interest with a minimum dollar denomination of $20 and integral multiples of $20
in excess thereof. The Class CE Certificates are issuable only in minimum
Percentage Interests of 10%. The Class R Certificate is issuable only as a
single certificate.

          The Certificates shall be executed on behalf of the Trust by manual or
facsimile signature on behalf of the Trustee by a Responsible Officer.
Certificates bearing the manual or facsimile signatures of individuals who were,
at the time when such signatures were affixed, authorized to sign on behalf of
the Trustee shall bind the Trust, notwithstanding that such individuals or any
of them have ceased to be so authorized prior to the authentication and delivery
of such Certificates or did not hold such offices at the date of such
Certificate. No Certificate shall be entitled to any benefit under this
Agreement or be valid for any purpose, unless such Certificate shall have been
manually authenticated by the Certificate Registrar substantially in the form
provided for herein, and such authentication upon any Certificate shall be
conclusive evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their authentication. Subject to Section 5.02(c), the Offered Certificates
and Class B Certificates shall be Book-Entry Certificates. The Class CE, Class P
and Class R Certificates shall not be Book-Entry Certificates but shall be
issued in fully registered certificate form.

                                      -102-

          Section 5.02 Registration of Transfer and Exchange of Certificates.

          (a) The Certificate Registrar shall cause to be kept at the Corporate
Trust Office of the Trustee a Certificate Register in which, subject to such
reasonable regulations as it may prescribe, the Certificate Registrar shall
provide for the registration of Certificates and of transfers and exchanges of
Certificates as herein provided. The Trustee shall initially serve as
Certificate Registrar for the purpose of registering Certificates and transfers
and exchanges of Certificates as herein provided. The Trustee as Certificate
Registrar shall be subject to the same standards of care, limitations on
liability and rights to indemnity as the Trustee, and the provisions of Sections
8.01, 8.02, 8.03, 8.04, 8.05, 8.14 and 8.15 shall apply to the Certificate
Registrar to the same extent as they apply to the Trustee. Any Certificate
Registrar appointed in accordance with this Section 5.02(a) may at any time
resign by giving at least 30 days' advance written notice of resignation to the
Trustee, the Servicer and the Depositor, such resignation to become effective
upon appointment of a successor Certificate Registrar.

          Upon surrender for registration of transfer of any Certificate at any
office or agency of the Certificate Registrar maintained for such purpose
pursuant to the foregoing paragraph and, in the case of the Class R Certificate,
upon satisfaction of the conditions set forth below, the Trustee on behalf of
the Trust shall execute and the Certificate Registrar shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Certificates of the same aggregate Percentage Interest.

          At the option of the Certificateholders, Certificates may be exchanged
for other Certificates in authorized denominations and the same aggregate
Percentage Interests, upon surrender of the Certificates to be exchanged at any
such office or agency. Whenever any Certificates are so surrendered for
exchange, the Trustee shall execute on behalf of the Trust and the Certificate
Registrar shall authenticate and deliver the Certificates which the
Certificateholder making the exchange is entitled to receive. Every Certificate
presented or surrendered for registration of transfer or exchange shall (if so
required by the Trustee or the Certificate Registrar) be duly endorsed by, or be
accompanied by a written instrument of transfer satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder thereof or his attorney
duly authorized in writing.

          (b) Upon original issuance, the Book-Entry Certificates shall be
issued in the form of one or more typewritten certificates, to be delivered to
the Depository, the initial Depository, by, or on behalf of, the Depositor; or
to, and deposited with the Certificate Custodian, on behalf of the Depository,
if directed to do so pursuant to instructions from the Depository. Except as
provided in paragraph (c) below, the Book-Entry Certificates shall at all times
remain registered in the name of the Depository or its nominee and at all times:
(i) registration of such Certificates may not be transferred by the Trustee
except to another Depository; (ii) the Depository shall maintain book-entry
records with respect to the Certificate Owners and with respect to ownership and
transfers of such Certificates; (iii) ownership and transfers of registration of
such Certificates on the books of the Depository shall be governed by applicable
rules established by the Depository; (iv) the Depository may collect its usual
and customary fees, charges and expenses from its Depository Participants; (v)
the Trustee shall for all purposes deal with the Depository as representative of
the Certificate Owners of the Certificates for purposes of exercising the rights
of Holders under this Agreement, and requests

                                      -103-

and directions for and votes of such representative shall not be deemed to be
inconsistent if they are made with respect to different Certificate Owners; (vi)
the Trustee may rely and shall be fully protected in relying upon information
furnished by the Depository with respect to its Depository Participants and
furnished by the Depository Participants with respect to indirect participating
firms and Persons shown on the books of such indirect participating firms as
direct or indirect Certificate Owners; and (vii) the direct participants of the
Depository shall have no rights under this Agreement under or with respect to
any of the Certificates held on their behalf by the Depository, and the
Depository may be treated by the Trustee and its agents, employees, officers and
directors as the absolute owner of the Certificates for all purposes whatsoever.

          All transfers by Certificate Owners of Book-Entry Certificates shall
be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owners. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners that it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures. The parties hereto
are hereby authorized to execute a Letter of Representations with the Depository
or take such other action as may be necessary or desirable to register a
Book-Entry Certificate to the Depository. In the event of any conflict between
the terms of any such Letter of Representation and this Agreement, the terms of
this Agreement shall control.

          (c) If the Depository advises the Trustee in writing that the
Depository is no longer willing or able to discharge properly its
responsibilities as Depository and the Trustee or the Depositor is unable to
locate a qualified successor. Upon surrender to the Certificate Registrar of the
Book-Entry Certificates by the Depository, accompanied by registration
instructions from the Depository for registration, the Trustee shall, at the
Trust's expense, execute on behalf of the Trust and the Certificate Registrar
shall authenticate definitive, fully registered certificates (the "Definitive
Certificates"). None of the Depositor or the Trustee shall be liable for any
delay in delivery of such instructions and may conclusively rely on, and shall
be protected in relying on, such instructions. Upon the issuance of Definitive
Certificates, the Trustee, the Certificate Registrar, the Servicer, any Paying
Agent and the Depositor shall recognize the Holders of the Definitive
Certificates as Certificateholders hereunder.

          (d) Except with respect to a transfer of the Private Certificates
between or among the Depositor, the Seller, their affiliates or both, no
transfer, sale, pledge or other disposition of any Private Certificate shall be
made unless such disposition is exempt from the registration requirements of the
1933 Act, and any applicable state securities laws or is made in accordance with
the 1933 Act and applicable state securities laws. In the event such a transfer
of a Private Certificate is to be made without registration or qualification,
(other than in connection with (i) the initial transfer of any such Private
Certificate by the Depositor to an affiliate of the Depositor, (ii) the transfer
of any such Class CE, Class P or Residual Certificate to the issuer under the
Indenture or the indenture trustee under the Indenture or (iii) a transfer of
any such Class CE, Class P or Residual Certificate from the issuer under the
Indenture or the indenture trustee under the Indenture to the Depositor or an
Affiliate of the Depositor), (i) unless such transfer is made in reliance upon
Rule 144A (as evidenced by the investment letter delivered to the Certificate
Registrar, in substantially the form attached hereto as Exhibit J) under the
1933 Act, the Certificate Registrar and the Depositor shall require a written
Opinion of Counsel (which may be in-house counsel) acceptable to and in form and
substance reasonably satisfactory

                                      -104-

to the Certificate Registrar and the Depositor that such transfer may be made
pursuant to an exemption, describing the applicable exemption and the basis
therefor, from the 1933 Act or is being made pursuant to the 1933 Act, which
Opinion of Counsel shall not be an expense of the Certificate Registrar or the
Depositor or (ii) the Certificate Registrar shall require the transferor to
execute a transferor certificate (in substantially the form attached hereto as
Exhibit L) and the transferee to execute an investment letter (in substantially
the form attached hereto as Exhibit J) acceptable to and in form and substance
reasonably satisfactory to the Depositor and the Certificate Registrar
certifying to the Depositor and the Certificate Registrar the facts surrounding
such transfer, which investment letter shall not be an expense of the
Certificate Registrar or the Depositor. The Holder of a Private Certificate
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Certificate Registrar and the Depositor against any liability that may result if
the transfer is not so exempt or is not made in accordance with such federal and
state laws.

          No transfer of an ERISA-Restricted Certificate shall be made unless
the Certificate Registrar shall have received either (i) a representation from
the transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Certificate Registrar and the Depositor (such requirement is
satisfied only by the Certificate Registrar's receipt of a representation letter
from the transferee substantially in the form of Exhibit I hereto, as
appropriate), to the effect that such transferee is not an employee benefit plan
or arrangement 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 or arrangement nor using the assets of
any such plan or arrangement to effect such transfer, (ii) (except in the case
of a Class R, Class P or Class CE Certificate) if the purchaser is an insurance
company, a representation that the purchaser is an insurance company which is
purchasing such Certificates with funds contained in an "insurance company
general account" (as such term is defined in Section V(e) of Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60") and that the purchase and
holding of such Certificates are covered under Sections I and III of PTCE 95-60
or (iii) (except in the case of the Class R Certificate) in the case of any such
ERISA Restricted Certificate presented for registration in the name of an
employee benefit plan subject to ERISA or a plan or arrangement subject to
Section 4975 of the Code (or comparable provisions of any subsequent
enactments), or a trustee of any such plan or any other person acting on behalf
of any such plan or arrangement or using such plan's or arrangement's assets, an
Opinion of Counsel satisfactory to the Certificate Registrar, to the effect that
the purchase or holding of such ERISA Restricted Certificate will not constitute
or result in a non-exempt prohibited transaction within the meaning of ERISA,
Section 4975 of the Code or Similar Law and will not subject the Depositor, the
Servicer, the Trustee, the NIMS Insurer or the Certificate Registrar to any
obligation in addition to those expressly undertaken in this Agreement or to any
liability. Notwithstanding anything else to the contrary herein, any purported
transfer of an ERISA-Restricted Certificate to or on behalf of an employee
benefit plan subject to ERISA, Section 4975 of the Code or Similar Law without
the delivery to the Certificate Registrar of an Opinion of Counsel satisfactory
to the Certificate Registrar as described above shall be void and of no effect.
Any representations required to be made in subsection (i) and (ii) above in the
case of an ERISA-Restricted Certificate which is also a Book-Entry Certificate
shall be deemed to have been made by the acquisition of such Certificate.

                                      -105-

          Each Person who has or who acquires any Ownership Interest in the
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 Depositor or its designee as its attorney-in-fact
to negotiate the terms of any mandatory sale under clause (v) below and to
execute all instruments of transfer and to do all other things necessary in
connection with any such sale, and the rights of each Person acquiring any
Ownership Interest in the Class R Certificate are expressly subject to the
following provisions:

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

          (ii) No Person shall acquire an Ownership Interest in the Class R
     Certificate unless such Ownership Interest is a pro rata undivided
     interest.

          (iii) In connection with any proposed transfer of any Ownership
     Interest in the Class R Certificate, the Certificate Registrar shall as a
     condition to registration of the transfer, require delivery to it, in form
     and substance satisfactory to it, of each of the following:

          (A) an affidavit in the form of Exhibit K hereto from the proposed
transferee to the effect that, among other things, such transferee is a
Permitted Transferee and that it is not acquiring its Ownership Interest in the
Class R Certificate that is the subject of the proposed transfer as a nominee,
trustee or agent for any Person who is not a Permitted Transferee; and

          (B) a covenant of the proposed transferee to the effect that the
proposed transferee agrees to be bound by and to abide by the transfer
restrictions applicable to the Class R Certificate.

          (iv) Any attempted or purported transfer of any Ownership Interest in
     the Class R Certificate in violation of the provisions of this Section
     shall be absolutely null and void and shall vest no rights in the purported
     transferee. If any purported transferee shall, in violation of the
     provisions of this Section, become the Holder of the Class R Certificate,
     then the prior Holder of such Class R Certificate that is a Permitted
     Transferee shall, upon discovery that the registration of transfer of such
     Class R Certificate was not in fact permitted by this Section, be restored
     to all rights as Holder thereof retroactive to the date of registration of
     transfer of such Class R Certificate. The Certificate Registrar shall be
     under no liability to any Person for any registration of transfer of the
     Class R Certificate that is in fact not permitted by this Section or for
     making any distributions due on such Class R Certificate to the Holder
     thereof or taking any other action with respect to such Holder under the
     provisions of this Agreement so long as the Certificate Registrar received
     the documents specified in clause (iii). The Trustee shall be entitled to
     recover from any Holder of the Class R Certificate that was in fact not a
     Permitted Transferee at the time such distributions were made all
     distributions made on such Class R Certificate. Any such distributions so
     recovered by the Trustee shall be distributed and delivered by the Trustee
     to the prior Holder of such Class R Certificate that is a Permitted
     Transferee.

                                      -106-

          (v) If any Person other than a Permitted Transferee acquires any
     Ownership Interest in the Class R Certificate in violation of the
     restrictions in this Section, then the Certificate Registrar shall have the
     right but not the obligation, without notice to the Holder of the Class R
     Certificate or any other Person having an Ownership Interest therein, to
     notify the Depositor to arrange for the sale of the Class R Certificate.
     The proceeds of such sale, net of commissions (which may include
     commissions payable to the Depositor or its Affiliates in connection with
     such sale), expenses and taxes due, if any, will be remitted by the Trustee
     to the previous Holder of the Class R Certificate that is a Permitted
     Transferee, except that in the event that the Trustee determines that the
     Holder of the Class R Certificate may be liable for any amount due under
     this Section or any other provisions of this Agreement, the Trustee may
     withhold a corresponding amount from such remittance as security for such
     claim. The terms and conditions of any sale under this clause (v) shall be
     determined in the sole discretion of the Trustee and it shall not be liable
     to any Person having an Ownership Interest in the Class R Certificate as a
     result of its exercise of such discretion.

          (vi) If any Person other than a Permitted Transferee acquires any
     Ownership Interest in the Class R Certificate in violation of the
     restrictions in this Section, then the Trustee will provide to the Internal
     Revenue Service, and to the persons specified in Sections 860E(e)(3) and
     (6) of the Code, information needed to compute the tax imposed under
     Section 860E(e)(5) of the Code on transfers of residual interests to
     disqualified organizations. The Trustee shall be entitled to reasonable
     compensation for providing such information from the person to whom it is
     provided.

The foregoing provisions of this Section shall cease to apply to transfers
occurring on or after the date on which there shall have been delivered to the
Certificate Registrar, in form and substance satisfactory to the Certificate
Registrar, (i) written notification from each Rating Agency that the removal of
the restrictions on Transfer set forth in this Section will not cause such
Rating Agency to downgrade its rating of the Certificates and (ii) an Opinion of
Counsel to the effect that such removal will not cause any REMIC created
hereunder to fail to qualify as a REMIC.

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

          All Certificates surrendered for registration of transfer or exchange
shall be cancelled by the Certificate Registrar and disposed of pursuant to its
standard procedures.

          Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.

          If (i) any mutilated Certificate is surrendered to the Certificate
Registrar or the Certificate Registrar receives evidence to its satisfaction of
the destruction, loss or theft of any Certificate and (ii) there is delivered to
the Trustee, the Depositor, the NIMS Insurer and the Certificate Registrar such
security or indemnity as may be required by them to save each of them harmless,
then, in the absence of notice to the Trustee or the Certificate Registrar that
such Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute on behalf of the

                                      -107-

Trust, and the Certificate Registrar shall 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 Percentage Interest. Upon the issuance of any
new Certificate under this Section, the Trustee or the Certificate Registrar may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee and the Certificate Registrar) in
connection therewith. Any duplicate Certificate issued pursuant to this Section,
shall constitute complete and indefeasible evidence of ownership in the Trust,
as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.

          Section 5.04 Persons Deemed Owners.

          The Servicer, the Depositor, the NIMS Insurer, the Trustee, the
Certificate Registrar, any Paying Agent and any agent of the Servicer, the
Depositor, the NIMS Insurer, the Certificate Registrar, any Paying Agent or the
Trustee may treat the Person, including a Depository, in whose name any
Certificate is registered as the owner of such Certificate for the purpose of
receiving distributions pursuant to Section 4.01 and 4.02 and for all other
purposes whatsoever, and none of the Servicer, the Trust, the NIMS Insurer, the
Trustee nor any agent of any of them shall be affected by notice to the
contrary.

          Section 5.05 Appointment of Paying Agent.

          The Paying Agent shall make distributions to Certificateholders from
the Distribution Account pursuant to Section 4.01 and 4.02 and shall report the
amounts of such distributions to the Trustee. The duties of the Paying Agent may
include the obligation to distribute statements and provide information to
Certificateholders as required hereunder. The Paying Agent hereunder shall at
all times be an entity duly incorporated and validly existing under the laws of
the United States of America or any state thereof, authorized under such laws to
exercise corporate trust powers and subject to supervision or examination by
federal or state authorities. The Paying Agent shall initially be the Trustee.
The Trustee may appoint a successor to act as Paying Agent, which appointment
shall be reasonably satisfactory to the Depositor, the NIMS Insurer and the
Rating Agencies. The Trustee as Paying Agent shall be subject to the same
standards of care, limitations on liability and rights to indemnity as the
Trustee, and the provisions of Sections 8.01, 8.02, 8.03, 8.04, 8.05, 8.14 and
8.15 shall apply to the Paying Agent to the same extent as they apply to the
Trustee. Any Paying Agent appointed in accordance with this Section 5.05 may at
any time resign by giving at least 30 days' advance written notice of
resignation to the Trustee, the Servicer, the NIMS Insurer and the Depositor,
such resignation to become effective upon appointment of a successor Paying
Agent.

                                   ARTICLE VI

                         THE SERVICER AND THE DEPOSITOR

          Section 6.01 Liability of the Servicer and the Depositor.

          The Servicer shall be liable in accordance herewith only to the extent
of the obligations specifically imposed upon and undertaken by the Servicer
herein. The Depositor

                                      -108-

shall be liable in accordance herewith only to the extent of the obligations
specifically imposed upon and undertaken by the Depositor.

          Section 6.02 Merger or Consolidation of, or Assumption of the
Obligations of, the Servicer or the Depositor.

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

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

          Section 6.03 Limitation on Liability of the Servicer and Others.

          None of the Depositor, the Servicer, or any directors, officers,
employees or agents of the Depositor or the Servicer shall be under any
liability to the Trust or the Certificateholders for any action taken or for
refraining from the taking of any action, in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Depositor or the Servicer or any such Person against any
liability which would otherwise be imposed by reason of any breach of
representations or warranties made by such party herein or against any specific
liability imposed on the Servicer for a breach of the Servicing Standard and/or
this Agreement, or against any liability that would otherwise be imposed by
reason of its respective willful misfeasance, bad faith, fraud or negligence in
the performance of its duties or by reason of its reckless disregard of its
respective obligations and duties hereunder. The Depositor, the Servicer and any
director, officer, employee or agent of the Depositor or the Servicer, may rely
in good faith on any document of any kind which, prima facie, is properly
executed and submitted by any appropriate Person with respect to any matters
arising hereunder. The Depositor, the Servicer and any director, officer,
employee or agent of the Depositor or the Servicer shall be indemnified and held
harmless by the Trust against any loss, liability or expense incurred in
connection with any legal action relating to this Agreement

                                      -109-

or the Certificates, other than any loss, liability or expense incurred in
connection with any legal action incurred by reason of its respective willful
misfeasance, bad faith or negligence, a breach of a representation or warranty
made by such party hereunder or (in the case of the Servicer) a breach of the
Servicing Standard in the performance of its respective duties or by reason of
reckless disregard of its respective obligations or duties hereunder or in the
event the Originator is the Servicer or an Affiliate of the Servicer, a breach
of the Originator's representations and warranties contained in the Originator
Mortgage Loan Purchase Agreement. Neither the Depositor nor the Servicer shall
be under any obligation to appear in, prosecute or defend any legal action
unless such action is related to its respective duties under this Agreement and
in its opinion does not expose it to any expense or liability; provided,
however, that the Depositor or the Servicer may in their discretion undertake
any action related to their obligations hereunder which they may deem necessary
or desirable with respect to this Agreement and the rights and duties of the
parties hereto and the interests of the Certificateholders hereunder. In such
event, the reasonable legal expenses and costs of such action and any liability
resulting therefrom shall be expenses, costs and liabilities of the Trust and
the Servicer shall be entitled to pay such expenses from the proceeds of the
Trust or to be reimbursed therefor pursuant to Section 3.05(a) upon presentation
to the Trustee of documentation of such expenses, costs and liabilities. The
Servicer's right to indemnity or reimbursement pursuant to this Section shall
survive any resignation or termination of the Servicer pursuant to Section 6.04
or 7.01 with respect to any losses, expenses, costs or liabilities arising prior
to such resignation or termination (or arising from events that occurred prior
to such resignation or termination).

          Section 6.04 Servicer Not to Resign.

          Subject to the provisions of Section 7.01 and Section 6.02, the
Servicer shall not resign from the obligations and duties hereby imposed on it
except (i) upon determination that the performance of its obligations or duties
hereunder are no longer permissible under applicable law or are in material
conflict by reason of applicable law with any other activities carried on by it
or its subsidiaries or Affiliates, the other activities of the Servicer so
causing such a conflict being of a type and nature carried on by the Servicer or
its subsidiaries or Affiliates at the date of this Agreement or (ii) upon
satisfaction of the following conditions: (a) the Servicer has proposed a
successor servicer to the Depositor, Trustee and the NIMS Insurer in writing and
such proposed successor servicer is reasonably acceptable to the Trustee and the
NIMS Insurer; and (b) each Rating Agency shall have delivered a letter to the
Trustee and the NIMS Insurer prior to the appointment of the successor servicer
stating that the proposed appointment of such successor servicer as Servicer
hereunder will not result in the reduction or withdrawal of the then current
rating of the Regular Certificates or the ratings that are in effect; provided,
however, that no such resignation by the Servicer shall become effective until
such successor servicer or, in the case of (i) above, the Trustee shall have
assumed the Servicer's responsibilities and obligations hereunder or the Trustee
shall have designated a successor servicer in accordance with Section 7.02. Any
such resignation shall not relieve the Servicer of responsibility for any of the
obligations specified in Sections 7.01 and 7.02 as obligations that survive the
resignation or termination of the Servicer. Any such determination permitting
the resignation of the Servicer shall be evidenced by an Opinion of Counsel to
such effect delivered to the Trustee and the NIMS Insurer.

                                      -110-

          Section 6.05 Rights of the Depositor and Others in Respect of the
Servicer.

          The Servicer shall afford (and any Sub-Servicing Agreement shall
provide that each Sub-Servicer shall afford) the Depositor, the NIMS Insurer and
the Trustee, upon reasonable notice, during normal business hours, access to all
records maintained by the Servicer (and any such Sub-Servicer) in respect of the
Servicer's rights and obligations hereunder and access to officers of the
Servicer (and those of any such Sub-Servicer) responsible for such obligations.
Upon request, the Servicer shall furnish to the Depositor, the NIMS Insurer and
the Trustee its (and any such Sub-Servicer's) most recent financial statements
and such other information relating to the Servicer's capacity to perform its
obligations under this Agreement that it possesses. To the extent such
information is not otherwise available to the public, the Depositor, the NIMS
Insurer and the Trustee shall not disseminate any information obtained pursuant
to the preceding two sentences without the Servicer's (or any such
Sub-Servicer's) written consent, except as required pursuant to this Agreement
or to the extent that it is appropriate to do so (i) in working with legal
counsel, auditors, taxing authorities or other governmental agencies, rating
agencies or reinsurers or (ii) pursuant to any law, rule, regulation, order,
judgment, writ, injunction or decree of any court or governmental authority
having jurisdiction over the Depositor, the Trustee or the Trust Fund, and in
either case, the Depositor, the NIMS Insurer or the Trustee, as the case may be,
shall use its best efforts to assure the confidentiality of any such
disseminated non-public information. The Depositor may, but is not obligated to,
enforce the obligations of the Servicer under this Agreement and may, but is not
obligated to, perform, or cause a designee to perform, any defaulted obligation
of the Servicer under this Agreement or exercise the rights of the Servicer
under this Agreement; provided that the Servicer shall not be relieved of any of
its obligations under this Agreement by virtue of such performance by the
Depositor or its designee. The Depositor shall not have any responsibility or
liability for any action or failure to act by the Servicer and is not obligated
to supervise the performance of the Servicer under this Agreement or otherwise.

          Section 6.06 Sub-Servicing Agreements Between the Servicer and
Sub-Servicers.

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

          Each Sub-Servicer shall be (i) authorized to transact business in the
state or states in which the related Mortgaged Properties it is to service are
situated, if and to the extent required by applicable law to enable the
Sub-Servicer to perform its obligations hereunder and under the Sub-Servicing
Agreement, (ii) an institution approved as a mortgage loan originator by the
Federal Housing Administration or an institution the deposit accounts in which
are insured by the FDIC and (iii) a Freddie Mac or Fannie Mae approved mortgage
servicer. Each Sub-Servicing Agreement must impose on the Sub-Servicer
requirements conforming to the provisions set forth in Section 6.11 and provide
for servicing of the Mortgage Loans consistent with the terms of this Agreement.
The Servicer shall examine each Sub-Servicing Agreement and shall be familiar
with the terms thereof. The terms of any Sub-Servicing Agreement shall

                                      -111-

not be inconsistent with any of the provisions of this Agreement. The Servicer
and the Sub-Servicers may enter into and make amendments to the Sub-Servicing
Agreements or enter into different forms of Sub-Servicing Agreements; provided,
however, that any such amendments or different forms shall be consistent with
and not violate the provisions of this Agreement, and that no such amendment or
different form shall be made or entered into which could be reasonably expected
to be materially adverse to the interests of the Certificateholders, without the
consent of the Holders of Certificates entitled to at least 66% of the Voting
Rights. Any variation without the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights from the provisions set forth in
Section 6.11, provisions relating to insurance in Section 3.12 or priority
requirements of Sub-Servicing Accounts, or credits and charges to the
Sub-Servicing Accounts or the timing and amount of remittances by the
Sub-Servicers to the Servicer, are conclusively deemed to be inconsistent with
this Agreement and therefore prohibited. The Servicer shall deliver to the
Trustee and the NIMS Insurer copies of all Sub-Servicing Agreements, and any
amendments or modifications thereof, promptly upon the Servicer's execution and
delivery of such instruments.

          (b) As part of its servicing activities hereunder, the Servicer
(except as otherwise provided in the last sentence of this paragraph), for the
benefit of the Trustee and the Certificateholders, shall enforce the obligations
of each Sub-Servicer under the related Sub-Servicing Agreement, including,
without limitation, any obligation to make advances in respect of delinquent
payments as required by a Sub-Servicing Agreement, . Such enforcement,
including, without limitation, the legal prosecution of claims, termination of
Sub-Servicing Agreements, and the pursuit of other appropriate remedies, shall
be in such form and carried out to such an extent and at such time as the
Servicer, in its good faith business judgment, would require were it the owner
of the related Mortgage Loans. The Servicer shall pay the costs of such
enforcement at its own expense, and shall be reimbursed therefor only (i) from a
general recovery resulting from such enforcement, to the extent, if any, that
such recovery exceeds all amounts due in respect of the related Mortgage Loans
or (ii) from a specific recovery of costs, expenses or attorneys' fees against
the party against whom such enforcement is directed.

