Document:

EXHIBIT "C"

                                WARRANT AGREEMENT

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NEITHER  THIS  WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON ITS EXERCISE
HAVE  BEEN  REGISTERED  UNDER  THE  SECURITIES  ACT  OF  1933,  AS  AMENDED (THE
"SECURITIES  ACT"),  OR  ANY  APPLICABLE  STATE  SECURITIES LAWS, AND MAY NOT BE
OFFERED,  SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS PURSUANT
TO  REGISTRATION  UNDER  THE  SECURITIES  ACT OR IN COMPLIANCE WITH AN EXEMPTION
THEREFROM  ESTABLISHED  BY  AN OPINION OF COUNSEL OR OTHERWISE TO THE REASONABLE
SATISFACTION  OF  THE  COMPANY.

Warrant.  Number  of  Shares:  AS  CALCULATED  BELOW

Date  of  Issuance:  July  30,  2004

                            ROCKY MOUNTAIN GAS, INC.
                            ------------------------

                          COMMON STOCK PURCHASE WARRANT
                          -----------------------------

     THIS IS TO CERTIFY THAT, for value received, GEDDES AND COMPANY, an Arizona
company  (the  "Registered  Holder"),  or  its permitted assigns, is entitled to
purchase  from ROCKY MOUNTAIN GAS, INC., a Wyoming corporation (the "Company" or
"RMG"),  pursuant  to a Credit Agreement dated July 30, 2004 between U.S. Energy
Corp.  and  Geddes  and Company, at the purchase price per share provided by the
following  table,  the  following  number(s) of common shares of the Company The
"Warrant  Shares"):

     AMOUNT  OF  LOAN  DRAWN  DOWN

<TABLE>
<CAPTION>

$   0          $1,000,001     $2,000,001                            Terms
    to             to             to          Total                  and
$1,000,000     $2,000,000     $3,000,000     Warrants          Exercise Price
----------     ----------     ----------     --------   ----------------------------

  150,000       +75,000        +75,000      300,000    5 year warrants @3.00/share*
<C>      <C>      <C>      <C>      <S>

   50,000       +25,000        +25,000      100,000    5 year warrants @3.25/share*
   50,000       +25,000        +25,000      100,000    5 year warrants @3.50/share*
   50,000       +25,000        +25,000      100,000    5 year warrants @3.75/share*
   -------      -------        -------      -------  ------------------------------
   300,000      150,000        150,000      600,000      Total Warrants
</TABLE>

*  The  "Exercise  Price" shall mean the lesser of $3.00 per share or the lowest
purchase  price  per  share  actually paid to and received by RMG from investors
after  the  date hereof in RMG private placements until $20 million (of which at
least  $15  million  must  be  cash and of which up to $5 million [determined in
accordance  with generally accepted accounting principles] may be in the form of
producing  properties)  is  cumulatively received (the "Offer Completion Date").
The  above listed prices of $ 3.25 to $ 3.75 shall also be adjusted accordingly.
For  example,  if  the Exercise Price were $ 2.90 then the $ 3.25 would become $
3.14  (8% above $ 2.90), $ 3.50 would become $ 3.38 and $ 3.75 would then become
$  3.63.  The  number  of  Warrant  Shares  will  be determined by the aggregate

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amount  of  advances  pursuant  to the Loan as described in the table above, and
shall  consist  of duly authorized, validly issued, fully paid and nonassessable
shares of Common Stock, $0.01 par value per share, of the Company. The number of
shares  subject  to  purchase  hereunder  and  the Exercise Price are subject to
adjustment  as  provided herein. The Warrants shall expire at 5:00 p.m., C.S.T.,
on  the  fifth  anniversary of the Offer Completion Date, but no later than July
30,  2019  ("Expiration  Date").

                                    ARTICLE I
                                    ---------

                              Exercise of Warrant
                              -------------------

     1.1  Method  of  Exercise.  This Warrant may be exercised by the Registered
          --------------------
Holder  as  a  whole  or in part from time to time until the Expiration Date, at
which  time  this Warrant shall expire and be of no further force or effect. The
minimum  number  of  Warrant  Shares  that may be purchased on a single exercise
shall  be 10,000 or the entire number of shares remaining available for exercise
hereunder, whichever is less. To exercise this Warrant, the Registered Holder or
permitted  assignees of all rights of the Registered Holder shall deliver to the
Company, at the Warrant Office designated in Section 2.1(a), a written notice in
the  form of the Purchase Form attached as Exhibit A hereto, stating therein the
election  of the Registered Holder or such permitted assignees of the Registered
Holder to exercise this Warrant in the manner provided in the Purchase Form, (b)
payment  in full of the Exercise Price for the Warrant Shares purchased, and (c)
this  Warrant. Subject to compliance with Section 3.1(a)(vi), this Warrant shall
be  deemed to be exercised on the date of receipt by the Company of the Purchase
Form,  accompanied  by  payment  for  the  Warrant  Shares  to  be purchased and
surrender  of this Warrant, and such date is referred to as the "Exercise Date."
                                                                 -------------
Upon such exercise, the Company shall issue and deliver to the Registered Holder
a  certificate  for  the  full  number  of the Warrant Shares purchasable by the
Registered  Holder  hereunder,  against  the receipt by the Company of the total
Exercise  Price  payable  hereunder  for  all  such Warrant Shares in cash or by
certified  or  cashier's  check. The Person in whose name the certificate(s) for
Common  Stock  is to be issued shall be deemed to have become a holder of record
of the Common Stock on the Exercise Date. In case such exercise is in part only,
a  new warrant or warrants (dated the date hereof) of like tenor, calling in the
aggregate on the face or faces thereof for the number of Warrant Shares equal to
the  number of such shares called for by this Warrant minus the number of shares
of  Common  Stock  purchased  by the Registered Holder upon exercise as provided
herein.

     1.2 Fractional Shares. No fractional shares of Common Stock shall be issued
         -----------------
upon  exercise  of  this  Warrant.

                                   ARTICLE II

                            Warrant Office; Transfer
                            ------------------------

     2.1  Warrant  Office.  The  Company  shall  maintain  an office for certain
          ---------------
purposes  specified  herein (the "Warrant Office"), which office shall initially
                                  --------------
be  the Company's office at 877 North 8th West, Riverton, Wyoming 82501, and may
subsequently be such other

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office  of  the  Company  or  of any transfer agent of the Common Stock of which
written  notice  has previously been given to the Registered Holder. The Company
shall  maintain,  at the Warrant Office, a register for the Warrant in which the
Company  shall  record the name and address of the Registered Holder, as well as
the  name and address of each permitted assignee of the rights of the Registered
Holder.

     2.2  Ownership  of  Warrant.  The Company may deem and treat the Registered
          ----------------------
Holder  as  the  holder  and  owner  hereof  (notwithstanding  any  notations of
ownership  or  writing  hereon  made  by  anyone other than the Company) for all
purposes  and  shall  not  be  affected  by  any  notice  to the contrary, until
presentation  of  this  Warrant  for  registration  of  transfer.

     2.3  Transfer  of  Warrants.  The Company agrees to maintain at the Warrant
          ----------------------
Office books for the registration and transfer of this Warrant. This Warrant may
be  transferred  in whole or in part only in compliance with the applicable law.
The  Company,  from time to time, shall register the transfer of this Warrant in
such  books  upon  surrender  of  this  Warrant  at the Warrant Office, properly
endorsed,  together  with a written assignment of this Warrant, substantially in
the  form  of  the Assignment attached as Exhibit B hereto. Upon transfer, a new
Warrant  shall  be  issued  to  the transferee, and the Company shall cancel the
surrendered  Warrant.  The  Registered  Holder shall pay all taxes and all other
expenses  and  charges  payable  in  connection  with  the  transfer of Warrants
pursuant  to  this  Section  2.3.

     2.4  No Rights as Shareholder Until Exercise. This Warrant does not entitle
          ---------------------------------------
the  Registered  Holder to any voting rights or other rights as a shareholder of
the  Company  prior  to  exercise.  Upon  the  surrender of this Warrant and the
payment  of  the aggregate Exercise Price, the Warrant Shares so purchased shall
be  issued to the Registered Holder as the record owner of such shares as of the
close of business on the later of the date of such surrender or payment. Warrant
Shares  shall be issued subject to no restrictions upon transfer or sale, except
applicable  securities  laws.

     2.5  Registration  Rights.  The  Company  agrees that at the request of the
          --------------------
Registered Holder (or Registered Holders, provided request is made by Registered
Holders  with  60% of the Warrants Shares issuable on exercise of this Warrant),
made  at  any  time  after  the Company has a class of stock registered with the
Securities  and  Exchange  Commission under the Securities Exchange Act of 1934,
public resale of the Warrant Shares shall be covered by a registration statement
on  an  appropriate form to be filed with the Securities and Exchange Commission
under  the  Securities  Act.

     Once public, the Company shall use its commercially reasonable best efforts
to  file the registration statement as soon as possible after receipt of request
from  the  Registered  Holder,  it  being  understood  that a request for filing
received  in the first quarter may result in a delay of filing until the Company
has  filed  its  annual  report with the Securities and Exchange Commission. The
Company  will file the registration statement at its sole cost and expense, have
it  declared  effective  as  soon as practicable, and maintain such registration
statement  in  effect  until  the first to occur of the following: (a) the third
anniversary  of effective date, (b) the date when all of the Warrant Shares have
been  sold;

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or  (c) the date the Registered Holder(s) is or are able to immediately sell the
Warrant  Shares  pursuant  to  Rule  144. The benefits of this section 2.5 shall
extend  to  each  Registered  Holder.

     When, pursuant to this Section, the Company shall take any action to permit
a  public  offering  or  sale  or  other distribution of the Warrant Shares, the
Company  shall:

     (a)  furnish,  without  charge, to each Registered Holder of Warrant Shares

          (i)  a  reasonable  number  of  copies  of such registration statement
               (including  any exhibits thereto other than exhibits incorporated
               by  reference), and each amendment and supplement thereto as such
               Registered  Holder  may  request,

          (ii) such  number  of  copies  of  the  prospectus  included  in  such
               registration statement (including each preliminary prospectus and
               any  other  prospectus  filed under Rule 424 under the Securities
               Act)  as  such  Registered Holder may request, in conformity with
               the  requirements  of  the  Securities  Act,  and

          (iii)  such  other  documents as such Registered Holder may reasonably
               request  in  order  to  facilitate the disposition of the Warrant
               Shares.

     (b)  bear  the  complete  cost  and  expense  of  such  registrations  or
          qualifications.

     (c)  indemnify  and  hold  harmless  each  Registered  Holder  and  each
          underwriter,  within  the  meaning  of  the  Securities  Act,  who may
          purchase  from  or  sell  for a Registered Holder, any Warrant Shares,
          from  and against any and all losses, claims, damages, and liabilities
          (including  but  not  limited  to,  any  and  all  expenses whatsoever
          reasonably incurred in investigating, preparing, defending or settling
          any  claim)  arising  from

          (i)  any  untrue  or  alleged  untrue  statement  of  a  material fact
               contained  in  any  registration  statement furnished pursuant to
               this  Section,  or  any  prospectus  included  herein  or

          (ii) any omission or alleged omission to state therein a material fact
               required to be stated therein or necessary to make the statements
               therein  not  misleading.  The  Company  shall  not be liable for
               amounts  paid  in  settlement  of  any  such  litigation  if such
               settlement  was  effected without the consent of the Company. The
               indemnity  agreement of the Company herein shall not inure to the
               benefit  of any such underwriter (or to the benefit of any person
               who  controls such underwriter) on

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               account  of  any losses, claims, damages, liabilities (or actions
               or  proceedings  in respect thereof) arising from the sale of any
               of  such  Warrant  Shares by such underwriter to a person if such
               underwriter  failed  to  send  or  give  a copy of the prospectus
               furnished  pursuant  to  this  Section,  as  the same may then be
               supplemented  or  amended  (if such supplement or amendment shall
               have  been furnished the Registered Holders), to such person with
               or  prior  to  the  written  confirmation  of  the sale involved.

     The  Registered  Holder  shall  supply  such information as the Company may
     reasonably  require from such Registered Holder, or any underwriter for the
     Registered  Holder,  for  inclusion  in such registration statement or post
     effective  amendment.

     2.6  Expenses  of  Delivery of Warrants. Except as provided in Section 2.3,
          ----------------------------------
the  Company  shall  pay  all  reasonable  expenses and other charges payable in
connection  with  the preparation, issuance and delivery of Warrants and related
Warrant  Shares  hereunder.

     2.7  Compliance  with  Securities  Laws.  The  Registered  Holder  (and its
          ----------------------------------
transferees  and  assigns),  by acceptance of this Warrant, covenants and agrees
that such Registered older is acquiring the Warrants evidenced hereby, and, upon
exercise  hereof,  the  Warrant Shares, for its own account as an investment and
not  with  a  view to distribution thereof. Neither this Warrant nor the Warrant
Shares  issuable  hereunder have been registered under the Securities Act or any
state  securities  laws  and  no  transfer of this Warrant or any Warrant Shares
shall  be  permitted  unless the Company has received notice of such transfer in
the  form  of  the  assignment  attached  hereto as Exhibit B, accompanied by an
opinion of counsel reasonably satisfactory to the Company that an exemption from
registration  of  such  Warrant  or  Warrant  Shares under the Securities Act is
available for such transfer. Upon exercise of the Warrants, certificates for the
Warrant  Shares  shall  bear  a  restrictive  legend  substantially  as follows:

     "The  securities  represented  by this certificate have not been registered
     under the Securities Act of 1933, as amended, or the securities laws of any
     state  (collectively,  the  "Acts").  Neither  the  shares nor any interest
     therein  may  be offered, sold, transferred, pledged, or otherwise disposed
     of  in  the  absence of an effective registration statement with respect to
     the  shares  under  all  of  the  applicable Acts, or an opinion of counsel
     satisfactory  to  Rocky  Mountain  Gas,  Inc.  to  the  effect  that  such
     registration  is  not  required."

     (c)  Any  attempted  transfer  of  the  Warrant  or  Warrant  Shares not in
compliance  with  the  provisions  of  this  section  shall  be  void.

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<PAGE>

                                  ARTICLE III

                            Anti-Dilution Provisions
                            ------------------------

     3.1 Adjustment of Exercise Price and Number of Warrant Shares. The Exercise
         ---------------------------------------------------------
Price  and  number of Warrant Shares shall be subject to adjustment from time to
time  as  hereinafter  provided  in  this  Article  III.

     (a)  Adjustments.  The Exercise Price and number of Warrant Shares shall be
          -----------
subject  to  adjustment  from  time  to  time  as  follows:

          (i)  Adjustment  for  Stock  Splits  and  Combinations. If the Company
               -------------------------------------------------
     shall,  at  any  time  or  from  time  to  time  after the date hereof (the
     "Original  Issue  Date")  while  this Warrant remains outstanding, effect a
      ---------------------
     subdivision  of  the outstanding Common Stock or a dividend in Common Stock
     shall  be paid in respect of the Common Stock, the Exercise Price in effect
     immediately  before  such  subdivision  shall be proportionately decreased.
     Conversely, if the Company shall at any time or from time to time after the
     Original  Issue  Date combine the outstanding shares of Common Stock into a
     smaller  number  of shares, the Exercise Price in effect immediately before
     such combination shall be proportionately increased. When any adjustment is
     required  to  be  made in the Exercise Price, the number of Warrants Shares
     purchasable  upon  the  exercise  of  this  Warrant shall be changed to the
     number  determined  by dividing (i) an amount equal to the number of shares
     issuable  upon  the  exercise  of  this  Warrant  immediately prior to such
     adjustment, multiplied by the Exercise Price in effect immediately prior to
     such  adjustment,  by  (ii)  the Exercise Price in effect immediately after
     such  adjustment.  Any adjustment under this Section 3.1(a)(i) shall become
     effective  at  the  close  of  business  on  the  date  the  subdivision or
     combination  becomes  effective.

          (ii)  Adjustment  for Reclassification, Exchange, and Substitution. If
                ------------------------------------------------------------
     at  any  time or from time to time after the Original Issue Date while this
     Warrant remains outstanding, the Common Stock is changed into the same or a
     different  number  of  shares  of any class or classes of stock, whether by
     recapitalization,  reclassification  or  otherwise,  the  Registered Holder
     shall  have  the  right  thereafter to convert such stock into the kind and
     amount of stock and other securities receivable upon such recapitalization,
     reclassification or other change by holders of the maximum number of shares
     of  Common  Stock  into  which  such shares of Common Stock could have been
     converted  immediately  prior to such recapitalization, reclassification or
     change.

          (iii) Other Dilutive Events. In case any material event shall occur as
                ---------------------
     to  which  the provisions of Section 3.1(a) are not strictly applicable but
     the  failure  to  make  an adjustment would not fairly protect the purchase
     rights  represented by this Warrant in accordance with the essential intent
     and  principles  of  such  section,  then,  in such case, at the Registered
     Holder's request, the Company shall appoint a firm of independent certified
     public  accountants of recognized standing and reasonably acceptable to the
     Registered  Holder  ("Firm").  Such  Firm shall give their opinion

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     upon  the  adjustment  in  the Exercise Price and/or Warrants, if any, on a
     basis  necessary  to  preserve,  without  dilution,  the  purchase  rights
     represented by this Warrant. Upon receipt of such opinion, the Company will
     promptly  mail  a  copy thereof to the Registered Holder and shall make the
     adjustments  described  therein;  if such adjustments result in a change in
     exercise  price  of  less than 5%, then the Registered Holder shall pay the
     cost  of  the  Firm's  review.

          (iv)  No Dilution or Impairment. The Company will not, by amendment of
                -------------------------
     its  charter or through any consolidation, merger, reorganization, transfer
     of  assets, dissolution, issue or sale of securities or any other voluntary
     action,  avoid or seek to avoid the observance or performance of any of the
     terms  of  the  Warrants, but will at all times in good faith carry out all
     such  terms  and take all such action as may be necessary or appropriate in
     order to protect the rights of the holders of the Warrants against dilution
     or  other impairment. Without limiting the generality of the foregoing, the
     Company  a) will not permit the par value of any shares of stock receivable
     upon  the  exercise  of the Warrants to exceed the amount payable therefore
     upon  such  exercise,  b)  will take all such action as may be necessary or
     appropriate  in  order that the Company may validly and legally issue, free
     from  preemptive rights, fully paid and non-assessable shares of stock upon
     the exercise of all Warrants from time to time outstanding, and c) will not
     take any action which results in any adjustment of the Warrant Price if the
     total  number  of shares of Common Stock issuable after the action upon the
     exercise  of all of the Warrants would exceed the total number of shares of
     Common Stock then authorized by the Company's charter and available for the
     purpose  of  issue  upon  such  exercise.

          (v)  Determinations.  All  determinations  by  the  Company  under the
               --------------
     provisions  of  this Warrant shall be made in good faith with due regard to
     the  interests  of  the  Registered  Holder,  and  in  accordance with good
     financial  practice.

          (vi)  Reorganizations,  Reclassifications, Mergers, Consolidations, or
                ----------------------------------------------------------------
     Sales  of  Assets.  If  at any time or from time to time after the Original
     -----------------
     Issue  Date  while  this  Warrant  remains  outstanding, there is a capital
     reorganization  or  reclassification  of  the  Common Stock or a merger, or
     consolidation  of  the Company with or into another corporation or transfer
     or sales of substantially all of the assets of the Company, provision shall
     be  made  so  that  the  Registered  Holder shall thereafter be entitled to
     receive  upon  exercise  hereof  the  number  of  shares  of stock or other
     securities  or  property  of the Company to which a holder of the number of
     shares  of Common Stock deliverable upon exercise immediately prior to such
     event  would have been entitled as a result of such Company reorganization,
     reclassification, merger, consolidation or sale of substantially all of the
     Company  assets.

          (vii)  Rounding  of Calculations; Minimum Adjustment. All calculations
                 ---------------------------------------------
     under  this Section 3.1(a) shall be made to the nearest cent. Any provision
     of  this  Section

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<PAGE>

     3.1  to  the  contrary notwithstanding, no adjustment in the Exercise Price
     shall be made if the amount of such adjustment would be less than one cent.

          (viii)  Timing  of  Issuance  of  Additional Common Stock Upon Certain
                  --------------------------------------------------------------
     Adjustments.  In  any  case  in which the provisions of this Section 3.1(a)
     -----------
     shall require that an adjustment shall become effective immediately after a
     record  date  for  an  event, the Company may defer until the occurrence of
     such  event  issuing  to  the  Registered Holder after such record date and
     before  the  occurrence of such event the additional shares of Common Stock
     or  other  property  issuable or deliverable upon exercise by reason of the
     adjustment required by such event over and above the shares of Common Stock
     or  other property issuable or deliverable upon such exercise before giving
     effect to such adjustment; provided, however, that the Company upon request
                                --------  -------
     shall  deliver  to  such  Registered Holder a due bill or other appropriate
     instrument  evidencing  such  Registered  Holder's  right  to  receive such
     additional  shares or other property, and such cash, upon the occurrence of
     the  event  requiring  such  adjustment.

     (b)  Statement  Regarding Adjustments. Whenever the Exercise Price shall be
          --------------------------------
adjusted  as  provided  in Section 3.1(a), and upon each change in the number of
shares  of  the Common Stock issuable upon exercise of this Warrant, the Company
shall  thereafter give notice thereof to the Registered Holder, with a statement
showing in detail the facts requiring such adjustment and the Exercise Price and
new  number  of  shares  issuable that shall be in effect after such adjustment.

     3.2  Costs.  The Registered Holder shall pay all direct documentary, stamp,
          -----
transfer  or  other transactional taxes attributable to the issuance or delivery
of  the  Warrant  Shares  upon  exercise  of  this Warrant, or in respect of any
transfer  of  the  Warrant  Shares.

     3.3  Reservation  of Shares. The Company shall reserve at all times so long
          ----------------------
as  this  Warrant  remains  outstanding, free from preemptive rights, out of its
treasury  Common Stock or its authorized but unissued shares of Common Stock, or
both,  solely  for  the  purpose  of  effecting  the  exercise  of this Warrant,
sufficient  shares  of  Common  Stock  to  provide  for  the  exercise  hereof.

     3.4  Valid  Issuance.  All  shares of Common Stock which may be issued upon
          ---------------
exercise  of  this Warrant will upon issuance by the Company be duly and validly
issued,  fully paid and nonassessable and free from all taxes, liens and charges
with  respect to the issuance thereof attributable to any act or omission by the
Company, and the Company shall take no action which will cause a contrary result
(including  without  limitation, any action which would cause the Exercise Price
to  be  less  than  the  par  value,  if  any,  of  the  Common  Stock).

     3.5  Reporting.  So  long  as this Warrant remains outstanding, the Company
          ---------
shall  furnish  to  the  Registered  Holder,  the  Company's quarterly financial
statements,  including balance sheets and statements of income, which statements
shall  be  annually  audited, as soon as practicable after they are prepared for
internal  use.

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<PAGE>

                                   ARTICLE IV

                            Covenant of the Company
                            -----------------------

     The  Company  covenants  and agrees that this Warrant shall be binding upon
any  corporation  succeeding  to  the  Company  by  merger  or  consolidation.

                                    ARTICLE V

                                  Miscellaneous
                                  -------------

     5.1  Governing  Law.  This  Warrant  shall  be governed by and construed in
          --------------
accordance with the internal laws of the State of Wyoming, without regard to its
conflict  of  law provisions. Any litigation shall be conducted in the courts of
the  State  of  Wyoming,  or  the  United  States  District  Court  for Wyoming.

     5.2  Waiver  and  Amendment.  Any  term or provision of this Warrant may be
          ----------------------
waived  at  any time by the party which is entitled to the benefits thereof, and
any term or provision of this Warrant may be amended or supplemented at any time
by  the  written consent of the parties (it being agreed that an amendment to or
waiver  under  any of the provisions of Article III of this Warrant shall not be
considered  an amendment of the number of Warrant Shares or the Exercise Price).
No  waiver by any party of any default, misrepresentation, or breach of warranty
or  covenant hereunder, whether intentional or not, shall be deemed to extend to
any  prior  or  subsequent  default, misrepresentation, or breach of warranty or
covenant  hereunder or affect in any way any rights arising because of any prior
or  subsequent  such  occurrence.

     5.4  Illegality.  In  the  event  that  any  one  or more of the provisions
          ----------
contained  in  this  Warrant  shall  be  determined  to  be  invalid, illegal or
unenforceable  in  any  respect  for  any  reason,  the  validity,  legality and
enforceability  of  any  such  provision  in any other respect and the remaining
provisions  of this Warrant shall not, at the election of the party for whom the
benefit  of  the  provision  exists,  be  in  any  way  impaired.

     5.5  Notice. Any notice or other document required or permitted to be given
          ------
or  delivered  to  the  Registered  Holder  shall  be  delivered  at, or sent by
certified  or  registered  mail  to  such Registered Holder at, the last address
shown  on  the  books  of  the  Company maintained at the Warrant Office for the
registration  of  this  Warrant  or  at  any  more  recent  address of which the
Registered  Holder  shall  have  notified  the Company in writing. Any notice or
other  document  required  or permitted to be given or delivered to the Company,
other  than  such  notice  or  documents required to be delivered to the Warrant
Office,  shall  be delivered at, or sent by certified or registered mail to, the
office  of  the  Company  at  877 North 8th West, Riverton, Wyoming 82501 or any
other  address as shall have been designated in writing by the Company delivered
to  the  Registered  Holder.

     5.6  Exchange, Loss, Destruction, etc. of Warrant. Upon receipt of evidence
          --------------------------------------------
satisfactory  to  the  Company  (an  affidavit of the Registered Holder shall be
satisfactory

                                        9
<PAGE>

evidence) of the loss, theft, mutilation or destruction of this Warrant, and, in
the  case  of  any  such  loss, theft or destruction, upon delivery of a bond of
indemnity  in  such  form  and amount as shall be reasonably satisfactory to the
Company,  or, in the event of such mutilation upon surrender and cancellation of
this  Warrant, the Company will make and deliver a new Warrant of like tenor, in
lieu  of  such  lost, stolen, destroyed or mutilated Warrant; provided, however,
                                                              --------  -------
that  the  original  Registered  Holder of this Warrant shall not be required to
provide any such bond of indemnity and may in lieu thereof provide his agreement
of  indemnity.  Any  Warrant  issued under the provisions of this Section 6.8 in
lieu  of  any Warrant alleged to be lost, destroyed or stolen, or in lieu of any
mutilated  Warrant,  shall  constitute an original contractual obligation on the
part of the Company. This Warrant shall be promptly canceled by the Company upon
the  surrender  hereof  in  connection  with  any  exchange  or replacement. The
Registered  Holder  of  this  Warrant  shall pay all taxes (including securities
transfer  taxes)  and  all  other  reasonable  expenses  and  charges payable in
connection  with  the  preparation,  execution  and  delivery  of  replacement
Warrant(s).

     5.7  Headings.  The  Article  and Section and other headings herein are for
          --------
convenience  only  and  are  not a part of this Warrant and shall not affect the
interpretation  thereof.

     5.8  Successors  and  Assigns.  Subject to applicable securities laws, this
          ------------------------
Warrant  and  the  rights  and  obligations  evidenced hereby shall inure to the
benefit  of and be binding upon the successors of the Company and the successors
and  permitted  assigns of Registered Holder. The provisions of this Warrant are
intended  to  be  for the benefit of all Registered Holders from time to time of
this  Warrant  and  shall  be  enforceable  by  any  such  Registered  Holder.

     IN WITNESS WHEREOF, the Company has caused this Warrant to be signed in its
name.

     Dated:  July  30,  2004

                                        ROCKY  MOUNTAIN  GAS,  INC.

                                        By:   /s/ Mark J. Larsen
                                           -------------------------------------
                                             Mark  J.  Larsen
                                             President

                                       10
<PAGE>

                                    Exhibit A

                                  PURCHASE FORM

To:     Rocky  Mountain  Gas,  Inc.

     The  undersigned,  pursuant  to  the  provisions  set forth in the attached
Warrant, hereby irrevocably elects to purchase shares of Common Stock covered by
such  Warrant,  and  pays  $                       for  the  Exercise  Price.
                            ---------------------

                                        Date:                          ,  2004
                                              -------------------------

     Name:
          -----------------------------

     Title:
           ----------------------------

                                       11
<PAGE>

                                    Exhibit B

                                   ASSIGNMENT

     For  value  received,,  hereby sells, assigns and transfers unto the within
Warrant,  together  with  all  right, title and interest therein and does hereby
irrevocably  constitute and appoint                     as attorney, to transfer
                                    -------------------
said  Warrant  on  the  books  of  the Company, with full power of substitution.

Dated:                                ,  2004
      --------------------------------

                                       12
<PAGE>ACE SECURITIES CORP.
                                    Depositor

                           HOMEQ SERVICING CORPORATION
                                    Servicer

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

                       HSBC BANK USA, NATIONAL ASSOCIATION
                                     Trustee

                         POOLING AND SERVICING AGREEMENT

                            Dated as of July 1, 2004

          ACE Securities Corp. Home Equity Loan Trust, Series 2004-RM1
                     Asset Backed Pass-Through Certificates

<PAGE>

<TABLE>
<CAPTION>
<S>                                                                                                               <C>
ARTICLE I DEFINITIONS                                                                                             4

   Section 1.01.       Defined Terms..............................................................................4
      Accepted Master Servicing Practices.........................................................................4
      Accepted Servicing Practices................................................................................4
      Account.....................................................................................................4
      Accrued Certificate Interest................................................................................4
      Adjustable Rate Mortgage Loan...............................................................................4
      Adjustment Date.............................................................................................5
      Administration Fees.........................................................................................5
      Administration Fee Rate.....................................................................................5
      Advance Facility............................................................................................5
      Affiliate...................................................................................................5
      Aggregate Loss Severity Percentage..........................................................................5
      Agreement...................................................................................................5
      Amounts Held for Future Distribution........................................................................5
      Assignment..................................................................................................5
      Available Distribution Amount...............................................................................5
      Avoided Payment.............................................................................................6
      Balloon Mortgage Loan.......................................................................................6
      Balloon Payment.............................................................................................6
      Bankruptcy Code.............................................................................................6
      Book-Entry Certificate......................................................................................6
      Book-Entry Custodian........................................................................................6
      Business Day................................................................................................6
      Cap Contracts...............................................................................................6
      Cash-Out Refinancing........................................................................................7
      Certificate.................................................................................................7
      Certificate Factor..........................................................................................7
      Certificate Insurance Policy................................................................................7
      Certificate Insurer.........................................................................................7
      Certificate Insurer Default.................................................................................7
      Certificate Margin..........................................................................................8
      Certificateholder...........................................................................................9
      Certificate Owner...........................................................................................9
      Certificate Principal Balance...............................................................................9
      Certificate Register.......................................................................................10
      Class......................................................................................................10
      Class A Certificate........................................................................................10
      Class A Principal Distribution Amount......................................................................10
      Class A-1 Allocation Percentage............................................................................10
      Class A-1 Certificate......................................................................................10
      Class A-1 Principal Distribution Amount....................................................................10
      Class A-1A Certificate.....................................................................................10
      Class A-1B Certificate.....................................................................................10
      Class A-1B Certificate Deficiency Amount...................................................................11

                                                        -i-

<PAGE>

      Class A-1B Percentage......................................................................................11
      Class A-1B Principal Loss Amount...........................................................................11
      Class A-2 Allocation Percentage............................................................................11
      Class A-2A Certificate.....................................................................................11
      Class A-2 Principal Distribution Amount....................................................................11
      Class B Certificate........................................................................................12
      Class B-1 Certificate......................................................................................12
      Class B-2 Certificate......................................................................................12
      Class B-3 Certificate......................................................................................12
      Class B-1 Principal Distribution Amount....................................................................12
      Class B-2 Principal Distribution Amount....................................................................13
      Class B-3 Principal Distribution Amount....................................................................13
      Class CE Certificate.......................................................................................14
      Class M Certificates.......................................................................................14
      Class M-1 Certificate......................................................................................14
      Class M-1 Principal Distribution Amount....................................................................14
      Class M-2 Certificate......................................................................................14
      Class M-2 Principal Distribution Amount....................................................................15
      Class M-3 Certificate......................................................................................15
      Class M-3 Principal Distribution Amount....................................................................15
      Class M-4 Certificate......................................................................................16
      Class M-4 Principal Distribution Amount....................................................................16
      Class M-5 Certificate......................................................................................16
      Class M-5 Principal Distribution Amount....................................................................16
      Class M-6 Certificate......................................................................................17
      Class M-6 Principal Distribution Amount....................................................................17
      Class P Certificate........................................................................................17
      Class R Certificates.......................................................................................17
      Class R-I Interest.........................................................................................18
      Class R-II Interest........................................................................................18
      Closing Date...............................................................................................18
      Code.......................................................................................................18
      Collection Account.........................................................................................18
      Commission.................................................................................................18
      Corporate Trust Office.....................................................................................18
      Corresponding Certificate..................................................................................18
      Credit Enhancement Percentage..............................................................................19
      Credit Risk Management Agreements..........................................................................19
      Credit Risk Management Fee.................................................................................19
      Credit Risk Management Fee Rate............................................................................19
      Credit Risk Manager........................................................................................19
      Custodial Agreement........................................................................................19
      Custodian..................................................................................................19
      Cut-off Date...............................................................................................19
      Debt Service Reduction.....................................................................................19
      Deficient Valuation........................................................................................19

                                                       -ii-

<PAGE>

      Definitive Certificates....................................................................................20
      Deleted Mortgage Loan......................................................................................20
      Delinquency Percentage.....................................................................................20
      Depositor..................................................................................................20
      Depository.................................................................................................20
      Depository Institution.....................................................................................20
      Depository Participant.....................................................................................20
      Determination Date.........................................................................................20
      Directly Operate...........................................................................................20
      Disqualified Organization..................................................................................21
      Distribution Account.......................................................................................21
      Distribution Date..........................................................................................21
      Due Date...................................................................................................21
      Due Period.................................................................................................21
      Eligible Account...........................................................................................21
      ERISA......................................................................................................22
      Estate in Real Property....................................................................................22
      Excess Liquidation Proceeds................................................................................22
      Expense Adjusted Mortgage Rate.............................................................................22
      Extraordinary Trust Fund Expense...........................................................................22
      Extra Principal Distribution Amount........................................................................22
      Fannie Mae.................................................................................................22
      FDIC.......................................................................................................22
      Final Maturity Date........................................................................................22
      Final Recovery Determination...............................................................................22
      Fitch......................................................................................................22
      Freddie Mac................................................................................................23
      Gross Margin...............................................................................................23
      Group I Interest Remittance Amount.........................................................................23
      Group I Mortgage Loans.....................................................................................23
      Group I Principal Distribution Amount......................................................................23
      Group I Principal Remittance Amount........................................................................23
      Group II  Interest Remittance Amount.......................................................................23
      Group II Mortgage Loans....................................................................................23
      Group II Principal Distribution Amount.....................................................................24
      Group II Principal Remittance Amount.......................................................................24
      Independent................................................................................................24
      Independent Contractor.....................................................................................24
      Index......................................................................................................25
      Insolvency Proceeding......................................................................................25
      Institutional Accredited Investor..........................................................................25
      Insurance Agreement........................................................................................25
      Insurance Proceeds.........................................................................................25
      Insured Certificates.......................................................................................25
      Insured Payments...........................................................................................25
      Interest Accrual Period....................................................................................25

                                                       -iii-

<PAGE>

      Interest Carry Forward Amount..............................................................................25
      Interest Determination Date................................................................................26
      Interest Distribution Amount...............................................................................26
      Interest Remittance Amount.................................................................................26
      Last Scheduled Distribution Date...........................................................................26
      Late Collections...........................................................................................26
      Liquidation Event..........................................................................................26
      Liquidation Proceeds.......................................................................................26
      Loan-to-Value Ratio........................................................................................27
      London Business Day........................................................................................27
      Loss Severity Percentage...................................................................................27
      Marker Rate................................................................................................27
      Master Servicer............................................................................................27
      Master Servicer Certification..............................................................................27
      Master Servicer Event of Default...........................................................................28
      Master Servicer Fee Rate...................................................................................28
      Master Servicing Fee.......................................................................................28
      Maximum I-LTZZ Uncertificated Interest Deferral Amount.....................................................28
      Maximum Mortgage Rate......................................................................................28
      MERS.......................................................................................................28
      MERS(R)System...............................................................................................28
      Mezzanine Certificate......................................................................................28
      MIN........................................................................................................28
      Minimum Mortgage Rate......................................................................................28
      MOM Loan...................................................................................................29
      Monthly Payment............................................................................................29
      Moody's....................................................................................................29
      Mortgage...................................................................................................29
      Mortgage File..............................................................................................29
      Mortgage Loan..............................................................................................29
      Mortgage Loan Documents....................................................................................29
      Mortgage Loan Purchase Agreement...........................................................................29
      Mortgage Loan Schedule.....................................................................................29
      Mortgage Note..............................................................................................31
      Mortgage Rate..............................................................................................32
      Mortgaged Property.........................................................................................32
      Mortgagor..................................................................................................32
      Net Monthly Excess Cashflow................................................................................32
      Net Mortgage Rate..........................................................................................32
      Net WAC Pass-Through Rate..................................................................................32
      Net WAC Rate Carryover Amount..............................................................................33
      New Lease..................................................................................................34
      Nonrecoverable P&I Advance.................................................................................34
      Nonrecoverable Servicing Advance...........................................................................34
      Non-United States Person...................................................................................34
      Notional Amount............................................................................................34

                                                       -iv-

<PAGE>

      Offered Certificates.......................................................................................34
      Officer's Certificate......................................................................................34
      One-Month LIBOR............................................................................................34
      One-Month LIBOR Pass-Through Rate..........................................................................35
      Opinion of Counsel.........................................................................................36
      Optional Termination Date..................................................................................36
      Originator.................................................................................................36
      Overcollateralization Amount...............................................................................36
      Overcollateralization Increase Amount......................................................................36
      Overcollateralization Reduction Amount.....................................................................37
      Ownership Interest.........................................................................................37
      P&I Advance................................................................................................37
      Pass-Through Rate..........................................................................................37
      Percentage Interest........................................................................................38
      Periodic Rate Cap..........................................................................................39
      Permitted Investments......................................................................................39
      Permitted Transferee.......................................................................................40
      Person.....................................................................................................41
      Plan.......................................................................................................41
      PMI Insurer................................................................................................41
      PMI Insurer Fee............................................................................................41
      PMI Insurer Fee Rate.......................................................................................41
      PMI Mortgage Loans.........................................................................................41
      PMI Policy.................................................................................................41
      Policy Payment.............................................................................................41
      Policy Payment Account.....................................................................................41
      Premium Amount.............................................................................................41
      Premium Rate...............................................................................................41
      Prepayment Assumption......................................................................................42
      Prepayment Charge..........................................................................................42
      Prepayment Charge Schedule.................................................................................42
      Prepayment Interest Excess.................................................................................42
      Prepayment Interest Shortfall..............................................................................43
      Prepayment Period..........................................................................................43
      Principal Prepayment.......................................................................................43
      Principal Distribution Amount..............................................................................43
      Principal Remittance Amount................................................................................43
      Purchase Price.............................................................................................43
      QIB........................................................................................................44
      Qualified Substitute Mortgage Loan.........................................................................44
      Rate/Term Refinancing......................................................................................45
      Rating Agency or Rating Agencies...........................................................................45
      Realized Loss..............................................................................................45
      Record Date................................................................................................46
      Reference Banks............................................................................................46
      Refinanced Mortgage Loan...................................................................................47

                                                        -v-

<PAGE>

      Regular Certificate........................................................................................47
      Regular Interest...........................................................................................47
      Regulation S Temporary Global Certificate..................................................................47
      Regulation S Permanent Global Certificate..................................................................47
      Reimbursement Amount.......................................................................................47
      Release Date...............................................................................................47
      Relief Act.................................................................................................47
      Relief Act Interest Shortfall..............................................................................47
      REMIC......................................................................................................47
      REMIC I....................................................................................................47
      REMIC I Interest Loss Allocation Amount....................................................................48
      REMIC I Marker Allocation Percentage.......................................................................48
      REMIC I Overcollateralization Amount.......................................................................48
      REMIC I Principal Loss Allocation Amount...................................................................48
      REMIC I Regular Interest...................................................................................49
      REMIC I Regular Interest I-LTAA............................................................................49
      REMIC I Regular Interest I-LTA1A...........................................................................49
      REMIC I Regular Interest I-LTA1B...........................................................................49
      REMIC I Regular Interest I-LTA2............................................................................49
      REMIC I Regular Interest I-LTB1............................................................................49
      REMIC I Regular Interest I-LTB2............................................................................49
      REMIC I Regular Interest I-LTB3............................................................................50
      REMIC I Regular Interest I-LTM1............................................................................50
      REMIC I Regular Interest I-LTM2............................................................................50
      REMIC I Regular Interest I-LTM3............................................................................50
      REMIC I Regular Interest I-LTM4............................................................................50
      REMIC I Regular Interest I-LTM5............................................................................50
      REMIC I Regular Interest I-LTM6............................................................................50
      REMIC I Regular Interest I-LTP.............................................................................51
      REMIC I Regular Interest I-LTXX............................................................................51
      REMIC I Regular Interest I-LTZZ............................................................................51
      REMIC I Regular Interest I-LT1A............................................................................51
      REMIC I Regular Interest I-LT1B............................................................................51
      REMIC I Regular Interest I-LT2A............................................................................51
      REMIC I Regular Interest I-LT2B............................................................................51
      REMIC I Remittance Rate....................................................................................52
      REMIC I Sub WAC Allocation Percentage......................................................................52
      REMIC I Subordinated Balance Ratio.........................................................................52
      REMIC I Required Overcollateralization Amount..............................................................52
      REMIC II...................................................................................................52
      REMIC II Certificate.......................................................................................52
      REMIC II Certificateholder.................................................................................52
      REMIC Provisions...........................................................................................52
      Remittance Report..........................................................................................52
      Rents from Real Property...................................................................................53
      REO Account................................................................................................53

                                                       -vi-

<PAGE>

      REO Disposition............................................................................................53
      REO Imputed Interest.......................................................................................53
      REO Principal Amortization.................................................................................53
      REO Property...............................................................................................53
      Required Overcollateralization Amount......................................................................53
      Reserve Fund...............................................................................................53
      Reserve Interest Rate......................................................................................53
      Residential Dwelling.......................................................................................54
      Residual Certificate.......................................................................................54
      Residual Interest..........................................................................................54
      Responsible Officer........................................................................................54
      Rule 144A..................................................................................................54
      S&P........................................................................................................54
      Scheduled Principal Balance................................................................................54
      Securities Act.............................................................................................55
      Securities Administrator...................................................................................55
      Seller.....................................................................................................55
      Senior Interest Distribution Amount........................................................................55
      Servicer...................................................................................................55
      Servicer Event of Default..................................................................................55
      Servicer Remittance Date...................................................................................55
      Servicer Report............................................................................................55
      Servicing Advances.........................................................................................55
      Servicing Fee..............................................................................................56
      Servicing Fee Rate.........................................................................................56
      Servicing Officer..........................................................................................56
      Single Certificate.........................................................................................56
      Startup Day................................................................................................56
      Stated Principal Balance...................................................................................56
      Stepdown Date..............................................................................................57
      Subordinate Certificates...................................................................................57
      Subsequent Recoveries......................................................................................57
      Sub-Servicer...............................................................................................57
      Sub-Servicing Agreement....................................................................................57
      Substitution Shortfall Amount..............................................................................57
      Tax Returns................................................................................................57
      Telerate Page 3750.........................................................................................57
      Termination Price..........................................................................................57
      Transfer...................................................................................................58
      Transferee.................................................................................................58
      Transferor.................................................................................................58
      Trigger Event..............................................................................................58
      Trust......................................................................................................58
      Trust Fund.................................................................................................58
      Trust REMIC................................................................................................58
      Trustee....................................................................................................58

                                                       -vii-

<PAGE>

      Uncertificated Balance.....................................................................................58
      Uncertificated Interest....................................................................................59
      Uninsured Cause............................................................................................59
      United States Person.......................................................................................59
      Value......................................................................................................59
      Voting Rights..............................................................................................60
      Wells Fargo................................................................................................60
   Section 1.02.       Allocation of Certain Interest Shortfalls.................................................60

ARTICLE II CONVEYANCE OF MORTGAGE LOANS;  ORIGINAL ISSUANCE OF CERTIFICATES                                      62

   Section 2.01.       Conveyance of the Mortgage Loans..........................................................62
   Section 2.02.       Acceptance of REMIC I by Trustee..........................................................63
   Section 2.03.       Repurchase or Substitution of Mortgage Loans..............................................63
   Section 2.04.       Representations and Warranties of the Master Servicer.....................................66
   Section 2.05.       Representations, Warranties and Covenants of the Servicer.................................67
   Section 2.06.       Issuance of the REMIC I Regular Interests and the Class R-I Interest......................70
   Section 2.07.       Conveyance of the REMIC I Regular Interests; Acceptance of REMIC I by the Trustee.........70
   Section 2.08.       Issuance of Class R Certificates..........................................................70
   Section 2.09.       Establishment of the Trust................................................................70

ARTICLE III ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS; ACCOUNTS                                         72

   Section 3.01.       The Servicer to Act as a Servicer.........................................................72
   Section 3.02.       Sub-Servicing Agreements Between the Servicer and Sub-Servicers...........................74
   Section 3.03.       Successor Sub-Servicers...................................................................74
   Section 3.04.       No Contractual Relationship Between Sub-Servicer, Trustee or the Certificateholders.......75
   Section 3.05.       Assumption or Termination of Sub-Servicing Agreement by Successor Servicer................75
   Section 3.06.       Collection of Certain Mortgage Loan Payments..............................................75
   Section 3.07.       Collection of Taxes, Assessments and Similar Items; Servicing Accounts....................76
   Section 3.08.       Collection Account and Distribution Account...............................................77
   Section 3.09.       Withdrawals from the Collection Account and Distribution Account..........................79
   Section 3.10.       Investment of Funds in the Investment Accounts............................................81
   Section 3.11.       Maintenance of Hazard Insurance, Errors and Omissions and Fidelity
                       Coverage and Primary Mortgage Insurance...................................................82
   Section 3.12.       Enforcement of Due-on-Sale Clauses; Assumption Agreements.................................84
   Section 3.13.       Realization Upon Defaulted Mortgage Loans.................................................85
   Section 3.14.       Trustee to Cooperate; Release of Mortgage Files...........................................87
   Section 3.15.       Servicing Compensation....................................................................88
   Section 3.16.       Collection Account Statements.............................................................89
   Section 3.17.       Statement as to Compliance................................................................89
   Section 3.18.       Independent Public Accountants' Servicing Report..........................................89

                                                      -viii-

<PAGE>

   Section 3.19.       Annual Certification......................................................................90
   Section 3.20.       Access to Certain Documentation...........................................................90
   Section 3.21.       Title, Management and Disposition of REO Property.........................................91
   Section 3.22.       Obligations of the Servicer in Respect of Prepayment Interest Shortfalls; Relief Act
                       Interest Shortfalls.......................................................................94
   Section 3.23.       Obligations of the Servicer in Respect of Mortgage Rates and  Monthly Payments............94
   Section 3.24.       Reserve Fund..............................................................................94
   Section 3.25.       Advance Facility..........................................................................96
   Section 3.26.       The Servicer Indemnification..............................................................98
   Section 3.27.       Certificate Insurer Access................................................................98
   Section 3.28.       PMI  Policy; Claims Under the PMI Policy..................................................98

ARTICLE IV ADMINISTRATION AND MASTER SERVICING OF THE MORTGAGE LOANS BY THE MASTER SERVICER                     100

   Section 4.01.       Master Servicer..........................................................................100
   Section 4.02.       REMIC-Related Covenants..................................................................101
   Section 4.03.       Monitoring of Servicer...................................................................101
   Section 4.04.       Fidelity Bond............................................................................102
   Section 4.05.       Power to Act; Procedures.................................................................102
   Section 4.06.       Due-on-Sale Clauses; Assumption Agreements...............................................103
   Section 4.07.       Reserved.................................................................................103
   Section 4.08.       Documents, Records and Funds in Possession of Master Servicer To Be Held for Trustee.....103
   Section 4.09.       Standard Hazard Insurance and Flood Insurance Policies...................................104
   Section 4.10.       Presentment of Claims and Collection of Proceeds.........................................104
   Section 4.11.       Maintenance of Primary Mortgage Insurance Policies.......................................104
   Section 4.12.       Trustee to Retain Possession of Certain Insurance Policies and Documents.................105
   Section 4.13.       Realization Upon Defaulted Mortgage Loans................................................105
   Section 4.14.       Compensation for the Master Servicer.....................................................105
   Section 4.15.       REO Property.............................................................................105
   Section 4.16.       Annual Officer's Certificate as to Compliance............................................106
   Section 4.17.       Annual Independent Accountant's Servicing Report.........................................107
   Section 4.18.       UCC......................................................................................107
   Section 4.19.       Obligation of the Master Servicer in Respect of Prepayment Interest Shortfalls...........107
   Section 4.20.       Reserved.................................................................................108
   Section 4.21.       Prepayment Penalty Verification..........................................................108

ARTICLE V PAYMENTS TO CERTIFICATEHOLDERS                                                                        109

   Section 5.01.       Distributions............................................................................109
   Section 5.02.       Statements to Certificateholders.........................................................123
   Section 5.03.       Servicer Reports; P&I Advances...........................................................127
   Section 5.04.       Allocation of Realized Losses............................................................128

                                                       -ix-

<PAGE>

   Section 5.05.       Compliance with Withholding Requirements.................................................131
   Section 5.06.       Reports Filed with Securities and Exchange Commission....................................131
   Section 5.07.       The Certificate Insurance Policy.........................................................132
   Section 5.08.       Effect of Payments by the Certificate Insurer; Subrogation...............................134

ARTICLE VI THE CERTIFICATES                                                                                     136

   Section 6.01.       The Certificates.........................................................................136
   Section 6.02.       Registration of Transfer and Exchange of Certificates....................................138
   Section 6.03.       Mutilated, Destroyed, Lost or Stolen Certificates........................................144
   Section 6.04.       Persons Deemed Owners....................................................................144
   Section 6.05.       Certain Available Information............................................................144
   Section 6.06.       Rights of the Certificate Insurer to Exercise Rights of Class A-1B Certificateholders....145
   Section 6.07.       Certificate Insurer Default..............................................................145

ARTICLE VII THE DEPOSITOR, THE SERVICER AND THE MASTER SERVICER                                                 147

   Section 7.01.       Liability of the Depositor, the Servicer and the Master Servicer.........................147
   Section 7.02.       Merger or Consolidation of the Depositor, the Servicer or the Master Servicer............147
   Section 7.03.       Limitation on Liability of the Depositor, the Servicer, the Master Servicer and Others...147
   Section 7.04.       Limitation on Resignation of the Servicer................................................148
   Section 7.05.       Limitation on Resignation of the Master Servicer.........................................149
   Section 7.06.       Assignment of Master Servicing...........................................................150
   Section 7.07.       Rights of the Depositor in Respect of the Servicer and the Master Servicer...............150
   Section 7.08.       Duties of the Credit Risk Manager........................................................151
   Section 7.09.       Limitation Upon Liability of the Credit Risk Manager.....................................152
   Section 7.10.       Removal of the Credit Risk Manager.......................................................152

ARTICLE VIII DEFAULT                                                                                            153

   Section 8.01.       Servicer Events of Default...............................................................153
   Section 8.02.       Master Servicer to Act; Appointment of Successor.........................................157
   Section 8.03.       Notification to Certificateholders.......................................................158
   Section 8.04.       Waiver of Servicer Events of Default.....................................................158

ARTICLE IX CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR                                              159

   Section 9.01.       Duties of Trustee and Securities Administrator...........................................159
   Section 9.02.       Certain Matters Affecting Trustee and Securities Administrator...........................160
   Section 9.03.       Trustee and Securities Administrator not Liable for Certificates or Mortgage Loans.......162
   Section 9.04.       Trustee and Securities Administrator May Own Certificates................................163
   Section 9.05.       Fees and Expenses of Trustee and Securities Administrator................................163

                                                        -x-

<PAGE>

   Section 9.06.       Eligibility Requirements for Trustee and Securities Administrator........................164
   Section 9.07.       Resignation and Removal of Trustee and Securities Administrator..........................164
   Section 9.08.       Successor Trustee or Securities Administrator............................................165
   Section 9.09.       Merger or Consolidation of Trustee or Securities Administrator...........................166
   Section 9.10.       Appointment of Co-Trustee or Separate Trustee............................................166
   Section 9.11.       Appointment of Office or Agency..........................................................167
   Section 9.12.       Representations and Warranties...........................................................167

ARTICLE X TERMINATION                                                                                           169

   Section 10.01.      Termination Upon Repurchase or Liquidation of All Mortgage Loans.........................169
   Section 10.02.      Additional Termination Requirements......................................................171

ARTICLE XI REMIC PROVISIONS                                                                                     173

   Section 11.01.      REMIC Administration.....................................................................173
   Section 11.02.      Prohibited Transactions and Activities...................................................175
   Section 11.03.      Indemnification..........................................................................176

ARTICLE XII MISCELLANEOUS PROVISIONS                                                                            177

   Section 12.01.      Amendment................................................................................177
   Section 12.02.      Recordation of Agreement; Counterparts...................................................178
   Section 12.03.      Limitation on Rights of Certificateholders...............................................178
   Section 12.04.      Governing Law............................................................................179
   Section 12.05.      Notices..................................................................................179
   Section 12.06.      Severability of Provisions...............................................................180
   Section 12.07.      Notice to Rating Agencies................................................................180
   Section 12.08.      Article and Section References...........................................................181
   Section 12.09.      Grant of Security Interest...............................................................181
   Section 12.10.      Survival of Indemnification..............................................................182
</TABLE>

Exhibits
--------

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

                                      -xi-

<PAGE>

                  Certificates, Class CE Certificates and Residual Certificates
                  Pursuant to Rule 501 (a) Under the 1933 Act
Exhibit B-3       Form of Transfer Affidavit and Agreement and Form of
                  Transferor Affidavit in Connection with Transfer of Residual
                  Certificates
Exhibit C         Form of Servicer Certification

Schedule 1        Mortgage Loan Schedule
Schedule 2        Prepayment Charge Schedule
Schedule 3        PMI Mortgage Loans
Schedule 4        Standard File Layout - Delinquency Reporting
Schedule 5        Standard File Layout - Scheduled/Scheduled

                                     -xiii-

<PAGE>

                  This Pooling and Servicing Agreement, is dated and effective
as of July 1, 2004, among ACE SECURITIES CORP., as Depositor, HOMEQ SERVICING
CORPORATION, as Servicer, WELLS FARGO BANK, N.A., as Master Servicer and
Securities Administrator and HSBC BANK USA, NATIONAL ASSOCIATION, as Trustee.

                             PRELIMINARY STATEMENT:

                  The Depositor intends to sell pass-through certificates to be
issued hereunder in multiple classes, which in the aggregate will evidence the
entire beneficial ownership interest of the Trust Fund created hereunder. The
Trust Fund will consist of a segregated pool of assets comprised of the Mortgage
Loans and certain other related assets subject to this Agreement.

                                     REMIC I
                                     -------

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

<PAGE>

<TABLE>
<CAPTION>
                                        REMIC I                   INITIAL               LATEST POSSIBLE
             DESIGNATION            REMITTANCE RATE        UNCERTIFICATED BALANCE      MATURITY DATE (1)
             -----------            ---------------        ----------------------      -----------------
<S>                                   <C>                   <C>                          <C>
      I-LTAA                          Variable(2)           $     201,589,605.37         July 25, 2034
      I-LTA1A                         Variable(2)           $         655,540.00         July 25, 2034
      I-LTA1B                         Variable(2)           $         655,540.00         July 25, 2034
      I-LTA2                          Variable(2)           $         349,970.00         July 25, 2034
      I-LTM1                          Variable(2)           $         118,285.00         July 25, 2034
      I-LTM2                          Variable(2)           $          92,565.00         July 25, 2034
      I-LTM3                          Variable(2)           $          25,715.00         July 25, 2034
      I-LTM4                          Variable(2)           $          25,715.00         July 25, 2034
      I-LTM5                          Variable(2)           $          20,570.00         July 25, 2034
      I-LTM6                          Variable(2)           $          20,570.00         July 25, 2034
      I-LTB1                          Variable(2)           $          30,855.00         July 25, 2034
      I-LTB2                          Variable(2)           $          41,140.00         July 25, 2034
      I-LTB3                          Variable(2)           $          10,285.00         July 25, 2034
      I-LTZZ                          Variable(2)           $       2,067,323.58         July 25, 2034
      I-LTP                           Variable(2)           $             100.00         July 25, 2034
      I-LT1A                          Variable(2)           $           6,251.13         July 25, 2034
      I-LT1B                          Variable(2)           $          32,472.74         July 25, 2034
      I-LT2A                          Variable(2)           $           1,668.60         July 25, 2034
      I-LT2B                          Variable(2)           $           8,668.00         July 25, 2034
      I-LTXX                          Variable(2)           $     205,654,618.47         July 25, 2034
</TABLE>
---------------------------
(1)      Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
         regulations, the Distribution Date immediately following the maturity
         date for the Mortgage Loan with the latest maturity date has been
         designated as the "latest possible maturity date" for each REMIC I
         Regular Interest.
(2)      Calculated in accordance with the definition of "REMIC I Remittance
         Rate" herein.

                                    REMIC II
                                    --------

                  As provided herein, the Trustee will elect to treat the
segregated pool of assets consisting of the REMIC I Regular Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC II." The Class R-II Interest will evidence the sole class
of "residual interests" in REMIC II for purposes of the REMIC Provisions. The
following table irrevocably sets forth the designation, the Pass-Through Rate,
the initial aggregate Certificate Principal Balance and, solely for purposes of
satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the "latest possible
maturity date" for the indicated Classes of Certificates.

                                       2
<PAGE>

<TABLE>
<CAPTION>
                                                              Initial Aggregate
                                                            Certificate Principal           Latest Possible
              Designation           Pass-Through Rate              Balance                 Maturity Date (1)
              -----------           -----------------              -------                 -----------------
<S>                                    <C>                  <C>                              <C>
      Class A-1A                       Variable(2)          $     131,108,000.00             July 25, 2034
      Class A-1B                       Variable(2)          $     131,108,000.00             July 25, 2034
      Class A-2                        Variable(2)          $      69,994,000.00             July 25, 2034
      Class M-1                        Variable(2)          $      23,657,000.00             July 25, 2034
      Class M-2                        Variable(2)          $      18,513,000.00             July 25, 2034
      Class M-3                        Variable(2)          $       5,143,000.00             July 25, 2034
      Class M-4                        Variable(2)          $       5,143,000.00             July 25, 2034
      Class M-5                        Variable(2)          $       4,114,000.00             July 25, 2034
      Class M-6                        Variable(2)          $       4,114,000.00             July 25, 2034
      Class B-1                        Variable(2)          $       6,171,000.00             July 25, 2034
      Class B-2                        Variable(2)          $       8,228,000.00             July 25, 2034
      Class B-3                        Variable(2)          $       2,057,000.00             July 25, 2034
      Class P                             N/A(3)            $             100.00             July 25, 2034
      Class CE                            N/A(4)            $       2,057,357.90             July 25, 2034
</TABLE>
-----------------
(1)      Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
         regulations, the Distribution Date immediately following the maturity
         date for the Mortgage Loan with the latest maturity date has been
         designated as the "latest possible maturity date" for each Class of
         Certificates.
(2)      Calculated in accordance with the definition of "Pass-Through Rate"
         herein.
(3)      The Class P Certificates will not accrue interest.
(4)      The Class CE Certificates will accrue interest at their variable
         Pass-Through Rate on the Notional Amount of the Class CE Certificates
         outstanding from time to time which shall equal the Uncertificated
         Balance of the REMIC I Regular Interests (other than REMIC I Regular
         Interest I-LTP). The Class CE Certificates will not accrue interest on
         their Certificate Principal Balance.

         As of the Cut-off Date, the Group I Mortgage Loans had an aggregate
Scheduled Principal Balance equal to $324,727,425.22 and the Group II Mortgage
Loans had an aggregate Scheduled Principal Balance equal to $86,680,032.68.

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

                                       3
<PAGE>

                                    ARTICLE I
                                   DEFINITIONS

                  Section 1.01. DEFINED TERMS.

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

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

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

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

                  "Accrued Certificate Interest": With respect to any Class A
Certificate, Mezzanine Certificate, Class B Certificates or Class CE Certificate
and each Distribution Date, interest accrued during the related Interest Accrual
Period at the Pass-Through Rate for such Certificate for such Distribution Date
on the Certificate Principal Balance, in the case of the Class A Certificates,
the Mezzanine Certificates and the Class B Certificates, or on the Notional
Amount in the case of the Class CE Certificates, of such Certificate immediately
prior to such Distribution Date. The Class P Certificates are not entitled to
distributions in respect of interest and, accordingly, will not accrue interest.
All distributions of interest on the Class A Certificates, the Mezzanine
Certificates and the Class B Certificates will be calculated on the basis of a
360-day year and the actual number of days in the applicable Interest Accrual
Period. All distributions of interest on the Class CE Certificates will be based
on a 360-day year consisting of twelve 30-day months. Accrued Certificate
Interest with respect to each Distribution Date, as to any Class A Certificate,
Mezzanine Certificate, Class B Certificate or Class CE Certificate shall be
reduced by an amount equal to the portion allocable to such Certificate pursuant
to Section 1.02 hereof, if any, of the sum of (a) the aggregate Prepayment
Interest Shortfall, if any, for such Distribution Date to the extent not covered
by payments pursuant to Section 3.22 or Section 4.19 of this Agreement and (b)
the aggregate amount of any Relief Act Interest Shortfall, if any, for such
Distribution Date. In addition, Accrued Certificate Interest with respect to
each Distribution Date, as to any Class CE Certificate, shall be reduced by an
amount equal to the portion allocable to such Class CE Certificate of Realized
Losses, if any, pursuant to Section 1.02 and Section 5.04 hereof.

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

                                       4
<PAGE>

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

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

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

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

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

                  "Aggregate Loss Severity Percentage": With respect to any
Distribution Date, the percentage equivalent of a fraction, the numerator of
which is the aggregate amount of Realized Losses incurred on any Mortgage Loans
from the Cut-off Date to the last day of the preceding calendar month and the
denominator of which is the aggregate principal balance of such Mortgage Loans
immediately prior to the liquidation of such Mortgage Loans.

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

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

                  "Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form, which is sufficient under the laws of
the jurisdiction wherein the related Mortgaged Property is located to reflect of
record the sale of the Mortgage, which assignment, notice of transfer or
equivalent instrument may be in the form of one or more blanket assignments
covering Mortgages secured by Mortgaged Properties located in the same county,
if permitted by law.