          Section 6.07 Successor Sub-Servicers.

          The Servicer, with the consent of the NIMS Insurer, shall be entitled
to terminate any Sub-Servicing Agreement and the rights and obligations of any
Sub-Servicer pursuant to any Sub-Servicing Agreement in accordance with the
terms and conditions of such Sub-Servicing Agreement. In the event of
termination of any Sub-Servicer, all servicing obligations of such Sub-Servicer
shall be assumed simultaneously by the Servicer without any act or deed on the
part of such Sub-Servicer or the Servicer, and the Servicer either shall service
directly the related Mortgage Loans or shall enter into a Sub-Servicing
Agreement with a successor Sub-Servicer which qualifies under Section 6.06.

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

                                      -112-

          Section 6.08 Liability of the Servicer.

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

          Section 6.09 No Contractual Relationship Between Sub-Servicers and the
NIMS Insurer, the Trustee or Certificateholders.

          Any Sub-Servicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Sub-Servicer
in its capacity as such shall be deemed to be between the Sub-Servicer and the
Servicer alone, and the NIMS Insurer, the Trustee and Certificateholders shall
not be deemed parties thereto and shall have no claims, rights, obligations,
duties or liabilities with respect to the Sub-Servicer except as set forth in
Section 6.10. The Servicer shall be solely liable for all fees owed by it to any
Sub-Servicer, irrespective of whether the Servicer's compensation pursuant to
this Agreement is sufficient to pay such fees.

          Section 6.10 Assumption or Termination of Sub-Servicing Agreements by
Trustee.

          In the event the Servicer shall for any reason no longer be the
Servicer (including termination due to a Servicer Event of Default), the Trustee
or its designee shall thereupon assume (or cause its designee or the successor
Servicer for the Trustee appointed pursuant to Section 7.02 to assume) all of
the rights and obligations of the Servicer under each Sub-Servicing Agreement
that the Servicer may have entered into, unless the Trustee elects to terminate
any Sub-Servicing Agreement in accordance with its terms as provided in Section
6.07. Upon such assumption, the Trustee, its designee or the successor servicer
for the Trustee appointed pursuant to Section 7.02 shall be deemed, subject to
Section 6.07, to have assumed all of the Servicer's interest therein and to have
replaced the Servicer as a party to each Sub-Servicing Agreement to the same
extent as if each Sub-Servicing Agreement had been assigned to the assuming
party, except that (i) the Servicer shall not thereby be relieved of any
liability or obligations under any Sub-Servicing Agreement and (ii) none of the
Trustee, its designee or any successor Servicer shall be deemed to have assumed
any liability or obligation of the Servicer that arose before it ceased to be
the Servicer.

          The Servicer at its expense shall, upon request of the Trustee,
deliver to the assuming party all documents and records relating to each
Sub-Servicing Agreement and the Mortgage Loans then being serviced and an
accounting of amounts collected and held by or on

                                      -113-

behalf of it, and otherwise use its best efforts to effect the orderly and
efficient transfer of the Sub-Servicing Agreements to the assuming party.

          Section 6.11 Sub-Servicing Accounts.

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

                                  ARTICLE VII

                                     DEFAULT

          Section 7.01 Servicer Events of Termination.

          (a) If any one of the following events ("Servicer Events of
Termination") shall occur and be continuing:

          (i) The failure by the Servicer to make any Advance on any Servicer
     Remittance Date required to be made from its own funds pursuant to Section
     4.03 which continues unremedied until 12:00 p.m. New York time on the
     Business Day immediately following the Servicer Remittance Date; or

          (ii) Any other failure by the Servicer to deposit in the Collection
     Accounts or remit to the Trustee for deposit in the Distribution Account
     any payment required to be made under the terms of this Agreement, which
     failure continues unremedied for a period of one Business Day after the
     first date on which written notice of such failure is given to the
     Servicer; or

          (iii) The failure by the Servicer duly to observe or perform, in any
     material respect, any other covenants, obligations or agreements of the
     Servicer as set forth in this Agreement, which failure continues unremedied
     for a period of 45 days, after the date (A) on which written notice of such
     failure, requiring the same to be remedied, shall have been given to the
     Servicer by the Trustee or the NIMS Insurer or by any Holder of a Regular
     Certificate evidencing at least 25% of the Voting Rights or (B) actual
     knowledge of such failure by a Servicing Officer of the Servicer; or

                                      -114-

          (iv) The entry against the Servicer of a decree or order by a court or
     agency or supervisory authority having jurisdiction in the premises for the
     appointment of a trustee, conservator, receiver or liquidator in any
     insolvency, conservatorship, receivership, readjustment of debt,
     marshalling of assets and liabilities or similar proceedings, or for the
     winding up or liquidation of its affairs, and the continuance of any such
     decree or order unstayed and in effect for a period of 60 days; or

          (v) The Servicer shall voluntarily go into liquidation, consent to the
     appointment of a conservator or receiver or liquidator or similar person in
     any insolvency, readjustment of debt, marshalling of assets and liabilities
     or similar proceedings of or relating to the Servicer or of or relating to
     all or substantially all of its property; or the Servicer shall admit in
     writing its inability to pay its debts generally as they become due, file a
     petition to take advantage of any applicable insolvency or reorganization
     statute, make an assignment for the benefit of its creditors or voluntarily
     suspend payment of its obligations; or

          (vi) Any reduction, withdrawal or qualification of the servicer rating
     of Servicer by any Rating Agency which results in the inability of Servicer
     to act as a primary or special servicer for any mortgage-backed or
     asset-basked transaction rated or to be rated by any Rating Agency; or

          (vii) Any failure by the Servicer of the Servicer Termination Test.

          Then, and in each and every such case, so long as a Servicer Event of
Termination shall not have been remedied within the applicable grace period, (x)
with respect solely to clause (i)above, if such Advance is not made by 12:00
P.M., New York time, on the Business Day immediately following the Servicer
Remittance Date, the Trustee shall terminate all of the rights and obligations
of the Servicer under this Agreement and the Trustee as successor servicer, or
another successor servicer appointed in accordance with Section 7.02, shall
immediately make such Advance and assume, pursuant to Section 7.02, the duties
of a successor servicer and (y) in the case of clause (ii), (iii), (iv), (v),
(vi) and (vii) above, the Trustee shall, by notice in writing to the Servicer,
at the direction of the NIMS Insurer or Holders of each Class of Regular
Certificates evidencing Percentage Interests aggregating not less than 51%, by
notice then given in writing to the Servicer (and to the Trustee if given by
Holders of Certificates), terminate all of the rights and obligations of the
Servicer as servicer under this Agreement. Any such notice to the Servicer shall
also be given to each Rating Agency, the NIMS Insurer and the Depositor. On or
after the receipt by the Servicer (and by the Trustee if such notice is given by
the Holders) of such written notice, all authority and power of the Servicer
under this Agreement, whether with respect to the Certificates or the Mortgage
Loans or otherwise, shall pass to and be vested in the Trustee pursuant to and
under this Section or successor servicer appointed in connection with Section
7.02; and, without limitation, the Trustee as successor servicer or another
successor servicer is hereby authorized and empowered to execute and deliver, on
behalf of the Servicer, as attorney-in-fact or otherwise, any and all documents
and other instruments, and to do or accomplish all other acts or things
necessary or appropriate to effect the purposes of such notice of termination,
whether to complete the transfer and endorsement of each Mortgage Loan and
Related Documents or otherwise. The Servicer agrees, at its sole cost and
expense, to cooperate with the Trustee (or the applicable successor servicer) in
effecting the termination of the

                                      -115-

responsibilities and rights of the Servicer hereunder, including, without
limitation, the delivery to the Trustee (or the applicable successor servicer)
of all documents and records requested by it to enable it to assume the
Servicer's functions under this Agreement within ten Business Days subsequent to
such notice from the Trustee, the transfer within one Business Day subsequent to
such notice to the Trustee (or the applicable successor servicer) for the
administration by it of all cash amounts that shall at the time be held by the
Servicer and to be deposited by it in the Collection Accounts, the Distribution
Account or any Escrow Account or that have been deposited by the Servicer in
such accounts or thereafter received by the Servicer with respect to the
Mortgage Loans or any REO Property received by the Servicer (provided, however,
that the Servicer shall continue to be entitled to receive all amounts accrued
or owing to it under this Agreement on or prior to the date of such termination,
whether in respect of Advances or otherwise, and shall continue to be entitled
to the benefits of Section 6.03, notwithstanding any such termination, with
respect to events occurring prior to such termination). For purposes of this
Section 7.01, the Trustee shall not be deemed to have knowledge of a Servicer
Event of Termination unless a Responsible Officer of the Trustee assigned to and
working in the Trustee's Corporate Trust Office has actual knowledge thereof or
unless written notice is received by the Trustee of any such event and such
notice references the Certificates, or this Agreement.

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

          Section 7.02 Trustee to Act; Appointment of Successor.

          (a) Within 90 days of the time the Servicer (and the Trustee, if
notice is sent by the Holders) receives a notice of termination pursuant to
Section 7.01 or 6.04, the Trustee (or such other successor servicer as is
approved in accordance with this Agreement) shall be the successor in all
respects to the Servicer in its capacity as 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
Servicer by the terms and provisions hereof arising on and after its succession.
As compensation therefor, the Trustee (or such other successor servicer) shall
be entitled to such compensation as the Servicer would have been entitled to
hereunder if no such notice of termination had been given. Notwithstanding the
above, (i) if the Trustee is unwilling to act as successor servicer or (ii) if
the Trustee is legally unable so to act, the Trustee shall appoint or petition a
court of competent jurisdiction to appoint, any established housing and home
finance institution, bank or other mortgage loan or home equity loan servicer
having a net worth of not less than $30,000,000 as the successor to the Servicer
hereunder in the assumption of all or any part of the responsibilities, duties
or liabilities of the Servicer hereunder; provided, that the appointment of any
such successor servicer will not result in the qualification, reduction or
withdrawal of the ratings assigned to the Certificates or the ratings that are
in effect by the Rating Agencies as evidenced by a letter to such effect from
the Rating Agencies and that, in the case of a successor servicer appointed by
the Trustee, such successor servicer is reasonably acceptable to the NIMS
Insurer. Pending appointment of a successor to the Servicer hereunder,

                                      -116-

unless the Trustee is prohibited by law from so acting, the Trustee shall act in
such capacity as hereinabove provided. In connection with such appointment and
assumption, the successor shall be entitled to receive compensation out of
payments on Mortgage Loans in an amount equal to the compensation which the
Servicer would otherwise have received pursuant to Section 3.18 (or such other
compensation as the Trustee and such successor shall agree, not to exceed the
Servicing Fee). The successor servicer shall be entitled to withdraw from the
Collection Account all costs and expenses associated with the transfer of the
servicing to the successor servicer, including costs and expenses of the
Trustee. The appointment of a successor servicer shall not affect any liability
of the predecessor servicer which may have arisen under this Agreement prior to
its termination as Servicer to pay any deductible under an insurance policy
pursuant to Section 3.12 or to indemnify the parties indicated in Section 3.26
pursuant to the terms thereof, nor shall any successor servicer be liable for
any acts or omissions of the predecessor servicer or for any breach by such
servicer of any of its representations or warranties contained herein or in any
related document or agreement. The Trustee and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession.

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

          (c) If the Servicer is terminated pursuant to Section 7.01, then the
successor Servicer shall not be permitted to reimburse itself directly for
Advances or Servicing Advances under Section 3.05(b), Section 3.05(c) or Section
3.05(d) if the Servicer has not been fully reimbursed for its Advances and
Servicing Advances, but instead the successor Servicer shall include such
amounts in the applicable remittance to the Trustee made pursuant to Section
3.04(b) to the extent of amounts on deposit in the Collection Account on the
related Servicer Remittance Date. The Trustee is hereby authorized to pay to the
terminated Servicer (or the related Advancing Person in accordance with Section
3.33) and the successor Servicer, as

                                      -117-

applicable, reimbursements for Advances and Servicing Advances from the
Distribution Account to the same extent each such Servicer would have been
permitted to reimburse itself for such Advances and/or Servicing Advances in
accordance with Section 3.05(b), Section 3.05(c) or Section 3.05(d), as the case
may be. All Advances and Servicing Advances made pursuant to the terms of this
Agreement shall be deemed made and shall be reimbursed on a "first in-first out"
(FIFO) basis. At such time as the Servicer (or related Advancing Person) has
been reimbursed for all Advances and Servicing Advances made by it, the
successor Servicer shall no longer be required to remit in accordance with the
first sentence of this Section 7.02(c) and shall then be permitted to reimburse
itself directly for Advances and Servicing Advances in accordance with Section
3.05(b), Section 3.05(c) or Section 3.05(d).

          (d) Any successor, including the Trustee, to the Servicer as servicer
shall during the term of its service as servicer continue to service and
administer the Mortgage Loans for the benefit of Certificateholders, and
maintain in force a policy or policies of insurance covering errors and
omissions in the performance of its obligations as Servicer hereunder and a
Fidelity Bond in respect of its officers, employees and agents to the same
extent as the Servicer is so required pursuant to Section 3.12.

          Section 7.03 Waiver of Defaults.

          The Holders of Certificates entitled to at least 66 2/3% of the Voting
Rights allocated to the Classes of Certificates affected by a Servicer Event of
Termination may, on behalf of all Certificateholders, and with the consent of
the NIMS Insurer, waive any events permitting removal of the Servicer as
servicer pursuant to this Article VII, provided, however, that such Holders may
not waive a default in making a required distribution on a Certificate without
the consent of the Holder of such Certificate and the NIMS Insurer. Upon any
waiver of a past default, such default shall cease to exist and any Servicer
Event of Termination 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
the Rating Agencies.

          Section 7.04 Notification to Certificateholders.

          (a) On any termination or appointment of a successor to the Servicer
pursuant to this Article VII or Section 6.04, the Trustee shall give prompt
written notice thereof to the Certificateholders at their respective addresses
appearing in the Certificate Register, the NIMS Insurer and each Rating Agency.

          (b) No later than 60 days after the occurrence of any event which
constitutes or which, with notice or a lapse of time or both, would constitute a
Servicer Event of Termination for five Business Days after a Responsible Officer
of the Trustee obtains actual knowledge of the occurrence of such an event, the
Trustee shall transmit by mail to the NIMS Insurer and all Certificateholders
notice of such occurrence unless such default or Servicer Event of Termination
shall have been waived or cured. Such notice shall be given to the Rating
Agencies promptly after any such occurrence.

                                      -118-

          Section 7.05 Survivability of Servicer Liabilities.

          Notwithstanding anything herein to the contrary, upon termination of
the Servicer hereunder, any liabilities of the Servicer which accrued prior to
such termination shall survive such termination.

                                  ARTICLE VIII

                                   THE TRUSTEE

          Section 8.01 Duties of Trustee.

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

          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 to the requirements of this Agreement; provided, however, that 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 Servicer, the Seller, the NIMS Insurer or the Depositor
hereunder. If any such instrument is found not to conform in any material
respect to the requirements of this Agreement, the Trustee shall notify the
Certificateholders of such instrument in the event that the Trustee, after so
requesting, does not receive a satisfactorily corrected instrument.

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

          (i) prior to the occurrence of a Servicer Event of Termination of
     which a Responsible Officer of the Trustee shall have actual knowledge, and
     after the curing of all such Servicer Events of Termination 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;

                                      -119-

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

          (iii) the Trustee shall not be personally liable with respect to any
     action taken, suffered or omitted to be taken by it in good faith in
     accordance with the direction of the NIMS Insurer or the Majority
     Certificateholders relating to the time, method and place of conducting any
     proceeding for any remedy available to the Trustee or exercising or
     omitting to exercise any trust or power conferred upon the Trustee under
     this Agreement; and

          (iv) the Trustee shall not be charged with knowledge of any failure by
     the Servicer to comply with the obligations of the Servicer referred to in
     clauses (i) and (ii) of Section 7.01(a) or any Servicer Event of
     Termination unless a Responsible Officer of the Trustee at the Corporate
     Trust Office obtains actual knowledge of such failure or the Trustee
     receives written notice of such failure from the Servicer, the NIMS Insurer
     or the Majority Certificateholders. In the absence of such receipt of such
     notice, the Trustee may conclusively assume that there is no Servicer Event
     of Termination.

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

          The Trustee shall not have any duty (A) to see 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 or (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 Fund other than
from funds available in the Distribution Account.

          The Trustee shall have no duty hereunder with respect to any
complaint, claim, demand, notice or other document it may receive or which may
be alleged to have been delivered to or served upon it by any third party as a
consequence of the assignment of any Mortgage Loan hereunder; provided, however,
that the Trustee shall promptly remit to the Servicer upon receipt of any such
complaint, claim, demand, notice or other document (i) which is delivered to the
Trustee at its Corporate Trust Office; (ii) of which a Responsible Officer has
actual knowledge and (iii) which contains information sufficient to permit the
Trustee to make a determination that the real property to which such document
relates to is a Mortgaged Property.

                                      -120-

          Section 8.02 Certain Matters Affecting the Trustee.

          Except as otherwise provided in Section 8.01:

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

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

          (c) the Trustee shall not be under any obligation to exercise any of
the rights or powers vested in it by this Agreement, or to institute, conduct or
defend any litigation hereunder or in relation hereto, at the request, order or
direction of the Certificateholders or the NIMS Insurer pursuant to the
provisions of this Agreement, unless such Certificateholders or the NIMS Insurer
shall have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which may be incurred therein or thereby; 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 any such act;

          (d) 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;

          (e) prior to the occurrence of a Servicer Event of Termination and
after the curing of all Servicer Events of Termination 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
documents, unless requested in writing to do so by the Majority
Certificateholders or the NIMS Insurer; 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 cost, expense or liability as a condition to
such proceeding. The reasonable expense of every such examination shall be paid
by the Servicer or, if paid by the Trustee, shall be reimbursed by the Servicer
upon demand. Nothing in this clause (e) shall derogate from the obligation of
the Servicer to observe any applicable law prohibiting disclosure of information
regarding the Mortgagors;

          (f) the Trustee shall not be accountable, have any liability or make
any representation as to any acts or omissions hereunder of the Servicer until
such time as the Trustee may be required to act as Servicer pursuant to Section
7.02;

                                      -121-

          (g) 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 or a custodian and the Trustee shall not be responsible for any
misconduct or negligence on the part of any such agent, attorney or custodian
appointed by it with due care;

          (h) 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; and

          (i) in order to comply with its duties under the USA Patriot Act of
2001, the Trustee shall obtain and verify certain information and documentation
from the other parties to this Agreement including, but not limited to, each
such party's name, address and other identifying information.

          Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans.

          The recitals contained herein and in the Certificates (other than the
authentication of the Trustee on the Certificates) shall be taken as the
statements of the Depositor, and the Trustee assumes no responsibility for the
correctness of the same. The Trustee makes no representations as to the validity
or sufficiency of this Agreement or of the Certificates (other than the
signature and authentication of the Trustee on the Certificates) or of any
Mortgage Loan or Related Document. The Trustee shall not be accountable for the
use or application by the Servicer, or for the use or application of any funds
paid to the Servicer in respect of the Mortgage Loans or deposited in or
withdrawn from the Collection Accounts by the Servicer. The Trustee shall not at
any time have any responsibility or liability for or with respect to the
legality, validity and enforceability of any Mortgage or any Mortgage Loan, or
the perfection and priority of any Mortgage or the maintenance of any such
perfection and priority, or for or with respect to the sufficiency of the Trust
or its ability to generate the payments to be distributed to Certificateholders
under this Agreement, including, without limitation: the existence, condition
and ownership of any Mortgaged Property; the existence and enforceability of any
hazard insurance thereon (other than if the Trustee shall assume the duties of
the Servicer pursuant to Section 7.02); the validity of the assignment of any
Mortgage Loan to the Trustee or of any intervening assignment; the completeness
of any Mortgage Loan; the performance or enforcement of any Mortgage Loan (other
than if the Trustee shall assume the duties of the Servicer pursuant to Section
7.02); the compliance by the Depositor or the Servicer with any warranty or
representation made under this Agreement or in any related document or the
accuracy of any such warranty or representation prior to the Trustee's receipt
of notice or other discovery of any non-compliance therewith or any breach
thereof; any investment of monies by or at the direction of the Servicer or any
loss resulting therefrom, it being understood that the Trustee shall remain
responsible for any Trust property that it may hold in its individual capacity;
the acts or omissions of any of the Servicer (other than if the Trustee shall
assume the duties of the Servicer pursuant to Section 7.02), or any Mortgagor;
any action of the Servicer (other than if the Trustee shall assume the duties of
the Servicer pursuant to Section 7.02), taken in the name of the Trustee; the
failure of the Servicer to act or perform any duties required of it as agent of
the Trustee hereunder; or any action by the Trustee taken at the instruction of
the Servicer (other than if the Trustee shall assume the duties of the Servicer
pursuant to Section 7.02); provided, however, that the foregoing shall not
relieve the Trustee of its obligation

                                      -122-

to perform its duties under this Agreement. The Trustee shall not have any
responsibility for filing any financing or continuation statement in any public
office at any time or to otherwise perfect or maintain the perfection of any
security interest or lien granted to it hereunder.

          Section 8.04 Trustee May Own Certificates.

          The Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates with the same rights as it would have if it
were not Trustee and may transact any banking and trust business with the
Servicer, the Depositor or their respective Affiliates.

          Section 8.05 Trustee Fees and Expenses.

          The Trustee shall be entitled to the Trustee Fee (which shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust) for all services rendered by the Trustee in the exercise and
performance of any of the powers and duties hereunder. The Trustee shall
withdraw from the Distribution Account on each Distribution Date and pay to
itself the Trustee Fee. The Trust shall reimburse the Trustee for all reasonable
expenses and disbursements incurred or made by the Trustee, and for any advances
made as successor servicer, in accordance with any of the provisions of this
Agreement (including the reasonable compensation and the expenses and
disbursements of its counsel and of all persons not regularly in its employ)
except any such expense, disbursement or advance as may arise from its
negligence or bad faith or which is the responsibility of Certificateholders or
the Trustee hereunder. In addition, the Trustee and its officers, directors,
employees and agents shall be indemnified by the Trust from, and held harmless
against, any and all losses, liabilities, damages, claims or expenses incurred
in connection with any legal action relating to this Agreement or the
Certificates, other than (i) any loss, liability or expense incurred by reason
of willful misfeasance, bad faith or negligence of the Trustee in the
performance of its duties hereunder or by reason of the Trustee's reckless
disregard of obligations and duties hereunder and (ii) to the extent such
indemnification is required to be provided by the Servicer pursuant to Section
3.26. This Section shall survive termination of this Agreement or the
resignation or removal of any Trustee hereunder. Anything in this Agreement to
the contrary notwithstanding, in no event shall the Trustee be liable for
special, indirect or consequential loss or damage of any kind whatsoever
(including, but not limited to, lost profits) even if the Trustee has been
advised of the likelihood of such loss or damage and regardless of the form of
action.

          Section 8.06 Eligibility Requirements for Trustee.

          The Trustee hereunder shall at all times be an entity duly organized
and validly existing under the laws of the United States of America or any state
thereof, authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least $50,000,000 and a minimum long-term
debt rating of "BBB" by Fitch and S&P and subject to supervision or examination
by federal or state authority. If such entity 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 8.06,
the combined capital and surplus of such entity shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. The principal office of the Trustee (other than the initial

                                      -123-

Trustee) shall be in a state with respect to which an Opinion of Counsel has
been delivered to such Trustee at the time such Trustee is appointed Trustee to
the effect that the Trust will not be a taxable entity under the laws of such
state. In case at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section 8.06, the Trustee shall resign immediately
in the manner and with the effect specified in Section 8.07.

          Section 8.07 Resignation or Removal of Trustee.

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

          If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.06 and shall fail to resign after written
request therefor by the Depositor or the NIMS Insurer, or if at any time the
Trustee shall be legally unable to act, or shall be adjudged a bankrupt or
insolvent, or a receiver of the Trustee or of their property shall be appointed,
or any public officer shall take charge or control of the Trustee or of their
property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Depositor or the NIMS Insurer may remove the Trustee. If
the Depositor or the NIMS Insurer removes the Trustee under the authority of the
immediately preceding sentence, the Depositor or the NIMS Insurer, as the case
may be, shall promptly appoint a successor Trustee (reasonably acceptable to the
NIMS Insurer if appointed by the Depositor) by written instrument, in duplicate,
one copy of which instrument shall be delivered to the Trustee so removed and
one copy to the successor Trustee.

          The Majority Certificateholders or the NIMS Insurer may at any time
remove the Trustee by written instrument or instruments delivered to the
Servicer, the Depositor, the NIMS Insurer and the Trustee; the Depositor shall
thereupon use its best efforts to appoint a successor Trustee reasonably
acceptable to the NIMS Insurer in accordance with this Section.

          Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section 8.07 shall
not become effective until acceptance of appointment by the successor Trustee as
provided in Section 8.08.

          Section 8.08 Successor Trustee.

          Any successor Trustee appointed as provided in Section 8.07 shall
execute, acknowledge and deliver to the Depositor, the NIMS Insurer, the Rating
Agencies, the Servicer and to its predecessor Trustee an instrument accepting
such appointment hereunder, and thereupon the resignation or removal of the
predecessor Trustee shall become effective, and such successor Trustee, without
any further act, deed or conveyance, shall become fully vested with

                                      -124-

all the rights, powers, duties and obligations of its predecessor hereunder,
with like effect as if originally named as Trustee. The Depositor, the Servicer
and the predecessor Trustee shall execute and deliver such instruments and do
such other things as may reasonably be required for 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 8.08 unless at the time of such acceptance such successor Trustee shall
be eligible under the provisions of Section 8.06 and the appointment of such
successor Trustee shall not result in a downgrading of the Regular Certificates
by either Rating Agency, as evidenced by a letter from each Rating Agency.

          Upon acceptance of appointment by a successor Trustee as provided in
this Section 8.08, the successor Trustee shall mail notice of the appointment of
a successor Trustee hereunder to all Holders of Certificates at their addresses
as shown in the Certificate Register and to each Rating Agency.

          Section 8.09 Merger or Consolidation of Trustee.

          Any entity into which the Trustee may be merged or converted or with
which it may be consolidated, or any entity resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any entity
succeeding to the business of the Trustee, shall be the successor of the
hereunder, provided such entity shall be eligible under the provisions of
Section 8.06 and 8.08, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.

          Section 8.10 Appointment of Co-Trustee or Separate Trustee.

          Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust or any Mortgaged Property may at the time be located, the
Depositor and the Trustee acting jointly shall have the power and shall execute
and deliver all instruments to appoint one or more Persons approved by the
Trustee and the NIMS Insurer to act as co-trustee or co-trustees, jointly with
the Trustee, or separate trustee or separate trustees, of all or any part of the
Trust, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust, or any part thereof,
and, subject to the other provisions of this Section 8.10, such powers, duties,
obligations, rights and trusts as the Servicer and the Trustee may consider
necessary or desirable. Any such co-trustee or separate trustee shall be subject
to the written approval of the Servicer and the NIMS Insurer. If the Servicer
and the NIMS Insurer shall not have joined in such appointment within 15 days
after the receipt by it of a request so to do, or in the case a Servicer Event
of Termination shall have occurred and be continuing, the Trustee alone shall
have the power to make such appointment. No co-trustee or separate trustee
hereunder shall be required to meet the terms of eligibility as a successor
Trustee under Section 8.06, and no notice to Certificateholders of the
appointment of any co-trustee or separate trustee shall be required under
Section 8.08.