                   "Available Distribution Amount": With respect to any
Distribution Date, an amount equal to (1) the sum of (a) the aggregate of the
amounts on deposit in the Collection Account and Distribution Account as of the
close of business on the related Servicer Remittance Date, (b) the aggregate of
any amounts deposited in the Distribution Account by the Servicer or

                                       5
<PAGE>

the Master Servicer in respect of Prepayment Interest Shortfalls for such
Distribution Date pursuant to Section 3.22 or Section 4.19 of this Agreement,
(c) the aggregate of any P&I Advances for such Distribution Date made by the
Servicer pursuant to Section 5.03 of this Agreement and (d) the aggregate of any
P&I Advances made by a successor Servicer (including the Master Servicer) for
such Distribution Date pursuant to Section 8.02, reduced (to not less than zero)
by (2) the portion of the amount described in clause (1)(a) above that
represents (i) Amounts Held for Future Distribution, (ii) Principal Prepayments
on the Mortgage Loans received after the related Prepayment Period (together
with any interest payments received with such Principal Prepayments to the
extent they represent the payment of interest accrued on the Mortgage Loans
during a period subsequent to the related Prepayment Period), (iii) Liquidation
Proceeds and Insurance Proceeds received in respect of the Mortgage Loans after
the related Prepayment Period, (iv) amounts reimbursable or payable to the
Depositor, the Servicer, the Trustee, the Master Servicer, the Securities
Administrator or the Custodian pursuant to Section 3.09 or 9.05 of this
Agreement or otherwise payable in respect of Extraordinary Trust Fund Expenses,
(v) the Credit Risk Management Fee, (vi) amounts deposited in the Collection
Account or the Distribution Account in error, (vii) the amount of any Prepayment
Charges collected by the Servicer in connection with the Principal Prepayment of
any of the Mortgage Loans, (viii) amounts reimbursable to a successor Servicer
(including the Master Servicer) pursuant to Section 8.02 and (ix) the PMI
Insurer Fee payable to the PMI Insurer from the Collection Account.

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

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

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

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

                  "Book-Entry Certificates": The Offered Certificates for so
long as the Certificates of such Class shall be registered in the name of the
Depository or its nominee.

                  "Book-Entry Custodian": The custodian appointed pursuant to
Section 6.01.

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

                  "Cap Contracts": Shall mean (i) the Cap Contract between the
Trustee and the counterparty named thereunder, for the benefit of the Holders of
the Class A-1 Certificates, the Mezzanine Certificates and the Class B
Certificates and (ii) the Cap Contract between the

                                       6
<PAGE>

Trustee and the counterparty thereunder, for the benefit of the Class A-2
Certificates, the Mezzanine Certificates and the Class B Certificates.

                  "Cash-Out Refinancing": A Refinanced Mortgage Loan the
proceeds of which are more than a nominal amount in excess of the principal
balance of any existing first mortgage plus any subordinate mortgage on the
related Mortgaged Property and related closing costs.

                  "Certificate": Any one of ACE Securities Corp., Asset Backed
Pass-Through Certificates, Series 2004-RM1, Class A-1A, Class A-1B, Class A-2,
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 B-3, Class P, Class CE and Class R issued under this
Agreement.

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

                  "Certificate Insurance Policy": The Financial Guaranty
Insurance Policy No. CA01082A, and all endorsements thereto dated the Closing
Date, issued by the Certificate Insurer for the benefit of the Class A-1B
Certificateholders.

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

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

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

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

                           (c) a court of competent jurisdiction, the New York
Department of Insurance or any other competent regulatory authority shall have
entered a final and nonappealable order, judgment or decree (i) appointing a
custodian, trustee, agent, or receiver for

                                       7
<PAGE>

the Certificate Insurer or for all or any material portion of its property or
(ii) authorizing the taking of possession by a custodian, trustee, agent, or
receiver of the Certificate Insurer (or the taking of possession of all or any
material portion of property of the Certificate Insurer).

                  "Certificate Margin": With respect to the Class A-1A
Certificates and, for purposes of the definition of "Marker Rate", REMIC I
Regular Interest I-LTA1A 0.350% in the case of each Distribution Date through
and including the Optional Termination Date and 0.700% in the case of each
Distribution Date thereafter.

                  With respect to the Class A-1B Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTA1B, 0.280% in
the case of each Distribution Date through and including the Optional
Termination Date and 0.560% in the case of each Distribution Date thereafter.

                  With respect to the Class A-2 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTA2 0.380% in
the case of each Distribution Date through and including the Optional
Termination Date and 0.760% in the case of each Distribution Date thereafter.

                  With respect to the Class M-1 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTM1, 0.700% in
the case of each Distribution Date through and including the Optional
Termination Date and 1.050% in the case of each Distribution Date thereafter.

                  With respect to the Class M-2 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTM2, 1.200% in
the case of each Distribution Date through and including the Optional
Termination Date and 1.800% in the case of each Distribution Date thereafter.

                  With respect to the Class M-3 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTM3, 1.450% in
the case of each Distribution Date through and including the Optional
Termination Date and 2.175% in the case of each Distribution Date thereafter.

                  With respect to the Class M-4 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTM4, 1.950% in
the case of each Distribution Date through and including the Optional
Termination Date and 2.925% in the case of each Distribution Date thereafter.

                  With respect to the Class M-5 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTM5, 2.100% in
the case of each Distribution Date through and including the Optional
Termination Date and 3.150% in the case of each Distribution Date thereafter.

                  With respect to the Class M-6 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTM6, 3.500% in
the case of each Distribution Date through and including the Optional
Termination Date and 5.250% in the case of each Distribution Date thereafter.

                                       8
<PAGE>

                  With respect to the Class B-1 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTB1, 3.500% in
the case of each Distribution Date through and including the Optional
Termination Date and 5.250% in the case of each Distribution Date thereafter.

                  With respect to the Class B-2 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTB2, 3.500% in
the case of each Distribution Date through and including the Optional
Termination Date and 5.250% in the case of each Distribution Date thereafter.

                  With respect to the Class B-3 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTB3, 3.500% in
the case of each Distribution Date through and including the Optional
Termination Date and 5.250% in the case of each Distribution Date thereafter.

                   "Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in the Certificate Register, except that a
Disqualified Organization or a Non-United States Person shall not be a Holder of
a Residual Certificate for any purposes hereof, and solely for the purposes of
giving any consent pursuant to this Agreement, any Certificate registered in the
name of or beneficially owned by the Depositor, the Seller, the Servicer, the
Master Servicer, the Securities Administrator, the Trustee or any Affiliate
thereof shall be deemed not to be outstanding and the Voting Rights to which it
is entitled shall not be taken into account in determining whether the requisite
percentage of Voting Rights necessary to effect any such consent has been
obtained, except as otherwise provided in Section 12.01. The Trustee and the
Securities Administrator may conclusively rely upon a certificate of the
Depositor, the Seller, the Master Servicer, the Securities Administrator or the
Servicer in determining whether a Certificate is held by an Affiliate thereof.
All references herein to "Holders" or "Certificateholders" shall reflect the
rights of Certificate Owners as they may indirectly exercise such rights through
the Depository and participating members thereof, except as otherwise specified
herein; provided, however, that the Trustee and the Securities Administrator
shall be required to recognize as a "Holder" or "Certificateholder" only the
Person in whose name a Certificate is registered in the Certificate Register.

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

                  "Certificate Principal Balance": With respect to each Class A
Certificate, Mezzanine Certificate, Class B Certificate or Class P Certificate
as of any date of determination, the Certificate Principal Balance of such
Certificate on the Distribution Date immediately prior to such date of
determination plus any Subsequent Recoveries added to the Certificate Principal
Balance of such Certificate pursuant to Section 5.04, minus all distributions
allocable to principal made thereon and Realized Losses allocated thereto, if
any, on such immediately prior Distribution Date (or, in the case of any date of
determination up to and including the first Distribution Date, the initial
Certificate Principal Balance of such Certificate, as stated on the face
thereof). With respect to each Class CE Certificate as of any date of
determination, an

                                       9
<PAGE>

amount equal to the Percentage Interest evidenced by such Certificate times the
excess, if any, of (A) the then aggregate Uncertificated Balances of the REMIC I
Regular Interests over (B) the then aggregate Certificate Principal Balances of
the Class A Certificates, the Mezzanine Certificates, the Class B Certificates
and the Class P Certificates then outstanding. The aggregate initial Certificate
Principal Balance of each Class of Regular Certificates is set forth in the
Preliminary Statement hereto.

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

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

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

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

                  "Class A-1 Allocation Percentage": With respect to any
Distribution Date is the percentage equivalent of a fraction, the numerator of
which is (x) the Group I Principal Remittance Amount for such Distribution Date
and the denominator of which is (y) the Principal Remittance Amount for such
Distribution Date.

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

                  "Class A-1 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of the Certificate Principal Balances
of the Class A-1A Certificates and the Class A-1B Certificates immediately prior
to such Distribution Date over (y) the lesser of (A) the product of (i) 61.50%
and (ii) the aggregate Stated Principal Balance of the Group I Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced and unscheduled collections of principal received during the related
Prepayment Period) and (B) the aggregate Stated Principal Balance of the Group I
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced and unscheduled collections of principal received
during the related Prepayment Period) minus the product of (i) 0.50% and (ii)
the aggregate principal balance of the Group I Mortgage Loans as of the Cut-off
Date.

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

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

                                       10
<PAGE>

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

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

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

          (iii)   the Certificate Principal Balance of the Class A-1B
                  Certificates on the Final Maturity Date or, if earlier, the
                  date on which the final scheduled distribution is made to the
                  Class A-1B Certificateholders pursuant to Article X.

                  "Class A-1B Percentage": The fraction, expressed as a
percentage, obtained by diving the Certificate Principal Balance of the Class
A-1B Certificates, by the aggregate Certificate Principal Balance of the Class
A-1 Certificates.

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

                  "Class A-2 Allocation Percentage": With respect to any
Distribution Date is the percentage equivalent of a fraction, the numerator of
which is (x) the Group II Principal Remittance Amount for such Distribution Date
and the denominator of which is (y) the Principal Remittance Amount for such
Distribution Date.

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

                  "Class A-2 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the Certificate Principal Balance of the Class
A-2 Certificates immediately prior to such Distribution Date over (y) the lesser
of (A) the product of (i) 61.50% and (ii) the aggregate Stated Principal Balance
of the Group II Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced and unscheduled collections of
principal received during the related Prepayment Period) and (B) the aggregate
Stated Principal Balance of the Group II Mortgage

                                       11
<PAGE>

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

                  "Class B Certificate": Any Class B-1, Class B-2 or Class B-3
Certificate.

                  "Class B-1 Certificate": Any one of the Class B-1 Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-3 and evidencing
a Regular Interest in REMIC II for purposes of the REMIC Provisions.

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

                  "Class B-3 Certificates": Any one of the Class B-3
Certificates executed and authenticated by the Securities Administrator and
delivered by the Trustee, substantially in the form annexed hereto as Exhibit
A-3 and evidencing a Regular Interest in REMIC II for purposes of the REMIC
Provisions.

                  "Class B-1 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (iii) the Certificate Principal Balance of the Class
M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into account the
payment of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date), (vi) the Certificate Principal Balance of the
Class M-5 Certificates (after taking into account the payment of the Class M-5
Principal Distribution Amount on such Distribution Date), (vii) the Certificate
Principal Balance of the Class M-6 Certificates (after taking into account the
payment of the Class M-6 Principal Distribution Amount on such Distribution
Date) and (viii) the Certificate Principal Balance of the Class B-1 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 94.00% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced and unscheduled collections of principal received
during the related Prepayment Period) and (B) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced and unscheduled collections of
principal received during the

                                       12
<PAGE>

related Prepayment Period) minus the product of (i) 0.50% and (ii) the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date.

                  "Class B-2 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (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 B-2 Certificates immediately prior to such Distribution Date over (y) the
lesser of (A) the product of (i) 98.00% and (ii) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced and unscheduled collections of
principal received during the related Prepayment Period) and (B) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period (after giving effect to scheduled payments of principal due during
the related Due Period, to the extent received or advanced and unscheduled
collections of principal received during the related Prepayment Period) minus
the product of (i) 0.50% and (ii) the aggregate principal balance of the
Mortgage Loans as of the Cut-off Date.

                  "Class B-3 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (iii) the Certificate Principal Balance of the Class
M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date), (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

                                       13
<PAGE>

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-2 Principal Distribution Amount on such
Distribution Date), (ix) the Certificate Principal Balance of the B-2
Certificates (after taking into account the payment of the Class B-2 Certificate
Principal Distribution Amount on such Distribution Date) and (x) the Certificate
Principal Balance of the B-3 Certificates immediately prior to such Distribution
Date over (y) the lesser of (A) the product of (i) 99.00% and (ii) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period (after giving effect to scheduled payments of principal due during
the related Due Period, to the extent received or advanced and unscheduled
collections of principal received during the related Prepayment Period) and (B)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced
and unscheduled collections of principal received during the related Prepayment
Period) minus the product of (i) 0.50% and (ii) the aggregate principal balance
of the Mortgage Loans as of the Cut-off Date.

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

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

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

                  "Class M-1 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date)
and (ii) the Certificate Principal Balance of the Class M-1 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 73.00% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced and unscheduled collections of principal received
during the related Prepayment Period) and (B) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced and unscheduled collections of
principal received during the related Prepayment Period) minus the product of
(i) 0.50% and (ii) the aggregate principal balance of the Mortgage Loans as of
the Cut-off Date.

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

                                       14
<PAGE>

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

                  "Class M-2 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date) and (iii) the Certificate Principal Balance of the
Class M-2 Certificates immediately prior to such Distribution Date over (y) the
lesser of (A) the product of (i) 82.00% and (ii) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced and unscheduled collections of
principal received during the related Prepayment Period) and (B) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period (after giving effect to scheduled payments of principal due during
the related Due Period, to the extent received or advanced and unscheduled
collections of principal received during the related Prepayment Period) minus
the product of (i) 0.50% and (ii) the aggregate principal balance of the
Mortgage Loans as of the Cut-off Date.

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

                  "Class M-3 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (iii) the Certificate Principal Balance of the Class
M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date) and (iv) the
Certificate Principal Balance of the Class M-3 Certificates immediately prior to
such Distribution Date over (y) the lesser of (A) the product of (i) 84.50% and
(ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last
day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced and unscheduled collections of principal received during the related
Prepayment Period) minus the product of (i) 0.50% and (ii) the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date.

                                       15
<PAGE>

                  "Class M-4 Certificate": Any one of the Class M-4 Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-2 and evidencing
a Regular Interest in REMIC II for purposes of the REMIC Provisions.

                  "Class M-4 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (iii) the Certificate Principal Balance of the Class
M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into account the
payment of the Class M-3 Principal Distribution Amount on such Distribution
Date) and (v) the Certificate Principal Balance of the Class M-4 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 87.00% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced and unscheduled collections of principal received
during the related Prepayment Period) and (B) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced and unscheduled collections of
principal received during the related Prepayment Period) minus the product of
(i) 0.50% and (ii) the aggregate principal balance of the Mortgage Loans as of
the Cut-off Date.

                  "Class M-5 Certificate": Any one of the Class M-5 Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-2 and evidencing
a Regular Interest in REMIC II for purposes of the REMIC Provisions.

                  "Class M-5 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (iii) the Certificate Principal Balance of the Class
M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into account the
payment of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date) and (vi) the Certificate Principal Balance of
the Class M-5 Certificates immediately prior to such Distribution Date over (y)
the lesser of (A) the product of (i) 89.00% and (ii) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the

                                       16
<PAGE>

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

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

                  "Class M-6 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (iii) the Certificate Principal Balance of the Class
M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into account the
payment of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date), (vi) the Certificate Principal Balance of the
Class M-5 Certificates (after taking into account the payment of the Class M-5
Principal Distribution Amount on such 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) 91.00% and
(ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last
day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced and unscheduled collections of principal received during the related
Prepayment Period) minus the product of (i) 0.50% and (ii) the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date.

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

                  "Class R Certificates": Any one of the Class R Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the

                                       17
<PAGE>

form annexed hereto as Exhibit A-6, and evidencing the Class R-I Interest and
the Class R-II Interest.

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

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

                  "Closing Date": July 30, 2004.

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

                  "Collection Account": The account or accounts created and
maintained, or caused to be created and maintained, by the Servicer pursuant to
Section 3.08(a), which shall be entitled "HomEq Servicing Corporation, as
Servicer for HSBC Bank USA, National Association as Trustee, in trust for the
registered holders of ACE Securities Corp., Home Equity Loan Trust, Series
2004-RM1, Asset Backed Pass-Through Certificates". The Collection Account must
be an Eligible Account.

                  "Commission": The Securities and Exchange Commission.

                  "Corporate Trust Office": The principal corporate trust office
of the Trustee which office at the date of the execution of this instrument is
located at 452 Fifth Avenue, New York, New York 10018, Attention: ACE Securities
Corp., 2004-RM1, or at such other address as the Trustee may designate from time
to time by notice to the Certificateholders, the Depositor, the Master Servicer,
the Securities Administrator and the Servicer. The office of the Securities
Administrator, which for purposes of Certificate transfers and surrender is
located at Wells Fargo Bank, N.A., Sixth and Marquette Avenue, Minneapolis,
Minnesota 55479, Attention: Corporate Trust (ACE 2004-RM1), and for all other
purposes is located at Wells Fargo Bank, N.A., P.O. Box 98, Columbia, Maryland
21045, Attention: Corporate Trust (ACE 2004-RM1) (or for overnight deliveries,
at 9062 Old Annapolis Road, Columbia, Maryland 21046, Attention: Corporate Trust
(ACE 2004-RM1)).

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

          REMIC I Regular Interest               Class
          ------------------------               -----
REMIC I Regular Interest I-LTA1A                 A-1A
REMIC I Regular Interest I-LTA1B                 A-1B
REMIC I Regular Interest I-LTA2                   A-2
REMIC I Regular Interest I-LTM1                   M-1
REMIC I Regular Interest I-LTM2                   M-2
REMIC I Regular Interest I-LTM3                   M-3
REMIC I Regular Interest I-LTM4                   M-4
REMIC I Regular Interest I-LTM5                   M-5
REMIC I Regular Interest I-LTM6                   M-6
REMIC I Regular Interest I-LTB1                   B-1
REMIC I Regular Interest I-LTB2                   B-2
REMIC I Regular Interest I-LTB3                   B-3

                                       18
<PAGE>

          REMIC I Regular Interest               Class
          ------------------------               -----
REMIC I Regular Interest I-LTP                     P

                  "Credit Enhancement Percentage": For any Distribution Date,
the percentage equivalent of a fraction, the numerator of which is the sum of
the aggregate Certificate Principal Balances of the Mezzanine Certificates, the
Class B Certificates and the Class CE Certificates, and the denominator of which
is the aggregate Stated Principal Balance of the Mortgage Loans, calculated
after taking into account distributions of principal on the Mortgage Loans and
distribution of the Principal Distribution Amount to the Certificates then
entitled to distributions of principal on such Distribution Date.

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

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

                  "Credit Risk Management Fee Rate": 0.015% per annum.

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

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

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

                  "Cut-off Date": With respect to each Mortgage Loan, July 1,
2004. With respect to all Qualified Substitute Mortgage Loans, their respective
dates of substitution. References herein to the "Cut-off Date," when used with
respect to more than one Mortgage Loan, shall be to the respective Cut-off Dates
for such Mortgage Loans.

                  "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

                                       19
<PAGE>

outstanding principal balance of the Mortgage Loan, which valuation results from
a proceeding initiated under the Bankruptcy Code.

                  "Definitive Certificates": As defined in Section 6.01(b).

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

                  "Delinquency Percentage": As of the last day of the related
Due Period, the percentage equivalent of a fraction, the numerator of which is
the aggregate Stated Principal Balance of all Mortgage Loans that, as of the
last day of the previous calendar month, are 60 or more days delinquent, are in
foreclosure, have been converted to REO Properties or have been discharged by
reason of bankruptcy, and the denominator of which is the aggregate Stated
Principal Balance of the Mortgage Loans and REO Properties as of the last day of
the previous calendar month.

                  "Depositor": ACE Securities Corp., a Delaware corporation, or
its successor in interest.

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

                  "Depository Institution": Any depository institution or trust
company, including the Trustee, that (a) is incorporated under the laws of the
United States of America or any State thereof, (b) is subject to supervision and
examination by federal or state banking authorities and (c) has outstanding
unsecured commercial paper or other short-term unsecured debt obligations (or,
in the case of a depository institution that is the principal subsidiary of a
holding company, such holding company has unsecured commercial paper or other
short-term unsecured debt obligations) that are rated at least A-1+ by S&P, F-1+
by Fitch and P-1 by Moody's (or, if such Rating Agencies are no longer rating
the Offered Certificates, comparable ratings by any other nationally recognized
statistical rating agency then rating the Offered Certificates).

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

                  "Determination Date": With respect to each Distribution Date,
the 15th day of the calendar month in which such Distribution Date occurs, or if
such 15th day is not a Business Day, the Business Day immediately preceding such
15th day.

                  "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

                                       20
<PAGE>

REMIC I other than through an Independent Contractor; provided, however, that
the Servicer, on behalf of the Trustee, shall not be considered to Directly
Operate an REO Property solely because the Servicer establishes rental terms,
chooses tenants, enters into or renews leases, deals with taxes and insurance,
or makes decisions as to repairs or capital expenditures with respect to such
REO Property.

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

                  "Distribution Account": The trust account or accounts created
and maintained by the Securities Administrator pursuant to Section 3.08(b) in
the name of the Securities Administrator for the benefit of the
Certificateholders and designated "Wells Fargo Bank, N.A., in trust for
registered holders of ACE Securities Corp. Home Equity Loan Trust, Series
2004-RM1". Funds in the Distribution Account shall be held in trust for the
Certificateholders for the uses and purposes set forth in this Agreement. The
Distribution Account must be an Eligible Account.

                  "Distribution Date": The 25th day of any month, or if such
25th day is not a Business Day, the Business Day immediately following such 25th
day, commencing in August 2004.

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

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

                  "Eligible Account": Any of (i) an account or accounts
maintained with a Depository Institution, (ii) an account or accounts the
deposits in which are fully insured by the FDIC or (iii) a trust account or
accounts maintained with a federal depository institution or state

                                       21
<PAGE>

chartered depository institution acting in its fiduciary capacity. Eligible
Accounts may bear interest.

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

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

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

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

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

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

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

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

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

                  "Final Recovery Determination": With respect to any defaulted
Mortgage Loan or any REO Property (other than a Mortgage Loan or REO Property
purchased by the Originator, the Seller or the Holder of the Class CE
Certificates pursuant to or as contemplated by Section 2.03, 3.13(c) or Section
10.01), a determination made by the Servicer that all Insurance 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, which determination shall be evidenced by a
certificate of a Servicing Officer delivered to the Master Servicer and
maintained in its records.

                  "Fitch": Fitch Ratings or any successor in interest.

                                       22
<PAGE>

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

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

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

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

                  "Group I Principal Distribution Amount": With respect to any
Distribution Date will be the sum of (i) the principal portion of all Monthly
Payments on the Group I Mortgage Loans due during the related Due Period,
whether or not received on or prior to the related Determination Date; (ii) the
principal portion of all proceeds received in respect of the repurchase of a
Group I Mortgage Loan or, in the case of a substitution, certain amounts
representing a principal adjustment, during the related Prepayment Period
pursuant to or as contemplated by Section 2.03, Section 3.13(c) and Section
10.01; (iii) the principal portion of all other unscheduled collections,
including Insurance Proceeds, Liquidation Proceeds and all Principal Prepayments
in full and in part, received during the related Prepayment Period, to the
extent applied as recoveries of principal on the Group I Mortgage Loans, net in
each case of payments or reimbursements to the Trustee, the Custodian, the
Master Servicer, the Securities Administrator and the Servicer and (iv) the
Class A-1 Allocation Percentage of the amount of any Overcollateralization
Increase Amount for such Distribution Date MINUS (v) the Class A-1 Allocation
Percentage of the amount of any Overcollateralization Reduction Amount for such
Distribution Date.

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

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

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

                                       23
<PAGE>

                  "Group II Principal Distribution Amount": With respect to any
Distribution Date will be the sum of (i) the principal portion of all Monthly
Payments on the Group II Mortgage Loans due during the related Due Period,
whether or not received on or prior to the related Determination Date; (ii) the
principal portion of all proceeds received in respect of the repurchase of a
Group II Mortgage Loan or, in the case of a substitution, certain amounts
representing a principal adjustment, during the related Prepayment Period
pursuant to or as contemplated by Section 2.03, Section 3.13(c) and Section
10.01; (iii) the principal portion of all other unscheduled collections,
including Insurance Proceeds, Liquidation Proceeds and all Principal Prepayments
in full and in part, received during the related Prepayment Period, to the
extent applied as recoveries of principal on the Group II Mortgage Loans, net in
each case of payments or reimbursements to the Trustee, the Custodian, the
Master Servicer, the Securities Administrator and the Servicer and (iv) the
Class A-2 Allocation Percentage of the amount of any Overcollateralization
Increase Amount for such Distribution Date MINUS (v) the Class A-2 Allocation
Percentage of the amount of any Overcollateralization Reduction Amount for such
Distribution Date.

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

                  "Independent": When used with respect to any specified Person,
any such Person who (a) is in fact independent of the Depositor, the Master
Servicer, the Securities Administrator, the Servicer, the Seller, the Originator
and their respective Affiliates, (b) does not have any direct financial interest
in or any material indirect financial interest in the Depositor, the Master
Servicer, the Securities Administrator, the Servicer, the Seller, the Originator
or any Affiliate thereof, and (c) is not connected with the Depositor, the
Master Servicer, the Securities Administrator, the Servicer, the Seller, the
Originator or any Affiliate thereof as an officer, employee, promoter,
underwriter, trustee, partner, director or Person performing similar functions;
provided, however, that a Person shall not fail to be Independent of the
Depositor, the Master Servicer, the Securities Administrator, the Servicer, the
Seller, the Originator or any Affiliate thereof merely because such Person is
the beneficial owner of 1% or less of any class of securities issued by the
Depositor, the Master Servicer, the Securities Administrator, the Servicer, the
Seller, the Originator 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 REMIC I
within the meaning of Section 856(d)(3) of the Code if REMIC I were a real
estate investment trust (except that the ownership tests set forth in that
section shall be considered to be met by any Person that owns, directly or
indirectly, 35% or more of any Class of Certificates), so long as REMIC I does
not receive or derive any income from such Person and provided that the
relationship between such Person and REMIC I is at arm's length, all within the
meaning of Treasury Regulation Section 1.856-4(b)(5), or (ii) any other Person
(including the Servicer) if the Trustee has received an Opinion of Counsel to
the effect that the taking of any action in respect of any REO Property by such
Person, subject to any conditions therein specified, that is otherwise herein
contemplated to be taken by an Independent Contractor will not cause such REO
Property to cease to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code (determined without regard to the exception
applicable for purposes of Section 860D(a) of the Code), or

                                       24
<PAGE>

cause any income realized in respect of such REO Property to fail to qualify as
Rents from Real Property.

                  "Index": As of any Adjustment Date, the index applicable to
the determination of the Mortgage Rate on each Adjustable Rate Mortgage Loan
will generally be the average of the interbank offered rates for six-month
United States dollar deposits in the London market as published in THE WALL
STREET JOURNAL and as most recently available either (a) as of the first
Business Day 45 days prior to such Adjustment Date or (b) as of the first
Business Day of the month preceding the month of such Adjustment Date, as
specified in the related Mortgage Note.

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

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

                  "Insurance Agreement": The Insurance and Indemnity Agreement,
dated as of the Closing Date, among the Certificate Insurer, the Master Servicer
and the Depositor.

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

                  "Insured Certificates": The Class A-1B Certificates.

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

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

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

                                       25
<PAGE>

                  "Interest Determination Date": With respect to the Class A
Certificates, the Mezzanine Certificates, the Class B Certificates, REMIC I
Regular Interest I-LTA1A, REMIC I Regular Interest I-LTA1B, REMIC I Regular
Interest I-LTA2, REMIC I Regular Interest I-LTM1, REMIC I Regular Interest
I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC
I Regular Interest I-LTM5, REMIC I Regular Interest I-LTM6, REMIC I Regular
Interest I-LTB1, REMIC I Regular Interest I-LTB2, REMIC I Regular Interest
I-LTB3 and any Interest Accrual Period therefor, the second London Business Day
preceding the commencement of such Interest Accrual Period.

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

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

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

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

                  "Liquidation Event": With respect to any Mortgage Loan, any of
the following events: (i) such Mortgage Loan is paid in full; (ii) a Final
Recovery Determination is made as to such Mortgage Loan or (iii) such Mortgage
Loan is removed from REMIC I by reason of its being purchased, sold or replaced
pursuant to or as contemplated by Section 2.03, Section 3.13(c) or Section
10.01. With respect to any REO Property, either of the following events: (i) a
Final Recovery Determination is made as to such REO Property or (ii) such REO
Property is removed from REMIC I by reason of its being purchased pursuant to
Section 10.01.

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

                                       26
<PAGE>

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

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

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

                  "Marker Rate": With respect to the Class CE Certificates and
any Distribution Date, a per annum rate equal to two (2) times the weighted
average of the REMIC I Remittance Rate for each of REMIC I Regular Interest
I-LTA1A, REMIC I Regular Interest I-LTA1B, REMIC I Regular Interest I-LTA2,
REMIC I Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I
Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular
Interest I-LTM5, REMIC I Regular Interest I-LTM6, REMIC I Regular Interest
I-LTB1, REMIC I Regular Interest I-LTB2, REMIC I Regular Interest I-LTB3 and
REMIC I Regular Interest I-LTZZ, with the rate on each such REMIC I Regular
Interest (other than REMIC I Regular Interest I-LTZZ) subject to a cap equal to
the lesser of (i) the related One-Month LIBOR Pass-Through Rate and (ii) the Net
WAC Pass-Through Rate for the purpose of this calculation for such Distribution
Date and with the rate on REMIC I Regular Interest I-LTZZ subject to a cap of
zero for the purpose of this calculation; provided however, each such cap for
each REMIC I Regular Interest shall be multiplied by a fraction the numerator of
which is the actual number of days in the related Interest Accrual Period and
the denominator of which is 30.

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

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

                                       27
<PAGE>

to by the Master Servicer, the Depositor and the Seller following a negotiation
in good faith to determine how to comply with any such new requirements.

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

                  "Master Servicer Fee Rate": 0.0185% per annum.

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

                  "Maximum I-LTZZ Uncertificated Interest Deferral Amount": With
respect to any Distribution Date, the excess of (i) accrued interest at the
REMIC I Remittance Rate applicable to REMIC I Regular Interest I-LTZZ for such
Distribution Date on a balance equal to the Uncertificated Balance of REMIC I
Regular Interest I-LTZZ minus the REMIC I Overcollateralization Amount, in each
case for such Distribution Date, over (ii) Uncertificated Interest on REMIC I
Regular Interest I-LTA1A, REMIC I Regular Interest I-LTA1B, REMIC I Regular
Interest I-LTA2, REMIC I Regular Interest I-LTM1, REMIC I Regular Interest
I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC
I Regular Interest I-LTM5, REMIC I Regular Interest I-LTM6, REMIC I Regular
Interest I-LTB1, REMIC I Regular Interest I-LTB2 and REMIC I Regular Interest
I-LTB3 for such Distribution Date, with the rate on each such REMIC I Regular
Interest subject to a cap equal to the lesser of (i) the related One-Month LIBOR
Pass-Through Rate and (ii) the Net WAC Pass-Through Rate for the purpose of this
calculation for such Distribution Date; provided however, each such cap for each
REMIC I Regular Interest shall be multiplied by a fraction the numerator of
which is the actual number of days in the related Interest Accrual Period and
the denominator of which is 30.

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

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

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

                  "Mezzanine Certificate": Any Class M-1, Class M-2, Class M-3,
Class M-4, Class M-5 or Class M-6 Certificate.

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

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

                                       28
<PAGE>

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

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

                  "Moody's:" Moody's Investors Service, Inc. or any successor
interest.

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

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

                  "Mortgage Loan": Each mortgage loan transferred and assigned
to the Trustee and the Mortgage Loan Documents for which have been delivered to
the Custodian pursuant to Section 2.01 of this Agreement and pursuant to the
Custodial Agreement, as held from time to time as a part of the Trust Fund, the
Mortgage Loans so held being identified in the Mortgage Loan Schedule.

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

                  "Mortgage Loan Purchase Agreement": Shall mean the Mortgage
Loan Purchase Agreement dated as of July 30, 2004, between the Depositor and the
Seller.

                  "Mortgage Loan Schedule": As of any date, the list of Mortgage
Loans included in REMIC I on such date, separately identifying the Group I
Mortgage Loans and the Group II Mortgage Loans, attached hereto as Schedule 1.
The Depositor shall deliver or cause the delivery of the initial Mortgage Loan
Schedule to the Servicer, the Master Servicer, the Custodian and the Trustee on
the Closing Date. The Mortgage Loan Schedule shall set forth the following
information with respect to each Mortgage Loan:

                  (i) the Mortgage Loan identifying number;

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

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

                                       29
<PAGE>

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

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

                  (vi) the original months to maturity;

                  (vii) the original date of the Mortgage Loan and the remaining
         months to maturity from the Cut-off Date, based on the original
         amortization schedule;

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

                  (ix) the Mortgage Rate in effect immediately following the
         Cut-off Date;

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

                  (xi) the stated maturity date;

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

                  (xiii) the amount of the Monthly Payment as of the Cut-off
         Date;

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

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

                  (xvi) the Stated Principal Balance of the Mortgage Loan as of
         the close of business on the Cut-off Date;

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

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

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

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

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

                  (xxii) the Mortgage Rate at origination;

                                       30
<PAGE>

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

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

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

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

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

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

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

                  (xxx) the Appraised Value of the Mortgaged Property;

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

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

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

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

                  (xxxv) whether the Mortgage Loan is covered under the PMI
         Policy; and

                  (xxxvi) the FICO score at origination.

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

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

                                       31
<PAGE>

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

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

                  "Mortgagor": The obligor on a Mortgage Note.

                  "Net Monthly Excess Cashflow": With respect to any
Distribution Date, the sum of (i) any Overcollateralization Reduction Amount for
such Distribution Date and (ii) the excess of (x) the Available Distribution
Amount for such Distribution Date over (y) the sum for such Distribution Date of
(A) the aggregate Senior Interest Distribution Amounts payable to the Holders of
the Class A Certificates, (B) the aggregate Interest Distribution Amounts
payable to the holders of the Mezzanine Certificates and the Class B
Certificates and (C) the Principal Remittance Amount.

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

                  "Net WAC Pass-Through Rate": With respect to the Class A-1
Certificates and any Distribution Date, a rate per annum equal to the product of
(x) the weighted average of the Expense Adjusted Mortgage Rates on the then
outstanding Group I Mortgage Loans, weighted based on their Stated Principal
Balances as of the first day of the calendar month preceding the month in which
the Distribution Date occurs minus, with respect to the Class A-1B Certificates,
a portion of the fee, expressed as a rate, payable to the Certificate Insurer
for providing the Certificate Insurance Policy and (y) a fraction, the numerator
of which is 30 and the denominator of which is the actual number of days elapsed
in the related Interest Accrual Period. For federal income tax purposes, the
economic equivalent of such rate shall be expressed as the weighted average of
(adjusted for the actual number of days elapsed in the related Interest Accrual
Period)

                                       32
<PAGE>

the REMIC I Remittance Rate on REMIC I Regular Interest I-LT1B, weighted on the
basis of the Uncertificated Balance of such REMIC I Regular Interest minus, with
respect to the Class A-1B Certificates, a portion of the fee, expressed as a
rate, payable to the Certificate Insurer for providing the Certificate Insurance
Policy.

                  With respect to the Class A-2 Certificates and any
Distribution Date, a rate per annum equal to the product of (x) the weighted
average of the Expense Adjusted Mortgage Rates on the then outstanding Group II
Mortgage Loans, weighted based on their Stated Principal Balances as of the
first day of the calendar month preceding the month in which the Distribution
Date occurs and (y) a fraction, the numerator of which is 30 and the denominator
of which is the actual number of days elapsed in the related Interest Accrual
Period. For federal income tax purposes, the economic equivalent of such rate
shall be expressed as the weighted average of (adjusted for the actual number of
days elapsed in the related Interest Accrual Period) the REMIC I Remittance Rate
on REMIC I Regular Interest I-LT2B, weighted on the basis of the Uncertificated
Balance of such REMIC I Regular Interest.

                  With respect to the Mezzanine Certificates and any
Distribution Date, a rate per annum equal to the product of (x) the weighted
average of the Expense Adjusted Mortgage Rates on the then outstanding Mortgage
Loans, weighted based on their Stated Principal Balances as of the first day of
the calendar month preceding the month in which the Distribution Date occurs and
(y) a fraction, the numerator of which is 30 and the denominator of which is the
actual number of days elapsed in the related Interest Accrual Period. For
federal income tax purposes, the economic equivalent of such rate shall be
expressed as the weighted average of (adjusted for the actual number of days
elapsed in the related Interest Accrual Period) the REMIC I Remittance Rates on
(a) REMIC I Regular Interest I-LT1A, subject to a cap and a floor equal to the
weighted average of the Expense Adjusted Mortgage Rates of the Group I Mortgage
Loans and (b) REMIC I Regular Interest I-LT2A, subject to a cap and a floor
equal to the weighted average of the Expense Adjusted Mortgage Rates of the
Group II Mortgage Loans, weighted on the basis of the Uncertificated Balance of
each such REMIC I Regular Interest.

                  With respect to the Class B Certificates and any Distribution
Date, a rate per annum equal to the product of (x) the weighted average of the
Expense Adjusted Mortgage Rates on the then outstanding Mortgage Loans, weighted
based on their Stated Principal Balances as of the first day of the calendar
month preceding the month in which the Distribution Date occurs and (y) a
fraction, the numerator of which is 30 and the denominator of which is the
actual number of days elapsed in the related Interest Accrual Period. For
federal income tax purposes, the economic equivalent of such rate shall be
expressed as the weighted average of (adjusted for the actual number of days
elapsed in the related Interest Accrual Period) the REMIC I Remittance Rates on
(a) REMIC I Regular Interest I-LT1A, subject to a cap and a floor equal to the
weighted average of the Expense Adjusted Mortgage Rates of the Group I Mortgage
Loans and (b) REMIC I Regular Interest I-LT2A, subject to a cap and a floor
equal to the weighted average of the Expense Adjusted Mortgage Rates of the
Group II Mortgage Loans, weighted on the basis of the Uncertificated Balance of
each such REMIC I Regular Interest.

                  "Net WAC Rate Carryover Amount": With respect to any Class A
Certificate, Mezzanine Certificate or Class B Certificate and any Distribution
Date on which the Pass-Through Rate is limited to the applicable Net WAC
Pass-Through Rate, an amount equal to the

                                       33
<PAGE>

sum of (i) the excess of (x) the amount of interest such Class would have been
entitled to receive on such Distribution Date if the applicable Net WAC
Pass-Through Rate would not have been applicable to such Class on such
Distribution Date over (y) the amount of interest paid to such Class on such
Distribution Date at the applicable Net WAC Pass-Through Rate plus (ii) the
related Net WAC Rate Carryover Amount for the previous Distribution Date not
previously distributed to such Class together with interest thereon at a rate
equal to the Pass-Through Rate for such Class for the most recently ended
Interest Accrual Period without taking into account the applicable Net WAC
Pass-Through Rate.

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

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

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

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

                  "Notional Amount": With respect to the Class CE Certificates
and any Distribution Date, the Uncertificated Balance of the REMIC I Regular
Interests (other than REMIC I Regular Interest I-LTP) for such Distribution
Date.

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

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

                  "One-Month LIBOR": With respect to the Class A Certificates,
the Mezzanine Certificates, the Class B Certificates, REMIC I Regular Interest
I-LTA1A, REMIC I Regular Interest I-LTA1B, REMIC I Regular Interest I-LTA2,
REMIC I Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I
Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular
Interest I-LTM5, REMIC I Regular Interest I-LTM6, REMIC I Regular Interest
I-LTB1, REMIC I Regular Interest I-LTB2, REMIC I Regular Interest I-LTB3 and any
Interest Accrual Period therefor, the rate determined by the Securities
Administrator on the related Interest Determination Date on the basis of the
offered rate for one-

                                       34
<PAGE>

month U.S. dollar deposits, as such rate appears on Telerate Page 3750 as of
11:00 a.m. (London time) on such Interest Determination Date; provided that if
such rate does not appear on Telerate Page 3750, the rate for such date will be
determined on the basis of the offered rates of the Reference Banks for
one-month U.S. dollar deposits, as of 11:00 a.m. (London time) on such Interest
Determination Date. In such event, the Securities Administrator will request the
principal London office of each of the Reference Banks to provide a quotation of
its rate. If on such Interest Determination Date, two or more Reference Banks
provide such offered quotations, One-Month LIBOR for the related Interest
Accrual Period shall be the arithmetic mean of such offered quotations (rounded
upwards if necessary to the nearest whole multiple of 1/16). If on such Interest
Determination Date, fewer than two Reference Banks provide such offered
quotations, One-Month LIBOR for the related Interest Accrual Period shall be the
higher of (i) LIBOR as determined on the previous Interest Determination Date
and (ii) the Reserve Interest Rate. Notwithstanding the foregoing, if, under the
priorities described above, LIBOR for an Interest Determination Date would be
based on LIBOR for the previous Interest Determination Date for the third
consecutive Interest Determination Date, the Securities Administrator shall
select an alternative comparable index (over which the Securities Administrator
has no control), used for determining one-month Eurodollar lending rates that is
calculated and published (or otherwise made available) by an independent party.
The establishment of One-Month LIBOR by the Securities Administrator and the
Securities Administrator's subsequent calculation of the One-Month LIBOR
Pass-Through Rates for the relevant Interest Accrual Period, shall, in the
absence of manifest error, be final and binding.

                  "One-Month LIBOR Pass-Through Rate": With respect to the Class
A-1A Certificates and, for purposes of the definition of "Marker Rate", REMIC I
Regular Interest I-LTA1A, a per annum rate equal to One-Month LIBOR plus the
related Certificate Margin.

                  With respect to the Class A-1B Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTA1B, a per
annum rate equal to One-Month LIBOR plus the related Certificate Margin.

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

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

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

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

                                       35
<PAGE>

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

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

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

                  With respect to the Class B-1 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTB1, a per annum
rate equal to One-Month LIBOR plus the related Certificate Margin.

                  With respect to the Class B-2 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTB2, a per annum
rate equal to One-Month LIBOR plus the related Certificate Margin.

                  With respect to the Class B-3 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTB3, a per annum
rate equal to One-Month LIBOR plus the related Certificate Margin.

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

                  "Optional Termination Date": The Distribution Date on which
the aggregate principal balance of the Mortgage Loans (and properties acquired
in respect thereof) remaining in the Trust Fund is reduced to less than 10% of
the aggregate principal balance of the Mortgage Loans as of the Cut-off Date.

                  "Originator": Residential Mortgage Assistance Enterprise, LLC.

                  "Overcollateralization Amount": With respect to any
Distribution Date, the excess, if any, of (a) the aggregate Stated Principal
Balances of the Mortgage Loans and REO Properties immediately following such
Distribution Date over (b) the sum of the aggregate Certificate Principal
Balances of the Class A Certificates, the Mezzanine Certificates, the Class B
Certificates and the Class P Certificates as of such Distribution Date (after
taking into account the payment of the Principal Remittance Amount on such
Distribution Date).

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

                                       36
<PAGE>

principal to the extent the Required Overcollateralization Amount exceeds the
Overcollateralization Amount.

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

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

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

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

                  With respect to the Class CE Certificates and any Distribution
Date, a rate per annum equal to the percentage equivalent of a fraction, the
numerator of which is the sum of the amounts calculated pursuant to clauses (i)
through (xv) below, and the denominator of which is the aggregate Uncertificated
Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular Interest I-LTA1A,
REMIC I Regular Interest I-LTA1B, REMIC I Regular Interest I-LTA2, REMIC I
Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular
Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular Interest
I-LTM5, REMIC I Regular Interest I-LTM6, REMIC I Regular Interest I-LTB1, REMIC
I Regular Interest I-LTB2, REMIC I Regular Interest I-LTB3 and REMIC I Regular
Interest I-LTZZ. For purposes of calculating the Pass-Through Rate for the Class
CE Certificates, the numerator is equal to the sum of the following components:

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

                  (ii) the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTA1A minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTA1A;

                  (iii) the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTA1B minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTA1B;

                                       37
<PAGE>

                  (iv) the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTA2 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTA2;

                  (v) the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTM1 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTM1;

                  (vi) the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTM2 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTM2;

                  (vii) the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTM3 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTM3;

                  (viii) the REMIC I Remittance Rate for REMIC I Regular
         Interest I-LTM4 minus the Marker Rate, applied to an amount equal to
         the Uncertificated Balance of REMIC I Regular Interest I-LTM4;

                  (ix) the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTM5 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTM5;

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

                  (xi) the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTB1 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTB1;

                  (xii) the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTB2 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTB2;

                  (xiii) the REMIC I Remittance Rate for REMIC I Regular
         Interest I-LTB3 minus the Marker Rate, applied to an amount equal to
         the Uncertificated Balance of REMIC I Regular Interest I-LTB3;

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

                  (xv) 100% of the interest on REMIC I Regular Interest I-LTP.

                  "Percentage Interest": With respect to any Class of
Certificates (other than the Residual Certificates), the undivided percentage
ownership in such Class evidenced by such

                                       38
<PAGE>

Certificate, expressed as a percentage, the numerator of which is the initial
Certificate Principal Balance represented by such Certificate and the
denominator of which is the aggregate initial Certificate Principal Balance or
Notional Amount of all of the Certificates of such Class. The Class A
Certificates, the Mezzanine Certificates and the Class B Certificates are
issuable only in minimum Percentage Interests corresponding to minimum initial
Certificate Principal Balances of $25,000 and integral multiples of $1.00 in
excess thereof. The Class P Certificates are issuable only in Percentage
Interests corresponding to initial Certificate Principal Balances of $20 and
integral multiples thereof. The Class CE Certificates are issuable only in
minimum Percentage Interests corresponding to minimum initial Certificate
Principal Balances of $10,000 and integral multiples of $1.00 in excess thereof;
provided, however, that a single Certificate of each such Class of Certificates
may be issued having a Percentage Interest corresponding to the remainder of the
aggregate initial Certificate Principal Balance of such Class or to an otherwise
authorized denomination for such Class plus such remainder. With respect to any
Residual Certificate, the undivided percentage ownership in such Class evidenced
by such Certificate, as set forth on the face of such Certificate. The Residual
Certificates are issuable in Percentage Interests of 20% and integral multiples
of 5% in excess thereof.

                  "Periodic Rate Cap": With respect to each Adjustable Rate
Mortgage Loan and any Adjustment Date therefor, the fixed percentage set forth
in the related Mortgage Note, which is the maximum amount by which the Mortgage
Rate for such Adjustable Rate Mortgage Loan may increase or decrease (without
regard to the Maximum Mortgage Rate or the Minimum Mortgage Rate) on such
Adjustment Date from the Mortgage Rate in effect immediately prior to such
Adjustment Date.

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

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

                  (ii) (A) demand and time deposits in, certificates of deposit
         of, bankers' acceptances issued by or federal funds sold by any
         depository institution or trust company (including the Trustee or its
         agent acting in their respective commercial capacities) incorporated
         under the laws of the United States of America or any state thereof and
         subject to supervision and examination by federal and/or state
         authorities, so long as, at the time of such investment or contractual
         commitment providing for such investment, such depository institution
         or trust company (or, if the only Rating Agency is S&P, in the case of
         the principal depository institution in a depository institution
         holding company, debt obligations of the depository institution holding
         company) or its ultimate parent has a short-term uninsured debt rating
         in the highest available rating category of Moody's, Fitch and S&P and
         provided that each such investment has an original maturity of no more
         than 365 days; and provided further that, if the only Rating Agency is
         S&P and if the depository or trust company is a principal subsidiary of
         a bank holding company and the debt obligations of such subsidiary are
         not separately rated, the

                                       39
<PAGE>

         applicable rating shall be that of the bank holding company; and,
         provided further that, if the original maturity of such short-term
         obligations of a domestic branch of a foreign depository institution or
         trust company shall exceed 30 days, the short-term rating of such
         institution shall be A-1+ in the case of S&P if S&P is the Rating
         Agency; and (B) any other demand or time deposit or deposit which is
         fully insured by the FDIC;

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

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

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

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

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

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

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

                                       40
<PAGE>

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

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

                  "PMI Insurer": Radian Guaranty Inc., a Pennsylvania
corporation, or its successors in interest.

                  "PMI Insurer Fee": The amount payable to the PMI Insurer on
each Distribution Date pursuant to Section 3.28, which amount shall equal one
twelfth of the product of (i) the PMI Insurer Fee Rate, multiplied by (ii) the
aggregate Stated Principal Balance of the PMI Mortgage Loans and any related REO
Properties as of the first day of the related Due Period (after giving effect to
scheduled payments of principal due during the Due Period relating to the
previous Distribution Date, to the extent received or advanced) plus any
applicable premium taxes on PMI Mortgage Loans located in West Virginia and
Kentucky.

                  "PMI Insurer Fee Rate": 0.89% per annum.

                  "PMI Mortgage Loans": The list of Mortgage Loans insured by
the PMI Insurer attached hereto as Schedule 3.

                  "PMI Policy": The Primary Mortgage Insurance Policy No. 76796
(policy reference number: 04-558051) with respect to the PMI Mortgage Loans,
including all endorsements thereto dated the Closing Date, issued by the PMI
Insurer and the Commitment Letter, dated July 30, 2004, between the PMI Insurer
and the Seller.

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

                  "Policy Payment Account": The separate Eligible Account
created and maintained by the Securities Administrator pursuant to Section 5.07
in the name of the Trustee for the benefit of the Class A-1B Certificateholders
and the Certificate Insurer, and designated "HSBC Bank USA, National
Association, as Trustee, in trust for the registered holders of Ace Securities
Corp., Asset-Backed Pass-Through Certificates, Series 2004-RM1, Class A-1B
Certificates."

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

                  "Premium Rate": The per annum rate at which the "Premium" is
determined as described in the letter, dated July 30, 2004, among the
Certificate Insurer, the Master Servicer,

                                       41
<PAGE>

the Trustee and the Depositor (a copy of which has been provided by the
Depositor to the Trustee).

                  "Prepayment Assumption": A prepayment rate for the Adjustable
Rate Mortgage Loans of 28% CPR and a prepayment rate of 100% PPC for the fixed
rate Mortgage Loans. The Prepayment Assumption is used solely for determining
the accrual of original issue discount on the Certificates for federal income
tax purposes. A CPR (or Constant Prepayment Rate) represents an annualized
constant assumed rate of prepayment each month of a pool of mortgage loans
relative to its outstanding principal balance for the life of such pool. A 100%
PPC represents (i) a per annum prepayment rate of 4% of the then outstanding
principal balance of the fixed rate Mortgage Loans in the first month of the
life of such Mortgage Loans, (ii) an additional 19%/11 per annum in each month
thereafter through the eleventh month and (iii) a constant prepayment rate of
23% per annum beginning in the twelfth month and in each month thereafter during
the life of the fixed rate Mortgage Loans.

                  "Prepayment Charge": With respect to any Principal Prepayment,
any prepayment premium, penalty or charge payable by a Mortgagor in connection
with any Principal Prepayment on a Mortgage Loan pursuant to the terms of the
related Mortgage Note.

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

                  (i) the Mortgage Loan identifying number;

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

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

                  (iv) the term of the related Prepayment Charge;

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

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

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

                                       42
<PAGE>

is collected from the related Mortgagor. To the extent not otherwise retained,
the Servicer may withdraw such Prepayment Interest Excess from the Collection
Account in accordance with Section 3.09(a)(x).

                  "Prepayment Interest Shortfall": With respect to any
Distribution Date, for each such Mortgage Loan that was the subject of a
Principal Prepayment in full or in part during the portion of the related
Prepayment Period occurring between the first day of the related Prepayment
Period and the last day of the calendar month preceding the month in which such
Distribution Date occurs that was applied by the Servicer to reduce the
outstanding principal balance of such Mortgage Loan on a date preceding the Due
Date in the succeeding Prepayment Period, an amount equal to interest at the
applicable Net Mortgage Rate on the amount of such Principal Prepayment for the
number of days commencing on the date on which the prepayment is applied and
ending on the last day of the calendar month preceding such Distribution Date.
The obligations of the Servicer and the Master Servicer in respect of any
Prepayment Interest Shortfall are set forth in Section 3.22 and Section 4.19,
respectively of this Agreement. The Certificate Insurance Policy with respect to
the Insured Certificates will not cover any such Prepayment Interest Shortfalls.

                  "Prepayment Period": With respect to any Distribution Date and
Principal Prepayments in full, the period commencing on the 16th day of the
month prior to the month in which the related Distribution Date occurs (or, on
the Cut-off Date, in connection with the first Prepayment Period) and ending on
the 15th day of the month in which such Distribution Date occurs and with
respect to any Distribution Date and Principal Prepayments in part, the calendar
month prior to the month of such Distribution Date.

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

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

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

                  "Purchase Price": With respect to any Mortgage Loan or REO
Property to be purchased pursuant to or as contemplated by Section 2.03, Section
3.13(c) or Section 10.01, and as confirmed by a certification of a Servicing
Officer to the Trustee, an amount equal to the sum of (i) 100% of the Stated
Principal Balance thereof as of the date of purchase (or such other price as
provided in Section 10.01), (ii) in the case of (x) a Mortgage Loan, accrued
interest on such Stated Principal Balance at the applicable Net Mortgage Rate in
effect from time to time from the Due Date as to which interest was last covered
by a payment by the Mortgagor or a P&I Advance by the Servicer, which payment or
P&I Advance had as of the date of purchase been distributed pursuant to Section
5.01, through the end of the calendar month in which the purchase is to be
effected and (y) an REO Property, the sum of (1) accrued interest on such

                                       43
<PAGE>

Stated Principal Balance at the applicable Net Mortgage Rate in effect from time
to time from the Due Date as to which interest was last covered by a payment by
the Mortgagor or a P&I Advance by the Servicer through the end of the calendar
month immediately preceding the calendar month in which such REO Property was
acquired, plus (2) REO Imputed Interest for such REO Property for each calendar
month commencing with the calendar month in which such REO Property was acquired
and ending with the calendar month in which such purchase is to be effected, net
of the total of all net rental income, Insurance Proceeds, Liquidation Proceeds
and P&I Advances that as of the date of purchase had been distributed as or to
cover REO Imputed Interest pursuant to Section 5.01, (iii) any unreimbursed
Servicing Advances and P&I Advances (including Nonrecoverable P&I Advances and
Nonrecoverable Servicing Advances) and any unpaid Servicing Fees allocable to
such Mortgage Loan or REO Property, (iv) any amounts previously withdrawn from
the Collection Account pursuant to Section 3.09(a)(ix) and Section 3.13(b) and
(v) in the case of a Mortgage Loan required to be purchased pursuant to Section
2.03, expenses reasonably incurred or to be incurred by the Servicer or the
Trustee in respect of the breach or defect giving rise to the purchase
obligation and any costs and damages incurred by the Trust Fund and the Trustee
in connection with any violation by any such Mortgage Loan of any predatory or
abusive lending law.

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

                  "Qualified Substitute Mortgage Loan": A mortgage loan
substituted for a Deleted Mortgage Loan pursuant to the terms of this Agreement
which must, on the date of such substitution, (i) have an outstanding principal
balance, after application of all scheduled payments of principal and interest
due during or prior to the month of substitution, not in excess of the Scheduled
Principal Balance of the Deleted Mortgage Loan as of the Due Date in the
calendar month during which the substitution occurs, (ii) have a Mortgage Rate
not less than (and not more than one percentage point in excess of) the Mortgage
Rate of the Deleted Mortgage Loan, (iii) if the mortgage loan is an Adjustable
Rate Mortgage Loan, have a Maximum Mortgage Rate not less than the Maximum
Mortgage Rate on the Deleted Mortgage Loan, (iv) if the mortgage loan is an
Adjustable Rate Mortgage Loan, have a Minimum Mortgage Rate not less than the
Minimum Mortgage Rate of the Deleted Mortgage Loan, (v) if the mortgage loan is
an Adjustable Rate Mortgage Loan, have a Gross Margin equal to the Gross Margin
of the Deleted Mortgage Loan, (vi) if the mortgage loan is an Adjustable Rate
Mortgage Loan, have a next Adjustment Date not more than two months later than
the next Adjustment Date on the Deleted Mortgage Loan, (vii) have a remaining
term to maturity not greater than (and not more than one year less than) that of
the Deleted Mortgage Loan, (viii) have the same Due Date as the Due Date on the
Deleted Mortgage Loan, (ix) have a Loan-to-Value Ratio as of the date of
substitution equal to or lower than the Loan-to-Value Ratio of the Deleted
Mortgage Loan as of such date, (x) be secured by a first lien priority on the
related Mortgaged Property, (xi) have a credit grade at least equal to the
credit grading assigned on the Deleted Mortgage Loan, (xii) be a "qualified
mortgage" as defined in the REMIC Provisions, (xiii) conform to each
representation and warranty set forth in Section 6 of the Mortgage Loan Purchase
Agreement applicable to the Deleted Mortgage Loan and (xiv) be covered by the
PMI Policy if the Deleted Mortgage Loan was covered by the PMI Policy. In the
event that one or more mortgage loans are substituted for one or more Deleted
Mortgage Loans, the amounts described in clause (i) hereof shall be determined
on the basis of aggregate principal balances, the Mortgage Rates described in
clause (ii) hereof shall be determined on the basis of weighted average Mortgage

                                       44
<PAGE>

Rates, the terms described in clause (vii) hereof shall be determined on the
basis of weighted average remaining term to maturity, the Loan-to-Value Ratios
described in clause (ix) hereof shall be satisfied as to each such mortgage
loan, the credit grades described in clause (x) hereof shall be satisfied as to
each such mortgage loan and, except to the extent otherwise provided in this
sentence, the representations and warranties described in clause (xii) hereof
must be satisfied as to each Qualified Substitute Mortgage Loan or in the
aggregate, as the case may be.

                  "Rate/Term Refinancing": A Refinanced Mortgage Loan, the
proceeds of which are not more than a nominal amount in excess of the existing
first mortgage loan and any subordinate mortgage loan on the related Mortgaged
Property and related closing costs, and were used exclusively (except for such
nominal amount) to satisfy the then existing first mortgage loan and any
subordinate mortgage loan of the Mortgagor on the related Mortgaged Property and
to pay related closing costs.

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

                  "Realized Loss": With respect to each Mortgage Loan as to
which a Final Recovery Determination has been made, an amount (not less than
zero), as reported by the Servicer to the Master Servicer (in substantially the
form of Schedule 4 hereto) equal to (i) the unpaid principal balance of such
Mortgage Loan as of the commencement of the calendar month in which the Final
Recovery Determination was made, plus (ii) accrued interest from the Due Date as
to which interest was last paid by the Mortgagor through the end of the calendar
month in which such Final Recovery Determination was made, calculated in the
case of each calendar month during such period (A) at an annual rate equal to
the annual rate at which interest was then accruing on such Mortgage Loan and
(B) on a principal amount equal to the Stated Principal Balance of such Mortgage
Loan as of the close of business on the Distribution Date during such calendar
month, plus (iii) any amounts previously withdrawn from the Collection Account
in respect of such Mortgage Loan pursuant to Section 3.09(a)(ix) and Section
3.13(b), minus (iv) the proceeds, if any, received in respect of such Mortgage
Loan during the calendar month in which such Final Recovery Determination was
made, net of amounts that are payable therefrom to the Servicer with respect to
such Mortgage Loan pursuant to Section 3.09(a)(iii) of this Agreement.

                  With respect to any REO Property as to which a Final Recovery
Determination has been made, an amount (not less than zero) equal to (i) the
unpaid principal balance of the related Mortgage Loan as of the date of
acquisition of such REO Property on behalf of REMIC I, plus (ii) accrued
interest from the Due Date as to which interest was last paid by the Mortgagor
in respect of the related Mortgage Loan through the end of the calendar month
immediately preceding the calendar month in which such REO Property was
acquired, calculated in the case of each calendar month during such period (A)
at an annual rate equal to the annual rate at which interest was then accruing
on the related Mortgage Loan and (B) on a principal amount equal to the Stated
Principal Balance of the related Mortgage Loan as of the close of business on
the Distribution Date during such calendar month, plus (iii) REO Imputed
Interest for such REO

                                       45
<PAGE>

Property for each calendar month commencing with the calendar month in which
such REO Property was acquired and ending with the calendar month in which such
Final Recovery Determination was made, plus (iv) any amounts previously
withdrawn from the Collection Account in respect of the related Mortgage Loan
pursuant to Section 3.09(a)(ix) and Section 3.13(b) of this Agreement, minus (v)
the aggregate of all P&I Advances and Servicing Advances (in the case of
Servicing Advances, without duplication of amounts netted out of the rental
income, Insurance Proceeds and Liquidation Proceeds described in clause (vi)
below) made by the Servicer in respect of such REO Property or the related
Mortgage Loan for which the Servicer has been or, in connection with such Final
Recovery Determination, will be reimbursed pursuant to Section 3.21 of this
Agreement, out of rental income, Insurance Proceeds and Liquidation Proceeds
received in respect of such REO Property, minus (vi) the total of all net rental
income, Insurance Proceeds and Liquidation Proceeds received in respect of such
REO Property that has been, or in connection with such Final Recovery
Determination, will be transferred to the Distribution Account pursuant to
Section 3.21 of this Agreement.

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

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

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

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

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

                                       46
<PAGE>

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

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

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

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

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

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

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

                  "Relief Act": The Servicemembers Civil Relief Act, as amended,
or similar state or local laws.

                  "Relief Act Interest Shortfall": With respect to any
Distribution Date and any Mortgage Loan, any reduction in the amount of interest
collectible on such Mortgage Loan for the most recently ended Due Period as a
result of the application of the Relief Act. The Certificate Insurance Policy
with respect to the Insured Certificates will not cover any such Relief Act
Interest Shortfalls.

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

                  "REMIC I": The segregated pool of assets subject hereto,
constituting the primary trust created hereby and to be administered hereunder,
with respect to which a REMIC election is to be made, consisting of: (i) such
Mortgage Loans and Prepayment Charges as from time to time are subject to this
Agreement, together with the Mortgage Files relating thereto, and together with
all collections thereon and proceeds thereof; (ii) any REO Property, together
with all collections thereon and proceeds thereof; (iii) the Trustee's rights
with respect to the Mortgage Loans under all insurance policies required to be
maintained pursuant to this Agreement, including the PMI Policy, and any
proceeds thereof; (iv) the Depositor's rights under the Mortgage Loan Purchase
Agreement (including any security interest created thereby); (v) the Collection
Account, the Distribution Account and any REO Account, and such assets that are
deposited therein from time to time and any investments thereof, together with
any and all income, proceeds and payments with respect thereto and (vi) with
respect to the Class A-1B Certificates only, the Class A-1B Policy.
Notwithstanding the foregoing, however, REMIC I

                                       47
<PAGE>

specifically excludes (i) all payments and other collections of principal and
interest due on the Mortgage Loans on or before the Cut-off Date and all
Prepayment Charges payable in connection with Principal Prepayments made before
the Cut-off Date; (ii) the Reserve Fund and any amounts on deposit therein from
time to time and any proceeds thereof and (iii) the Cap Contracts.

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

                  "REMIC I Marker Allocation Percentage": 0.50% of any amount
payable or loss attributable from the Mortgage Loans, which shall be allocated
to REMIC I Regular Interest I-LTAA, REMIC I Regular Interest I-LTA1A, REMIC I
Regular Interest I-LTA1B, REMIC I Regular Interest I-LTA2, REMIC I Regular
Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular Interest
I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC
I Regular Interest I-LTM6, REMIC I Regular Interest I-LTB1, REMIC I Regular
Interest I-LTB2, REMIC I Regular Interest I-LTB3, REMIC I Regular Interest
I-LTZZ and REMIC I Regular Interest I-LTP.

                  "REMIC I Overcollateralization Amount": With respect to any
date of determination, (i) 0.50% of the aggregate Uncertificated Balances of the
REMIC I Regular Interests minus (ii) the aggregate of the Uncertificated
Balances of REMIC I Regular Interest I-LTA1A, REMIC I Regular Interest I-LTA1B,
REMIC I Regular Interest I-LTA2, REMIC I Regular Interest I-LTM1, REMIC I
Regular Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular
Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I Regular Interest
I-LTM6, REMIC I Regular Interest I-LTB1, REMIC I Regular Interest I-LTB2, REMIC
I Regular Interest I-LTB3, and REMIC I Regular Interest I-LTP, in each case as
of such date of determination.

                  "REMIC I Principal Loss Allocation Amount": With respect to
any Distribution Date, an amount equal to (a) the product of (i) 0.50% of the
aggregate Stated Principal Balance of the Mortgage Loans and REO Properties then
outstanding and (ii) 1 minus a fraction, the numerator of which is two times the
aggregate of the Uncertificated Balances of REMIC I Regular Interest I-LTA1A,
REMIC I Regular Interest I-LTA1B, REMIC I Regular Interest I-LTA2, REMIC I
Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular
Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular Interest
I-LTM5, REMIC I Regular Interest I-LTM6 and REMIC I Regular Interest I-LTB1,
REMIC I Regular Interest I-LTB2, REMIC I Regular Interest I-LTB3 and the
denominator of which is the aggregate of the Uncertificated Balances of REMIC I
Regular Interest I-LTA1A, REMIC I Regular Interest I-LTA1B, REMIC I Regular
Interest I-LTA2, REMIC I Regular Interest I-LTM1, REMIC I Regular Interest
I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC
I Regular Interest I-LTM5, REMIC I Regular Interest I-LTM6, REMIC I Regular
Interest I-LTB1, REMIC I Regular Interest I-LTB2, REMIC I Regular Interest
I-LTB3 and REMIC I Regular Interest I-LTZZ.

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<PAGE>

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

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

                  "REMIC I Regular Interest I-LTA1A": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTA1A
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTA1B": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTA1B
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTA2": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTA2
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTB1": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTB1
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTB2": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTB2
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal,

                                       49
<PAGE>

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

                  "REMIC I Regular Interest I-LTB3": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTB3
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTM1": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTM1
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                   "REMIC I Regular Interest I-LTM2": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTM2
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTM3": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTM3
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTM4": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTM4
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTM5": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTM5
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTM6": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTM6
shall accrue interest at the related REMIC I

                                       50
<PAGE>

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

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

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

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

                  "REMIC I Regular Interest I-LT1A": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LT1A
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LT1B": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LT1B
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LT2A": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LT2A
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LT2B": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest

                                       51
<PAGE>

in REMIC I. REMIC I Regular Interest I-LT2B shall accrue interest at the related
REMIC I Remittance Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Balance as set forth in the
Preliminary Statement hereto.

                  "REMIC I Remittance Rate": With respect to REMIC I Regular
Interest I-LTAA, REMIC I Regular Interest I-LTA1A, REMIC I Regular Interest
I-LTA1B, REMIC I Regular Interest I-LTA2, REMIC I Regular Interest I-LTM1, REMIC
I Regular Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular
Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I Regular Interest
I-LTM6, REMIC I Regular Interest I-LTB1, REMIC I Regular Interest I-LTB2, REMIC
I Regular Interest I-LTB3, REMIC I Regular Interest I-LTZZ, REMIC I Regular
Interest I-LTP, REMIC I Regular Interest I-LT1A, REMIC I Regular Interest I-LT2A
and REMIC I Regular Interest I-LTXX, the weighted average of the Expense
Adjusted Mortgage Rates of the Mortgage Loans. With respect to REMIC I Regular
Interest I-LT1B, the weighted average of the Expense Adjusted Mortgage Rates of
the Group I Mortgage Loans. With respect to REMIC I Regular Interest I-LT2B, the
weighted average of the Expense Adjusted Mortgage Rates of the Group II Mortgage
Loans.

                  "REMIC I Sub WAC Allocation Percentage": 0.50% of any amount
payable or loss attributable from the Mortgage Loans, which shall be allocated
to REMIC I Regular Interest I-LT1A, REMIC I Regular Interest I-LT1B, REMIC I
Regular Interest I-LT2A, REMIC I Regular Interest I-LT2B and REMIC I Regular
Interest I-LTXX.

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

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

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

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

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

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

                  "Remittance Report": A report by the Servicer pursuant to
Section 5.03(a).

                                       52
<PAGE>

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

                  "REO Account": The account or accounts maintained, or caused
to be maintained, by the Servicer in respect of an REO Property pursuant to
Section 3.21 of this Agreement.

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

                  "REO Imputed Interest": As to any REO Property, for any
calendar month during which such REO Property was at any time part of REMIC I,
one month's interest at the applicable Net Mortgage Rate on the Stated Principal
Balance of such REO Property (or, in the case of the first such calendar month,
of the related Mortgage Loan, if appropriate) as of the close of business on the
Distribution Date in such calendar month.

                  "REO Principal Amortization": With respect to any REO
Property, for any calendar month, the excess, if any, of (a) the aggregate of
all amounts received in respect of such REO Property during such calendar month,
whether in the form of rental income, sale proceeds (including, without
limitation, that portion of the Termination Price paid in connection with a
purchase of all of the Mortgage Loans and REO Properties pursuant to Section
10.01 that is allocable to such REO Property) or otherwise, net of any portion
of such amounts (i) payable in respect of the proper operation, management and
maintenance of such REO Property or (ii) payable or reimbursable to the Servicer
pursuant to Section 3.21(d) of this Agreement for unpaid Servicing Fees in
respect of the related Mortgage Loan and unreimbursed Servicing Advances and P&I
Advances in respect of such REO Property or the related Mortgage Loan, over (b)
the REO Imputed Interest in respect of such REO Property for such calendar
month.

                  "REO Property": A Mortgaged Property acquired by the Servicer
on behalf of REMIC I through foreclosure or deed-in-lieu of foreclosure, as
described in Section 3.21 of this Agreement.

                   "Required Overcollateralization Amount": With respect to any
Distribution Date (i) prior to the Stepdown Date, the product of (A) 0.50% and
(B) the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date, (ii) on or after the Stepdown Date provided a Trigger Event is not in
effect, the greater of (x) 1.00% of the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day of the related Due Period and (y) an
amount equal to the product of (A) 0.50% and (B) the aggregate principal balance
of the Mortgage Loans as of the Cut-off Date, and (iii) on or after the Stepdown
Date and a Trigger Event is in effect, the Required Overcollateralization Amount
for the immediately preceding Distribution Date.

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

                  "Reserve Interest Rate": With respect to any Interest
Determination Date, the rate per annum that the Securities Administrator
determines to be either (i) the arithmetic mean (rounded upwards if necessary to
the nearest whole multiple of 1/16%) of the one-month U.S. dollar lending rates
which New York City banks selected by the Securities Administrator, after

                                       53
<PAGE>

consultation with the Depositor, are quoting on the relevant Interest
Determination Date to the principal London offices of leading banks in the
London interbank market or (ii) in the event that the Securities Administrator
can determine no such arithmetic mean, the lowest one-month U.S. dollar lending
rate which New York City banks selected by the Securities Administrator are
quoting on such Interest Determination Date to leading European banks.

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

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

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

                  "Responsible Officer": When used with respect to the Trustee,
any officer of the Trustee having direct responsibility for the administration
of this Agreement and, with respect to a particular matter, to whom such matter
is referred because of such officer's knowledge of and familiarity with the
particular subject.

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

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

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

                                       54
<PAGE>

Amortization, if any, in respect of REO Property for all previously ended
calendar months; and (b) as of any Due Date subsequent to the occurrence of a
Liquidation Event with respect to such REO Property, zero.

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

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

                  "Seller": DB Structured Products, Inc. or its successor in
interest, in its capacity as seller under the Mortgage Loan Purchase Agreement.

                  "Senior Interest Distribution Amount": With respect to any
Distribution Date, an amount equal to the sum of (i) the Interest Distribution
Amount for such Distribution Date for the Class A Certificates and (ii) the
Interest Carry Forward Amount, if any, for such Distribution Date for the Class
A Certificates.

                  "Servicer": HomEq Servicing Corporation or any successor
thereto appointed hereunder in connection with the servicing and administration
of the Mortgage Loans.

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

                  "Servicer Remittance Date": With respect to any Distribution
Date, by 1:00 p.m. New York time on the third Business Day immediately preceding
the related Distribution Date.

                  "Servicer Report": A report (substantially in the form of
Schedule 5 hereto) or otherwise in form and substance acceptable to the Master
Servicer and Securities Administrator on an electronic data file or tape
prepared by the Servicer pursuant to Section 5.03(a) with such additions,
deletions and modifications as agreed to by the Master Servicer, the Securities
Administrator and the Servicer.

                  "Servicing Advances": The customary and reasonable
"out-of-pocket" costs and expenses incurred by the Servicer in connection with a
default, delinquency or other unanticipated event by the Servicer in the
performance of its servicing obligations, including, but not limited to, the
cost of (i) the preservation, restoration and protection of a Mortgaged
Property, (ii) any enforcement or judicial proceedings, including but not
limited to foreclosures, in respect of a particular Mortgage Loan, including any
expenses incurred in relation to any such proceedings that result from the
Mortgage Loan being registered on the MERS(R) System, (iii) the management
(including reasonable fees in connection therewith) and liquidation of any REO
Property and (iv) the performance of its obligations under Section 3.01, Section
3.07, Section 3.11, Section 3.13 and Section 3.21 of this Agreement. Servicing
Advances also include any reasonable "out-of-pocket" cost and expenses
(including legal fees) incurred by a Servicer in connection with executing and
recording instruments of satisfaction, deeds of reconveyance or Assignments to
the extent not recovered from the Mortgagor or otherwise payable under this
Agreement. The Servicer shall not be required to make any Nonrecoverable
Servicing Advances.

                  "Servicing Fee": With respect to each Mortgage Loan and for
any calendar month, an amount equal to one-twelfth of the product of the
Servicing Fee Rate multiplied by the Scheduled Principal Balance of the Mortgage
Loans as of the Due Date in the preceding calendar month. The Servicing Fee is
payable solely from collections of interest on the Mortgage Loans.

                  "Servicing Fee Rate": 0.50% per annum.

                  "Servicing Officer": Any officer of the 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, the Master Servicer, the Securities Administrator
and the Depositor on the Closing Date, as such list may from time to time be
amended.

                  "Single Certificate": With respect to any Class of
Certificates (other than the Residual Certificates), a hypothetical Certificate
of such Class evidencing a Percentage Interest for such Class corresponding to
an initial Certificate Principal Balance of $1,000. With respect to the Residual
Certificates, a hypothetical Certificate of such Class evidencing a 100%
Percentage Interest in such Class.

                  "Startup Day": With respect to each Trust REMIC, the day
designated as such pursuant to Section 11.01(b) hereof.

                  "Stated Principal Balance": With respect to any Mortgage Loan:
(a) as of any date of determination up to but not including the Distribution
Date on which the proceeds, if any, of a Liquidation Event with respect to such
Mortgage Loan would be distributed, the Scheduled Principal Balance of such
Mortgage Loan as of the Cut-off Date, as shown in the Mortgage Loan Schedule,
minus the sum of (i) the principal portion of each Monthly Payment due on a Due
Date subsequent to the Cut-off Date, to the extent received from the Mortgagor
or advanced by the Servicer or a successor Servicer (including the Master
Servicer) and distributed pursuant to Section 5.01 of this Agreement on or
before such date of determination, (ii) all Principal Prepayments received after
the Cut-off Date, to the extent distributed pursuant to Section 5.01 of this
Agreement on or before such date of determination, (iii) all Liquidation
Proceeds and Insurance Proceeds applied by the Servicer as recoveries of
principal in accordance with the provisions of Section 3.13, to the extent
distributed pursuant to Section 5.01 of this Agreement on or before such date of
determination, and (iv) any Realized Loss incurred with respect thereto as a
result of a Deficient Valuation made during or prior to the Prepayment Period
for the most recent Distribution Date coinciding with or preceding such date of
determination; and (b) as of any date of determination coinciding with or
subsequent to the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such Mortgage Loan would be distributed, zero.
With respect to any REO Property: (a) as of any date of determination up to but
not including the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such REO Property would be distributed, an
amount (not less than zero) equal to the Stated Principal Balance of the related
Mortgage Loan as of the date on which such REO Property was acquired on behalf
of REMIC I, minus the sum of (i) if such REO Property was acquired before the
Distribution Date in any calendar month, the principal portion of the Monthly
Payment due on the Due Date in the calendar month of acquisition, to the extent
advanced by the Servicer or a successor Servicer (including the Master Servicer)
and distributed

                                       56
<PAGE>

pursuant to Section 5.01 of this Agreement on or before such date of
determination and (ii) the aggregate amount of REO Principal Amortization in
respect of such REO Property for all previously ended calendar months, to the
extent distributed pursuant to Section 4.01 of this Agreement on or before such
date of determination; and (b) as of any date of determination coinciding with
or subsequent to the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such REO Property would be distributed, zero.

                  "Stepdown Date": The earlier to occur of (i) the later to
occur of (a) the Distribution Date occurring in August 2007 and (b) the first
Distribution Date on which the Credit Enhancement Percentage (calculated for
this purpose only after taking into account distributions of principal on the
Mortgage Loans but prior to any distribution of the Principal Distribution
Amount to the Certificates then entitled to distributions of principal on such
Distribution Date) is equal to or greater than 38.50% and (ii) the first
Distribution Date on which the aggregate Certificate Principal Balance of the
Class A Certificates has been reduced to zero.

                  "Subordinate Certificates": Collectively, the Mezzanine
Certificates, the Class B Certificates and the Class CE Certificates.

                  "Subsequent Recoveries": As of any Distribution Date, amounts
received during the related Prepayment Period by the Servicer specifically
related to a defaulted Mortgage Loan or disposition of an REO Property prior to
the related Prepayment Period that resulted in a Realized Loss, after the
liquidation or disposition of such defaulted Mortgage Loan, net of any amount
reimbursable to the Servicer related to such Mortgage Loan or REO Property.

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

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

                  "Substitution Shortfall Amount": As defined in Section 2.03.

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

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

                  "Termination Price": As defined in Section 10.01.

                                       57
<PAGE>

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

                  "Transferee": Any Person who is acquiring by Transfer any

                  Ownership Interest in a Certificate.

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

                  "Trigger Event": A Trigger Event has occurred with respect to
a Distribution Date if either (x) the Delinquency Percentage exceeds 38.00% of
the Credit Enhancement Percentage with respect to such Distribution Date or (y)
the aggregate amount of Realized Losses incurred since the Cut-off Date through
the last day of the related Due Period divided by the aggregate principal
balance of the Mortgage Loans as of the Cut-off Date exceeds the applicable
percentages set forth below with respect to such Distribution Date:

<TABLE>
<CAPTION>

              DISTRIBUTION DATE                     PERCENTAGE
              -----------------                     ----------
<S>                                                 <C>
              August 2007 to July 2008              3.00%, plus 1/12 of 1.25% for each month thereafter
              August 2008 to July 2009              4.25%, plus 1/12 of 0.75% for each month thereafter
              August 2009 to July 2010              5.00%, plus 1/12 of 0.40% for each month thereafter
              August 2010 and thereafter            5.40%
</TABLE>

                  "Trust": ACE Securities Corp., Home Equity Loan Trust, Series
2004-RM1, the trust created hereunder.

                  "Trust Fund": Collectively, all of the assets of REMIC I,
REMIC II and the Reserve Fund and any amounts on deposit therein and any
proceeds thereof, the Prepayment Charges and the Cap Contracts.

                  "Trust REMIC": REMIC I or REMIC II.

                  "Trustee":  HSBC Bank USA, National Association a New York
banking corporation, or its successor in interest, or any successor trustee
appointed as herein provided.

                  "Uncertificated Balance": The amount of the REMIC I Regular
Interests outstanding as of any date of determination. As of the Closing Date,
the Uncertificated Balance of each REMIC I Regular Interest shall equal the
amount set forth in the Preliminary Statement hereto as its initial
uncertificated balance. On each Distribution Date, the Uncertificated Balance of
the REMIC I Regular Interest shall be reduced by all distributions of principal
made on such REMIC I Regular Interest on such Distribution Date pursuant to
Section 5.01 and, if and to the extent necessary and appropriate, shall be
further reduced on such Distribution Date by Realized Losses as provided in
Section 5.04 and the Uncertificated Balance of REMIC I Regular Interest

                                       58
<PAGE>

I-LTZZ shall be increased by interest deferrals as provided in Section
5.01(a)(1)(i). The Uncertificated Balance of each REMIC I Regular Interest shall
never be less than zero.

                  "Uncertificated Interest": With respect to any REMIC I Regular
Interest for any Distribution Date, one month's interest at the REMIC I
Remittance Rate applicable to such REMIC I Regular Interest for such
Distribution Date, accrued on the Uncertificated Balance or Uncertificated
Notional Amount, as applicable, thereof immediately prior to such Distribution
Date. Uncertificated Interest in respect of the REMIC I Regular Interests shall
accrue on the basis of a 360-day year consisting of twelve 30-day months.
Uncertificated Interest with respect to each Distribution Date, as to any REMIC
I Regular Interest, shall be reduced by an amount equal to the sum of (a) the
aggregate Prepayment Interest Shortfall, if any, for such Distribution Date to
the extent not covered by payments pursuant to Section 3.22 or Section 4.19 of
this Agreement and (b) the aggregate amount of any Relief Act Interest
Shortfall, if any allocated, in each case, to such REMIC I Regular Interest or
REMIC I Regular Interest pursuant to Section 1.02. In addition, Uncertificated
Interest with respect to each Distribution Date, as to any Uncertificated REMIC
Regular Interest, shall be reduced by Realized Losses, if any, allocated to such
Uncertificated REMIC Regular Interest pursuant to Section 1.02 and Section 5.04.

                  "Uninsured Cause": Any cause of damage to a Mortgaged Property
such that the complete restoration of such property is not fully reimbursable by
the hazard insurance policies required to be maintained pursuant to Section
3.11.

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

                  "Value": With respect to any Mortgaged Property, the lesser of
(i) the lesser of (a) the value thereof as determined by an appraisal made for
the Originator of the Mortgage Loan at the time of origination of the Mortgage
Loan by an appraiser who met the minimum requirements of Fannie Mae and Freddie
Mac and (b) the value thereof as determined by a review appraisal conducted by
the Originator of the Mortgage Loan in accordance with the Originator's
underwriting guidelines, and (ii) the purchase price paid for the related
Mortgaged Property by the Mortgagor with the proceeds of the Mortgage Loan;
provided, however, (A) in

                                       59
<PAGE>

the case of a Refinanced Mortgage Loan, such value of the Mortgaged Property is
based solely upon the lesser of (1) the value determined by an appraisal made
for the Originator of the Mortgage Loan of such Refinanced Mortgage Loan at the
time of origination of such Refinanced Mortgage Loan by an appraiser who met the
minimum requirements of Fannie Mae and Freddie Mac and (2) the value thereof as
determined by a review appraisal conducted by the originator of the Mortgage
Loan in accordance with the Originator's underwriting guidelines, and (B) in the
case of a Mortgage Loan originated in connection with a "lease-option purchase,"
such value of the Mortgaged Property is based on the lower of the value
determined by an appraisal made for the Originator of such Mortgage Loan at the
time of origination or the sale price of such Mortgaged Property if the "lease
option purchase price" was set less than 12 months prior to origination, and is
based on the value determined by an appraisal made for the Originator of such
Mortgage Loan at the time of origination if the "lease option purchase price"
was set 12 months or more prior to origination.

                  "Voting Rights": The portion of the voting rights of all of
the Certificates which is allocated to any such Certificate. With respect to any
date of determination, 98% of all Voting Rights will be allocated among the
holders of the Class A Certificates, the Mezzanine Certificates and the Class CE
Certificates in proportion to the then outstanding Certificate Principal
Balances of their respective Certificates, 1% of all Voting Rights will be
allocated among the holders of the Class P Certificates and 1% of all Voting
Rights will be allocated among the holders of the Class R Certificates. The
Voting Rights allocated to each Class of Certificate shall be allocated among
Holders of each such Class in accordance with their respective Percentage
Interests as of the most recent Record Date. Notwithstanding any of the
foregoing, unless a Certificate Insurer Default is continuing, on any date on
which any Insured Certificates are outstanding, or any amounts are owed to the
Certificate Insurer under this Agreement, the Certificate Insurer will have all
Voting Rights of the Insured Certificates. So long as the Certificate Insurer
has the Voting Rights pursuant to the preceding sentence, the reference to
holders of the Class A-1B Certificates shall be deemed to refer to the
Certificate Insurer.

                  "Wells Fargo": Wells Fargo Bank, N.A. or any successor
thereto.

                  Section 1.02. ALLOCATION OF CERTAIN INTEREST SHORTFALLS.

                  For purposes of calculating the amount of Accrued Certificate
Interest and the amount of the Interest Distribution Amount for the Class A
Certificates, the Mezzanine Certificates, the Class B Certificates and the Class
CE Certificates for any Distribution Date, (1) the aggregate amount of any
Prepayment Interest Shortfalls (to the extent not covered by payments by the
Servicer pursuant to Section 3.22 of this Agreement or the Master Servicer
pursuant to Section 4.19 and any Relief Act Interest Shortfalls incurred in
respect of the Mortgage Loans for any Distribution Date shall be allocated
first, to the Class CE Certificates, second, to the Class B-3 Certificates,
third to the Class B-2 Certificates, fourth, to the Class B-1 Certificates,
fifth, to the Class M-6 Certificates, sixth, to the Class M-5 Certificates,
seventh, to the Class M-4 Certificates, eighth, to the Class M-3 Certificates,
ninth, to the Class M-2 Certificates, tenth, to the Class M-1 Certificates and
eleventh, to the Class A Certificates, on a PRO RATA basis, in each case based
on, and to the extent of, one month's interest at the then applicable respective
Pass-Through Rate on the respective Certificate Principal Balance or

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Notional Amount, as applicable, of each such Certificate and (2) the aggregate
amount of any Realized Losses allocated to the Class B Certificates, the
Mezzanine Certificates and Net WAC Rate Carryover Amounts paid to the Class A
Certificates, the Mezzanine Certificates and the Class B Certificates incurred
for any Distribution Date shall be allocated to the Class CE Certificates on a
PRO RATA basis based on, and to the extent of, one month's interest at the then
applicable respective Pass-Through Rate on the respective Certificate Principal
Balance or Notional Amount thereof, as applicable.

                  For purposes of calculating the amount of Uncertificated
Interest for the REMIC I Regular Interests for any Distribution Date:

                                    (A) The REMIC I Marker Allocation Percentage
                  of the aggregate amount of any Prepayment Interest Shortfalls
                  (to the extent not covered by payments by the Servicer
                  pursuant to Section 3.22 of this Agreement or the Master
                  Servicer pursuant to Section 4.19) and the REMIC I Marker
                  Allocation Percentage of any Relief Act Interest Shortfalls
                  incurred in respect of the Mortgage Loans for any Distribution
                  Date shall be allocated among REMIC I Regular Interest
                  I-LTA1A, REMIC I Regular Interest I-LTA1B, REMIC I Regular
                  Interest I-LTA2, REMIC I Regular Interest I-LTM1, REMIC I
                  Regular Interest I-LTM2, REMIC I Regular Interest I-LTM3,
                  REMIC I Regular Interest I-LTM4, REMIC I Regular Interest
                  I-LTM5, REMIC I Regular Interest I-LTM6, REMIC I Regular
                  Interest I-LTB1, REMIC I Regular Interest I-LTB2, REMIC I
                  Regular Interest I-LTB3 and REMIC I Regular Interest I-LTZZ
                  PRO RATA based on, and to the extent of, one month's interest
                  at the then applicable respective REMIC I Remittance Rate on
                  the respective Uncertificated Balance of each such REMIC I
                  Regular Interest; and

                                    (B) The REMIC I Sub WAC Allocation
                  Percentage of the aggregate amount of any Prepayment Interest
                  Shortfalls (to the extent not covered by payments by the
                  Servicer pursuant to Section 3.22 of this Agreement or the
                  Master Servicer pursuant to Section 4.19) and the REMIC I Sub
                  WAC Allocation Percentage of any Relief Act Interest
                  Shortfalls incurred in respect of the Mortgage Loans for any
                  Distribution Date shall be allocated first, to Uncertificated
                  Interest payable to REMIC I Regular Interest I-LT1A, REMIC I
                  Regular Interest I-LT1B, REMIC I Regular Interest I-LT2A,
                  REMIC I Regular Interest I-LT2B, and REMIC I Regular Interest
                  I-LTXX, PRO RATA based on, and to the extent of, one month's
                  interest at the then applicable respective REMIC I Remittance
                  Rate on the respective Uncertificated Balance of each such
                  REMIC I Regular Interest.

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                                   ARTICLE II

                          CONVEYANCE OF MORTGAGE LOANS;
                        ORIGINAL ISSUANCE OF CERTIFICATES

                  Section 2.01. CONVEYANCE OF THE MORTGAGE LOANS.

                  The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey to the
Trustee, on behalf of the Trust, without recourse, for the benefit of the
Certificateholders and the Certificate Insurer, all the right, title and
interest of the Depositor, including any security interest therein for the
benefit of the Depositor, in and to the Mortgage Loans identified on the
Mortgage Loan Schedule, the rights of the Depositor under the Mortgage Loan
Purchase Agreement (including, without limitation the right to enforce the
obligations of the other parties thereto thereunder), and all other assets
included or to be included in REMIC I. Such assignment includes all interest and
principal received by the Depositor or the Servicer on or with respect to the
Mortgage Loans (other than payments of principal and interest due on such
Mortgage Loans on or before the Cut-off Date). The Depositor herewith delivers
to the Trustee and the Servicer an executed copy of the Mortgage Loan Purchase
Agreement and the PMI Policy.

                  In connection with such transfer and assignment, the Depositor
does hereby deliver to, and deposit with the Custodian pursuant to the Custodial
Agreement the documents with respect to each Mortgage Loan as described under
Section 2 of the Custodial Agreement (the "Mortgage Loan Documents"). In
connection with such delivery and as further described in the Custodial
Agreement, the Custodian will be required to review such Mortgage Loan Documents
and deliver to the Trustee, the Depositor, the Servicer and the Seller
certifications (in the forms attached to the Custodial Agreement) with respect
to such review with exceptions noted thereon. In addition, under the Custodial
Agreement the Depositor will be required to cure certain defects with respect to
the Mortgage Loan Documents for the related Mortgage Loans after the delivery
thereof by the Depositor to the Custodian as more particularly set forth
therein.

                  Notwithstanding anything to the contrary contained herein, the
parties hereto acknowledge that the functions of the Trustee with respect to the
custody, acceptance, inspection and release of the Mortgage Files, including,
but not limited to certain insurance policies and documents contemplated by
Section 4.12, and preparation and delivery of the certifications shall be
performed by the Custodian pursuant to the terms and conditions of the Custodial
Agreement.

                  The Depositor shall deliver or cause the Originator to deliver
to the Servicer copies of all trailing documents required to be included in the
Mortgage File at the same time the originals or certified copies thereof are
delivered to the Trustee or Custodian, such documents including the mortgagee
policy of title insurance and any Mortgage Loan Documents upon return from the
recording office. The Servicer shall not be responsible for any custodian fees
or other costs incurred in obtaining such documents and the Depositor shall
cause the Servicer to be reimbursed for any such costs the Servicer may incur in
connection with performing its obligations under this Agreement.

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<PAGE>

                  The Mortgage Loans permitted by the terms of this Agreement to
be included in the Trust are limited to (i) Mortgage Loans (which the Depositor
acquired pursuant to the Mortgage Loan Purchase Agreement, which contains, among
other representations and warranties, a representation and warranty of the
Seller that no Mortgage Loan is a "High-Cost Home Loan" as defined in the New
Jersey Home Ownership Act effective November 27, 2003 or as defined in the New
Mexico Home Loan Protection Act effective January 1, 2004) and (ii) Qualified
Substitute Mortgage Loans (which, by definition as set forth herein and referred
to in the Mortgage Loan Purchase Agreement, are required to conform to, among
other representations and warranties, the representation and warranty of the
Seller that no Qualified Substitute Mortgage Loan is a "High-Cost Home Loan" as
defined in the New Jersey Home Ownership Act effective November 27, 2003 or as
defined in the New Mexico Home Loan Protection Act effective January 1, 2004.
The Depositor and the Trustee on behalf of the Trust understand and agree that
it is not intended that any mortgage loan be included in the Trust that is a
"High-Cost Home Loan" as defined in the New Jersey Home Ownership Act effective
November 27, 2003 or as defined in the New Mexico Home Loan Protection Act
effective January 1, 2004.

                  Section 2.02. ACCEPTANCE OF REMIC I BY TRUSTEE.

                  The Trustee acknowledges receipt, subject to the provisions of
Section 2.01 hereof and Section 2 of the Custodial Agreement, of the Mortgage
Loan Documents and all other assets included in the definition of "REMIC I"
under clauses (i), (iii), (iv) and (v) (to the extent of amounts deposited into
the Distribution Account) and declares that it holds (or the Custodian on its
behalf holds) and will hold such documents and the other documents delivered to
it constituting a Mortgage Loan Document, and that it holds (or the Custodian on
its behalf holds) or will hold all such assets and such other assets included in
the definition of "REMIC I" in trust for the exclusive use and benefit of all
present and future Certificateholders.

                  Section 2.03. REPURCHASE OR SUBSTITUTION OF MORTGAGE LOANS.

                  (a)Upon discovery or receipt of notice of any materially
defective document in, or that a document is missing from, a Mortgage File or of
a breach by the Seller of any representation, warranty or covenant under the
Mortgage Loan Purchase Agreement in respect of any Mortgage Loan that materially
and adversely affects the value of such Mortgage Loan or the interest therein of
the Certificateholders or the Certificate Insurer, the Trustee shall promptly
notify the Seller and the Servicer of such defect, missing document or breach
and request that the Seller deliver such missing document, cure such defect or
breach within 60 days from the date the Seller was notified of such missing
document, defect or breach, and if the Seller does not deliver such missing
document or cure such defect or breach in all material respects during such
period, the Trustee shall enforce the obligations of the Seller under the
Mortgage Loan Purchase Agreement to repurchase such Mortgage Loan from REMIC I
at the Purchase Price within 90 days after the date on which the Seller was
notified of such missing document, defect or breach, if and to the extent that
the Seller is obligated to do so under the Mortgage Loan Purchase Agreement. The
Purchase Price for the repurchased Mortgage Loan shall be remitted to the
Servicer for deposit in the Collection Account and the Trustee, upon receipt of
written certification from the Servicer of such deposit, shall release or cause
the Custodian (upon receipt of a request for release in the form attached to the
Custodial

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<PAGE>

Agreement) to release to the Seller the related Mortgage File and the Trustee
shall execute and deliver such instruments of transfer or assignment, in each
case without recourse, representation or warranty, as the Seller shall furnish
to it and as shall be necessary to vest in the Seller any Mortgage Loan released
pursuant hereto, and the Trustee shall not have any further responsibility with
regard to such Mortgage File. In lieu of repurchasing any such Mortgage Loan as
provided above, if so provided in the Mortgage Loan Purchase Agreement, the
Seller may cause such Mortgage Loan to be removed from REMIC I (in which case it
shall become a Deleted Mortgage Loan) and substitute one or more Qualified
Substitute Mortgage Loans in the manner and subject to the limitations set forth
in Section 2.03(b). It is understood and agreed that the obligation of the
Seller to cure or to repurchase (or to substitute for) any Mortgage Loan as to
which a document is missing, a material defect in a constituent document exists
or as to which such a breach has occurred and is continuing shall constitute the
sole remedy respecting such omission, defect or breach available to the Trustee
and the Certificateholders.

                  In addition, promptly upon the earlier of discovery by the
Servicer or receipt of notice by the Servicer of the breach of the
representation or covenant of the Seller set forth in Section 5(xiv) of the
Mortgage Loan Purchase Agreement which materially and adversely affects the
interests of the Holders of the Class P Certificates in any Prepayment Charge,
the Servicer shall promptly notify the Seller and the Trustee of such breach.
The Trustee shall enforce the obligations of the Seller under the Mortgage Loan
Purchase Agreement to remedy such breach to the extent and in the manner set
forth in the Mortgage Loan Purchase Agreement.

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

                  As to any Deleted Mortgage Loan for which the Seller
substitutes a Qualified Substitute Mortgage Loan or Loans, such substitution
shall be effected by the Seller delivering to the Trustee or the Custodian on
behalf of the Trustee, for such Qualified Substitute Mortgage Loan or Loans, the
Mortgage Note, the Mortgage, the Assignment to the Trustee, and such other
documents and agreements, with all necessary endorsements thereon, as are
required by Section 2 of the Custodial Agreement, as applicable, together with
an Officers' Certificate providing that each such Qualified Substitute Mortgage
Loan satisfies the definition thereof and specifying the Substitution Shortfall
Amount (as described below), if any, in connection with such substitution. The
Custodian on behalf of the Trustee shall acknowledge receipt of such Qualified
Substitute Mortgage Loan or Loans and, within ten Business Days thereafter,
review such documents and deliver to the Depositor, the Trustee and the
Servicer, with respect to such Qualified Substitute Mortgage Loan or Loans, an
initial certification pursuant to the Custodial Agreement, with any applicable
exceptions noted thereon. Within one year of the date of substitution, the
Custodian on behalf of the Trustee shall deliver to the Depositor, the Trustee
and the Servicer a final certification pursuant to the Custodial Agreement with
respect to such Qualified Substitute Mortgage Loan or Loans, with any applicable
exceptions noted thereon. Monthly Payments due with respect to Qualified
Substitute Mortgage Loans in the month of substitution are not part of REMIC I
and will be retained by the Seller. For the month of substitution, distributions
to Certificateholders will reflect the Monthly Payment due on such Deleted
Mortgage Loan on or before the Due Date in the month of substitution, and the
Seller shall thereafter be entitled to

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<PAGE>

retain all amounts subsequently received in respect of such Deleted Mortgage
Loan. The Depositor shall give or cause to be given written notice to the
Certificateholders and the Certificate Insurer that such substitution has taken
place, shall amend the Mortgage Loan Schedule to reflect the removal of such
Deleted Mortgage Loan from the terms of this Agreement and the substitution of
the Qualified Substitute Mortgage Loan or Loans and shall deliver a copy of such
amended Mortgage Loan Schedule to the Trustee and the Servicer. Upon such
substitution, such Qualified Substitute Mortgage Loan or Loans shall constitute
part of the Trust Fund and shall be subject in all respects to the terms of this
Agreement and the Mortgage Loan Purchase Agreement, including all applicable
representations and warranties thereof included herein or in the Mortgage Loan
Purchase Agreement.

                  For any month in which the Seller substitutes one or more
Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the
Servicer will determine the amount (the "Substitution Shortfall Amount"), if
any, by which the aggregate Purchase Price of all such Deleted Mortgage Loans
exceeds the aggregate of, as to each such Qualified Substitute Mortgage Loan,
the Scheduled Principal Balance thereof as of the date of substitution, together
with one month's interest on such Scheduled Principal Balance at the applicable
Net Mortgage Rate, plus all outstanding P&I Advances and Servicing Advances
(including Nonrecoverable P&I Advances and Nonrecoverable Servicing Advances)
related thereto. On the date of such substitution, the Seller will deliver or
cause to be delivered to the Servicer for deposit in the Collection Account an
amount equal to the Substitution Shortfall Amount, if any, and the Trustee or
the Custodian on behalf of the Trustee, upon receipt of the related Qualified
Substitute Mortgage Loan or Loans, upon receipt of a request for release in the
form attached to the Custodial Agreement and certification by the Servicer of
such deposit, shall release to the Seller the related Mortgage File or Files and
the Trustee shall execute and deliver such instruments of transfer or
assignment, in each case without recourse, representation or warranty, as the
Seller shall deliver to it and as shall be necessary to vest therein any Deleted
Mortgage Loan released pursuant hereto.

                  In addition, the Seller shall obtain at its own expense and
deliver to the Trustee an Opinion of Counsel to the effect that such
substitution will not cause (a) any federal tax to be imposed on any Trust
REMIC, including without limitation, any federal tax imposed on "prohibited
transactions" under Section 860F(a)(1) of the Code or on "contributions after
the startup date" under Section 860G(d)(1) of the Code, or (b) any Trust REMIC
to fail to qualify as a REMIC at any time that any Certificate is outstanding.

                  (c)Upon discovery by the Depositor, the Seller, the Servicer
or the Trustee that any Mortgage Loan does not constitute a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code, the party discovering such
fact shall within two Business Days give written notice thereof to the other
parties. In connection therewith, the Seller shall repurchase or substitute one
or more Qualified Substitute Mortgage Loans for the affected Mortgage Loan
within 90 days of the earlier of discovery or receipt of such notice with
respect to such affected Mortgage Loan. Such repurchase or substitution shall be
made by (i) the Seller if the affected Mortgage Loan's status as a non-qualified
mortgage is or results from a breach of any representation, warranty or covenant
made by the Seller under the Mortgage Loan Purchase Agreement or (ii) the
Depositor, if the affected Mortgage Loan's status as a non-qualified mortgage is
a breach of no representation or warranty. Any such repurchase or

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<PAGE>

substitution shall be made in the same manner as set forth in Section 2.03(a).
The Trustee shall reconvey to the Seller the Mortgage Loan to be released
pursuant hereto in the same manner, and on the same terms and conditions, as it
would a Mortgage Loan repurchased for breach of a representation or warranty.

                  (d)With respect to a breach of the representations made
pursuant to Section 5(xiv) of the Mortgage Loan Purchase Agreement that
materially and adversely affects the value of such Mortgage Loan or the interest
therein of the Certificateholders or the Certificate Insurer, the Seller shall
be required to take the actions set forth in this Section 2.03.

                  (e)Within 90 days of the earlier of discovery by 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 or Prepayment Charge, the Servicer shall cure such breach in all material
respects.

                  Section 2.04. REPRESENTATIONS AND WARRANTIES OF THE MASTER
                                SERVICER.

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

                           (i) The Master Servicer is a national banking
         association duly formed, validly existing and in good standing under
         the laws of the United States of America and is duly authorized and
         qualified to transact any and all business contemplated by this
         Agreement to be conducted by the Master Servicer;

                           (ii) The Master Servicer has the full power and
         authority to conduct its business as presently conducted by it and to
         execute, deliver and perform, and to enter into and consummate, all
         transactions contemplated by this Agreement. The Master Servicer has
         duly authorized the execution, delivery and performance of this
         Agreement, has duly executed and delivered this Agreement, and this
         Agreement, assuming due authorization, execution and delivery by the
         other parties hereto, constitutes a legal, valid and binding obligation
         of the Master Servicer, enforceable against it in accordance with its
         terms except as the enforceability thereof may be limited by
         bankruptcy, insolvency, reorganization or similar laws affecting the
         enforcement of creditors' rights generally and by general principles of
         equity;

                           (iii) The execution and delivery of this Agreement by
         the Master Servicer, the consummation by the Master Servicer of any
         other of the transactions herein contemplated, and the fulfillment of
         or compliance with the terms hereof are in the ordinary course of
         business of the Master Servicer and will not (A) result in a breach of
         any term or provision of charter and by-laws of the Master Servicer or
         (B) conflict with, result in a breach, violation or acceleration of, or
         result in a default under, the terms of any other material agreement or
         instrument to which the Master Servicer is a party or by which it may
         be bound, or any statute, order or regulation applicable to the Master
         Servicer of any court, regulatory body, administrative agency or
         governmental body having jurisdiction over the Master Servicer; and the
         Master Servicer is not a party to,

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<PAGE>

         bound by, or in breach or violation of any indenture or other agreement
         or instrument, or subject to or in violation of any statute, order or
         regulation of any court, regulatory body, administrative agency or
         governmental body having jurisdiction over it, which materially and
         adversely affects or, to the Master Servicer's knowledge, would in the
         future materially and adversely affect, (x) the ability of the Master
         Servicer to perform its obligations under this Agreement or (y) the
         business, operations, financial condition, properties or assets of the
         Master Servicer taken as a whole;

                           (iv) The Master Servicer does not believe, nor does
         it have any reason or cause to believe, that it cannot perform each and
         every covenant made by it and contained in this Agreement;

                           (v) No litigation is pending against the Master
         Servicer that would materially and adversely affect the execution,
         delivery or enforceability of this Agreement or the ability of the
         Master Servicer to perform any of its other obligations hereunder in
         accordance with the terms hereof,

                           (vi) There are no actions or proceedings against, or
         investigations known to it of, the Master Servicer before any court,
         administrative or other tribunal (A) that might prohibit its entering
         into this Agreement, (B) seeking to prevent the consummation of the
         transactions contemplated by this Agreement or (C) that might prohibit
         or materially and adversely affect the performance by the Master
         Servicer of its obligations under, or validity or enforceability of,
         this Agreement; and

                           (vii) No consent, approval, authorization or order of
         any court or governmental agency or body is required for the execution,
         delivery and performance by the Master Servicer of, or compliance by
         the Master Servicer with, this Agreement or the consummation by it of
         the transactions contemplated by this Agreement, except for such
         consents, approvals, authorizations or orders, if any, that have been
         obtained prior to the Closing Date.

                  It is understood and agreed that the representations,
warranties and covenants set forth in this Section 2.04 shall survive the
resignation or termination of the parties hereto and the termination of this
Agreement and shall inure to the benefit of the Trustee, the Depositor and the
Certificateholders.

                  Section 2.05. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
                                SERVICER.

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

                           (i) The Servicer is a corporation organized and
         validly existing under the laws of the State of New Jersey 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

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<PAGE>

         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 Servicer has the full power and authority to
         conduct its business as presently conducted by it and to execute,
         deliver and perform, and to enter into and consummate, all transactions
         contemplated by this Agreement. The Servicer has duly authorized the
         execution, delivery and performance of this Agreement, has duly
         executed and delivered this Agreement, and this Agreement, assuming due
         authorization, execution and delivery by the other parties hereto,
         constitutes a legal, valid and binding obligation of the Servicer,
         enforceable against it in accordance with its terms, except as the
         enforceability thereof may be limited by bankruptcy, insolvency,
         reorganization or similar laws affecting the enforcement of creditors'
         rights generally and by general principles of equity;

                           (iii) The execution and delivery of this Agreement by
         the Servicer, the servicing of the Mortgage Loans by the Servicer
         hereunder, the consummation by the Servicer of any other of the
         transactions herein contemplated, and the fulfillment of or compliance
         with the terms hereof are in the ordinary course of business of the
         Servicer and will not (A) result in a breach of any term or provision
         of the charter or by-laws of the Servicer or (B) conflict with, result
         in a breach, violation or acceleration of, or result in a default
         under, the terms of any other material agreement or instrument to which
         the Servicer is a party or by which it may be bound, or any statute,
         order or regulation applicable to the Servicer of any court, regulatory
         body, administrative agency or governmental body having jurisdiction
         over the Servicer; and the Servicer is not a party to, bound by, or in
         breach or violation of any indenture or other material agreement or
         instrument, or subject to or in violation of any statute, order or
         regulation of any court, regulatory body, administrative agency or
         governmental body having jurisdiction over it, which materially and
         adversely affects or, to the Servicer's knowledge, would in the future
         materially and adversely affect, (x) the ability of the Servicer to
         perform its obligations under this Agreement, (y) the business,
         operations, financial condition, properties or assets of the Servicer
         taken as a whole or (z) the legality, validity or enforceability of
         this Agreement;

                           (iv) The Servicer does not believe, nor does it have
         any reason or cause to believe, that it cannot perform each and every
         covenant made by it and contained in this Agreement;

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

                           (vi) There are no actions or proceedings against, or
         investigations known to it of, the Servicer before any court,
         administrative or other tribunal (A) that might prohibit its entering
         into this Agreement, (B) seeking to prevent the consummation of the
         transactions contemplated by this Agreement or (C) that might prohibit
         or

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<PAGE>

         materially and adversely affect the performance by the Servicer of its
         obligations under, or the validity or enforceability of, this
         Agreement;

                           (vii) No consent, approval, authorization or order of
         any court or governmental agency or body is required for the execution,
         delivery and performance by the Servicer of, or compliance by the
         Servicer with, this Agreement or the consummation by it of the
         transactions contemplated by this Agreement, except for such consents,
         approvals, authorizations or orders, if any, that have been obtained
         prior to the Closing Date;

                           (viii) The Servicer has fully furnished and will
         continue to fully furnish, in accordance with the Fair Credit Reporting
         Act and its implementing regulations, accurate and complete information
         (e.g., favorable and unfavorable) on its borrower credit files to
         Equifax, Experian and Trans Union Credit Information Company or their
         successors on a monthly basis; and

                           (ix) The Servicer will not waive any Prepayment
         Charge other than in accordance with the standard set forth in Section
         3.01.

Notwithstanding anything to the contrary contained in this Agreement, if the
covenant of the Servicer set forth in Section 2.05(ix) above is breached, the
Servicer will pay the amount of such waived Prepayment Charge, from its own
funds without any right of reimbursement, for the benefit of the Holders of the
Class P Certificates, by depositing such amount into the Collection Account
within 90 days of the earlier of discovery by the Servicer or receipt of notice
by the Servicer of such breach. Furthermore, notwithstanding any other
provisions of this Agreement, any payments made by the Servicer in respect of
any waived Prepayment Charges pursuant to this paragraph shall be deemed to be
paid outside of the Trust Fund.

                  It is understood and agreed that the representations,
warranties and covenants set forth in this Section 2.05 shall survive the
resignation or termination of the parties hereto, the termination of this
Agreement and the delivery of the Mortgage Files to the Custodian and shall
inure to the benefit of the Trustee, the Master Servicer, the Securities
Administrator, the Depositor and the Certificateholders and the Certificate
Insurer. Upon discovery by any such Person or the Servicer of a breach of any of
the foregoing representations, warranties and covenants which materially and
adversely affects the value of any Mortgage Loan, Prepayment Charge or the
interests therein of the Certificateholders or the Certificate Insurer, the
party discovering such breach shall give prompt written notice (but in no event
later than two Business Days following such discovery) to the Trustee. Subject
to Section 8.01, unless such breach shall not be susceptible of cure within 90
days, the obligation of the Servicer set forth in Section 2.03(e) to cure
breaches shall constitute the sole remedy against the Servicer available to the
Certificateholders, the Depositor or the Trustee on behalf of the
Certificateholders and the Certificate Insurer respecting a breach of the
representations, warranties and covenants contained in this Section 2.05.

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<PAGE>

                  Section 2.06. ISSUANCE OF THE REMIC I REGULAR INTERESTS AND
THE CLASS R-I INTEREST.

                  The Trustee acknowledges the assignment to it of the Mortgage
Loans and the delivery to the Custodian on its behalf of the Mortgage Loan
Documents, subject to the provisions of Section 2.01 and Section 2.02 hereof and
Section 2 of the Custodial Agreement, together with the assignment to it of all
other assets included in REMIC I, the receipt of which is hereby acknowledged.
The interests evidenced by the Class R-I Interest, together with the REMIC I
Regular Interests, constitute the entire beneficial ownership interest in REMIC
I. The rights of the Holders of the Class R-I Interest and REMIC I (as holder of
the REMIC I Regular Interests) to receive distributions from the proceeds of
REMIC I in respect of the Class R-I Interest and the REMIC I Regular Interests,
respectively, and all ownership interests evidenced or constituted by the Class
R-I Interest and the REMIC I Regular Interests, shall be as set forth in this
Agreement.

                  Section 2.07. CONVEYANCE OF THE REMIC I REGULAR INTERESTS;
ACCEPTANCE OF REMIC I BY THE TRUSTEE.

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

                  Section 2.08. ISSUANCE OF CLASS R CERTIFICATES.

                  The Trustee acknowledges the assignment to it of the REMIC I
Regular Interests and, concurrently therewith and in exchange therefor, pursuant
to the written request of the Depositor executed by an officer of the Depositor,
the Securities Administrator has executed and authenticated and the Trustee has
delivered to or upon the order of the Depositor, the Class R Certificates in
authorized denominations. The Class R Certificates evidence ownership in the
Class R-I Interest and the Class R-II Interest.

                  Section 2.09. ESTABLISHMENT OF THE TRUST.

                  The Depositor does hereby establish, pursuant to the further
provisions of this Agreement and the laws of the State of New York, an express
trust to be known, for convenience, as "ACE Securities Corp., Home Equity Loan
Trust, Series 2004-RM1" and does

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hereby appoint HSBC Bank USA, National Association as Trustee in accordance with
the provisions of this Agreement.

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<PAGE>

                                  ARTICLE III

                          ADMINISTRATION AND SERVICING
                         OF THE MORTGAGE LOANS; ACCOUNTS

                  Section 3.01. THE SERVICER TO ACT AS A SERVICER.

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

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

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

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

                           (iv) the Servicer's right to receive compensation for
         its services hereunder.

                  To the extent consistent with the foregoing, the Servicer
shall also seek to maximize the timely and complete recovery of principal and
interest on the Mortgage Notes related to the Mortgage Loans and shall waive (or
permit a Sub-Servicer to waive) a Prepayment Charge only under the following
circumstances: (i) such waiver is standard and customary in servicing similar
Mortgage Loans and such waiver is related to a default or reasonably foreseeable
default and would, in the reasonable judgement of the Servicer, maximize
recovery of total proceeds taking into account the value of such Prepayment
Charge and the related the Mortgage Loan and, if such waiver is made in
connection with a refinancing of the related the Mortgage Loan, such refinancing
is related to a default or a reasonably foreseeable default, (ii) such
Prepayment Charge is unenforceable in accordance with applicable law or the
collection of such related Prepayment Charge would otherwise violate applicable
law or (iii) the collection of such Prepayment Charge would be considered
"predatory" pursuant to written guidance published or issued by any applicable
federal, state or local regulatory authority acting in its official capacity and
having jurisdiction over such matters. Notwithstanding any provision in this
Agreement to the contrary, in the event the Prepayment Charge payable under the
terms of the Mortgage Note related to a Mortgage Loan is less than the amount of
the Prepayment Charge set forth in the Prepayment Charge Schedule or other
information provided to the Servicer, the Servicer shall not have any liability
or obligation with respect to such difference, and in addition shall not have
any liability or obligation to pay the amount of any uncollected Prepayment

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<PAGE>

Charge if the failure to collect such amount is the direct result of inaccurate
or incomplete information on the Prepayment Charge Schedule.

                  Subject only to the above-described servicing standards (the
"Accepted Servicing Practices") and the terms of this Agreement and of the
respective the Mortgage Loans, the Servicer shall have full power and authority,
to do or cause to be done any and all things in connection with such servicing
and administration which it may deem necessary or desirable with the goal of
maximizing proceeds of the Mortgage Loan. Without limiting the generality of the
foregoing, the Servicer in its own name is hereby authorized and empowered by
the Trustee when the Servicer believes it appropriate in its best judgment, to
execute and deliver, on behalf of the Trust Fund, the Certificateholders and the
Trustee or any of them, and upon written notice to the Trustee, any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge or subordination, and all other comparable instruments, with respect
to the Mortgage Loans and the Mortgaged Properties and to institute foreclosure
proceedings or obtain a deed-in-lieu of foreclosure so as to convert the
ownership of such properties, and to hold or cause to be held title to such
properties, on behalf of the Trustee, for the benefit of the Trust Fund and the
Certificateholders. The Servicer shall service and administer the Mortgage Loans
in accordance with applicable state and federal law and shall provide to the
Mortgagors any reports required to be provided to them thereby. The Servicer
shall also comply in the performance of this Agreement with all reasonable rules
and requirements of each insurer under any standard hazard insurance policy.
Subject to Section 3.14, the Trustee shall execute, at the written request of
the Servicer, and furnish to the Servicer any special or limited powers of
attorney and other documents necessary or appropriate to enable the Servicer to
carry out its servicing and administrative duties hereunder and furnished to the
Trustee by the Servicer, and the Trustee shall not be liable for the actions of
the Servicer under such powers of attorney and shall be indemnified by the
Servicer for any cost, liability or expense incurred by the Trustee in
connection with the Servicer's use or misuse of any such power of attorney.

                  In accordance with Accepted Servicing Practices, the Servicer
shall make or cause to be made Servicing Advances as necessary for the purpose
of effecting the payment of taxes and assessments on the Mortgaged Properties,
which Servicing Advances shall be reimbursable in the first instance from
related collections from the related Mortgagors pursuant to Section 3.07, and
further as provided in Section 3.09; provided, however, the Servicer shall only
make such Servicing Advance if the related Mortgagor has not made such payment
and if the failure to make such Servicing Advance would result in the loss of
the related Mortgaged Property due to a tax sale or foreclosure as result of a
tax lien. Any cost incurred by the Servicer in effecting the payment of taxes
and assessments on a Mortgaged Property shall not, for the purpose of
calculating the Stated Principal Balance of such Mortgage Loan or distributions
to Certificateholders, be added to the unpaid principal balance of the related
Mortgage Loan, notwithstanding that the terms of such the Mortgage Loan so
permit.

                  Notwithstanding anything in this Agreement to the contrary,
the Servicer may not make any future advances with respect to a Mortgage Loan
and the Servicer shall not permit any modification with respect to any related
Mortgage Loan that would change the Mortgage Rate, reduce or increase the
principal balance (except for reductions resulting from actual payments of
principal) or change the final maturity date on such related Mortgage Loan
(unless, as provided in Section 3.06, the related Mortgagor is in default with
respect to the related Mortgage Loan or

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<PAGE>

such default is, in the judgment of the Servicer, reasonably foreseeable) or any
modification, waiver or amendment of any term of any Mortgage Loan that would
both (A) effect an exchange or reissuance of such Mortgage Loan under Section
1001 of the Code (or final, temporary or proposed Treasury regulations
promulgated thereunder) and (B) cause any Trust REMIC created hereunder to fail
to qualify as a REMIC under the Code or the imposition of any tax on "prohibited
transactions" or "contributions after the startup date" under the REMIC
Provisions.

                  In the event that the Mortgage Loan Documents relating to any
Mortgage Loan contain provisions requiring the related Mortgagor to arbitrate
disputes (at the option of the Trustee, on behalf of the Trust), the Trustee
hereby authorizes the Servicer to waive the Trustee's right or option to
arbitrate disputes and to send written notice of such waiver to the Mortgagor,
although the Mortgagor may still require arbitration at its option.

                  Section 3.02. SUB-SERVICING AGREEMENTS BETWEEN THE SERVICER
AND SUB-SERVICERS.

                  The Servicer may arrange for the subservicing of any Mortgage
Loan by a Sub- Servicer pursuant to a Sub-Servicing Agreement; provided that
such sub-servicing arrangement and the terms of the related Sub-Servicing
Agreement must provide for the servicing of such Mortgage Loans in a manner
consistent with the servicing arrangements contemplated hereunder. Each
Sub-Servicer shall be (i) authorized to transact business in the state or states
where the related Mortgaged Properties it is to service are situated, if and to
the extent required by applicable law to enable the Sub-Servicer to perform its
obligations hereunder and under the Sub-Servicing Agreement and (ii) a Freddie
Mac or Fannie Mae approved mortgage servicer. Notwithstanding the provisions of
any Sub-Servicing Agreement, any of the provisions of this Agreement relating to
agreements or arrangements between the Servicer or a Sub-Servicer or reference
to actions taken through the Servicer or otherwise, the Servicer shall remain
obligated and liable to the Depositor, the Trustee and the Certificateholders
for the servicing and administration of the Mortgage Loans in accordance with
the provisions of this Agreement without diminution of such obligation or
liability by virtue of such Sub-Servicing Agreements or arrangements or by
virtue of indemnification from the Sub-Servicer and to the same extent and under
the same terms and conditions as if the Servicer alone were servicing and
administering the Mortgage Loans. Every Sub-Servicing Agreement entered into by
the Servicer shall contain a provision giving the successor Servicer the option
to terminate such agreement in the event a successor Servicer is appointed. All
actions of each Sub-Servicer performed pursuant to the related Sub-Servicing
Agreement shall be performed as an agent of the Servicer with the same force and
effect as if performed directly by the Servicer.

                  For purposes of this Agreement, the Servicer shall be deemed
to have received any collections, recoveries or payments with respect to the
Mortgage Loans that are received by a Sub-Servicer regardless of whether such
payments are remitted by the Sub-Servicer to the Servicer.

                  Section 3.03. SUCCESSOR SUB-SERVICERS.

                  Any Sub-Servicing Agreement shall provide that the Servicer
shall be entitled to terminate any Sub-Servicing Agreement and to either itself
directly service the related Mortgage

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<PAGE>

Loans or enter into a Sub-Servicing Agreement with a successor Sub-Servicer
which qualifies under Section 3.02. Any Sub-Servicing Agreement shall include
the provision that such agreement may be immediately terminated by any successor
to the Servicer (which may be the Trustee or the Master Servicer) without fee,
in accordance with the terms of this Agreement, in the event that the Servicer
(or any successor to the Servicer) shall, for any reason, no longer be the
Servicer of the Mortgage Loans (including termination due to a Servicer Event of
Default).

                  Section 3.04. NO CONTRACTUAL RELATIONSHIP BETWEEN
SUB-SERVICER, TRUSTEE OR THE CERTIFICATEHOLDERS.

                  Any Sub-Servicing Agreement and any other transactions or
services relating to the Mortgage Loans involving a Sub-Servicer shall be deemed
to be between the Sub-Servicer and the Servicer alone and the Master Servicer,
the Trustee and the Certificateholders shall not be deemed parties thereto and
shall have no claims, rights, obligations, duties or liabilities with respect to
any Sub-Servicer except as set forth in Section 3.05.

                  Section 3.05. ASSUMPTION OR TERMINATION OF SUB-SERVICING
AGREEMENT BY SUCCESSOR SERVICER.

                  In connection with the assumption of the responsibilities,
duties and liabilities and of the authority, power and rights of the Servicer
hereunder by a successor Servicer (which may be the Trustee or the Master
Servicer) pursuant to Section 8.02, it is understood and agreed that the
Servicer's rights and obligations under any Sub-Servicing Agreement then in
force between the Servicer and a Sub-Servicer shall be assumed simultaneously by
such successor Servicer without act or deed on the part of such successor
Servicer; provided, however, that any successor Servicer may terminate the
Sub-Servicer.

                  The Servicer shall, upon the reasonable request of the Master
Servicer, but at its own expense, deliver to the assuming party documents and
records relating to each Sub-Servicing Agreement and an accounting of amounts
collected and held by it and otherwise use its best efforts to effect the
orderly and efficient transfer of the Sub-Servicing Agreements to the assuming
party.

                  The Servicing Fee payable to any such successor Servicer shall
be payable from payments received on the Mortgage Loans in the amount and in the
manner set forth in this Agreement.

                  Section 3.06. COLLECTION OF CERTAIN MORTGAGE LOAN PAYMENTS.

                  The Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Mortgage Loans, and
shall, to the extent such procedures shall be consistent with this Agreement and
Accepted Servicing Practices, follow such collection procedures as it would
follow with respect to mortgage loans comparable to the Mortgage Loans and held
for its own account. Consistent with the foregoing, the Servicer may in its
discretion (i) waive any late payment charge or, if applicable, penalty interest
or (ii) extend the due dates for the Monthly Payments due on a Mortgage Note for
a period of not greater than 180 days; provided that any extension pursuant to
this clause shall not affect the amortization schedule of any Mortgage Loan for
purposes of any computation hereunder. Notwithstanding the foregoing,

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<PAGE>

in the event that any Mortgage Loan is in default or, in the judgment of the
Servicer, such default is reasonably foreseeable, the Servicer, consistent with
Accepted Servicing Practices may waive, modify or vary any term of such Mortgage
Loan (including modifications that change the Mortgage Rate, forgive the payment
of principal or interest or extend the final maturity date of such Mortgage
Loan), accept payment from the related Mortgagor of an amount less than the
Stated Principal Balance in final satisfaction of such Mortgage Loan, or consent
to the postponement of strict compliance with any such term or otherwise grant
indulgence to any Mortgagor if in the Servicer's determination such waiver,
modification, postponement or indulgence is not materially adverse to the
interests of the Certificateholders or the Certificate Insurer (taking into
account any estimated Realized Loss that might result absent such action).

                  Section 3.07. COLLECTION OF TAXES, ASSESSMENTS AND SIMILAR
ITEMS; SERVICING ACCOUNTS.

                  To the extent the terms of a Mortgage provide for Escrow
Payments, the Servicer shall establish and maintain one or more accounts (the
"Servicing Accounts"), into which all collections from the related Mortgagors
(or related advances from Sub-Servicers) for the payment of taxes, assessments,
fire, flood, and hazard insurance premiums, and comparable items for the account
of the Mortgagors ("Escrow Payments") shall be deposited and retained. Servicing
Accounts shall be Eligible Accounts. The Servicer shall deposit in the Servicing
Accounts on a daily basis and in no event later than the second Business Day
after receipt, and retain therein, all Escrow Payments collected on account of
the Mortgage Loans, for the purpose of effecting the timely payment of any such
items as required under the terms of this Agreement. Withdrawals of amounts from
a Servicing Account may be made only to (i) effect timely payment of taxes,
assessments, fire, flood, and hazard insurance premiums, and comparable items;
(ii) reimburse itself out of related collections for any Servicing Advances made
pursuant to Section 3.01 (with respect to taxes and assessments) and Section
3.11 (with respect to fire, flood and hazard insurance); (iii) refund to
Mortgagors any sums as may be determined to be overages; (iv) pay interest, if
required and as described below, to Mortgagors on balances in the Servicing
Account; or (v) clear and terminate the Servicing Account at the termination of
the Servicer's obligations and responsibilities in respect of the Mortgage Loans
under this Agreement in accordance with Article X. As part of its servicing
duties, the Servicer shall pay to the Mortgagors interest on funds in Servicing
Accounts, to the extent required by law and, to the extent that interest earned
on funds in the Servicing Accounts is insufficient, to pay such interest from
its or their own funds, without any reimbursement therefor. Notwithstanding the
foregoing, the Servicer shall not be obligated to collect Escrow Payments if the
related Mortgage Loan does not require such payments but the Servicer shall
nevertheless be obligated to make Servicing Advances as provided in Section 3.01
and Section 3.11. In the event the Servicer shall deposit in the Servicing
Accounts any amount not required to be deposited therein, it may at any time
withdraw such amount from the Servicing Accounts, any provision to the contrary
notwithstanding.

                  To the extent that a Mortgage 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

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<PAGE>

payment has not been made and the Servicer receives notice of a tax lien with
respect to the Mortgage Loan being imposed, the Servicer shall, promptly and to
the extent required to avoid loss of the Mortgaged Property, advance or cause to
be advanced funds necessary to discharge such lien on the Mortgaged Property
unless the Servicer determines the advance to be nonrecoverable. 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 to effect such payments subject to its determination of
recoverability.