                                      -125-

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

          (i) all rights, powers, duties and obligations conferred or imposed
     upon the Trustee shall be conferred or imposed upon and exercised or
     performed by the Trustee and such separate trustee or co-trustee jointly
     (it being understood that such separate trustee or co-trustee is not
     authorized to act separately without the Trustee joining in such act),
     except to the extent that under any law of any jurisdiction in which any
     particular act or acts are to be performed (whether as Trustee hereunder or
     as successor to the 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
     or any portion thereof in any such jurisdiction) shall be exercised and
     performed singly by such separate trustee or co-trustee, but solely at the
     direction of the Trustee;

          (ii) no trustee hereunder shall be held personally liable by reason of
     any act or omission of any other trustee hereunder; and

          (iii) the Servicer and the Trustee, acting jointly may at any time
     accept the resignation of or remove any separate trustee or co-trustee
     except that following the occurrence of a Servicer Event of Termination,
     the Trustee acting alone may accept the resignation or remove any separate
     trustee or co-trustee.

          Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Depositor, the NIMS Insurer, the Rating Agencies and the Servicer.

          Any separate trustee or co-trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor Trustee.

          Section 8.11 Limitation of Liability.

          The Certificates are executed by the Trustee, not in its individual
capacity but solely as Trustee of the Trust, in the exercise of the powers and
authority conferred and vested in it by this Agreement. Each of the undertakings
and agreements made on the part of the Trustee in the Certificates is made and
intended not as a personal undertaking or agreement by the Trustee but is made
and intended for the purpose of binding only the Trust.

                                      -126-

          Section 8.12 Trustee May Enforce Claims Without Possession of
Certificates.

          (a) All rights of action and claims under this Agreement or the
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and such proceeding instituted by the Trustee shall
be brought in its own name or in its capacity as Trustee for the benefit of all
Holders of such Certificates, subject to the provisions of this Agreement. Any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursement and advances of the Trustee, its agents and
counsel, be for the ratable benefit of the Certificateholders in respect of
which such judgment has been recovered.

          (b) The Trustee shall afford the Depositor, the Servicer, the NIMS
Insurer and each Certificateholder upon reasonable notice during normal business
hours, access to all records maintained by the Trustee in respect of its duties
hereunder and access to officers of the Trustee responsible for performing such
duties. The Trustee shall cooperate fully with the Servicer, the NIMS Insurer,
the Depositor and such Certificateholder and shall make available to the
Servicer, the NIMS Insurer, the Depositor and such Certificateholder for review
and copying at the expense of the party requesting such copies, such books,
documents or records as may be requested with respect to the Trustee's duties
hereunder. The Depositor, the Servicer, the NIMS Insurer and the
Certificateholders shall not have any responsibility or liability for any action
or failure to act by the Trustee and are not obligated to supervise the
performance of the Trustee under this Agreement or otherwise.

          Section 8.13 Suits for Enforcement.

          In case a Servicer Event of Termination or other default by the
Servicer hereunder shall occur and be continuing, the Trustee may proceed to
protect and enforce its rights and the rights of the Certificateholders under
this Agreement by a suit, action or proceeding in equity or at law or otherwise,
whether for the specific performance of any covenant or agreement contained in
this Agreement or in aid of the execution of any power granted in this Agreement
or for the enforcement of any other legal, equitable or other remedy, as the
Trustee, being advised by counsel, and subject to the foregoing, shall deem most
effectual to protect and enforce any of the rights of the Trustee and the
Certificateholders.

          Section 8.14 Waiver of Bond Requirement.

          The Trustee shall be relieved of, and each Certificateholder hereby
waives, any requirement of any jurisdiction in which the Trust, or any part
thereof, may be located that the Trustee post a bond or other surety with any
court, agency or body whatsoever.

          Section 8.15 Waiver of Inventory, Accounting and Appraisal
Requirement.

          The Trustee shall be relieved of, and each Certificateholder hereby
waives, any requirement of any jurisdiction in which the Trust, or any part
thereof, may be located that the Trustee file any inventory, accounting or
appraisal of the Trust with any court, agency or body at any time or in any
manner whatsoever.

                                      -127-

                                   ARTICLE IX

                     REMIC AND GRANTOR TRUST ADMINISTRATION

          Section 9.01 REMIC Administration.

          (a) The Trustee shall make or cause to be made REMIC elections for
each of REMIC 1 and REMIC 2 as set forth in the Preliminary Statement on Forms
1066 or other appropriate federal tax or information return for the taxable year
ending on the last day of the calendar year in which the Certificates are
issued. In addition, the Trustee shall request a taxpayer identification number
on IRS Form SS-4 for each REMIC and file IRS Form 8811 for each such REMIC
within 30 days of the Closing Date. The regular interests and residual interest
in each REMIC shall be as designated in the Preliminary Statement.

          (b) The Closing Date is hereby designated as the "Startup Day" of each
REMIC within the meaning of section 860G(a)(9) of the Code.

          (c) The Trustee shall pay any and all tax related expenses (not
including taxes) of each REMIC, including but not limited to any professional
fees or expenses related to audits or any administrative or judicial proceedings
with respect to such REMIC that involve the Internal Revenue Service or state
tax authorities, but only to the extent that (i) such expenses are ordinary or
routine expenses, including expenses of a routine audit but not expenses of
litigation (except as described in (ii)); or (ii) such expenses or liabilities
(including taxes and penalties) are attributable to the negligence or willful
misconduct of the Trustee in fulfilling its duties hereunder. The Trustee shall
be entitled to reimbursement of expenses to the extent provided in clause (i)
above from the Trust.

          (d) The Trustee shall prepare or cause to be prepared, sign and file
or cause to be filed, each REMIC's federal and state tax and information returns
as such REMIC's direct representative. The expenses of preparing and filing such
returns shall be borne by the Trustee.

          (e) The Holder of the Class R Certificate shall be the "tax matters
person" as defined in the REMIC Provisions (the "Tax Matters Person") with
respect to each REMIC, and the Trustee is irrevocably designated as and shall
act as attorney-in-fact and agent for such Tax Matters Person for each REMIC.
The Trustee, as agent for the Tax Matters Person, shall perform, on behalf of
each REMIC, all reporting and other tax compliance duties that are the
responsibility of such REMIC under the Code, the REMIC Provisions, or other
compliance guidance issued by the Internal Revenue Service or any state or local
taxing authority. Among its other duties, if required by the Code, the REMIC
Provisions, or other such guidance, the Trustee, as agent for the Tax Matters
Person, shall provide (i) to the Treasury or other governmental authority such
information as is necessary for the application of any tax relating to the
transfer of the Class R Certificate to any disqualified person or organization
and (ii) to the Certificateholders such information or reports as are required
by the Code or REMIC Provisions.

          (f) The Trustee, the Servicer, and the Holders of Certificates shall
take any action or cause any REMIC formed under this Agreement to take any
action necessary to create or maintain the status of such REMIC as a REMIC under
the REMIC Provisions and shall assist

                                      -128-

each other as necessary to create or maintain such status. None of the Trustee,
the Servicer or the Holder of the Class R Certificate shall take any action or
cause any REMIC formed under this Agreement to take any action or fail to take
(or fail to cause to be taken) any action that, under the REMIC Provisions, if
taken or not taken, as the case may be, could (i) endanger or cause the loss of
the status of such REMIC as a REMIC or (ii) result in the imposition of any tax
upon such REMIC (including but not limited to the tax on prohibited transactions
as defined in Code Section 860F(a)(2) and the tax on prohibited contributions
set forth on Section 860G(d) of the Code) (either such event, an "Adverse REMIC
Event") unless the Trustee, the NIMS Insurer and the Servicer have received an
Opinion of Counsel (at the expense of the party seeking to take such action) to
the effect that the contemplated action will not endanger such status or result
in the imposition of such a tax. In addition, prior to taking any action with
respect to any REMIC formed under this Agreement or the assets therein, or
causing such REMIC to take any action, which is not expressly permitted under
the terms of this Agreement, any Holder of the Class R Certificate will consult
with the Trustee, the NIMS Insurer and the Servicer, or their respective
designees, in writing, with respect to whether such action could cause an
Adverse REMIC Event to occur with respect to such REMIC, and no such Person
shall take any such action or cause such REMIC to take any such action as to
which the Trustee, the NIMS Insurer or the Servicer has advised it in writing
that an Adverse REMIC Event could occur.

          (g) The Holder of the Class R Certificate shall pay when due any and
all taxes imposed on any REMIC formed under this Agreement by federal or state
governmental authorities, but only from amounts, if any, distributable thereon.
To the extent that such REMIC taxes are not paid by the Class R
Certificateholder, the Trustee shall pay any remaining REMIC taxes out of future
amounts otherwise distributable to the Holder of the Class R Certificate or, if
no such amounts are available, out of other amounts held in the Distribution
Account, and shall reduce amounts otherwise payable to Holders of the
Certificates.

          (h) The Trustee, shall, for federal income tax purposes, maintain or
cause to be maintained books and records with respect to each REMIC formed under
this Agreement on a calendar year and on an accrual basis.

          (i) No additional contributions of assets shall be made to any REMIC.

          (j) Neither the Trustee nor the Servicer shall enter into any
arrangement by which any REMIC will receive a fee or other compensation for
services.

          (k) The Trustee shall treat (i) the rights of the Class A-1A
Certificates to receive Cap Carryover Amounts as a right in interest rate cap
contracts written by the Class CE Certificateholders in favor of the Holders of
the Class A-1A Certificates and (ii) the rights of the Class CE Certificates
under the Yield Maintenance Agreement in accordance with the respective terms
thereof and shall assign such rights for federal tax return and information
reporting a value of zero. The Trustee shall account for such as property held
separate and apart from the regular interests it holds in each of the REMICs
created hereunder. The provisions of this paragraph and Section 3.04(g) are
intended to satisfy the requirements of Treasury Regulations Section 1.860G-2(i)
for the treatment of property rights coupled with regular interests to be
separately respected and shall be interpreted consistent with such regulation.
On each Distribution Date, to the extent the Class A-1A Certificates receive
interest in excess of their Certificate Interest Rate, such

                                      -129-

interest will be treated as distributed to the Class CE Certificates, together
with any amounts deposited in the Reserve Account in respect of the Yield
Maintenance Agreement and then paid to the Class A-1A Certificates pursuant to
the related interest rate cap agreement.

          Section 9.02 Prohibited Transactions and Activities.

          None of the Depositor, the Servicer or the Trustee shall sell, dispose
of, or substitute for any of the Mortgage Loans, except in a disposition
pursuant to (i) the foreclosure of a Mortgage Loan, (ii) the bankruptcy of the
Trust Fund, (iii) the termination of any REMIC pursuant to Article X of this
Agreement, (iv) a repurchase of Mortgage Loans pursuant to Article II of this
Agreement or (v) an optional purchase by the Servicer pursuant to Section 3.16
of this Agreement, nor acquire any assets for any REMIC constituting part of the
Trust Fund, nor sell or dispose of any investments in the Distribution Account
for gain, nor accept any contributions to any REMIC constituting part of the
Trust Fund after the Closing Date, unless such party and the NIMS Insurer has
received an Opinion of Counsel (at the expense of the party causing such sale or
disposition) that such disposition, acquisition or acceptance will not (a)
affect adversely the status of such REMIC as a REMIC or of the interests therein
other than the Class R Certificate as the regular interests therein, (b) affect
the distribution of interest or principal on the Certificates, (c) result in the
encumbrance of the assets transferred or assigned to the Trust Fund (except
pursuant to the provisions of this Agreement) or (d) cause such REMIC to be
subject to a tax on prohibited transactions or prohibited contributions pursuant
to the REMIC Provisions.

          Section 9.03 Indemnification with Respect to Certain Taxes and Loss of
REMIC Status.

          In the event that any REMIC formed hereunder fails to qualify as a
REMIC, loses its status as a REMIC, or incurs federal, state or local taxes as a
result of a prohibited transaction or prohibited contribution under the REMIC
Provisions due to the negligent performance by (i) the Servicer of its duties
and obligations set forth herein or is subject to any state or local taxes based
on the location of the Servicer, the Servicer shall indemnify the Holder of the
Class R Certificate against any and all losses, claims, damages, liabilities or
expenses ("Losses") resulting from such negligence; provided, however, that the
Servicer shall not be liable for any such Losses attributable to the action or
inaction of the Trustee, the Depositor or the Holder of the Class R Certificate,
as applicable, nor for any such Losses resulting from misinformation provided by
the Holder of the Class R Certificate on which the Servicer has relied or (ii)
the Trustee of its duties and obligations set forth herein, the Trustee shall
indemnify the Holder of the Class R Certificates against any and all Losses
resulting from such negligence; provided, however, that the Trustee shall not be
liable for any such Losses attributable to the action or inaction of the
Servicer, the Depositor or the Holder of the Class R Certificates, as
applicable, nor for any such Losses resulting from misinformation provided the
Holder of the Class R Certificate on which the Trustee has relied. The foregoing
shall not be deemed to limit or restrict the rights and remedies of the Holder
of the Class R Certificate now or hereafter existing at law or in equity.
Notwithstanding the foregoing, however, in no event shall the Servicer or the
Trustee have any liability (1) for any action or omission that is taken in
accordance with and in compliance with the express terms of, or which is
expressly permitted by the terms of, this Agreement, (2) for any Losses other
than arising out of a negligent performance by the Servicer

                                      -130-

or the Trustee of its duties and obligations set forth herein, and (3) for any
special or consequential damages to Certificateholders (in addition to payment
of principal and interest on the Certificates).

          Section 9.04 REO Property.

          (a) Subject to compliance with applicable laws and regulations as
shall at any time be in force, and notwithstanding any other provision of this
Agreement, the Servicer, acting on behalf of the Trust hereunder, shall not
rent, lease, or otherwise earn income on behalf of any REMIC with respect to any
REO Property which might cause such REO Property to fail to qualify as
"foreclosure" property within the meaning of section 860G(a)(8) of the Code or
result in the receipt by any REMIC of any "income from non-permitted assets"
within the meaning of section 860F(a)(2) of the Code or any "net income from
foreclosure property" which is subject to tax under the REMIC Provisions unless
the Servicer has advised, or has caused the applicable Servicer to advise, the
Trustee in writing to the effect that, under the REMIC Provisions, such action
would not adversely affect the status of any REMIC as a REMIC and any income
generated for such REMIC by the REO Property would not result in the imposition
of a tax upon such REMIC.

          (b) The Servicer shall make reasonable efforts to sell any REO
Property for its fair market value. In any event, however, the Servicer shall
dispose of any REO Property before the close of the third calendar year
beginning after the year of its acquisition by the Trust Fund unless the
Servicer has received a grant of extension from the Internal Revenue Service to
the effect that, under the REMIC Provisions and any relevant proposed
legislation and under applicable state law, any REMIC constituting part of the
Trust Fund may hold REO Property for a longer period without adversely affecting
its REMIC status or causing the imposition of a Federal or state tax upon any
REMIC constituting part of the Trust Fund. If the Servicer has received such an
extension, then the Servicer shall continue to attempt to sell the REO Property
for its fair market value as determined in good faith by the Servicer for such
longer period as such extension permits (the "Extended Period"). If the Servicer
has not received such an extension and the Servicer is unable to sell the REO
Property within 33 months after its acquisition by the Trust Fund or if the
Servicer has received such an extension, and the Servicer is unable to sell the
REO Property within the period ending three months before the close of the
Extended Period, the Servicer shall, before the end of the applicable period,
(i) purchase such REO Property at a price equal to the REO Property's fair
market value as determined in good faith by the Servicer or (ii) auction the REO
Property to the highest bidder (which may be the Servicer) in an auction
reasonably designed to produce a fair price prior to the expiration of the
applicable period.

          Section 9.05 Grantor Trust Administration.

          The parties intend that the portions of the Trust Fund consisting of
the right of the Class P Certificates to receive Servicer Prepayment Charge
Payment Amounts, the right of the Class A-1A Certificates to receive Cap
Carryover Amounts, the Reserve Account and the right of the Class CE
Certificates to receive Yield Maintenance Agreement Payments subject to the
obligation of the Class CE Certificates to pay Cap Carryover Amounts, shall be
treated as a "grantor trust" under the Code, and the provisions hereof shall be
interpreted consistently with

                                      -131-

this intention. In furtherance of such intention, the Trustee shall furnish or
cause to be furnished (i) to the Holders of the Class A-1A Certificates, (ii) to
the Holders of the Class P Certificates and (iii) to the Holder of the Class CE
Certificates and shall file or cause to be filed with the Internal Revenue
Service together with Form 1041 or such other form as may be applicable, their
allocable shares of income and expenses with respect to the property held by the
Grantor Trust, at the time or times and in the manner required by the Code.

                                    ARTICLE X

                                   TERMINATION

          Section 10.01 Termination.

          (a) The respective obligations and responsibilities of the Servicer,
the Depositor, the Trustee and the Certificate Registrar created hereby (other
than the obligation of the Trustee to make certain payments to
Certificateholders after the final Distribution Date and the obligation of the
Servicer to send certain notices as hereinafter set forth) shall terminate upon
notice to the Trustee upon the earliest of (i) the Distribution Date on which
the Certificate Principal Balance of each Class of Certificates has been reduced
to zero, (ii) the final payment or other liquidation of the last Mortgage Loan
in the Trust, and (iii) the optional purchase by the NIMS Insurer, if there is a
NIMS Insurer, or if there is no NIMS Insurer, the Majority Class CE
Certificateholders (or if such holder is the Seller, or an affiliate of the
Seller, the Servicer of the Mortgage Loans) as described below. Notwithstanding
the foregoing, in no event shall the trust created hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants of
Joseph P. Kennedy, the late ambassador of the United States to the Court of St.
James, living on the date hereof.

          The NIMS Insurer, if there is a NIMS Insurer, or if there is no NIMS
Insurer, the Majority Class CE Certificateholders (and, if such holder is the
Seller or an affiliate of the Seller, the Servicer of the Mortgage Loans) may,
at its option, terminate the Trust Fund and retire the Certificates on the next
succeeding Distribution Date upon which the aggregate current Pool Balance is
less than 10% of the Cut-off Date Aggregate Principal Balance by purchasing all
of the outstanding (i) Mortgage Loans in the Trust Fund at a price equal to the
sum of the outstanding Principal Balance of the Mortgage Loans and except to the
extent previously advanced by the Servicer, accrued and unpaid interest thereon
at the weighted average of the Mortgage Interest Rates through the end of the
Collection Period preceding the final Distribution Date plus unreimbursed
Servicing Advances, Advances and any unpaid Servicing Fees allocable to such
Mortgage Loans and (ii) REO Properties in the Trust Fund at a price equal to
their fair market value as determined in good faith by the Servicer (the
"Termination Price"). If the NIMS Insurer or the Majority Class CE
Certificateholders (or, if the Majority Class CE Certificateholder is the Seller
or an affiliate of the Seller, the Servicer) is subject to regulation by the
Office of the Comptroller of the Currency, the FDIC, the Federal Reserve or the
Office of Thrift Supervision, however, the option may not be exercised unless
the aggregate fair market value of the Mortgage Loans and REO Properties is
greater than or equal to the Termination Price. Notwithstanding the foregoing,
no party may exercise this optional purchase right unless any Reimbursement
Amount owed to the Trust pursuant to Section 2.03 hereof has been paid.

                                      -132-

          In connection with any such purchase pursuant to the preceding
paragraph, the Servicer shall deliver to the Trustee for deposit in the
Distribution Account all amounts then on deposit in the Collection Account (less
amounts permitted to be withdrawn by the Servicer pursuant to Section 3.07),
which deposit shall be deemed to have occurred immediately following such
purchase.

          Any such purchase shall be accomplished by delivery on the
Determination Date before such Distribution Date of the Termination Price to the
Trustee for deposit into the Distribution Account as part of Available Funds.

          (b) Notice of any termination, specifying the Distribution Date (which
shall be a date that would otherwise be a Distribution Date) upon which the
Certificateholders may surrender their Certificates to the Trustee for payment
of the final distribution and cancellation, shall be given promptly by the
Trustee upon the Trustee receiving notice of such date from the NIMS Insurer,
the Majority Class CE Certificateholders or the Servicer, as applicable, by
letter to the Certificateholders mailed not earlier than the 15th day of the
month preceding the month of such final distribution and not later than the 15th
day of the month of such final distribution specifying (1) the Distribution Date
upon which final distribution of the Certificates will be made upon presentation
and surrender of such Certificates at the office or agency of the Trustee
therein designated, (2) the amount of any such final distribution and (3) that
the Record Date otherwise applicable to such Distribution Date is not
applicable, distributions being made only upon presentation and surrender of the
Certificates at the office or agency of the Trustee therein specified. Not less
than five (5) Business Days prior to such Determination Date relating to such
Distribution Date, the Trustee shall notify the Originator and the Seller of the
amount of any unpaid Reimbursement Amount owed to the Trust.

          (c) Upon presentation and surrender of the Certificates, the Trustee
shall cause to be distributed to the Holders of the Certificates on the
Distribution Date for such final distribution, in proportion to the Percentage
Interests of their respective Class and to the extent that funds are available
for such purpose, an amount equal to the amount required to be distributed to
such Holders in accordance with the provisions of Sections 4.01 and 4.02 for
such Distribution Date.

          (d) In the event that all Certificateholders shall not surrender their
Certificates for final payment and cancellation on or before such final
Distribution Date, the Trustee shall promptly following such date cause all
funds in the Distribution Account not distributed in final distribution to
Certificateholders to be withdrawn therefrom and credited to the remaining
Certificateholders by depositing such funds in a separate escrow account for the
benefit of such Certificateholders, and the 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
nine months after the second notice all the Certificates shall not have been
surrendered for cancellation, the Class R Certificateholder shall be entitled to
all unclaimed funds and other assets which remain subject hereto (except with
respect to the Class CE and Class P Certificates) and the Trustee upon transfer
of such funds shall be discharged of any responsibility for such funds, and all
other Certificateholders shall look to the Class R Certificateholder for
payment.

                                      -133-

          Section 10.02 Additional Termination Requirements.

          (a) In the event that the NIMS Insurer, the Majority Class CE
Certificateholders or the Servicer, as applicable, exercises the purchase option
as provided in Section 10.01, the Trust shall be terminated in accordance with
the following additional requirements, unless the Trustee shall have been
furnished with an Opinion of Counsel to the effect that the failure of the Trust
to comply with the requirements of this Section will not cause an Adverse REMIC
Event to occur at any time that any Certificates are outstanding:

          (i) The Trustee shall designate a date within 90 days prior to the
     final Distribution Date as the date of adoption of plans of complete
     liquidation of each of REMIC 1 and REMIC 2 and shall specify such date in a
     statement attached to the final federal income tax return of each REMIC,
     which such statement shall constitute a plan of liquidation for each such
     REMIC pursuant to Treasury Regulation Section 1.860F-1;

          (ii) After the date of adoption of such plans of complete liquidation
     and at or prior to the final Distribution Date, the Trustee shall sell all
     of the assets of the Trust to the Majority Class CE Certificateholders or
     the Servicer, as applicable, 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 in the following order of priority (A) (i) to the
     Holders of each of the Class A-1A, Class A-1B, Class A-2, Class A-3, Class
     A-4, Class A-5 and Class A-6 Certificates, pro rata and (ii) sequentially,
     to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6,
     Class B-1 and Class B-2 Certificates, the related Certificate Principal
     Balance, as applicable, plus one month's interest thereon at the applicable
     Certificate Interest Rate, (B) to the Class CE Certificates, the amount of
     any remaining Monthly Excess Cash Flow Amounts not previously distributed
     thereon, (C) to the remaining Regular Certificates and/or REMIC 1 Regular
     Interests the amounts allocable thereto pursuant to Section 4.08 and (D) to
     the Class R Certificateholder, all cash on hand in respect of the REMICs
     after such payment (other than cash retained to meet claims) and the Trust
     shall terminate at such time.

          (b) By their acceptance of Certificates, the Holders thereof hereby
agree to appoint the Trustee as their attorney-in-fact to: (i) designate such
date of adoption of plans of complete liquidation and (ii) to take such other
action in connection therewith as may be reasonably required to carry out such
plans of complete liquidation all in accordance with the terms hereof.

                                   ARTICLE XI

                            MISCELLANEOUS PROVISIONS

          Section 11.01 Amendment.

          This Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee; with the consent of the NIMS Insurer and without the
consent of the Certificateholders, (i) to cure any ambiguity or mistake, (ii) to
correct, modify or supplement any provision herein which may be inconsistent
with any other provision herein or the Prospectus

                                      -134-

Supplement or Private Placement Memorandum, (iii) 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, (iv) to comply with
any requirements imposed by the Code or (v) to provide for the rights of the
NIMS Insurer; provided, however, that any such action listed in clause (iii)
above shall not adversely affect in any respect the interests of any
Certificateholder, as evidenced by (i) notice in writing to the Depositor, the
Servicer and the Trustee from the Rating Agencies that such action will not
result in the reduction or withdrawal of the rating of any outstanding Class of
Certificates with respect to which it is a Rating Agency, or (ii) an Opinion of
Counsel delivered to the Servicer and the Trustee.

          In addition, this Agreement may be amended from time to time by the
Depositor, the Servicer and the Trustee, with the consent of the NIMS Insurer
and the Majority Certificateholders for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this Agreement
or of modifying in any manner the rights of the Holders of Certificates;
provided, however, that no such amendment or waiver shall (x) reduce in any
manner the amount of, or delay the timing of, payments on the Certificates which
are required to be made on any Certificate without the consent of the Holder of
such Certificate, (y) adversely affect in any material respect the interests of
the Holders of any Class of Certificates in a manner other than as described in
clause (x) above, without the consent of the Holders of Certificates of such
Class evidencing at least a 662/3% Percentage Interest in such Class, or (z)
reduce the percentage of Voting Rights required by clause (y) above without the
consent of the Holders of all Certificates of such Class then outstanding. Upon
approval of an amendment, a copy of such amendment shall be sent to the Rating
Agencies. Prior to the execution of any amendment to this Agreement, the Trustee
shall be entitled to receive and rely upon an Opinion of Counsel (at the expense
of the Person seeking such amendment) stating that the execution of such
amendment is authorized or permitted by this Agreement. The Trustee may, but
shall not be obligated to, enter into any such amendment which affects the
Trustee's own rights, duties or immunities under this Agreement.

          Notwithstanding any provision of this Agreement to the contrary,
neither the Trustee nor the NIMS Insurer shall consent to any amendment to this
Agreement unless it shall have first received an Opinion of Counsel, delivered
by (and at the expense of) the Person seeking such Amendment, to the effect that
such amendment will not result in an Adverse REMIC Event at any time that any
Certificates are outstanding and that the amendment is being made in accordance
with the terms hereof.

          Promptly after the execution of any such amendment the Trustee shall
furnish, at the expense of the Person that requested the amendment if such
Person is the Servicer (but in no event at the expense of the Trustee),
otherwise at the expense of the Trust, a copy of such amendment and the Opinion
of Counsel referred to in the immediately preceding paragraph to the Servicer
and each Rating Agency.

          It shall not be necessary for the consent of Certificateholders under
this Section 11.01 to approve the particular form of any proposed amendment;
instead it shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe.

                                      -135-

          Section 11.02 Recordation of Agreement; Counterparts.

          To the extent permitted by applicable law, this Agreement is subject
to recordation in all appropriate public offices for real property records in
all of the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Servicer at the expense of the Trust, but only upon direction of
Certificateholders, accompanied by an Opinion of Counsel to the effect that such
recordation materially and beneficially affects the interests of the
Certificateholders.

          For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall together constitute but
one and the same instrument.

          Section 11.03 Limitation on Rights of Certificateholders.

          The death or incapacity of any Certificateholder shall not (i) operate
to terminate this Agreement or the Trust, (ii) entitle such Certificateholder's
legal representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust, or (iii)
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.

          Except as expressly provided for herein, no Certificateholder shall
have any right to vote or in any manner otherwise control the operation and
management of the Trust, or the obligations of the parties hereto, nor shall
anything herein set forth or contained in the terms of the Certificates be
construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability to any third person by reason of any action taken by the parties
to this Agreement pursuant to any provision hereof.

          No Certificateholder shall have any right by virtue of any provision
of this Agreement to institute any suit, action or proceeding in equity or at
law upon or under or with respect to this Agreement, unless such Holder
previously shall have given to the Trustee a written notice of default and of
the continuance thereof, as herein provided, and unless also the Holders of
Certificates entitled to at least 25% of the Voting Rights shall have made
written request upon the Trustee to institute such action, suit or proceeding in
its own name as Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee for 60 days after
its receipt of such notice, request and offer of indemnity, shall have neglected
or refused to institute any such action, suit or proceeding. It is understood
and intended, and expressly covenanted by each Certificateholder with every
other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, which priority or
preference is not otherwise provided for herein, or to enforce any right under
this Agreement, except in the manner herein provided and

                                      -136-

for the equal, ratable and common benefit of all Certificateholders. For the
protection and enforcement of the provisions of this Section 11.03 each and
every Certificateholder and the Trustee shall be entitled to such relief as can
be given either at law or in equity.

          Section 11.04 Governing Law; Jurisdiction.

          This Agreement shall be construed in accordance with the laws of the
State of New York, and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws. With respect to any
claim arising out of this Agreement, each party irrevocably submits to the
exclusive jurisdiction of the courts of the State of New York and the United
States District Court located in the Borough of Manhattan in The City of New
York, and each party irrevocably waives any objection which it may have at any
time to the laying of venue of any suit, action or proceeding arising out of or
relating hereto brought in any such courts, irrevocably waives any claim that
any such suit, action or proceeding brought in any such court has been brought
in any inconvenient forum and further irrevocably waives the right to object,
with respect to such claim, suit, action or proceeding brought in any such
court, that such court does not have jurisdiction over such party, provided that
service of process has been made by any lawful means.

          Section 11.05 Notices.

          All directions, demands and notices hereunder shall be in writing and
shall be deemed to have been duly given if personally delivered at or mailed by
first class mail, postage prepaid, or by express delivery service, to (a) in the
case of the Trustee, Deutsche Bank National Trust Company, 1761 East St. Andrew
Place, Santa Ana, California 92705, Attention: Trust Administration - BA05AQ1,
or such other address as may hereafter be furnished to the Depositor, the NIMS
Insurer and the Servicer in writing by the Trustee, (b) in the case of the
Depositor, Asset Backed Funding Corporation, 100 North Tryon Street, 11th Floor,
Charlotte, North Carolina 28255, Attention: ABFC 2005-AQ1 Trust, Asset-Backed
Certificates, Series 2005-AQ1, or such other address as may be furnished to the
Servicer, the NIMS Insurer and the Trustee in writing by the Depositor, (c) in
the case of the Servicer, Ameriquest Mortgage Company, 1100 Town & Country Road,
11th Floor, Orange, California 92868, Attention: General Counsel, or such other
address as may be hereafter furnished to the Depositor, the NIMS Insurer and the
Trustee by the Servicer in writing and (d) in the case of the NIMS Insurer, such
address furnished to the Depositor, the Servicer and the Trustee in writing by
the NIMS Insurer. Any notice required or permitted to be mailed to a
Certificateholder shall be given by first class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register. Notice of any
Servicer Event of Termination shall be given by telecopy and by certified mail.
Any notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have duly been given when mailed, whether or not the
Certificateholder receives such notice. A copy of any notice required to be
telecopied hereunder shall also be mailed to the appropriate party in the manner
set forth above.

          Section 11.06 Severability of Provisions.

          If any one or more of the covenants, agreements, provisions or terms
of this Agreement shall for any reason whatsoever be held invalid, then such
covenants, agreements,

                                      -137-

provisions or terms shall be deemed severable from the remaining covenants,
agreements, provisions or terms of this Agreement and shall in no way affect the
validity or enforceability of the other provisions of this Agreement or of the
Certificates or the rights of the Holders thereof.

          Section 11.07 Article and Section References.

          All article and section references used in this Agreement, unless
otherwise provided, are to articles and sections in this Agreement.

          Section 11.08 Notice to the Rating Agencies and the NIMS Insurer.

          (a) Each of the Trustee and the Servicer shall be obligated to use its
best reasonable efforts promptly to provide notice to the Rating Agencies and
the NIMS Insurer with respect to each of the following of which a Responsible
Officer of the Trustee or the Servicer, as the case may be, has actual
knowledge:

          (i) any material change or amendment to this Agreement;

          (ii) the occurrence of any Servicer Event of Termination that has not
     been cured or waived;

          (iii) the resignation or termination of the Servicer or the Trustee;

          (iv) the final payment to Holders of the Certificates of any Class;

          (v) any change in the location of any Account;

          (vi) if the Trustee is acting as successor servicer pursuant to
     Section 7.02 hereof, any event that would result in the inability of the
     Trustee to make Advances; and

          (vii) each notice delivered pursuant to Section 7.01(a) hereof which
     relates to the fact that the Servicer has not made an Advance.

          (viii) In addition, the Servicer shall promptly furnish to each Rating
     Agency copies of the following:

          (A) each annual statement as to compliance described in Section 3.19
hereof; and

          (B) each annual independent public accountants' servicing report
described in Section 3.20 hereof.

          Any such notice pursuant to this Section 11.08 shall be in writing and
shall be deemed to have been duly given if personally delivered or mailed by
first class mail, postage prepaid, or by express delivery service to: Fitch
Ratings, One State Street Plaza, New York, New York 10004, Attention: Managing
Director, Residential Mortgage-Backed Securities; Standard & Poor's, a division
of The McGraw-Hill Companies, Inc., 55 Water Street, 41st Floor,

                                      -138-

New York, New York 10041, Attention: Mortgage Surveillance Group and the NIMS
Insurer, at the address to be provided by the Depositor.

          Section 11.09 Further Assurances.

          Notwithstanding any other provision of this Agreement, neither the
Regular Certificateholders nor the Trustee shall have any obligation to consent
to any amendment or modification of this Agreement unless they have been
provided reasonable security or indemnity against their out-of-pocket expenses
(including reasonable attorneys' fees) to be incurred in connection therewith.

          Section 11.10 Third Party Beneficiary.

          Nothing in this Agreement or in the Certificates, expressed or
implied, shall give to any Person, other than the Certificateholders, the
parties hereto and the NIMS Insurer and their successors hereunder, any benefit
or any legal or equitable right, remedy or claim under this Agreement.

          The NIMS Insurer shall be deemed a third-party beneficiary of this
Agreement to the same extent as if it were a party hereto, and shall have the
right to enforce the provisions of this Agreement directly against the parties
to this Agreement.

          Section 11.11 Acts of Certificateholders.

          (a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by the
Certificateholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Certificateholders in person or by
agent duly appointed in writing; and such action shall become effective when
such instrument or instruments are delivered to the Trustee and the Servicer.
Such instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "act" of the Certificateholders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Agreement and conclusive in favor of the Trustee and the Trust,
if made in the manner provided in this Section 11.11.

          (b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of a notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Whenever
such execution is by a signer acting in a capacity other than his or her
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority.

          (c) Any request, demand, authorization, direction, notice, consent,
waiver or other action by any Certificateholder shall bind every future Holder
of such Certificate and the Holder of every Certificate issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof, in
respect of anything done, omitted or suffered to be done by the

                                      -139-

Trustee or the Trust in reliance thereon, whether or not notation of such action
is made upon such Certificate.

                        [Signatures follow on next page]

                                      -140-

          IN WITNESS WHEREOF, the Depositor, the Servicer and the Trustee have
caused their names to be signed hereto by their respective officers thereunto
duly authorized, all as of the day and year first above written.

                                               ASSET BACKED FUNDING CORPORATION,
                                               as Depositor

                                               By:  /s/ Bruce W. Good
                                                   -----------------------------
                                                   Name: Bruce W. Good
                                                   Title: Vice President

                                               AMERIQUEST MORTGAGE COMPANY, as
                                               Servicer

                                               By:  /s/ Karen Christensen
                                                   -----------------------------
                                                   Name: Karen Christensen
                                                   Title: CFO

                                               DEUTSCHE BANK NATIONAL TRUST
                                               COMPANY, as Trustee

                                               By:  /s/ Hang Luu
                                                   -----------------------------
                                                   Name: Hang Luu
                                                   Title: Authorized Signer

                                               By: /s/ Ronaldo Reyes
                                                   -----------------------------
                                                   Name: Ronaldo Reyes
                                                   Title: Vice President

STATE OF NORTH CAROLINA )
                        ) ss.:

COUNTY OF MECKLENBURG   )

          On the 7th day of June 2005 before me, a notary public in and for said
State, personally appeared Bruce W. Good, known to me to be a Vice President of
Asset Backed Funding Corporation, a Delaware corporation that executed the
within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.

          IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                           Notary Public: Stephanie M. Siejka

                                           My Commission expires: Dec. 15, 2007

STATE OF CALIFORNIA )
                    ) ss.:
COUNTY OF ORANGE    )

          On the 7th day of June 2005 before me, a notary public in and for said
State, personally appeared Hang Luu, known to me to be an Authorized Signer of
Deutsche Bank National Trust Company, a national banking association that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said association, and acknowledged to me that such
association executed the within instrument.

          IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                             Notary Public: Manuel Rivas

                                             My Commission expires: Dec. 9, 2008

STATE OF CALIFORNIA )
                    ) ss.:
COUNTY OF ORANGE    )

          On the 7th day of June 2005 before me, a notary public in and for said
State, personally appeared Ronaldo Reyes, known to me to be a Vice President of
Deutsche Bank National Trust Company, a national banking association that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said association, and acknowledged to me that such
association executed the within instrument.

          IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                             Notary Public: Manuel Rivas

                                             My Commission expires: Dec. 9, 2008

STATE OF CALIFORNIA )
                    ) ss.:
COUNTY OF ORANGE    )

          On the 7th day of June 2005 before me, a notary public in and for said
State, personally appeared Karen Christensen, known to me to be the Chief
Financial Officer of Ameriquest Mortgage Company, a Delaware corporation, that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.

          IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                             Notary Public: Michele E. Negrete

                                             My Commission expires: Oct. 4, 2008

                                  EXHIBIT A-1A

                      [FORM OF THE CLASS A-1A CERTIFICATE]

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE 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 REPRESENTS BENEFICIAL
OWNERSHIP OF 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") AND CERTAIN OTHER
PROPERTY.

                                     A-1A-1

                               ABFC 2005-AQ1 TRUST
                            ASSET-BACKED CERTIFICATES
                           SERIES 2005-AQ1, CLASS A-1A

evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate one- to four-family first lien mortgage
loans formed and sold by

                        ASSET BACKED FUNDING CORPORATION

Series 2005-AQ1, Class A-1A

Certificate Interest Rate: Floating

Date of Pooling and Servicing Agreement and Cut-off Date: June 1, 2005

First Distribution Date:  July 25, 2005

No.

CUSIP: 04542B MP 4

ISIN: US04542BMP49

Original Class Certificate Principal Balance of the Class A-1A Certificates as
of the Closing Date: $103,638,000

Initial Certificate Principal Balance: $[__]

Servicer: Ameriquest Mortgage Company

Trustee: Deutsche Bank National Trust Company

Closing Date: June 7, 2005

DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN
THE AMOUNT SHOWN ABOVE.

THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET BACKED
FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR AFFILIATES. THIS
CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
STATES.

          This certifies that _______________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class A-1A Certificates) in that certain beneficial ownership interest
evidenced by all the Class A-1A Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

                                     A-1A-2

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
A-1A Certificates on such Distribution Date pursuant to the Agreement; provided,
however, that if any Class A-1A Certificate becomes a Definitive Certificate,
the Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Class A-1A
Certificates, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose as provided in the Agreement.

          The Certificate Interest Rate for the Class A-1A Certificates for each
Distribution Date will be the least of (i) One-Month LIBOR as of the related
LIBOR Determination Date plus the Class A-1A Certificate Margin, (ii) the
Maximum Rate Cap and (iii) the Pool Cap. Interest will accrue on the Class A-1A
Certificates during each Interest Accrual Period at the Certificate Interest
Rate.

          This Certificate is one of a duly authorized issue of Certificates
designated as ABFC 2005-AQ1 Trust, Asset-Backed Certificates, of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class A-1A Certificates.

          The Class A-1A Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Accounts and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer and 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 entitled to the Voting Rights
identified in the Agreement. Any such consent by the Holder of this

                                     A-1A-3

Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates.

          As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.

          The Depositor, the Servicer, the Trustee and the Certificate Registrar
and any agent of the Depositor, the Servicer, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Servicer, the
Trustee, the Certificate Registrar nor any such agent shall be affected by
notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Pool
Balance of the Mortgage Loans at the time of purchase being 10% or less of the
Cut-off Date Aggregate Principal Balance.

                                     A-1A-4

          The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.

          Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                     A-1A-5

          IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated:

                                        DEUTSCHE BANK NATIONAL TRUST
                                           COMPANY, as Trustee

                                        By:
                                            ------------------------------------
                                            Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

          This is one of the Certificates referred to in the within-mentioned
Agreement.

                                        DEUTSCHE BANK NATIONAL TRUST
                                           COMPANY, as Certificate Registrar

                                        By:
                                            ------------------------------------
                                            Authorized Signatory

Date of authentication:

                                     A-1A-6

                                  ABBREVIATIONS

          The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common           UNIF GIFT MIN ACT - Custodian
                                                             (Cust) (Minor)
TEN ENT - as tenants by the entireties                       under Uniform Gifts
                                                             to Minors Act
JT TEN - as joint tenants with right
         of survivorship and not as                          ___________________
         tenants in common                                         (State)

          Additional abbreviations may also be used though not in the above
list.

                                   ASSIGNMENT

          FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

          I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________

Dated:

                                         ---------------------------------------
                                         Signature by or on behalf of assignor

                                         ---------------------------------------
                                         Signature Guaranteed

                                     A-1A-7

                            DISTRIBUTION INSTRUCTIONS

          The assignee should include the following for purposes of
distribution:

          Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of ___________________________, account number ________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.

                                     A-1A-8

                                  EXHIBIT A-1B

                      [FORM OF THE CLASS A-1B CERTIFICATE]

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE 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 REPRESENTS BENEFICIAL
OWNERSHIP OF 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") AND CERTAIN OTHER
PROPERTY.

                                     A-1B-1

                               ABFC 2005-AQ1 TRUST
                            ASSET-BACKED CERTIFICATES
                           SERIES 2005-AQ1, CLASS A-1B

evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate one- to four-family first lien mortgage
loans formed and sold by

                        ASSET BACKED FUNDING CORPORATION

Series 2005-AQ1, Class A-1B

Certificate Interest Rate: Fixed

Date of Pooling and Servicing Agreement and Cut-off Date: June 1, 2005

First Distribution Date: July 25, 2005

No.

CUSIP: 04542B NB 4

ISIN: US04542NB44

Original Class Certificate Principal Balance of the Class A-1B Certificates as
of the Closing Date: $100,000,000

Initial Certificate Principal Balance: $[___]

Servicer: Ameriquest Mortgage Company

Trustee: Deutsche Bank National Trust Company

Closing Date: June 7, 2005

DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN
THE AMOUNT SHOWN ABOVE.

THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET BACKED
FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR AFFILIATES. THIS
CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
STATES.

          This certifies that _______________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class A-1B Certificates) in that certain beneficial ownership interest
evidenced by all the Class A-1B Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

                                     A-1B-2

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the last Business Day of the month immediately
preceding the month in which the related Distribution Date occurs (the "Record
Date") from funds in the Distribution Account in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A-1B Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Class A-1B
Certificates, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose as provided in the Agreement.

          The Certificate Interest Rate for the Class A-1B Certificates for each
Distribution Date will be a per annum rate equal to the lesser of (i) 4.250% and
(ii) the Pool Cap. Interest will accrue on the Class A-1B Certificates during
each Interest Accrual Period at the Certificate Interest Rate.

          This Certificate is one of a duly authorized issue of Certificates
designated as ABFC 2005-AQ1 Trust, Asset-Backed Certificates, of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class A-1B Certificates.

          The Class A-1B Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Accounts and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer and 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 entitled to the Voting Rights
identified 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 herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement

                                     A-1B-3

also permits the amendment thereof, in certain limited circumstances, without
the consent of the Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.

          The Depositor, the Servicer, the Trustee and the Certificate Registrar
and any agent of the Depositor, the Servicer, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Servicer, the
Trustee, the Certificate Registrar nor any such agent shall be affected by
notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Pool
Balance of the Mortgage Loans at the time of purchase being 10% or less of the
Cut-off Date Aggregate Principal Balance.

          The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.

                                     A-1B-4

          Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                     A-1B-5

          IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated:

                                        DEUTSCHE BANK NATIONAL TRUST
                                           COMPANY, as Trustee

                                        By:
                                            ------------------------------------
                                            Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

          This is one of the Certificates referred to in the within-mentioned
Agreement.

                                        DEUTSCHE BANK NATIONAL TRUST
                                           COMPANY, as Certificate Registrar

                                        By:
                                            ------------------------------------
                                            Authorized Signatory

Date of authentication:

                                     A-1B-6

                                  ABBREVIATIONS

          The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common           UNIF GIFT MIN ACT - Custodian
                                                             (Cust) (Minor)
TEN ENT - as tenants by the entireties                       under Uniform Gifts
                                                             to Minors Act
JT TEN - as joint tenants with right
         of survivorship and not as                          ___________________
         tenants in common                                         (State)

          Additional abbreviations may also be used though not in the above
list.

                                   ASSIGNMENT

          FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

          I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________

Dated:

                                         ---------------------------------------
                                         Signature by or on behalf of assignor

                                         ---------------------------------------
                                         Signature Guaranteed

                                     A-1B-7

                            DISTRIBUTION INSTRUCTIONS

          The assignee should include the following for purposes of
distribution:

          Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________, account number ____________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.

                                     A-1B-8

                                   EXHIBIT A-2

                       [FORM OF THE CLASS A-2 CERTIFICATE]

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE 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 REPRESENTS BENEFICIAL
OWNERSHIP OF 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") AND CERTAIN OTHER
PROPERTY.

                                      A-2-1

                               ABFC 2005-AQ1 TRUST
                            ASSET-BACKED CERTIFICATES
                           SERIES 2005-AQ1, CLASS A-2

evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate one- to four-family first lien mortgage
loans formed and sold by

                        ASSET BACKED FUNDING CORPORATION

Series 2005-AQ1, Class A-2

Certificate Interest Rate: Fixed

Date of Pooling and Servicing Agreement and Cut-off Date: June 1, 2005

First Distribution Date: July 25, 2005

No.

CUSIP: 04542B MQ 2

ISIN: US04542BMQ22

Original Class Certificate Principal Balance of the Class A-2 Certificates as of
the Closing Date: $206,669,000

Initial Certificate Principal Balance: $[__]

Servicer: Ameriquest Mortgage Company

Trustee: Deutsche Bank National Trust Company

Closing Date: June 7, 2005

DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN
THE AMOUNT SHOWN ABOVE.

THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET BACKED
FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR AFFILIATES. THIS
CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
STATES.

          This certifies that _______________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class A-2 Certificates) in that certain beneficial ownership interest
evidenced by all the Class A-2 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

                                      A-2-2

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the last Business Day of the month immediately
preceding the month in which the related Distribution Date occurs (the "Record
Date") from funds in the Distribution Account in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A-2 Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Class A-2
Certificates, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose as provided in the Agreement.

          The Certificate Interest Rate for the Class A-2 Certificates for each
Distribution Date will be a per annum rate equal to the lesser of (i) 4.300% and
(ii) the Pool Cap. Interest will accrue on the Class A-2 Certificates during
each Interest Accrual Period at the Certificate Interest Rate.

          This Certificate is one of a duly authorized issue of Certificates
designated as ABFC 2005-AQ1 Trust, Asset-Backed Certificates, of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class A-2 Certificates.

          The Class A-2 Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Accounts and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer and 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 entitled to the Voting Rights
identified 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 herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement

                                      A-2-3

also permits the amendment thereof, in certain limited circumstances, without
the consent of the Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.

          The Depositor, the Servicer, the Trustee and the Certificate Registrar
and any agent of the Depositor, the Servicer, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Servicer, the
Trustee, the Certificate Registrar nor any such agent shall be affected by
notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Pool
Balance of the Mortgage Loans at the time of purchase being 10% or less of the
Cut-off Date Aggregate Principal Balance.

          The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.

                                      A-2-4

          Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      A-2-5

          IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated:

                                        DEUTSCHE BANK NATIONAL TRUST COMPANY, as
                                           Trustee

                                        By:
                                            ------------------------------------
                                            Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

          This is one of the Certificates referred to in the within-mentioned
Agreement.

                                        DEUTSCHE BANK NATIONAL TRUST COMPANY, as
                                           Certificate Registrar

                                        By:
                                            ------------------------------------
                                            Authorized Signatory

Date of authentication:

                                      A-2-6

                                 ABBREVIATIONS

          The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common           UNIF GIFT MIN ACT - Custodian
                                                             (Cust)(Minor)
TEN ENT - as tenants by the entireties                       under Uniform Gifts
                                                             to Minors Act
JT TEN  - as joint tenants with right                        ___________________
          of survivorship and not as                               (State)
          tenants in common

        Additional abbreviations may also be used though not in the above
list.

                                   ASSIGNMENT

          FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

          I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________

Dated:

                                        ----------------------------------------
                                        Signature by or on behalf of assignor

                                        ----------------------------------------
                                        Signature Guaranteed

                                      A-2-7

                            DISTRIBUTION INSTRUCTIONS

          The assignee should include the following for purposes of
distribution:

          Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________, account number __________________,
or, if mailed by check, to ___________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by ______________________________________________,
the assignee named above, or __________________________________, as its agent.

                                      A-2-8

                                   EXHIBIT A-3

                       [FORM OF THE CLASS A-3 CERTIFICATE]

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE 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 REPRESENTS BENEFICIAL
OWNERSHIP OF 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") AND CERTAIN OTHER
PROPERTY.

                                      A-3-1

                               ABFC 2005-AQ1 TRUST
                            ASSET-BACKED CERTIFICATES
                           SERIES 2005-AQ1, CLASS A-3

evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate one- to four-family first lien mortgage
loans formed and sold by

                        ASSET BACKED FUNDING CORPORATION

Series 2005-AQ1, Class A-3

Certificate Interest Rate: Fixed

Date of Pooling and Servicing Agreement and Cut-off Date: June 1, 2005

First Distribution Date: July 25, 2005

No.

CUSIP: 04542B MR 0

ISIN: US04542BMR05

Original Class Certificate Principal Balance of the Class A-3 Certificates as of
the Closing Date: $42,406,000

Initial Certificate Principal Balance: $[__]

Servicer: Ameriquest Mortgage Company

Trustee: Deutsche Bank National Trust Company

Closing Date: June 7, 2005

DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN
THE AMOUNT SHOWN ABOVE.

THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET BACKED
FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR AFFILIATES. THIS
CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
STATES.

          This certifies that _______________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class A-3 Certificates) in that certain beneficial ownership interest
evidenced by all the Class A-3 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

                                      A-3-2

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the last Business Day of the month immediately
preceding the month in which the related Distribution Date occurs (the "Record
Date") from funds in the Distribution Account in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A-3 Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Class A-3
Certificates, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose as provided in the Agreement.

          The Certificate Interest Rate for the Class A-3 Certificates for each
Distribution Date will be a per annum rate equal to the lesser of (i) 4.420% and
(ii) the Pool Cap. Interest will accrue on the Class A-3 Certificates during
each Interest Accrual Period at the Certificate Interest Rate.

          This Certificate is one of a duly authorized issue of Certificates
designated as ABFC 2005-AQ1 Trust, Asset-Backed Certificates, of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class A-3 Certificates.

          The Class A-3 Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Accounts and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer and 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 entitled to the Voting Rights
identified 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 herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement

                                      A-3-3

also permits the amendment thereof, in certain limited circumstances, without
the consent of the Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.

          The Depositor, the Servicer, the Trustee and the Certificate Registrar
and any agent of the Depositor, the Servicer, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Servicer, the
Trustee, the Certificate Registrar nor any such agent shall be affected by
notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Pool
Balance of the Mortgage Loans at the time of purchase being 10% or less of the
Cut-off Date Aggregate Principal Balance.

          The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.

                                      A-3-4

          Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      A-3-5

          IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated:

                                        DEUTSCHE BANK NATIONAL TRUST COMPANY, as
                                           Trustee

                                        By:
                                            -----------------------------------
                                            Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

          This is one of the Certificates referred to in the within-mentioned
Agreement.

                                        DEUTSCHE BANK NATIONAL TRUST COMPANY, as
                                           Certificate Registrar

                                        By:
                                            -----------------------------------
                                            Authorized Signatory

Date of authentication:

                                      A-3-6

                                  ABBREVIATIONS

          The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common           UNIF GIFT MIN ACT - Custodian
                                                             (Cust)(Minor)
TEN ENT - as tenants by the entireties                       under Uniform Gifts
                                                             to Minors Act
JT TEN  - as joint tenants with right                        ___________________
          of survivorship and not as                               (State)
          tenants in common

          Additional abbreviations may also be used though not in the above
list.

                                   ASSIGNMENT

          FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

          I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________

Dated:

                                        ----------------------------------------
                                        Signature by or on behalf of assignor

                                        ----------------------------------------
                                        Signature Guaranteed

                                      A-3-7

                            DISTRIBUTION INSTRUCTIONS

          The assignee should include the following for purposes of
distribution:

          Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________, account number __________________,
or, if mailed by check, to ___________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by ______________________________________________,
the assignee named above, or __________________________________, as its agent.

                                      A-3-8

                                   EXHIBIT A-4

                       [FORM OF THE CLASS A-4 CERTIFICATE]

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE 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 REPRESENTS BENEFICIAL
OWNERSHIP OF 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") AND CERTAIN OTHER
PROPERTY.