                  Section 3.08. COLLECTION ACCOUNT AND DISTRIBUTION ACCOUNT.

                  (a) On behalf of the Trust Fund, the Servicer shall establish
and maintain one or more Collection Accounts, held in trust for the benefit of
the Trustee and the Certificateholders. On behalf of the Trust Fund, the
Servicer shall deposit or cause to be deposited in the Collection Account on a
daily basis and in no event later than two Business Days after receipt, as and
when received or as otherwise required hereunder, the following payments and
collections received or made by it on or subsequent to the Cut-off Date other
than amounts attributable to a Due Date on or prior to the Cut-off Date:

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

                           (ii) all payments on account of interest (net of the
         related Servicing Fee and any Prepayment Interest Excess) on each
         Mortgage Loan;

                           (iii) all Insurance Proceeds and Liquidation Proceeds
         (other than proceeds collected in respect of any particular REO
         Property) and all Subsequent Recoveries;

                           (iv) any amounts required to be deposited by the
         Servicer pursuant to Section 3.10 in connection with any losses
         realized on Permitted Investments with respect to funds held in the
         Collection Account;

                           (v) any amounts required to be deposited by the
         Servicer pursuant to the second paragraph of Section 3.11(a) in respect
         of any blanket policy deductibles;

                           (vi) any Purchase Price or Substitution Shortfall
         Amount delivered to the Servicer and all proceeds (net of amounts
         payable or reimbursable to the Servicer, the Master Servicer, the
         Trustee, the Custodian or the Securities Administrator) of Mortgage
         Loans purchased in accordance with Section 2.03, Section 3.13 or
         Section 10.01;

                           (vii) any Prepayment Charges collected by the
         Servicer in connection with the Principal Prepayment of any of the
         Mortgage Loans or amounts required to be deposited by the Servicer in
         connection with a breach of its obligations under Section 2.05; and

                           (viii) without duplication, all payments of claims
         under the PMI Policy.

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<PAGE>

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

                  (b)On behalf of the Trust Fund, the Securities Administrator
shall establish and maintain one or more accounts (such account or accounts, the
"Distribution Account"), held in trust for the benefit of the Trustee, the Trust
Fund and the Certificateholders. On behalf of the Trust Fund, the Servicer shall
deliver to the Securities Administrator in immediately available funds for
deposit in the Distribution Account on or before [1:00 pm] New York time on the
Servicer Remittance Date, that portion of the Available Distribution Amount
(calculated without regard to the references in clause (2) of the definition
thereof to amounts that may be withdrawn from the Distribution Account) for the
related Distribution Date then on deposit in the Collection Account and the
amount of all Prepayment Charges collected by the Servicer in connection with
the Principal Prepayment of any of the Mortgage Loans then on deposit in the
Collection Account and the amount of any funds reimbursable to an Advance
Financing Person pursuant to Section 3.25 of this Agreement. If the balance on
deposit in a Collection Account exceeds $100,000 as of the commencement of
business on any Business Day and the Collection Account constitute an Eligible
Account solely pursuant to clause (ii) of the definition of "Eligible Account,"
the Servicer shall, on or before 5:00 p.m. New York time on such Business Day,
withdraw from the Collection Account any and all amounts payable or reimbursable
to the Depositor, the Servicer, the Trustee, the Master Servicer, the Securities
Administrator or the Seller pursuant to Section 3.09(a) and shall pay such
amounts to the Persons entitled thereto.

                  With respect to any remittance received by the Securities
Administrator on or after the first Business Day following the Business Day on
which such payment was due, the Securities Administrator shall send written
notice thereof to the Servicer. The Servicer shall pay to the Securities
Administrator interest on any such late payment by the Servicer at an annual
rate equal to Prime Rate (as defined in THE WALL STREET JOURNAL) plus one
percentage point, but in no event greater than the maximum amount permitted by
applicable law. Such interest shall be paid by the Servicer to the Securities
Administrator on the date such late payment is made and shall cover the period
commencing with the day following such first Business Day and ending with the
Business Day on which such payment is made, both inclusive. The payment by the
Servicer of any such interest, or the failure of the Securities Administrator to
notify the Servicer of such interest, shall not be deemed an extension of time
for payment or a waiver of any Event of Default by the Servicer.

                  (c)Funds in the Collection Account and funds in the
Distribution Account may be invested in Permitted Investments in accordance with
the provisions set forth in Section 3.10. The Servicer shall give notice to the
Trustee, the Securities Administrator and the Master Servicer of the location of
the Collection Account when established and prior to any change thereof. The
Securities Administrator shall give notice to the Servicer and the

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<PAGE>

Depositor of the location of the Distribution Account when established and prior
to any change thereof.

                  (d)Funds held in the Collection Account at any time may be
delivered by the Servicer in immediately available funds to the Securities
Administrator for deposit in the Distribution Account. In the event the Servicer
shall deliver to the Securities Administrator for deposit in the Distribution
Account any amount not required to be deposited therein, it may at any time
request that the Securities Administrator withdraw such amount from the
Distribution Account and remit to it any such amount, any provision herein to
the contrary notwithstanding. In no event shall the Securities Administrator
incur liability as a result of withdrawals from the Distribution Account at the
direction of the Servicer in accordance with the immediately preceding sentence.
In addition, the Servicer shall deliver to the Securities Administrator no later
than the Servicer Remittance Date the amounts set forth in clauses (i) through
(iv) below:

                           (i) any P&I Advances, as required pursuant to Section
         5.03;

                           (ii) any amounts required to be deposited pursuant to
         Section 3.21(d) or 3.21(f) in connection with any REO Property;

                           (iii) any amounts to be paid in connection with a
         purchase of Mortgage Loans and REO Properties pursuant to Section
         10.01; and

                           (iv) any amounts required to be deposited pursuant to
         Section 3.22 in connection with any Prepayment Interest Shortfalls.

                  Section 3.09. WITHDRAWALS FROM THE COLLECTION ACCOUNT AND
DISTRIBUTION ACCOUNT.

                  (a) The Servicer shall, from time to time, make withdrawals
from Collection Account for any of the following purposes or as described in
Section 5.03:

                           (i) to remit to the Securities Administrator for
         deposit in the Distribution Account the amounts required to be so
         remitted pursuant to Section 3.08(b) or permitted to be so remitted
         pursuant to the first sentence of Section 3.08(d);

                           (ii) subject to Section 3.13(d), to reimburse itself
         (including any successor Servicer) for P&I Advances made by it, but
         only to the extent of amounts received which represent Late Collections
         (net of the related Servicing Fees) of Monthly Payments on related
         Mortgage Loans with respect to which such P&I Advances were made in
         accordance with the provisions of Section 5.03;

                           (iii) subject to Section 3.13(d), to pay itself any
         unpaid Servicing Fees and reimburse itself any unreimbursed Servicing
         Advances with respect to each Mortgage Loan, but only to the extent of
         any Liquidation Proceeds and Insurance Proceeds received with respect
         to such related Mortgage Loan;

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<PAGE>

                           (iv) to pay to itself as servicing compensation (in
         addition to the Servicing Fee) on the Servicer Remittance Date any
         interest or investment income earned on funds deposited in the
         Collection Account;

                           (v) to pay itself or the Seller, as the case may be,
         with respect to each related Mortgage Loan that has previously been
         purchased or replaced pursuant to Section 2.03 or Section 3.13(c) all
         amounts received thereon not included in the Purchase Price or the
         Substitution Shortfall Amount;

                           (vi) to reimburse itself (including any successor
         Servicer) for any P&I Advance or Servicing Advance previously made by
         it which it has determined to be a Nonrecoverable P&I Advance or a
         Nonrecoverable Servicing Advance in accordance with the provisions of
         Section 5.03;

                           (vii) to reimburse itself or the Depositor for
         expenses incurred by or reimbursable to it or the Depositor, as the
         case may be, pursuant to Section 3.01 or Section 7.03;

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

                           (ix) to pay, or to reimburse itself for advances in
         respect of, expenses incurred in connection with any Mortgage Loan
         pursuant to Section 3.13(b);

                           (x) to pay to itself any Prepayment Interest Excess
         on the Mortgage Loans to the extent not retained pursuant to Section
         3.08(a)(ii));

                           (xi) to pay the PMI Insurer the PMI Insurer Fee; and

                           (xii) to clear and terminate the Collection Account
         pursuant to Section 10.01.

                  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 (ii), (iii), (v), (vi), (vii), (viii), (ix) and (x)
above.

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

                           (i) to make distributions to Certificateholders in
         accordance with Section 5.01;

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                           (ii) to pay to itself, the Custodian, the Master
         Servicer and the Trustee amounts to which it is entitled pursuant to
         Section 9.05 or any other provision of this Agreement and any
         Extraordinary Trust Fund Expenses;

                           (iii) to reimburse itself or the Master Servicer
         pursuant to Section 8.02;

                           (iv) to pay to an Advance Financing Person
         reimbursements for P&I Advances and/or Servicing Advances pursuant to
         Section 3.25;

                           (v) to pay any amounts in respect of taxes pursuant
         to Section 11.01(g)(v);

                           (vi) to pay the Master Servicing Fee to the Master
         Servicer;

                           (vii) to pay the Credit Risk Management Fee to the
         Credit Risk Manager; and

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

                  Section 3.10. INVESTMENT OF FUNDS IN THE INVESTMENT ACCOUNTS.

                  (a)The Servicer may direct, by means of written directions
(which may be standing directions), any depository institution maintaining the
Collection Account to invest the funds in such Collection Account (for purposes
of this Section 3.10, an "Investment Account") in one or more Permitted
Investments bearing interest or sold at a discount, and maturing, unless payable
on demand, (i) no later than the Business Day immediately preceding the date on
which such funds are required to be withdrawn from such account pursuant to this
Agreement, if a Person other than the Securities Administrator is the obligor
thereon, and (ii) no later than the date on which such funds are required to be
withdrawn from such account pursuant to this Agreement, if the Securities
Administrator is the obligor on such Permitted Investment. Amounts in the
Distribution Account may be invested in Permitted Investments as directed in
writing by the Master Servicer and maturing, unless payable on demand, (i) no
later than the Business Day immediately preceding the date on which such funds
are required to be withdrawn from such account pursuant to this Agreement, if a
Person other than the Securities Administrator is the obligor thereon, and (ii)
no later than the date on which such funds are required to be withdrawn from
such account pursuant to this Agreement, if the Securities Administrator is the
obligor thereon. All such Permitted Investments shall be held to maturity,
unless payable on demand. Any investment of funds shall be made in the name of
the Trustee (in its capacity as such) or in the name of a nominee of the
Trustee. The Securities Administrator shall be entitled to sole possession over
each such investment in the Distribution Account and, subject to subsection (b)
below, the income thereon, and any certificate or other instrument evidencing
any such investment shall be delivered directly to the Securities Administrator
or its agent, together with any document of transfer necessary to transfer title
to such investment to the Trustee or its nominee. In the event amounts on
deposit in the Collection Account are at any time invested in a Permitted
Investment payable on demand, the party with investment discretion over such
Investment Account shall:

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

                           (y) demand payment of all amounts due thereunder
                  promptly upon receipt by such party of written notice from the
                  Servicer that such Permitted Investment would not constitute a
                  Permitted Investment in respect of funds thereafter on deposit
                  in the Investment Account.

                  (b)All income and gain realized from the investment of funds
deposited in the Collection Account, shall be for the benefit of the Servicer
and shall be subject to its withdrawal in accordance with Section 3.09. The
Servicer shall deposit in the Collection Account the amount of any loss incurred
in respect of any such Permitted Investment made with funds in such account
immediately upon realization of such loss. All earnings and gain realized from
the investment of funds deposited in the Distribution Account shall be for the
benefit of the Master Servicer. The Master Servicer shall remit from its own
funds for deposit into the Distribution Account the amount of any loss incurred
on Permitted Investments in the Distribution Account.

                  (c)Except as otherwise expressly provided in this Agreement,
if any default occurs in the making of a payment due under any Permitted
Investment, or if a default occurs in any other performance required under any
Permitted Investment, the Trustee may and, subject to Section 9.01 and Section
9.02(a)(v), shall, at the written direction of the Servicer, take such action as
may be appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate proceedings.

                  (d)The Trustee, the Master Servicer or their respective
Affiliates are permitted to receive additional compensation that could be deemed
to be in the Trustee's or the Master Servicer's economic self-interest for (i)
serving as investment adviser, administrator, shareholder servicing agent,
custodian or sub-custodian with respect to certain of the Permitted Investments,
(ii) using Affiliates to effect transactions in certain Permitted Investments
and (iii) effecting transactions in certain Permitted Investments. Such
compensation shall not be considered an amount that is reimbursable or payable
to the Trustee or the Master Servicer pursuant to Section 3.09 or 3.10 or
otherwise payable in respect of Extraordinary Trust Fund Expenses. Such
additional compensation shall not be an expense of the Trust Fund.

                  Section 3.11. MAINTENANCE OF HAZARD INSURANCE, ERRORS AND
OMISSIONS AND FIDELITY COVERAGE AND PRIMARY MORTGAGE INSURANCE.

                  (a)The terms of each Mortgage Note require the related
Mortgagor to maintain fire, flood and hazard insurance policies. To the extent
such policies are not maintained, the Servicer shall cause to be maintained for
each Mortgaged Property fire and hazard insurance with extended coverage as is
customary in the area where the Mortgaged Property is located in an amount which
is at least equal to the lesser of the current principal

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balance of such Mortgage Loan and the amount necessary to compensate fully for
any damage or loss to the improvements which are a part of such property on a
replacement cost basis, in each case in an amount not less than such amount as
is necessary to avoid the application of any coinsurance clause contained in the
related hazard insurance policy. The Servicer shall also cause to be maintained
fire and hazard insurance on each REO Property with extended coverage as is
customary in the area where the Mortgaged Property is located in an amount which
is at least equal to the lesser of (i) the maximum insurable value of the
improvements which are a part of such property and (ii) the outstanding
principal balance of the related Mortgage Loan at the time it became an REO
Property. The Servicer will comply in the performance of this Agreement with all
reasonable rules and requirements of each insurer under any such hazard
policies. Any amounts to be collected by the Servicer under any such policies
(other than amounts to be applied to the restoration or repair of the property
subject to the related Mortgage or amounts to be released to the Mortgagor in
accordance with Accepted Servicing Practices, subject to the terms and
conditions of the related Mortgage and Mortgage Note) shall be deposited in the
Collection Account, subject to withdrawal pursuant to Section 3.09, if received
in respect of a Mortgage Loan, or in the REO Account, subject to withdrawal
pursuant to Section 3.21, if received in respect of an REO Property. Any cost
incurred by the Servicer in maintaining any such insurance shall not, for the
purpose of calculating distributions to Certificateholders, be added to the
unpaid principal balance of the related Mortgage Loan, notwithstanding that the
terms of such Mortgage Loan so permit. It is understood and agreed that no
earthquake or other additional insurance is to be required of any Mortgagor
other than pursuant to such applicable laws and regulations as shall at any time
be in force and as shall require such additional insurance. If the Mortgaged
Property or REO Property is at any time in an area identified in the Federal
Register by the Federal Emergency Management Agency as having special flood
hazards, the Servicer will cause to be maintained a flood insurance policy in
respect thereof. Such flood insurance shall be in an amount equal to the lesser
of (i) the unpaid principal balance of the related Mortgage Loan and (ii) the
maximum amount of such insurance available for the related Mortgaged Property
under the national flood insurance program (assuming that the area in which such
Mortgaged Property is located is participating in such program).

                  In the event that the Servicer shall obtain and maintain a
blanket policy with an insurer having a General Policy Rating of A:X or better
in Best's Key Rating Guide or otherwise acceptable to Fannie Mae or Freddie Mac
insuring against hazard losses on all of the Mortgage Loans, it shall
conclusively be deemed to have satisfied its obligations to cause fire and
hazard insurance to be maintained on the Mortgaged Properties, it being
understood and agreed that such policy may contain a deductible clause, in which
case 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 the
first two sentences of this Section 3.11, and there shall have been one or more
losses which would have been covered by such policy, deposit to the Collection
Account from its own funds the amount not otherwise payable under the blanket
policy because of such deductible clause. In connection with its activities as
administrator and servicer of the Mortgage Loans, the Servicer agrees to prepare
and present, on behalf of itself, the Trustee, the Trust Fund and the
Certificateholders and the Certificate Insurer, claims under any such blanket
policy in a timely fashion in accordance with the terms of such policy.

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                  (b)The Servicer shall keep in force during the term of this
Agreement a policy or policies of insurance covering errors and omissions for
failure in the performance of its respective obligations under this Agreement,
which policy or policies shall be in such form and amount that would meet the
requirements of Fannie Mae or Freddie Mac if it were the purchaser of the
Mortgage Loans, unless the Servicer, has obtained a waiver of such requirements
from Fannie Mae or Freddie Mac. The Servicer shall also maintain a fidelity bond
in the form and amount that would meet the requirements of Fannie Mae or Freddie
Mac, unless the 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. Any such errors
and omissions policy and fidelity bond shall by its terms not be cancelable
without thirty days' prior written notice to the Trustee.

                  (c)The Servicer shall not take any action that would result in
noncoverage under any applicable primary mortgage insurance policy of any loss
which, but for the actions of the Servicer would have been covered thereunder.
The Servicer shall use its best efforts to keep in force and effect any
applicable primary mortgage insurance policy and, to the extent that the related
Mortgage Loan requires the Mortgagor to maintain such insurance, any other
primary mortgage insurance applicable to any Mortgage Loan. Except as required
by applicable law or the related Mortgage Loan Documents, the Servicer shall not
cancel or refuse to renew any such primary mortgage insurance policy that is in
effect at the date of the initial issuance of the related Mortgage Note and is
required to be kept in force hereunder.

                  The Servicer agrees to present on behalf of the Trustee and
the Certificateholders and the Certificate Insurer claims to the applicable
insurer under any other primary mortgage insurance policies and, in this regard,
to take such reasonable action as shall be necessary to permit recovery under
any primary mortgage insurance policies respecting defaulted Mortgage Loans.
Pursuant to Section 3.08, any amounts collected by the Servicer under any
primary mortgage insurance policies shall be deposited in the Collection
Account, subject to withdrawal pursuant to Section 3.09.

                  Section 3.12. ENFORCEMENT OF DUE-ON-SALE CLAUSES; ASSUMPTION
AGREEMENTS.

                  The Servicer shall, to the extent it has knowledge of any
conveyance of any Mortgaged Property by any related Mortgagor (whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under the
"due-on-sale" clause, if any, applicable thereto; provided, however, that the
Servicer shall not exercise any such rights if prohibited by law from doing so.
If the Servicer reasonably believes it is unable under applicable law to enforce
such "due-on-sale" clause, or if any of the other conditions set forth in the
proviso to the preceding sentence apply, the Servicer shall enter into an
assumption and modification agreement from or with the person to whom such
property has been conveyed or is proposed to be conveyed, pursuant to which such
person becomes liable under the Mortgage Note and, to the extent permitted by
applicable state law, the Mortgagor remains liable thereon. The Servicer is also
authorized to enter into a substitution of liability

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<PAGE>

agreement with such person, pursuant to which the original Mortgagor is released
from liability and such person is substituted as the Mortgagor and becomes
liable under the Mortgage Note, provided that no such substitution shall be
effective unless such person satisfies the then current underwriting criteria of
the Servicer for mortgage loans similar to the Mortgage Loans. In connection
with any assumption or substitution, the Servicer shall apply such underwriting
standards and follow such practices and procedures in accordance with customary
and prudent mortgage underwriting practices. The Servicer shall not take or
enter into any assumption and modification agreement, however, unless (to the
extent practicable in the circumstances) it shall have received confirmation, in
writing, of the continued effectiveness of any applicable hazard insurance
policy. Any fee collected by the Servicer in respect of an assumption or
substitution of liability agreement will be retained by the Servicer as
additional servicing compensation. In connection with any such assumption, no
material term of the Mortgage Note (including but not limited to the related
Mortgage Rate and the amount of the Monthly Payment) may be amended or modified,
except as otherwise required pursuant to the terms thereof. The Servicer shall
notify the Trustee (or the Custodian) that any such substitution or assumption
agreement has been completed by forwarding to the Trustee the executed original
of such substitution or assumption agreement, which document shall be added to
the related Mortgage File and shall, for all purposes, be considered a part of
such Mortgage File to the same extent as all other documents and instruments
constituting a part thereof.

                  Notwithstanding the foregoing paragraph or any other provision
of this Agreement, 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 by the terms of the Mortgage Note or any
assumption which the Servicer may be restricted by law from preventing, for any
reason whatever. For purposes of this Section 3.12, the term "assumption" is
deemed to also include a sale (of the Mortgaged Property) subject to the
Mortgage that is not accompanied by an assumption or substitution of liability
agreement.

                  Section 3.13. REALIZATION UPON DEFAULTED MORTGAGE LOANS.

                  (a)The Servicer shall use its best efforts, consistent with
Accepted Servicing Practices, to foreclose upon or otherwise comparably convert
the ownership of properties securing such of the Mortgage Loans as come into and
continue in default and as to which no satisfactory arrangements can be made for
collection of delinquent payments pursuant to Section 3.06. The Servicer shall
be responsible for all costs and expenses incurred by it in any such
proceedings; provided, however, that such costs and expenses will be recoverable
as Servicing Advances by the Servicer as contemplated in Sections 3.09 and 3.21.
The foregoing is subject to the provision that, in any case in which a Mortgaged
Property shall have suffered damage from an Uninsured Cause, the Servicer shall
not be required to expend its own funds toward the restoration of such property
unless it shall determine in its discretion that such restoration will increase
the proceeds of liquidation of the related Mortgage Loan after reimbursement to
itself for such expenses. In addition, the Servicer may charge off any second
lien Mortgage Loan which is greater than 180 days delinquent and for which the
related first lien is not a Mortgage Loan subject to this Agreement if it has
made a Final Recovery Determination with respect to such second lien Mortgage
Loan. Any such charged-off second lien Mortgage Loan shall be treated as a
liquidated Mortgage Loan, giving rise to a Realized Loss. The Servicer shall
have no obligation to make any Servicing Advances or P&I

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<PAGE>

Advances with respect to any charged-off Mortgage Loan and shall not be entitled
to the Servicing Fee with respect to such charged-off Mortgage Loan for the
period following the date on which such second lien Mortgage Loan was charged
off. Any Subsequent Recoveries received with respect to any such charged-off
Mortgage Loan shall be deposited in the Collection Account pursuant to Section
3.08.

                  (b)Notwithstanding anything to the contrary contained herein,
in connection with a foreclosure or acceptance of a deed in lieu of foreclosure,
in the event the Servicer has received actual notice of, or has actual knowledge
of the presence of, hazardous or toxic substances or wastes on the related
Mortgaged Property, or if the Trustee otherwise requests, the Servicer shall
cause an environmental inspection or review of such Mortgaged Property to be
conducted by a qualified inspector. Upon completion of the inspection, the
Servicer shall promptly provide the Trustee, the Master Servicer and the
Depositor with a written report of the environmental inspection.

                  After reviewing the environmental inspection report, the
Master Servicer shall determine how the Servicer shall proceed with respect to
the Mortgaged Property. In the event (a) the environmental inspection report
indicates that the Mortgaged Property is contaminated by hazardous or toxic
substances or wastes and (b) the Master Servicer directs the Servicer to proceed
with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer
shall be reimbursed for all reasonable costs associated with such foreclosure or
acceptance of a deed in lieu of foreclosure and any related environmental
clean-up costs, as applicable, from the related Liquidation Proceeds, or if the
Liquidation Proceeds are insufficient to fully reimburse the Servicer, the
Servicer shall be entitled to be reimbursed from amounts in the Collection
Account pursuant to Section 3.09. In the event the Master Servicer directs the
Servicer not to proceed with foreclosure or acceptance of a deed in lieu of
foreclosure, the Servicer shall be reimbursed from general collections for all
Servicing Advances made with respect to the related Mortgaged Property from the
Collection Account pursuant to Section 3.09.

                  (c)The Servicer shall have the right to purchase from REMIC I
any defaulted Mortgage Loan that is 90 days or more delinquent, which the
Servicer determines in good faith will otherwise become subject to foreclosure
proceedings (evidence of such determination to be delivered in writing to the
Trustee, in form and substance satisfactory to the Servicer and the Trustee,
prior to purchase), at a price equal to the Purchase Price. The Purchase Price
for any Mortgage Loan purchased hereunder shall be deposited in the Collection
Account, and the Trustee, upon receipt of written certification from the
Servicer of such deposit, shall release or cause to be released to the Servicer
the related Mortgage File and the Trustee shall execute and deliver such
instruments of transfer or assignment, in each case without recourse,
representation or warranty, as the Servicer shall furnish and as shall be
necessary to vest in the Servicer title to any Mortgage Loan released pursuant
hereto.

                  (d)Proceeds received in connection with any Final Recovery
Determination, as well as any recovery resulting from a partial collection of
Insurance Proceeds or Liquidation Proceeds, in respect of any Mortgage Loan,
will be applied in the following order of priority: first, to reimburse the
Servicer for any related unreimbursed Servicing Advances and P&I Advances,
pursuant to Section 3.09(a)(ii) or (a)(iii); second, to

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accrued and unpaid interest on the Mortgage Loan, to the date of the Final
Recovery Determination, or to the Due Date prior to the Distribution Date on
which such amounts are to be distributed if not in connection with a Final
Recovery Determination; and third, as a recovery of principal of the Mortgage
Loan. If the amount of the recovery so allocated to interest is less than the
full amount of accrued and unpaid interest due on such Mortgage Loan, the amount
of such recovery will be allocated by the Servicer as follows: first, to unpaid
Servicing Fees; and second, to the balance of the interest then due and owing.
The portion of the recovery so allocated to unpaid Servicing Fees shall be
reimbursed to the Servicer pursuant to Section 3.09(a)(iii). The portion of the
recovery allocated to interest (net of unpaid Servicing Fees) and the portion of
the recovery allocated to principal of the Mortgage Loan shall be applied as
follows: first, to reimburse the Servicer for any related unreimbursed Servicing
Advance or P&I Advances in accordance with Section 3.09(a)(ii) and any other
amounts reimbursable to the Servicer pursuant to Section 3.09, and second, as
part of the amounts to be transferred to the Distribution Account in accordance
with Section 3.08(b).

                  Section 3.14. TRUSTEE TO COOPERATE; RELEASE OF MORTGAGE FILES.

                  (a)Upon becoming aware of the payment in full of any Mortgage
Loan, or the receipt by the Servicer of a notification that payment in full has
been escrowed in a manner customary for such purposes for payment to
Certificateholders on the next Distribution Date, the Servicer will promptly
furnish to the Custodian, on behalf of the Trustee, two copies of a request for
release substantially in the form attached to the Custodial Agreement signed by
a Servicing Officer or in a mutually agreeable electronic format which will, in
lieu of a signature on its face, originate from a Servicing Officer (which
certification shall include a statement to the effect that all amounts received
in connection with such payment that are required to be deposited in the
Collection Account have been or will be so deposited) and shall request that the
Custodian, on behalf of the Trustee, deliver to the Servicer the related
Mortgage File. Upon receipt of such certification and request, the Custodian, on
behalf of the Trustee, shall within five (5) Business Days release the related
Mortgage File to the Servicer and the Trustee and Custodian shall have no
further responsibility with regard to such Mortgage File. Upon any such payment
in full, the Servicer is authorized, to give, as agent for the Trustee, as the
mortgagee under the Mortgage that secured the Mortgage Loan, an instrument of
satisfaction (or assignment of mortgage without recourse) regarding the
Mortgaged Property subject to the Mortgage, which instrument of satisfaction or
assignment, as the case may be, shall be delivered to the Person or Persons
entitled thereto against receipt therefor of such payment, it being understood
and agreed that no expenses incurred in connection with such instrument of
satisfaction or assignment, as the case may be, shall be chargeable to the
Collection Account.

                  (b)From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, the Trustee shall execute such documents as
shall be prepared and furnished to the Trustee by the Servicer (in form
reasonably acceptable to the Trustee) and as are necessary to the prosecution of
any such proceedings. The Custodian, on behalf of the Trustee, shall, upon the
request of the Servicer, and delivery to the Custodian, on behalf of the
Trustee, of two copies of a request for release signed by a Servicing Officer
substantially in the form attached to the Custodial Agreement (or in a mutually
agreeable electronic format which will, in lieu of a signature on its face,
originate from a Servicing Officer), release within five (5) Business Days the
related Mortgage File held in its possession or control to the

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Servicer. Such trust receipt shall obligate the Servicer to return the Mortgage
File to the Custodian on behalf of 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 certificate of a Servicing Officer similar to that
hereinabove specified, the Mortgage File shall be released by the Custodian, on
behalf of the Trustee, to the Servicer.

                  Notwithstanding the foregoing, in connection with a Principal
Prepayment in full of any Mortgage Loan, the Master Servicer may request release
of the related Mortgage File from the Custodian, in accordance with the
provisions of the Custodial Agreement, in the event the Servicer fails to do so.

                  Upon written certification of a Servicing Officer, the Trustee
shall execute and deliver to the Servicer, any court pleadings, requests for
trustee's sale or other documents prepared and delivered to the Trustee and
reasonably acceptable to it and necessary to the foreclosure or trustee's sale
in respect of a Mortgaged Property or to any legal action brought to obtain
judgment against any Mortgagor on the Mortgage Note or Mortgage or to obtain a
deficiency judgment, or to enforce any other remedies or rights provided by the
Mortgage Note or Mortgage or otherwise available at law or in equity. Each such
certification shall include a request that such pleadings or documents be
executed by the Trustee and a statement as to the reason such documents or
pleadings are required and that the execution and delivery thereof by the
Trustee will not invalidate or otherwise affect the lien of the Mortgage, except
for the termination of such a lien upon completion of the foreclosure or
trustee's sale. So long as no Servicer Event of Default shall have occurred and
be continuing, the Servicer shall have the right to execute any and all such
court pleadings, requests and other documents as attorney-in-fact for, and on
behalf of the Trustee.

                  Section 3.15. SERVICING COMPENSATION.

                  As compensation for the activities of the Servicer, hereunder,
the Servicer shall be entitled to the Servicing Fee with respect to each
Mortgage Loan payable solely from payments of interest in respect of such
Mortgage Loan, subject to Section 3.22. In addition, the Servicer shall be
entitled to recover unpaid Servicing Fees out of Insurance Proceeds or
Liquidation Proceeds to the extent permitted by Section 3.09(a)(iii) and out of
amounts derived from the operation and sale of an REO Property to the extent
permitted by Section 3.21. The right to the Servicing Fee may not be transferred
in whole or in part except in connection with the transfer of all of the
Servicer's responsibilities under this Agreement to the extent permitted herein.

                  Additional servicing compensation in the form of assumption
fees, late payment charges and other miscellaneous fees (other than Prepayment
Charges) shall be retained by the Servicer only to the extent such fees or
charges are received by the Servicer. The Servicer shall also be entitled
pursuant to Section 3.09(a)(iv) to withdraw from the Collection Account and
pursuant to Section 3.21(b) to withdraw from any REO Account, as additional
servicing compensation, interest or other income earned on deposits therein,
subject to Section 3.10. In addition, the Servicer shall be entitled to retain
or withdraw from the Collection Account, pursuant to Section 3.09(a)(x), any
Prepayment Interest Excess as additional servicing compensation. The Servicer
shall be required to pay all expenses incurred by it in connection

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with its servicing activities hereunder and shall not be entitled to
reimbursement therefor except as specifically provided herein.

                  Section 3.16. COLLECTION ACCOUNT STATEMENTS.

                  Not later than fifteen days after each Distribution Date, the
Servicer shall forward to the Master Servicer, the Securities Administrator, the
Trustee and the Depositor a statement prepared by the institution at which the
Collection Account is maintained setting forth the status of the Collection
Account as of the close of business on such Distribution Date and showing, for
the period covered by such statement, the aggregate amount of deposits into and
withdrawals from the Collection Account of each category of deposit specified in
Section 3.08(a) and each category of withdrawal specified in Section 3.09.
Copies of such statement shall be provided by the Securities Administrator to
any Certificateholder and to any Person identified to the Securities
Administrator as a prospective transferee of a Certificate, upon request at the
expense of the requesting party, provided such statement is delivered by the
Servicer to the Securities Administrator.

                  Section 3.17. STATEMENT AS TO COMPLIANCE.

                  Not later than March 15th of each calendar year commencing in
2005, the Servicer shall deliver to the Trustee, the Master Servicer and the
Depositor an Officers' Certificate in a form acceptable for filing with the
Securities and Exchange Commission as an exhibit to Form 8-K or other required
form (upon which the Master Servicer can conclusively rely in connection with
its obligations under Section 5.06) stating, as to each signatory thereof, that
(i) a review of the activities of the Servicer during the preceding year and of
performance under this Agreement has been made under such officers' supervision
and (ii) to the best of such officer's knowledge, based on such review, the
Servicer has fulfilled all of its obligations under this Agreement throughout
such year, or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officer and the nature
and status thereof. Copies of any such statement shall be provided by the
Trustee to the Certificate Insurer and any Certificateholder, upon request at
the expense of the requesting party, provided such statement is delivered by the
Servicer to the Trustee.

                  Section 3.18. INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING
REPORT.

                  Not later than March 15th of each calendar year commencing in
2005, the Servicer, at its expense, shall cause a nationally recognized firm of
independent certified public accountants to furnish to the Servicer a report in
a form acceptable for filing with the Securities and Exchange Commission as an
exhibit to Form 8-K or other required form 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 the Uniform
Single Attestation Program for Mortgage Bankers established by the Mortgage
Bankers Association of America, with respect to the servicing of residential
mortgage loans during the most recently completed fiscal year and (ii) on the
basis of an examination conducted by such firm in accordance with standards
established by the American Institute of Certified Public Accountants, such
representation is fairly stated and such firm has determined that the Servicer
has complied in all material respects, subject to such

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exceptions and other qualifications that may be appropriate. Immediately upon
receipt of such report, the Servicer shall furnish a copy of such report to the
Master Servicer, the Trustee and each Rating Agency. Copies of such statement
shall be provided by the Trustee to any Certificateholder and the Certificate
Insurer upon request at the Servicer's expense, provided that such statement is
delivered by the Servicer to the Trustee.

                  Section 3.19. ANNUAL CERTIFICATION.

                  (a)The Servicer shall deliver to the Master Servicer, on or
before March 15th of each calendar year beginning in 2005 (or, if any such day
is not a Business Day, the immediately preceding Business Day) or such
alternative date reasonably specified by the Master Servicer which shall occur
not later than 15 days prior to the date any Form 10-K is required to be filed
with the Commission in connection with the transactions contemplated by this
Agreement, a certification in the form attached hereto as Exhibit C. Such
certification shall be signed by the senior officer in charge of servicing of
the Servicer. In addition, the Servicer shall provide such other information
with respect to the Mortgage Loans and the servicing and administration thereof
within the control of the Servicer which shall be required to enable the Master
Servicer to comply with the reporting requirements of the Securities and
Exchange Act of 1934, as amended, pursuant to Section 5.06 hereof.

                  (b)The Servicer shall indemnify and hold harmless the Master
Servicer, the Securities Administrator, the Trustee, the Depositor and their
respective officers, directors, agents and affiliates from and against any
losses, damages, penalties, fines, forfeitures, reasonable legal fees and
related costs, judgments and other costs and expenses arising out of or based
upon a breach by the Servicer or any of its officers, directors, agents or
affiliates of its obligations under this Section 3.19 or the Servicer's
negligence, bad faith or willful misconduct in connection therewith. Such
indemnity shall survive the termination or resignation of the parties hereto or
the termination of this Agreement. If the indemnification provided for herein is
unavailable or insufficient to hold harmless the Master Servicer, the Securities
Administrator, the Trustee and the Depositor, then the Servicer agrees that it
shall contribute to the amount paid or payable by the Master Servicer, the
Securities Administrator, the Trustee and the Depositor as a result of the
losses, claims, damages or liabilities of the Master Servicer, the Securities
Administrator, the Trustee and the Depositor in such proportion as is
appropriate to reflect the relative fault of the Master Servicer, the Securities
Administrator, the Trustee and the Depositor on the one hand and the Servicer on
the other in connection with a breach of the Servicer's obligations under this
Section 3.19.

                  Section 3.20. ACCESS TO CERTAIN DOCUMENTATION.

                  The Servicer shall provide to the Office of Thrift
Supervision, the FDIC, and any other federal or state banking or insurance
regulatory authority that may exercise authority over any Certificate Owner,
access to the documentation regarding the Mortgage Loans required by applicable
laws and regulations. Such access shall be afforded without charge, but only
upon reasonable request and during normal business hours at the offices of the
Servicer designated by it. Nothing in this Section 3.20 shall limit the
obligation of the Servicer to comply with any applicable law prohibiting
disclosure of information regarding the Mortgagors and the failure of the
Servicer to provide access as provided in this Section as a result of such
obligation shall not

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constitute a breach of this Section. Nothing in this Section 3.20 shall require
the Servicer to collect, create, collate or otherwise generate any information
that it does not generate in its usual course of business. The Servicer shall
not be required to make copies of or ship documents to any Person unless
provisions have been made for the reimbursement of the costs thereof.

                  Section 3.21. TITLE, MANAGEMENT AND DISPOSITION OF REO
PROPERTY.

                  (a) The deed or certificate of sale of any REO Property shall
be taken in the name of the Trustee, or its nominee, on behalf of the Trust Fund
and for the benefit of the Certificateholders. The Servicer, on behalf of REMIC
I, shall either sell any REO Property by the close of the third calendar year
following the calendar year in which REMIC I acquires ownership of such REO
Property for purposes of Section 860G(a)(8) of the Code or request from the
Internal Revenue Service, no later than 60 days before the day on which the
three-year grace period would otherwise expire an extension of the three-year
grace period, unless the Servicer had delivered to the Trustee an Opinion of
Counsel, addressed to the Trustee and the Depositor, to the effect that the
holding by REMIC I of such REO Property subsequent to three years after its
acquisition will not result in the imposition on any Trust REMIC created
hereunder of taxes on "prohibited transactions" thereof, as defined in Section
860F of the Code, or cause any Trust REMIC hereunder to fail to qualify as a
REMIC under Federal law at any time that any Certificates are outstanding. The
Servicer shall manage, conserve, protect and operate each REO Property for the
Certificateholders solely for the purpose of its prompt disposition and sale in
a manner which does not cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code or
result in the receipt by any Trust REMIC created hereunder of any "income from
non-permitted assets" within the meaning of Section 860F(a)(2)(B) of the Code,
or any "net income from foreclosure property" which is subject to taxation under
the REMIC Provisions.

                  (b) The Servicer shall segregate and hold all funds collected
and received in connection with the operation of any REO Property separate and
apart from its own funds and general assets and shall establish and maintain
with respect to REO Properties an account held in trust for the Trustee, on
behalf of the Trust Fund and for the benefit of the Certificateholders (the "REO
Account"), which shall be an Eligible Account. The Servicer shall be permitted
to allow the Collection Account to serve as the REO Account, subject to the
maintenance of separate ledgers for each REO Property. The Servicer shall be
entitled to retain or withdraw any interest income paid on funds deposited in
the REO Account.

                  (c) The Servicer shall have full power and authority, subject
only to the specific requirements and prohibitions of this Agreement, to do any
and all things in connection with any REO Property as are consistent with the
manner in which the Servicer manages and operates similar property owned by it
or any of its Affiliates, all on such terms and for such period as the Servicer
deems to be in the best interests of Certificateholders. In connection
therewith, the Servicer shall deposit, or cause to be deposited, on a daily
basis in the REO Account all revenues received by it with respect to an REO
Property and shall withdraw therefrom funds necessary for the proper operation,
management and maintenance of such REO Property including, without limitation:

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

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

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

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

                  Subject to compliance with applicable laws and regulations as
shall at any time be in force, and notwithstanding the foregoing, the Servicer,
on behalf of the Trust Fund, shall not:

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

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

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

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

unless, in any such case, the Servicer has obtained an Opinion of Counsel,
provided to the Servicer and the Trustee, to the effect that such action will
not cause such REO Property to fail to qualify as "foreclosure property" within
the meaning of Section 860G(a)(8) of the Code at any time that it is held by
REMIC I, in which case the Servicer may take such actions as are specified in
such Opinion of Counsel.

                  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

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         the operation and management of such REO Property, including those
         listed above and remit all related revenues (net of such costs and
         expenses) to the Servicer as soon as practicable, but in no event later
         than thirty days following the receipt thereof by such Independent
         Contractor;

                           (iii) none of the provisions of this Section 3.21(c)
         relating to any such contract or to actions taken through any such
         Independent Contractor shall be deemed to relieve the Servicer of any
         of its duties and obligations to the Trustee on behalf of the Trust
         Fund and for the benefit of the Certificateholders with respect to the
         operation and management of any such REO Property; and

                           (iv) 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 3.15 is sufficient to pay such fees.
Any such agreement shall include a provision that such agreement may be
immediately terminated by the Trustee (as successor Servicer) or any other
successor Servicer (including the Master Servicer) without fee, in the event the
Servicer shall for any reason, no longer be the Servicer of the Mortgage Loans
(including termination due to a Servicer Event of Default).

                  (d)In addition to the withdrawals permitted under Section
3.21(c), the Servicer may from time to time make withdrawals from the REO
Account for any REO Property: (i) to pay itself unpaid Servicing Fees in respect
of the related Mortgage Loan; and (ii) to reimburse itself or any Sub-Servicer
for unreimbursed Servicing Advances and Advances made in respect of such REO
Property or the related Mortgage Loan. On the Servicer Remittance Date, the
Servicer shall withdraw from each REO Account maintained by it and deposit into
the Distribution Account in accordance with Section 3.08(d)(ii), for
distribution on the related Distribution Date in accordance with Section 5.01,
the income from the related REO Property received during the prior calendar
month, net of any withdrawals made pursuant to Section 3.21(c) or this Section
3.21(d).

                  (e)Subject to the time constraints set forth in Section
3.21(a), each REO Disposition shall be carried out by the Servicer at such price
and upon such terms and conditions as the Servicer shall deem necessary or
advisable, as shall be normal and usual in accordance with Accepted Servicing
Practices.

                  (f)The proceeds from the REO Disposition, net of any amount
required by law to be remitted to the Mortgagor under the related Mortgage Loan
and net of any payment or reimbursement to the Servicer as provided above, shall
be deposited in the Distribution Account in accordance with Section 3.08(d)(ii)
on the Servicer Remittance Date in the month following the receipt thereof for
distribution on the related Distribution Date in accordance

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with Section 5.01. Any REO Disposition shall be for cash only (unless changes in
the REMIC Provisions made subsequent to the Startup Day allow a sale for other
consideration).

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

                  Section 3.22. OBLIGATIONS OF THE SERVICER IN RESPECT OF
PREPAYMENT INTEREST SHORTFALLS; RELIEF ACT INTEREST SHORTFALLS.

                  The Servicer shall deliver to the Securities Administrator for
deposit into the Distribution Account on or before 1:00 pm New York time on the
Servicer Remittance Date from its own funds an amount equal to the lesser of (i)
the aggregate amount of the Prepayment Interest Shortfalls attributable to
Principal Prepayments in full on the Mortgage Loans for the related Distribution
Date resulting solely from voluntary Principal Prepayments received by the
Servicer during the related Prepayment Period and (ii) the aggregate amount of
the related Servicing Fees payable to the Servicer on such Distribution Date
with respect to the Mortgage Loans. The Servicer shall not have the right to
reimbursement for any amounts remitted to the Securities Administrator in
respect of this Section 3.22. The Servicer shall not be obligated to pay the
amounts set forth in this Section 3.22 with respect to shortfalls resulting from
the application of the Relief Act.

                  Section 3.23. OBLIGATIONS OF THE SERVICER IN RESPECT OF
MORTGAGE RATES AND MONTHLY PAYMENTS.

                  In the event that a shortfall in any collection on or
liability with respect to any Mortgage Loan results from or is attributable to
adjustments to Mortgage Rates, Monthly Payments or Stated Principal Balances
that were made by the Servicer in a manner not consistent with the terms of the
related Mortgage Note and this Agreement, the Servicer, upon discovery or
receipt of notice thereof, immediately shall deliver to the Securities
Administrator for deposit in the Distribution Account from its own funds the
amount of any such shortfall and shall indemnify and hold harmless the Trust
Fund, the Trustee, the Securities Administrator and the Master Servicer, the
Depositor and any successor Servicer in respect of any such liability. Such
indemnities shall survive the termination or discharge of this Agreement.
Notwithstanding the foregoing, this Section 3.23 shall not limit the ability of
the Servicer to seek recovery of any such amounts from the related Mortgagor
under the terms of the related Mortgage Note and Mortgage, to the extent
permitted by applicable law.

                  Section 3.24. RESERVE FUND.

                  (a)No later than the Closing Date, the Securities
Administrator shall establish and maintain a separate, segregated trust account
entitled, "Reserve Fund, Wells Fargo Bank, N.A., in trust for the registered
holders of ACE Securities Corp. Home Equity Loan Trust, Series 2004-RM1, Asset
Backed Pass-Through Certificates." On the Closing

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Date, the Depositor will deposit, or cause to be deposited, into the Reserve
Fund $1,000. In addition, the amount deposited in the Reserve Fund shall be
increased by any payments received by the Securities Administrator under the Cap
Contract relating to the Group I Mortgage Loans and deposited into Reserve Fund
for the benefit of the Class A-1 Certificates, Mezzanine Certificates and the
Class B Certificates and under the Cap Contract relating to the Group II
Mortgage Loans and deposited in the Reserve Fund for the benefit of the Class
A-2 Certificates, the Mezzanine Certificates and the Class B Certificates.

                  (b)On each Distribution Date, the Securities Administrator
shall deposit into the Reserve Fund the amounts described in Section
5.01(a)(7)(ix), rather than distributing such amounts to the Class CE
Certificateholders, and Section 5.01(a)(7)(x). On each such Distribution Date,
the Securities Administrator shall hold all such amounts for the benefit of the
Holders of the Class A Certificates, the Mezzanine Certificates and the Class B
Certificates and will distribute such amounts to the Holders of the Class A
Certificates, the Mezzanine Certificates and the Class B Certificates, in the
amounts and priorities set forth in Section 5.01(a). If no Net WAC Rate
Carryover Amounts are payable on a Distribution Date, the Securities
Administrator shall deposit, into the Reserve Fund on behalf of the Class CE
Certificateholders, from amounts otherwise distributable to the Class CE
Certificateholders, an amount such that when added to other amounts already on
deposit in the Reserve Fund, the aggregate amount on deposit therein is equal to
$1,000.

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

                  (d)By accepting a Class CE Certificate, each Class CE
Certificateholder hereby agrees that the Securities Administrator will deposit
into the Reserve Fund the amounts described above on each Distribution Date
rather than distributing such amounts to the Class CE Certificateholders. By
accepting a Class CE Certificate, each Class CE Certificateholder further agrees
that its agreement to such action by the Securities Administrator is given for
good and valuable consideration, the receipt and sufficiency of which is
acknowledged by such acceptance.

                  (e)At the direction of the Holders of a majority in Percentage
Interest in the Class CE Certificates, the Securities Administrator shall direct
any depository institution maintaining the Reserve Fund to invest the funds in
such account in one or more Permitted Investments bearing interest or sold at a
discount, and maturing, unless payable on demand, (i) no later than the Business
Day immediately preceding the date on which such funds are

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<PAGE>

required to be withdrawn from such account pursuant to this Agreement, if a
Person other than the Securities Administrator or an Affiliate manages or
advises such investment, and (ii) no later than the date on which such funds are
required to be withdrawn from such account pursuant to this Agreement, if the
Securities Administrator or an Affiliate manages or advises such investment. All
income and gain earned upon such investment shall be deposited into the Reserve
Fund. In no event shall the Securities Administrator be liable for any
investments made pursuant to this clause (e). If the Holders of a majority in
Percentage Interest in the Class CE Certificates fail to provide investment
instructions, funds on deposit in the Reserve Fund shall be held uninvested by
the Securities Administrator without liability for interest or compensation.

                  (f)For federal tax return and information reporting, the right
of the Class A Certificateholders, the Mezzanine Certificateholders and Class B
Certificateholders to receive payments from the Reserve Fund in respect of any
Net WAC Rate Carryover Amount shall be assigned a value of $255,000.00 with
respect to Certificates covered by the Group I Cap Contract and $60,000.00 with
respect to Certificates covered by the Group II Cap Contract.

                  Section 3.25. ADVANCE FACILITY.

                  (a)Notwithstanding anything to the contrary contained herein,
(i) the Servicer is hereby authorized to enter into an advance facility
("Advance Facility") but no more than two Advance Facilities without the prior
written consent of the Trustee, which consent shall not be unreasonably
withheld, under which (A) the Servicer sells, assigns or pledges to an advancing
person (an "Advance Financing Person") the Servicer's rights under this
Agreement to be reimbursed for any P&I Advances or Servicing Advances and/or (B)
an Advance Financing Person agrees to finance some or all P&I Advances or
Servicing Advances required to be made by the Servicer pursuant to this
Agreement and (ii) the Servicer is hereby authorized to assign its rights to the
Servicing Fee (which rights shall terminate upon the resignation, termination or
removal of the Servicer pursuant to the terms of this Agreement); it being
understood that neither the Trust Fund nor any party hereto shall have a right
or claim (including without limitation any right of offset) to any amounts for
reimbursement of P&I Advances or Servicing Advances so assigned or to the
portion of the Servicing Fee so assigned. Subject to the provisions of the first
sentence of this Section 3.25(a), no consent of the Depositor, Trustee,
Certificateholders or any other party is required before the Servicer may enter
into an Advance Facility, but the Servicer shall provide notice to the
Depositor, Master Servicer and the Trustee of the existence of any such Advance
Facility promptly upon the consummation thereof stating (a) the identity of the
Advance Financing Person and (b) the identity of any Person ("Servicer's
Assignee") who has the right to receive amounts in reimbursement of previously
unreimbursed P&I Advances or Servicing Advances. Notwithstanding the existence
of any Advance Facility under which an advancing person agrees to finance P&I
Advances and/or Servicing Advances on the Servicer's behalf, the Servicer shall
remain obligated pursuant to this Agreement to make P&I Advances and Servicing
Advances pursuant to and as required by this Agreement, and shall not be
relieved of such obligations by virtue of such Advance Facility.

                  (b)Reimbursement amounts shall consist solely of amounts in
respect of P&I Advances and/or Servicing Advances made with respect to the
Mortgage Loans for which

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the Servicer would be permitted to reimburse itself in accordance with this
Agreement, assuming the Servicer had made the related P&I Advance(s) and/or
Servicing Advance(s).

                  (c)The Servicer shall maintain and provide to any successor
Servicer (with, upon request, a copy to the Trustee) a detailed accounting on a
loan-by-loan basis as to amounts advanced by, pledged or assigned to, and
reimbursed to any advancing person. The successor Servicer shall be entitled to
rely on any such information provided by the predecessor Servicer, and the
successor Servicer shall not be liable for any errors in such information.

                  (d)Reimbursement amounts distributed with respect to each
Mortgage Loan shall be allocated to outstanding unreimbursed P&I Advances or
Servicing Advances (as the case may be) made with respect to that Mortgage Loan
on a "first-in, first out" (FIFO) basis. The documentation establishing any
Advance Facility shall require the Servicer to provide to the related advancing
person or its designee loan-by-loan information with respect to each such
reimbursement amount distributed to such advancing person or Advance Facility
trustee on each Distribution Date, to enable the advancing person or Advance
Facility trustee to make the FIFO allocation of each such reimbursement amount
with respect to each Mortgage Loan. The Servicer shall remain entitled to be
reimbursed by the advancing person or Advance Facility trustee for all P&I
Advances and Servicing Advances funded by the Servicer to the extent the related
rights to be reimbursed therefor have not been sold, assigned or pledged to an
advancing person.

                  (e)Any amendment to this Section 3.25 or to any other
provision of this Agreement that may be necessary or appropriate to effect the
terms of an Advance Facility as described generally in this Section 3.25,
including amendments to add provisions relating to a successor Servicer, may be
entered into by the Trustee, the Depositor, the Master Servicer and the Servicer
without the consent of any Certificateholder, notwithstanding anything to the
contrary in this Agreement, provided, that the Trustee has been provided an
Opinion of Counsel that such amendment is authorized hereunder and has no
material adverse effect on the Certificateholders or the Certificate Insurer,
which opinion shall be an expense of the party requesting such opinion but in
any case shall not be an expense of the Trustee or the Trust Fund; provided,
further, that the amendment shall not be deemed to adversely affect in any
material respect the interests of the Certificateholders if the Person
requesting the amendment obtains a letter from each Rating Agency (instead of
obtaining an Opinion of Counsel to such effect) stating that the amendment would
not result in the downgrading or withdrawal of the respective ratings then
assigned to the Certificates; it being understood and agreed that any such
rating letter in and of itself will not represent a determination as to the
materiality of any such amendment and will represent a determination only as to
the credit issues affecting any such rating. Prior to entering into an Advance
Facility, the Servicer shall notify the lender under such facility in writing
that: (a) the P&I Advances and/or Servicing Advances financed by and/or pledged
to the lender are obligations owed to the Servicer on a non-recourse basis
payable only from the cash flows and proceeds received under this Agreement for
reimbursement of P&I Advances and/or Servicing Advances only to the extent
provided herein, and neither the Master Servicer, the Securities Administrator,
the Trustee nor the Trust are otherwise obligated or liable to repay any P&I
Advances and/or Servicing Advances financed by the lender; (b) the Servicer will
be responsible for remitting to the lender the

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applicable amounts collected by it as Servicing Fees and as reimbursement for
P&I Advances and/or Servicing Advances funded by the lender, as applicable,
subject to the restrictions and priorities created in this Agreement; and (c)
none of the Master Servicer, the Securities Administrator or the Trustee shall
have any responsibility to calculate any amount payable under an Advance
Facility or to track or monitor the administration of the financing arrangement
between the Servicer and the lender or the payment of any amount under an
Advance Facility.

                  (f)The Servicer shall indemnify the Master Servicer, the
Securities Administrator, the Trustee and the Trust Fund for any cost, liability
or expense relating to the Advance Facility including, without limitation, a
claim, pending or threatened, by an Advance Financing Person.

                  Section 3.26. THE SERVICER INDEMNIFICATION.

                  The Servicer agrees to indemnify the Certificate Insurer,
Trustee, Master Servicer and the Securities Administrator, from, and hold the
Trustee, Master Servicer and the Securities Administrator harmless against, any
loss, liability or expense (including reasonable attorney's fees and expenses)
incurred by any such Person by reason of the Servicer's willful misfeasance, bad
faith or gross negligence in the performance of its duties under this Agreement
or by reason of the Servicer's reckless disregard of its obligations and duties
under this Agreement. Such indemnity shall survive the termination or discharge
of this Agreement and the resignation or removal of the Certificate Insurer,
Servicer, the Trustee, the Master Servicer and the Securities Administrator. Any
payment hereunder made by the Servicer to any such Person shall be from the
Servicer's own funds, without reimbursement from REMIC I therefor.

                  Section 3.27. CERTIFICATE INSURER ACCESS

                  Upon the occurrence of a Trigger Event, the Servicer shall
afford the Certificate Insurer access to its books and records concerning the
servicing of the Mortgage Loans, and shall make servicing officers available to
the Certificate Insurer to discuss the servicing of the Mortgage Loans, upon
reasonable prior notice to the Servicer, and during the Servicer's normal
business hours.

                  Section 3.28. PMI POLICY; CLAIMS UNDER THE PMI POLICY.

                  Notwithstanding anything to the contrary elsewhere in this
Article III, the Servicer shall not agree to any modification or assumption of a
PMI Mortgage Loan or take any other action with respect to a PMI Mortgage Loan
that could result in denial of coverage under the PMI Policy. The Servicer shall
notify the PMI Insurer that the Trustee, on behalf of the Certificateholders, is
the Insured, as that term is defined in the PMI Policy, of each PMI Mortgage
Loan. The Servicer shall, on behalf of the Trustee, prepare and file on a timely
basis with the PMI Insurer, with a copy to the Trustee, all claims which may be
made under the PMI Policy with respect to the PMI Mortgage Loans. Consistent
with all rights and obligations hereunder, the Servicer shall take all actions
required under the PMI Policy as a condition to the payment of any such claim.
Any amount received from the PMI Insurer with respect to any such PMI Mortgage
Loan shall be deposited by the Servicer into the Collection Account in
accordance with Section 3.08(a). The Servicer shall withdraw from the Collection
Account on

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each Servicer Remittance Date and pay to the PMI Insurer the PMI Insurer Fee in
accordance with the terms of the PMI Policy.

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                                   ARTICLE IV

                       ADMINISTRATION AND MASTER SERVICING
                  OF THE MORTGAGE LOANS BY THE MASTER SERVICER

                  Section 4.01. MASTER SERVICER.

                  The Master Servicer shall supervise, monitor and oversee the
obligation of the Servicer to service and administer the Mortgage Loans in
accordance with the terms of this Agreement and shall have full power and
authority to do any and all things which it may deem necessary or desirable in
connection with such master servicing and administration. In performing its
obligations hereunder, the Master Servicer shall act in a manner consistent with
Accepted Master Servicing Practices. Furthermore, the Master Servicer shall
oversee and consult with the Servicer as necessary from time-to-time to carry
out the Master Servicer's obligations hereunder, shall receive, review and
evaluate all reports, information and other data provided to the Master Servicer
by the Servicer and shall cause the Servicer to perform and observe the
covenants, obligations and conditions to be performed or observed by the
Servicer under this Agreement. The Master Servicer shall independently and
separately monitor the Servicer's servicing activities with respect to each
related Mortgage Loan, reconcile the results of such monitoring with such
information provided in the previous sentence on a monthly basis and coordinate
corrective adjustments to the Servicer's and Master Servicer's records, and
based on such reconciled and corrected information, prepare the statements
specified in Section 5.03 and any other information and statements required to
be provided by the Master Servicer hereunder. The Master Servicer shall
reconcile the results of its Mortgage Loan monitoring with the actual
remittances of the Servicer to the Distribution Account pursuant to the terms
hereof based on information provided to the Master Servicer by the Servicer.

                  The Trustee shall furnish the Servicer and the Master Servicer
with any limited powers of attorney and other documents in form as provided to
it necessary or appropriate to enable the Servicer and the Master Servicer to
service and administer the related Mortgage Loans and REO Property. The Trustee
shall have no responsibility for any action of the Master Servicer or the
Servicer pursuant to any such limited power of attorney and shall be indemnified
by the Master Servicer or the Servicer, as applicable, for any cost, liability
or expense incurred by the Trustee in connection with such Person's misuse of
any such power of attorney.

                  The Trustee, the Custodian and the Securities Administrator
shall provide access to the records and documentation in possession of the
Trustee, the Custodian or the Securities Administrator regarding the related
Mortgage Loans and REO Property and the servicing thereof to the
Certificateholders, the FDIC, and the supervisory agents and examiners of the
FDIC, such access being afforded only upon reasonable prior written request and
during normal business hours at the office of the Trustee, the Custodian or the
Securities Administrator; provided, however, that, unless otherwise required by
law, none of the Trustee, the Custodian or the Securities Administrator shall be
required to provide access to such records and documentation if the provision
thereof would violate the legal right to privacy of any Mortgagor. The Trustee,
the Custodian and the Securities Administrator shall allow representatives of
the above entities to photocopy any of the records and documentation and shall
provide equipment for that purpose at a charge that covers the Trustee's, the
Custodian's or the Securities Administrator's actual costs.

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                  The Trustee shall execute and deliver to the Servicer or the
Master Servicer upon request any court pleadings, requests for trustee's sale or
other documents necessary or desirable to (i) the foreclosure or trustee's sale
with respect to a Mortgaged Property; (ii) any legal action brought to obtain
judgment against any Mortgagor on the Mortgage Note or any other Mortgage Loan
Document; (iii) obtain a deficiency judgment against the Mortgagor; or (iv)
enforce any other rights or remedies provided by the Mortgage Note or any other
Mortgage Loan Document or otherwise available at law or equity.

                  Section 4.02. REMIC-RELATED COVENANTS.

                  For as long as each REMIC shall exist, the Trustee and the
Securities Administrator shall act in accordance herewith to treat such REMIC as
a REMIC, and the Trustee and the Securities Administrator shall comply with any
directions of the Seller, the Servicer or the Master Servicer to assure such
continuing treatment. In particular, the Trustee shall not (a) sell or permit
the sale of all or any portion of the Mortgage Loans or of any investment of
deposits in an Account unless such sale is as a result of a repurchase of the
Mortgage Loans pursuant to this Agreement or the Trustee has received a REMIC
Opinion prepared at the expense of the Trust Fund; and (b) other than with
respect to a substitution pursuant to the Mortgage Loan Purchase Agreements or
Section 2.03 of this Agreement, as applicable, accept any contribution to any
REMIC after the Startup Day without receipt of a Opinion of Counsel stating that
such contribution will not result in an Adverse REMIC Event as defined in
Section 11.01(f).

                  Section 4.03. MONITORING OF SERVICER.

                  (a)The Master Servicer shall be responsible for monitoring the
compliance by the Servicer with its duties under this Agreement. In the review
of the Servicer's activities, the Master Servicer may rely upon an officer's
certificate of the Servicer with regard to the Servicer's compliance with the
terms of this Agreement. In the event that the Master Servicer, in its judgment,
determines that the Servicer should be terminated in accordance with the terms
hereof or that a notice should be sent pursuant to the terms hereof with respect
to the occurrence of an event that, unless cured, would constitute a Servicer
Event of Default by the Servicer, the Master Servicer shall notify the Servicer,
the Seller and the Trustee thereof and the Master Servicer shall issue such
notice or take such other action as it deems appropriate.

                  (b)The Master Servicer, for the benefit of the Trustee and the
Certificateholders, shall enforce the obligations of the Servicer under this
Agreement and shall, in the event that the Servicer fails to perform its
obligations in accordance with this Agreement, subject to this Section and
Article VIII, cause the Trustee to terminate the rights and obligations of the
Servicer hereunder in accordance with the provisions of Article VIII. Such
enforcement, including, without limitation, the legal prosecution of claims and
the pursuit of other appropriate remedies, shall be in such form and carried out
to such an extent and at such time as the Master Servicer, in its good faith
business judgment, would require were it the owner of the related Mortgage
Loans. The Master Servicer shall pay the costs of such enforcement at its own
expense, provided that the Master Servicer shall not be required to prosecute or
defend any legal action except to the extent that the Master Servicer shall have
received reasonable indemnity for its costs and expenses in pursuing such
action.

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                  (c)The Master Servicer shall be entitled to be reimbursed by
the Servicer (or from amounts on deposit in the Distribution Account if the
Servicer is unable to fulfill its obligations hereunder) for all reasonable
out-of-pocket or third party costs associated with the transfer of servicing
from the predecessor Servicer (or if the predecessor Servicer is the Master
Servicer, from the Servicer immediately preceding the Master Servicer),
including without limitation, any reasonable out-of-pocket or third party costs
or expenses associated with the complete transfer of all servicing data and the
completion, correction or manipulation of such servicing data as may be required
by the Master Servicer to correct any errors or insufficiencies in the servicing
data or otherwise to enable the Master Servicer to service the Mortgage Loans
properly and effectively, upon presentation of reasonable documentation of such
costs and expenses.