                                      A-4-1

                               ABFC 2005-AQ1 TRUST
                            ASSET-BACKED CERTIFICATES
                           SERIES 2005-AQ1, CLASS A-4

evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate one- to four-family first lien mortgage
loans formed and sold by

                        ASSET BACKED FUNDING CORPORATION

Series 2005-AQ1, Class A-4

Certificate Interest Rate: Fixed

Date of Pooling and Servicing Agreement and Cut-off Date: June 1, 2005

First Distribution Date: July 25, 2005

No.

CUSIP: 04542B MS 8

ISIN: US04542BMS87

Original Class Certificate Principal Balance of the Class A-4 Certificates as of
the Closing Date: $165,805,000

Initial Certificate Principal Balance: $[__]

Servicer: Ameriquest Mortgage Company

Trustee: Deutsche Bank National Trust Company

Closing Date: June 7, 2005

DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN
THE AMOUNT SHOWN ABOVE.

THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET BACKED
FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR AFFILIATES. THIS
CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
STATES.

          This certifies that _______________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class A-4 Certificates) in that certain beneficial ownership interest
evidenced by all the Class A-4 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

                                      A-4-2

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the last Business Day of the month immediately
preceding the month in which the related Distribution Date occurs (the "Record
Date") from funds in the Distribution Account in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A-4 Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Class A-4
Certificates, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose as provided in the Agreement.

          The Certificate Interest Rate for the Class A-4 Certificates for each
Distribution Date will be a per annum rate equal to the lesser of (i) 5.010% and
(ii) the Pool Cap. Interest will accrue on the Class A-4 Certificates during
each Interest Accrual Period at the Certificate Interest Rate.

          This Certificate is one of a duly authorized issue of Certificates
designated as ABFC 2005-AQ1 Trust, Asset-Backed Certificates, of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class A-4 Certificates.

          The Class A-4 Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Accounts and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer and 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 entitled to the Voting Rights
identified 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 herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement

                                      A-4-3

also permits the amendment thereof, in certain limited circumstances, without
the consent of the Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.

          The Depositor, the Servicer, the Trustee and the Certificate Registrar
and any agent of the Depositor, the Servicer, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Servicer, the
Trustee, the Certificate Registrar nor any such agent shall be affected by
notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Pool
Balance of the Mortgage Loans at the time of purchase being 10% or less of the
Cut-off Date Aggregate Principal Balance.

          The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.

                                      A-4-4

          Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      A-4-5

          IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated:

                                        DEUTSCHE BANK NATIONAL TRUST COMPANY, as
                                           Trustee

                                        By:
                                            -----------------------------------
                                            Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

          This is one of the Certificates referred to in the within-mentioned
Agreement.

                                        DEUTSCHE BANK NATIONAL TRUST COMPANY, as
                                           Certificate Registrar

                                        By:
                                            -----------------------------------
                                            Authorized Signatory

Date of authentication:

                                      A-4-6

                                  ABBREVIATIONS

          The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common           UNIF GIFT MIN ACT - Custodian
                                                             (Cust)(Minor)
TEN ENT - as tenants by the entireties                       under Uniform Gifts
                                                             to Minors Act
JT TEN  - as joint tenants with right                        ___________________
          of survivorship and not as                               (State)
          tenants in common

          Additional abbreviations may also be used though not in the above
list.

                                   ASSIGNMENT

          FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

          I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________

Dated:

                                        ----------------------------------------
                                        Signature by or on behalf of assignor

                                        ----------------------------------------
                                        Signature Guaranteed

                                      A-4-7

                            DISTRIBUTION INSTRUCTIONS

          The assignee should include the following for purposes of
distribution:

          Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________, account number __________________,
or, if mailed by check, to ___________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by ______________________________________________,
the assignee named above, or __________________________________, as its agent.

                                      A-4-8

                                   EXHIBIT A-5

                       [FORM OF THE CLASS A-5 CERTIFICATE]

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE 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 REPRESENTS BENEFICIAL
OWNERSHIP OF 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") AND CERTAIN OTHER
PROPERTY.

                                      A-5-1

                               ABFC 2005-AQ1 TRUST
                            ASSET-BACKED CERTIFICATES
                           SERIES 2005-AQ1, CLASS A-5

evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate one- to four-family first lien mortgage
loans formed and sold by

                        ASSET BACKED FUNDING CORPORATION

Series 2005-AQ1, Class A-5

Certificate Interest Rate: Fixed

Date of Pooling and Servicing Agreement and Cut-off Date: June 1, 2005

First Distribution Date: July 25, 2005

No.

CUSIP: 04542B MT 6

ISIN: US04542BMT60

Original Class Certificate Principal Balance of the Class A-5 Certificates as of
the Closing Date: $52,291,000

Initial Certificate Principal Balance: $[__]

Servicer: Ameriquest Mortgage Company

Trustee: Deutsche Bank National Trust Company

Closing Date: June 7, 2005

DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN
THE AMOUNT SHOWN ABOVE.

THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET BACKED
FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR AFFILIATES. THIS
CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
STATES.

          This certifies that _______________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class A-5 Certificates) in that certain beneficial ownership interest
evidenced by all the Class A-5 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

                                      A-5-2

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the last Business Day of the month immediately
preceding the month in which the related Distribution Date occurs (the "Record
Date") from funds in the Distribution Account in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A-5 Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Class A-5
Certificates, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose as provided in the Agreement.

          The Certificate Interest Rate for the Class A-5 Certificates for each
Distribution Date will be a per annum rate equal to the lesser of (i) 5.320% and
(ii) the Pool Cap. Interest will accrue on the Class A-5 Certificates during
each Interest Accrual Period at the Certificate Interest Rate.

          This Certificate is one of a duly authorized issue of Certificates
designated as ABFC 2005-AQ1 Trust, Asset-Backed Certificates, of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class A-5 Certificates.

          The Class A-5 Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Accounts and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer and 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 entitled to the Voting Rights
identified 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 herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement

                                      A-5-3

also permits the amendment thereof, in certain limited circumstances, without
the consent of the Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.

          The Depositor, the Servicer, the Trustee and the Certificate Registrar
and any agent of the Depositor, the Servicer, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Servicer, the
Trustee, the Certificate Registrar nor any such agent shall be affected by
notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Pool
Balance of the Mortgage Loans at the time of purchase being 10% or less of the
Cut-off Date Aggregate Principal Balance.

          The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.

                                      A-5-4

          Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      A-5-5

          IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated:

                                        DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                           as Trustee

                                        By:
                                            ------------------------------------
                                            Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

          This is one of the Certificates referred to in the within-mentioned
Agreement.

                                        DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                           as Certificate Registrar

                                        By:
                                            ------------------------------------
                                            Authorized Signatory

Date of authentication:

                                      A-5-6

                                  ABBREVIATIONS

          The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common           UNIF GIFT MIN ACT - Custodian
                                                             (Cust) (Minor)
TEN ENT - as tenants by the entireties                       under Uniform Gifts
                                                             to Minors Act
JT TEN  - as joint tenants with right                        ___________________
          of survivorship and not as                               (State)
          tenants in common

          Additional abbreviations may also be used though not in the above
list.

                                   ASSIGNMENT

          FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

          I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________

Dated:

                                           -------------------------------------
                                           Signature by or on behalf of assignor

                                           -------------------------------------
                                           Signature Guaranteed

                                      A-5-7

                            DISTRIBUTION INSTRUCTIONS

          The assignee should include the following for purposes of
distribution:

          Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _____________________________, account number ______________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or _________________________________________, as its
agent.

                                      A-5-8

                                   EXHIBIT A-6

                       [FORM OF THE CLASS A-6 CERTIFICATE]

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE 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 REPRESENTS BENEFICIAL
OWNERSHIP OF 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") AND CERTAIN OTHER
PROPERTY.

                                      A-6-1

                               ABFC 2005-AQ1 TRUST
                            ASSET-BACKED CERTIFICATES
                           SERIES 2005-AQ1, CLASS A-6

evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate one- to four-family first lien mortgage
loans formed and sold by

                        ASSET BACKED FUNDING CORPORATION

Series 2005-AQ1, Class A-6

Certificate Interest Rate: Fixed

Date of Pooling and Servicing Agreement and Cut-off Date: June 1, 2005

First Distribution Date: July 25, 2005

No.

CUSIP: 04542B MU 3

ISIN: US04542BMU34

Original Class Certificate Principal Balance of the Class A-6 Certificates as of
the Closing Date: $74,534,000

Initial Certificate Principal Balance: $[__]

Servicer: Ameriquest Mortgage Company

Trustee: Deutsche Bank National Trust Company

Closing Date: June 7, 2005

DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN
THE AMOUNT SHOWN ABOVE.

THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET BACKED
FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR AFFILIATES. THIS
CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
STATES.

          This certifies that _______________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class A-6 Certificates) in that certain beneficial ownership interest
evidenced by all the Class A-6 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

                                      A-6-2

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the last Business Day of the month immediately
preceding the month in which the related Distribution Date occurs (the "Record
Date") from funds in the Distribution Account in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A-6 Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Class A-6
Certificates, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose as provided in the Agreement.

          The Certificate Interest Rate for the Class A-6 Certificates for each
Distribution Date will be a per annum rate equal to the lesser of (i) 4.780% and
(ii) the Pool Cap. Interest will accrue on the Class A-6 Certificates during
each Interest Accrual Period at the Certificate Interest Rate.

          This Certificate is one of a duly authorized issue of Certificates
designated as ABFC 2005-AQ1 Trust, Asset-Backed Certificates, of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class A-6 Certificates.

          The Class A-6 Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Accounts and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer and 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 entitled to the Voting Rights
identified 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 herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement

                                      A-6-3

also permits the amendment thereof, in certain limited circumstances, without
the consent of the Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.

          The Depositor, the Servicer, the Trustee and the Certificate Registrar
and any agent of the Depositor, the Servicer, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Servicer, the
Trustee, the Certificate Registrar nor any such agent shall be affected by
notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Pool
Balance of the Mortgage Loans at the time of purchase being 10% or less of the
Cut-off Date Aggregate Principal Balance.

          The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.

                                      A-6-4

          Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      A-6-5

          IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated:

                                        DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                           as Trustee

                                        By:
                                            ------------------------------------
                                            Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

          This is one of the Certificates referred to in the within-mentioned
Agreement.

                                        DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                          as Certificate Registrar

                                        By:
                                            ------------------------------------
                                            Authorized Signatory

Date of authentication:

                                      A-6-6

                                  ABBREVIATIONS

          The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common           UNIF GIFT MIN ACT - Custodian
                                                             (Cust) (Minor)
TEN ENT - as tenants by the entireties                       under Uniform Gifts
                                                             to Minors Act
JT TEN  - as joint tenants with right                        ___________________
          of survivorship and not as                               (State)
          tenants in common

          Additional abbreviations may also be used though not in the above
list.

                                   ASSIGNMENT

          FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

          I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________

Dated:

                                           -------------------------------------
                                           Signature by or on behalf of assignor

                                           -------------------------------------
                                           Signature Guaranteed

                                      A-6-7

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.

                                      A-6-8

                                   EXHIBIT B-1

                         [FORM OF CLASS M-1 CERTIFICATE]

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE 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.

THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A CERTIFICATES
AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS BENEFICIAL
OWNERSHIP OF 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") AND CERTAIN OTHER
PROPERTY.

THE CLASS M-1 CERTIFICATES ARE ONLY OFFERED FOR SALE, AND ARE ONLY TRANSFERABLE
TO PLAN INVESTORS IF AN EXEMPTION FROM THE PROHIBITED TRANSACTION RULES OF ERISA
AND THE CODE APPLIES.

                                      B-1-1

                               ABFC 2005-AQ1 TRUST
                            ASSET-BACKED CERTIFICATES
                           SERIES 2005-AQ1, CLASS M-1

evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate one- to four-family first lien mortgage
loans formed and sold by

                        ASSET BACKED FUNDING CORPORATION

Series 2005-AQ1, Class M-1

Certificate Interest Rate: Fixed

Date of Pooling and Servicing Agreement and Cut-off Date: June 1, 2005

First Distribution Date: July 25, 2005

No.

CUSIP: 04542B MV 1

ISIN: US04542BMV17

Original Class Certificate Principal Balance of the Class M-1 Certificates as of
the Closing Date: $36,818,000

Initial Certificate Principal Balance: $[__]

Servicer: Ameriquest Mortgage Company

Trustee: Deutsche Bank National Trust Company

Closing Date: June 7, 2005

DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN
THE AMOUNT SHOWN ABOVE.

THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET BACKED
FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR AFFILIATES. THIS
CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
STATES.

          This certifies that _________________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class M-1 Certificates) in that certain beneficial ownership interest
evidenced by all the Class M-1 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

                                      B-1-2

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the last Business Day of the month immediately
preceding the month in which the related Distribution Date occurs (the "Record
Date") from funds in the Distribution Account in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-1 Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Class M-1
Certificates, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose as provided in the Agreement.

          The Certificate Interest Rate for the Class M-1 Certificates for each
Distribution Date will be a per annum rate equal to the lesser of (i) 5.240% and
(ii) the Pool Cap. Interest will accrue on the Class M-1 Certificates during
each Interest Accrual Period at the Certificate Interest Rate.

          This Certificate is one of a duly authorized issue of Certificates
designated as ABFC 2005-AQ1 Trust, Asset-Backed Certificates, of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class M-1 Certificates.

          The Class M-1 Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Accounts and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          This certificate is subordinated in right of payment to the Class A
Certificates as described in the Agreement referred to herein.

          The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, 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 entitled to the Voting Rights
identified in the Agreement. Any such consent by the Holder of this

                                      B-1-3

Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates.

          As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.

          The Depositor, the Servicer, the Trustee and the Certificate Registrar
and any agent of the Depositor, the Servicer, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Servicer, the
Trustee, the Certificate Registrar nor any such agent shall be affected by
notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Pool
Balance of the Mortgage Loans at the time of purchase being 10% or less of the
Cut-off Date Aggregate Principal Balance.

                                      B-1-4

          The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.

          Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      B-1-5

          IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated:

                                        DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                           as Trustee

                                        By:
                                            -------------------------------
                                            Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

          This is one of the Certificates referred to in the within-mentioned
Agreement.

                                        DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                           as Certificate Registrar

                                        By:
                                            -------------------------------
                                            Authorized Signatory

Date of authentication:

                                      B-1-6

                                  ABBREVIATIONS

          The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common           UNIF GIFT MIN ACT - Custodian
                                                             (Cust) (Minor)
TEN ENT - as tenants by the entireties                       under Uniform Gifts
                                                             to Minors Act
JT TEN  - as joint tenants with right                        ___________________
          of survivorship and not as                               (State)
          tenants in common

          Additional abbreviations may also be used though not in the above
list.

                                   ASSIGNMENT

          FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

          I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________

Dated:

                                           -------------------------------------
                                           Signature by or on behalf of assignor

                                           -------------------------------------
                                           Signature Guaranteed

                                      B-1-7

                            DISTRIBUTION INSTRUCTIONS

          The assignee should include the following for purposes of
distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
________________________________________________________________________________
for the account of _____________________________, account number ______________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.

                                      B-1-8

                                   EXHIBIT B-2

                         [FORM OF CLASS M-2 CERTIFICATE]

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE 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.

THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A AND CLASS
M-1 CERTIFICATES AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.

FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS BENEFICIAL
OWNERSHIP OF 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") AND CERTAIN OTHER
PROPERTY.

THE CLASS M-2 CERTIFICATES ARE ONLY OFFERED FOR SALE, AND ARE ONLY TRANSFERABLE
TO PLAN INVESTORS IF AN EXEMPTION FROM THE PROHIBITED TRANSACTION RULES OF ERISA
AND THE CODE APPLIES.

                                      B-2-1

                               ABFC 2005-AQ1 TRUST
                            ASSET-BACKED CERTIFICATES
                           SERIES 2005-AQ1, CLASS M-2

evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate one- to four-family first lien mortgage
loans formed and sold by

                        ASSET BACKED FUNDING CORPORATION

Series 2005-AQ1, Class M-2

Certificate Interest Rate: Fixed

Date of Pooling and Servicing Agreement and Cut-off Date: June 1, 2005

First Distribution Date: July 25, 2005

No.

CUSIP: 04542B MW 9

ISIN: US04542BMW99

Original Class Certificate Principal Balance of the Class M-2 Certificates as of
the Closing Date: $13,499,000

Initial Certificate Principal Balance: $[__]

Servicer: Ameriquest Mortgage Company

Trustee: Deutsche Bank National Trust Company

Closing Date: June 7, 2005

DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN
THE AMOUNT SHOWN ABOVE.

THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET BACKED
FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR AFFILIATES. THIS
CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
STATES.

          This certifies that _________________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class M-2 Certificates) in that certain beneficial ownership interest
evidenced by all the Class M-2 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

                                      B-2-2

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the last Business Day of the month immediately
preceding the month in which the related Distribution Date occurs (the "Record
Date") from funds in the Distribution Account in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-2 Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Class M-2
Certificates, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose as provided in the Agreement.

          The Certificate Interest Rate for the Class M-2 Certificates for each
Distribution Date will be a per annum rate equal to the lesser of (i) 5.440% and
(ii) the Pool Cap. Interest will accrue on the Class M-2 Certificates during
each Interest Accrual Period at the Certificate Interest Rate.

          This Certificate is one of a duly authorized issue of Certificates
designated as ABFC 2005-AQ1 Trust, Asset-Backed Certificates, of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class M-2 Certificates.

          The Class M-2 Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Accounts and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          This certificate is subordinated in right of payment to the Class A
Certificates and Class M-1 Certificates as described in the Agreement referred
to herein.

          The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, 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 entitled to the Voting Rights
identified in the Agreement. Any such consent by the Holder of this

                                      B-2-3

Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates.

          As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.

          The Depositor, the Servicer, the Trustee and the Certificate Registrar
and any agent of the Depositor, the Servicer, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Servicer, the
Trustee, the Certificate Registrar nor any such agent shall be affected by
notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Pool
Balance of the Mortgage Loans at the time of purchase being 10% or less of the
Cut-off Date Aggregate Principal Balance.

                                      B-2-4

          The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.

          Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      B-2-5

          IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated:

                                            DEUTSCHE BANK NATIONAL TRUST
                                               COMPANY, as Trustee

                                            By:
                                                --------------------------------
                                                Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

          This is one of the Certificates referred to in the within-mentioned
Agreement.

                                            DEUTSCHE BANK NATIONAL TRUST
                                               COMPANY, as Certificate Registrar

                                            By:
                                                --------------------------------
                                                Authorized Signatory

Date of authentication:

                                      B-2-6

                                  ABBREVIATIONS

          The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common           UNIF GIFT MIN ACT - Custodian
                                                             (Cust) (Minor)
TEN ENT - as tenants by the entireties                       under Uniform Gifts
                                                             to Minors Act
JT TEN  - as joint tenants with right                        ___________________
          of survivorship and not as                               (State)
          tenants in common

          Additional abbreviations may also be used though not in the above
list.

                                   ASSIGNMENT

          FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

          I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________

Dated:

                                           -------------------------------------
                                           Signature by or on behalf of assignor

                                           -------------------------------------
                                           Signature Guaranteed

                                      B-2-7

                            DISTRIBUTION INSTRUCTIONS

          The assignee should include the following for purposes of
distribution:

          Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of __________________________, account number _________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ___________________________________, as its agent.

                                      B-2-8

                                   EXHIBIT B-3

                         [FORM OF CLASS M-3 CERTIFICATE]

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE 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.

THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A, CLASS M-1
AND CLASS M-2 CERTIFICATES AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.

FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS BENEFICIAL
OWNERSHIP OF 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") AND CERTAIN OTHER
PROPERTY.

THE CLASS M-3 CERTIFICATES ARE ONLY OFFERED FOR SALE, AND ARE ONLY TRANSFERABLE
TO PLAN INVESTORS IF AN EXEMPTION FROM THE PROHIBITED TRANSACTION RULES OF ERISA
AND THE CODE APPLIES.

                                      B-3-1

                               ABFC 2005-AQ1 TRUST
                            ASSET-BACKED CERTIFICATES
                           SERIES 2005-AQ1, CLASS M-3

evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate one- to four-family first lien mortgage
loans formed and sold by

                        ASSET BACKED FUNDING CORPORATION

Series 2005-AQ1, Class M-3

Certificate Interest Rate: Fixed

Date of Pooling and Servicing Agreement and Cut-off Date: June 1, 2005

First Distribution Date: July 25, 2005

No.

CUSIP: 04542B MX 7

ISIN: US04542BMX72

Original Class Certificate Principal Balance of the Class M-3 Certificates as of
the Closing Date: $3,273,000

Initial Certificate Principal Balance: $[__]

Servicer: Ameriquest Mortgage Company

Trustee: Deutsche Bank National Trust Company

Closing Date: June 7, 2005

DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN
THE AMOUNT SHOWN ABOVE.

THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET BACKED
FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR AFFILIATES. THIS
CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
STATES.

          This certifies that _________________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class M-3 Certificates) in that certain beneficial ownership interest
evidenced by all the Class M-3 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

                                      B-3-2

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the last Business Day of the month immediately
preceding the month in which the related Distribution Date occurs (the "Record
Date") from funds in the Distribution Account in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-3 Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Class M-3
Certificates, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose as provided in the Agreement.

          The Certificate Interest Rate for the Class M-3 Certificates for each
Distribution Date will be a per annum rate equal to the lesser of (i) 5.740% and
(ii) the Pool Cap. Interest will accrue on the Class M-3 Certificates during
each Interest Accrual Period at the Certificate Interest Rate.

          This Certificate is one of a duly authorized issue of Certificates
designated as ABFC 2005-AQ1 Trust, Asset-Backed Certificates, of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class M-3 Certificates.

          The Class M-3 Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Accounts and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          This certificate is subordinated in right of payment to the Class A
Certificates, Class M-1 Certificates and Class M-2 Certificates as described in
the Agreement referred to herein.

          The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, 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 entitled to

                                      B-3-3

the Voting Rights identified 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 herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.

          The Depositor, the Servicer, the Trustee and the Certificate Registrar
and any agent of the Depositor, the Servicer, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Servicer, the
Trustee, the Certificate Registrar nor any such agent shall be affected by
notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Pool
Balance of the Mortgage Loans at the time of purchase being 10% or less of the
Cut-off Date Aggregate Principal Balance.

                                      B-3-4

          The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.

          Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      B-3-5

          IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated:

                                      DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                         as Trustee

                                      By:
                                          --------------------------------------
                                          Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

          This is one of the Certificates referred to in the within-mentioned
Agreement.

                                      DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                         as Certificate Registrar

                                      By:
                                          --------------------------------------
                                          Authorized Signatory

Date of authentication:

                                      B-3-6

                                  ABBREVIATIONS

          The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common           UNIF GIFT MIN ACT - Custodian
                                                             (Cust) (Minor)
TEN ENT - as tenants by the entireties                       under Uniform Gifts
                                                             to Minors Act
JT TEN  - as joint tenants with right                        ___________________
          of survivorship and not as                               (State)
          tenants in common

          Additional abbreviations may also be used though not in the above
list.

                                   ASSIGNMENT

          FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) ____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

          I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:

________________________________________________________________________________

Dated:

                                           -------------------------------------
                                           Signature by or on behalf of assignor

                                           -------------------------------------
                                           Signature Guaranteed

                                      B-3-7

                            DISTRIBUTION INSTRUCTIONS

          The assignee should include the following for purposes of
distribution:

          Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of ___________________________, account number ________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ___________________________________, as its agent.

                                      B-3-8

                                   EXHIBIT B-4

                         [FORM OF CLASS M-4 CERTIFICATE]

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE 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.

THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A, CLASS M-1,
CLASS M-2 AND CLASS M-3 CERTIFICATES AS DESCRIBED IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.

FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS BENEFICIAL
OWNERSHIP OF 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") AND CERTAIN OTHER
PROPERTY.

THE CLASS M-4 CERTIFICATES ARE ONLY OFFERED FOR SALE, AND ARE ONLY TRANSFERABLE
TO PLAN INVESTORS IF AN EXEMPTION FROM THE PROHIBITED TRANSACTION RULES OF ERISA
AND THE CODE APPLIES.

                                      B-4-1

                               ABFC 2005-AQ1 TRUST
                            ASSET-BACKED CERTIFICATES
                           SERIES 2005-AQ1, CLASS M-4

evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate one- to four-family first lien mortgage
loans formed and sold by

                        ASSET BACKED FUNDING CORPORATION

Series 2005-AQ1, Class M-4

Certificate Interest Rate: Fixed

Date of Pooling and Servicing Agreement and Cut-off Date: June 1, 2005

First Distribution Date: July 25, 2005

No.

CUSIP: 04542B MY 5

ISIN: US04542BMY55

Original Class Certificate Principal Balance of the Class M-4 Certificates as of
the Closing Date: $2,863,000

Initial Certificate Principal Balance: $[__]

Servicer: Ameriquest Mortgage Company

Trustee: Deutsche Bank National Trust Company

Closing Date: June 7, 2005

DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN
THE AMOUNT SHOWN ABOVE.

THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET BACKED
FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR AFFILIATES. THIS
CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
STATES.

          This certifies that _________________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class M-4 Certificates) in that certain beneficial ownership interest
evidenced by all the Class M-4 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

                                      B-4-2

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the last Business Day of the month immediately
preceding the month in which the related Distribution Date occurs (the "Record
Date") from funds in the Distribution Account in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-4 Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Class M-4
Certificates, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose as provided in the Agreement.

          The Certificate Interest Rate for the Class M-4 Certificates for each
Distribution Date will be a per annum rate equal to the lesser of (i) 5.750% and
(ii) the Pool Cap. Interest will accrue on the Class M-4 Certificates during
each Interest Accrual Period at the Certificate Interest Rate.

          This Certificate is one of a duly authorized issue of Certificates
designated as ABFC 2005-AQ1 Trust, Asset-Backed Certificates, of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class M-4 Certificates.

          The Class M-4 Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Accounts and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          This certificate is subordinated in right of payment to the Class A
Certificates, Class M-1 Certificates, Class M-2 Certificates and Class M-3
Certificates as described in the Agreement referred to herein.

          The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, 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 entitled to

                                      B-4-3

the Voting Rights identified 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 herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.

          The Depositor, the Servicer, the Trustee and the Certificate Registrar
and any agent of the Depositor, the Servicer, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Servicer, the
Trustee, the Certificate Registrar nor any such agent shall be affected by
notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Pool
Balance of the Mortgage Loans at the time of purchase being 10% or less of the
Cut-off Date Aggregate Principal Balance.

                                      B-4-4

          The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.

          Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      B-4-5

          IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated:

                                      DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                         as Trustee

                                      By:
                                          --------------------------------------
                                          Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

          This is one of the Certificates referred to in the within-mentioned
Agreement.

                                      DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                         as Certificate Registrar

                                      By:
                                          --------------------------------------
                                          Authorized Signatory

Date of authentication:

                                      B-4-6

                                  ABBREVIATIONS

          The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common           UNIF GIFT MIN ACT - Custodian
                                                             (Cust) (Minor)
TEN ENT - as tenants by the entireties                       under Uniform Gifts
                                                             to Minors Act
JT TEN  - as joint tenants with right                        ___________________
          of survivorship and not as                               (State)
          tenants in common

          Additional abbreviations may also be used though not in the above
list.

                                   ASSIGNMENT

          FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
 _______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)  ____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

          I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________

Dated:

                                         ---------------------------------------
                                         Signature by or on behalf of assignor

                                         ---------------------------------------
                                         Signature Guaranteed

                                      B-4-7

                            DISTRIBUTION INSTRUCTIONS

          The assignee should include the following for purposes of
distribution:

          Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of ____________________________, account number _______________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ___________________________________, as its agent.

                                      B-4-8

                                   EXHIBIT B-5

                         [FORM OF CLASS M-5 CERTIFICATE]

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE 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.

THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A, CLASS M-1,
CLASS M-2, CLASS M-3 AND CLASS M-4 CERTIFICATES AS DESCRIBED IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.

FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS BENEFICIAL
OWNERSHIP OF 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") AND CERTAIN OTHER
PROPERTY.

THE CLASS M-5 CERTIFICATES ARE ONLY OFFERED FOR SALE, AND ARE ONLY TRANSFERABLE
TO PLAN INVESTORS IF AN EXEMPTION FROM THE PROHIBITED TRANSACTION RULES OF ERISA
AND THE CODE APPLIES.

                                      B-5-1

                               ABFC 2005-AQ1 TRUST
                            ASSET-BACKED CERTIFICATES
                           SERIES 2005-AQ1, CLASS M-5

evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate one- to four-family first lien mortgage
loans formed and sold by

                        ASSET BACKED FUNDING CORPORATION

Series 2005-AQ1, Class M-5

Certificate Interest Rate: Fixed

Date of Pooling and Servicing Agreement and Cut-off Date: June 1, 2005

First Distribution Date: July 25, 2005

No.

CUSIP: 04542B MZ 2

ISIN: US04542BMZ21

Original Class Certificate Principal Balance of the Class M-5 Certificates as of
the Closing Date: $2,864,000

Initial Certificate Principal Balance: $[__]

Servicer: Ameriquest Mortgage Company

Trustee: Deutsche Bank National Trust Company

Closing Date: June 7, 2005

DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN
THE AMOUNT SHOWN ABOVE.

THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET BACKED
FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR AFFILIATES. THIS
CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
STATES.

          This certifies that _________________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class M-5 Certificates) in that certain beneficial ownership interest
evidenced by all the Class M-5 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

                                      B-5-2

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the last Business Day of the month immediately
preceding the month in which the related Distribution Date occurs (the "Record
Date") from funds in the Distribution Account in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-5 Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Class M-5
Certificates, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose as provided in the Agreement.

          The Certificate Interest Rate for the Class M-5 Certificates for each
Distribution Date will be a per annum rate equal to the lesser of (i) 5.750% and
(ii) the Pool Cap. Interest will accrue on the Class M-5 Certificates during
each Interest Accrual Period at the Certificate Interest Rate.

          This Certificate is one of a duly authorized issue of Certificates
designated as ABFC 2005-AQ1 Trust, Asset-Backed Certificates, of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class M-5 Certificates.

          The Class M-5 Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Accounts and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          This certificate is subordinated in right of payment to the Class A
Certificates, Class M-1 Certificates, Class M-2 Certificates, Class M-3
Certificates and Class M-4 Certificates as described in the Agreement referred
to herein.

          The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, 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 entitled to

                                      B-5-3

the Voting Rights identified 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 herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.

          The Depositor, the Servicer, the Trustee and the Certificate Registrar
and any agent of the Depositor, the Servicer, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Servicer, the
Trustee, the Certificate Registrar nor any such agent shall be affected by
notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Pool
Balance of the Mortgage Loans at the time of purchase being 10% or less of the
Cut-off Date Aggregate Principal Balance.

                                      B-5-4

          The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.

          Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      B-5-5

          IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated:

                                        DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                           as Trustee

                                        By:
                                            ------------------------------------
                                            Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

          This is one of the Certificates referred to in the within-mentioned
Agreement.

                                        DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                           as Certificate Registrar

                                        By:
                                            ------------------------------------
                                            Authorized Signatory

Date of authentication:

                                      B-5-6

                                  ABBREVIATIONS

          The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common           UNIF GIFT MIN ACT - Custodian
                                                             (Cust) (Minor)
TEN ENT - as tenants by the entireties                       under Uniform Gifts
                                                             to Minors Act
JT TEN  - as joint tenants with right
          of survivorship and not as                         ___________________
          tenants in common                                        (State)

          Additional abbreviations may also be used though not in the above
list.

                                   ASSIGNMENT

          FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

          I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________

Dated:

                                        ----------------------------------------
                                        Signature by or on behalf of assignor

                                        ----------------------------------------
                                        Signature Guaranteed

                                      B-5-7

                            DISTRIBUTION INSTRUCTIONS

          The assignee should include the following for purposes of
distribution:

          Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of ______________________________, account number _____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.

                                      B-5-8

                                   EXHIBIT B-6

                         [FORM OF CLASS M-6 CERTIFICATE]

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE 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.

THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A, CLASS M-1,
CLASS M-2, CLASS M-3, CLASS M-4 AND CLASS M-5 CERTIFICATES AS DESCRIBED IN THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS BENEFICIAL
OWNERSHIP OF 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") AND CERTAIN OTHER
PROPERTY.

THE CLASS M-6 CERTIFICATES ARE ONLY OFFERED FOR SALE, AND ARE ONLY TRANSFERABLE
TO PLAN INVESTORS IF AN EXEMPTION FROM THE PROHIBITED TRANSACTION RULES OF ERISA
AND THE CODE APPLIES.

                                      B-6-1

                               ABFC 2005-AQ1 TRUST
                            ASSET-BACKED CERTIFICATES
                           SERIES 2005-AQ1, CLASS M-6

evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate one- to four-family first lien mortgage
loans formed and sold by

                        ASSET BACKED FUNDING CORPORATION

Series 2005-AQ1, Class M-6

Certificate Interest Rate: Fixed

Date of Pooling and Servicing Agreement and Cut-off Date: June 1, 2005

First Distribution Date: July 25, 2005

No.

CUSIP: 04542B NA 6

ISIN: US04542BNA60

Original Class Certificate Principal Balance of the Class M-6 Certificates as of
the Closing Date: $3,273,000

Initial Certificate Principal Balance: $[__]

Servicer: Ameriquest Mortgage Company

Trustee: Deutsche Bank National Trust Company

Closing Date: June 7, 2005

DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN
THE AMOUNT SHOWN ABOVE.

THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET BACKED
FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR AFFILIATES. THIS
CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
STATES.

          This certifies that _________________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class M-6 Certificates) in that certain beneficial ownership interest
evidenced by all the Class M-6 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

                                      B-6-2

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the last Business Day of the month immediately
preceding the month in which the related Distribution Date occurs (the "Record
Date") from funds in the Distribution Account in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-6 Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Class M-6
Certificates, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose as provided in the Agreement.

          The Certificate Interest Rate for the Class M-6 Certificates for each
Distribution Date will be a per annum rate equal to the lesser of (i) 5.750% and
(ii) the Pool Cap. Interest will accrue on the Class M-6 Certificates during
each Interest Accrual Period at the Certificate Interest Rate.

          This Certificate is one of a duly authorized issue of Certificates
designated as ABFC 2005-AQ1 Trust, Asset-Backed Certificates, of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class M-6 Certificates.

          The Class M-6 Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Accounts and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          This certificate is subordinated in right of payment to the Class A
Certificates, Class M-1 Certificates, Class M-2 Certificates, Class M-3
Certificates, Class M-4 Certificates and Class M-5 Certificates as described in
the Agreement referred to herein.

          The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, 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 entitled to

                                      B-6-3

the Voting Rights identified 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 herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.

          The Depositor, the Servicer, the Trustee and the Certificate Registrar
and any agent of the Depositor, the Servicer, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Servicer, the
Trustee, the Certificate Registrar nor any such agent shall be affected by
notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Pool
Balance of the Mortgage Loans at the time of purchase being 10% or less of the
Cut-off Date Aggregate Principal Balance.

                                      B-6-4

          The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.

          Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      B-6-5

          IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated:

                                        DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                           as Trustee

                                        By:
                                            ------------------------------------
                                            Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

          This is one of the Certificates referred to in the within-mentioned
Agreement.

                                        DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                           as Certificate Registrar

                                        By:
                                            ------------------------------------
                                            Authorized Signatory

Date of authentication:

                                      B-6-6

                                  ABBREVIATIONS

          The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common           UNIF GIFT MIN ACT - Custodian
                                                             (Cust) (Minor)
TEN ENT - as tenants by the entireties                       under Uniform Gifts
                                                             to Minors Act
JT TEN  - as joint tenants with right
          of survivorship and not as                         ___________________
          tenants in common                                       (State)

          Additional abbreviations may also be used though not in the above
list.

                                   ASSIGNMENT

          FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

          I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________

Dated:

                                         ---------------------------------------
                                         Signature by or on behalf of assignor

                                         ---------------------------------------
                                         Signature Guaranteed

                                      B-6-7

                           DISTRIBUTION INSTRUCTIONS

          The assignee should include the following for purposes of
distribution:

          Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of ______________________________, account number _____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.

                                      B-6-8

                                   EXHIBIT B-7

                         [FORM OF CLASS B-1 CERTIFICATE]

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE 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.

THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A, CLASS M-1,
CLASS M-2, CLASS M-3, CLASS M-4, CLASS M-5, AND CLASS M-6 CERTIFICATES AS
DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS BENEFICIAL
OWNERSHIP OF 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") AND CERTAIN OTHER
PROPERTY.

THIS CLASS B-1 CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES LAWS OF
ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE WITHOUT
SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION THAT DOES
NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 5.02 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.

EACH PURCHASER OF A CLASS B-1 CERTIFICATE WILL BE DEEMED TO REPRESENT AND
WARRANT BY VIRTUE OF ITS ACCEPTANCE OF SUCH NOTE OR INTEREST THEREIN EITHER THAT
IT (I) IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO SECTION 406 OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") OR ANY MATERIALLY
SIMILAR PROVISIONS OF APPLICABLE FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW"),
THE TRUSTEE OF ANY SUCH PLAN OR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN NOR A
PERSON USING THE ASSETS OF ANY SUCH PLAN OR (II) IS AN INSURANCE COMPANY WHICH
IS PURCHASING SUCH CERTIFICATES WITH FUNDS CONTAINED IN AN

                                      B-7-1

"INSURANCE COMPANY GENERAL ACCOUNT" (AS SUCH TERM IS DEFINED IN SECTION V(E) OF
PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 ("PTCE 95-60") AND THAT THE
PURCHASE AND HOLDING OF SUCH CERTIFICATES ARE COVERED UNDER SECTIONS I AND III
OF PTCE 95-60.

                                      B-7-2

                               ABFC 2005-AQ1 TRUST
                            ASSET-BACKED CERTIFICATES
                           SERIES 2005-AQ1, CLASS B-1

evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate one- to four-family first lien mortgage
loans formed and sold by

                        ASSET BACKED FUNDING CORPORATION

Series 2005-AQ1, Class B-1

Certificate Interest Rate: Floating

Date of Pooling and Servicing Agreement and Cut-off Date: June 1, 2005

First Distribution Date: July 25, 2005

No.

CUSIP: 04542B MM 1

ISIN: US04542BMM18

Original Class Certificate Principal Balance of the Class B-1 Certificates as of
the Closing Date: $3,272,000

Initial Certificate Principal Balance: $[__]

Servicer: Ameriquest Mortgage Company

Trustee: Deutsche Bank National Trust Company

Closing Date: June 7, 2005

DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN
THE AMOUNT SHOWN ABOVE.

THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET BACKED
FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR AFFILIATES. THIS
CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
STATES.

          This certifies that _________________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class B-1 Certificates) in that certain beneficial ownership interest
evidenced by all the Class B-1 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

                                      B-7-3

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the last Business Day of the month immediately
preceding the month in which the related Distribution Date occurs (the "Record
Date") from funds in the Distribution Account in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class B-1 Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Class B-1
Certificates, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose as provided in the Agreement.

          The Certificate Interest Rate for the Class B-1 Certificates for each
Distribution Date will be a per annum rate equal to the lesser of (i) 5.750% and
(ii) the Pool Cap. Interest will accrue on the Class B-1 Certificates during
each Interest Accrual Period at the Certificate Interest Rate.

          This Certificate is one of a duly authorized issue of Certificates
designated as ABFC 2005-AQ1 Trust, Asset-Backed Certificates, of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class B-1 Certificates.

          The Class B-1 Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Accounts and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  This certificate is subordinated in right of payment to the
Class A Certificates, Class M-1 Certificates, Class M-2 Certificates, Class M-3
Certificates, Class M-4 Certificates, Class M-5 Certificates, and Class M-6
Certificates, as described in the Agreement referred to herein.

          The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, 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 entitled to

                                      B-7-4

the Voting Rights identified 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 herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.

          No transfer of this Certificate shall be made unless that transfer is
made pursuant to an effective registration statement under the 1933 Act and
effective registration or qualification under applicable state securities laws,
or is made in a transaction that does not require such registration or
qualification. In the event that a transfer is to be made without registration
or qualification, the Trustee shall require, in order to assure compliance with
such laws, either (i) in the case of a transfer made in reliance on Rule 144A
under the 1933 Act, that the proposed transferee delivers to the Trustee a
completed investment letter in substantially the form attached to the Agreement
as Exhibit J, or (ii) in the case of any other transfer, that the
Certificateholder desiring to effect the transfer and such Certificateholder's
prospective transferee each execute a representation letter in substantially the
forms of Exhibit L and Exhibit J attached to the Agreement, respectively,
certifying to the Depositor and the Trustee the facts surrounding the transfer
as described in Section 5.02 of the Agreement, or as provided in the Agreement
the Depositor and the Trustee shall require an Opinion of Counsel satisfactory
to them that such transfer may be made without such registration or
qualification, which Opinion of Counsel shall not be an expense of the
Depositor, the Trustee or the Certificate Registrar, in their respective
capacities as such. None of the Depositor, the Certificate Registrar nor the
Trustee is obligated to register or qualify the Class of Certificates specified
on the face hereof under the 1933 Act or any other securities law or to take any
action not otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any

                                      B-7-5

such Certificateholder desiring to effect such transfer shall, and does hereby
agree to, indemnify the Trustee, the Depositor, the Certificate Registrar and
the Servicer against any liability that may result if the transfer is not so
exempt or is not made in accordance with such federal and state laws.

          The Depositor, the Servicer, the Trustee and the Certificate Registrar
and any agent of the Depositor, the Servicer, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Servicer, the
Trustee, the Certificate Registrar nor any such agent shall be affected by
notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Pool
Balance of the Mortgage Loans at the time of purchase being 10% or less of the
Cut-off Date Aggregate Principal Balance.

          The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.

          Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      B-7-6

          IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated:

                                         DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                            as Trustee

                                         By:
                                             -----------------------------------
                                             Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

          This is one of the Certificates referred to in the within-mentioned
Agreement.

                                         DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                            as Certificate Registrar

                                         By:
                                             -----------------------------------
                                             Authorized Signatory

Date of authentication:

                                      B-7-7

                                  ABBREVIATIONS

          The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common           UNIF GIFT MIN ACT - Custodian
                                                             (Cust) (Minor)
TEN ENT - as tenants by the entireties                       under Uniform Gifts
                                                             to Minors Act
JT TEN  - as joint tenants with right
          of survivorship and not as                         ___________________
          tenants in common                                        (State)

          Additional abbreviations may also be used though not in the above
list.

                                   ASSIGNMENT

          FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

          I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________

Dated:

                                         ---------------------------------------
                                         Signature by or on behalf of assignor

                                         ---------------------------------------
                                         Signature Guaranteed

                                      B-7-8

                            DISTRIBUTION INSTRUCTIONS

          The assignee should include the following for purposes of
distribution:

          Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of ______________________________, account number _____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.

                                      B-7-9

                                   EXHIBIT B-8

                         [FORM OF CLASS B-2 CERTIFICATE]

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE 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.

THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A, CLASS M-1,
CLASS M-2, CLASS M-3, CLASS M-4, CLASS M-5, CLASS M-6 AND CLASS B-1 CERTIFICATES
AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS BENEFICIAL
OWNERSHIP OF 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") AND CERTAIN OTHER
PROPERTY.

THIS CLASS B-2 CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES LAWS OF
ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE WITHOUT
SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION THAT DOES
NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 5.02 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.

EACH PURCHASER OF A CLASS B-2 CERTIFICATE WILL BE DEEMED TO REPRESENT AND
WARRANT BY VIRTUE OF ITS ACCEPTANCE OF SUCH NOTE OR INTEREST THEREIN EITHER THAT
IT (I) IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO SECTION 406 OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") OR ANY MATERIALLY
SIMILAR PROVISIONS OF APPLICABLE FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW"),
THE TRUSTEE OF ANY SUCH PLAN OR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN NOR A
PERSON USING THE ASSETS OF ANY SUCH PLAN OR (II) IS AN INSURANCE COMPANY WHICH
IS PURCHASING SUCH CERTIFICATES WITH FUNDS CONTAINED IN AN

                                      B-8-1

"INSURANCE COMPANY GENERAL ACCOUNT" (AS SUCH TERM IS DEFINED IN SECTION V(E) OF
PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 ("PTCE 95-60") AND THAT THE
PURCHASE AND HOLDING OF SUCH CERTIFICATES ARE COVERED UNDER SECTIONS I AND III
OF PTCE 95-60.

                                      B-8-2

                               ABFC 2005-AQ1 TRUST
                            ASSET-BACKED CERTIFICATES
                           SERIES 2005-AQ1, CLASS B-2

evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate one- to four-family first lien mortgage
loans formed and sold by

                        ASSET BACKED FUNDING CORPORATION

Series 2005-AQ1, Class B-2

Certificate Interest Rate: Floating

Date of Pooling and Servicing Agreement and Cut-off Date: June 1, 2005

First Distribution Date: July 25, 2005

No.

CUSIP: 04542B MN 9

ISIN: US04542BMN90

Original Class Certificate Principal Balance of the Class B-2 Certificates as of
the Closing Date: $3,682,000

Initial Certificate Principal Balance: $[__]

Servicer: Ameriquest Mortgage Company

Trustee: Deutsche Bank National Trust Company

Closing Date: June 7, 2005

DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN
THE AMOUNT SHOWN ABOVE.

THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET BACKED
FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR AFFILIATES. THIS
CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
STATES.

          This certifies that _________________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class B-2 Certificates) in that certain beneficial ownership interest
evidenced by all the Class B-2 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

                                      B-8-3

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the last Business Day of the month immediately
preceding the month in which the related Distribution Date occurs (the "Record
Date") from funds in the Distribution Account in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class B-2 Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Class B-2
Certificates, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose as provided in the Agreement.

          The Certificate Interest Rate for the Class B-2 Certificates for each
Distribution Date will be a per annum rate equal to the lesser of (i) 5.750% and
(ii) the Pool Cap. Interest will accrue on the Class B-2 Certificates during
each Interest Accrual Period at the Certificate Interest Rate.

          This Certificate is one of a duly authorized issue of Certificates
designated as ABFC 2005-AQ1 Trust, Asset-Backed Certificates, of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class B-2 Certificates.

          The Class B-2 Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Accounts and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          This certificate is subordinated in right of payment to the Class A
Certificates, Class M-1 Certificates, Class M-2 Certificates, Class M-3
Certificates, Class M-4 Certificates, Class M-5 Certificates, Class M-6
Certificates and Class B-1 Certificates, as described in the Agreement referred
to herein.

          The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, 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 entitled to

                                      B-8-4

the Voting Rights identified 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 herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.

          No transfer of this Certificate shall be made unless that transfer is
made pursuant to an effective registration statement under the 1933 Act and
effective registration or qualification under applicable state securities laws,
or is made in a transaction that does not require such registration or
qualification. In the event that a transfer is to be made without registration
or qualification, the Trustee shall require, in order to assure compliance with
such laws, either (i) in the case of a transfer made in reliance on Rule 144A
under the 1933 Act, that the proposed transferee delivers to the Trustee a
completed investment letter in substantially the form attached to the Agreement
as Exhibit J, or (ii) in the case of any other transfer, that the
Certificateholder desiring to effect the transfer and such Certificateholder's
prospective transferee each execute a representation letter in substantially the
forms of Exhibit L and Exhibit J attached to the Agreement, respectively,
certifying to the Depositor and the Trustee the facts surrounding the transfer
as described in Section 5.02 of the Agreement, or as provided in the Agreement
the Depositor and the Trustee shall require an Opinion of Counsel satisfactory
to them that such transfer may be made without such registration or
qualification, which Opinion of Counsel shall not be an expense of the
Depositor, the Trustee or the Certificate Registrar, in their respective
capacities as such. None of the Depositor, the Certificate Registrar nor the
Trustee is obligated to register or qualify the Class of Certificates specified
on the face hereof under the 1933 Act or any other securities law or to take any
action not otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any

                                      B-8-5

such Certificateholder desiring to effect such transfer shall, and does hereby
agree to, indemnify the Trustee, the Depositor, the Certificate Registrar and
the Servicer against any liability that may result if the transfer is not so
exempt or is not made in accordance with such federal and state laws.

          The Depositor, the Servicer, the Trustee and the Certificate Registrar
and any agent of the Depositor, the Servicer, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Servicer, the
Trustee, the Certificate Registrar nor any such agent shall be affected by
notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Pool
Balance of the Mortgage Loans at the time of purchase being 10% or less of the
Cut-off Date Aggregate Principal Balance.

          The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.

          Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      B-8-6

          IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated:

                                        DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                           as Trustee

                                        By:
                                            ------------------------------------
                                            Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

          This is one of the Certificates referred to in the within-mentioned
Agreement.

                                        DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                           as Certificate Registrar

                                        By:
                                            ------------------------------------
                                            Authorized Signatory

Date of authentication:

                                      B-8-7

                                  ABBREVIATIONS

          The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common           UNIF GIFT MIN ACT - Custodian
                                                             (Cust) (Minor)
TEN ENT - as tenants by the entireties                       under Uniform Gifts
                                                             to Minors Act

JT TEN  - as joint tenants with right                        ___________________
          of survivorship and not as                              (State)
          tenants in common

          Additional abbreviations may also be used though not in the above
list.

                                   ASSIGNMENT

          FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to _____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

          I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:

________________________________________________________________________________

Dated:

                                        ----------------------------------------
                                        Signature by or on behalf of assignor

                                        ----------------------------------------
                                        Signature Guaranteed

                                      B-8-8

                            DISTRIBUTION INSTRUCTIONS

          The assignee should include the following for purposes of
distribution:

          Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.

                                      B-8-9

                                   EXHIBIT C-1

                         [FORM OF CLASS CE CERTIFICATES]

FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A DIRECT OR
INDIRECT BENEFICIAL INTEREST IN 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") AND
CERTAIN OTHER PROPERTY.

THIS CLASS CE CERTIFICATE IS SUBORDINATE TO THE OFFERED CERTIFICATES OF THIS
SERIES TO THE EXTENT DESCRIBED HEREIN AND IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.

THIS CLASS CE CERTIFICATE WILL NOT BE ENTITLED TO PAYMENTS UNTIL SUCH TIME AS
DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

THIS CLASS CE CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES LAWS OF
ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE WITHOUT
SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION THAT DOES
NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 5.02 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.

NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED, SECTION 4975 OF THE CODE OR ANY MATERIALLY SIMILAR PROVISIONS
OF APPLICABLE FEDERAL, STATE OR LOCAL LAW WILL BE REGISTERED EXCEPT AS PROVIDED
IN THE POOLING AND SERVICING AGREEMENT.

                                      C-1-1

                               ABFC 2005-AQ1 TRUST
                            ASSET-BACKED CERTIFICATES
                            SERIES 2005-AQ1, CLASS CE

evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate one- to four-family first lien mortgage
loans formed and sold by

                        ASSET BACKED FUNDING CORPORATION

Series 2005-AQ1, Class CE

Date of Pooling and Servicing Agreement and Cut-off Date: June 1, 2005

First Distribution Date: July 25, 2005

No.

Percentage Interest: 100%

Servicer: Ameriquest Mortgage Company

Trustee: Deutsche Bank National Trust Company

Closing Date: June 7, 2005

     THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
     BACKED FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR
     AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
     INSTRUMENTALITY OF THE UNITED STATES.

          This certifies that __________________________________ is the
registered owner of a Percentage Interest set forth above in that certain
beneficial ownership interest evidenced by all the Class CE Certificates in the
Trust Fund created pursuant to a Pooling and Servicing Agreement, dated as
specified above (the "Agreement"), among Asset Backed Funding Corporation
(hereinafter called the "Depositor," which term includes any successor entity
under the Agreement), the Servicer and the Trustee, a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the last Business Day of the month immediately
preceding the month in which the related Distribution Date occurs (the "Record
Date"), from funds in the Distribution Account in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class CE Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately

                                      C-1-2

available funds to the account of the Person entitled thereto if such Person
shall have so notified the Certificate Registrar in writing at least five
Business Days prior to the Record Date immediately prior to such Distribution
Date and is the registered owner of Class CE Certificates, or by check mailed by
first class mail to the address of the Person entitled thereto, as such name and
address shall appear on the Certificate Register, provided that the Certificate
Registrar may deduct a reasonable wire transfer fee from any payment made by
wire transfer. Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee for that purpose as provided in the
Agreement.

          This Certificate is one of a duly authorized issue of Certificates
designated as ABFC 2005-AQ1 Trust, Asset-Backed Certificates, of the Series
specified on the face hereof (herein called the "Certificates") and representing
the Percentage Interest specified on the face hereof.

          The Class CE Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Accounts and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, 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 entitled to the Voting Rights
identified 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 herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.

          As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are

                                      C-1-3

exchangeable for new Certificates of the same Class in authorized denominations
evidencing the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.

          No transfer of this Certificate shall be made unless that transfer is
made pursuant to an effective registration statement under the 1933 Act and
effective registration or qualification under applicable state securities laws,
or is made in a transaction that does not require such registration or
qualification. In the event that a transfer is to be made without registration
or qualification, the Certificate Registrar shall require, in order to assure
compliance with such laws, either (i) that the Certificateholder desiring to
effect the transfer and such Certificateholder's prospective transferee each
execute a representation letter in the form described by the Agreement
certifying to the Certificate Registrar the facts surrounding the transfer, or
(ii) unless such transfer is made in reliance upon Rule 144A under the 1933 Act,
that the Depositor and the Certificate Registrar receive an Opinion of Counsel
satisfactory to them that such transfer may be made without such registration or
qualification, which Opinion of Counsel shall not be an expense of the
Depositor, the Trustee or the Certificate Registrar, in their respective
capacities as such. None of the Depositor, the Certificate Registrar or the
Trustee is obligated to register or qualify the Class of Certificates specified
on the face hereof under the 1933 Act or any other securities law or to take any
action not otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any such Certificateholder
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee, the Depositor, the Certificate Registrar and any Servicer against any
liability that may result if the transfer is not so exempt or is not made in
accordance with such federal and state laws.

          No transfer of a Certificate or any interest therein may be made to
employee benefit plans and certain other retirement plans and arrangements,
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 are subject to the fiduciary responsibility
provisions of ERISA, Section 4975 of the Code or any materially similar
provisions of applicable federal, state or local law (collectively, "Plans") or
any person who is directly or indirectly purchasing the Certificate or interest
therein on behalf of, as named fiduciary of, as trustee of, or with assets of a
Plan except as provided in the Pooling and Servicing Agreement.