                  (d)The Master Servicer shall require the Servicer to comply
with the remittance requirements and other obligations set forth in this
Agreement.

                  (e)If the Master Servicer acts as successor to the Servicer,
it will not assume liability for the representations and warranties of the
terminated Servicer.

                  Section 4.04. FIDELITY BOND.

                  The Master Servicer, at its expense, shall maintain in effect
a blanket fidelity bond and an errors and omissions insurance policy, affording
coverage with respect to all directors, officers, employees and other Persons
acting on such Master Servicer's behalf, and covering errors and omissions in
the performance of the Master Servicer's obligations hereunder. The errors and
omissions insurance policy and the fidelity bond shall be in such form and
amount generally acceptable for entities serving as master servicers or
trustees.

                  Section 4.05. POWER TO ACT; PROCEDURES.

                  The Master Servicer shall master service the Mortgage Loans
and shall have full power and authority, subject to the REMIC Provisions and the
provisions of Article XI, to do any and all things that it may deem necessary or
desirable in connection with the master servicing and administration of the
Mortgage Loans, including but not limited to the power and authority (i) to
execute and deliver, on behalf of the Certificateholders and the Trustee,
customary consents or waivers and other instruments and documents, (ii) to
consent to transfers of any Mortgaged Property and assumptions of the Mortgage
Notes and related Mortgages, (iii) to collect any Insurance Proceeds and
Liquidation Proceeds, and (iv) to effectuate foreclosure or other conversion of
the ownership of the Mortgaged Property securing any Mortgage Loan, in each
case, in accordance with the provisions of this Agreement; provided, however,
that the Master Servicer shall not (and, consistent with its responsibilities
under Section 4.03, shall not permit the Servicer to) knowingly or intentionally
take any action, or fail to take (or fail to cause to be taken) any action
reasonably within its control and the scope of duties more specifically set
forth herein, that, under the REMIC Provisions, if taken or not taken, as the
case may be, would cause REMIC I or REMIC II to fail to qualify as a REMIC or
result in the imposition of a tax upon the Trust Fund (including but not limited
to the tax on prohibited transactions as defined in Section 860F(a)(2) of the
Code and the tax on contributions to a REMIC set forth in Section 860G(d) of the
Code) unless the Master Servicer has received an Opinion of Counsel (but not at
the expense

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of the Master Servicer) to the effect that the contemplated action will not
would cause REMIC I or REMIC II to fail to qualify as a REMIC or result in the
imposition of a tax upon REMIC I or REMIC II, as the case may be. The Trustee
shall furnish the Master Servicer, upon written request from a Servicing
Officer, with any powers of attorney prepared and delivered to it and reasonably
acceptable to it by empowering the Master Servicer or 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 Mortgaged
Property, and to appeal, prosecute or defend in any court action relating to the
Mortgage Loans or the Mortgaged Property, in accordance with this Agreement, and
the Trustee shall execute and deliver such other documents prepared and
delivered to it and reasonably acceptable to it, as the Master Servicer or the
Servicer may request, to enable the Master Servicer to master service and
administer the Mortgage Loans and carry out its duties hereunder, in each case
in accordance with Accepted Master Servicing Practices (and the Trustee shall
have no liability for misuse of any such powers of attorney by the Master
Servicer or the Servicer and shall be indemnified by the Master Servicer or the
Servicer, as applicable, for any cost, liability or expense incurred by the
Trustee in connection with such Person's use or misuse of any such power of
attorney). If the Master Servicer or the Trustee has been advised that it is
likely that the laws of the state in which action is to be taken prohibit such
action if taken in the name of the Trustee or that the Trustee would be
adversely affected under the "doing business" or tax laws of such state if such
action is taken in its name, the Master Servicer shall join with the Trustee in
the appointment of a co-trustee pursuant to Section 9.10. In the performance of
its duties hereunder, the Master Servicer shall be an independent contractor and
shall not, except in those instances where it is taking action in the name of
the Trustee, be deemed to be the agent of the Trustee.

                  Section 4.06. DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS.

                  To the extent Mortgage Loans contain enforceable due-on-sale
clauses, the Master Servicer shall cause the Servicer to enforce such clauses in
accordance with this Agreement. If applicable law prohibits the enforcement of a
due-on-sale clause or such clause is otherwise not enforced in accordance with
this Agreement and, as a consequence, a Mortgage Loan is assumed, the original
Mortgagor may be released from liability in accordance with this Agreement.

                  Section 4.07. RESERVED.

                  Section 4.08. DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF
MASTER SERVICER TO BE HELD FOR TRUSTEE.

                  (a)The Master Servicer shall transmit to the Trustee or
Custodian such documents and instruments coming into the possession of the
Master Servicer from time to time as are required by the terms hereof to be
delivered to the Trustee or Custodian. Any funds received by the Master Servicer
in respect of any Mortgage Loan or which otherwise are collected by the Master
Servicer as Liquidation Proceeds or Insurance Proceeds in respect of any
Mortgage Loan shall be remitted to the Securities Administrator for deposit in
the Distribution Account. The Master Servicer shall, and, subject to Section
3.20, shall cause the Servicer to, provide access to information and
documentation regarding the Mortgage Loans to the Trustee, its agents and
accountants at any time upon reasonable request and during

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normal business hours, and to Certificateholders that are savings and loan
associations, banks or insurance companies, the Office of Thrift Supervision,
the FDIC and the supervisory agents and examiners of such Office and Corporation
or examiners of any other federal or state banking or insurance regulatory
authority if so required by applicable regulations of the Office of Thrift
Supervision or other regulatory authority, such access to be afforded without
charge but only upon reasonable request in writing and during normal business
hours at the offices of the Master Servicer designated by it. In fulfilling such
a request the Master Servicer shall not be responsible for determining the
sufficiency of such information.

                  (b)All Mortgage Files and funds collected or held by, or under
the control of, the Master Servicer, in respect of any Mortgage Loans, whether
from the collection of principal and interest payments or from Liquidation
Proceeds or Insurance Proceeds, shall be remitted to the Trustee for deposit in
the Distribution Account.

                  Section 4.09. STANDARD HAZARD INSURANCE AND FLOOD INSURANCE
POLICIES.

                  For each Mortgage Loan, the Master Servicer shall enforce the
obligation of the Servicer under this Agreement to maintain or cause to be
maintained standard fire and casualty insurance and, where applicable, flood
insurance, all in accordance with the provisions of this Agreement. It is
understood and agreed that such insurance shall be with insurers meeting the
eligibility requirements set forth in Section 3.11 and that no earthquake or
other additional insurance is to be required of any Mortgagor or to be
maintained on property acquired in respect of a defaulted loan, other than
pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance.

                  Section 4.10. PRESENTMENT OF CLAIMS AND COLLECTION OF
PROCEEDS.

                  The Master Servicer shall enforce the Servicer's obligations
under this Agreement to, prepare and present on behalf of the Trustee and the
Certificateholders all claims under the Insurance Policies and take such actions
(including the negotiation, settlement, compromise or enforcement of the
insured's claim) as shall be necessary to realize recovery under such policies.
Any proceeds disbursed to the Master Servicer in respect of such policies, bonds
or contracts shall be promptly remitted to the Trustee for deposit in the
Distribution Account upon receipt, except that any amounts realized that are to
be applied to the repair or restoration of the related Mortgaged Property as a
condition precedent to the presentation of claims on the related Mortgage Loan
to the insurer under any applicable insurance policy need not be so or remitted.

                  Section 4.11. MAINTENANCE OF PRIMARY MORTGAGE INSURANCE
POLICIES.

                  (a)The Master Servicer shall not take, or permit the Servicer
to take (to the extent such action is prohibited by this Agreement), any action
that would result in noncoverage under any primary mortgage insurance policy of
any loss which, but for the actions of the Master Servicer or the Servicer,
would have been covered thereunder. The Master Servicer shall use its best
reasonable efforts to cause the Servicer to keep in force and effect (to the
extent that the Mortgage Loan requires the Mortgagor to maintain such
insurance), primary mortgage insurance applicable to each Mortgage Loan in
accordance with the provisions of this Agreement. The Master Servicer shall not,
and shall not permit the Servicer to, cancel or refuse to renew any primary
mortgage insurance policy that is in effect

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at the date of the initial issuance of the Mortgage Note and is required to be
kept in force hereunder except in accordance with the provisions of this
Agreement.

                  (b)The Master Servicer agrees to cause the Servicer to
present, on behalf of the Trustee and the Certificateholders, claims to the
insurer under any primary mortgage insurance policies and, in this regard, to
take such reasonable action as shall be necessary to permit recovery under any
primary mortgage insurance policies respecting defaulted Mortgage Loans.

                  Section 4.12. TRUSTEE TO RETAIN POSSESSION OF CERTAIN
INSURANCE POLICIES AND DOCUMENTS.

                  The Trustee or the applicable Custodian, shall retain
possession and custody of the originals (to the extent available) of any primary
mortgage insurance policies, or certificate of insurance if applicable, and any
certificates of renewal as to the foregoing as may be issued from time to time
as contemplated by this Agreement. Until all amounts distributable in respect of
the Certificates have been distributed in full and the Master Servicer and the
Servicer have otherwise fulfilled their respective obligations under this
Agreement, the Trustee or the Custodian shall also retain possession and custody
of each Mortgage File in accordance with and subject to the terms and conditions
of this Agreement and the Custodial Agreement. The Master Servicer shall
promptly deliver or cause to be delivered to the Trustee or the Custodian, upon
the execution or receipt thereof the originals of any primary mortgage insurance
policies, any certificates of renewal, and such other documents or instruments
that constitute Mortgage Loan Documents that come into the possession of the
Master Servicer from time to time.

                  Section 4.13. REALIZATION UPON DEFAULTED MORTGAGE LOANS.

                  The Master Servicer shall cause the Servicer to foreclose
upon, repossess or otherwise comparably convert the ownership of Mortgaged
Properties securing such of the Mortgage Loans as come into and continue in
default and as to which no satisfactory arrangements can be made for collection
of delinquent payments, all in accordance with this Agreement.

                  Section 4.14. COMPENSATION FOR THE MASTER SERVICER.

                  As compensation for the activities of the Master Servicer
hereunder, the Master Servicer shall be entitled to the Master Servicing Fee and
the income from investment of or earnings on the funds from time to time in the
Distribution Account, as provided in Section 3.10. The Master Servicing Fee
payable to the Master Servicer in respect of any Distribution Date shall be
reduced in accordance with Section 4.19. The Master Servicer shall be required
to pay all expenses incurred by it in connection with its activities hereunder
and shall not be entitled to reimbursement therefor except as provided in this
Agreement.

                  Section 4.15. REO PROPERTY.

                  (a)In the event the Trust Fund acquires ownership of any REO
Property in respect of any related Mortgage Loan, the deed or certificate of
sale shall be issued to the Trustee, or to its nominee, on behalf of the related
Certificateholders. The Master Servicer

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shall cause the Servicer to sell, any REO Property as expeditiously as possible
and in accordance with the provisions of this Agreement. Further, the Master
Servicer shall cause the Servicer to sell any REO Property prior to three years
after the end of the calendar year of its acquisition by REMIC I unless (i) the
Trustee shall have been supplied by the Servicer with an Opinion of Counsel to
the effect that the holding by the Trust Fund of such REO Property subsequent to
such three-year period will not result in the imposition of taxes on "prohibited
transactions" of any REMIC hereunder as defined in section 860F of the Code or
cause any REMIC hereunder to fail to qualify as a REMIC at any time that any
Certificates are outstanding, in which case the Trust Fund may continue to hold
such Mortgaged Property (subject to any conditions contained in such Opinion of
Counsel) or (ii) the Servicer shall have applied for, prior to the expiration of
such three-year period, an extension of such three-year period in the manner
contemplated by Section 856(e)(3) of the Code, in which case the three-year
period shall be extended by the applicable extension period. The Master Servicer
shall cause the Servicer to protect and conserve, such REO Property in the
manner and to the extent required by this Agreement in accordance with the REMIC
Provisions and in a manner that does not result in a tax on "net income from
foreclosure property" or cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code.

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

                  Section 4.16. ANNUAL OFFICER'S CERTIFICATE AS TO COMPLIANCE.

                  (a)The Master Servicer shall deliver to the Trustee and the
Rating Agencies on or before March 15 of each year, commencing on March 15,
2005, an Officer's Certificate, certifying that with respect to the period
ending December 31 of the prior year: (i) such Servicing Officer has reviewed
the activities of such Master Servicer during the preceding calendar year or
portion thereof and its performance under this Agreement, (ii) to the best of
such Servicing Officer's knowledge, based on such review, such Master Servicer
has performed and fulfilled its duties, responsibilities and obligations under
this Agreement in all material respects throughout such year, or, if there has
been a default in the fulfillment of any such duties, responsibilities or
obligations, specifying each such default known to such Servicing Officer and
the nature and status thereof, (iii) nothing has come to the attention of such
Servicing Officer to lead such Servicing Officer to believe that the Master
Servicer has failed to perform any of its duties, responsibilities and
obligations under this Agreement in all material respects throughout such year,
or, if there has been a material default in the performance or fulfillment of
any such duties, responsibilities or obligations, specifying each such default
known to such Servicing Officer and the nature and status thereof.

                  (b)Copies of such statements shall be provided to any
Certificateholder upon request, by the Master Servicer or by the Trustee at the
Master Servicer's expense if the Master Servicer failed to provide such copies
(unless (i) the Master Servicer shall have failed to provide the Trustee with
such statement or (ii) the Trustee shall be unaware of the Master Servicer's
failure to provide such statement).

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                  Section 4.17. ANNUAL INDEPENDENT ACCOUNTANT'S SERVICING
REPORT.

                  If the Master Servicer has, during the course of any calendar
year, directly serviced any of the Mortgage Loans, then the Master Servicer at
its expense shall cause a nationally recognized firm of independent certified
public accountants to furnish a statement to the Trustee, the Rating Agencies
and the Seller on or before March 15 of each year, commencing on March 15, 2005
to the effect that, with respect to the most recently ended fiscal year, such
firm has examined certain records and documents relating to the Master
Servicer's performance of its servicing obligations under this Agreement and
pooling and servicing and trust agreements in material respects similar to this
Agreement and to each other and that, on the basis of such examination conducted
substantially in compliance with the audit program for mortgages serviced for
Freddie Mac or the Uniform Single Attestation Program for Mortgage Bankers, such
firm is of the opinion that the Master Servicer's activities have been conducted
in compliance with this Agreement, or that such examination has disclosed no
material items of noncompliance except for (i) such exceptions as such firm
believes to be immaterial, (ii) such other exceptions as are set forth in such
statement and (iii) such exceptions that the Uniform Single Attestation Program
for Mortgage Bankers or the Audit Program for Mortgages Serviced by Freddie Mac
requires it to report. Copies of such statements shall be provided to any
Certificateholder upon request by the Master Servicer, or by the Trustee at the
expense of the Master Servicer if the Master Servicer shall fail to provide such
copies (unless (i) the Master Servicer shall have failed to provide the Trustee
with such statement or (ii) the Trustee shall be unaware of the Master
Servicer's failure to provide such statement). If such report discloses
exceptions that are material, the Master Servicer shall advise the Trustee
whether such exceptions have been or are susceptible of cure, and will take
prompt action to do so.

                  Section 4.18. UCC.

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

                  Section 4.19. OBLIGATION OF THE MASTER SERVICER IN RESPECT OF
PREPAYMENT INTEREST SHORTFALLS.

                  In the event of any Prepayment Interest Shortfalls, the Master
Servicer shall deposit into the Distribution Account not later than the related
Distribution Date an amount equal to the lesser of (i) the aggregate amounts
required to be paid by the Servicer with respect to Prepayment Interest
Shortfalls attributable to Principal Prepayments in full on the Mortgage Loans
for the related Distribution Date, and not so paid by the Servicer and (ii) the
aggregate amount of the related Master Servicing Fees for such Distribution
Date, without reimbursement therefor.

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                  Section 4.20. RESERVED.

                  Section 4.21. PREPAYMENT PENALTY VERIFICATION.

                  On or prior to each Servicer Remittance Date, the Servicer
shall provide in an electronic format acceptable to the Master Servicer and it
the data necessary for the Master Servicer to perform its verification duties
set forth in this Section 4.21. The Master Servicer or a third party reasonably
acceptable to the Master Servicer and the Depositor (the "Verification Agent")
will perform such verification duties and will use its best efforts to issue its
findings in a report (the "Verification Report") delivered to the Master
Servicer and the Depositor within ten (10) Business Days following the related
Distribution Date; provided, however, that if the Verification Agent is unable
to issue the Verification Report within ten (10) Business Days following the
Distribution Date, the Verification Agent may issue and deliver to the Master
Servicer and the Depositor the Verification Report upon the completion of its
verification duties. The Master Servicer shall forward the Verification Report
to the Servicer and shall notify the Servicer if the Master Servicer has
determined that the Servicer did not deliver the appropriate Prepayment Charge
to the Securities Administrator in accordance with this Agreement. Such written
notification from the Master Servicer shall include the loan number, prepayment
penalty code and prepayment penalty amount as calculated by the Master Servicer
or the Verification Agent, as applicable, of each Mortgage Loan for which there
is a discrepancy. If the Servicer agrees with the verified amounts, the Servicer
shall adjust the immediately succeeding Servicer Report and the amount remitted
to the Trustee with respect to prepayments accordingly. If the Servicer
disagrees with the determination of the Master Servicer, the Servicer shall,
within five (5) Business Days of its receipt of the Verification Report, notify
the Master Servicer of such disagreement and provide the Master Servicer with
detailed information to support its position. The Servicer and the Master
Servicer shall cooperate to resolve any discrepancy on or prior to the
immediately succeeding Servicer Remittance Date, and the Servicer will indicate
the effect of such resolution on the related Servicer Report and shall adjust
the amount remitted with respect to prepayments on such Servicer Remittance Date
accordingly.

                  During such time as the Servicer and the Master Servicer are
resolving discrepancies with respect to the Prepayment Charges, no payments in
respect of any disputed Prepayment Charges will be remitted to the Securities
Administrator for deposit in the Distribution Account and the Master Servicer
shall not be obligated to deposit such payments, unless otherwise required
pursuant to Section 8.01 hereof. In connection with such duties, the Master
Servicer shall be able to rely solely on the information provided to it by the
Servicer in accordance with this Section. The Master Servicer shall not be
responsible for verifying the accuracy of any of the information provided to it
by the Servicer.

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                                   ARTICLE V

                         PAYMENTS TO CERTIFICATEHOLDERS

                  Section 5.01. DISTRIBUTIONS.

                  (a) (1) On each Distribution Date, the following amounts, in
the following order of priority, shall be distributed by REMIC I to REMIC II on
account of the REMIC I Regular Interests or withdrawn from the Distribution
Account and distributed to the holders of the Class R Certificates, in respect
of the Class R-I Interest, as the case may be:

                           (i) to Holders of REMIC I Regular Interest I-LTAA,
         REMIC I Regular Interest I-LTAIA, REMIC I Regular Interest I-LTA1B,
         REMIC I Regular Interest I-LTA2, REMIC I Regular Interest I-LTM1, REMIC
         I Regular Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I
         Regular Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I
         Regular Interest I-LTM6, REMIC I Regular Interest I-LTB1, REMIC I
         Regular Interest I-LTB2, REMIC I Regular Interest I-LTB3, REMIC I
         Regular Interest I-LTZZ and REMIC I Regular Interest I-LTP, PRO RATA,
         in an amount equal to (A) the Uncertificated Interest for such
         Distribution Date, plus (B) any amounts in respect thereof remaining
         unpaid from previous Distribution Dates. Amounts payable as
         Uncertificated Interest in respect of REMIC I Regular Interest I-LTZZ
         shall be reduced when the REMIC I Overcollateralization Amount is less
         than the REMIC I Required Overcollateralization Amount, by the lesser
         of (x) the amount of such difference and (y) the Maximum I-LTZZ
         Uncertificated Interest Deferral Amount and such amount will be payable
         to the Holders of REMIC I Regular Interest I-LTA1A, REMIC I Regular
         Interest I-LTA1B, REMIC I Regular Interest I-LTA2, REMIC I Regular
         Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular
         Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular
         Interest I-LTM5, REMIC I Regular Interest I-LTM6 and REMIC I Regular
         Interest I-LTB1, REMIC I Regular Interest I-LTB2, REMIC I Regular
         Interest I-LTB3, in the same proportion as the Overcollateralization
         Increase Amount is allocated to the Corresponding Certificates and the
         Uncertificated Balance of REMIC I Regular Interest I-LTZZ shall be
         increased by such amount;

                           (ii) to Holders of REMIC I Regular Interest I-LT1A,
         REMIC I Regular Interest I-LT1B, REMIC I Regular Interest I-LT2A, REMIC
         I Regular Interest I-LT2B and REMIC I Regular Interest I-LTXX, pro
         rata, in an amount equal to (A) the Uncertificated Interest for such
         Distribution Date, plus (B) any amounts in respect thereof remaining
         unpaid from previous Distribution Dates;

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

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                                    (A) 98.00% of such remainder to the Holders
                  of REMIC I Regular Interest I-LTAA, until the Uncertificated
                  Balance of such Uncertificated REMIC I Regular Interest is
                  reduced to zero;

                                    (B) 2.00% of such remainder first to the
                  Holders of REMIC I Regular Interest I-LTA1A, REMIC I Regular
                  Interest I-LTA1B, REMIC I Regular Interest I-LTA2, REMIC I
                  Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2,
                  REMIC I Regular Interest I-LTM3, REMIC I Regular Interest
                  I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I Regular
                  Interest I-LTM6 and REMIC I Regular Interest I-LTB1, REMIC I
                  Regular Interest I-LTB2, REMIC I Regular Interest I-LTB3, in
                  the same proportion as principal payments are allocated to the
                  Corresponding Certificates, until the Uncertificated Balances
                  of such REMIC I Regular Interests are reduced to zero and
                  second to the Holders of REMIC I Regular Interest I-LTZZ,
                  until the Uncertificated Balance of such REMIC I Regular
                  Interest is reduced to zero;

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

                                    (D) any remaining amount to the Holders of
                  the Class R-I Interest, in respect of the Class R-I Interest;

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

                  (iv) to the Holders of REMIC I Regular Interests, in an amount
         equal to the remainder of the REMIC I Sub WAC Allocation Percentage of
         Available Funds for such Distribution Date after the distributions made
         pursuant to clause (ii) above, such that distributions of principal
         shall be deemed to be made to the REMIC I Regular Interests first, so
         as to keep the Uncertificated Balance of each REMIC I Regular Interest
         ending with the designation "B" equal to 0.01% of the aggregate Stated
         Principal Balance of the Mortgage Loans in the related Loan Group;
         second, to each REMIC I Regular Interest ending with the designation
         "A," so that the Uncertificated Balance of each such REMIC I Regular
         Interest is equal to 0.01% of the excess of (x) the aggregate Stated
         Principal Balance of the Mortgage Loans in the related Loan Group over
         (y) the current Certificate Principal Balance of the Class A
         Certificate in the related Loan Group (except that if any such excess
         is a larger number than in the preceding distribution period, the least
         amount of principal shall be distributed to such REMIC I Regular
         Interests such that the REMIC I Subordinated Balance Ratio is
         maintained); and third, any remaining principal to REMIC I Regular
         Interest I-LTXX.

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<PAGE>

                  (v) Notwithstanding the distributions described in Section
         5.01(a)(1), distributions of funds shall be made to Certificateholders
         only in accordance with Section 5.01(2) through (7) and Section
         5.01(b).

                  (2) On each Distribution Date, the Securities Administrator
         shall withdraw from the Distribution Account to the extent on deposit
         therein an amount equal to the Group I Interest Remittance Amount and
         make the following disbursements and transfers in the order of priority
         described below, in each case to the extent of the Group I Interest
         Remittance Amount remaining for such Distribution Date:

         FIRST, to the Certificate Insurer, the Premium Amount;

         SECOND, concurrently, to the Holders of the Class A-1A Certificates and
         the Class A-1B Certificates, the Senior Interest Distribution Amount
         allocable to each such Class on a PRO RATA basis, based on the
         entitlement of each such Class;

         THIRD, to the Holders of the Class A-2 Certificates, the Interest
         Distribution Amount allocable to Class A-2 Certificates, to the extent
         remaining unpaid after the distribution of the Group II Interest
         Remittance Amount as set forth in clause first of Section 5.01(a)(3)
         below;

         FOURTH, to the Certificate Insurer, any Reimbursement Amount; and

         FIFTH, to the Holders of the Class A-2 Certificates, the Interest Carry
         Forward Amount allocable to the Class A-2 Certificates, to the extent
         remaining unpaid after the distribution of the Group II Interest
         Remittance Amount as set forth in clause FIRST of Section 5.01(a)(3)
         below.

                  (3) On each Distribution Date, the Securities Administrator
         shall withdraw from the Distribution Account to the extent on deposit
         therein an amount equal to the Group II Interest Remittance Amount and
         make the following disbursements and transfers in the order of priority
         described below, in each case to the extent of the Group II Interest
         Remittance Amount remaining for such Distribution Date:

         FIRST, to the Holders of the Class A-2 Certificates, the Senior
         Interest Distribution Amount allocable to the Class A-2 Certificates;

         SECOND, concurrently, to the Holders of the Class A-1A Certificates and
         Class A-B Certificates, the Senior Interest Distribution Amount
         allocable to each such Class, on a PRO RATA basis, based on the
         entitlement of each such Class, to the extent remaining unpaid after
         the distribution of the Group I Interest Remittance Amount as set forth
         in clause SECOND of Section 5.01(a)(2) above; and

         THIRD, to the Certificate Insurer, the Premium Amount and, thereafter
         any Reimbursement Amounts, in each case to the extent remaining unpaid
         after distribution of the Group I Interest Remittance Amount as set
         forth in clause FIRST of Section 5.01(a)(2) above.

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<PAGE>

         (4) On each Distribution Date, the Securities Administrator shall
withdraw from the Distribution Account to the extent on deposit therein an
amount equal to the Group I Interest Remittance Amount and the Group II Interest
Remittance Amount remaining after the distributions required by clauses (2) and
(3) above and make the following disbursements and transfers in the order of
priority described below, in each case to the extent of the Group I Interest
Remittance Amount and Group II Interest Remittance Amount remaining for such
Distribution Date:

         FIRST, sequentially, to the Holders of the Class M-1, Class M-2, Class
         M-3, Class M-4, Class M-5 and Class M-6 Certificates, in that order,
         the Interest Distribution Amount allocable to each such Class; and

         SECOND, sequentially, to the Holders of the Class B-1, Class B-2 and
         Class B-3 Certificates, in that order, the Interest Distribution Amount
         allocable to each such Class.

         (5) On each Distribution Date (a) prior to the Stepdown Date or (b) on
which a Trigger Event is in effect, the Securities Administrator shall withdraw
from the Distribution Account to the extent on deposit therein an amount equal
to the Group I Principal Distribution Amount and the Group II Principal
Distribution Amount and distribute to the Certificateholders the following
amounts, in the following order of priority:

                           (i) The Group I Principal Distribution Amount shall
         be distributed in the following order of priority:

                        FIRST, concurrently, to the Holders of the Class A-1A
                        Certificates and Class A-1B Certificates, on a PRO RATA
                        basis, based on the Certificate Principal Balance of
                        each such Class, until the Certificate Principal Balance
                        of each such Class has been reduced to zero;

                        SECOND, to the Certificate Insurer, the amount of all
                        Reimbursement Amounts not repaid from interest
                        collections pursuant to Sections 5.01(a)(2) and (a)(3)
                        above; and

                        THIRD, to the Holders of the Class A-2 Certificates,
                        after taking into account the distribution of the Group
                        II Principal Distribution Amount pursuant to clause
                        FIRST of Section 5.01(a)(5)(ii) below on a sequential
                        basis, in that order, until the Certificate Principal
                        Balance of the Class A-2 Certificates has been reduced
                        to zero.

                           (ii) The Group II Principal Distribution Amount shall
         be distributed in the following order of priority:

                        FIRST, to the Holders of the Class A-2 Certificates,
                        until the Certificate Principal Balance of the Class A-2
                        Certificates has been reduced to zero;

                        SECOND, concurrently, to the Holders of the Class A-1A
                        Certificates and Class A-1B Certificates, on a PRO RATA
                        basis, based on the Certificate Principal Balance of
                        each such Class, after taking into account the
                        distribution of the

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<PAGE>

                        Group I Principal Distribution Amount pursuant to clause
                        FIRST of Section 5.01(a)(5)(i) above, until the
                        Certificate Principal Balance of each such Class has
                        been reduced to zero; and

                        THIRD, to the Certificate Insurer, the remaining amount
                        of all Reimbursement Amounts, not repaid from interest
                        collections pursuant to Sections 5.01(a)(2) and (a)(3)
                        and principal collections pursuant to Section
                        5.01(a)(5)(i).

                           (iii) The Group I Principal Distribution Amount and
         Group II Principal Distribution Amount remaining after distributions
         pursuant to Sections 5.01(a)(5)(i) and (ii) above shall be distributed
         in the following order of priority:

                       FIRST, sequentially, to the Holders of the Class M-1,
                       Class M-2, Class M-3, Class M-4, Class M-5 and Class M-6
                       Certificates, in that order, until the Certificate
                       Principal Balance of each such Class has been reduced to
                       zero; and

                       SECOND, sequentially, to the Holders of the Class B-1,
                       Class B-2 and Class B-3 Certificates, in that order,
                       until the Certificate Principal Balance of each such
                       Class has been reduced to zero.

         (6) On each Distribution Date (a) on or after the Stepdown Date and (b)
on which a Trigger Event is not in effect, the Securities Administrator shall
withdraw from the Distribution Account to the extent on deposit therein an
amount equal to the Group I Principal Distribution Amount and the Group II
Principal Distribution Amount and distribute to the Certificateholders the
following amounts, in the following order of priority:

                           (i) The Group I Principal Distribution Amount shall
         be distributed in the following order of priority:

                        FIRST, concurrently, to the Holders of the Class A-1A
                        Certificates and Class A-1B Certificates, on a PRO RATA
                        basis, based on the Certificate Principal Balance of
                        each such Class, the Class A-1 Principal Distribution
                        Amount until the Certificate Principal Balance of each
                        such Class has been reduced to zero;

                        SECOND, to the Certificate Insurer, the amount of all
                        Reimbursement Amounts not repaid from interest
                        collections pursuant to Sections 5.01(a)(2) and (a)(3)
                        above; and

                        THIRD, to the Holders of the Class A-2 Certificates,
                        after taking into account the distribution of the Group
                        II Principal Distribution Amount, pursuant to clause
                        FIRST of Section 5.01(a)(6)(ii) below up to the amount,
                        if any, of the Class A-2 Principal Distribution Amount
                        remaining unpaid on such Distribution Date, until the
                        Certificate Principal Balance of the Class A-2
                        Certificates has been reduced to zero.

                           (ii) The Group II Principal Distribution Amount shall
         be distributed in the following order of priority:

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<PAGE>

                           FIRST, to the Holders of the Class A-2 Certificates,
                           the Class A-2 Principal Distribution Amount, until
                           the Certificate Principal Balance of the Class A-2
                           Certificates has been reduced to zero;

                           SECOND, to the Holders of the Class A-1A Certificates
                           and Class A-1B Certificates, on a PRO RATA basis,
                           based on the Certificate Principal Balance of each
                           such Class, after taking into account the
                           distribution of the Group I Principal Distribution
                           Amount, pursuant to clause FIRST of Section
                           5.01(a)(6)(i) above, up the amount, if any, of the
                           Class A-1 Principal Distribution Amount remaining
                           unpaid on such Distribution Date until the
                           Certificate Principal Balance of each such Class has
                           been reduced to zero; and

                           THIRD, to the Certificate Insurer, the remaining
                           amount of all Reimbursement Amounts not repaid from
                           interest collections pursuant to Sections 5.01(a)(2)
                           and (a)(3) and principal collections pursuant to
                           Section 5.01(a)(6)(i).

(iii)    The Principal Distribution Amount remaining after distributions
         pursuant to Section 5.01(a)(6)(i) and (ii) above shall be distributed
         in the following order of priority:

                           FIRST, to the Holders of the Class M-1 Certificates,
                           the lesser of (x) the remaining Principal
                           Distribution Amount and (y) the Class M-1 Principal
                           Distribution Amount, until the Certificate Principal
                           Balance of such Class has been reduced to zero;

                           SECOND, to the Holders of the Class M-2 Certificates,
                           the lesser of (x) the excess of (i) the Principal
                           Distribution Amount over (ii) the amount distributed
                           to the Holders of the Class M-1 Certificates pursuant
                           to clause FIRST of this Section 5.01(a)(6)(iii), and
                           (y) the Class M-2 Principal Distribution Amount,
                           until the Certificate Principal Balance of such Class
                           has been reduced to zero;

                           THIRD, to the Holders of the Class M-3 Certificates,
                           the lesser of (x) the excess of (i) the remaining
                           Principal Distribution Amount over (ii) the sum of
                           the amounts distributed to the Holders of the Class
                           M-1 Certificates pursuant to clause FIRST of this
                           Section 5.01(a)(6)(iii) and to the Holders of the
                           Class M-2 Certificates pursuant to clause SECOND of
                           this Section 5.01(a)(6)(iii), and (y) the Class M-3
                           Principal Distribution Amount, until the Certificate
                           Principal Balance of such Class has been reduced to
                           zero;

                           FOURTH, to the Holders of the Class M-4 Certificates,
                           the lesser of (x) the excess of (i) the remaining
                           Principal Distribution Amount over (ii) the sum of
                           the amounts distributed to the Holders of the Class
                           M-1 Certificates pursuant to clause FIRST of this
                           Section 5.01(a)(6)(iii), to the Holders of the Class
                           M-2 Certificates pursuant to clause SECOND of this

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<PAGE>

                           Section 5.01(a)(6)(iii) and to the Holders of the
                           Class M-3 Certificates pursuant to clause THIRD of
                           this Section 5.01(a)(6)(iii) and (y) the Class M-4
                           Principal Distribution Amount, until the Certificate
                           Principal Balance of such Class has been reduced to
                           zero;

                           FIFTH, to the Holders of the Class M-5 Certificates,
                           the lesser of (x) the excess of (i) the remaining
                           Principal Distribution Amount over (ii) the sum of
                           the amounts distributed to the Holders of the Class
                           M-1 Certificates pursuant to clause FIRST of this
                           Section 5.01(a)(6)(iii), to the Holders of the Class
                           M-2 Certificates pursuant to clause SECOND of this
                           Section 5.01(a)(6)(iii), to the Holders of the Class
                           M-3 Certificates pursuant to clause THIRD of this
                           Section 5.01(a)(6)(iii) and to the Holders of the
                           Class M-4 Certificates pursuant to clause FOURTH of
                           this Section 5.01(a)(6)(iii) and (y) the Class M-5
                           Principal Distribution Amount, until the Certificate
                           Principal Balance of such Class has been reduced to
                           zero;

                           SIXTH, to the Holders of the Class M-6 Certificates,
                           the lesser of (x) the excess of (i) the remaining
                           Principal Distribution Amount over (ii) the sum of
                           the amounts distributed to the Holders of the Class
                           M-1 Certificates pursuant to clause FIRST of this
                           Section 5.01(a)(6)(iii), to the Holders of the Class
                           M-2 Certificates pursuant to clause SECOND of this
                           Section 5.01(a)(6)(iii), to the Holders of the Class
                           M-3 Certificates pursuant to clause THIRD of this
                           Section 5.01(a)(6)(iii), to the Holders of the Class
                           M-4 Certificates pursuant to clause FOURTH of this
                           Section 5.01(a)(6)(iii) and to the Holders of the
                           Class M-5 Certificates pursuant to clause FIFTH of
                           this Section 5.01(a)(6)(iii) and (y) the Class M-6
                           Principal Distribution Amount, until the Certificate
                           Principal Balance of such Class has been reduced to
                           zero;

                           SEVENTH, to the Holders of the Class B-1 Certificates
                           the lesser of (x) the excess of (i) the remaining
                           Principal Distribution Amount over (ii) the sum of
                           the amounts distributed to the Holders of the Class
                           M-1 Certificates pursuant to clause FIRST of this
                           Section 5.01(a)(6)(iii), to the Holders of the Class
                           M-2 Certificates pursuant to clause SECOND of this
                           Section 5.01(a)(6)(iii), to the Holders of the Class
                           M-3 Certificates pursuant to clause THIRD of this
                           Section 5.01(a)(6)(iii), to the Holders of the Class
                           M-4 Certificates pursuant to clause FOURTH of this
                           Section 5.01(a)(6)(iii), to the Holders of the Class
                           M-5 Certificates pursuant to clause FIFTH of this
                           Section 5.01(a)(6)(iii) and to the Holders of the
                           Class M-6 Certificates pursuant to clause SIXTH of
                           this Section 5.01(a)(6)(iii) and (y) the Class B-1
                           Principal Distribution Amount, until the Certificate
                           Principal Balance of such Class has been reduced to
                           zero;

                           EIGHTH, to the Holders of the Class B-2 Certificates
                           the lesser of (x) the excess of (i) the remaining
                           Principal Distribution Amount over (ii) the sum of
                           the amounts distributed to the Holders of the Class
                           M-1 Certificates pursuant to clause FIRST of this
                           Section 5.01(a)(6)(iii), to the

                                      115
<PAGE>

                           Holders of the Class M-2 Certificates pursuant to
                           clause SECOND of this Section 5.01(a)(6)(iii), to the
                           Holders of the Class M-3 Certificates pursuant to
                           clause THIRD of this Section 5.01(a)(6)(iii), to the
                           Holders of the Class M-4 Certificates pursuant to
                           clause FOURTH of this Section 5.01(a)(6)(iii), to the
                           Holders of the Class M-5 Certificates pursuant to
                           clause FIFTH of this Section 5.01(a)(6)(iii), to the
                           Holders of the Class M-6 Certificates pursuant to
                           clause SIXTH of this Section 5.01(a)(6)(iii) and to
                           the Holders of the Class B-1 Certificates pursuant to
                           clause SEVENTH of this Section 5.01(a)(6)(iii) and
                           (y) the Class B-2 Principal Distribution Amount,
                           until the Certificate Principal Balance of such Class
                           has been reduced to zero; and

                           NINTH, to the Holders of the Class B-3 Certificates
                           the lesser of (x) the excess of (i) the remaining
                           Principal Distribution Amount over (ii) the sum of
                           the amounts distributed to the Holders of the Class
                           M-1 Certificates pursuant to clause FIRST of this
                           Section 5.01(a)(6)(iii), to the Holders of the Class
                           M-2 Certificates pursuant to clause SECOND of this
                           Section 5.01(a)(6)(iii), to the Holders of the Class
                           M-3 Certificates pursuant to clause THIRD of this
                           Section 5.01(a)(6)(iii), to the Holders of the Class
                           M-4 Certificates pursuant to clause FOURTH of this
                           Section 5.01(a)(6)(iii), to the Holders of the Class
                           M-5 Certificates pursuant to clause FIFTH of this
                           Section 5.01(a)(6)(iii), to the Holders of the Class
                           M-6 Certificates pursuant to clause SIXTH of this
                           Section 5.01(a)(6)(iii), to the Holders of the Class
                           B-1 Certificates pursuant to clause SEVENTH of this
                           Section 5.01(a)(6)(iii) and to the Holders of the
                           Class B-2 Certificates pursuant to clause EIGHTH of
                           this Section 5.01(a)(6)(iii) and (y) the Class B-3
                           Principal Distribution Amount, until the Certificate
                           Principal Balance of such Class has been reduced to
                           zero.

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

                           (i) to the Holders of the Class or Classes of
                           Certificates then entitled to receive distributions
                           in respect of principal, in an amount equal to any
                           Extra Principal Distribution Amount, payable to such
                           Holders in accordance with the priorities set forth
                           in Section 5.01(b) below;

                           (ii) sequentially, to the Holders of the Class M-1,
                           Class M-2, Class M-3, Class M-4, Class M-5 and Class
                           M-6 Certificates, in that order, in an amount equal
                           to the Interest Carry Forward Amount allocable to
                           each such Class;

                           (iii) sequentially, to the Holders of the Class B-1,
                           Class B-2 and Class B-3 Certificates, in that order,
                           in an amount equal to the Interest Carry Forward
                           Amount allocable to each such Class;

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<PAGE>

                           (iv) sequentially, to the Holders of the Class M-1,
                           Class M-2, Class M-3, Class M-4, Class M-5 and Class
                           M-6 Certificates, in that order, in an amount equal
                           to the Allocated Realized Loss Amount allocable to
                           each such Class;

                           (v) sequentially, to the Holders of the Class B-1,
                           Class B-2 and Class B-3 Certificates, in that order,
                           in an amount equal to the Allocated Realized Loss
                           Amount allocable to each such Class;

                           (vi) concurrently, to the Holders of the Class A
                           Certificates, in an amount equal to such
                           Certificates' allocated share of any Prepayment
                           Interest Shortfalls on the related Mortgage Loans to
                           the extent not covered by payments pursuant to
                           Section 3.22 or 4.19 and any shortfalls resulting
                           from the application of the Relief Act or similar
                           state or local law or the bankruptcy code with
                           respect to the related Mortgage Loans to the extent
                           not previously reimbursed pursuant to 1.02;

                           (vii) sequentially, to the holders of the Class M-1,
                           Class M-2, Class M-3, Class M-4, Class M-5 and Class
                           M-6 Certificates, in that order, in an amount equal
                           to such certificates' share of any Prepayment
                           Interest Shortfalls on the Mortgage Loans to the
                           extent not covered by payments pursuant to Sections
                           3.22 or Section 4.19 and any Relief Act Interest
                           Shortfall, in each case that were allocated to such
                           Class for such Distribution Date and for any prior
                           Distribution Date, to the extent not previously
                           reimbursed pursuant to Section 1.02;

                           (viii) sequentially, to the Holders of the Class B-1,
                           Class B-2 and Class B-3 Certificates, in that order,
                           in an amount equal to such certificates' share of any
                           Prepayment Interest Shortfalls on the Mortgage Loans
                           to the extent not covered by payments pursuant to
                           Section 3.22 or Section 4.19 and any Relief Act
                           Interest Shortfall, in each case that were allocated
                           to such Class for such Distribution Date and for any
                           prior Distribution Date to the extent not previously
                           reimbursed pursuant to 1.02;

                           (ix) to the Reserve Fund from amounts otherwise
                           payable to the Class CE Certificates, and then from
                           the Reserve Fund to the Class A, Class M-1, Class
                           M-2, Class M-3, Class M-4, Class M-5, Class M-6,
                           Class B-1, Class B-2, Class B-3 in that order, in an
                           amount equal to the unpaid amount of any Net WAC Rate
                           Carryover Amount for each such Class for such
                           Distribution Date;

                           (x) to the Reserve Fund, the amount required to be
                           deposited therein pursuant to Section 3.24(b), after
                           taking into account amounts received under the Cap
                           Contracts;

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

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<PAGE>

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

         On each Distribution Date, after making the distributions of the
Available Distribution Amount as set forth above, the Securities Administrator
will FIRST, withdraw from the Reserve Fund all income from the investment of
funds in the Reserve Fund and distribute such amount to the Holders of the Class
CE Certificates, and SECOND, withdraw from the Reserve Fund, to the extent of
amounts remaining on deposit therein, the amount of any Net WAC Rate Carryover
Amount for such Distribution Date and distribute such amount FIRST, concurrently
to the Class A Certificates, on a pro rata basis; SECOND, to the Class M-1
Certificates, THIRD, to the Class M-2 Certificates, FOURTH, to the Class M-3
Certificates, FIFTH, to the Class M-4 Certificates, SIXTH, to the Class M-5
Certificates, SEVENTH, to the Class M-6 Certificates, EIGHTH, to the Class B-1
Certificates, NINTH, to the Class B-2 Certificates and TENTH, to the Class B-3
Certificates, in each case to the extent to the extent any Net WAC Rate
Carryover Amount is allocable to each such Class.

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

                           FIRST, concurrently to the Holders of the Class A
                           Certificates, on a PRO RATA basis, based on the
                           Certificate Principal Balance of each such Class,
                           until the Certificate Principal Balance of each such
                           Class has been reduced to zero;

                           SECOND, sequentially, to the Holders of the Class
                           M-1, Class M-2, Class M-3, Class M-4, Class M-5 and
                           Class M-6 Certificates, in that order, until the
                           Certificate Principal Balance of each such Class has
                           been reduced to zero; and

                           THIRD, sequentially to the Holders of the Class B-1,
                           Class B-2 and Class B-3 Certificates, in that order,
                           until the Certificate Principal Balance of each such
                           Class has been reduced to zero.

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

                           FIRST,(a) the lesser of (x) the Group I Principal
                           Distribution Amount and (y) the Class A-1 Principal
                           Distribution Amount, shall be distributed to the
                           Holders of the Class A-1A and Class A-2B Certificates
                           on a PRO RATA

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<PAGE>

                           basis, based on the Certificate Principal Balance of
                           each such Class, until the Certificate Principal
                           Balance of each Class has been reduced to zero and
                           (b) the lesser of (x) the Group II Principal
                           Distribution Amount and (y) the Class A-2 Principal
                           Distribution Amount, shall be distributed to the
                           Holders of the Class A-2 Certificates, until the
                           Certificate Principal Balance of the Class A-2
                           Certificates has been reduced to zero;

                           SECOND, the lesser of (x) the excess of (i) the
                           Principal Distribution Amount over (ii) the amount
                           distributed to the Holders of the Class A
                           Certificates pursuant to clause FIRST of this Section
                           5.01(b)(ii) and (y) the Class M-1 Principal
                           Distribution Amount, shall be distributed to the
                           Holders of the Class M-1 Certificates, until the
                           Certificate Principal Balance of such Class has been
                           reduced to zero;

                           THIRD, the lesser of (x) the excess of (i) the
                           Principal Distribution Amount over (ii) the sum of
                           the amounts distributed to the Holders of the Class A
                           Certificates pursuant to clause FIRST of this Section
                           5.01(b)(ii) and to the Holders of the Class M-1
                           Certificates pursuant to clause SECOND of this
                           Section 5.01(b)(ii) and (y) the Class M-2 Principal
                           Distribution Amount, shall be distributed to the
                           Holders of the Class M-2 Certificates, until the
                           Certificate Principal Balance of such Class has been
                           reduced to zero;

                           FOURTH, the lesser of (x) the excess of (i) the
                           Principal Distribution Amount over (ii) the sum of
                           the amounts distributed to the Holders of the Class A
                           Certificates pursuant to clause FIRST of this Section
                           5.01(b)(ii), to the Holders of the Class M-1
                           Certificates pursuant to clause SECOND of this
                           Section 5.01(b)(ii) and to the Holders of the Class
                           M-2 Certificates pursuant to clause THIRD of this
                           Section 5.01(b)(ii) and (y) the Class M-3 Principal
                           Distribution Amount, shall be distributed to the
                           Holders of the Class M-3 Certificates, until the
                           Certificate Principal Balance of such Class has been
                           reduced to zero;

                           FIFTH, the lesser of (x) the excess of (i) the
                           Principal Distribution Amount over (ii) the sum of
                           the amounts distributed to the Holders of the Class A
                           Certificates pursuant to clause FIRST of this Section
                           5.01(b)(ii), to the Holders of the Class M-1
                           Certificates pursuant to clause SECOND of this
                           Section 5.01(b)(ii), to the Holders of the Class M-2
                           Certificates pursuant to clause THIRD of this Section
                           5.01(b)(ii) and to the Holders of the Class M-3
                           Certificates pursuant to clause FOURTH of this
                           Section 5.01(b)(ii) and (y) the Class M-4 Principal
                           Distribution Amount, shall be distributed to the
                           Holders of the Class M-4 Certificates, until the
                           Certificate Principal Balance of such Class has been
                           reduced to zero;

                           SIXTH, the lesser of (x) the excess of (i) the
                           Principal Distribution Amount over (ii) the sum of
                           the amounts distributed to the Holders of the Class A
                           Certificates pursuant to clause FIRST of this Section
                           5.01(b)(ii), to the Holders of the Class M-1
                           Certificates pursuant to clause SECOND of this

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                           Section 5.01(b)(ii), to the Holders of the Class M-2
                           Certificates pursuant to clause THIRD of this Section
                           5.01(b)(ii), to the Holders of the Class M-3
                           Certificates pursuant to clause FOURTH of this
                           Section 5.01(b)(ii) and to the Holders of the Class
                           M-4 Certificates pursuant to clause FIFTH of this
                           Section 5.01(b)(ii) and (y) the Class M-5 Principal
                           Distribution Amount, shall be distributed to the
                           Holders of the Class M-5 Certificates, until the
                           Certificate Principal Balance of such Class has been
                           reduced to zero;

                           SEVENTH, the lesser of (x) the excess of (i) the
                           Principal Distribution Amount over (ii) the sum of
                           the amounts distributed to the Holders of the Class A
                           Certificates pursuant to clause FIRST of this Section
                           5.01(b)(ii), to the Holders of the Class M-1
                           Certificates pursuant to clause SECOND of this
                           Section 5.01(b)(ii), to the Holders of the Class M-2
                           Certificates pursuant to clause THIRD of this Section
                           5.01(b)(ii), to the Holders of the Class M-3
                           Certificates pursuant to clause FOURTH of this
                           Section 5.01(b)(ii), to the Holders of the Class M-4
                           Certificates pursuant to clause FIFTH of this Section
                           5.01(b)(ii) and to the Holders of the Class M-5
                           Certificates pursuant to clause SIXTH of this Section
                           5.01(b)(ii) and (y) the Class M-6 Principal
                           Distribution Amount, shall be distributed to the
                           Holders of the Class M-6 Certificates, until the
                           Certificate Principal Balance of such Class has been
                           reduced to zero;

                           EIGHTH, the lesser of (x) the excess of (i) the
                           Principal Distribution Amount over (ii) the sum of
                           the amounts distributed to the Holders of the Class A
                           Certificates pursuant to clause FIRST of this Section
                           5.01(b)(ii), to the Holders of the Class M-1
                           Certificates pursuant to clause SECOND of this
                           Section 5.01(b)(ii), to the Holders of the Class M-2
                           Certificates pursuant to clause THIRD of this Section
                           5.01(b)(ii), to the Holders of the Class M-3
                           Certificates pursuant to clause FOURTH of this
                           Section 5.01(b)(ii), to the Holders of the Class M-4
                           Certificates pursuant to clause FIFTH of this Section
                           5.01(b)(ii), to the Holders of the Class M-5
                           Certificates pursuant to clause SIXTH of this Section
                           5.01(b)(ii) and to the Holders of the Class M-6
                           Certificates pursuant to clause SEVENTH of this
                           Section 5.01(b)(ii) and (y) the Class B-1 Principal
                           Distribution Amount, shall be distributed to the
                           Holders of the Class B-1 Certificates until the
                           Certificate Principal Balance of such Class has been
                           reduced to zero;

                           NINTH, the lesser of (x) the excess of (i) the
                           Principal Distribution Amount over (ii) the sum of
                           the amounts distributed to the Holders of the Class A
                           Certificates pursuant to clause FIRST of this Section
                           5.01(b)(ii), to the Holders of the Class M-1
                           Certificates pursuant to clause SECOND of this
                           Section 5.01(b)(ii), to the Holders of the Class M-2
                           Certificates pursuant to clause THIRD of this Section
                           5.01(b)(ii), to the Holders of the Class M-3
                           Certificates pursuant to clause FOURTH of this
                           Section 5.01(b)(ii), to the Holders of the Class M-4
                           Certificates pursuant to clause FIFTH of this Section
                           5.01(b)(ii), to the Holders of the Class M-5
                           Certificates pursuant to clause SIXTH of this Section
                           5.01(b)(ii), to the Holders of the Class M-6

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                           Certificates pursuant to clause SEVENTH of this
                           Section 5.01(b)(ii) and to the Holders of the Class
                           B-1 Certificates pursuant to clause EIGHTH of this
                           Section 5.01(b)(ii) and (y) the Class B-2 Principal
                           Distribution Amount, shall be distributed to the
                           Holders of the Class B-2 Certificates until the
                           Certificate Principal Balance of such Class has been
                           reduced to zero; and

                           TENTH, the lesser of (x) the excess of (i) the
                           Principal Distribution Amount over (ii) the sum of
                           the amounts distributed to the Holders of the Class A
                           Certificates pursuant to clause FIRST of this Section
                           5.01(b)(ii), to the Holders of the Class M-1
                           Certificates pursuant to clause SECOND of this
                           Section 5.01(b)(ii), to the Holders of the Class M-2
                           Certificates pursuant to clause THIRD of this Section
                           5.01(b)(ii), to the Holders of the Class M-3
                           Certificates pursuant to clause FOURTH of this
                           Section 5.01(b)(ii), to the Holders of the Class M-4
                           Certificates pursuant to clause FIFTH of this Section
                           5.01(b)(ii), to the Holders of the Class M-5
                           Certificates pursuant to clause SIXTH of this Section
                           5.01(b)(ii), to the Holders of the Class M-6
                           Certificates pursuant to clause SEVENTH of this
                           Section 5.01(b)(ii), to the Holders of the Class B-1
                           Certificates pursuant to clause EIGHTH of this
                           Section 5.01(b)(ii) and to the Holders of the Class
                           B-2 Certificates pursuant to clause NINTH of this
                           Section 5.01(b)(ii) and (y) the Class B-3 Principal
                           Distribution Amount, shall be distributed to the
                           Holders of the Class B-3 Certificates until the
                           Certificate Principal Balance of such Class has been
                           reduced to zero..

                  (c)On each Distribution Date, the Securities Administrator
shall withdraw any amounts then on deposit in the Distribution Account that
represent Prepayment Charges and shall distribute such amounts to the Class P
Certificateholders as described above.

                  (d)All distributions made with respect to each Class of
Certificates on each Distribution Date shall be allocated PRO RATA among the
outstanding Certificates in such Class based on their respective Percentage
Interests. Payments in respect of each Class of Certificates on each
Distribution Date will be made to the Holders of the respective Class of record
on the related Record Date (except as otherwise provided in Section 5.01(e) or
Section 10.01 respecting the final distribution on such Class), based on the
aggregate Percentage Interest represented by their respective Certificates, and
shall be made by wire transfer of immediately available funds to the account of
any such Holder at a bank or other entity having appropriate facilities
therefor, if such Holder shall have so notified the Securities Administrator in
writing at least five Business Days prior to the Record Date immediately prior
to such Distribution Date and is the registered owner of Certificates having an
initial aggregate Certificate Principal Balance that is in excess of the lesser
of (i) $5,000,000 or (ii) two-thirds of the initial Certificate Principal
Balance of such Class of Certificates, or otherwise by check mailed by first
class mail to the address of such Holder appearing in the Certificate Register.
The final distribution on each Certificate will be made in like manner, but only
upon presentment and surrender of such Certificate at the Corporate Trust Office
of the Securities Administrator or such other location specified in the notice
to Certifcateholders of such final distribution.

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

                  (e) The rights of the Certificateholders to receive
distributions in respect of the Certificates, and all interests of the
Certificateholders in such distributions, shall be as set forth in this
Agreement. None of the Holders of any Class of Certificates, the Trustee, the
Servicer, the Securities Administrator or the Master Servicer shall in any way
be responsible or liable to the Holders of any other Class of Certificates in
respect of amounts properly previously distributed on the Certificates.

                  (f) Except as otherwise provided in Section 10.01, whenever
the Securities Administrator expects that the final distribution with respect to
any Class of Certificates will be made on the next Distribution Date, the
Securities Administrator shall, no later than three (3) days before the related
Distribution Date, mail to each Holder on such date of such Class of
Certificates a notice to the effect that:

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

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

                  Any funds not distributed to any Holder or Holders of
Certificates of such Class on such Distribution Date because of the failure of
such Holder or Holders to tender their Certificates shall, on such date, be set
aside and held in trust by the Securities Administrator and credited to the
account of the appropriate non-tendering Holder or Holders. If any Certificates
as to which notice has been given pursuant to this Section 5.01(f) shall not
have been surrendered for cancellation within six months after the time
specified in such notice, the Securities Administrator shall mail a second
notice to the remaining non-tendering Certificateholders to surrender their
Certificates for cancellation in order to receive the final distribution with
respect thereto. If within one year after the second notice all such
Certificates shall not have been surrendered for cancellation, the Securities
Administrator shall, directly or through an agent, mail a final notice to the
remaining non-tendering Certificateholders concerning surrender of their
Certificates but shall continue to hold any remaining funds for the benefit of
non-tendering Certificateholders. If within one year after the final notice any
such Certificates shall not have been surrendered for cancellation, any amounts
which were paid by the Certificate Insurer under the Certificate Insurance
Policy and are being held for non-tendering Certificateholders shall be

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reimbursed to the Certificate Insurer. The costs and expenses of maintaining the
funds in trust and of contacting such Certificateholders shall be paid out of
the assets remaining in such trust fund. If within one year after the final
notice any such Certificates shall not have been surrendered for cancellation,
the Securities Administrator shall pay to the Depositor all such amounts, and
all rights of non-tendering Certificateholders in or to such amounts shall
thereupon cease. No interest shall accrue or be payable to any Certificateholder
on any amount held in trust by the Securities Administrator as a result of such
Certificateholder's failure to surrender its Certificate(s) on the final
Distribution Date for final payment thereof in accordance with this Section
5.01(f). Any such amounts held in trust by the Securities Administrator shall be
held uninvested in an Eligible Account.

                  (g)Notwithstanding anything to the contrary herein, (i) in no
event shall the Certificate Principal Balance of a Class A Certificate, a
Mezzanine Certificate or a Class B Certificate be reduced more than once in
respect of any particular amount both (a) allocated to such Certificate in
respect of Realized Losses pursuant to Section 5.04 and (b) distributed to the
Holder of such Certificate in reduction of the Certificate Principal Balance
thereof pursuant to this Section 5.01 from Net Monthly Excess Cashflow and (ii)
in no event shall the Uncertificated Balance of a REMIC Regular Interest be
reduced more than once in respect of any particular amount both (a) allocated to
such REMIC Regular Interest in respect of Realized Losses pursuant to Section
5.04 and (b) distributed on such REMIC Regular Interest in reduction of the
Uncertificated Balance thereof pursuant to this Section 5.01.

                  Section 5.02. STATEMENTS TO CERTIFICATEHOLDERS.

                  On each Distribution Date, the Securities Administrator (based
on the information set forth in the Servicer Report for such Distribution Date
and information provided by the Trustee or the counterparty to the Cap Contracts
with respect to payments made pursuant to the Cap Contracts) shall make
available to each Holder of the Certificates and the Certificate Insurer, a
statement as to the distributions made on such Distribution Date setting forth:

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

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

                           (iii) the aggregate Servicing Fee received by the
         Servicer and Master Servicing Fee received by the Master Servicer
         during the related Due Period;

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

                           (v) Reserved;

                           (vi) the number, aggregate principal balance,
         weighted average remaining term to maturity and weighted average
         Mortgage Rate of the Mortgage Loans as of the related Due Date;

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

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

                           (ix) if available, the book value of any REO Property
         as of the close of business on the last Business Day of the calendar
         month preceding the Distribution Date;

                           (x) the aggregate amount of Principal Prepayments
         made during the related Prepayment Period and the aggregate amount of
         any Prepayment Charges received in respect thereof;

                           (xi) the aggregate amount of Realized Losses incurred
         during the related Prepayment Period and the aggregate amount of
         Realized Losses incurred since the Closing Date;

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

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

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

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

                           (xvi) the aggregate amount of any Prepayment Interest
         Shortfall for such Distribution Date, to the extent not covered by
         payments by the Servicer pursuant to Section 3.22 of this Agreement or
         the Master Servicer pursuant to Section 4.19;

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

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

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

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

                           (xxi) the Net WAC Rate Carryover Amount, if any, for
         such Distribution Date;

                           (xxii) the Net WAC Rate Carryover Amount, if any,
         outstanding after reimbursements therefor on such Distribution Date and
         any amounts received under the Cap Contracts;

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

                           (xxiv) the amount of any deposit to the Reserve Fund
         contemplated by Section 3.24(b);

                           (xxv) the balance of the Reserve Fund prior to the
         deposit or withdrawal of any amounts on such Distribution Date;

                           (xxvi) the amount of any deposit to the Reserve Fund
         pursuant to Section 5.01(a)(7)(xxv);

                           (xxvii) the balance of the Reserve Fund after all
         deposits and withdrawals on such Distribution Date;

                           (xxviii) the Loss Severity Percentage with respect to
         each Mortgage Loan;

                           (xxix) the Aggregate Loss Severity Percentage;

                           (xxx) the Class A Certificate Deficiency Amount and
         the Policy Payment for such Distribution Date;

                           (xxxi) the amount of the Reimbursement Amount for
         such Distribution Date and the amount received by the Certificate
         Insurer in respect thereof on such Distribution Date;

                           (xxxii) to the extent reported by the Servicer, (A)
         the amount of payments received by the Servicer related to claims under
         the PMI Policy during the related Prepayment Period (and the number of
         Mortgage Loans to which such payments related)

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         and (B) the cumulative amount of payments received related to claims
         under the PMI Policy since the Closing Date (and the number of Mortgage
         Loans to which such payments related); and

                           (xxxiii) to the extent reported by the Servicer, (A)
         the dollar amount of claims made under the PMI Policy that were denied
         (as identified by the Servicer) during the Prepayment Period (and the
         number of Mortgage Loans to which such denials related) and (B) the
         dollar amount of the cumulative claims made under the PMI Policy that
         were denied since the Closing Date (and the number of Mortgage Loans to
         which such denials related).

                  The Securities Administrator will make such statement (and, at
its option, any additional files containing the same information in an
alternative format) available each month to the Certificateholders, the
Certificate Insurer and the Rating Agencies via the Securities Administrator's
internet website. The Securities Administrator's internet website shall
initially be located at http:\\www.ctslink.com and assistance in using the
website can be obtained by calling the Securities Administrator's customer
service desk at 1-301-815-6600. Parties that are unable to use the above
distribution options are entitled to have a paper copy mailed to them via first
class mail by calling the customer service desk and indicating such. The
Securities Administrator shall have the right to change the way such statements
are distributed in order to make such distribution more convenient and/or more
accessible to the above parties and the Securities Administrator shall provide
timely and adequate notification to all above parties regarding any such
changes.

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

                  Within a reasonable period of time after the end of each
calendar year, the Securities Administrator shall furnish upon request to each
Person who at any time during the calendar year was a Holder of a Regular
Certificate a statement containing the information set forth in subclauses (i)
through (iii) above, aggregated for such calendar year or applicable portion
thereof during which such person was a Certificateholder. Such obligation of the
Securities Administrator shall be deemed to have been satisfied to the extent
that substantially comparable information shall be provided by the Securities
Administrator pursuant to any requirements of the Code as from time to time are
in force.

                  Within a reasonable period of time after the end of each
calendar year, the Securities Administrator shall furnish upon request to each
Person who at any time during the calendar year was a Holder of a Residual
Certificate a statement setting forth the amount, if any, actually distributed
with respect to the Residual Certificates, as appropriate, aggregated for such
calendar year or applicable portion thereof during which such Person was a
Certificateholder.