          No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.

          The Depositor, the Servicer, the Trustee and the Certificate Registrar
and any agent of the Depositor, the Servicer, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Servicer, the
Trustee, the Certificate Registrar nor any such agent shall be affected by
notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the

                                      C-1-4

Trustee and required to be paid to them pursuant to the Agreement following the
earlier of (i) the final payment or other liquidation (or any advance with
respect thereto) of the last Mortgage Loan remaining in the Trust Fund, and (ii)
the purchase by the party designated in the Agreement at a price determined as
provided in the Agreement from the Trust Fund of all Mortgage Loans and all
property acquired in respect of such Mortgage Loans. The Agreement permits, but
does not require, the party designated in the Agreement to purchase from the
Trust Fund all Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Pool Balance of the Mortgage Loans
at the time of purchase being 10% or less of the Cut-off Date Aggregate
Principal Balance.

          The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assume no responsibility for their correctness.

          Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      C-1-5

          IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated:

                                        DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                           as Trustee

                                        By:
                                            ------------------------------------
                                            Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

          This is one of the Certificates referred to in the within-mentioned
Agreement.

Dated:

                                        DEUTSCHE BANK NATIONAL TRUST COMPANY, as
                                           Certificate Registrar

                                        By:
                                            ------------------------------------
                                            Authorized Signatory

                                      C-1-6

                                  ABBREVIATIONS

          The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common           UNIF GIFT MIN ACT - Custodian
                                                             (Cust) (Minor)
TEN ENT - as tenants by the entireties                       under Uniform Gifts
                                                             to Minors Act
JT TEN  - as joint tenants with right                        ___________________
          of survivorship and not as                              (State)
          tenants in common

          Additional abbreviations may also be used though not in the above
list.

                                   ASSIGNMENT

          FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to _____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

          I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:

________________________________________________________________________________

Dated:

                                        ----------------------------------------
                                        Signature by or on behalf of assignor

                                        ----------------------------------------
                                        Signature Guaranteed

                                      C-1-7

                            DISTRIBUTION INSTRUCTIONS

          The assignee should include the following for purposes of
distribution:

          Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.

                                      C-1-8

                                   EXHIBIT C-2

                          [FORM OF CLASS P CERTIFICATE]

THIS CLASS P CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES LAWS OF
ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE WITHOUT
SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION THAT DOES
NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 5.02 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.

FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS BENEFICIAL
OWNERSHIP OF 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") AND CERTAIN OTHER
PROPERTY.

NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED, SECTION 4975 OF THE CODE OR ANY MATERIALLY SIMILAR PROVISIONS
OF APPLICABLE FEDERAL, STATE OR LOCAL LAW WILL BE REGISTERED EXCEPT AS PROVIDED
IN THE POOLING AND SERVICING AGREEMENT.

                                      C-2-1

                               ABFC 2005-AQ1 TRUST
                            ASSET-BACKED CERTIFICATES
                            SERIES 2005-AQ1, CLASS P

evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate one- to four-family first lien mortgage
loans formed and sold by

                        ASSET BACKED FUNDING CORPORATION

Series 2005-AQ1, Class P

Date of Pooling and Servicing Agreement and Cut-off Date: June 1, 2005

First Distribution Date: July 25, 2005

No.

Original Class Certificate Principal Balance of the Class P Certificates as of
the Closing Date: $100

Initial Certificate Principal Balance: $100

Servicer: Ameriquest Mortgage Company

Trustee: Deutsche Bank National Trust Company

Closing Date: June 7, 2005

     THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
     BACKED FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR
     AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
     INSTRUMENTALITY OF THE UNITED STATES.

          This certifies that ___________________________ is the registered
owner of a Percentage Interest set forth above in that certain beneficial
ownership interest evidenced by all the Class P Certificates in the Trust Fund
created pursuant to a Pooling and Servicing Agreement, dated as specified above
(the "Agreement"), among Asset Backed Funding Corporation (hereinafter called
the "Depositor," which term includes any successor entity under the Agreement),
the Servicer and the Trustee, a summary of certain of the pertinent provisions
of which is set forth hereafter. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the last Business Day of the month immediately
preceding the month in which the related Distribution Date occurs (the "Record
Date"), from Prepayment Charges, Originator Prepayment Charge Payment Amounts
and Servicer Prepayment Charge Payment Amounts in the Distribution Account in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to

                                      C-2-2

be distributed to the Holders of Class P Certificates on such Distribution Date
pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Class P
Certificates, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose as provided in the Agreement.

          This Certificate is one of a duly authorized issue of Certificates
designated as ABFC 2005-AQ1 Trust, Asset-Backed Certificates, of the Series
specified on the face hereof (herein called the "Certificates") and representing
the Percentage Interest specified on the face hereof.

          The Class P Certificates are limited in right of payment to Prepayment
Charges received on the Mortgage Loans, Originator Prepayment Charge Payment
Amounts and Servicer Prepayment Charge Payment Amounts, all as more specifically
set forth herein and in the Agreement. As provided in the Agreement, withdrawals
from the Collection Accounts and the Distribution Account may be made from time
to time for purposes other than distributions to Certificateholders, such
purposes including reimbursement of advances made, or certain expenses incurred,
with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, 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 entitled to the Voting Rights
identified 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 herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.

          As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in

                                      C-2-3

authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No transfer of this Certificate shall be made unless that transfer is
made pursuant to an effective registration statement under the 1933 Act and
effective registration or qualification under applicable state securities laws,
or is made in a transaction that does not require such registration or
qualification. In the event that a transfer is to be made without registration
or qualification, the Certificate Registrar shall require, in order to assure
compliance with such laws, either (i) that the Certificateholder desiring to
effect the transfer and such Certificateholder's prospective transferee each
execute a representation letter in the form described by the Agreement
certifying to the Certificate Registrar the facts surrounding the transfer, or
(ii) unless such transfer is made in reliance upon Rule 144A under the 1933 Act,
that the Depositor and the Certificate Registrar receive an Opinion of Counsel
satisfactory to them that such transfer may be made without such registration or
qualification, which Opinion of Counsel shall not be an expense of the
Depositor, the Trustee or the Certificate Registrar, in their respective
capacities as such. None of the Depositor, the Certificate Registrar or the
Trustee is obligated to register or qualify the Class of Certificates specified
on the face hereof under the 1933 Act or any other securities law or to take any
action not otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any such Certificateholder
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee, the Depositor, the Certificate Registrar and any Servicer against any
liability that may result if the transfer is not so exempt or is not made in
accordance with such federal and state laws.

          No transfer of a Certificate or any interest therein may be made to
employee benefit plans and certain other retirement plans and arrangements,
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 are subject to the fiduciary responsibility
provisions of ERISA, Section 4975 of the Code or any materially similar
provisions of applicable federal, state or local law (collectively, "Plans") or
any person who is directly or indirectly purchasing the Certificate or interest
therein on behalf of, as named fiduciary of, as trustee of, or with assets of a
Plan.

          No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.

          The Depositor, the Servicer, the Trustee and the Certificate Registrar
and any agent of the Depositor, the Servicer, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the

                                      C-2-4

Depositor, the Servicer, the Trustee, the Certificate Registrar or any such
agent shall be affected by notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Pool
Balance of the Mortgage Loans at the time of purchase being 10% or less of the
Cut-off Date Aggregate Principal Balance.

          The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.

          Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      C-2-5

          IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated:

                                           DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                              as Trustee

                                           By:
                                               ---------------------------------
                                               Authorized Officer

                         CERTIFICATE OF AUTHENTICATION

          This is one of the Certificates referred to in the within-mentioned
Agreement.

Dated:

                                           DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                              as Certificate Registrar

                                           By:
                                               ---------------------------------
                                               Authorized Signatory

                                      C-2-6

                                 ABBREVIATIONS

          The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common           UNIF GIFT MIN ACT - Custodian
                                                             (Cust) (Minor)
TEN ENT - as tenants by the entireties                       under Uniform Gifts
                                                             to Minors Act
JT TEN  - as joint tenants with right
          of survivorship and not as                         ___________________
          tenants in common                                        (State)

          Additional abbreviations may also be used though not in the above
list.

                                   ASSIGNMENT

          FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)______________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

          I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________

Dated:

                                        ----------------------------------------
                                        Signature by or on behalf of assignor

                                        ----------------------------------------
                                        Signature Guaranteed

                                      C-2-7

                            DISTRIBUTION INSTRUCTIONS

          The assignee should include the following for purposes of
distribution:

          Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.

                                      C-2-8

                                  EXHIBIT C-3

                         [FORM OF CLASS R CERTIFICATE]

THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON-UNITED STATES PERSON.

FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS THE "RESIDUAL
INTEREST" IN TWO SEPARATE "REAL ESTATE MORTGAGE INVESTMENT CONDUITS," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE").

THIS CLASS R CERTIFICATE IS SUBORDINATE TO THE OFFERED CERTIFICATES OF THIS
SERIES TO THE EXTENT DESCRIBED HEREIN AND IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.

THIS CLASS R CERTIFICATE WILL NOT BE ENTITLED TO PAYMENTS UNTIL SUCH TIME AS
DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

THIS CLASS R CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES LAWS OF
ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE WITHOUT
SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION THAT DOES
NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 5.02 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.

NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED, SECTION 4975 OF THE CODE OR ANY MATERIALLY SIMILAR PROVISIONS
OF APPLICABLE FEDERAL, STATE OR LOCAL LAW WILL BE REGISTERED.

ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CLASS R CERTIFICATE MAY BE
MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (1) AN AFFIDAVIT TO THE
CERTIFICATE REGISTRAR THAT SUCH TRANSFEREE IS NOT (A) THE UNITED STATES, ANY
STATE OR POLITICAL SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY
INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE
FOREGOING, (B) ANY ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED IN SECTION
521 OF THE CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE
UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE
CODE, (C) ANY ORGANIZATION DESCRIBED IN SECTION 1381(A)(2)(C) OF THE CODE (ANY
SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (A), (B) OR (C) BEING

                                      C-3-1

HEREINAFTER REFERRED TO AS A "DISQUALIFIED ORGANIZATION"), OR (D) AN AGENT OF A
DISQUALIFIED ORGANIZATION AND (2) NO PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE
ASSESSMENT OR COLLECTION OF TAX, AND (3) SUCH TRANSFEREE SATISFIES CERTAIN
ADDITIONAL CONDITIONS RELATING TO THE FINANCIAL CONDITION OF THE PROPOSED
TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE REGISTER OR ANY
TRANSFER, SALE OR OTHER DISPOSITION OF THIS CLASS R CERTIFICATE TO A
DISQUALIFIED ORGANIZATION OR AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH
REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND
SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE
HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
CERTIFICATE. EACH HOLDER OF THE CLASS R CERTIFICATE BY ACCEPTANCE OF THIS
CERTIFICATE SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS
PARAGRAPH AND THE PROVISIONS OF SECTION 5.02(D) OF THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN. ANY PERSON THAT IS A DISQUALIFIED ORGANIZATION IS
PROHIBITED FROM ACQUIRING BENEFICIAL OWNERSHIP OF THIS CLASS R CERTIFICATE.

                                      C-3-2

                              ABFC 2005-AQ1 TRUST
                           ASSET-BACKED CERTIFICATES
                            SERIES 2005-AQ1, CLASS R

evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate one- to four-family first lien mortgage
loans formed and sold by

                        ASSET BACKED FUNDING CORPORATION

Series 2005-AQ1, Class R

Date of Pooling and Servicing Agreement and Cut-off Date: June 1, 2005

First Distribution Date:  July 25, 2005

No.

Percentage Interest: 100%

Servicer: Ameriquest Mortgage Company

Trustee: Deutsche Bank National Trust Company

Closing Date: June 7, 2005

THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET BACKED
FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR AFFILIATES. THIS
CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
STATES.

          This certifies that _______________________ is the registered owner of
100% Percentage Interest in that certain beneficial ownership interest evidenced
by the Class R Certificate in the Trust Fund created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Asset
Backed Funding Corporation (hereinafter called the "Depositor," which term
includes any successor entity under the Agreement), the Servicer and the
Trustee, a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the last Business Day of the month immediately
preceding the month in which the related Distribution Date occurs (the "Record
Date"), from funds in the Distribution Account in the amount required to be
distributed to the Holder of Class R Certificate on such Distribution Date
pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date

                                      C-3-3

immediately prior to such Distribution Date and is the registered owner of Class
R Certificate, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose as provided in the Agreement.

          This Certificate is one of a duly authorized issue of Certificates
designated as ABFC 2005-AQ1 Trust, Asset-Backed Certificates, of the Series
specified on the face hereof (herein called the "Certificates") and representing
the Percentage Interest specified on the face hereof.

          The Class R Certificate is limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Accounts and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, 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 entitled to the Voting Rights
identified 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 herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.

          As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

                                      C-3-4

          No transfer of this Certificate shall be made unless that transfer is
made pursuant to an effective registration statement under the 1933 Act and
effective registration or qualification under applicable state securities laws,
or is made in a transaction that does not require such registration or
qualification. In the event that a transfer is to be made without registration
or qualification, the Certificate Registrar shall require, in order to assure
compliance with such laws, either (i) that the Certificateholder desiring to
effect the transfer and such Certificateholder's prospective transferee each
execute a representation letter in the form described by the Agreement
certifying to the Certificate Registrar the facts surrounding the transfer, or
(ii) unless such transfer is made in reliance upon Rule 144A under the 1933 Act,
that the Depositor and the Certificate Registrar receive an Opinion of Counsel
satisfactory to them that such transfer may be made without such registration or
qualification, which Opinion of Counsel shall not be an expense of the
Depositor, the Trustee or the Certificate Registrar, in their respective
capacities as such. None of the Depositor, the Certificate Registrar or the
Trustee is obligated to register or qualify the Class of Certificates specified
on the face hereof under the 1933 Act or any other securities law or to take any
action not otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any such Certificateholder
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee, the Depositor, the Certificate Registrar and any Servicer against any
liability that may result if the transfer is not so exempt or is not made in
accordance with such federal and state laws.

          No transfer of this Certificate or any interest therein may be made to
employee benefit plans and certain other retirement plans and arrangements,
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 are subject to the fiduciary responsibility
provisions of ERISA, Section 4975 of the Code or any materially similar
provisions of applicable federal, state or local law (collectively, "Plans") or
any person who is directly or indirectly purchasing the Certificate or interest
therein on behalf of, as named fiduciary of, as trustee of, or with assets of a
Plan.

          The Holder of this Certificate, by its acceptance hereof, shall be
deemed for all purposes to have consented to the provisions of Section 5.02 of
the Agreement and to any amendment of the Agreement deemed necessary by counsel
of the Depositor to ensure that the transfer of this Certificate to any Person
other than a Permitted Transferee or any other Person will not cause the Trust
to cease to qualify as two separate REMICs or cause the imposition of a tax upon
the Trust.

          No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.

          The Depositor, the Servicer, the Trustee and the Certificate Registrar
and any agent of the Depositor, the Servicer, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Servicer, the
Trustee, the Certificate Registrar nor any such agent shall be affected by
notice to the contrary.

                                      C-3-5

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Pool
Balance of the Mortgage Loans at the time of purchase being 10% or less of the
Cut-off Date Aggregate Principal Balance.

          The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.

          Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      C-3-6

          IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated:

                                           DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                              as Trustee

                                           By:
                                               ---------------------------------
                                               Authorized Officer

                         CERTIFICATE OF AUTHENTICATION

          This is the one of the Certificates referred to in the
within-mentioned Agreement.

Dated:

                                           DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                              as Certificate Registrar

                                           By:
                                               ---------------------------------
                                               Authorized Signatory

                                      C-3-7

                                 ABBREVIATIONS

          The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common           UNIF GIFT MIN ACT - Custodian
                                                             (Cust) (Minor)
TEN ENT - as tenants by the entireties                       under Uniform Gifts
                                                             to Minors Act
JT TEN  - as joint tenants with right
          of survivorship and not as                         ___________________
          tenants in common                                        (State)

          Additional abbreviations may also be used though not in the above
list.

                                   ASSIGNMENT

          FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)______________________________________________
a Percentage Interest equal to _____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

          I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________

Dated:

                                           -------------------------------------
                                           Signature by or on behalf of assignor

                                           -------------------------------------
                                           Signature Guaranteed

                                      C-3-8

                           DISTRIBUTION INSTRUCTIONS

          The assignee should include the following for purposes of
distribution:

          Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.

                                      C-3-9

                                    EXHIBIT D

                             MORTGAGE LOAN SCHEDULE

                                       D-1

                                    EXHIBIT E

                    FORM OF REQUEST FOR RELEASE OF DOCUMENTS

To:  Deutsche Bank National Trust Company
     1761 East St. Andrew Place
     Santa Ana, California 92705
     Attention: Trust Administration - BA05Q1

     Re:  Pooling and Servicing Agreement dated as of June 1, 2005 among Asset
          Backed Funding Corporation, as depositor, Ameriquest Mortgage Company,
          as Servicer, and Deutsche Bank National Trust Company, as trustee

          All capitalized terms used herein shall have the means ascribed to
them in the Pooling and Servicing Agreement (the "Agreement") referenced above.

          In connection with the administration of the Mortgage Loans held by
you as Trustee pursuant to the Agreement, we request the release, and hereby
acknowledge receipt, of the Trustee's Mortgage File for the Mortgage Loan
described below, for the reason indicated.

Mortgage Loan Number:

Mortgagor Name, Address & Zip Code:

Reason for Requesting Documents (check one):

_____ 1.  Mortgage Paid in Full

_____ 2.  Foreclosure

_____ 3.  Substitution

_____ 4.  Other Liquidation (Repurchases, etc.)

_____ 5.  Nonliquidation       Reason:
                                       -----------------------------

                               By:
                                   ---------------------------------
                                   (authorized signer)

                               Issuer:
                                       -----------------------------

                               Address:
                                        ----------------------------

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

                               Date:
                                     -------------------------------

                                       E-1

Custodian

Deutsche Bank National Trust Company

          Please acknowledge the execution of the above request by your
signature and date below, if requested:

---------------------------------------   --------------------------
               Signature                  Date

Documents returned to Custodian:

---------------------------------------   --------------------------
               Custodian                  Date

                                       E-2

                                   EXHIBIT F-1

                     FORM OF TRUSTEE'S INITIAL CERTIFICATION

                                                                __________, 20__

Asset Backed Funding Corporation
214 North Tryon Street
Charlotte, North Carolina 28255

Ameriquest Mortgage Company
1100 Town and Country Road, Suite 1100
Orange, California 92868

          Re:   ABFC 2005-AQ1 Trust,
                Asset-Backed Certificates, Series 2005-AQ1

Ladies and Gentlemen:

          The undersigned, as Trustee, hereby certifies that, as except as noted
on the schedule of exceptions attached hereto as Schedule A, as to each Mortgage
Loan listed on the Mortgage Loan Schedule (other than any Mortgage Loan paid in
full or any Mortgage Loan listed on the attachment hereto) it has reviewed the
Mortgage Files and has determined that (i) all documents required to be
delivered to it pursuant to Section 2.01(a), (b), (c), (d) and (e) of the
Pooling and Servicing Agreement, dated as of June 1, 2005, among Asset Backed
Funding Corporation, as depositor, Ameriquest Mortgage Company, as servicer and
the undersigned, as trustee (the "Agreement") are in its possession, and if
indicated as applicable in a separate writing delivered to the Trustee, that all
documents delivered to it pursuant to Section 2.01(f) of the Agreement are in
its possession; (ii) such documents have been reviewed by it and appear regular
on their face and related to such Mortgage Loan, (iii) each Mortgage Note has
been endorsed as provided in Section 2.01(a) of the Agreement and each Mortgage
has been assigned in accordance with Section 2.01(c) and (d) of the Agreement
and (iv) based on its examination of the documents in the Mortgage File and only
as to such documents, the Mortgage Loan information corresponding to items 1, 2,
12, 13, 14 and 17 of the definition of Mortgage Loan Schedule accurately
reflects information set forth in the related Mortgage File. The Trustee makes
no representations as to (i) the validity, legality, enforceability,
sufficiency, due authorization or genuineness of any of the documents contained
in each Mortgage File or of any of the Mortgage Loans or (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan.

          This Initial Certification is not divisible or negotiable.

The Trustee will accept and act on instructions with respect to the Mortgage
Loans subject hereto upon surrender of this Initial Certification at its office
at 1761 East St. Andrew Place, Santa Ana, California 92705, Attention: Trust
Administration - BA05Q1.

                                      F-1-1

          Capitalized terms used herein shall have the meaning ascribed to them
in the Agreement.

                                            DEUTSCHE BANK NATIONAL TRUST
                                            COMPANY,as Trustee

                                            By:
                                                --------------------------------
                                            Name:
                                                  ------------------------------
                                            Title:
                                                   -----------------------------

                                       E-2

                      SCHEDULE A - TO INITIAL CERTIFICATION

                                   EXCEPTIONS

                                       E-3

                                   EXHIBIT F-2

                      FORM OF TRUSTEE'S FINAL CERTIFICATION

                                                                    June 7, 2005

Asset Backed Funding Corporation
214 North Tryon Street, 21st Floor
Charlotte, North Carolina 28255

Ameriquest Mortgage Company
1100 Town and Country Road, Suite 1100
Orange, California 92868
Attention: General Counsel

          Re:   ABFC 2005-AQ1 Trust,
                Asset-Backed Certificates, Series 2005-AQ1

Ladies and Gentlemen:

          The undersigned, as Trustee, hereby certifies that, as except as noted
on the schedule of exceptions attached hereto as Schedule A, as to each Mortgage
Loan listed on the Mortgage Loan Schedule (other than any Mortgage Loan paid in
full or any Mortgage Loan listed on the attachment hereto) it has reviewed the
Mortgage Files and has determined that (i) all documents required to be
delivered to it pursuant to Section 2.01(a), (b), (c), (d) and (e) of the
Pooling and Servicing Agreement, dated as of June 1, 2005, among Asset Backed
Funding Corporation, as depositor, Ameriquest Mortgage Company, as servicer and
the undersigned, as trustee (the "Agreement") are in its possession, and if
indicated as applicable in a separate writing delivered to the Trustee, that all
documents delivered to it pursuant to Section 2.01(f) of the Agreement are in
its possession; (ii) such documents have been reviewed by it and appear regular
on their face and related to such Mortgage Loan, (iii) each Mortgage Note has
been endorsed as provided in Section 2.01(a) of the Agreement and each Mortgage
has been assigned in accordance with Sections 2.01(c) and (d) of the Agreement
and (iv) based on its examination of the documents in the Mortgage File and only
as to such documents, the Mortgage Loan information corresponding to items 1, 2,
12, 13, 14 and 17 of the definition of Mortgage Loan Schedule accurately
reflects information set forth in the related Mortgage File. The Trustee makes
no representations as to (x) the validity, legality, enforceability,
sufficiency, due authorization or genuineness of any of the documents contained
in each Mortgage File or of any of the Mortgage Loans or (y) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan.

          This Final Certification is not divisible or negotiable.

          The Trustee will accept and act on instructions with respect to the
Mortgage Loans subject hereto upon surrender of this Final Certification at its
office at 1761 East St. Andrew Place, Santa Ana, California 92705, Attention:
Trust Administration - BA05Q1.

                                      F-2-1

          Capitalized terms used herein shall have the meaning ascribed to them
in the Agreement.

                                            DEUTSCHE BANK NATIONAL TRUST
                                            COMPANY, as Trustee

                                            By:
                                                --------------------------------
                                            Name:
                                                  ------------------------------
                                            Title:
                                                   -----------------------------

                                      F-2-2

                       SCHEDULE A - TO FINAL CERTIFICATION

                                   EXCEPTIONS

                                      F-2-3

                                   EXHIBIT F-3

                        FORM OF RECEIPT OF MORTGAGE NOTE

Asset Backed Funding Corporation
214 North Tryon Street
21st Floor
Charlotte, North Carolina 28255

     Re:   ABFC 2005-AQ1 Trust,
           Asset-Backed Certificates, Series 2005-AQ1

Ladies and Gentlemen:

          Pursuant to Section 2.01 of the Pooling and Servicing Agreement, dated
as of June 1, 2005, among Asset Backed Funding Corporation, as depositor,
Ameriquest Mortgage Company, as Servicer, and Deutsche Bank National Trust
Company, as trustee, we hereby acknowledge the receipt of the original Mortgage
Note, or, with respect to any lost Mortgage Note, an original Lost Note
Affidavit, together with a copy of the related Mortgage Note (a copy of which is
attached hereto as Exhibit 1) with any exceptions thereto listed on Exhibit 2.

                                            DEUTSCHE BANK NATIONAL TRUST
                                               COMPANY, as Trustee

                                            By:
                                                --------------------------------
                                                Name:
                                                Title:

                                      F-3-1

                                    EXHIBIT G

                        MORTGAGE LOAN PURCHASE AGREEMENT

                             (ON FILE WITH TRUSTEE)

                                       G-1

                                    EXHIBIT H

                           FORM OF LOST NOTE AFFIDAVIT

          Personally appeared before me the undersigned authority to administer
oaths, ______________________ who first being duly sworn deposes and says:
Deponent is ______________________ of ______________________________, successor
by merger to _________________________________________ ("Seller") and who has
personal knowledge of the facts set out in this affidavit.

          On ___________________, _________________________ did execute and
deliver a promissory note in the principal amount of $__________.

          That said note has been misplaced or lost through causes unknown and
is presently lost and unavailable after diligent search has been made. Seller's
records show that an amount of principal and interest on said note is still
presently outstanding, due, and unpaid, and Seller is still owner and holder in
due course of said lost note.

          Seller executes this Affidavit for the purpose of inducing Deutsche
Bank National Trust Company, as trustee on behalf of ABFC 2005-AQ1 Trust,
Asset-Backed Certificates, Series 2005-AQ1, to accept the transfer of the above
described loan from Seller.

          Seller agrees to indemnify and hold harmless Deutsche Bank National
Trust Company and Asset Backed Funding Corporation for any losses incurred by
such parties resulting from the above described promissory note has been lost or
misplaced.

                                            By:
                                                --------------------------------

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

STATE OF    )
            )   SS:
COUNTY OF   )

          On this ____ day of _______ 20__, before me, a Notary Public, in and
for said County and State, appeared ________________________, who acknowledged
the extension of the foregoing and who, having been duly sworn, states that any
representations therein contained are true.

          Witness my hand and Notarial Seal this ____ day of _______ 20__.

____________________________________
____________________________________

My commission expires _____________________.

                                       H-1

                                    EXHIBIT I

                          FORM OF ERISA REPRESENTATION

Deutsche Bank National Trust Company
1761 East St. Andrew Place
Santa Ana, California 92705
Attention: Trust Administration - BA05Q1

Asset Backed Funding Corporation
214 North Tryon Street
21st Floor
Charlotte, North Carolina 28255

     Re:   ABFC 2005-AQ1 Trust,
           Asset-Backed Certificates, Series 2005-AQ1

Ladies and Gentlemen:

          1. [The undersigned is the ______________________ of ________________
(the "Transferee") a [corporation duly organized] and existing under the laws of
__________, on behalf of which he makes this affidavit.] [The undersigned,
___________________, is the transferee (the "Transferee").]