                  The Securities Administrator shall, upon request, furnish to
each Certificateholder during the term of this Agreement, such periodic,
special, or other reports or information, whether or not provided for herein, as
shall be reasonable with respect to the Certificateholder, as applicable, or
otherwise with respect to the purposes of this Agreement, all such reports or

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information to be provided at the expense of the Certificateholder, in
accordance with such reasonable and explicit instructions and directions as the
Certificateholder may provide.

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

                  Section 5.03. SERVICER REPORTS; P&I ADVANCES.

                  (a)On or before 1:00 pm New York time on the 18th calendar day
of each month, and if the 18th calendar day is not a Business Day, the
immediately following Business Day, the Servicer shall deliver to the Master
Servicer and the Securities Administrator by telecopy or electronic mail (or by
such other means as the Servicer, the Master Servicer and the Securities
Administrator may agree from time to time) a remittance report containing such
information with respect to the Mortgage Loans and the related Distribution Date
as is reasonably available to the Servicer as the Master Servicer or the
Securities Administrator may reasonably require so as to enable the Master
Servicer to master service the Mortgage Loans and oversee the servicing by the
Servicer and the Securities Administrator to fulfill its obligations hereunder
with respect to securities and tax reporting. On the second Business Day
following each Determination Date, but in no event later than the 18th calendar
day of each month (or, if the 18th day is not a Business Day, the succeeding
Business Day), the Servicer shall deliver to the Master Servicer by electronic
mail (or by such other means as the Servicer and the Master Servicer may agree
from time to time) a prepayment report with respect to the related Remittance
Date. Such prepayment report shall include such information with respect to
Principal Prepayments in full as the Master Servicer may reasonably require.

                  (b)The amount of P&I Advances to be made by the Servicer on
any Distribution Date shall equal, subject to Section 5.03(d), (i) the aggregate
amount of Monthly Payments (net of the related Servicing Fees), due during the
related Due Period in respect of the Mortgage Loans, which Monthly Payments were
delinquent as of the close of business on the related Determination Date and
(ii) with respect to each REO Property, which was acquired during or prior to
the related Prepayment Period and as to which an REO Disposition did not occur
during the related Prepayment Period, an amount equal to the excess, if any, of
the REO Imputed Interest on such REO Property for the most recently ended
calendar month, over the net income from such REO Property deposited in the
Collection Account pursuant to Section 3.21 for distribution on such
Distribution Date; provided, however, the Servicer shall not be required to make
P&I Advances with respect to Relief Act Interest Shortfalls, or with respect to
Prepayment Interest Shortfalls in excess of its obligations under Section 3.22.
For purposes of the preceding sentence, the Monthly Payment on each Balloon
Mortgage Loan with a delinquent Balloon Payment is equal to the assumed monthly
payment that would have been due on the related Due Date based on the original
principal amortization schedule for such Balloon Mortgage Loan.

                  By 1:00 pm New York time on the Servicer Remittance Date, the
Servicer shall remit in immediately available funds to the Securities
Administrator for deposit in the Distribution Account an amount equal to the
aggregate amount of P&I Advances, if any, to be

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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 any
Amounts Held For Future Distribution on deposit therein (in which case it will
cause to be made an appropriate entry in the records of the Collection Account
that Amounts Held For Future Distribution have been, as permitted by this
Section 5.03, used by the Servicer in discharge of any such P&I Advance) or
(iii) in the form of any combination of (i) and (ii) aggregating the total
amount of P&I Advances to be made by the Servicer with respect to the Mortgage
Loans. In addition, the Servicer shall have the right to reimburse itself for
any outstanding P&I Advance made from its own funds from Amounts Held for Future
Distribution. Any Amounts Held For Future Distribution used by the Servicer to
make P&I Advances or to reimburse itself for outstanding P&I Advances shall be
appropriately reflected in the Servicer's records and replaced by the Servicer
by deposit in the Collection Account no later than the close of business on the
Servicer Remittance Date immediately following the Due Period or Prepayment
Period for which such amounts relate. The Securities Administrator will notify
the Servicer and the Master Servicer by the close of business on the Business
Day prior to the Distribution Date in the event that the amount remitted by the
Servicer to the Securities Administrator on such date is less than the P&I
Advances required to be made by the Servicer for the related Distribution Date.

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

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

                  (e)Subject to and in accordance with the provisions of Article
VIII, in the event the Servicer fails to make any required P&I Advance, then the
Master Servicer (in its capacity as successor servicer) or any other successor
Servicer shall be required to make such P&I Advance on the Distribution Date on
which the Servicer was required to make such Advance, subject to its
determination of recoverability.

                  Section 5.04. ALLOCATION OF REALIZED LOSSES.

                  (a)Prior to the Determination Date, the Servicer shall
determine as to each Mortgage Loan and REO Property and include in the monthly
remittance report provided to the Master Servicer and the Securities
Administrator (substantially in the form of Schedule 4 hereto) such information
as is reasonably available to the Servicer as the Master Servicer or the
Securities Administrator may reasonably require so as to enable the Master
Servicer to

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master service the Mortgage Loans and oversee the servicing by the Servicer and
the Securities Administrator to fulfill its obligations hereunder with respect
to securities and tax reporting, which shall include, but not be limited to: (i)
the total amount of Realized Losses, if any, incurred in connection with any
Final Recovery Determinations made during the related Prepayment Period; and
(ii) the respective portions of such Realized Losses allocable to interest and
allocable to principal. Prior to each Determination Date, the Servicer shall
also determine as to each Mortgage Loan: (i) the total amount of Realized
Losses, if any, incurred in connection with any Deficient Valuations made during
the related Prepayment Period; and (ii) the total amount of Realized Losses, if
any, incurred in connection with Debt Service Reductions in respect of Monthly
Payments due during the related Due Period.

                  (b)All Realized Losses on the Mortgage Loans allocated to any
REMIC I Regular Interest pursuant to Section 5.04(c) on the Mortgage Loans shall
be allocated by the Securities Administrator on each Distribution Date as
follows: first, to Net Monthly Excess Cashflow; second, to the Class CE
Certificates; third, to the Class B-3 Certificates until the Certificate
Principal Balance has been reduced to zero, fourth to the Class B-2 Certificates
until the Certificate Principal Balance thereof has been reduced to zero, fifth
to the Class B-1 Certificates until the Certificate Principal Balance thereof
has been reduced to zero, sixth, to the Class M-6 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; seventh, to the
Class M-5 Certificates, until the Certificate Principal Balance thereof has been
reduced to zero; eighth, to the Class M-4 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero; ninth, to the Class M-3
Certificates, until the Certificate Principal Balance thereof has been reduced
to zero; tenth, to the Class M-2 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero; and eleventh, to the Class M-1
Certificates, until the Certificate Principal Balance thereof has been reduced
to zero. All Realized Losses to be allocated to the Certificate Principal
Balances of all Classes on any Distribution Date shall be so allocated after the
actual distributions to be made on such date as provided above. All references
above to the Certificate Principal Balance of any Class of Certificates shall be
to the Certificate Principal Balance of such Class immediately prior to the
relevant Distribution Date, before reduction thereof by any Realized Losses, in
each case to be allocated to such Class of Certificates, on such Distribution
Date.

                  Any allocation of Realized Losses to a Mezzanine Certificate
or Class B Certificate on any Distribution Date shall be made by reducing the
Certificate Principal Balance thereof by the amount so allocated; any allocation
of Realized Losses to a Class CE Certificates shall be made by reducing the
amount otherwise payable in respect thereof pursuant to Section
5.01(a)(7)(xxvi). No allocations of any Realized Losses shall be made to the
Certificate Principal Balances of the Class A Certificates or Class P
Certificates.

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

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                  In addition, in the event that the Servicer receives any
Subsequent Recoveries, the Servicer shall deposit such funds into the Collection
Account pursuant to Section 3.08. If, after taking into account such Subsequent
Recoveries, the amount of a Realized Loss is reduced, the amount of such
Subsequent Recoveries will be applied to increase the Certificate Principal
Balance of the Class of Subordinate Certificates with the highest payment
priority to which Realized Losses have been allocated, but not by more than the
amount of Realized Losses previously allocated to that Class of Subordinate
Certificates pursuant to this Section 5.04 and not previously reimbursed to such
Class of Subordinate Certificates with Net Monthly Excess Cashflow pursuant to
Section 5.01(a)(7). The amount of any remaining Subsequent Recoveries will be
applied to sequentially increase the Certificate Principal Balance of the
Subordinate Certificates, beginning with the Class of Subordinate Certificates
with the next highest payment priority, up to the amount of such Realized Losses
previously allocated to such Class of Subordinate Certificates pursuant to this
Section 5.04 and not previously reimbursed to such Class of Subordinate
Certificates with Net Monthly Excess Cashflow pursuant to clause THIRD of
Section 5.01(a)(7). Holders of such Certificates will not be entitled to any
payment in respect of current interest on the amount of such increases for any
Interest Accrual Period preceding the Distribution Date on which such increase
occurs. Any such increases shall be applied to the Certificate Principal Balance
of each Subordinate Certificate of such Class in accordance with its respective
Percentage Interest.

                  (c) (i) The REMIC I Marker Percentage of all Realized Losses
on the Mortgage Loans shall be allocated by the Trustee, based solely on the
instructions of the Securities Administrator, on each Distribution Date to the
following REMIC I Regular Interests in the specified percentages, as follows:
first, to Uncertificated Interest payable to the REMIC I Regular Interest I-LTAA
and REMIC I Regular Interest I-LTZZ up to an aggregate amount equal to the REMIC
I Interest Loss Allocation Amount, 98.00% and 2.00%, respectively; second, to
the Uncertificated Balances of the REMIC I Regular Interest I-LTAA and REMIC I
Regular Interest I-LTZZ up to an aggregate amount equal to the REMIC I Principal
Loss Allocation Amount, 98.00% and 2.00%, respectively; third, to the
Uncertificated Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular
Interest I-LTB3 and REMIC I Regular Interest I-LTZZ, 98.00%, 1.00% and 1.00%,
respectively, until the Uncertificated Balance of

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REMIC I Regular Interest I-LTB3 has been reduced to zero; fourth, to the
Uncertificated Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular
Interest I-LTB2 and REMIC I Regular Interest I-LTZZ, 98.00%, 1.00%, and 1.00%,
respectively, until the Uncertificated Balance of REMIC I Regular Interest
I-LTB2 has been reduced to zero; fifth, to the Uncertificated Balances of REMIC
I Regular Interest I-LTAA, REMIC I Regular Interest I-LTB1 and REMIC I Regular
Interest I-LTZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated
Balance of REMIC I Regular Interest I-LTB1 has been reduced to zero; sixth, to
the Uncertificated Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular
Interest I-LTM6 and REMIC I Regular Interest I-LTZZ, 98.00%, 1.00% and 1.00%,
respectively, until the Uncertificated Balance of REMIC I Regular Interest
I-LTM6 has been reduced to zero; seventh, to the Uncertificated Balances of
REMIC I Regular Interest I-LTAA, REMIC I Regular Interest I-LTM5 and REMIC I
Regular Interest I-LTZZ, 98.00%, 1.00% and 1.00%, respectively, until the
Uncertificated Balance of REMIC I Regular Interest I-LTM5 has been reduced to
zero; eighth, to the Uncertificated Balances of REMIC I Regular Interest I-LTAA,
REMIC I Regular Interest I-LTM4 and REMIC I Regular Interest I-LTZZ, 98.00%,
1.00% and 1.00%, respectively, until the Uncertificated Balance of REMIC I
Regular Interest I-LTM4 has been reduced to zero; ninth, to the Uncertificated
Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular Interest I-LTM3 and
REMIC I Regular Interest I-LTZZ, 98.00%, 1.00% and 1.00%, respectively, until
the Uncertificated Balance of REMIC I Regular Interest I-LTM3 has been reduced
to zero; tenth, to the Uncertificated Balances of REMIC I Regular Interest
I-LTAA, REMIC I Regular Interest I-LTM2 and REMIC I Regular Interest I-LTZZ,
98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Balance of REMIC
I Regular Interest I-LTM2 has been reduced to zero; and eleventh, to the
Uncertificated Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular
Interest I-LTM1 and REMIC I Regular Interest I-LTZZ, 98.00%, 1.00% and 1.00%,
respectively, until the Uncertificated Balance of REMIC I Regular Interest
I-LTM1 has been reduced to zero.

                           (ii) The REMIC I Sub WAC Allocation Percentage of all
         Realized Losses shall be applied after all distributions have been made
         on each Distribution Date first, so as to keep the Uncertificated
         Balance of each REMIC I Regular Interest ending with the designation
         "B" equal to 0.01% of the aggregate Stated Principal Balance of the
         Mortgage Loans in the related Loan Group; second, to each REMIC I
         Regular Interest ending with the designation "A," so that the
         Uncertificated Balance of each such REMIC I Regular Interest is equal
         to 0.01% of the excess of (x) the aggregate Stated Principal Balance of
         the Mortgage Loans in the related Loan Group over (y) the current
         Certificate Principal Balance of the Class A Certificate in the related
         Loan Group (except that if any such excess is a larger number than in
         the preceding distribution period, the least amount of Realized Losses
         shall be applied to such REMIC I Regular Interests such that the REMIC
         I Subordinated Balance Ratio is maintained); and third, any remaining
         Realized Losses shall be allocated to REMIC I Regular Interest I-LTXX.

                  Section 5.05. COMPLIANCE WITH WITHHOLDING REQUIREMENTS.

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

                  Section 5.06. REPORTS FILED WITH SECURITIES AND EXCHANGE
COMMISSION.

                  The Depositor shall prepare or cause to be prepared the
initial current report on Form 8-K. Within 15 days after each Distribution Date,
the Securities Administrator shall, in accordance with industry standards, file
with the Commission via the Electronic Data Gathering and Retrieval System
("EDGAR"), a Form 8-K with a copy of the statement to be furnished to the
Certificateholders for such Distribution Date as an exhibit thereto. Prior to
January 30, 2005, the Securities Administrator shall, in accordance with
industry standards, file a Form 15 Suspension Notice with respect to the Trust
Fund, if applicable. Prior to (i) March 20, 2005 and (ii) unless and until a
Form 15 Suspension Notice shall have been filed, prior to March 20th of

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each year thereafter, the Master Servicer shall provide the Securities
Administrator with a Master Servicer Certification, together with a copy of the
annual independent accountant's servicing report and annual statement of
compliance of the Servicer to be delivered pursuant to this Agreement, and, if
applicable, the annual independent accountant's servicing report and annual
statement of compliance to be delivered by the Master Servicer pursuant to
Sections 4.16 and 4.17. Prior to (i) March 31, 2005 and (ii) unless and until a
Form 15 Suspension Notice shall have been filed, March 31 of each year
thereafter, the Securities Administrator shall file a Form 10-K, in substance
conforming to industry standards, with respect to the Trust. Such Form 10-K
shall include the Master Servicer Certification and other documentation provided
by the Master Servicer pursuant to the second preceding sentence. The Depositor
hereby grants to the Securities Administrator a limited power of attorney to
execute and file each such document on behalf of the Depositor. Such power of
attorney shall continue until either the earlier of (i) receipt by the
Securities Administrator from the Depositor of written termination of such power
of attorney and (ii) the termination of the Trust Fund. The Depositor agrees to
promptly furnish to the Securities Administrator, from time to time upon
request, such further information, reports and financial statements within its
control related to this Agreement, the Mortgage Loans as the Securities
Administrator reasonably deems appropriate to prepare and file all necessary
reports with the Commission. The Securities Administrator shall have no
responsibility to file any items other than those specified in this Section
5.06; provided, however, the Securities Administrator will cooperate with the
Depositor in connection with any additional filings with respect to the Trust
Fund as the Depositor deems necessary under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"). Fees and expenses incurred by the Securities
Administrator in connection with this Section 5.06 shall not be reimbursable
from the Trust Fund.

                  Section 5.07. THE CERTIFICATE INSURANCE POLICY.

                  (a)The Trustee hereby appoints the Securities Administrator as
its agent in connection with the receipt and distribution of all amounts
required to be paid by the Certificate Insurer under the Certificate Insurance
Policy and the providing of any notices required to be provided thereunder. The
Securities Administrator shall establish a separate non-interest bearing trust
account which shall be an Eligible Account for the benefit of Holders of the
Class A-1B Certificates and the Certificate Insurer referred to herein as the
"Policy Payment Account" over which the Securities Administrator shall have
exclusive control and sole right of withdrawal. The Securities Administrator
shall deposit upon receipt any amount paid under the Certificate Insurance
Policy in the Policy Payment Account and distribute such amount only for
purposes of payment to the Class A-1B Certificates of the Policy Payment for
which a claim was made and such amount may not be applied to satisfy any costs,
expenses or liabilities of the Master Servicer, the Trustee or the Trust Fund or
to pay any other Class of Certificates. Amounts paid under the Certificate
Insurance Policy, to the extent needed to pay any Class A-1B Certificate
Deficiency Amount, shall be transferred to the Distribution Account on the
related Distribution Date, and the portion thereof representing the Class A-1B
Certificate Deficiency Amount shall be disbursed by the Securities Administrator
to the Class A-1B Certificateholders, in each case as if it were a distribution
to the Holders of such Certificates pursuant to Section 5.01. It shall not be
necessary for such payments to be made by checks or wire transfers separate from
the checks or wire transfers used to pay other distributions to the Class A-1B
Certificateholders, as applicable, with other funds available to make such
payment. However, the amount of any

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payment of principal or of interest on the Class A-1B Certificates to be paid
from funds transferred from the Policy Payment Account shall be noted as
provided in paragraph (d) below and in the statement to be furnished to Holders
of such Class of Certificates pursuant to Section 5.02. Funds held in the Policy
Payment Account shall not be invested. Any funds remaining in the Policy Payment
Account on the first Business Day following a Distribution Date shall be
returned to the Certificate Insurer pursuant to the written instructions of the
Certificate Insurer by the end of such Business Day.

                  (b)If the Securities Administrator has determined that a Class
A-1B Certificate Deficiency Amount is required to be paid under the Certificate
Insurance Policy with respect to such Distribution Date, it shall deliver a
Notice of Claim (in the form attached as Exhibit A to the Certificate Insurance
Policy) to the Certificate Insurer no later than noon, New York, New York time
on the second Business Day preceding such Distribution Date and shall provide a
copy thereof to the Master Servicer at or prior to the time such Notice of Claim
is received by the Certificate Insurer. The Notice of Claim shall constitute a
claim therefor pursuant to the Certificate Insurance Policy.

                  (c)If the Securities Administrator receives a certified copy
of a final order of the appropriate court exercising jurisdiction in an
Insolvency Proceeding with respect to which the appeal period as expired without
an appeal having been filed (an "Order") that any prior distribution made on the
Insured Certificates constitutes an Avoided Payment and must be returned by the
Certificate Owner, the Securities Administrator shall so notify the Certificate
Insurer, shall comply with the provisions of the Certificate Insurance Policy to
obtain payment by the Certificate Insurer of such Avoided Payment and shall, at
the time it provides notice to the Certificate Insurer, notify each holder of
the affected Insured Certificates by mail that (i) subject to the terms of the
Certificate Insurance Policy, the Certificate Insurer will disburse the Avoided
Payment directly to the receiver, conservator, debtor-in-possession or trustee
in bankruptcy named in the Order on the Business Day following such
Certificateholder's making timely delivery to the Securities Administrator of
(a) a certified copy of the Order of such Certificateholder that such Order has
been entered and is not subject to any stay, (b) an assignment duly executed and
delivered by such Certificate Owner, in such form as is reasonably required by
the Certificate Insurer and provided to such Certificateholder by the
Certificate Insurer, irrevocably assigning to the Certificate Insurer all rights
and claims of such Certificate Owner relating to or arising under the affected
Insured Certificates against the debtor that made a payment of such Avoided
Payment, or otherwise with respect to such payment and (c) a payment notice in
the form required by the Certificate Insurance Policy, appropriately completed
and executed by the Securities Administrator, provided that if such documents
are received after 10:00 a.m., New York time, on such Business Day, they will be
deemed to be received on the following Business Day. A copy of the Certificate
Insurance Policy shall be made available to each affected Certificateholder
through the Trustee, and the Securities Administrator shall furnish to the
Certificate Insurer or its fiscal agent, if any, a copy of its records
evidencing the payments that have been made by the Securities Administrator and
subsequently recovered from Certificateholders and the dates on which such
payments were made.

                  (d)The Securities Administrator shall keep a complete and
accurate record of the amount of interest and principal paid in respect of any
Class A-1B Certificates from

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moneys received under the Certificate Insurance Policy. The Certificate Insurer
shall have the right to inspect such records at reasonable times during normal
business hours upon two Business Day's prior notice to the Securities
Administrator.

                  (e)The Holders of the Insured Certificates are not entitled to
institute proceedings directly against the Certificate Insurer. Each Holder of
the Insured Certificates, by its purchase of Insured Certificates hereby agrees
that the Certificate Insurer may at any time during the continuation of any
proceeding relating to an Avoided Payment, direct all matters relating to such
Avoided Payment on their behalf, including, without limitation, the direction of
any appeal of any order relating to such preference claim and the posting of any
surety, supersedeas or performance bond pending any such appeal.

                  (f)Any payments to the Certificate Insurer shall be made by
wire transfer of immediately available funds to the following Federal Reserve
Account (unless and until the Certificate Insurer notifies the Securities
Administrator of a change in such account information in writing):

                           Fleet Bank, N.A.
                           777 Main Street
                           Hartford, CT  06115-2001
                           ABA Number: 04900571
                           For the Account of: XL Capital Assurance Inc.
                           1221 Avenue of the Americas, 31st Floor
                           New York, NY 10020-1001
                           Account #: 942-783-5841
                           Reference: Policy Number CA01082A

                  (g)The Securities Administrator shall, upon retirement of the
Class A-1B Certificates, furnish to the Certificate Insurer a notice of such
retirement, and, after retirement of the Class A-1B Certificates and the
expiration of the term of the Certificate Insurance Policy, surrender the
Certificate Insurance Policy to the Certificate Insurer for cancellation.

                  (h)The Trustee shall hold the Certificate Insurance Policy in
trust as agent for the Holders of the Class A-1B Certificates for the purpose of
making claims thereon and distributing the proceeds thereof. Neither the
Certificate Insurance Policy nor the amounts paid on the Certificate Insurance
Policy shall constitute part of the Trust Fund created by this Agreement. Each
Holder of Class A-1B Certificates, by accepting its Class A-1B Certificates,
appoints the Securities Administrator as attorney-in-fact for the purpose of
making claims on the Certificate Insurance Policy.

                  Section 5.08. EFFECT OF PAYMENTS BY THE CERTIFICATE INSURER;
SUBROGATION.

                  Anything herein to the contrary notwithstanding, any payment
with respect to principal of or interest on the Class A-1B Certificates which is
made with moneys received pursuant to the terms of the Certificate Insurance
Policy shall not be considered payment of the Class A-1B Certificates from the
Trust Fund. The Depositor, the Master Servicer and the Trustee acknowledge, and
each Holder by its acceptance of a Class A-1B Certificate agrees, that without
the need for any further action on the part of the Certificate Insurer, the
Depositor, the Master

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Servicer, the Trustee or the Certificate Registrar (a) to the extent the
Certificate Insurer makes payments, directly or indirectly, on account of
principal of or interest on the Class A-1B Certificates to the Holders of such
Class of Certificates, the Certificate Insurer shall be fully subrogated to, and
each such Certificateholder, the Master Servicer and the Trustee hereby delegate
and assign to the Certificate Insurer, to the fullest extent permitted by law,
the rights of such Holders to receive such principal and interest (in the manner
and order of priority in relation to other Classes of Certificates as is set
forth in this Agreement) from the Trust Fund, and (b) the Certificate Insurer
shall be paid such amounts from the sources and in the manner provided herein
for the payment of such amounts and as provided in this Agreement until full
reimbursement of all Insured Payments (together with interest thereon at the
Pass-Through Rate from the date paid by the Certificate Insurer until the date
of reimbursement thereof). The Trustee and the Master Servicer shall cooperate
in all respects with any reasonable request by the Certificate Insurer for
action to preserve or enforce the Certificate Insurer's rights or interests
under this Agreement without limiting the rights or affecting the interests of
the Holders of the Insured Certificates as otherwise set forth herein.

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                                   ARTICLE VI

                                THE CERTIFICATES

                  Section 6.01. THE CERTIFICATES.

                  (a)The Certificates in the aggregate will represent the entire
beneficial ownership interest in the Mortgage Loans and all other assets
included in REMIC I.

                  The Certificates will be substantially in the forms annexed
hereto as Exhibits A-1 through A-6. The Certificates of each Class will be
issuable in registered form only, in denominations of authorized Percentage
Interests as described in the definition thereof. Each Certificate will share
ratably in all rights of the related Class.

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

                  (b)The Class A Certificates and the Mezzanine Certificates
shall initially be issued as one or more Certificates held by the Book-Entry
Custodian or, if appointed to hold such Certificates as provided below, the
Depository and registered in the name of the Depository or its nominee and,
except as provided below, registration of such Certificates may not be
transferred by the Securities Administrator except to another Depository that
agrees to hold such Certificates for the respective Certificate Owners with
Ownership Interests therein. The Certificate Owners shall hold their respective
Ownership Interests in and to such Certificates through the book-entry
facilities of the Depository and, except as provided below, shall not be
entitled to definitive, fully registered Certificates ("Definitive
Certificates") in respect of such Ownership Interests. All transfers by
Certificate Owners of their respective Ownership Interests in the Book-Entry
Certificates shall be made in accordance with the procedures established by the
Depository Participant or brokerage firm representing such Certificate Owner.
Each Depository Participant shall only transfer the Ownership Interests in the
Book-Entry Certificates of Certificate Owners it represents or of brokerage
firms for which it acts as agent in accordance with the Depository's normal
procedures. The Securities Administrator is hereby initially appointed as the
Book-Entry Custodian and hereby agrees to act as such in accordance herewith and
in accordance with the agreement that it has with the Depository authorizing it
to act as such. The Book-Entry Custodian may, and, if it is no longer qualified
to act as such, the Book-Entry Custodian shall, appoint, by a written instrument

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delivered to the Depositor, the Servicer and, if the Trustee is not the
Book-Entry Custodian, the Trustee, any other transfer agent (including the
Depository or any successor Depository) to act as Book-Entry Custodian under
such conditions as the predecessor Book-Entry Custodian and the Depository or
any successor Depository may prescribe, provided that the predecessor Book-Entry
Custodian shall not be relieved of any of its duties or responsibilities by
reason of any such appointment of other than the Depository. If the Securities
Administrator resigns or is removed in accordance with the terms hereof, the
successor Securities Administrator or, if it so elects, the Depository shall
immediately succeed to its predecessor's duties as Book-Entry Custodian. The
Depositor shall have the right to inspect, and to obtain copies of, any
Certificates held as Book-Entry Certificates by the Book-Entry Custodian.

                  (c)The Class B Certificates initially offered and sold in
offshore transactions in reliance on Regulation S shall be issued in the form of
a temporary global certificate in definitive, fully registered form (each, a
"Regulation S Temporary Global Certificate"), which shall be deposited with the
Securities Administrator or an agent of the Securities Administrator as
custodian for the Depository and registered in the name of Cede & Co. as nominee
of the Depository for the account of designated agents holding on behalf of
Euroclear or Clearstream. Beneficial interests in each Regulation S Temporary
Global Certificate may be held only through Euroclear or Clearstream; provided,
however, that such interests may be exchanged for interests in a Definitive
Certificate in accordance with the requirements described in Section 6.02. After
the expiration of the Release Date, a beneficial interest in a Regulation S
Temporary Global Certificate may be exchanged for a beneficial interest in the
related permanent global certificate of the same Class (each, a "Regulation S
Permanent Global Certificate"), in accordance with the procedures set forth in
Section 6.02. Each Regulation S Permanent Global Certificate shall be deposited
with the Securities Administrator or an agent of the Securities Administrator as
custodian for the Depository and registered in the name of Cede & Co. as nominee
of the Depository.

                  The Class B Certificates offered and sold to Qualified
Institutional Buyers ("QIBs") in reliance on Rule 144A under the Securities Act
("Rule 144A") or institutional investors that are accredited investors within
the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the
Securities Act ("Institutional Accredited Investors") will be issued in the form
of Definitive Certificates.

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

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with solicitations of consents from or voting by Certificateholders and shall
give notice to the Depository of such record date.

                  If (i)(A) the Depositor advises the Securities Administrator
in writing that the Depository is no longer willing or able to properly
discharge its responsibilities as Depository, and (B) the Depositor is unable to
locate a qualified successor, (ii) the Depositor at its option advises the
Securities Administrator in writing that it elects to terminate the book-entry
system through the Depository or (iii) after the occurrence of a Servicer Event
of Default, Certificate Owners representing in the aggregate not less than 51%
of the Ownership Interests of the Book-Entry Certificates advise the Securities
Administrator through the Depository, in writing, that the continuation of a
book-entry system through the Depository is no longer in the best interests of
the Certificate Owners, the Securities Administrator shall notify all
Certificate Owners, through the Depository, of the occurrence of any such event
and of the availability of Definitive Certificates to Certificate Owners
requesting the same. With respect to a Global Certificate, the related
Certificate Owner (other than a Holder of a Regulation S Temporary Global
Certificate) may request that its interest in a Global Certificate be exchanged
for a Definitive Certificate. Upon surrender to the Securities Administrator of
the Book-Entry Certificates by the Book-Entry Custodian or the Depository, as
applicable, or the Global Certificates by the Depository accompanied by
registration instructions from the Depository for registration of transfer, the
Securities Administrator shall cause the Definitive Certificates to be issued.
Such Definitive Certificates will be issued in minimum denominations of $10,000
except that any beneficial ownership that was represented by a Book-Entry
Certificate, or a Global Certificate, as applicable in an amount less than
$10,000 immediately prior to the issuance of a Definitive Certificate shall be
issued in a minimum denomination equal to the amount represented by such
Book-Entry Certificate or a Global Certificate, as applicable. None of the
Depositor, the Servicer, the Master Servicer, the Securities Administrator or
the Trustee shall be liable for any delay in the delivery of such instructions
and may conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of Definitive Certificates all references herein
to obligations imposed upon or to be performed by the Depository shall be deemed
to be imposed upon and performed by the Securities Administrator, to the extent
applicable with respect to such Definitive Certificates, and the Securities
Administrator shall recognize the Holders of the Definitive Certificates as
Certificateholders hereunder.

                  Section 6.02. REGISTRATION OF TRANSFER AND EXCHANGE OF
CERTIFICATES.

                  (a)The Securities Administrator shall cause to be kept at one
of the offices or agencies to be appointed by the Securities Administrator in
accordance with the provisions of Section 9.11, a Certificate Register for the
Certificates in which, subject to such reasonable regulations as it may
prescribe, the Securities Administrator shall provide for the registration of
Certificates and of transfers and exchanges of Certificates as herein provided.

                  (b)No transfer of any Class B Certificate, Class CE
Certificate, Class P Certificate or Residual Certificate shall be made unless
that transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and effective registration
or qualification under applicable state securities laws, or is made in a
transaction that does not require such registration or qualification. In the
event that such a transfer of a Class B Certificate, Class CE Certificate, Class
P Certificate or Residual

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Certificate is to be made without registration or qualification (other than in
connection with the initial transfer of any such Certificate by the Depositor),
the Securities Administrator shall require receipt of: (i) if such transfer is
purportedly being made in reliance upon Rule 144A under the 1933 Act, written
certifications from the Certificateholder desiring to effect the transfer and
from such Certificateholder's prospective transferee, substantially in the form
attached hereto as Exhibit B-1; (ii) if such transfer is purportedly being made
in reliance upon Rule 501(a) under the 1933 Act, written certifications from the
Certificateholder desiring to effect the transfer and from such
Certificateholder's prospective transferee, substantially in the form attached
hereto as Exhibit B-2; (iii) if such transfer is purportedly being made in
reliance on Regulation S, a written certification from the prospective
transferee, substantially in the form attached hereto as Exhibit B-1 and (iv) in
all other cases, an Opinion of Counsel satisfactory to the Securities
Administrator that such transfer may be made without such registration or
qualification (which Opinion of Counsel shall not be an expense of the Trust
Fund or of the Depositor, the Trustee, the Master Servicer, the Securities
Administrator or the Servicer), together with copies of the written
certification(s) of the Certificateholder desiring to effect the transfer and/or
such Certificateholder's prospective transferee upon which such Opinion of
Counsel is based, if any. Neither of the Depositor nor the Securities
Administrator is obligated to register or qualify any such Certificates under
the 1933 Act or any other securities laws or to take any action not otherwise
required under this Agreement to permit the transfer of such Certificates
without registration or qualification. Any Certificateholder desiring to effect
the transfer of any such Certificate shall, and does hereby agree to, indemnify
the Trustee, the Depositor, the Master Servicer, the Securities Administrator
and the Servicer against any liability that may result if the transfer is not so
exempt or is not made in accordance with such federal and state laws.

                  A holder of a beneficial interest in a Regulation S Temporary
Global Certificate must provide Euroclear or Clearstream, as the case may be,
with a certificate in the form of Annex A to Exhibit B-1 hereto certifying that
the beneficial owner of the interest in such Global Certificate is not a U.S.
Person (as defined in Regulation S), and Euroclear or Clearstream, as the case
may be, must provide to the Trustee and Securities Administrator a certificate
in the form of Exhibit B-1 hereto prior to (i) the payment of interest or
principal with respect to such holder's beneficial interest in the Regulation S
Temporary Global Certificate and (ii) any exchange of such beneficial interest
for a beneficial interest in a Regulation S Permanent Global Certificate.

                  (c)No transfer of a Class B Certificate, Class CE Certificate,
Class P Certificate or a Residual Certificate or any interest therein shall be
made to any Plan subject to ERISA or Section 4975 of the Code, any Person
acting, directly or indirectly, on behalf of any such Plan or any Person
acquiring such Certificates with "Plan Assets" of a Plan within the meaning of
the Department of Labor regulation promulgated at 29 C.F.R. ss. 2510.3-101
("Plan Assets") unless (i) in the case of the Class CE, Class P or Residual
Certificates, the Securities Administrator is provided with an Opinion of
Counsel on which the Depositor, the Master Servicer, the Securities
Administrator, the Trustee and the Servicer may rely, which establishes to the
satisfaction of the Securities Administrator that the purchase of such
Certificates is permissible under applicable law, will not constitute or result
in any prohibited transaction under ERISA or Section 4975 of the Code and will
not subject the Depositor, the Servicer, the Trustee, the Master Servicer, the
Securities Administrator or the Trust Fund to any obligation or liability
(including obligations or liabilities under ERISA or Section 4975 of

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the Code) in addition to those undertaken in this Agreement, which Opinion of
Counsel shall not be an expense of the Depositor, the Servicer, the Trustee, the
Master Servicer, the Securities Administrator, the Trust Fund or (ii) in the
case of the Class B Certificates, the Transferee represents and warrants, or is
deemed to represent and warrant, that (1) it is an insurance company, (2) the
source of funds used to acquire or hold the certificate or interest therein is
an "insurance company general account," as such term is defined in Prohibited
Transaction Class Exemption ("PTCE") 95-60, and (3) the conditions in Sections I
and III of PTCE 95-60 have been satisfied. An Opinion of Counsel will not be
required in connection with the initial transfer of any such Certificate by the
Depositor to an affiliate of the Depositor (in which case, the Depositor or any
affiliate thereof shall have deemed to have represented that such affiliate is
not a Plan or a Person investing Plan Assets) and the Securities Administrator
shall be entitled to conclusively rely upon a representation (which, upon the
request of the Securities Administrator, shall be a written representation) from
the Depositor of the status of such transferee as an affiliate of the Depositor.

                  Each Transferee of a Mezzanine Certificate will be deemed to
have represented by virtue of its purchase or holding of such Certificate (or
interest therein) that either (a) such Transferee is not a Plan or purchasing
such Certificate with Plan Assets, (b) it has acquired and is holding such
Certificate in reliance on Prohibited Transaction Exemption ("PTE") 94-84 or FAN
97-03E, as amended by PTE 97-34, 62 Fed. Reg. 39021 (July 21, 1997), PTE
2000-58, 65 Fed. Reg. 67765 (November 13, 2000) and PTE 2002-41, 67 Fed. Reg.
54487 (August 22, 2002) (the "Exemption"), and that it understands that there
are certain conditions to the availability of the Exemption including that such
Certificate must be rated, at the time of purchase, not lower than "BBB-" (or
its equivalent) by a Rating Agency or (c) the following conditions are
satisfied: (i) such Transferee is an insurance company, (ii) the source of funds
used to purchase or hold such Certificate (or interest therein) is an "insurance
company general account" (as defined in PTCE 95-60, and (iii) the conditions set
forth in Sections I and III of PTCE 95-60 have been satisfied.

                  If any Certificate or any interest therein is acquired or held
in violation of the conditions described in this Section 6.02(c), the next
preceding permitted beneficial owner will be treated as the beneficial owner of
that Certificate, retroactive to the date of transfer to the purported
beneficial owner. Any purported beneficial owner whose acquisition or holding of
any certificate or interest therein was effected in violation of the conditions
described in this Section 6.02(c) shall indemnify and hold harmless the
Depositor, the Trustee, the Servicer, the Master Servicer, the Securities
Administrator and the Trust Fund from and against any and all liabilities,
claims, costs or expenses incurred by those parties as a result of that
acquisition or holding.

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

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

                                    (B) In connection with any proposed Transfer
                  of any Ownership Interest in a Residual Certificate, the
                  Trustee shall require delivery to it, and shall not register
                  the Transfer of any Residual Certificate until its receipt of,
                  an affidavit and agreement (a "Transfer Affidavit and
                  Agreement," in the form attached hereto as Exhibit B-3) from
                  the proposed Transferee, in form and substance satisfactory to
                  the Securities Administrator, representing and warranting,
                  among other things, that such Transferee is a Permitted
                  Transferee, that it is not acquiring its Ownership Interest in
                  the Residual Certificate that is the subject of the proposed
                  Transfer as a nominee, trustee or agent for any Person that is
                  not a Permitted Transferee, that for so long as it retains its
                  Ownership Interest in a Residual Certificate, it will endeavor
                  to remain a Permitted Transferee, and that it has reviewed the
                  provisions of this Section 6.02(d) and agrees to be bound by
                  them.

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

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

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

                           (ii) The Securities Administrator will register the
         Transfer of any Residual Certificate only if it shall have received the
         Transfer Affidavit and Agreement and all of such other documents as
         shall have been reasonably required by the Securities Administrator as
         a condition to such registration. In addition, no Transfer of a
         Residual Certificate shall be made unless the Securities Administrator
         shall have received a

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         representation letter from the Transferee of such Certificate to the
         effect that such Transferee is a Permitted Transferee.

                           (iii) (A) If any purported Transferee shall become a
         Holder of a Residual Certificate in violation of the provisions of this
         Section 6.02(d), then the last preceding Permitted Transferee shall be
         restored, to the extent permitted by law, to all rights as holder
         thereof retroactive to the date of registration of such Transfer of
         such Residual Certificate. The Securities Administrator shall be under
         no liability to any Person for any registration of Transfer of a
         Residual Certificate that is in fact not permitted by this Section
         6.02(d) or for making any payments due on such Certificate to the
         holder thereof or for taking any other action with respect to such
         holder under the provisions of this Agreement.

                                    (B) If any purported Transferee shall become
                  a holder of a Residual Certificate in violation of the
                  restrictions in this Section 6.02(d) and to the extent that
                  the retroactive restoration of the rights of the holder of
                  such Residual Certificate as described in clause (iii)(A)
                  above shall be invalid, illegal or unenforceable, then the
                  Securities Administrator shall have the right, without notice
                  to the holder or any prior holder of such Residual
                  Certificate, to sell such Residual Certificate to a purchaser
                  selected by the Securities Administrator on such terms as the
                  Securities Administrator may choose. Such purported Transferee
                  shall promptly endorse and deliver each Residual Certificate
                  in accordance with the instructions of the Securities
                  Administrator. Such purchaser may be the Securities
                  Administrator itself or any Affiliate of the Securities
                  Administrator. The proceeds of such sale, net of the
                  commissions (which may include commissions payable to the
                  Securities Administrator or its Affiliates), expenses and
                  taxes due, if any, will be remitted by the Securities
                  Administrator to such purported Transferee. The terms and
                  conditions of any sale under this clause (iii)(B) shall be
                  determined in the sole discretion of the Securities
                  Administrator, and the Securities Administrator shall not be
                  liable to any Person having an Ownership Interest in a
                  Residual Certificate as a result of its exercise of such
                  discretion.

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

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                           (v)The provisions of this Section 6.02(d) set forth
         prior to this subsection (v) may be modified, added to or eliminated,
         provided that there shall have been delivered to the Securities
         Administrator at the expense of the party seeking to modify, add to or
         eliminate any such provision the following:

                                    (A)written notification from each Rating
                  Agency to the effect that the modification, addition to or
                  elimination of such provisions will not cause such Rating
                  Agency to downgrade its then-current ratings of any Class of
                  Certificates (and with respect to the Insured Certificates,
                  without regard to the Certificate Insurance Policy); and

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

                  (e)Subject to the preceding subsections, upon surrender for
registration of transfer of any Certificate at any office or agency of the
Securities Administrator maintained for such purpose pursuant to Section 9.11,
the Securities Administrator shall execute, authenticate and deliver, in the
name of the designated Transferee or Transferees, one or more new Certificates
of the same Class of a like aggregate Percentage Interest.

                  (f)At the option of the Holder thereof, any Certificate may be
exchanged for other Certificates of the same Class with authorized denominations
and a like aggregate Percentage Interest, upon surrender of such Certificate to
be exchanged at any office or agency of the Securities Administrator maintained
for such purpose pursuant to Section 9.11. Whenever any Certificates are so
surrendered for exchange, the Securities Administrator shall execute,
authenticate and deliver, the Certificates which the Certificateholder making
the exchange is entitled to receive. Every Certificate presented or surrendered
for transfer or exchange shall (if so required by the Securities Administrator)
be duly endorsed by, or be accompanied by a written instrument of transfer in
the form satisfactory to the Securities Administrator duly executed by, the
Holder thereof or his attorney duly authorized in writing.

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

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

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                  Section 6.03. MUTILATED, DESTROYED, LOST OR STOLEN
CERTIFICATES.

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

                  Section 6.04. PERSONS DEEMED OWNERS.

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

                  Section 6.05. CERTAIN AVAILABLE INFORMATION.

                  On or prior to the date of the first sale of any Class CE
Certificate, Class P Certificate or Residual Certificate to an Independent third
party, the Depositor shall provide to the Securities Administrator ten copies of
any private placement memorandum or other disclosure document used by the
Depositor in connection with the offer and sale of such Certificate. In
addition, if any such private placement memorandum or disclosure document is
revised, amended or supplemented at any time following the delivery thereof to
the Securities Administrator, the Depositor promptly shall inform the Securities
Administrator of such event and shall deliver to the Securities Administrator
ten copies of the private placement memorandum or disclosure document, as
revised, amended or supplemented. The Securities Administrator shall maintain at
its office as set forth in Section 12.05 hereof and shall make available free of
charge during normal business hours for review by any Holder of a Certificate or
any Person identified to the Securities Administrator as a prospective
transferee of a Certificate, originals or copies of the following items: (i) in
the case of a Holder or prospective transferee of a Class CE Certificate, Class
P Certificate or Residual Certificate, the related private placement memorandum
or other disclosure document relating to such Class of Certificates, in the form
most recently provided to the Securities Administrator; and (ii) in all cases,
(A) this Agreement and any amendments hereof entered into pursuant to Section
11.01, (B) all monthly statements required to be delivered to Certificateholders
of the relevant Class

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pursuant to Section 4.02 since the Closing Date, and all other notices, reports,
statements and written communications delivered to the Certificateholders of the
relevant Class pursuant to this Agreement since the Closing Date and (C) any
copies of all Officers' Certificates of the Servicer since the Closing Date
delivered to the Master Servicer to evidence such Person's determination that
any P&I Advance or Servicing Advance was, or if made, would be a Nonrecoverable
P&I Advance or Nonrecoverable Servicing Advance. Copies and mailing of any and
all of the foregoing items will be available from the Securities Administrator
upon request at the expense of the Person requesting the same.

                  Section 6.06. RIGHTS OF THE CERTIFICATE INSURER TO EXERCISE
RIGHTS OF CLASS A-1B CERTIFICATEHOLDERS.

                  (a)By accepting its Certificate, each Class A-1B
Certificateholder agrees that, unless a Certificate Insurer Default exists, the
Certificate Insurer shall be deemed to be the Class A-1B Certificateholders for
all purposes (other than with respect to the receipt of payment on such Classes
of Certificates except payments with respect to which the Certificate Insurer
has subrogation rights as set forth herein) and shall have the right to exercise
all rights of such Certificateholders under this Agreement and under the Class
A-1B Certificates without any further consent of such Certificateholders.

                  (b)All notices, statement reports, certificates or opinions
required by this Agreement to be sent to any Class A-1B Certificateholder shall
also be sent to the Certificate Insurer.

                  (c)(x) On the Distribution Date immediately after the
expiration of the Term of the Certificate Insurance Policy (as such term is
defined in the Certificate Insurance Policy) or (y) during the occurrence of a
Certificate Insurer Default (until such time as it has been cured), the rights,
consents and notifications granted to the Certificate Insurer in this Agreement
shall be extinguished.

                  Section 6.07. CERTIFICATE INSURER DEFAULT.

                  Notwithstanding anything elsewhere in this Agreement or in the
Certificates to the contrary, if (i) a Certificate Insurer Default exists and is
continuing or (ii) if and to the extent the Certificate Insurer has delivered
its written renunciation of all of its rights under this Agreement, all
provisions of this Agreement which (a) permit the Certificate Insurer to
exercise rights of the Class A-1B Certificateholders, (b) restrict the ability
of the Certificateholders, the Master Servicer or the Trustee to act without the
consent or approval of the Certificate Insurer, (c) provide that a particular
act or thing must be acceptable to the Certificate Insurer, (d) permit the
Certificate Insurer to direct (or otherwise to require) the actions of the
Trustee, the Master Servicer or the Certificateholders, (e) provide that any
action or omission taken with the consent, approval or authorization of the
Certificate Insurer shall be authorized hereunder or shall not subject the party
taking or omitting to take such action to any liability hereunder or (f) have a
similar effect, shall be of no further force and effect and the Trustee shall
administer the Trust Fund and perform its obligations hereunder solely for the
benefit of the Holders of the Certificates. Nothing in the foregoing sentence,
nor any action taken pursuant thereto or in compliance therewith, shall be
deemed (x) to have released the Certificate Insurer from any

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obligation or liability it may have to any party or to the Class A-1B
Certificateholders hereunder, under any other agreement, instrument or document
(including, without limitation, the Certificate Insurance Policy) or under
applicable law or (y) to have terminated (1) the Certificate Insurer's right to
receive Reimbursement Amounts under this Agreement or its subrogation to the
rights of the Holders of the Class A-1B Certificates under this Agreement or the
Certificate Insurance Policy, (2) the Certificate Insurer's right to receive
reports and distributions as described in this Agreement or (3) the requirement
that the Certificate Insurer approve any amendments to this Agreement that would
adversely affect the aforementioned rights. At such time as the Class A-1B
Certificates are no longer outstanding hereunder, and no amounts owed to the
Certificate Insurer hereunder with respect to the Class A-1B remain unpaid, the
Certificate Insurer's rights hereunder shall terminate.

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                                  ARTICLE VII

               THE DEPOSITOR, THE SERVICER AND THE MASTER SERVICER

                  Section 7.01. LIABILITY OF THE DEPOSITOR, THE SERVICER AND THE
MASTER SERVICER.

                  The Depositor, the Servicer and the Master Servicer each shall
be liable in accordance herewith only to the extent of the obligations
specifically imposed by this Agreement upon them in their respective capacities
as Depositor, Servicer and Master Servicer and undertaken hereunder by the
Depositor, the Servicer and the Master Servicer herein.

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

                  Subject to the following paragraph, the Depositor will keep in
full effect its existence, rights and franchises as a corporation under the laws
of the jurisdiction of its incorporation. Subject to the following paragraph,
the Servicer will keep in full effect its existence, rights and franchises as a
corporation under the laws of the jurisdiction of its incorporation. Subject to
the following paragraph, the Master Servicer will keep in full effect its
existence, rights and franchises as a corporation under the laws of the
jurisdiction of its formation. The Depositor, the Servicer and the Master
Servicer each will obtain and preserve its qualification to do business as a
foreign corporation in each jurisdiction in which such qualification is or shall
be necessary to protect the validity and enforceability of this Agreement, the
Certificates or any of the Mortgage Loans and to perform its respective duties
under this Agreement.

                  The Depositor, the Servicer or the Master Servicer may be
merged or consolidated with or into any Person, or transfer all or substantially
all of its assets to any Person, in which case any Person resulting from any
merger or consolidation to which the Depositor, the Servicer or the Master
Servicer shall be a party, or any Person succeeding to the business of the
Depositor, the Servicer or the Master Servicer, shall be the successor of the
Depositor, the Servicer or the Master Servicer, as the case may be, hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding;
provided, however, that any successor of the Servicer or the Master Servicer
shall meet the eligibility requirements set forth in clauses (i) and (iii) of
the last paragraph of Section 8.02(a) or Section 7.06, as applicable.

                  Section 7.03. LIMITATION ON LIABILITY OF THE DEPOSITOR, THE
SERVICER, THE MASTER SERVICER AND OTHERS.

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

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specific liability imposed on any such Person pursuant hereto or against any
liability which would otherwise be imposed by reason of willful misfeasance, bad
faith or gross negligence in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder. The Depositor, the Servicer, the
Securities Administrator, the Master Servicer and any director, officer,
employee or agent of the Depositor, the Servicer, the Securities Administrator
and the Master Servicer may rely in good faith on any document of any kind
which, PRIMA FACIE, is properly executed and submitted by any Person respecting
any matters arising hereunder. The Depositor, the Servicer, the Securities
Administrator, the Master Servicer and any director, officer, employee or agent
of the Depositor, the Servicer, the Securities Administrator or the Master
Servicer shall be indemnified and held harmless by the Trust Fund against any
loss, liability or expense incurred in connection with any legal action relating
to this Agreement, the Certificates or any Credit Risk Management Agreement or
any loss, liability or expense incurred other than by reason of willful
misfeasance, bad faith or gross negligence in the performance of duties
hereunder or by reason of reckless disregard of obligations and duties
hereunder. None of the Depositor, the Servicer, the Securities Administrator or
the Master Servicer shall be under any obligation to appear in, prosecute or
defend any legal action unless such action is related to its respective duties
under this Agreement and, in its opinion, does not involve it in any expense or
liability; provided, however, that each of the Depositor, the Servicer, the
Securities Administrator and the Master Servicer may in its discretion undertake
any such action which it may deem necessary or desirable with respect to this
Agreement and the rights and duties of the parties hereto and the interests of
the Certificateholders hereunder. In such event, the legal expenses and costs of
such action and any liability resulting therefrom (except any loss, liability or
expense incurred by reason of willful misfeasance, bad faith or gross negligence
in the performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder) shall be expenses, costs and liabilities of
the Trust Fund, and the Depositor, the Servicer, the Securities Administrator
and the Master Servicer shall be entitled to be reimbursed therefor from the
Collection Account or the Distribution Account as and to the extent provided in
Article III and Article IV, any such right of reimbursement being prior to the
rights of the Certificateholders to receive any amount in the Collection Account
and the Distribution Account.

                  Notwithstanding anything to the contrary contained herein, the
Servicer shall not be liable for any actions or inactions prior to the Cut-off
Date of any prior servicer of the Mortgage Loans and the Master Servicer shall
not be liable for any action or inaction of the Servicer, except to the extent
expressly provided herein, or the Credit Risk Manager.

                  Section 7.04. LIMITATION ON RESIGNATION OF THE SERVICER.

                  (a) The Servicer shall neither assign all or substantially all
of its rights under this Agreement or the servicing hereunder nor delegate all
or substantially all of its duties hereunder nor sell or otherwise dispose of
all or substantially all of its property or assets (other than as provided in
Section 7.02) without, in each case, the prior written consent of the Master
Servicer and the Certificate Insurer, which consent shall not be unreasonably
withheld; provided, that in each case, there must be delivered to the Trustee
and the Master Servicer a letter from each Rating Agency to the effect that such
transfer of servicing or sale or disposition of all or substantially all of
servicer's property or assets (other than as provided in Section 7.02) will not
result in a qualification, withdrawal or downgrade of the then-current

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rating of any of the Certificates (and with respect to the Insured Certificates,
without regard to the Certificate Insurance Policy). Notwithstanding the
foregoing, the Servicer, without the consent of the Trustee or the Master
Servicer, may retain third-party contractors to perform certain servicing and
loan administration functions, including without limitation hazard insurance
administration, tax payment and administration, flood certification and
administration, collection services and similar functions, PROVIDED, HOWEVER,
that the retention of such contractors by the Servicer shall not limit the
obligation of the Servicer to service the Mortgage Loans pursuant to the terms
and conditions of this Agreement. The Servicer shall not resign from the
obligations and duties hereby imposed on it except by consent of the Master
Servicer or upon determination that its duties hereunder are no longer
permissible under applicable law or as provided in Section 7.04(c). Any such
determination pursuant to the preceding sentence permitting the resignation
(other than pursuant to Section 7.04(c)) of the Servicer shall be evidenced by
an Opinion of Counsel to such effect obtained at the expense of the Servicer and
delivered to the Trustee and the Rating Agencies. No resignation of the Servicer
shall become effective until the Master Servicer or a successor Servicer shall
have assumed the Servicer's responsibilities, duties, liabilities (other than
those liabilities arising prior to the appointment of such successor) and
obligations under this Agreement.

                  (b) Except as expressly provided herein, the Servicer shall
not assign or transfer any of its rights, benefits or privileges hereunder to
any other Person, or delegate to or subcontract with, or authorize or appoint
any other Person to perform any of the duties, covenants or obligations to be
performed by the Servicer hereunder. The foregoing prohibition on assignment
shall not prohibit the Servicer from designating a Sub-Servicer as payee of any
indemnification amount payable to the Servicer hereunder; provided, however,
that as provided in Section 3.02, no Sub-Servicer shall be a third-party
beneficiary hereunder and the parties hereto shall not be required to recognize
any Sub-Servicer as an indemnitee under this Agreement.

                  (c) Notwithstanding anything to the contrary herein, the
Servicer may pledge or assign as collateral all its rights, title and interest
under this Agreement to a lender (the "Lender"), provided, that:

                                    (1) upon an Event of Default and receipt of
                  a notice of termination by the Servicer, the Lender may direct
                  the Servicer or its designee to appoint a successor Servicer
                  pursuant to the provisions, and subject to the conditions, set
                  forth in Section 8.02 regarding the Servicer's appointment of
                  a successor Servicer;

                                    (2) the Lender's rights are subject to this
                  Agreement; and

                                    (3) the Servicer shall remain subject to
                  termination as servicer under this Agreement pursuant to the
                  terms hereof.

                  Section 7.05. LIMITATION ON RESIGNATION OF THE MASTER
SERVICER.

                  The Master Servicer shall not resign from the obligations and
duties hereby imposed on it except upon determination that its duties hereunder
are no longer permissible

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under applicable law. Any such determination pursuant to the preceding sentence
permitting the resignation of the Master Servicer shall be evidenced by an
Opinion of Counsel to such effect obtained at the expense of the Master Servicer
and delivered to the Trustee and the Rating Agencies. No resignation of the
Master Servicer shall become effective until the Trustee or a successor Master
Servicer meeting the criteria specified in Section 7.06 shall have assumed the
Master Servicer's responsibilities, duties, liabilities (other than those
liabilities arising prior to the appointment of such successor) and obligations
under this Agreement.

                  Section 7.06. ASSIGNMENT OF MASTER SERVICING.

                  The Master Servicer may sell and assign its rights and
delegate its duties and obligations in its entirety as Master Servicer under
this Agreement; provided, however, that: (i) the purchaser or transferee accept
in writing such assignment and delegation and assume the obligations of the
Master Servicer hereunder (a) shall have a net worth of not less than
$15,000,000 (unless otherwise approved by each Rating Agency pursuant to clause
(ii) below); (b) shall be reasonably satisfactory to the Trustee (as evidenced
in a writing signed by the Trustee) and the Certificate Insurer; and (c) shall
execute and deliver to the Trustee an agreement, in form and substance
reasonably satisfactory to the Trustee, which contains an assumption by such
Person of the due and punctual performance and observance of each covenant and
condition to be performed or observed by it as master servicer under this
Agreement, any custodial agreement from and after the effective date of such
agreement; (ii) each Rating Agency shall be given prior written notice of the
identity of the proposed successor to the Master Servicer and each Rating
Agency's rating of the Certificates in effect immediately prior to such
assignment, sale and delegation will not be downgraded, qualified or withdrawn
as a result of such assignment, sale and delegation, as evidenced by a letter to
such effect delivered to the Master Servicer and the Trustee; and (iii) the
Master Servicer assigning and selling the master servicing shall deliver to the
Trustee an officer's certificate and an Opinion of Independent counsel, each
stating that all conditions precedent to such action under this Agreement have
been completed and such action is permitted by and complies with the terms of
this Agreement. No such assignment or delegation shall affect any liability of
the Master Servicer arising out of acts or omissions prior to the effective date
thereof.

                  Section 7.07. RIGHTS OF THE DEPOSITOR IN RESPECT OF THE
SERVICER AND THE MASTER SERVICER.

                  Each of the Master Servicer and the Servicer shall afford (and
any Sub-Servicing Agreement shall provide that each Sub-Servicer shall afford)
the Depositor and the Trustee, upon reasonable notice, during normal business
hours, access to all records maintained by the Master Servicer or the Servicer
(and any such Sub-Servicer) in respect of the Servicer's rights and obligations
hereunder and access to officers of the Master Servicer or the Servicer (and
those of any such Sub-Servicer) responsible for such obligations, and the Master
Servicer shall have access to all such records maintained by the Servicer and
any Sub-Servicers. Upon request, each of the Master Servicer and the Servicer
shall furnish to the Depositor and the Trustee its (and any such Sub-Servicer's)
most recent financial statements (or, in the case of the Servicer, the most
recent financial statements of the consolidated group that includes the
Servicer) and such other information relating to the Master Servicer's or the
Servicer's capacity to perform its obligations under this Agreement as it
possesses (and that any such Sub-Servicer possesses). To the extent

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such information is not otherwise available to the public, the Depositor and the
Trustee shall not disseminate any information obtained pursuant to the preceding
two sentences without the Master Servicer's or the Servicer's written consent,
except as required pursuant to this Agreement or to the extent that it is
appropriate to do so (i) to its legal counsel, auditors, taxing authorities or
other governmental agencies and the Certificateholders, (ii) pursuant to any
law, rule, regulation, order, judgment, writ, injunction or decree of any court
or governmental authority having jurisdiction over the Depositor and the Trustee
or the Trust Fund, and in any case, the Depositor or the Trustee, (iii)
disclosure of any and all information that is or becomes publicly known, or
information obtained by the Trustee from sources other than the Depositor, the
Servicer or the Master Servicer, (iv) disclosure as required pursuant to this
Agreement or (v) disclosure of any and all information (A) in any preliminary or
final offering circular, registration statement or contract or other document
pertaining to the transactions contemplated by the Agreement approved in advance
by the Depositor, the Servicer or the Master Servicer or (B) to any affiliate,
independent or internal auditor, agent, employee or attorney of the Trustee
having a need to know the same, provided that the Trustee advises such recipient
of the confidential nature of the information being disclosed, shall use its
best efforts to assure the confidentiality of any such disseminated non-public
information. Nothing in this Section 7.07 shall limit the obligation of the
Servicer to comply with any applicable law prohibiting disclosure of information
regarding the Mortgagors and the failure of the Servicer to provide access as
provided in this Section 7.07 as a result of such obligation shall not
constitute a breach of this Section. Nothing in this Section 7.07 shall require
the Servicer to collect, create, collate or otherwise generate any information
that it does not generate in its usual course of business. The Servicer shall
not be required to make copies of or ship documents to any party unless
provisions have been made for the reimbursement of the costs thereof. The
Depositor may, but is not obligated to, enforce the obligations of the Master
Servicer and the Servicer under this Agreement and may, but is not obligated to,
perform, or cause a designee to perform, any defaulted obligation of the Master
Servicer or the Servicer under this Agreement or exercise the rights of the
Master Servicer or the Servicer under this Agreement; provided that neither the
Master Servicer nor the Servicer shall be relieved of any of its obligations
under this Agreement by virtue of such performance by the Depositor or its
designee. The Depositor shall not have any responsibility or liability for any
action or failure to act by the Master Servicer or the Servicer and is not
obligated to supervise the performance of the Master Servicer or the Servicer
under this Agreement or otherwise.

                  Section 7.08. DUTIES OF THE CREDIT RISK MANAGER.

                  For and on behalf of the Depositor, the Credit Risk Manager
will provide reports and recommendations concerning certain delinquent and
defaulted Mortgage Loans, and as to the collection of any Prepayment Charges
with respect to the Mortgage Loans. Such reports and recommendations will be
based upon information provided to the Credit Risk Manager pursuant to the
Credit Risk Management Agreements, and the Credit Risk Manager shall look solely
to the Servicer and/or Master Servicer for all information and data (including
loss and delinquency information and data) relating to the servicing of the
related Mortgage Loans. Upon any termination of the Credit Risk Manager or the
appointment of a successor Credit Risk Manager, the Depositor shall give written
notice thereof to the Servicer, the Master Servicer, the Trustee, and each
Rating Agency. Notwithstanding the foregoing, the termination of the Credit Risk

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Manager pursuant to this Section shall not become effective until the
appointment of a successor Credit Risk Manager.

                  Section 7.09. LIMITATION UPON LIABILITY OF THE CREDIT RISK
MANAGER.

                  Neither the Credit Risk Manager, nor any of its directors,
officers, employees, or agents shall be under any liability to the Trustee, the
Certificateholders, or the Depositor for any action taken or for refraining from
the taking of any action made in good faith pursuant to this Agreement, in
reliance upon information provided by the Servicer under the related Credit Risk
Management Agreement, or for errors in judgment; provided, however, that this
provision shall not protect the Credit Risk Manager or any such person against
liability that would otherwise be imposed by reason of willful malfeasance or
bad faith in its performance of its duties. The Credit Risk Manager and any
director, officer, employee, or agent of the Credit Risk Manager may rely in
good faith on any document of any kind PRIMA FACIE properly executed and
submitted by any Person respecting any matters arising hereunder, and may rely
in good faith upon the accuracy of information furnished by the Servicer
pursuant to the related Credit Risk Management Agreement in the performance of
its duties thereunder and hereunder.

                  Section 7.10. REMOVAL OF THE CREDIT RISK MANAGER.

                  The Credit Risk Manager may be removed as Credit Risk Manager
by Certificateholders holding not less than 66 2/3% of the Voting Rights in the
Trust Fund, in the exercise of its or their sole discretion. The
Certificateholders shall provide written notice of the Credit Risk Manager's
removal to the Trustee. Upon receipt of such notice, the Trustee shall provide
written notice to the Credit Risk Manager of its removal, which shall be
effective upon receipt of such notice by the Credit Risk Manager.