          2. The Transferee hereby acknowledges that under the terms of the
Pooling and Servicing Agreement (the "Agreement") dated as of June 1, 2005,
among Asset Backed Funding Corporation, as depositor (the "Depositor"),
Ameriquest Mortgage Company as Servicer, and Deutsche Bank National Trust
Company, as trustee (the "Trustee"), no transfer of the ERISA-Restricted
Certificates shall be permitted to be made to any person unless the Depositor
and the Certificate Registrar (as defined in the Agreement) have received a
certificate from such transferee in the form hereof.

          3. The Transferee either (x) (i) is not an employee benefit plan
subject to Section 406 or Section 407 of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), or Section 4975 of the Internal Revenue Code
of 1986, as amended (the "Code") or any materially similar provisions of
applicable federal, state or local law ("Similar Law"), the Trustee of any such
plan or a person acting on behalf of any such plan nor a person using the assets
of any such plan or (ii) (except in the case of the Class R, Class CE and Class
P Certificates) is an insurance company which is purchasing such Certificates
with funds contained in an "insurance company general account" (as such term is
defined in Section V(e) of Prohibited Transaction Class Exemption 95-60 ("PTCE
95-60") and that the purchase and holding of such Certificates are covered under
Sections I and III of PTCE 95-60 or (y) (except in the case of the Class R
Certificate) shall deliver to the Certificate Registrar and the Depositor an
opinion of counsel (a "Benefit Plan Opinion") satisfactory to the Certificate
Registrar, and upon which the Certificate Registrar and the Depositor shall be
entitled to rely, to the effect that the purchase or holding of such Certificate
by the Transferee will not constitute or result in a non-exempt prohibited
transaction within the meaning of ERISA or Section 4975 of the Code (or similar
provisions of Similar Law) and will not subject the Trustee or the Depositor to
any

                                       I-1

obligation in addition to those undertaken by such entities in the Pooling and
Servicing Agreement, which opinion of counsel shall not be an expense of the
Trustee or the Depositor.

          Capitalized terms used but not defined herein shall have the meanings
ascribed to such terms in the Agreement.

          IN WITNESS WHEREOF, the Transferee has executed this certificate.

                                            ------------------------------------
                                            [Transferee]

                                            By:
                                                --------------------------------
                                                Name:
                                                Title:

                                       I-2

                                    EXHIBIT J

                    FORM OF INVESTMENT LETTER [NON-RULE 144A]

                                                             [DATE]

Asset Backed Funding Corporation
214 North Tryon Street
21st Floor
Charlotte, North Carolina 28255

Deutsche Bank National Trust Company
1761 East St. Andrew Place
Santa Ana, California 92705
Attention: Trust Administration - BA05Q1

Ladies and Gentlemen:

          In connection with our acquisition of the ABFC 2005-AQ1 Trust,
Asset-Backed Certificates, Series 2005-AQ1 (the "Certificates"), we certify that
(a) we understand that the Certificates are not being registered under the
Securities Act of 1933, as amended (the "Act"), or any state securities laws and
are being transferred to us in a transaction that is exempt from the
registration requirements of the Act and any such laws, (b) we are an
"accredited investor," as defined in Regulation D under the Act, and have such
knowledge and experience in financial and business matters that we are capable
of evaluating the merits and risks of investments in the Certificates, (c) we
have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) we are acquiring the Certificates for investment
for our own account and not with a view to any distribution of such Certificates
(but without prejudice to our right at all times to sell or otherwise dispose of
the Certificates in accordance with clause (g) below), (e) we agree that the
Certificates must be held indefinitely by us and we acknowledge that we are able
to bear the economic risk of investment in the Certificates, (f) we have not
offered or sold any Certificates to, or solicited offers to buy any Certificates
from, any person, or otherwise approached or negotiated with any person with
respect thereto, or taken any other action which would result in a violation of
Section 5 of the Act, (g) we will not sell, transfer or otherwise dispose of any
Certificates unless (1) such sale, transfer or other disposition is made
pursuant to an effective registration statement under the Act or is exempt from
such registration requirements, and if requested, we will at our expense provide
an opinion of counsel satisfactory to the addressees of this Certificate that
such sale, transfer or other disposition may be made pursuant to an exemption
from the Act, (2) the purchaser or transferee of such Certificate has executed
and delivered to you a certificate to substantially the same effect as this
certificate, and (3) the purchaser or transferee has otherwise complied with any
conditions for transfer set forth in the Pooling and Servicing Agreement and (h)
we acknowledge that the Certificates will bear a legend setting forth the
applicable restrictions on transfer.

                                       J-1

                                            Very truly yours,

                                            [NAME OF TRANSFEREE]

                                            By:
                                                --------------------------------
                                                Authorized Officer

                                       J-2

                       FORM OF RULE 144A INVESTMENT LETTER
                                     [DATE]

Asset Backed Funding Corporation
214 North Tryon Street
21st Floor
Charlotte, North Carolina 28255

Deutsche Bank National Trust Company
1761 East St. Andrew Place
Santa Ana, California 92705
Attention: Trust Administration - BA05Q1

     Re:   ABFC 2005-AQ1 Trust,
           Asset-Backed Certificates, Series 2005-AQ1

Ladies and Gentlemen:

          In connection with our acquisition of the ABFC 2005-AQ1 Trust,
Asset-Backed Certificates, Series 2005-AQ1 (the "Certificates"), we certify that
(a) we understand that the Certificates are not being registered under the
Securities Act of 1933, as amended (the "Act"), or any state securities laws and
are being transferred to us in a transaction that is exempt from the
registration requirements of the Act and any such laws, (b) we have had the
opportunity to ask questions of and receive answers from the Depositor
concerning the purchase of the Certificates and all matters relating thereto or
any additional information deemed necessary to our decision to purchase the
Certificates, (c) we have not, nor has anyone acting on our behalf offered,
transferred, pledged, sold or otherwise disposed of the Certificates, any
interest in the Certificates or any other similar security to, or solicited any
offer to buy or accept a transfer, pledge or other disposition of the
Certificates, any interest in the Certificates or any other similar security
from, or otherwise approached or negotiated with respect to the Certificates,
any interest in the Certificates or any other similar security with, any person
in any manner, or made any general solicitation by means of general advertising
or in any other manner, or taken any other action, that would constitute a
distribution of the Certificates under the Securities Act or that would render
the disposition of the Certificates a violation of Section 5 of the Securities
Act or require registration pursuant thereto, nor will act, nor has authorized
or will authorize any person to act, in such manner with respect to the
Certificates, (d) we are a "qualified institutional buyer" as that term is
defined in Rule 144A under the Securities Act and have completed either of the
forms of certification to that effect attached hereto as Annex 1 or Annex 2. We
are aware that the sale to us is being made in reliance on Rule 144A. We are
acquiring the Certificates for our own account or for resale pursuant to Rule
144A and further, understand that such Certificates may be resold, pledged or
transferred only (i) to a person reasonably believed to be a qualified
institutional buyer that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that the resale, pledge or
transfer is being made in reliance on Rule 144A, and who executes a
certification in the form of this letter and a certification in the form of
either Annex 1 or Annex 2 attached hereto, or (ii) pursuant to another exemption
from registration under the Securities Act.

                                       J-3

                                            Very truly yours,

                                            [NAME OF TRANSFEREE]

                                            By:
                                                --------------------------------
                                                Authorized Officer

                                       J-4

                                                            ANNEX 1 TO EXHIBIT J

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

          [For Transferees Other Than Registered Investment Companies]

          The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:

          i. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.

          ii. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned
and/or invested on a discretionary basis $ ______ (1) in securities (except for
the excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule 144A
and (ii) the Buyer satisfies the criteria in the category marked below.

          ___ Corporation, etc. The Buyer is a corporation (other than a bank,
          savings and loan association or similar institution), Massachusetts or
          similar business trust, partnership, or charitable organization
          described in Section 501(c)(3) of the Internal Revenue Code of 1986,
          as amended.

          ___ Bank. The Buyer (a) is a national bank or banking institution
          organized under the laws of any State, territory or the District of
          Columbia, the business of which is substantially confined to banking
          and is supervised by the State or territorial banking commission or
          similar official or is a foreign bank or equivalent institution, and
          (b) has an audited net worth of at least $25,000,000 as demonstrated
          in its latest annual financial statements, a copy of which is attached
          hereto.

          ___ Savings and Loan. The Buyer (a) is a savings and loan association,
          building and loan association, cooperative bank, homestead association
          or similar institution, which is supervised and examined by a State or
          Federal authority having supervision over any such institutions or is
          a foreign savings and loan association or equivalent institution and
          (b) has an audited net worth of at least $25,000,000 as demonstrated
          in its latest annual financial statements, a copy of which is attached
          hereto.

          ___ Broker-dealer. The Buyer is a dealer registered pursuant to
          Section 15 of the Securities Exchange Act of 1934.

----------
     (1) Buyer must own and/or invest on a discretionary basis at least
$__________ in securities unless Buyer is a dealer, and, in that case, Buyer
must own and/or invest on a discretionary basis at least $__________ in
securities.

                                       J-5

          ___ Insurance Company. The Buyer is an insurance company whose primary
          and predominant business activity is the writing of insurance or the
          reinsuring of risks underwritten by insurance companies and which is
          subject to supervision by the insurance commissioner or a similar
          official or agency of a State, territory or the District of Columbia.

          ___ State or Local Plan. The Buyer is a plan established and
          maintained by a State, its political subdivisions, or any agency or
          instrumentality of the State or its political subdivisions, for the
          benefit of its employees.

          ___ ERISA Plan. The Buyer is an employee benefit plan within the
          meaning of Title I of the Employee Retirement Income Security Act of
          1974.

          ___ Investment Advisor. The Buyer is an investment advisor registered
          under the Investment Advisors Act of 1940.

          ___ Small Business Investment Company. Buyer is a small business
          investment company licensed by the U.S. Small Business Administration
          under Section 301(c) or (d) of the Small Business Investment Act of
          1958.

          ___ Business Development Company. Buyer is a business development
          company as defined in Section 202(a)(22) of the Investment Advisors
          Act of 1940.

          iii. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer is
a dealer, (iii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iv) bank deposit notes and certificates of deposit,
(v) loan participations, (vi) repurchase agreements, (vii) securities owned but
subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.

          iv. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used the
cost of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.

          v. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will

                                       J-6

continue to rely on the statements made herein because one or more sales to the
Buyer may be in reliance on Rule 144A.

          vi. Until the date of purchase of the Rule 144A Securities, the Buyer
will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.

                                            ------------------------------------
                                            Print Name of Buyer

                                            By:
                                                --------------------------------
                                                Name:
                                                Title:

                                            Date:
                                                  ------------------------------

                                       J-7

                                                            ANNEX 2 TO EXHIBIT J

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

           [For Transferees That are Registered Investment Companies]

          The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:

          1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.

          2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.

          ___ The Buyer owned $ in securities (other than the excluded
          securities referred to below) as of the end of the Buyer's most recent
          fiscal year (such amount being calculated in accordance with Rule
          144A).

          ___ The Buyer is part of a Family of Investment Companies which owned
          in the aggregate $ in securities (other than the excluded securities
          referred to below) as of the end of the Buyer's most recent fiscal
          year (such amount being calculated in accordance with Rule 144A).

          3. The term "Family of Investment Companies" as used herein means two
or more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).

          4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) securities issued or guaranteed by
the U.S. or any instrumentality thereof, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase agreements,
(vi) securities owned but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.

                                       J-8

          5. The Buyer is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.

          6. Until the date of purchase of the Certificates, the undersigned
will notify the parties listed in the Rule 144A Transferee Certificate to which
this certification relates of any changes in the information and conclusions
herein. Until such notice is given, the Buyer's purchase of the Certificates
will constitute a reaffirmation of this certification by the undersigned as of
the date of such purchase.

                                            ------------------------------------
                                            Print Name of Buyer or Adviser

                                            By:
                                                --------------------------------
                                                Name:
                                                Title:

                                            IF AN ADVISER:

                                            ------------------------------------
                                            Print Name of Buyer

                                            Date:
                                                  ------------------------------

                                       J-9

                                    EXHIBIT K

                 FORM OF CLASS R CERTIFICATE TRANSFER AFFIDAVIT

                              ABFC 2005-AQ1 TRUST,
                   ASSET-BACKED CERTIFICATES, SERIES 2005-AQ1

STATE OF    )
            ) ss.:
COUNTY OF   )

          The undersigned, being first duly sworn, deposes and says as follows:

          1. The undersigned is [an officer of] ____________, the proposed
Transferee of an Ownership Interest in the Class R Certificates (the
"Certificate") issued pursuant to the Pooling and Servicing Agreement, (the
"Agreement"), relating to the above-referenced Certificates, among Asset Backed
Funding Corporation, as depositor, Ameriquest Mortgage Company, as Servicer, and
Deutsche Bank National Trust Company, as trustee (the "Trustee"). Capitalized
terms used, but not defined herein shall have the meanings ascribed to such
terms in the Agreement. The Transferee has authorized the undersigned to make
this affidavit on behalf of the Transferee.

          2. The Transferee is, as of the date hereof, and will be, as of the
date of the Transfer, a Permitted Transferee. The Transferee is acquiring its
Ownership Interest in the Certificates either (i) for its own account or (ii) as
nominee, trustee or agent for another Person and has attached hereto an
affidavit from such Person in substantially the same form as this affidavit. The
Transferee has no knowledge that any such affidavit is false.

          3. The Transferee has been advised of, and understands that (i) a tax
will be imposed on Transfers of the Certificate to Persons that are a
Disqualified Organization; (ii) such tax will be imposed on the transferor, or,
if such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is a Disqualified Organization, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability for
the tax if the subsequent Transferee furnished to such Person an affidavit that
such subsequent Transferee is not a Disqualified Organization and, at the time
of Transfer, such Person does not have actual knowledge that the affidavit is
false.

          4. The Transferee has been advised of, and understands that a tax will
be imposed on a "pass-through entity" holding the Certificate if at any time
during the taxable year of the pass-through entity a Person that is a
Disqualified Organization is the record holder of an interest in such entity.
The Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is not a Disqualified Organization and the
pass-through entity does not have actual knowledge that such affidavit is false.
(For this purpose, a "pass-through entity" includes a regulated investment
company, a real estate investment trust or common trust fund, a

                                       K-1

partnership, trust or estate, and certain cooperatives and, except as may be
provided in Treasury Regulations, persons holding interests in pass-through
entities as a nominee for another Person.)

          5. The Transferee has reviewed the provisions of Section 5.02(d) of
the Agreement and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificate including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The Transferee expressly agrees to be bound by and
to abide by the provisions of Section 5.02(d) of the Agreement and the
restrictions noted on the face of the Certificate. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the Transfer to the Transferee contemplated hereby null and void.

          6. The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to Transfer its Ownership Interest in the
Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth in this Exhibit L to the Agreement (a "Transferor Certificate")
to the effect that such Transferee has no actual knowledge that the Person to
which the Transfer is to be made is not a Permitted Transferee.

          7. The Transferee does not have the intention to impede the assessment
or collection of any tax legally required to be paid with respect to the
Certificate.

          8. The taxpayer identification number of the Transferee's nominee is
_______ .

          9. The Transferee is a U.S. Person as defined in Code Section
7701(a)(30).

          10. The Transferee is aware that the Certificate may be a "noneconomic
residual interest" within the meaning of Treasury regulations promulgated
pursuant to the Code and that the transferor of a noneconomic residual interest
will remain liable for any taxes due with respect to the income on such residual
interest, unless no significant purpose of the transfer was to impede the
assessment or collection of tax.

          11. The Transferee has filed all required federal and state income tax
returns and has paid all federal and state income tax due and intends to file
and pay all such returns and taxes in the future.

          12. The Transferee historically has paid its debts as they come due
and fully intends to be financially able to pay its debts, including any and all
tax liabilities, as they become due.

          13. The Transferee understands that, as the holder of an Ownership
Interest in a Certificate, it may incur tax liabilities in excess of any cash
flows generated by such Ownership Interest and intends to pay all taxes
associated with holding such Ownership Interest as such taxes become due.

                                       K-2

          14. That the Transferee will not cause income from the Class R
Certificate to be attributable to a foreign permanent establishment or fixed
base, within the meaning of an applicable income tax treaty, of the Transferee
or any other person.

          15. That, if the Transferee is purchasing the Class R Certificate in a
transfer intended to meet the safe harbor provisions of Treasury Regulations
Sections 1.860E-1(c), the Transferee has executed and attached Attachment A
hereto.

          16. The Transferee is not an employee benefit plan that is subject to
ERISA or a plan that is subject to Section 4975 of the Code or a plan or
arrangement subject to any materially similar provisions of applicable federal,
state or local law, nor are we acting on behalf of such a plan.

                                       K-3

          IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
duly authorized officer, duly attested, this __ day of__________, 20__.

                                            [NAME OF TRANSFEREE]

                                            By:
                                                --------------------------------
                                                Name:
                                                Title:

[Corporate Seal]

ATTEST:

[Assistant] Secretary

          Personally appeared before me the above-named ___________, known or
proved to me to be the same person who executed the foregoing instrument and to
be the _____________ of the Transferee, and acknowledged that he executed the
same as his free act and deed and the free act and deed of the Transferee.

          Subscribed and sworn before me this _____ day of _________, 20__.

                                            ------------------------------------
                                            NOTARY PUBLIC

                                            My Commission expires the __ day
                                            of ____, 20__.

                                       K-4

                                  ATTACHMENT A

                                       to

                   AFFIDAVIT PURSUANT TO SECTION 860E(e)(4) OF
                  THE INTERNAL REVENUE CODE OF 1986, AS AMENDED

Check the appropriate box:

[ ] The consideration paid to the Transferee to acquire the Class R Certificate
equals or exceeds the excess of (a) the present value of the anticipated tax
liabilities over (b) the present value of the anticipated savings associated
with holding such Certificate, in each case calculated in accordance with U.S.
Treasury Regulations Sections 1.860E-1(c)(7) and (8), computing present values
using a discount rate equal to the short-term Federal rate prescribed by Section
1274(d) of the Code and the compounding period used by the Transferee.

          OR

[ ] The transfer of the Class R Certificate complies with U.S. Treasury
Regulations Sections 1.860E-1(c)(5) and (6) and, accordingly:

          (i) the Transferee is an "eligible corporation," as defined in U.S.
     Treasury Regulations Section 1.860E-1(c)(6)(i), as to which income from
     Class R Certificate will only be taxed in the United States;

          (ii) at the time of the transfer, and at the close of the Transferee's
     two fiscal years preceding the year of the transfer, the Transferee had
     gross assets for financial reporting purposes (excluding any obligation of
     a person related to the Transferee within the meaning of U.S. Treasury
     Regulations Section 1.860E-1(c)(6)(ii)) in excess of $100 million and net
     assets in excess of $10 million;

          (iii) the Transferee will transfer the Class R Certificate only to
     another "eligible corporation," as defined in U.S. Treasury Regulations
     Section 1.860E-1(c)(6)(i), in a transaction that satisfies the requirements
     of Sections 1.860E-1(c)(4)(i), (ii) and (iii) and Section 1.860E-1(c)(5) of
     the U.S. Treasury Regulations;

          (iv) the Transferee has determined the consideration paid to it to
     acquire the Class R Certificate based on reasonable market assumptions
     (including, but not limited to, borrowing and investment rates, prepayment
     and loss assumptions, expense and reinvestment assumptions, tax rates and
     other factors specific to the Transferee) that it has determined in good
     faith; and

          (v) in the event of any transfer of the Class R Certificate by the
     Transferee, the Transferee will require its transferee to complete a
     representation in the form of this Attachment A as a condition of the
     transferee's purchase of the Class R Certificate.

                                       K-5

                                    EXHIBIT L

                         FORM OF TRANSFEROR CERTIFICATE

                                                               [DATE]

Deutsche Bank National Trust Company
1761 East St. Andrew Place
Santa Ana, California 92705
Attention: Trust Administration - BA05Q1

Asset Backed Funding Corporation
214 North Tryon Street
21st Floor
Charlotte, North Carolina 28255

     Re: ABFC 2005-AQ1 Trust,
         Asset-Backed Certificates, Series 2005-AQ1

Ladies and Gentlemen:

          In connection with our disposition of the ABFC 2005-AQ1 Trust,
Asset-Backed Certificates, Series 2005-AQ1 (the "Certificates"), we certify that
(a) we understand that the Certificates have not been registered under the
Securities Act of 1933, as amended (the "Act"), and are being disposed by us in
a transaction that is exempt from the registration requirements of the Act, (b)
we have not offered or sold any Certificates to, or solicited offers to buy any
Certificates from, any person, or otherwise approached or negotiated with any
person with respect thereto, in a manner that would be deemed, or taken any
other action which would result in, a violation of Section 5 of the Act, (c) to
the extent we are disposing of the Class R Certificate, we have no knowledge the
Transferee is not a Permitted Transferee and (d) no purpose of the proposed
disposition of the Class R Certificate is to impede the assessment or collection
of tax.

                                        Very truly yours,

                                        [__________________________]

                                        By:
                                            ------------------------------------

                                       L-1

                                    EXHIBIT M

                       FORM OF SERVICER REMITTANCE REPORT

                          [TO BE PROVIDED BY SERVICER]

                                       M-1

                                    EXHIBIT N

         FORM OF YIELD MAINTENANCE AGREEMENT RELATING TO THE CLASS A-1A
                                  CERTIFICATES

                             (ON FILE WITH TRUSTEE)

                                       N-1

                                    EXHIBIT O

                              FORM OF CERTIFICATION

                              ABFC 2005-AQ1 TRUST,
                   ASSET-BACKED CERTIFICATES, SERIES 2005-AQ1

          I, [identify the certifying individual] certify that:

1.   I have reviewed the annual report on Form 10-K, and all Monthly Form 8-K's
     containing Distribution Date Statements filed in respect of periods
     included in the year covered by this annual report, of the ABFC 2005-AQ1
     Trust;

2.   Based on my knowledge, the information in these reports, taken as a whole,
     does not contain any untrue statement of a material fact or omit to state a
     material fact necessary to make the statements made, in light of the
     circumstances under which such statements were made, not misleading as of
     the last day of the period covered by this annual report;

3.   Based on my knowledge, the distribution or servicing information required
     to be provided to the Trustee by the Servicer under the Pooling and
     Servicing Agreement, dated as of June 1, 2005 (the "Agreement"), among
     Asset Backed Funding Corporation, as depositor, Ameriquest Mortgage
     Company, as Servicer (the "Servicer"), and Deutsche Bank National Trust
     Company, as trustee (the "Trustee") for inclusion in these reports is
     included in these reports;

4.   Based on my knowledge and upon the annual compliance statement included in
     the annual report on Form 10-K and required to be delivered to the Trustee
     in accordance with the terms of the Agreement, and except as disclosed in
     the reports, the Servicer has fulfilled its obligations under the
     Agreement;

5.   The reports disclose all significant deficiencies relating to the
     Servicer's compliance with the minimum servicing standards based upon the
     report provided by an independent public accountant, after conducting a
     review in compliance with the Uniform Single Attestation Program for
     Mortgage Bankers or similar procedure, as set forth in the Agreement, that
     is included in these reports; and

6.   In giving the certifications above, I have reasonably relied on information
     provided to me by the following unaffiliated parties: Ameriquest Mortgage
     Company and Deutsche Bank National Trust Company.

                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:

                                       O-1

                                   EXHIBIT P-1

           FORM OF CERTIFICATION TO BE PROVIDED BY THE TRUSTEE TO THE
                                    DEPOSITOR

                              ABFC 2005-AQ1 TRUST,
                   ASSET-BACKED CERTIFICATES, SERIES 2005-AQ1

          The Trustee hereby certifies to Asset Backed Funding Corporation and
its officers, directors and affiliates, and with the knowledge and intent that
they will rely upon this certification, that:

1.   The trustee has reviewed the annual report on Form 10-K for the fiscal year
     [___], and all reports on Form 8-K containing distribution reports filed in
     respect of periods included in the year covered by that annual report,
     relating to the above-referenced Trust;

2.   Subject to paragraph (4), the distribution information in the distribution
     reports contained in all monthly Form 8-K's included in the year covered by
     the annual report on Form 10-K for the calendar year [____], taken as a
     whole, does not contain any untrue statement of a material fact or omit to
     state a material fact required by the Pooling and Servicing Agreement to be
     included therein and necessary to make the statements made, in light of the
     circumstances under which statements were made, not misleading as of the
     last day of the period covered by that annual report;

3.   The distribution information required to be provided by the Trustee under
     the Pooling and Servicing Agreement is included in these reports; and

4.   In compiling the distribution information and making the foregoing
     certifications, it has relied upon information furnished to it by the
     Servicer under the Pooling and Servicing Agreement. The Trustee shall have
     no responsibility or liability for any inaccuracy in such reports resulting
     from information so provided by the Servicer.

                                        DEUTSCHE BANK NATIONAL TRUST
                                           COMPANY, as Trustee

                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:

                                      P-1-1

                                   EXHIBIT P-2

           FORM OF CERTIFICATION TO BE PROVIDED BY THE SERVICER TO THE
                                    DEPOSITOR

                              ABFC 2005-AQ1 TRUST,
                   ASSET-BACKED CERTIFICATES, SERIES 2005-AQ1

          I, [identify the certifying individual], certify to Asset Backed
Funding Corporation and its officers, directors and affiliates, and with the
knowledge and intent that they will rely upon this certification, that:

1.   I have reviewed the annual report on Form 10-K for the calendar year [___],
     and all Monthly Form 8-K's containing Distribution Date Statements filed in
     respect of periods included in the year covered by that annual report, of
     the ABFC 2005-AQ1 Trust;

2.   Based on my knowledge, the servicing information in the Distribution Date
     Statements contained in all Monthly Form 8-K's included in the year covered
     by the annual report on Form 10-K for the calendar year [___], taken as a
     whole, does not contain any untrue statement of a material fact or omit to
     state a material fact necessary to make the statements made, in light of
     the circumstances under which such statements were made, not misleading as
     of the last day of the period covered by that annual report;

3.   Based on my knowledge, the servicing information required to be provided to
     the Trustee by the Servicer under the Pooling and Servicing Agreement,
     dated as of June 1, 2005 (the "Agreement"), among Asset Backed Funding
     Corporation, as depositor, Ameriquest Mortgage Company, as Servicer (the
     "Servicer"), and Deutsche Bank National Trust Company, as trustee (the
     "Trustee"), for inclusion in these reports is included in these reports;

4.   I am responsible for reviewing the activities performed by the Servicer
     under the Agreement and based upon my knowledge and the annual compliance
     review required under the Agreement, and except as disclosed in the
     reports, the Servicer has fulfilled its obligations under the Agreement;
     and

5.   The reports disclose all significant deficiencies relating to the
     Servicer's compliance with the minimum servicing standards based upon the
     report provided by an independent public accountant, after conducting a
     review in compliance with the Uniform Single Attestation Program for
     Mortgage Bankers or similar procedure, as set forth in the Agreement, that
     is included in these reports.

                                        AMERIQUEST MORTGAGE COMPANY

                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:

                                      P-2-1

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