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                                  ARTICLE VIII

                                     DEFAULT

                  Section 8.01. SERVICER EVENTS OF DEFAULT.

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

                           (i) any failure by the Servicer to remit to the
         Securities Administrator for distribution to the Certificateholders any
         payment (other than a P&I Advance required to be made from its own
         funds on any Servicer Remittance Date pursuant to Section 5.03)
         required to be made under the terms of the Certificates and this
         Agreement which continues unremedied for a period of one Business Day
         after the date upon which written notice of such failure, requiring the
         same to be remedied, shall have been given to the Servicer by the
         Depositor or the Trustee (in which case notice shall be provided by
         telecopy), or to the Servicer, the Depositor, the Trustee and by the
         Holders of Certificates entitled to at least 25% of the Voting Rights;
         or

                           (ii) any failure on the part of the Servicer duly to
         observe or perform in any material respect any other of the covenants
         or agreements on the part of the Servicer contained in this Agreement,
         or the material breach by the Servicer of any representation and
         warranty contained in Section 2.05, which continues unremedied for a
         period of 30 days after the date on which written notice of such
         failure, requiring the same to be remedied, shall have been given to
         the Servicer by the Depositor or the Trustee or to the Servicer, the
         Depositor and the Trustee by the Holders of Certificates entitled to at
         least 25% of the Voting Rights; provided, however, that in the case of
         a failure that cannot be cured within thirty (30) days, the cure period
         may be extended for an additional thirty (30) days if the Servicer can
         demonstrate to the reasonable satisfaction of the Trustee that the
         Servicer is diligently pursuing remedial action; or

                           (iii) a decree or order of a court or agency or
         supervisory authority having jurisdiction in the premises in an
         involuntary case under any present or future federal or state
         bankruptcy, insolvency or similar law or the appointment of a
         conservator or receiver or liquidator in any insolvency, readjustment
         of debt, marshalling of assets and liabilities or similar proceeding,
         or for the winding-up or liquidation of its affairs, shall have been
         entered against the Servicer and such decree or order shall have
         remained in force undischarged or unstayed for a period of 90 days; or

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

                           (v) the 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;

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<PAGE>

                           (vi) failure by the Servicer to duly perform, within
         the required time period, its obligations under Section 3.17, 3.18 or
         3.19 which failure continues unremedied for a period of ten (10) days
         after the date on which written notice of such failure, requiring the
         same to be remedied, shall have been given to the Servicer by any party
         to this Agreement; or

                           (vii) any failure of the Servicer to make any P&I
         Advance on any Servicer Remittance Date required to be made from its
         own funds pursuant to Section 5.03 which continues unremedied until
         3:00 p.m. New York time on the Business Day immediately following the
         Servicer Remittance Date.

If a Servicer Event of Default described in clauses (i) through (vi) of this
Section shall occur, then, and in each and every such case, so long as such
Servicer Event of Default shall not have been remedied, the Depositor or the
Trustee may, and at the written direction of the Holders of Certificates
entitled to at least 51% of Voting Rights, the Trustee shall, by notice in
writing to the Servicer (and to the Depositor if given by the Trustee or to the
Trustee if given by the Depositor) with a copy to the Master Servicer and each
Rating Agency, terminate all of the rights and obligations of the Servicer in
its capacity as the Servicer under this Agreement, to the extent permitted by
law, and in and to the Mortgage Loans and the proceeds thereof. If a Servicer
Event of Default described in clause (vii) hereof shall occur, the Trustee
shall, by notice in writing to the Servicer, the Depositor and the Master
Servicer, terminate all of the rights and obligations of the Servicer in its
capacity as the Servicer under this Agreement and in and to the Mortgage Loans
and the proceeds thereof. Subject to Section 8.02, on or after the receipt by
the Servicer of such written notice, all authority and power of the Servicer
under this Agreement, whether with respect to the Certificates (other than as a
Holder of any Certificate) or the Mortgage Loans or otherwise, shall pass to and
be vested in the Master Servicer pursuant to and under this Section, and,
without limitation, the Master Servicer is hereby authorized and empowered, as
attorney-in-fact or otherwise, to execute and deliver, on behalf of and at the
expense of the Servicer, any and all documents and other instruments and to do
or accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Mortgage Loans and related documents, or
otherwise. The Servicer agrees promptly (and in any event no later than ten
Business Days subsequent to such notice) to provide the Master Servicer with all
documents and records requested by it to enable it to assume the Servicer's
functions under this Agreement, and to cooperate with the Master Servicer in
effecting the termination of the Servicer's responsibilities and rights under
this Agreement, including, without limitation, the transfer within one Business
Day to the Master Servicer for administration by it of all cash amounts which at
the time shall be or should have been credited by the Servicer to the Collection
Account held by or on behalf of the Servicer or thereafter be received with
respect to the Mortgage Loans or any REO Property (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 P&I Advances, Servicing Advances, accrued and unpaid Servicing
Fees or otherwise, and shall continue to be entitled to the benefits of Section
7.03, notwithstanding any such termination, with respect to events occurring
prior to such termination). For purposes of this Section 8.01(a), the Trustee
shall not be deemed to have knowledge of a Servicer Event of Default unless a
Responsible Officer of the Trustee assigned to and working in the Trustee's
Corporate Trust Office has actual knowledge thereof or unless written notice of
any event which is in fact such a

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<PAGE>

Servicer Event of Default is received by the Trustee at its Corporate Trust
Office and such notice references the Certificates, the Trust or this Agreement.
The Trustee shall promptly notify the Master Servicer and the Rating Agencies of
the occurrence of a Servicer Event of Default of which it has knowledge as
provided above.

                  The Master Servicer shall be entitled to be reimbursed by the
Servicer (or from amounts on deposit in the Distribution Account if the Servicer
is unable to fulfill its obligations hereunder) for all reasonable out-of-pocket
or third party costs associated with the transfer of servicing from the
predecessor Servicer (or if the predecessor Servicer is the Master Servicer,
from the Trust), including without limitation, any reasonable out-of-pocket or
third party costs or expenses associated with the complete transfer of all
servicing data and the completion, correction or manipulation of such servicing
data as may be required by the Master Servicer to correct any errors or
insufficiencies in the servicing data or otherwise to enable the Master Servicer
to service the Mortgage Loans properly and effectively, upon presentation of
reasonable documentation of such costs and expenses. The Servicer shall be
responsible for the costs set forth in this paragraph with respect to one
servicing transfer.

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

                           (i) any failure on the part of the Master Servicer
         duly to observe or perform in any material respect any other of the
         covenants or agreements on the part of the Master Servicer contained in
         this Agreement, or the breach by the Master Servicer of any
         representation and warranty contained in Section 2.04, which continues
         unremedied for a period of 30 days after the date on which written
         notice of such failure, requiring the same to be remedied, shall have
         been given to the Master Servicer by the Depositor or the Trustee or to
         the Master Servicer, the Depositor and the Trustee by the Holders of
         Certificates entitled to at least 25% of the Voting Rights; or

                           (ii) a decree or order of a court or agency or
         supervisory authority having jurisdiction in the premises in an
         involuntary case under any present or future federal or state
         bankruptcy, insolvency or similar law or the appointment of a
         conservator or receiver or liquidator in any insolvency, readjustment
         of debt, marshalling of assets and liabilities or similar proceeding,
         or for the winding-up or liquidation of its affairs, shall have been
         entered against the Master Servicer and such decree or order shall have
         remained in force undischarged or unstayed for a period of 90 days; or

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

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

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<PAGE>

If a Master Servicer Event of Default shall occur, then, and in each and every
such case, so long as such Master Servicer Event of Default shall not have been
remedied, the Depositor or the Trustee may, and at the written direction of the
Holders of Certificates entitled to at least 51% of Voting Rights, the Trustee
shall, by notice in writing to the Master Servicer (and to the Depositor if
given by the Trustee or to the Trustee if given by the Depositor) with a copy to
each Rating Agency, terminate all of the rights and obligations of the Master
Servicer in its capacity as Master Servicer under this Agreement, to the extent
permitted by law, and in and to the Mortgage Loans and the proceeds thereof. On
or after the receipt by the Master Servicer of such written notice, all
authority and power of the Master Servicer under this Agreement, whether with
respect to the Certificates (other than as a Holder of any Certificate) or the
Mortgage Loans or otherwise including, without limitation, the compensation
payable to the Master Servicer under this Agreement, shall pass to and be vested
in the Trustee pursuant to and under this Section, and, without limitation, the
Trustee is hereby authorized and empowered, as attorney-in-fact or otherwise, to
execute and deliver, on behalf of and at the expense of the Master Servicer, any
and all documents and other instruments and to do or accomplish all other acts
or things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment of
the Mortgage Loans and related documents, or otherwise. The Master Servicer
agrees promptly (and in any event no later than ten Business Days subsequent to
such notice) to provide the Trustee with all documents and records requested by
it to enable it to assume the Master Servicer's functions under this Agreement,
and to cooperate with the Trustee in effecting the termination of the Master
Servicer's responsibilities and rights under this Agreement (provided, however,
that the Master Servicer shall continue to be entitled to receive all amounts
accrued or owing to it under this Agreement on or prior to the date of such
termination and shall continue to be entitled to the benefits of Section 7.03,
notwithstanding any such termination, with respect to events occurring prior to
such termination). For purposes of this Section 8.01(b), the Trustee shall not
be deemed to have knowledge of a Master Servicer Event of Default unless a
Responsible Officer of the Trustee assigned to and working in the Trustee's
Corporate Trust Office has actual knowledge thereof or unless written notice of
any event which is in fact such a Master Servicer Event of Default is received
by the Trustee and such notice references the Certificates, the Trust or this
Agreement. The Trustee shall promptly notify the Rating Agencies of the
occurrence of a Master Servicer Event of Default of which it has knowledge as
provided above.

                  To the extent that the costs and expenses of the Trustee
related to the termination of the Master Servicer, appointment of a successor
Master Servicer or the transfer and assumption of the master servicing by the
Trustee (including, without limitation, (i) all legal costs and expenses and all
due diligence costs and expenses associated with an evaluation of the potential
termination of the Master Servicer as a result of a Master Servicer Event of
Default and (ii) all costs and expenses associated with the complete transfer of
the master servicing, including all servicing files and all servicing data and
the completion, correction or manipulation of such servicing data as may be
required by the successor Master Servicer to correct any errors or
insufficiencies in the servicing data or otherwise to enable the successor
Master Servicer to master service the Mortgage Loans in accordance with this
Agreement) are not fully and timely reimbursed by the terminated Master
Servicer, the Trustee shall be entitled to reimbursement of such costs and
expenses from the Distribution Account.

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                  Section 8.02. MASTER SERVICER TO ACT; APPOINTMENT OF t
SUCCESSOR.

                  (a)On and after the time the Servicer receives a notice of
termination, the Master Servicer 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 all the responsibilities, duties and
liabilities relating thereto and arising thereafter shall be assumed by the
Master Servicer (except for any representations or warranties of the Servicer
under this Agreement, the responsibilities, duties and liabilities contained in
Section 2.03 and the obligation to deposit amounts in respect of losses pursuant
to Section 3.10(b)) by the terms and provisions hereof including, without
limitation, the Servicer's obligations to make P&I Advances pursuant to Section
5.03; provided, however, that if the Master Servicer is prohibited by law or
regulation from obligating itself to make advances regarding delinquent mortgage
loans, then the Master Servicer shall not be obligated to make P&I Advances
pursuant to Section 5.03; and provided further, that any failure to perform such
duties or responsibilities caused by the Servicer's failure to provide
information required by Section 8.01 shall not be considered a default by the
Master Servicer as successor to the Servicer hereunder; provided, however, that
(1) it is understood and acknowledged by the parties hereto that there will be a
period of transition (not to exceed 90 days) before the actual servicing
functions can be fully transferred to the Master Servicer or any successor
Servicer appointed in accordance with the following provisions and (2) any
failure to perform such duties or responsibilities caused by the Servicer's
failure to provide information required by Section 8.01 shall not be considered
a default by the Master Servicer as successor to the Servicer hereunder. As
compensation therefor, the Master Servicer shall be entitled to the Servicing
Fee and all funds relating to the Mortgage Loans to which the Servicer would
have been entitled if it had continued to act hereunder. Notwithstanding the
above and subject to the immediately following paragraph, the Master Servicer
may, if it shall be unwilling to so act, or shall, if it is unable to so act
promptly appoint or petition a court of competent jurisdiction to appoint, a
Person that satisfies the eligibility criteria set forth below as the successor
to the Servicer under this Agreement in the assumption of all or any part of the
responsibilities, duties or liabilities of the Servicer under this Agreement.

                  Notwithstanding anything herein to the contrary, in no event
shall the Trustee or the Master Servicer be liable for any Servicing Fee or for
any differential in the amount of the Servicing Fee paid hereunder and the
amount necessary to induce any successor Servicer to act as successor Servicer
under this Agreement and the transactions set forth or provided for herein.

                  Any successor Servicer appointed under this Agreement must (i)
be an established mortgage loan servicing institution that is a Fannie Mae and
Freddie Mac approved seller/servicer, (ii) be approved by each Rating Agency by
a written confirmation from each Rating Agency that the appointment of such
successor Servicer would not result in the reduction or withdrawal of the then
current ratings of any outstanding Class of Certificates (without regard to the
Certificate Insurance Policy), (iii) have a net worth of not less than
$15,000,000, (iv) be reasonably acceptable to the Certificate Insurer and (v)
assume all the responsibilities, duties or liabilities of the Servicer (other
than liabilities of the Servicer hereunder incurred prior to termination of the
Servicer under Section 8.01 herein) under this Agreement as if originally named
as a party to this Agreement.

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<PAGE>

                  (b)(1) All servicing transfer costs (including, without
limitation, servicing transfer costs of the type described in Section 8.02(a)
and incurred by the Trustee, the Master Servicer and any successor Servicer
under paragraph (b)(2) below) shall be paid by the terminated Servicer upon
presentation of reasonable documentation of such costs, and if such predecessor
or initial Servicer, as applicable, defaults in its obligation to pay such
costs, the successor Servicer, the Master Servicer and the Trustee shall be
entitled to reimbursement therefor from the assets of the Trust Fund.

                  (2) No appointment of a successor to the Servicer under this
Agreement shall be effective until the assumption by the successor of all of the
Servicer's responsibilities, duties and liabilities hereunder. In connection
with such appointment and assumption described herein, the Trustee may make such
arrangements for the compensation of such successor out of payments on Mortgage
Loans as it and such successor shall agree; PROVIDED, HOWEVER, that no such
compensation shall be in excess of that permitted the Servicer as such
hereunder. The Depositor, the Trustee and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession. Pending appointment of a successor to the Servicer under this
Agreement, the Master Servicer shall act in such capacity as hereinabove
provided.

                  Section 8.03. NOTIFICATION TO CERTIFICATEHOLDERS.

                  (a)Upon any termination of the Servicer or the Master Servicer
pursuant to Section 8.01(a) or (b) or any appointment of a successor to the
Servicer or the Master Servicer pursuant to Section 8.02, the Trustee shall give
prompt written notice thereof to the Certificateholders at their respective
addresses appearing in the Certificate Register.

                  (b)Not later than the later of 60 days after the occurrence of
any event, which constitutes or which, with notice or lapse of time or both,
would constitute a Servicer Event of Default or a Master Servicer Event of
Default or five days after a Responsible Officer of the Trustee becomes aware of
the occurrence of such an event, the Trustee shall transmit by mail to all
Holders of Certificates notice of each such occurrence, unless such default or
Servicer Event of Default or Master Servicer Event of Default shall have been
cured or waived.

                  Section 8.04. WAIVER OF SERVICER EVENTS OF DEFAULT.

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

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                                   ARTICLE IX

             CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR

                  Section 9.01. DUTIES OF TRUSTEE AND SECURITIES ADMINISTRATOR.

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

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

                  The Trustee shall promptly remit to the Servicer any
complaint, claim, demand, notice or other document (collectively, the "Notices")
delivered to the Trustee as a consequence of the assignment of any Mortgage Loan
hereunder and relating to the servicing of the Mortgage Loans; provided than any
such notice (i) is delivered to the Trustee at its Corporate Trust Office, (ii)
contains information sufficient to permit the Trustee to make a determination
that the real property to which such document relates is a Mortgaged Property.
The Trustee shall have no duty hereunder with respect to any Notice it may
receive or which may be alleged to have been delivered to or served upon it
unless such Notice is delivered to it or served upon it at its Corporate Trust
Office and such Notice contains the information required pursuant to clause (ii)
of the preceding sentence.

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

                           (i) Prior to the occurrence of a Master Servicer
         Event of Default, and after the curing or waiver of all such Master
         Servicer Events of Default which may have occurred with respect to the
         Trustee and at all times with respect to the Securities Administrator,
         the duties and obligations of the Trustee shall be determined solely by
         the express provisions of this Agreement, neither the Trustee nor the
         Securities Administrator shall be liable except for the performance of
         such duties and obligations as are

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         specifically set forth in this Agreement, no implied covenants or
         obligations shall be read into this Agreement against the Trustee or
         the Securities Administrator and, in the absence of bad faith on the
         part of the Trustee or the Securities Administrator, respectively, the
         Trustee or the Securities Administrator, respectively, may conclusively
         rely, as to the truth of the statements and the correctness of the
         opinions expressed therein, upon any certificates or opinions furnished
         to the Trustee or the Securities Administrator, respectively, that
         conform to the requirements of this Agreement;

                           (ii) Neither the Trustee nor the Securities
         Administrator shall be liable for an error of judgment made in good
         faith by a Responsible Officer or Responsible Officers of the Trustee
         or an officer or officers of the Securities Administrator,
         respectively, unless it shall be proved that the Trustee or the
         Securities Administrator, respectively, was negligent in ascertaining
         the pertinent facts; and

                           (iii) Neither the Trustee nor the Securities
         Administrator shall be liable with respect to any action taken,
         suffered or omitted to be taken by it in good faith in accordance with
         the direction of the Holders of Certificates entitled to at least 25%
         of the Voting Rights relating to the time, method and place of
         conducting any proceeding for any remedy available to the Trustee or
         the Securities Administrator or exercising any trust or power conferred
         upon the Trustee or the Securities Administrator under this Agreement.

                  Section 9.02. CERTAIN MATTERS AFFECTING TRUSTEE AND SECURITIES
ADMINISTRATOR.

                  (a) Except as otherwise provided in Section 9.01:

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

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

                           (iii) Neither the Trustee nor the Securities
         Administrator shall be under any obligation to exercise any of the
         trusts or powers vested in it by this Agreement or to institute,
         conduct or defend any litigation hereunder or in relation hereto at the
         request, order or direction of any of the Certificateholders, pursuant
         to the provisions of this Agreement, unless such Certificateholders
         shall have offered to the Trustee or the Securities Administrator, as
         the case may be, reasonable security or indemnity satisfactory to it
         against the costs, expenses and liabilities which may be incurred
         therein or thereby; nothing contained herein shall, however, relieve
         the Trustee of the obligation,

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         upon the occurrence of a Master Servicer Event of Default (which has
         not been cured or waived), to exercise such of the rights and powers
         vested in it by this Agreement, and to use the same degree of care and
         skill in their exercise as a prudent person would exercise or use under
         the circumstances in the conduct of such person's own affairs;

                           (iv) Neither the Trustee nor the Securities
         Administrator shall be liable for any action taken, suffered or omitted
         by it in good faith and believed by it to be authorized or within the
         discretion or rights or powers conferred upon it by this Agreement;

                           (v) Prior to the occurrence of a Master Servicer
         Event of Default hereunder and after the curing or waiver of all Master
         Servicer Events of Default which may have occurred with respect to the
         Trustee and at all times with respect to the Securities Administrator,
         neither the Trustee nor the Securities Administrator shall be bound to
         make any investigation into the facts or matters stated in any
         resolution, certificate, statement, instrument, opinion, report,
         notice, request, consent, order, approval, bond or other paper or
         document, unless requested in writing to do so by the Holders of
         Certificates entitled to at least 25% of the Voting Rights; PROVIDED,
         HOWEVER, that if the payment within a reasonable time to the Trustee or
         the Securities Administrator of the costs, expenses or liabilities
         likely to be incurred by it in the making of such investigation is, in
         the opinion of the Trustee or the Securities Administrator, as
         applicable, not reasonably assured to the Trustee or the Securities
         Administrator by such Certificateholders, the Trustee or the Securities
         Administrator, as applicable, may require reasonable indemnity
         satisfactory to it against such expense, or liability from such
         Certificateholders as a condition to taking any such action;

                           (vi) The Trustee may execute any of the trusts or
         powers hereunder or perform any duties hereunder either directly or by
         or through agents or attorneys and the Trustee shall not be responsible
         for any misconduct or negligence on the part of any agent or attorney
         appointed with due care by it hereunder;

                           (vii) The Trustee shall not be liable for any loss
         resulting from the investment of funds held in the Collection Account,
         for any loss resulting from the investment of funds held in the Reserve
         Fund or for any loss resulting from the redemption or sale of any such
         investment as therein authorized;

                           (viii) The Trustee shall not be deemed to have notice
         of any default, Master Servicer Event of Default or Servicer Event of
         Default unless a Responsible Officer of the Trustee has actual
         knowledge thereof or unless written notice of any event which is in
         fact such a default is received by a Responsible Officer of the Trustee
         at the Corporate Trust Office of the Trustee, and such notice
         references the Certificates and this Agreement; and

                           (ix) The rights, privileges, protections, immunities
         and benefits given to the Trustee, including, without limitation, its
         right to be indemnified, are extended to, and shall be enforceable by,
         each agent, custodian and other Person employed to act hereunder.

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

                  (c)The Trustee is hereby directed by the Depositor to execute
the Cap Contracts on behalf of the Trust Fund in the form presented to it by the
Depositor and shall have no responsibility for the contents of the Cap
Contracts, including, without limitation, the representations and warranties
contained therein. Any funds payable by the Trustee under the Cap Contracts at
closing shall be paid by the Depositor. Notwithstanding anything to the contrary
contained herein or in the Cap Contracts, the Trustee shall not be required to
make any payments to the counterparty under the Cap Contracts.

                  (d)None of the Securities Administrator, the Master Servicer,
the Servicer, the Seller, the Depositor, the Custodian or the Trustee shall be
responsible for the acts or omissions of the others, it being understood that
this Agreement shall not be construed to render those partners joint venturers
or agents of one another.

                  (e)The Depositor hereby directs the Trustee to execute and
deliver the PMI Policy on behalf of the Trust Fund in the form presented to it
by the Depositor. Every provision of this Agreement relating to the conduct or
affecting the liability of or affording protection to the Trustee shall apply to
the Trustee's execution of the PMI Policy, and the performance of its duties and
satisfaction of its obligations thereunder.

                  Section 9.03. TRUSTEE AND SECURITIES ADMINISTRATOR NOT LIABLE
FOR CERTIFICATES OR MORTGAGE LOANS.

                  The recitals contained herein and in the Certificates (other
than the signature of the Securities Administrator, the authentication of the
Securities Administrator on the Certificates, the acknowledgments of the Trustee
contained in Article II and the representations and warranties of the Trustee in
Section 9.12) shall be taken as the statements of the Depositor and neither the
Trustee nor the Securities Administrator assumes any responsibility for their
correctness. Neither the Trustee nor the Securities Administrator makes any
representations or warranties as to the validity or sufficiency of this
Agreement (other than as specifically set forth in Section 9.12) or of the
Certificates (other than the signature of the Securities Administrator and
authentication of the Securities Administrator on the Certificates) or of any
Mortgage Loan or related document. The Trustee and the Securities Administrator
shall not be accountable for the use or application by the Depositor of any of
the Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Depositor or the Master Servicer in respect
of the Mortgage Loans or deposited in or withdrawn from the Collection Account
by the Servicer, other than with respect to the Securities Administrator any
funds held by it or on behalf of the Trustee in accordance with Section 3.23 and
3.24.

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                  Section 9.04. TRUSTEE AND SECURITIES ADMINISTRATOR MAY OWN
CERTIFICATES.

                  Each of the Trustee and the Securities Administrator in its
individual capacity or any other capacity may become the owner or pledgee of
Certificates and may transact business with other interested parties and their
Affiliates with the same rights it would have if it were not Trustee or the
Securities Administrator.

                  Section 9.05. FEES AND EXPENSES OF TRUSTEE AND SECURITIES
ADMINISTRATOR.

                  The fees of the Trustee and the Securities Administrator
hereunder and of Wells Fargo under the Custodial Agreement shall be paid in
accordance with a side letter agreement with the Master Servicer and at the sole
expense of the Master Servicer. In addition, the Trustee, the Securities
Administrator, the Custodian and any director, officer, employee or agent of the
Trustee, the Securities Administrator and the Custodian shall be indemnified by
the Trust and held harmless against any loss, liability or expense (including
reasonable attorney's fees and expenses) incurred by the Trustee, the Custodian
or the Securities Administrator in connection with any claim or legal action or
any pending or threatened claim or legal action arising out of or in connection
with the acceptance or administration of its respective obligations and duties
under this Agreement, including the Cap Contracts and any and all other
agreements related hereto, other than any loss, liability or expense (i) for
which the Trustee is indemnified by the Master Servicer or any Servicer, (ii)
that constitutes a specific liability of the Trustee or the Securities
Administrator pursuant to Section 11.01(g) or (iii) any loss, liability or
expense incurred by reason of willful misfeasance, bad faith or negligence in
the performance of duties hereunder by the Trustee or the Securities
Administrator or by reason of reckless disregard of obligations and duties
hereunder. In no event shall the Trustee or the Securities Administrator be
liable for special, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if it has been
advised of the likelihood of such loss or damage and regardless of the form of
action. The Master Servicer agrees to indemnify the Trustee, from, and hold the
Trustee harmless against, any loss, liability or expense (including reasonable
attorney's fees and expenses) incurred by the Trustee by reason of the Master
Servicer's willful misfeasance, bad faith or gross negligence in the performance
of its duties under this Agreement or by reason of the Master Servicer's
reckless disregard of its obligations and duties under this Agreement. In
addition, the Seller agrees to indemnify the Trustee for, and to hold the
Trustee harmless against, any loss, liability or expense arising out of, or in
connection with, the provisions set forth in the last paragraph of Section 2.01,
including, without limitation, all costs, liabilities and expenses (including
reasonable legal fees and expenses) of investigating and defending itself
against any claim, action or proceeding, pending or threatened, relating to the
provisions of such paragraph. The indemnities in this Section 9.05 shall survive
the termination or discharge of this Agreement and the resignation or removal of
the Master Servicer, the Trustee, the Securities Administrator or the Custodian.
Any payment hereunder made by the Master Servicer to the Trustee shall be from
the Master Servicer's own funds, without reimbursement from REMIC I therefor.

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                  Section 9.06. ELIGIBILITY REQUIREMENTS FOR TRUSTEE AND
SECURITIES ADMINISTRATOR.

                  The Trustee and the Securities Administrator shall at all
times be a corporation or an association (other than the Depositor, the Seller,
the Master Servicer or any Affiliate of the foregoing) organized and doing
business under the laws of any state or the United States of America, authorized
under such laws to exercise corporate trust powers, having a combined capital
and surplus of at least $50,000,000 (or a member of a bank holding company whose
capital and surplus is at least $50,000,000) and subject to supervision or
examination by federal or state authority. If such corporation or association
publishes reports of conditions at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section the combined capital and surplus of such corporation or
association shall be deemed to be its combined capital and surplus as set forth
in its most recent report of conditions so published. In case at any time the
Trustee or the Securities Administrator, as applicable, shall cease to be
eligible in accordance with the provisions of this Section, the Trustee or the
Securities Administrator, as applicable, shall resign immediately in the manner
and with the effect specified in Section 9.07.

                  Section 9.07. RESIGNATION AND REMOVAL OF TRUSTEE AND
SECURITIES ADMINISTRATOR.

                  The Trustee and the Securities Administrator may at any time
resign and be discharged from the trust hereby created by giving written notice
thereof to the Depositor, to the Master Servicer, to the Securities
Administrator (or the Trustee, if the Securities Administrator resigns) and to
the Certificateholders. Upon receiving such notice of resignation, the Depositor
shall promptly appoint a successor trustee or successor securities administrator
by written instrument, in duplicate, which instrument shall be delivered to the
resigning Trustee or Securities Administrator, as applicable, and to the
successor trustee or successor securities administrator, as applicable. A copy
of such instrument shall be delivered to the Certificateholders, the Trustee,
the Securities Administrator and the Master Servicer by the Depositor. If no
successor trustee or successor securities administrator shall have been so
appointed and have accepted appointment within 30 days after the giving of such
notice of resignation, the resigning Trustee or Securities Administrator, as the
case may be, may, at the expense of the Trust Fund, petition any court of
competent jurisdiction for the appointment of a successor trustee, successor
securities administrator, Trustee or Securities Administrator, as applicable.

                  If at any time the Trustee or the Securities Administrator
shall cease to be eligible in accordance with the provisions of Section 9.06 and
shall fail to resign after written request therefor by the Depositor, or if at
any time the Trustee or the Securities Administrator shall become incapable of
acting, or shall be adjudged bankrupt or insolvent, or a receiver of the Trustee
or the Securities Administrator or of its property shall be appointed, or any
public officer shall take charge or control of the Trustee or the Securities
Administrator or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Depositor may remove the Trustee or the
Securities Administrator, as applicable and appoint a successor trustee or
successor securities administrator, as applicable, by written instrument, in
duplicate, which instrument shall be delivered to the Trustee or the Securities
Administrator so removed and to

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the successor trustee or successor securities administrator. A copy of such
instrument shall be delivered to the Certificateholders, the Trustee, the
Securities Administrator and the Master Servicer by the Depositor.

                  The Holders of Certificates entitled to at least 51% of the
Voting Rights may at any time remove the Trustee or the Securities Administrator
and appoint a successor trustee or successor securities administrator by written
instrument or instruments, in triplicate, signed by such Holders or their
attorneys-in-fact duly authorized, one complete set of which instruments shall
be delivered to the Depositor, one complete set to the Trustee or the Securities
Administrator so removed and one complete set to the successor so appointed. A
copy of such instrument shall be delivered to the Certificateholders, the
Trustee (in the case of the removal of the Securities Administrator), the
Securities Administrator (in the case of the removal of the Trustee) and the
Master Servicer by the Depositor.

                  Any resignation or removal of the Trustee or the Securities
Administrator and appointment of a successor trustee or successor securities
administrator pursuant to any of the provisions of this Section shall not become
effective until acceptance of appointment by the successor trustee or successor
securities administrator, as applicable, as provided in Section 8.08.

                  Notwithstanding anything to the contrary contained herein, the
Master Servicer and the Securities Administrator shall at all times be the same
Person.

                  Section 9.08. SUCCESSOR TRUSTEE OR SECURITIES ADMINISTRATOR.

                  Any successor trustee or successor securities administrator
appointed as provided in Section 9.07 shall execute, acknowledge and deliver to
the Depositor and its predecessor trustee or predecessor securities
administrator an instrument accepting such appointment hereunder, and thereupon
the resignation or removal of the predecessor trustee or predecessor securities
administrator shall become effective and such successor trustee or successor
securities administrator without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with the like effect as if originally named as trustee or
securities administrator herein. The predecessor trustee or predecessor
securities administrator shall deliver to the successor trustee or successor
securities administrator all Mortgage Loan Documents and related documents and
statements to the extent held by it hereunder, as well as all moneys, held by it
hereunder, and the Depositor and the predecessor trustee or predecessor
securities administrator shall execute and deliver such instruments and do such
other things as may reasonably be required for more fully and certainly vesting
and confirming in the successor trustee or successor securities administrator
all such rights, powers, duties and obligations.

                  No successor trustee or successor securities administrator
shall accept appointment as provided in this Section unless at the time of such
acceptance such successor trustee or successor securities administrator shall be
eligible under the provisions of Section 8.06 and the appointment of such
successor trustee or successor securities administrator shall not result in a
downgrading of any Class of Certificates by any Rating Agency, as evidenced by a
letter from each Rating Agency.

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                  Upon acceptance of appointment by a successor trustee or
successor securities administrator as provided in this Section, the Depositor
shall mail notice of the succession of such trustee hereunder to all Holders of
Certificates at their addresses as shown in the Certificate Register. If the
Depositor fails to mail such notice within 10 days after acceptance of
appointment by the successor trustee or successor securities administrator, the
successor trustee or successor securities administrator shall cause such notice
to be mailed at the expense of the Depositor.

                  Section 9.09. MERGER OR CONSOLIDATION OF TRUSTEE OR SECURITIES
ADMINISTRATOR.

                  Any corporation or association into which the Trustee or the
Securities Administrator may be merged or converted or with which it may be
consolidated or any corporation or association resulting from any merger,
conversion or consolidation to which the Trustee or the Securities Administrator
shall be a party, or any corporation or association succeeding to the business
of the Trustee or the Securities Administrator shall be the successor of the
Trustee or the Securities Administrator hereunder, provided such corporation or
association shall be eligible under the provisions of Section 8.06, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding.

                  Section 9.10. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.

                  Notwithstanding any other provisions hereof, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the REMIC I or property securing the same may at the time be located,
the Trustee shall have the power and shall execute and deliver all instruments
to appoint one or more Persons approved by the Trustee to act as co-trustee or
co-trustees, jointly with the Trustee, or separate trustee or separate trustees,
of all or any part of REMIC I, and to vest in such Person or Persons, in such
capacity, and for the benefit of the Holders of the Certificates, such title to
REMIC I, or any part thereof, and, subject to the other provisions of this
Section 9.10, such powers, duties, obligations, rights and trusts as the Trustee
may consider necessary or desirable. No co-trustee or separate trustee hereunder
shall be required to meet the terms of eligibility as a successor trustee under
Section 9.06 hereunder and no notice to Holders of Certificates of the
appointment of co-trustee(s) or separate trustee(s) shall be required under
Section 8.08 hereof.

                  In the case of any appointment of a co-trustee or separate
trustee pursuant to this Section 9.10 all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed by the Trustee (whether as
Trustee hereunder or as successor to a defaulting Master Servicer hereunder),
the Trustee shall be incompetent or unqualified to perform such act or acts, in
which event such rights, powers, duties and obligations (including the holding
of title to REMIC I or any portion thereof in any such jurisdiction) shall be
exercised and performed by such separate trustee or co-trustee at the direction
of the Trustee.

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<PAGE>

                  Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article IX. Each separate trustee and co-trustee, upon
its acceptance of the trust conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee, or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or affording
protection to, the Trustee. Every such instrument shall be filed with the
Trustee.

                  Any separate trustee or co-trustee may, at any time,
constitute the Trustee, its agent or attorney-in-fact, with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee or co-trustee.

                  Section 9.11. APPOINTMENT OF OFFICE OR AGENCY.

                  The Certificates may be surrendered for registration of
transfer or exchange at the Securities Administrator's office located at Sixth
and Marquette, Minneapolis, Minnesota 55479, and presented for final
distribution at the Corporate Trust Office of the Securities Administrator where
notices and demands to or upon the Securities Administrator in respect of the
Certificates and this Agreement may be served.

                  Section 9.12. REPRESENTATIONS AND WARRANTIES.

                  The Trustee hereby represents and warrants to the Master
Servicer, the Securities Administrator, the Servicer and the Depositor as
applicable, as of the Closing Date, that:

                           (i) It is a banking corporation duly organized,
         validly existing and in good standing under the laws of the State of
         New York.

                           (ii) The execution and delivery of this Agreement by
         it, and the performance and compliance with the terms of this Agreement
         by it, will not violate its articles of association or bylaws or
         constitute a default (or an event which, with notice or lapse of time,
         or both, would constitute a default) under, or result in the breach of,
         any material agreement or other instrument to which it is a party or
         which is applicable to it or any of its assets.

                           (iii) It has the full power and authority to enter
         into and consummate all transactions contemplated by this Agreement,
         has duly authorized the execution, delivery and performance of this
         Agreement, and has duly executed and delivered this Agreement.

                           (iv) This Agreement, assuming due authorization,
         execution and delivery by the other parties hereto, constitutes a
         valid, legal and binding obligation of it, enforceable against it in
         accordance with the terms hereof, subject to (A) applicable bankruptcy,
         insolvency, receivership, reorganization, moratorium and other laws

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         affecting the enforcement of creditors' rights generally, and (B)
         general principles of equity, regardless of whether such enforcement is
         considered in a proceeding in equity or at law.

                           (v) It is not in violation of, and its execution and
         delivery of this Agreement and its performance and compliance with the
         terms of this Agreement will not constitute a violation of, any law,
         any order or decree of any court or arbiter, or any order, regulation
         or demand of any federal, state or local governmental or regulatory
         authority, which violation, in its good faith and reasonable judgment,
         is likely to affect materially and adversely either the ability of it
         to perform its obligations under this Agreement or its financial
         condition.

                           (vi) No litigation is pending or, to the best of its
         knowledge, threatened against it, which would prohibit it from entering
         into this Agreement or, in its good faith reasonable judgment, is
         likely to materially and adversely affect either the ability of it to
         perform its obligations under this Agreement or its financial
         condition.

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                                   ARTICLE X

                                   TERMINATION

                  Section 10.01. TERMINATION UPON REPURCHASE OR LIQUIDATION OF
ALL MORTGAGE LOANS.

                  (a)Subject to Section 10.02, the respective obligations and
responsibilities under this Agreement of the Depositor, the Master Servicer, the
Securities Administrator, the Servicer and the Trustee (other than the
obligations of the Master Servicer to the Trustee pursuant to Section 9.05 and
of the Servicer to make remittances to the Securities Administrator and the
Securities Administrator to make payments in respect of the REMIC I Regular
Interests, REMIC I Regular Interests or the Classes of Certificates as
hereinafter set forth) shall terminate upon payment to the Certificateholders
and the deposit of all amounts held by or on behalf of the Trustee and required
hereunder to be so paid or deposited on the Distribution Date coinciding with or
following the earlier to occur of (i) the purchase by the Holder of the Class CE
Certificates of all Mortgage Loans and each REO Property remaining in REMIC I
and (ii) the final payment or other liquidation (or any advance with respect
thereto) of the last Mortgage Loan or REO Property remaining in REMIC I;
PROVIDED, HOWEVER, that in no event shall the trust created hereby continue
beyond the expiration of 21 years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late ambassador of the United States to
the Court of St. James, living on the date hereof. The purchase by the Holder of
the Class CE Certificates of all Mortgage Loans and each REO Property remaining
in REMIC I shall be at a price (the "Termination Price") equal to the sum of (i)
the greater of (A) the aggregate Purchase Price of all the Mortgage Loans
included in REMIC I, plus the appraised value of each REO Property, if any,
included in REMIC I, such appraisal to be conducted by an appraiser mutually
agreed upon by the Holder of the Class CE Certificates and the Trustee in their
reasonable discretion and (B) the aggregate fair market value of all of the
assets of REMIC I (as determined by the Holder of the Class CE Certificates and
the Trustee, as of the close of business on the third Business Day next
preceding the date upon which notice of any such termination is furnished to
Certificateholders pursuant to the third paragraph of this Section 10.01) plus
(ii) any amounts due the Servicer and the Master Servicer in respect of unpaid
Servicing Fees, Master Servicing Fees and outstanding P&I Advances and Servicing
Advances plus (iii) any Premium Amounts and Reimbursement Amounts owed to the
Certificate Insurer under this Agreement. If a termination pursuant to this
Section 10.01(a) or Section 10.01(b) will result in a claim under the
Certificate Insurance Policy or if any amount owed to the Certificate Insurer
will not be fully reimbursed after such termination, the consent of the
Certificate Insurer shall be required prior to the Holder of the Class CE
Certificates exercising such option.

                  (b)The Holder of the Class CE Certificates shall have the
right to purchase all of the Mortgage Loans and each REO Property remaining in
REMIC I pursuant to clause (i) of the preceding paragraph no later than the
Determination Date in the month immediately preceding the Distribution Date on
which the Certificates will be retired; provided, however, that the Holder of
the Class CE Certificates may elect to purchase all of the Mortgage Loans and
each REO Property remaining in REMIC I pursuant to clause (i) above only if the
aggregate Stated Principal Balance of the Mortgage Loans and each REO Property
remaining

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in the Trust Fund at the time of such election is reduced to less than 10% of
the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off
Date. By acceptance of the Residual Certificates, the Holder of the Residual
Certificates agrees, in connection with any termination hereunder, to assign and
transfer any portion of the Termination Price in excess of par, and to the
extent received in respect of such termination, to pay any such amounts to the
Holders of the Class CE Certificates.

                  (c)Notice of the liquidation of the Certificates shall be
given promptly by the Securities Administrator by letter to the
Certificateholders mailed (a) in the event such notice is given in connection
with the purchase of the Mortgage Loans and each REO Property by the Holder of
the Class CE Certificates, not earlier than the 15th day and not later than the
25th day of the month next preceding the month of the final distribution on the
Certificates or (b) otherwise during the month of such final distribution on or
before the Determination Date in such month, in each case specifying (i) the
Distribution Date upon which the Trust Fund will terminate and the final payment
in respect of the REMIC I Regular Interests, REMIC I Regular Interests or the
Certificates will be made upon presentation and surrender of the related
Certificates at the office of the Securities Administrator therein designated,
(ii) the amount of any such final payment, (iii) that no interest shall accrue
in respect of the REMIC I Regular Interests, REMIC I Regular Interests or
Certificates from and after the Interest Accrual Period relating to the final
Distribution Date therefor and (iv) that the Record Date otherwise applicable to
such Distribution Date is not applicable, payments being made only upon
presentation and surrender of the Certificates at the office of the Securities
Administrator. In the event such notice is given in connection with the purchase
of all of the Mortgage Loans and each REO Property remaining in REMIC I by the
Holder of the Class CE Certificates, the Holder of the Class CE Certificates
shall deliver to the Securities Administrator for deposit in the Distribution
Account not later than the Business Day prior to the Distribution Date on which
the final distribution on the Certificates an amount in immediately available
funds equal to the above-described Termination Price. The Securities
Administrator shall remit to the Servicer, the Master Servicer, the Trustee and
the Custodian from such funds deposited in the Distribution Account (i) any
amounts which the Servicer would be permitted to withdraw and retain from the
Collection Account pursuant to Section 3.09 as if such funds had been deposited
therein (including all unpaid Servicing Fees and all outstanding P&I Advances
and Servicing Advances) and (ii) any other amounts otherwise payable by the
Securities Administrator to the Master Servicer, the Trustee, the Custodian and
the Servicer from amounts on deposit in the Distribution Account pursuant to the
terms of this Agreement prior to making any final distributions pursuant to
Section 10.01(d) below. Upon certification to the Trustee by the Securities
Administrator of the making of such final deposit, the Trustee shall promptly
release or cause to be released to the Holder of the Class CE Certificates the
Mortgage Files for the remaining Mortgage Loans, and Trustee shall execute all
assignments, endorsements and other instruments delivered to it and necessary to
effectuate such transfer.

                  (d)Upon presentation of the Certificates by the
Certificateholders on the final Distribution Date, the Securities Administrator
shall distribute to each Certificateholder so presenting and surrendering its
Certificates the amount otherwise distributable on such Distribution Date in
accordance with Section 5.01 in respect of the Certificates so presented and
surrendered. Any funds not distributed to any Holder or Holders of Certificates
being

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retired on such Distribution Date because of the failure of such Holder or
Holders to tender their Certificates shall, on such date, be set aside and held
in trust and credited to the account of the appropriate non-tendering Holder or
Holders. If any Certificates as to which notice has been given pursuant to this
Section 10.01 shall not have been surrendered for cancellation within six months
after the time specified in such notice, the Securities Administrator shall mail
a second notice to the remaining non-tendering Certificateholders to surrender
their Certificates for cancellation in order to receive the final distribution
with respect thereto. If within one year after the second notice all such
Certificates shall not have been surrendered for cancellation, the Securities
Administrator shall, directly or through an agent, mail a final notice to the
remaining non-tendering Certificateholders concerning surrender of their
Certificates. The costs and expenses of maintaining the funds in trust and of
contacting such Certificateholders shall be paid out of the assets remaining in
the trust funds. If within one year after the final notice any such Certificates
shall not have been surrendered for cancellation, the Securities Administrator
shall pay to the Depositor all such amounts, and all rights of non-tendering
Certificateholders in or to such amounts shall thereupon cease. No interest
shall accrue or be payable to any Certificateholder on any amount held in trust
by the Securities Administrator as a result of such Certificateholder's failure
to surrender its Certificate(s) on the final Distribution Date for final payment
thereof in accordance with this Section 10.01. Any such amounts held in trust by
the Securities Administrator shall be held uninvested in an Eligible Account.

                  Section 10.02. ADDITIONAL TERMINATION REQUIREMENTS.

                  (a)In the event that the Holder of the Class CE Certificates
purchases all the Mortgage Loans and each REO Property or the final payment on
or other liquidation of the last Mortgage Loan or REO Property remaining in
REMIC I pursuant to Section 10.01, the Trust Fund shall be terminated in
accordance with the following additional requirements:

                           (i)The Trustee shall specify the first day in the
         90-day liquidation period in a statement attached to each Trust REMIC's
         final Tax Return pursuant to Treasury regulation Section 1.860F-1 and
         shall satisfy all requirements of a qualified liquidation under Section
         860F of the Code and any regulations thereunder, as evidenced by an
         Opinion of Counsel obtained by and at the expense of the Holder of the
         Class CE Certificates;

                           (ii) During such 90-day liquidation period and, at or
         prior to the time of making of the final payment on the Certificates,
         the Trustee shall sell all of the assets of REMIC I to the Holder of
         the Class CE Certificates for cash; and

                           (iii) At the time of the making of the final payment
         on the Certificates, the Securities Administrator shall distribute or
         credit, or cause to be distributed or credited, to the Holders of the
         Residual Certificates all cash on hand in the Trust Fund (other than
         cash retained to meet claims), and the Trust Fund shall terminate at
         that time.

                  (b)At the expense of the requesting Holder of the Class CE
Certificates (or, if the Trust Fund is being terminated as a result of the
occurrence of the event described in clause (ii) of the first paragraph of
Section 10.01, at the expense of the Trust Fund), the Holder

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of the Class CE Certificates shall prepare or cause to be prepared the
documentation required in connection with the adoption of a plan of liquidation
of each Trust REMIC pursuant to this Section 10.02.

                  (c)By their acceptance of Certificates, the Holders thereof
hereby agree to authorize the Trustee to specify the 90-day liquidation period
for each Trust REMIC, which authorization shall be binding upon all successor
Certificateholders.

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                                   ARTICLE XI

                                REMIC PROVISIONS

                  Section 11.01. REMIC ADMINISTRATION.

                  (a)The Trustee shall elect to treat each Trust REMIC as a
REMIC under the Code and, if necessary, under applicable state law. Each such
election will be made by the Securities Administrator on Form 1066 or other
appropriate federal tax or information return or any appropriate state return
for the taxable year ending on the last day of the calendar year in which the
Certificates are issued. For the purposes of the REMIC election in respect of
REMIC I, the REMIC I Regular Interests shall be designated as the Regular
Interests in REMIC I and the Class R-I Interest shall be designated as the
Residual Interests in REMIC I. The Class A Certificates, the Mezzanine
Certificates, the Class B Certificates, the Class P Certificates and the Class
CE Certificates shall be designated as the Regular Interests in REMIC II and the
Class R-II Interest shall be designated as the Residual Interests in REMIC II.
The Trustee shall not permit the creation of any "interests" in each Trust REMIC
(within the meaning of Section 860G of the Code) other than the REMIC I Regular
Interests and the interests represented by the Certificates.

                  (b)The Closing Date is hereby designated as the "Startup Day"
of each Trust REMIC within the meaning of Section 860G(a)(9) of the Code.

                  (c)The Securities Administrator shall be reimbursed for any
and all expenses relating to any tax audit of the Trust Fund (including, but not
limited to, any professional fees or any administrative or judicial proceedings
with respect to each Trust REMIC that involve the Internal Revenue Service or
state tax authorities), including the expense of obtaining any tax related
Opinion of Counsel except as specified herein. The Securities Administrator, as
agent for each Trust REMIC's tax matters person shall (i) act on behalf of the
Trust Fund in relation to any tax matter or controversy involving any Trust
REMIC and (ii) represent the Trust Fund in any administrative or judicial
proceeding relating to an examination or audit by any governmental taxing
authority with respect thereto. The holder of the largest Percentage Interest of
each class of Residual Certificates shall be designated, in the manner provided
under Treasury regulations section 1.860F-4(d) and Treasury regulations section
301.6231(a)(7)-1, as the tax matters person of the related REMIC created
hereunder. By their acceptance thereof, the holder of the largest Percentage
Interest of the Residual Certificates hereby agrees to irrevocably appoint the
Securities Administrator or an Affiliate as its agent to perform all of the
duties of the tax matters person for the Trust Fund.

                  (d)The Securities Administrator shall prepare and file and the
Trustee shall sign all of the Tax Returns in respect of each REMIC created
hereunder. The expenses of preparing and filing such returns shall be borne by
the Securities Administrator without any right of reimbursement therefor.

                  (e)The Securities Administrator shall perform on behalf of
each Trust REMIC all reporting and other tax compliance duties that are the
responsibility of such

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REMIC under the Code, the REMIC Provisions or other compliance guidance issued
by the Internal Revenue Service or any state or local taxing authority. Among
its other duties, as required by the Code, the REMIC Provisions or other such
compliance guidance, the Securities Administrator shall provide (i) to any
Transferor of a Residual Certificate such information as is necessary for the
application of any tax relating to the transfer of a Residual Certificate to any
Person who is not a Permitted Transferee upon receipt of additional reasonable
compensation, (ii) to the Certificateholders such information or reports as are
required by the Code or the REMIC Provisions including reports relating to
interest, original issue discount and market discount or premium (using the
Prepayment Assumption as required) and (iii) to the Internal Revenue Service the
name, title, address and telephone number of the person who will serve as the
representative of each Trust REMIC. The Depositor shall provide or cause to be
provided to the Securities Administrator, within ten (10) days after the Closing
Date, all information or data that the Securities Administrator reasonably
determines to be relevant for tax purposes as to the valuations and issue prices
of the Certificates, including, without limitation, the price, yield, prepayment
assumption and projected cash flow of the Certificates.

                  (f)To the extent in the control of the Trustee or the
Securities Administrator, each such Person (i) shall take such action and shall
cause each REMIC created hereunder to take such action as shall be necessary to
create or maintain the status thereof as a REMIC under the REMIC Provisions,
(ii) shall not take any action, cause the Trust Fund to take any action or fail
to take (or fail to cause to be taken) any action that, under the REMIC
Provisions, if taken or not taken, as the case may be, could (A) endanger the
status of each Trust REMIC as a REMIC or (B) result in the imposition of a tax
upon the Trust Fund (including but not limited to the tax on prohibited
transactions as defined in Section 860F(a)(2) of the Code and the tax on
contributions to a REMIC set forth in Section 860G(d) of the Code) (either such
event, an "Adverse REMIC Event") unless such action or inaction is permitted
under this Agreement or the Trustee and the Securities Administrator have
received an Opinion of Counsel, addressed to the them (at the expense of the
party seeking to take such action but in no event at the expense of the Trustee
or the Securities Administrator) to the effect that the contemplated action will
not, with respect to any Trust REMIC, endanger such status or result in the
imposition of such a tax, nor (iii) shall the Securities Administrator take or
fail to take any action (whether or not authorized hereunder) as to which the
Trustee has advised it in writing that it has received an Opinion of Counsel to
the effect that an Adverse REMIC Event could occur with respect to such action;
provided that the Securities Administrator may conclusively rely on such Opinion
of Counsel and shall incur no liability for its action or failure to act in
accordance with such Opinion of Counsel. In addition, prior to taking any action
with respect to any Trust REMIC or the respective assets of each, or causing any
Trust REMIC to take any action, which is not contemplated under the terms of
this Agreement, the Securities Administrator will consult with the Trustee or
its designee, in writing, with respect to whether such action could cause an
Adverse REMIC Event to occur with respect to any Trust REMIC, and the Securities
Administrator shall not take any such action or cause any Trust REMIC to take
any such action as to which the Trustee has advised it in writing that an
Adverse REMIC Event could occur. The Trustee may consult with counsel to make
such written advice, and the cost of same shall be home by the party seeking to
take the action not permitted by this Agreement, but in no event shall such cost
be an expense of the Trustee.

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<PAGE>

                  (g)In the event that any tax is imposed on "prohibited
transactions" of any REMIC created hereunder as defined in Section 860F(a)(2) of
the Code, on the "net income from foreclosure property" of such REMIC as defined
in Section 860G(c) of the Code, on any contributions to any such REMIC after the
Startup Day therefor pursuant to Section 860G(d) of the Code, or any other tax
is imposed by the Code or any applicable provisions of state or local tax laws,
such tax shall be charged (i) to the Trustee pursuant to Section 11.03, if such
tax arises out of or results from a breach by the Trustee of any of its
obligations under this Article XI, (ii) to the Securities Administrator pursuant
to Section 11.03, if such tax arises out of or results from a breach by the
Securities Administrator of any of its obligations under this Article XI, (iii)
to the Master Servicer pursuant to Section 11.03, if such tax arises out of or
results from a breach by the Master Servicer of any of its obligations under
Article IV or under this Article XI, (iv) to the Servicer pursuant to Section
11.03, if such tax arises out of or results from a breach by the Servicer of any
of its obligations under Article III or under this Article XI, or (v) in all
other cases, against amounts on deposit in the Distribution Account and shall be
paid by withdrawal therefrom.

                  (h)The Securities Administrator shall, for federal income tax
purposes, maintain books and records with respect to each Trust REMIC on a
calendar year and on an accrual basis.

                  (i)Following the Startup Day, neither the Securities
Administrator nor the Trustee shall accept any contributions of assets to any
Trust REMIC other than in connection with any Qualified Substitute Mortgage Loan
delivered in accordance with Section 2.03 unless it shall have received an
Opinion of Counsel to the effect that the inclusion of such assets in the Trust
Fund will not cause the related REMIC to fail to qualify as a REMIC at any time
that any Certificates are outstanding or subject such REMIC to any tax under the
REMIC Provisions or other applicable provisions of federal, state and local law
or ordinances.

                  (j)Neither the Trustee nor the Securities Administrator shall
knowingly enter into any arrangement by which any Trust REMIC will receive a fee
or other compensation for services nor permit either REMIC to receive any income
from assets other than "qualified mortgages" as defined in Section 860G(a)(3) of
the Code or "permitted investments" as defined in Section 860G(a)(5) of the
Code.

                  (k)The Securities Administrator shall apply for an employer
identification number with the Internal Revenue Service via a Form SS-4 or other
comparable method for each REMIC. In connection with the foregoing, the
Securities Administrator shall provide the name and address of the person who
can be contacted to obtain information required to be reported to the holders of
Regular Interests in each REMIC as required by IRS Form 8811.

                  Section 11.02. PROHIBITED TRANSACTIONS AND ACTIVITIES.

                  None of the Depositor, the Servicer, the Securities
Administrator, the Master Servicer or the Trustee shall sell, dispose of or
substitute for any of the Mortgage Loans (except in connection with (i) the
foreclosure of a Mortgage Loan, including but not limited to, the acquisition or
sale of a Mortgaged Property acquired by deed in lieu of foreclosure, (ii) the
bankruptcy of REMIC I, (iii) the termination of REMIC I pursuant to Article X of
this

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Agreement, (iv) a substitution pursuant to Article II of this Agreement or (v) a
purchase of Mortgage Loans pursuant to Article II of this Agreement), nor
acquire any assets for any Trust REMIC (other than REO Property acquired in
respect of a defaulted Mortgage Loan), nor sell or dispose of any investments in
the Collection Account or the Distribution Account for gain, nor accept any
contributions to any Trust REMIC after the Closing Date (other than a Qualified
Substitute Mortgage Loan delivered in accordance with Section 2.03), unless it
has received an Opinion of Counsel, addressed to the Trustee and the Securities
Administrator (at the expense of the party seeking to cause such sale,
disposition, substitution, acquisition or contribution but in no event at the
expense of the Trustee) that such sale, disposition, substitution, acquisition
or contribution will not (a) affect adversely the status of any Trust REMIC as a
REMIC or (b) cause any Trust REMIC to be subject to a tax on "prohibited
transactions" or "contributions" pursuant to the REMIC Provisions.

                  Section 11.03. INDEMNIFICATION.

                  (a)The Trustee agrees to be liable for any taxes and costs
incurred by the Trust Fund, the Depositor, the Master Servicer, the Securities
Administrator or the Servicer including, without limitation, any reasonable
attorneys fees imposed on or incurred by the Trust Fund, the Depositor, the
Master Servicer, the Securities Administrator or the Servicer as a result of the
Trustee's failure to perform its covenants set forth in this Article XI in
accordance with the standard of care of the Trustee set forth in this Agreement.

                  (b)The Servicer agrees to indemnify the Trust Fund, the
Depositor, the Master Servicer, the Securities Administrator and the Trustee for
any taxes and costs including any reasonable attorneys' fees imposed on or
incurred by the Trust Fund, the Depositor, the Master Servicer, the Securities
Administrator or the Trustee, as a result of the Servicer's failure to perform
its covenants set forth in Article III in accordance with the standard of care
of the Servicer set forth in this Agreement.

                  (c)The Master Servicer agrees to indemnify the Trust Fund, the
Depositor, the Servicer and the Trustee for any taxes and costs including any
reasonable attorneys' fees imposed on or incurred by the Trust Fund, the
Depositor, the Servicer or the Trustee, as a result of the Master Servicer's
failure to perform its covenants set forth in Article IV in accordance with the
standard of care of the Master Servicer set forth in this Agreement.

                  (d)The Securities Administrator agrees to be liable for any
taxes and costs incurred by the Trust Fund, the Depositor, the Servicer or the
Trustee including any reasonable attorneys' fees imposed on or incurred by the
Trust Fund, the Depositor, the Servicer or the Trustee as a result of the
Securities Administrator's failure to perform its covenants set forth in this
Article XI in accordance with the standard of care of the Securities
Administrator set forth in this Agreement.

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                                  ARTICLE XII

                            MISCELLANEOUS PROVISIONS

                  Section 12.01. AMENDMENT.

                  This Agreement may be amended from time to time by the
Depositor, the Servicer, the Master Servicer, the Securities Administrator and
the Trustee, but without the consent of any of the Certificateholders, (i) to
cure any ambiguity or defect, (ii) to correct, modify or supplement any
provisions herein (including to give effect to the expectations of
Certificateholders), or (iii) to make any other provisions with respect to
matters or questions arising under this Agreement or the Certificate Insurance
Policy which shall not be inconsistent with the provisions of this Agreement,
provided that the prior consent of the Certificate Insurer shall be required for
any amendment that affects its rights, duties or obligations and that such
action shall not, as evidenced by an Opinion of Counsel delivered to the
Trustee, adversely affect in any material respect the interests of any
Certificateholder or the Certificate Insurer; provided that any such amendment
shall be deemed not to adversely affect in any material respect the interests of
the Certificateholders and no such Opinion of Counsel shall be required if the
Person requesting such amendment obtains a letter from each Rating Agency
stating that such amendment would not result in the downgrading or withdrawal of
the respective ratings then assigned to the Certificates (without regard to the
Certificate Insurance Policy). No amendment shall be deemed to adversely affect
in any material respect the interests of any Certificateholder who shall have
consented thereto, and no Opinion of Counsel shall be required to address the
effect of any such amendment on any such consenting Certificateholder.

                  This Agreement may also be amended from time to time by the
Depositor, the Servicer, the Master Servicer, the Securities Administrator and
the Trustee with the consent of the Holders of Certificates entitled to at least
66% of the Voting Rights for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Holders of Certificates; PROVIDED,
HOWEVER, that no such amendment shall (i) reduce in any manner the amount of, or
delay the timing of, payments received on Mortgage Loans which are required to
be distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) adversely affect in any material respect the interests of the
Holders of any Class of Certificates or the Certificate Insurer in a manner,
other than as described in (i), without the consent of the Holders of
Certificates of such Class evidencing at least 66% of the Voting Rights
allocated to such Class, or (iii) modify the consents required by the
immediately preceding clauses (i) and (ii) without the consent of the Holders of
all Certificates then outstanding. Notwithstanding any other provision of this
Agreement, for purposes of the giving or withholding of consents pursuant to
this Section 12.01, Certificates registered in the name of the Depositor or a
Servicer or any Affiliate thereof shall be entitled to Voting Rights with
respect to matters affecting such Certificates. Without limiting the generality
of the foregoing, any amendment to this Agreement required in connection with
the compliance with or the clarification of any reporting obligations described
in Section 5.06 hereof shall not require the consent of any Certificateholder
and without the need for any Opinion of Counsel or Rating Agency confirmation.

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                  Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel to the effect that such amendment is
permitted hereunder and will not result in the imposition of any tax on any
Trust REMIC pursuant to the REMIC Provisions or cause any Trust REMIC to fail to
qualify as a REMIC at any time that any Certificates are outstanding and that
such amendment is authorized or permitted by this Agreement.

                  Promptly after the execution of any such amendment the Trustee
shall furnish a copy of such amendment to each Certificateholder.

                  It shall not be necessary for the consent of
Certificateholders under this Section 12.01 to approve the particular form of
any proposed amendment, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable regulations as the Trustee may prescribe.

                  The cost of any Opinion of Counsel to be delivered pursuant to
this Section 12.01 shall be borne by the Person seeking the related amendment,
but in no event shall such Opinion of Counsel be an expense of the Trustee .

                  The Trustee may, but shall not be obligated to enter into any
amendment pursuant to this Section that affects its rights, duties and
immunities under this Agreement or otherwise.

                  Section 12.02. RECORDATION OF AGREEMENT; COUNTERPARTS.

                  To the extent permitted by applicable law, this Agreement is
subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the properties subject to the Mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Depositor at the expense of the Certificateholders, but only
upon direction of the Trustee accompanied by an Opinion of Counsel to the effect
that such recordation materially and beneficially affects the interests of the
Certificateholders.

                  For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.

                  Section 12.03. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS.

                  The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the Trust Fund, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of the
Trust Fund, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.

                  No Certificateholder shall have any right to vote (except as
expressly provided for herein) or in any manner otherwise control the operation
and management of the Trust Fund, or

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the obligations of the parties hereto, nor shall anything herein set forth, or
contained in the terms of any of the Certificates, be construed so as to
constitute the Certificateholders from time to time as partners or members of an
association; nor shall any Certificateholder be under any liability to any third
person by reason of any action taken by the parties to this Agreement pursuant
to any provision hereof.

                  No Certificateholder shall have any right by virtue of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of default
and of the continuance thereof, as hereinbefore provided, and unless also the
Holders of Certificates entitled to at least 25% of the Voting Rights shall have
made written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for 15 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding. It is
understood and intended, and expressly covenanted by each Certificateholder with
every other Certificateholder. and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatsoever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, or to enforce any right
under this Agreement, except in the manner herein provided and for the equal,
ratable and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section, each and every Certificateholder
and the Trustee shall be entitled to such relief as can be given either at law
or in equity.

                  Section 12.04. GOVERNING LAW.

                  This Agreement shall be construed in accordance with the laws
of the State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws without regard to
conflicts of laws principles thereof.

                  Section 12.05. NOTICES.

                  All directions, demands and notices hereunder shall be in
writing and shall be deemed to have been duly given when received if sent by
facsimile, receipt confirmed, if personally delivered at or mailed by first
class mail, postage prepaid, or by express delivery service or delivered in any
other manner specified herein, to (a) in the case of the Depositor, ACE
Securities Corp., AMACAR GROUP, 6525 Morrison Boulevard, Suite 318, Charlotte,
North Carolina 28211, Attention: Juliana Johnson (telecopy number:(704)
365-1362), or such other address or telecopy number as may hereafter be
furnished to the Servicer, the Master Servicer, the Securities Administrator and
the Trustee in writing by the Depositor, (b) in the case of the Servicer, HomEq
Servicing Corporation, 4837 Watt Avenue, North Highlands, California 95660,
Attention: Portfolio Management (telecopy number: (916) 339-6995), with a copy
to, HomEq Servicing Corporation, 1620 East Roseville Parkway, Suite 210,
Roseville, California 95661, Attention: legal department (telecopy number: (916)
787-9567), or such other address or telecopy number as may hereafter be
furnished to the Trustee, the Master Servicer, the Securities

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Administrator and the Depositor in writing by the Servicer, (c) in the case of
the Master Servicer and the Securities Administrator, P.O. Box 98, Columbia,
Maryland 21046 and for overnight delivery to 9062 Old Annapolis Road, Columbia,
Maryland 21045, Attention: Ace Securities Corp., 2004-RM1 (telecopy number:
(410) 715-2380), or such other address or telecopy number as may hereafter be
furnished to the Trustee, the Depositor and the Servicer in writing by the
Master Servicer or the Securities Administrator and (d) in the case of the
Trustee, at the Corporate Trust Office or such other address or telecopy number
as the Trustee may hereafter be furnish to the Servicer, the Master Servicer,
the Securities Administrator and the Depositor in writing by the Trustee. Any
notice required or permitted to be given to a Certificateholder shall be given
by first class mail, postage prepaid, at the address of such Holder as shown in
the Certificate Register. Any notice so mailed within the time prescribed in
this Agreement shall be conclusively presumed to have been duly given when
mailed, whether or not the Certificateholder receives such notice. A copy of any
notice required to be telecopied hereunder also shall be mailed to the
appropriate party in the manner set forth above.

                  Section 12.06. SEVERABILITY OF PROVISIONS.

                  If any one or more of the covenants, agreements, provisions or
terms of this Agreement shall be for any reason whatsoever held invalid, then
such covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions of
this Agreement or of the Certificates or the rights of the Holders thereof.

                  Section 12.07. NOTICE TO RATING AGENCIES.

                  The Trustee shall use its best efforts promptly to provide
notice to the Rating Agencies with respect to each of the following of which a
Responsible Officer has actual knowledge:

                  1. Any material change or amendment to this Agreement;

                  2. The occurrence of any Servicer Event of Default or Master
         Servicer Event of Default that has not been cured or waived;

                  3. The resignation or termination of the Servicer, the Master
         Servicer or the Trustee;

                  4. The repurchase or substitution of Mortgage Loans pursuant
         to or as contemplated by Section 2.03;

                  5. The final payment to the Holders of any Class of
         Certificates;

                  6. Any change in the location of the Distribution Account; and

                  7. Any event that would result in the inability of the Trustee
         as successor Servicer to make advances regarding delinquent Mortgage
         Loans.

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                  In addition, the Securities Administrator shall promptly make
available to each Rating Agency copies of each report to Certificateholders
described in Section 5.02.

                  The Servicer shall make available to each Rating Agency copies
of the following:

                  1. Each annual statement as to compliance described in Section
         3.17; and

                  2. Each annual independent public accountants' servicing
         report described in Section 3.18.

                  Any such notice pursuant to this Section 12.07 shall be in
writing and shall be deemed to have been duly given if personally delivered at
or mailed by first class mail, postage prepaid, or by express delivery service
to Standard & Poor's, a division of the McGraw-Hill Companies, Inc., 55 Water
Street, New York, New York 10041, to Fitch Ratings, 1 State Street Plaza, New
York, New York 10004 and to Moody's Investors Service, Inc., 99 Church Street,
New York, New York 10007 or such other addresses as the Rating Agencies may
designate in writing to the parties hereto.

                  Section 12.08. ARTICLE AND SECTION REFERENCES.

                  All article and section references used in this Agreement,
unless otherwise provided, are to articles and sections in this Agreement.

                  Section 12.09. GRANT OF SECURITY INTEREST.

                  It is the express intent of the parties hereto that the
conveyance of the Mortgage Loans by the Depositor to the Trustee, on behalf of
the Trust and for the benefit of the Certificateholders, be, and be construed
as, a sale of the Mortgage Loans by the Depositor and not a pledge of the
Mortgage Loans to secure a debt or other obligation of the Depositor. However,
in the event that, notwithstanding the aforementioned intent of the parties, the
Mortgage Loans are held to be property of the Depositor, then, (a) it is the
express intent of the parties that such conveyance be deemed a pledge of the
Mortgage Loans by the Depositor to the Trustee, on behalf of the Trust and for
the benefit of the Certificateholders, to secure a debt or other obligation of
the Depositor and (b)(1) this Agreement shall also be deemed to be a security
agreement within the meaning of Articles 8 and 9 of the Uniform Commercial Code
as in effect from time to time in the State of New York; (2) the conveyance
provided for in Section 2.01 shall be deemed to be a grant by the Depositor to
the Trustee, on behalf of the Trust and for the benefit of the
Certificateholders, of a security interest in all of the Depositor's right,
title and interest in and to the Mortgage Loans and all amounts payable to the
holders of the Mortgage Loans in accordance with the terms thereof and all
proceeds of the conversion, voluntary or involuntary, of the foregoing into
cash, instruments, securities or other property, including without limitation
all amounts, other than investment earnings, from time to time held or invested
in the Collection Account and the Distribution Account, whether in the form of
cash, instruments, securities or other property; (3) the obligations secured by
such security agreement shall be deemed to be all of the Depositor's obligations
under this Agreement, including the obligation to provide to the
Certificateholders the benefits of this Agreement relating to the Mortgage Loans
and the Trust Fund; and (4) notifications to persons holding such property, and
acknowledgments, receipts or confirmations from persons holding such property,
shall be

                                      181
<PAGE>

deemed notifications to, or acknowledgments, receipts or confirmations from,
financial intermediaries, bailees or agents (as applicable) of the Trustee for
the purpose of perfecting such security interest under applicable law.
Accordingly, the Depositor hereby grants to the Trustee, on behalf of the Trust
and for the benefit of the Certificateholders, a security interest in the
Mortgage Loans and all other property described in clause (2) of the preceding
sentence, for the purpose of securing to the Trustee the performance by the
Depositor of the obligations described in clause (3) of the preceding sentence.
Notwithstanding the foregoing, the parties hereto intend the conveyance pursuant
to Section 2.01 to be a true, absolute and unconditional sale of the Mortgage
Loans and assets constituting the Trust Fund by the Depositor to the Trustee, on
behalf of the Trust and for the benefit of the Certificateholders.

                  Section 12.10. SURVIVAL OF INDEMNIFICATION.

                  Any and all indemnities to be provided by any party to this
Agreement shall survive the termination and resignation of any party hereto and
the termination of this Agreement.

                                      182
<PAGE>

                  IN WITNESS WHEREOF, the Depositor, the Servicer, the Master
Servicer, the Securities Administrator and the Trustee have caused their names
to be signed hereto by their respective officers thereunto duly authorized, in
each case as of the day and year first above written.

                          ACE SECURITIES CORP.,
                          as Depositor
                          By:
                             --------------------------------------------------
                          Name:
                          Title:

                          By:
                             --------------------------------------------------
                          Name:
                          Title:

                          HOMEQ SERVICING CORPORATION,
                          as Servicer
                          By:
                             --------------------------------------------------
                          Name:
                          Title:

                          HSBC BANK USA, NATIONAL ASSOCIATION
                          not in its individual capacity but solely as Trustee
                          By:
                             --------------------------------------------------
                          Name:
                          Title:

                          WELLS FARGO BANK, N.A.
                          as Master Servicer and Securities Administrator
                          By:
                             --------------------------------------------------
                          Name:
                          Title:

<PAGE>

                          For purposes of Sections 7.08, 7.09 and 7.10:

                          THE MURRAYHILL COMPANY

                          By:
                             --------------------------------------------------
                          Name:
                          Title:

<PAGE>

                           ACKNOWLEDGED AND AGREED FOR PURPOSES OF SECTION 9.05:

                           DB STRUCTURED PRODUCTS, INC

                           By:_________________________________________________
                           Name:
                           Title:

                           By:_________________________________________________
                           Name:
                           Title:

<PAGE>

STATE OF          )
                  ) ss.:
COUNTY OF         )

                  On the ___ day of July 2004, before me, a notary public in and
for said State, personally appeared _____________________ known to me to be a
_____________________ of ACE Securities Corp., one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.

                  IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                             __________________________________
                                                        Notary Public

[Notarial Seal]                                      My commission expires

<PAGE>

STATE OF          )
                  ) ss.:
COUNTY OF         )

                  On the __ day of July 2004, before me, a notary public in and
for said State, personally appeared ___________________________ known to me to
be a ____________________ of ACE Securities Corp., one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.

                  IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                             __________________________________
                                                        Notary Public

[Notarial Seal]                                      My commission expires

<PAGE>

STATE OF         )
                 ) ss.:
COUNTY OF        )

                  On the ___ day of July 2004, before me, a notary public in and
for said State, personally appeared _______________ known to me to be a
_______________ of ________________, the HomEq Servicing Corporation, one of the
corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.

                  IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                             __________________________________
                                                        Notary Public

[Notarial Seal]                                      My commission expires

<PAGE>

STATE OF          )
                  ) ss.:
COUNTY OF         )

                  On the ___ day of July 2004, before me, a notary public in and
for said State, personally appeared ____________________, known to me to be a
__________________ of Wells Fargo Bank, N.A., one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.

                  IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                             __________________________________
                                                        Notary Public

[Notarial Seal]                                      My commission expires

<PAGE>

STATE OF          )
                  ) ss.:
COUNTY OF         )

                  On the ___ day of July 2004, before me, a notary public in and
for said State, personally appeared ____________________, known to me to be a
__________________ of HSBC Bank USA, National Association one of the
corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.

                  IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                             __________________________________
                                                        Notary Public

[Notarial Seal]                                      My commission expires

<PAGE>

                                   EXHIBIT A-1

                     FORM OF CLASS A-[1A][1B][2] CERTIFICATE

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
         "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
         THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
         INTERNAL REVENUE CODE OF 1986 (THE "CODE").

         UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
         THE DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR
         REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
         ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
         REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
         COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR
         OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
         SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

<PAGE>

<TABLE>
<CAPTION>

<S>                                                        <C>
Series 2004-RM1, Class A-[1A][1B][2]                       Aggregate Certificate Principal Balance of
                                                           the Class A-[1A][1B][2] Certificates as of
                                                           the Issue Date: $

Pass-Through Rate: Variable                                Denomination:  $

Date of Pooling and  Servicing  Agreement and Cut-off      Master Servicer: Wells Fargo Bank, N.A.
Date: July 1, 2004

First Distribution Date: August 25, 2004                   Trustee: HSBC Bank USA, National Association

No.__                                                      Issue Date: July 30, 2004

                                                           CUSIP:________________
</TABLE>

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
         CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
         OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
         LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
         CERTIFICATE.

                                      A-1-2

<PAGE>

          ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2004-RM1
                      ASSET BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family, fixed and
adjustable-rate first and second lien mortgage loans (the "Mortgage Loans")
formed and sold by

                              ACE SECURITIES CORP.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ACE
         SECURITIES CORP., THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR,
         THE SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES.
         NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE
         GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that ________________ is the registered owner
of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class
A-[1A][1B][2]Certificates as of the Issue Date) in that certain beneficial
ownership interest evidenced by all the Class A-[1A][1B][2] Certificates in
REMIC II created pursuant to a Pooling and Servicing Agreement, dated as
specified above (the "Agreement"), among ACE Securities Corp., as depositor
(hereinafter called the "Depositor", which term includes any successor entity
under the Agreement), Wells Fargo Bank, N.A. as master servicer (the "Master
Servicer") and securities administrator (the "Securities Administrator"), HomEq
Servicing Corporation, as servicer (the "Servicer") and HSBC Bank USA, National
Association as trustee (the "Trustee"), a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following such 25th day (a "Distribution Date"),
commencing on the First Distribution Date specified above, to the Person in
whose name this Certificate is registered on the Business Day immediately
preceding such Distribution Date (the "Record Date"), in an amount equal to the
product of the Percentage Interest evidenced by this Certificate and the amount
required to be distributed to the Holders of Class A-[1A][1B][2] Certificates on
such Distribution Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Securities Administrator by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Securities
Administrator in writing at least five Business Days prior to the Record Date
immediately prior to such Distribution Date and is the registered owner of Class
A-[1A][1B][2]Certificates the aggregate initial Certificate Principal Balance of
which is in excess

                                      A-1-3

<PAGE>

of the lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial
Certificate Principal Balance of the Class A-[1A][1B][2] Certificates, or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Securities Administrator of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Securities Administrator for that
purpose as provided in the Agreement.

                  The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
be a rate per annum equal to the lesser of (i) One-Month LIBOR plus [_____]%, in
the case of each Distribution Date through and including the Distribution Date
on which the aggregate principal balance of the Mortgage Loans (and properties
acquired in respect thereof) remaining in the Trust Fund is reduced to less than
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date, or One-Month LIBOR plus [_____]%, in the case of any Distribution Date
thereafter and (ii) the applicable Net WAC Pass-Through Rate for such
Distribution Date.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificate of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans and payments received
pursuant to the Cap Contracts, all as more specifically set forth herein and in
the Agreement. As provided in the Agreement, withdrawals from the Collection
Account and the Distribution Account may be made from time to time for purposes
other than distributions to Certificateholders, such purposes including
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans. [The Class A-1B Certificates will have the benefit of a
financial guaranty policy issued by XL Capital Assurance Inc.]

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee, the Securities
Administrator, the Servicer and the rights of the Certificateholders under the
Agreement at any time by the Depositor, the Master Servicer, the Trustee, the
Securities Administrator and the Servicer with the consent of the Holders of
Certificates entitled to at least 66% of the Voting Rights. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Securities

                                      A-1-5

<PAGE>

Administrator as provided in the Agreement, duly endorsed by, or accompanied by
an assignment in the form below or other written instrument of transfer in form
satisfactory to the Securities Administrator duly executed by, the Holder hereof
or such Holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations evidencing the
same aggregate Percentage Interest will be issued to the designated transferee
or transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

                  No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Securities Administrator may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of
Certificates.

                  The Depositor, the Master Servicer, the Trustee, the
Securities Administrator, the Servicer and any agent of the Depositor, the
Master Servicer, the Trustee, the Securities Administrator or the Servicer may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Depositor, the Master Servicer, the
Trustee, the Securities Administrator, the Servicer nor any such agent shall be
affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Securities Administrator and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in REMIC I and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and neither the Trustee nor the Securities Administrator assumes
any responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Securities Administrator, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

                                      A-1-6

<PAGE>

                  IN WITNESS WHEREOF, the Securities Administrator has caused
this Certificate to be duly executed.

Dated:
                                         WELLS FARGO BANK, N.A.
                                         as Securities Administrator

                                         By:
                                            --------------------------------
                                             Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

                  This is one of the Class A-[1A][1B][2] Certificates referred
to in the within-mentioned Agreement.

                                         WELLS FARGO BANK, N.A.
                                         as Securities Administrator

                                         By:
                                            --------------------------------
                                             Authorized Officer

<PAGE>

                                  ABBREVIATIONS

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
<TABLE>
<CAPTION>

<S>                   <C>                                   <C>                             <C>
TEN COM       -       as tenants in common                  UNIF GIFT MIN ACT -                   CUSTODIAN
                                                                                                (Cust) (Minor)
                                                                                              under Uniform Gifts
                                                                                                 to Minors Act
TEN ENT       -       as tenants by the entireties                                             ________________
                                                                                                    (State)
JT TEN        -       as joint tenants with right
                      if survivorship and not as
                      tenants in common

                       Additional abbreviations may also be used though not in
the above list.
</TABLE>

                                   ASSIGNMENT
                                   ----------

                  FOR  VALUE  RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto _______________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer of
such interest to assignee on the Certificate Register of the Trust Fund.

                  I (we) further direct the Trustee or the Securities
Administrator to issue a new Certificate of a like  Percentage  Interest and
Class to the above named  assignee and deliver such  Certificate  to the
following address: ___________________________________________________________
_____________________________________________________________________________.

Dated:
                                      _________________________________________
                                      Signature by or on behalf of assignor

                                      ______________________________________
                                      Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________
for the account of_____________________________________________________________,
account number ____________________, or, if mailed by check, to _______________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by________________________________________________,
the assignee named above, or __________________________________________, as its
agent.

<PAGE>

                                   EXHIBIT A-2

                 FORM OF CLASS M-[1][2][3][4][5][6] CERTIFICATE

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
         "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
         THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
         INTERNAL REVENUE CODE OF 1986 (THE "CODE").

         UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
         THE DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR
         REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
         ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
         REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
         COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR
         OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
         SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

         THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES [[,/AND]
         CLASS M-1 CERTIFICATES [,/AND] CLASS M-2 CERTIFICATES[,/AND] CLASS M-3
         CERTIFICATES [,/AND] CLASS M-4 CERTIFICATES [,/AND] CLASS M-5
         CERTIFICATES] TO THE EXTENT DESCRIBED IN THE AGREEMENT REFERRED TO
         HEREIN.

         ANY TRANSFEREE OF THIS CERTIFICATE SHALL BE DEEMED TO MAKE THE
         REPRESENTATIONS SET FORTH IN SECTION 6.02(C) OF THE AGREEMENT REFERRED
         TO HEREIN.

         THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DECREASED
         BY THE PRINCIPAL PAYMENTS HEREON AND REALIZED LOSSES ALLOCABLE HERETO
         AS DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN. ACCORDINGLY,
         FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE CERTIFICATE
         PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE
         DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY
         ASCERTAIN ITS CERTIFICATE PRINCIPAL BALANCE BY INQUIRY OF THE
         SECURITIES ADMINISTRATOR NAMED HEREIN.

<PAGE>

<TABLE>
<CAPTION>

<S>                                                            <C>
Series 2004-RM1, Class M-[1][2][3][4][5][6]                    Aggregate Certificate Principal Balance of the
                                                               Class M-[1][2][3][4][5][6] Certificates as of the
                                                               Issue Date: $______________

Pass-Through Rate: Variable                                    Denomination: $______________

Date of Pooling and Servicing Agreement                        Master Servicer: Wells Fargo Bank, N.A.
and Cut-off Date: July 1, 2004

First Distribution Date: August 25, 2004                       Trustee: HSBC Bank USA, National Association

No.___                                                         Issue Date: July 30, 2004

                                                               CUSIP:_________________

</TABLE>

                                      A-2-2
<PAGE>

          ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2004-RM1
                      ASSET BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family, fixed and
adjustable-rate first and second lien mortgage loans (the "Mortgage Loans")
formed and sold by

                              ACE SECURITIES CORP.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ACE
         SECURITIES CORP., THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR,
         THE SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES.
         NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE
         GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that _____________________ is the registered
owner of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class
M-[1][2][3][4][5][6] Certificates as of the Issue Date) in that certain
beneficial ownership interest evidenced by all the Class M-[1][2][3][4][5][6]
Certificates in REMIC II created pursuant to a Pooling and Servicing Agreement,
dated as specified above (the "Agreement"), among ACE Securities Corp., as
depositor (hereinafter called the "Depositor", which term includes any successor
entity under the Agreement), Wells Fargo Bank, N.A. as master servicer (the
"Master Servicer") and securities administrator (the "Securities
Administrator"), HomEq Servicing Corporation , as servicer (the "Servicer") and
HSBC Bank USA, National Association, as trustee (the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following such 25th day (a "Distribution Date"),
commencing on the First Distribution Date specified above, to the Person in
whose name this Certificate is registered on the Business Day immediately
preceding such Distribution Date (the "Record Date"), in an amount equal to the
product of the Percentage Interest evidenced by this Certificate and the amount
required to be distributed to the Holders of Class M-[1][2][3][4][5][6]
Certificates on such Distribution Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Securities Administrator by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Securities
Administrator in writing at least five Business Days prior to the Record Date

                                      A-2-3
<PAGE>

immediately prior to such Distribution Date and is the registered owner of Class
M-[1][2][3][4][5][6] Certificates the aggregate initial Certificate Principal
Balance of which is in excess of the lesser of (i) $5,000,000 or (ii) two-thirds
of the aggregate initial Certificate Principal Balance of the Class
M-[1][2][3][4][5][6] Certificates, or otherwise by check mailed by first class
mail to the address of the Person entitled thereto, as such name and address
shall appear on the Certificate Register. Notwithstanding the above, the final
distribution on this Certificate will be made after due notice by the Securities
Administrator of the pendency of such distribution and only upon presentation
and surrender of this Certificate at the office or agency appointed by the
Securities Administrator for that purpose as provided in the Agreement.

                  The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
equal a rate per annum equal to the lesser of (i) One-Month LIBOR plus [____]% ,
in the case of each Distribution Date through and including the Distribution
Date on which the aggregate principal balance of the Mortgage Loans (and
properties acquired in respect thereof) remaining in the Trust Fund is reduced
to less than 10% of the aggregate principal balance of the Mortgage Loans as of
the Cut-off Date, or One-Month LIBOR plus [____]%, in the case of any
Distribution Date thereafter and (ii) the applicable Net WAC Pass-Through Rate
for such Distribution Date.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificate of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans and payments received
pursuant to the Cap Contracts, all as more specifically set forth herein and in
the Agreement. As provided in the Agreement, withdrawals from the Collection
Account and the Distribution Account may be made from time to time for purposes
other than distributions to Certificateholders, such purposes including
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee, the Securities
Administrator, the Servicer and the rights of the Certificateholders under the
Agreement at any time by the Depositor, the Master Servicer, the Trustee, the
Securities Administrator and the Servicer with the consent of the Holders of
Certificates entitled to at least 66% of the Voting Rights. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

                                      A-2-4
<PAGE>
                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Securities Administrator
as provided in the Agreement, duly endorsed by, or accompanied by an assignment
in the form below or other written instrument of transfer in form satisfactory
to the Securities Administrator duly executed by, the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

                  Any transferee of this Certificate shall be deemed to make the
representations set forth in Section 6.02(c) of the Agreement.

                  No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Securities Administrator may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of
Certificates.

                  The Depositor, the Master Servicer, the Trustee, the
Securities Administrator, the Servicer and any agent of the Depositor, the
Master Servicer, the Trustee, the Securities Administrator or the Servicer may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Depositor, the Master Servicer, the
Trustee, the Securities Administrator, the Servicer nor any such agent shall be
affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Securities Administrator and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in REMIC I and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.

                                      A-2-4
<PAGE>
                  The recitals contained herein shall be taken as statements of
the Depositor and neither the Trustee nor the Securities Administrator assume
any responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Securities Administrator by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

                                      A-2-5
<PAGE>

                  IN WITNESS WHEREOF, the Securities Administrator has caused
this Certificate to be duly executed.

Dated:
                                         WELLS FARGO BANK, N.A.
                                         as Securities Administrator

                                         By:
                                            --------------------------------
                                             Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

                  This is one of the Class  M-[1][2][3][4][5][6] Certificates
referred to in the within-mentioned Agreement.

                                         WELLS FARGO BANK, N.A.
                                         as Securities Administrator

                                         By:
                                            --------------------------------
                                             Authorized Officer

<PAGE>

                                  ABBREVIATIONS
                                  -------------

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
<TABLE>
<CAPTION>

<S>                   <C>                                   <C>                             <C>
TEN COM       -       as tenants in common                  UNIF GIFT MIN ACT -                   CUSTODIAN
                                                                                                (Cust) (Minor)
                                                                                              under Uniform Gifts
                                                                                                 to Minors Act
TEN ENT       -       as tenants by the entireties                                             ________________
                                                                                                    (State)
JT TEN        -       as joint tenants with right
                      if survivorship and not as
                      tenants in common

                       Additional abbreviations may also be used though not in
the above list.
</TABLE>

                                   ASSIGNMENT
                                   ----------

                  FOR  VALUE  RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto _______________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer of
such interest to assignee on the Certificate Register of the Trust Fund.

                  I (we) further direct the Trustee or the Securities
Administrator to issue a new Certificate of a like  Percentage  Interest and
Class to the above named  assignee and deliver such  Certificate  to the
following address: ___________________________________________________________
_____________________________________________________________________________.

Dated:
                                      _________________________________________
                                      Signature by or on behalf of assignor

                                      ______________________________________
                                      Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________
for the account of_____________________________________________________________,
account number ____________________, or, if mailed by check, to _______________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by________________________________________________,
the assignee named above, or __________________________________________, as its
agent.

<PAGE>

                                   EXHIBIT A-3

                  FORM OF CLASS B-[1][2][3][4][5] CERTIFICATES

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
         "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
         THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
         INTERNAL REVENUE CODE OF 1986 (THE "CODE").

         THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
         CERTIFICATES, THE MEZZANINE CERTIFICATES [[,/AND] CLASS B-1
         CERTIFICATES [,/AND] CLASS B-2 CERTIFICATES[,/AND] CLASS B-3
         CERTIFICATES [,/AND] CLASS B-4 CERTIFICATES], AS DESCRIBED IN THE
         AGREEMENT REFERRED TO HEREIN.

         THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DECREASED
         BY THE PRINCIPAL PAYMENTS HEREON AND REALIZED LOSSES ALLOCABLE HERETO
         AS DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN. ACCORDINGLY,
         FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE CERTIFICATE
         PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE
         DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY
         ASCERTAIN ITS CERTIFICATE PRINCIPAL BALANCE BY INQUIRY OF THE
         SECURITIES ADMINISTRATOR NAMED HEREIN.

         THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
         SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER ANY STATE
         SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE,
         AGREES THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR
         OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND
         OTHER APPLICABLE LAWS AND (1) OUTSIDE OF THE UNITED STATES WITHIN THE
         MEANING OF AND IN COMPLIANCE WITH REGULATION S UNDER THE ACT
         ("REGULATION S"), OR (2) WITHIN THE UNITED STATES TO (A) "QUALIFIED
         INSTITUTIONAL BUYERS" WITHIN THE MEANING OF AND IN COMPLIANCE WITH RULE
         144A UNDER THE ACT ("RULE 144A") OR (B) TO INSTITUTIONAL INVESTORS THAT
         ARE "ACCREDITED INVESTORS" WITHIN THE MEANING OF RULE 501(A)(1), (2),
         (3) OR (7) OF "REGULATION D" UNDER THE ACT.

         [THIS CERTIFICATE IS A REGULATION S TEMPORARY GLOBAL CERTIFICATE FOR
         PURPOSES OF REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF
         1933, AS AMENDED (THE "SECURITIES ACT"). PRIOR TO THE DATE THAT IS 40
         DAYS
<PAGE>

         AFTER THE LATER OF (I) THE COMMENCEMENT OF THE OFFERING OF THE OFFERED
         CERTIFICATES AND (II) THE CLOSING DATE, THIS CERTIFICATE MAY NOT BE
         OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE UNITED STATES
         OR TO A U.S. PERSON EXCEPT PURSUANT TO AN EXEMPTION FROM THE
         REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.]

         [NO BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL CERTIFICATE
         SHALL BE ENTITLED TO RECEIVE PAYMENTS OF PRINCIPAL OR INTEREST HEREIN
         UNLESS THE REQUIRED CERTIFICATIONS HAVE BEEN DELIVERED PURSUANT TO THE
         TERMS OF THE AGREEMENT (AS DEFINED HEREIN).]

         [THE HOLDER OF THIS REGULATION S PERMANENT GLOBAL CERTIFICATE BY ITS
         ACCEPTANCE HEREOF AGREES NOT TO OFFER, SELL OR OTHERWISE TRANSFER SUCH
         CERTIFICATE WITHIN THE UNITED STATES OR TO U.S. PERSONS (AS DEFINED IN
         REGULATION S UNDER THE SECURITIES ACT) PRIOR TO THE DATE WHICH IS THE
         LATER OF (I) 40 DAYS AFTER THE LATER OF THE CLOSING DATE AND (II) THE
         DATE ON WHICH THE REQUISITE CERTIFICATIONS ARE DUE TO AND PROVIDED TO
         THE TRUSTEE AND SECURITIES ADMINISTRATOR PURSUANT TO THE AGREEMENT (AS
         DEFINED BELOW), EXCEPT PURSUANT TO AN EXEMPTION FROM THE REGISTRATION
         REQUIREMENTS OF THE SECURITIES ACT.]

         NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE
         TRANSFEREE PROVIDES A CERTIFICATION PURSUANT TO SECTION 6.02(C) OF THE
         AGREEMENT.

                                      A-3-2
<PAGE>

<TABLE>
<CAPTION>

<S>                                                            <C>
Series ACE 2004-RM1, Class B-[1][2][3][4][5]                   Aggregate Certificate Principal Balance
                                                               of the Class B-[1][2][3][4][5]
                                                               Certificates as of the Issue Date: $

Pass-Through Rate: Variable                                    Denomination: $

Date of Pooling and Servicing Agreement                        Master Servicer: Wells Fargo Bank, N.A.
and Cut-off Date: July 1, 2004

First Distribution Date: August 25, 2004                       Trustee: HSBC Bank USA, National Association

No. ______                                                     Issue Date: July 30, 2004

                                                               CUSIP:
</TABLE>

          ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2004-IN1
                      ASSET BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family, fixed and
adjustable-rate first and second lien mortgage loans (the "Mortgage Loans")
formed and sold by

                              ACE SECURITIES CORP.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ACE
         SECURITIES CORP., THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR,
         THE SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES.
         NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE
         GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

         This certifies that _______________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class B-[1][2][3][4][5]
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class B-[1][2][3][4][5] Certificates in REMIC II created
pursuant to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among ACE Securities Corp., as depositor (hereinafter called the
"Depositor", which term includes any successor entity under the Agreement),
Wells Fargo Bank, N.A., as master servicer (the "Master Servicer"), and
securities administrator (the "Securities Administrator"), HomEq Servicing
Corporation, as servicer (the "Servicer") and HSBC Bank USA, National
Association, as trustee (the "Trustee"), a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate

<PAGE>

by virtue of the acceptance hereof assents and by which such Holder is bound.

         Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following such 25th day (a "Distribution Date"),
commencing on the First Distribution Date specified above, to the Person in
whose name this Certificate is registered at the close of business on the
Business Day immediately preceding such Distribution Date (the "Record Date"),
in an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
B-[1][2][3][4][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 the Securities Administrator by wire
transfer in immediately available funds to the account of the Person entitled
thereto if such Person shall have so notified the Securities Administrator in
writing at least five Business Days prior to the Record Date immediately prior
to such Distribution Date and is the registered owner of Class B-[1][2][3][4][5]
Certificates the aggregate initial Certificate Principal Balance of which is in
excess of the lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate
initial Certificate Principal Balance of the Class B-[1][2][3][4][5]
Certificates, or otherwise by check mailed by first class mail to the address of
the Person entitled thereto, as such name and address shall appear on the
Certificate Register. Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Securities Administrator of the
pendency of such distribution and only upon presentation and surrender of this
Certificate at the office or agency appointed by the Securities Administrator
for that purpose as provided in the Agreement.

         The Pass-Through Rate applicable to the calculation of interest payable
with respect to this Certificate on any Distribution Date shall equal a rate per
annum equal to the lesser of (i) One Month LIBOR plus _____%, in the case of
each Distribution Date through and including the Distribution Date on which the
aggregate principal balance of the Mortgage Loans (and properties acquired in
respect thereof) remaining in the Trust Fund is reduced to less than 10% of the
aggregate principal balance of the Mortgage Loans as of the Cut-off Date, or
One-Month LIBOR plus _____%, in the case of any Distribution Date thereafter and
(ii) the applicable Net WAC Pass-Through Rate for such Distribution Date.

         This Certificate is one of a duly authorized issue of Certificates
designated as Asset Backed Pass-Through Certificates of the Series specified on
the face hereof (herein called the "Certificates") and representing a Percentage
Interest in the Class of Certificates specified on the face hereof equal to the
denomination specified on the face hereof divided by the aggregate Certificate
Principal Balance of the Class of Certificates specified on the face hereof.

         The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans and payments received pursuant to
the Cap Contracts, all as more specifically set forth herein and in the
Agreement. As provided in the Agreement, withdrawals from the Collection Account
and the Distribution Account may be made from time to time for purposes other
than distributions to Certificateholders, such purposes including reimbursement
of advances made, or certain expenses incurred, with respect to the Mortgage
Loans.

                                      A-3-4

<PAGE>

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Trustee, the Securities Administrator, the
Servicer and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Master Servicer, the Trustee, the Securities
Administrator and the Servicer with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Securities Administrator as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Securities
Administrator duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

         The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange of Certificates, but the Securities Administrator may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.

         No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and an effective registration or
qualification under applicable state securities laws, or is made in a
transaction that does not require such registration or qualification. In the
event that such a transfer of this Certificate is to be made without
registration or qualification, the Securities Administrator shall require
receipt of (i) if such transfer is purportedly being made in reliance upon Rule
144A or Regulation S under the 1933 Act, written certifications from the Holder
of the Certificate desiring to effect the transfer, and from such Holder's
prospective transferee, substantially in the forms attached to the Agreement as
Exhibit B-1, and (ii) in all other cases, an Opinion of Counsel satisfactory to
it that such transfer may be made without such registration or qualification
(which Opinion of Counsel shall not be an expense of the Trust Fund or of the
Depositor, the Trustee, the Master Servicer or the Securities Administrator in
their respective capacities as such), together with copies of the written
certification(s) of the Holder of the Certificate desiring to effect the
transfer and/or such Holder's prospective transferee upon which

                                      A-3-5
<PAGE>

such Opinion of Counsel is based. None of the Depositor, the Trustee or the
Securities Administrator is obligated to register or qualify the Class of
Certificates specified on the face hereof under the 1933 Act or any other
securities law or to take any action not otherwise required under the Agreement
to permit the transfer of such Certificates without registration or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Depositor, the Master Servicer
and the Securities Administrator against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws.

         No transfer of this Class B-[1][2][3][4][5] Certificate will be made
unless the Depositor, the Trustee and the Securities Administrator have received
a representation letter, in the form as described by the Agreement, stating that
either (i) the transferee is not an employee benefit or other plan subject to
the prohibited transaction provisions of ERISA or Section 4975 of the Code (a
"Plan"), or any other person (including an investment manager, a named fiduciary
or a trustee of any Plan) acting, directly or indirectly, on behalf of or
purchasing any Certificate with "plan assets" of any Plan or (ii) (A) it is an
insurance company, (B) the source of funds used to acquire or hold the
certificate or interest therein is an "insurance company general account," as
such term is defined in Prohibited Transaction Class Exemption ("PTCE") 95-60,
and (C) the conditions in Sections I and III of PTCE 95-60 have been satisfied.

         The Depositor, the Master Servicer, the Trustee, the Securities
Administrator, the Servicer and any agent of the Depositor, the Master Servicer,
the Trustee, the Securities Administrator or the Servicer may treat the Person
in whose name this Certificate is registered as the owner hereof for all
purposes, and none of the Depositor, the Master Servicer, the Trustee, the
Securities Administrator, the Servicer nor any such agent shall be affected by
notice to the contrary.

         The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by the Securities Administrator and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in REMIC I and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.

         The recitals contained herein shall be taken as statements of the
Depositor and neither the Trustee nor the Securities Administrator assume any
responsibility for their correctness.

                                      A-3-6
<PAGE>

Unless the certificate of authentication hereon has been executed by the
Securities Administrator, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

<PAGE>

                  IN WITNESS WHEREOF, the Securities Administrator has caused
this Certificate to be duly executed.

Dated:
                                         WELLS FARGO BANK, N.A.
                                         as Securities Administrator

                                         By:
                                            --------------------------------
                                             Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

                  This is one of the Class  B-[1][2][3][4][5] Certificates
referred to in the within-mentioned Agreement.

                                         WELLS FARGO BANK, N.A.
                                         as Securities Administrator

                                         By:
                                            --------------------------------
                                             Authorized Officer

<PAGE>

                                  ABBREVIATIONS

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
<TABLE>
<CAPTION>

<S>                   <C>                                   <C>                             <C>
TEN COM       -       as tenants in common                  UNIF GIFT MIN ACT -                   CUSTODIAN
                                                                                                (Cust) (Minor)
                                                                                              under Uniform Gifts
                                                                                                 to Minors Act
TEN ENT       -       as tenants by the entireties                                             ________________
                                                                                                    (State)
JT TEN        -       as joint tenants with right
                      if survivorship and not as
                      tenants in common

                       Additional abbreviations may also be used though not in
the above list.
</TABLE>

                                   ASSIGNMENT
                                   ----------

                  FOR  VALUE  RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto _______________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer of
such interest to assignee on the Certificate Register of the Trust Fund.

                  I (we) further direct the Trustee or the Securities
Administrator to issue a new Certificate of a like  Percentage  Interest and
Class to the above named  assignee and deliver such  Certificate  to the
following address: ___________________________________________________________
_____________________________________________________________________________.

Dated:
                                      _________________________________________
                                      Signature by or on behalf of assignor

                                      ______________________________________
                                      Signature Guaranteed
<PAGE>

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________
for the account of_____________________________________________________________,
account number ____________________, or, if mailed by check, to _______________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by________________________________________________,
the assignee named above, or __________________________________________, as its
agent.

<PAGE>

                                   EXHIBIT A-4
                                   -----------

                          FORM OF CLASS CE CERTIFICATE

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
         "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
         THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
         INTERNAL REVENUE CODE OF 1986 (THE "CODE").

         THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES AND THE
         MEZZANINE CERTIFICATES TO THE EXTENT DESCRIBED IN THE AGREEMENT
         REFERRED TO HEREIN.

         THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
         SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE
         AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT
         TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE
         EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW
         AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 6.02 OF
         THE AGREEMENT.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
         RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
         SECURITY ACT OF 1974, AS AMENDED, OR THE CODE WILL BE REGISTERED EXCEPT
         IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.

<PAGE>

<TABLE>
<CAPTION>

<S>                                                                <C>
Series 2004-RM1, Class CE                                          Aggregate Certificate Principal
                                                                   Balance of the Class CE
                                                                   Certificates as of the
                                                                   Issue Date: $_____________

Pass-Through Rate: Variable                                        Denomination: $_________________

Cut-off Date and date of Pooling and Servicing Agreement:          Master Servicer: Wells Fargo Bank, N.A.
July 1, 2004

First Distribution Date: August 25, 2004                           Trustee: HSBC Bank USA, National Association
No. __                                                             Issue Date: July 30, 2004

Aggregate Notional Amount of the
Class CE Certificates as of the Issue Date: $_____________

Notional Amount: $_______________
</TABLE>

          ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2004-RM1
                      ASSET BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family, fixed and
adjustable-rate, first and second lien mortgage loans (the "Mortgage Loans")
formed and sold by

                              ACE SECURITIES CORP.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ACE
         SECURITIES CORP., THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR,
         THE SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES.
         NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE
         GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that ________________ is the registered owner
of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class CE
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class CE Certificates in REMIC II created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among ACE Securities Corp., as depositor (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), Wells Fargo Bank,
N.A., as master servicer (the "Master Servicer") and securities administrator
(the "Securities Administrator"), HomEq Servicing Corporation, as servicer (the
"Servicer") and HSBC Bank USA, National Association, as trustee (the "Trustee"),
a summary of certain of the pertinent provisions of which is set forth
hereafter.

                                      A-4-3
<PAGE>

To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following such 25th day (a "Distribution Date"),
commencing on the First Distribution Date specified above, to the Person in
whose name this Certificate is registered on the last Business Day of the
calendar month immediately preceding the month in which the related Distribution
Date occurs (the "Record Date"), in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to the Holders of Class 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 the Securities Administrator by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Securities
Administrator in writing at least five Business Days prior to the Record Date
immediately prior to such Distribution Date and is the registered owner of Class
CE Certificates the aggregate initial Certificate Principal Balance of which is
in excess of the lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate
initial Certificate Principal Balance of the Class CE Certificates, or otherwise
by check mailed by first class mail to the address of the Person entitled
thereto, as such name and address shall appear on the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Securities Administrator of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Securities Administrator for that purpose as
provided in the Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificate of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee, the Securities
Administrator, the Servicer and the rights of the Certificateholders under the
Agreement at any time by the Depositor, the Master Servicer, the Trustee, the
Securities Administrator and the Servicer with the consent of the Holders of
Certificates entitled

                                      A-4-4
<PAGE>

to at least 66% of the Voting Rights. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Securities Administrator
as provided in the Agreement, duly endorsed by, or accompanied by an assignment
in the form below or other written instrument of transfer in form satisfactory
to the Securities Administrator duly executed by, the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

                  No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Securities Administrator shall require
receipt of (i) if such transfer is purportedly being made in reliance upon Rule
144A under the 1933 Act, written certifications from the Holder of the
Certificate desiring to effect the transfer, and from such Holder's prospective
transferee, substantially in the forms attached to the Agreement as Exhibit B-1,
and (ii) in all other cases, an Opinion of Counsel satisfactory to it that such
transfer may be made without such registration or qualification (which Opinion
of Counsel shall not be an expense of the Trust Fund or of the Depositor, the
Trustee, the Master Servicer or the Securities Administrator in their respective
capacities as such), together with copies of the written certification(s) of the
Holder of the Certificate desiring to effect the transfer and/or such Holder's
prospective transferee upon which such Opinion of Counsel is based. None of the
Depositor, the Trustee or the Securities Administrator is obligated to register
or qualify the Class of Certificates specified on the face hereof under the 1933
Act or any other securities law or to take any action not otherwise required
under the Agreement to permit the transfer of such Certificates without
registration or qualification. Any Holder desiring to effect a transfer of this
Certificate shall be required to indemnify the Trustee, the Depositor, the
Master Servicer and the Securities Administrator against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.

                  No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 6.02(c) of the Agreement.

                                      A-4-5
<PAGE>
                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee, the
Securities Administrator, the Servicer and any agent of the Depositor, the
Master Servicer, the Trustee, the Securities Administrator or the Servicer may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Depositor, the Master Servicer, the
Trustee, the Securities Administrator, the Servicer nor any such agent shall be
affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Securities Administrator and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in REMIC I and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and neither the Trustee nor the Securities Administrator assume
any responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Securities Administrator, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

                                      A-4-5
<PAGE>

                  IN WITNESS WHEREOF, the Securities Administrator has caused
this Certificate to be duly executed.

Dated:
                                         WELLS FARGO BANK, N.A.
                                         as Securities Administrator

                                         By:
                                            --------------------------------
                                             Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

                  This is one of the Class  CE Certificates referred to in the
within-mentioned Agreement.

                                         WELLS FARGO BANK, N.A.
                                         as Securities Administrator

                                         By:
                                            --------------------------------
                                             Authorized Officer

<PAGE>

                                  ABBREVIATIONS
                                  -------------

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
<TABLE>
<CAPTION>

<S>                   <C>                                   <C>                             <C>
TEN COM       -       as tenants in common                  UNIF GIFT MIN ACT -                   CUSTODIAN
                                                                                                (Cust) (Minor)
                                                                                              under Uniform Gifts
                                                                                                 to Minors Act
TEN ENT       -       as tenants by the entireties                                             ________________
                                                                                                    (State)
JT TEN        -       as joint tenants with right
                      if survivorship and not as
                      tenants in common

                       Additional abbreviations may also be used though not in
the above list.
</TABLE>

                                   ASSIGNMENT
                                   ----------

                  FOR  VALUE  RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto _______________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer of
such interest to assignee on the Certificate Register of the Trust Fund.

                  I (we) further direct the Trustee or the Securities
Administrator to issue a new Certificate of a like  Percentage  Interest and
Class to the above named  assignee and deliver such  Certificate  to the
following address: ___________________________________________________________
_____________________________________________________________________________.

Dated:
                                      _________________________________________
                                      Signature by or on behalf of assignor

                                      ______________________________________
                                      Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS
                            -------------------------

                  The assignee should include the following for purposes of
distribution:

Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________
for the account of_____________________________________________________________,
account number ____________________, or, if mailed by check, to _______________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by________________________________________________,
the assignee named above, or __________________________________________, as its
agent.

<PAGE>

                                   EXHIBIT A-5
                                   -----------

                               CLASS P CERTIFICATE

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
         "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
         THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
         INTERNAL REVENUE CODE OF 1986 (THE "CODE").

         THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
         SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE
         AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT
         TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE
         EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW
         AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 6.02 OF
         THE AGREEMENT.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
         RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
         SECURITY ACT OF 1974, AS AMENDED, OR THE CODE WILL BE REGISTERED EXCEPT
         IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.

<PAGE>

<TABLE>
<CAPTION>
<S>                                                              <C>
Series 2004-RM1, Class P                                         Aggregate Certificate Principal Balance of the Class
                                                                 P Certificates as of the Issue Date: $100.00

Cut-off Date and date of Pooling and Servicing Agreement:        Denomination: $100.00
July 1, 2004

First Distribution Date: August 25, 2004                         Master Servicer: Wells Fargo Bank, N.A.

No.                                                              __ Trustee: HSBC Bank USA, National
                                                                 Association

                                                                 Issue Date:
                                                                 July 30, 2004
</TABLE>

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
         CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
         OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
         LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
         CERTIFICATE.

<PAGE>

          ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2004-RM1
                      ASSET BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family, fixed and
adjustable-rate, first and second lien mortgage loans (the "Mortgage Loans")
formed and sold by

                              ACE SECURITIES CORP.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ACE
         SECURITIES CORP., THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR,
         THE SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES.
         NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE
         GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that____________________ is the registered
owner of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class P
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class P Certificates in REMIC II created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among ACE Securities Corp., as depositor (hereinafter called the "Depositor",
which term includes any successor entity under the Agreement), Wells Fargo Bank,
N.A., as master servicer (the "Master Servicer"), and securities administrator
(the "Securities Administrator"), HomEq Servicing Corporation, as servicer (the
"Servicer") and HSBC Bank USA, National Association, as trustee (the "Trustee"),
a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following such 25th day (a "Distribution Date"),
commencing on the First Distribution Date specified above, to the Person in
whose name this Certificate is registered on the last Business Day of the
calendar month immediately preceding the month in which the related Distribution
Date occurs (the "Record Date"), in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to the Holders of Class P Certificates on such Distribution Date
pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Securities Administrator by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Securities
Administrator in writing at least five Business Days prior to the Record Date
immediately prior to such Distribution Date and is the registered owner of Class
P Certificates

                                      A-5-3

<PAGE>

the aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class P Certificates, or otherwise by check mailed by
first class mail to the address of the Person entitled thereto, as such name and
address shall appear on the Certificate Register. Notwithstanding the above, the
final distribution on this Certificate will be made after due notice by the
Securities Administrator of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Securities Administrator for that purpose as provided in the Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificate of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee, the Securities
Administrator, the Servicer and the rights of the Certificateholders under the
Agreement at any time by the Depositor, the Master Servicer, the Trustee, the
Securities Administrator and the Servicer with the consent of the Holders of
Certificates entitled to at least 66% of the Voting Rights. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Securities Administrator
as provided in the Agreement, duly endorsed by, or accompanied by an assignment
in the form below or other written instrument of transfer in form satisfactory
to the Securities Administrator duly executed by, the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

                  No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933

                                      A-5-4

<PAGE>

Act"), and an effective registration or qualification under applicable state
securities laws, or is made in a transaction that does not require such
registration or qualification. In the event that such a transfer of this
Certificate is to be made without registration or qualification, the Securities
Administrator shall require receipt of (i) if such transfer is purportedly being
made in reliance upon Rule 144A under the 1933 Act, written certifications from
the Holder of the Certificate desiring to effect the transfer, and from such
Holder's prospective transferee, substantially in the forms attached to the
Agreement as Exhibit B-1, and (ii) in all other cases, an Opinion of Counsel
satisfactory to it that such transfer may be made without such registration or
qualification (which Opinion of Counsel shall not be an expense of the Trust
Fund or of the Depositor, the Trustee, the Master Servicer or the Securities
Administrator in their respective capacities as such), together with copies of
the written certification(s) of the Holder of the Certificate desiring to effect
the transfer and/or such Holder's prospective transferee upon which such Opinion
of Counsel is based. None of the Depositor, the Trustee or the Securities
Administrator is obligated to register or qualify the Class of Certificates
specified on the face hereof under the 1933 Act or any other securities law or
to take any action not otherwise required under the Agreement to permit the
transfer of such Certificates without registration or qualification. Any Holder
desiring to effect a transfer of this Certificate shall be required to indemnify
the Trustee, the Depositor, the Master Servicer and the Securities Administrator
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws.

                  No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 6.02(c) of the Agreement.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee, the
Securities Administrator, the Servicer and any agent of the Depositor, the
Master Servicer, the Trustee, the Securities Administrator or the Servicer may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Depositor, the Master Servicer, the
Trustee, the Securities Administrator, the Servicer nor any such agent shall be
affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Securities Administrator and required to be paid to them
pursuant to the Agreement following the earlier of

                                      A-5-5

<PAGE>

(i) the final payment or other liquidation (or any advance with respect thereto)
of the last Mortgage Loan remaining in REMIC I and (ii) the purchase by the
party designated in the Agreement at a price determined as provided in the
Agreement from REMIC I of all the Mortgage Loans and all property acquired in
respect of such Mortgage Loans. The Agreement permits, but does not require, the
party designated in the Agreement to purchase from REMIC I all the Mortgage
Loans and all property acquired in respect of any Mortgage Loan at a price
determined as provided in the Agreement. The exercise of such right will effect
early retirement of the Certificates; however, such right to purchase is subject
to the aggregate Stated Principal Balance of the Mortgage Loans at the time of
purchase being less than 10% of the aggregate principal balance of the Mortgage
Loans as of the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and neither the Trustee nor the Securities Administrator assume
any responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Securities Administrator, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

                                      A-5-6
<PAGE>

                  IN WITNESS WHEREOF, the Securities Administrator has caused
this Certificate to be duly executed.

Dated:
                                         WELLS FARGO BANK, N.A.
                                         as Securities Administrator

                                         By:
                                            --------------------------------
                                             Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

                  This is one of the Class P Certificates referred to in the
within-mentioned Agreement.

                                         WELLS FARGO BANK, N.A.
                                         as Securities Administrator

                                         By:
                                            --------------------------------
                                             Authorized Officer

<PAGE>

                                  ABBREVIATIONS

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
<TABLE>
<CAPTION>

<S>                   <C>                                   <C>                             <C>
TEN COM       -       as tenants in common                  UNIF GIFT MIN ACT -                   CUSTODIAN
                                                                                                (Cust) (Minor)
                                                                                              under Uniform Gifts
                                                                                                 to Minors Act
TEN ENT       -       as tenants by the entireties                                             ________________
                                                                                                    (State)
JT TEN        -       as joint tenants with right
                      if survivorship and not as
                      tenants in common

                       Additional abbreviations may also be used though not in
the above list.
</TABLE>

                                   ASSIGNMENT
                                   ----------

                  FOR  VALUE  RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto _______________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer of
such interest to assignee on the Certificate Register of the Trust Fund.

                  I (we) further direct the Trustee or the Securities
Administrator to issue a new Certificate of a like  Percentage  Interest and
Class to the above named  assignee and deliver such  Certificate  to the
following address: ___________________________________________________________
_____________________________________________________________________________.

Dated:
                                      _________________________________________
                                      Signature by or on behalf of assignor

                                      ______________________________________
                                      Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________
for the account of_____________________________________________________________,
account number ____________________, or, if mailed by check, to _______________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by________________________________________________,
the assignee named above, or __________________________________________, as its
agent.

<PAGE>

                                   EXHIBIT A-6

                           FORM OF CLASS R CERTIFICATE

         THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON-UNITED STATES PERSON.

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
         REPRESENTS THE SOLE "RESIDUAL INTEREST" IN EACH "REAL ESTATE MORTGAGE
         INVESTMENT CONDUIT" ("REMIC"), AS THOSE TERMS ARE DEFINED,
         RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
         1986 (THE "CODE").

         ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
         MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF SECTION 6.02 OF THE
         AGREEMENT REFERRED TO HEREIN.

         THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
         SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE
         AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT
         TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE
         EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW
         AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 6.02 OF
         THE AGREEMENT.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
         RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
         SECURITY ACT OF 1974, AS AMENDED, OR THE CODE WILL BE REGISTERED EXCEPT
         IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.

         ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
         MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (I) AN AFFIDAVIT TO THE
         SECURITIES ADMINISTRATOR THAT (A) SUCH TRANSFEREE IS NOT (1) THE UNITED
         STATES OR ANY POSSESSION THEREOF, ANY STATE OR POLITICAL SUBDIVISION
         THEREOF, ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY
         AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING, (2) ANY ORGANIZATION
         (OTHER THAN A COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) THAT IS
         EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH
         ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE,
         (3) ANY ORGANIZATION DESCRIBED IN SECTION 1381(A)(2)(C) OF THE CODE
         (ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (1), (2) OR (3)
         SHALL HEREINAFTER BE REFERRED TO AS A "DISQUALIFIED ORGANIZATION") OR
         (4) AN AGENT OF A DISQUALIFIED ORGANIZATION AND (B) NO PURPOSE OF SUCH
         TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX, AND (II)
         SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO THE
         FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE
         REGISTRATION IN THE CERTIFICATE REGISTER OF ANY TRANSFER, SALE OR OTHER
         DISPOSITION OF THIS CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN
         AGENT OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED
         TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT
         BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER,
         INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
         CERTIFICATE. EACH HOLDER OF THIS CERTIFICATE BY ACCEPTANCE HEREOF SHALL
         BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH AND THE
         PROVISIONS OF SECTION 6.02(D) OF THE AGREEMENT REFERRED TO HEREIN. ANY
         PERSON THAT IS A DISQUALIFIED ORGANIZATION IS PROHIBITED FROM ACQUIRING
         BENEFICIAL OWNERSHIP OF THIS CERTIFICATE.

<TABLE>
<CAPTION>

<S>                                                              <C>
Series 2004-RM1, Class R                                         Aggregate Percentage Interest of the Class R
                                                                 Certificates as of the Issue Date: 100.00%

Date of Pooling and Servicing Agreement                          Master Servicer: Wells Fargo Bank, N.A.
and Cut-off Date: July 1, 2004

First Distribution Date: August 25, 2004                         Trustee: HSBC Bank USA, National Association

No __                                                            Issue Date: July 30, 2004
</TABLE>

                                      A-6-2

<PAGE>

          ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2004-RM1
                      ASSET BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family, fixed and
adjustable-rate first and second lien mortgage loans (the "Mortgage Loans")
formed and sold by

                              ACE SECURITIES CORP.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ACE
         SECURITIES CORP., THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR,
         THE SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES.
         NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE
         GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

                                      A-6-3

<PAGE>

                  This certifies that _______________ is the registered owner of
a Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class R Certificates as of
the Issue Date) in that certain beneficial ownership interest evidenced by all
the Class R Certificates in REMIC II created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among ACE Securities
Corp., as depositor (hereinafter called the "Depositor", which term includes any
successor entity under the Agreement), Wells Fargo Bank, N.A., as master
servicer (the "Master Servicer") and securities administrator (the "Securities
Administrator"), HomEq Servicing Corporation, as the servicer (the "Servicer")
and HSBC Bank USA, National Association, as trustee (the "Trustee"), a summary
of certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class R Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Securities Administrator by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Securities
Administrator in writing at least five Business Days prior to the Record Date
immediately prior to such Distribution Date and is the registered owner of Class
R Certificates, or otherwise by check mailed by first class mail to the address
of the Person entitled thereto, as such name and address shall appear on the
Certificate Register. Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Securities Administrator of the
pendency of such distribution and only upon presentation and surrender of this
Certificate at the office or agency appointed by the Securities Administrator
for that purpose as provided in the Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificate of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to

                                      A-6-4
<PAGE>

Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee, the Securities
Administrator, the Servicer and the rights of the Certificateholders under the
Agreement at any time by the Depositor, the Master Servicer, the Trustee, the
Securities Administrator and the Servicer with the consent of the Holders of
Certificates entitled to at least 66% of the Voting Rights. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Securities Administrator
as provided in the Agreement, duly endorsed by, or accompanied by an assignment
in the form below or other written instrument of transfer in form satisfactory
to the Securities Administrator duly executed by, the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

                  No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Securities Administrator shall require
receipt of (i) if such transfer is purportedly being made in reliance upon Rule
144A under the 1933 Act, written certifications from the Holder of the
Certificate desiring to effect the transfer, and from such Holder's prospective
transferee, substantially in the forms attached to the Agreement as Exhibit B-1,
and (ii) in all other cases, an Opinion of Counsel satisfactory to it that such
transfer may be made without such registration or qualification (which Opinion
of Counsel shall not be an expense of the Trust Fund or of the Depositor, the
Trustee, the Master Servicer or the Securities Administrator in their respective
capacities as such), together with copies of the written certification(s) of the
Holder of the Certificate desiring to effect the transfer and/or such Holder's
prospective transferee upon which such Opinion of Counsel is based. None of the
Depositor, the Trustee or the Securities

                                      A-6-5
<PAGE>

Administrator is obligated to register or qualify the Class of Certificates
specified on the face hereof under the 1933 Act or any other securities law or
to take any action not otherwise required under the Agreement to permit the
transfer of such Certificates without registration or qualification. Any Holder
desiring to effect a transfer of this Certificate shall be required to indemnify
the Trustee, the Depositor, the Master Servicer and the Securities Administrator
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws.

                  No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 6.02 of the Agreement.

                  Prior to registration of any transfer, sale or other
disposition of this Certificate, the proposed transferee shall provide to the
Securities Administrator (i) an affidavit to the effect that such transferee is
any Person other than a Disqualified Organization or the agent (including a
broker, nominee or middleman) of a Disqualified Organization, and (ii) a
certificate that acknowledges that (A) the Class R Certificates have been
designated as representing the beneficial ownership of the residual interests in
each of REMIC I and REMIC II, (B) it will include in its income a PRO RATA share
of the net income of the Trust Fund and that such income may be an "excess
inclusion," as defined in the Code, that, with certain exceptions, cannot be
offset by other losses or benefits from any tax exemption, and (C) it expects to
have the financial means to satisfy all of its tax obligations including those
relating to holding the Class R Certificates. Notwithstanding the registration
in the Certificate Register of any transfer, sale or other disposition of this
Certificate to a Disqualified Organization or an agent (including a broker,
nominee or middleman) of a Disqualified Organization, such registration shall be
deemed to be of no legal force or effect whatsoever and such Person shall not be
deemed to be a Certificateholder for any purpose, including, but not limited to,
the receipt of distributions in respect of this Certificate.

                  The Holder of this Certificate, by its acceptance hereof,
shall be deemed to have consented to the provisions of Section 6.02 of the
Agreement and to any amendment of the Agreement deemed necessary by counsel of
the Depositor to ensure that the transfer of this Certificate to any Person
other than a Permitted Transferee or any other Person will not cause any portion
of the Trust Fund to cease to qualify as a REMIC or cause the imposition of a
tax upon any REMIC.

                  No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Securities Administrator may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of
Certificates.

                  The Depositor, the Master Servicer, the Trustee, the
Securities Administrator, the Servicer and any agent of the Depositor, the
Master Servicer, the Trustee, the Securities Administrator or the Servicer may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Depositor, the Master Servicer, the
Trustee,

                                      A-6-6
<PAGE>

the Securities Administrator, the Servicer nor any such agent shall be affected
by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Securities Administrator and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in REMIC I and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and neither the Trustee nor the Securities Administrator assume
any responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Securities Administrator, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

                                      A-6-7
<PAGE>

                  IN WITNESS WHEREOF, the Securities Administrator has caused
this Certificate to be duly executed.

Dated:
                                         WELLS FARGO BANK, N.A.
                                         as Securities Administrator

                                         By:
                                            --------------------------------
                                             Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

                  This is one of the Class R Certificates referred to in the
within-mentioned Agreement.

                                         WELLS FARGO BANK, N.A.
                                         as Securities Administrator

                                         By:
                                            --------------------------------
                                             Authorized Officer

<PAGE>

                                  ABBREVIATIONS

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
<TABLE>
<CAPTION>

<S>                   <C>                                   <C>                             <C>
TEN COM       -       as tenants in common                  UNIF GIFT MIN ACT -                   CUSTODIAN
                                                                                                (Cust) (Minor)
                                                                                              under Uniform Gifts
                                                                                                 to Minors Act
TEN ENT       -       as tenants by the entireties                                             ________________
                                                                                                    (State)
JT TEN        -       as joint tenants with right
                      if survivorship and not as
                      tenants in common

                       Additional abbreviations may also be used though not in
the above list.
</TABLE>

                                   ASSIGNMENT
                                   ----------

                  FOR  VALUE  RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto _______________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer of
such interest to assignee on the Certificate Register of the Trust Fund.

                  I (we) further direct the Trustee or the Securities
Administrator to issue a new Certificate of a like  Percentage  Interest and
Class to the above named  assignee and deliver such  Certificate  to the
following address: ___________________________________________________________
_____________________________________________________________________________.

Dated:
                                      _________________________________________
                                      Signature by or on behalf of assignor

                                      ______________________________________
                                      Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________
for the account of_____________________________________________________________,
account number ____________________, or, if mailed by check, to _______________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by________________________________________________,
the assignee named above, or __________________________________________, as its
agent.

<PAGE>

                                   EXHIBIT B-1
                                   -----------

                    FORM OF TRANSFEROR REPRESENTATION LETTER

                                     [Date]

Wells Fargo Bank, N.A.
Sixth and Marquette Avenue
Minneapolis, Minnesota 55479
Attention: Corporate Trust ACE 2004-RM1

         Re:      Ace Securities Corp. Home Equity Loan Trust, Series 2004-RM1
                  Asset Backed Pass-Through Certificates
                  Class B, Class Ce, Class P and Class R Certificates
                  -------------------------------------------------------------

Ladies and Gentlemen:

                  In connection with the transfer by ______________________ (the
"Transferor") to ___________________ (the "Transferee") of the captioned
mortgage pass-through certificates (the "Certificates"), the Transferor hereby
certifies as follows:

                  Neither the Transferor nor anyone acting on its behalf has (a)
offered, pledged, sold, disposed of or otherwise transferred any Certificate,
any interest in any Certificate or any other similar security to any person in
any manner, (b) has solicited any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c) has
otherwise approached or negotiated with respect to any Certificate, any interest
in any Certificate or any other similar security with any person in any manner,
(d) has made any general solicitation by means of general advertising or in any
other manner, (e) has taken any other action, that (in the case of each of
subclauses (a) through (e) above) would constitute a distribution of the
Certificates under the Securities Act of 1933, as amended (the "1933 Act"), or
would render the disposition of any Certificate a violation of Section 5 of the
1933 Act or any state securities law or would require registration or
qualification pursuant thereto. The Transferor will not act, nor has it
authorized or will it authorize any person to act, in any manner set forth in
the foregoing sentence with respect to any Certificate. The Transferor will not
sell or otherwise transfer any of the Certificates, except in compliance with
the provisions of that certain Pooling and Servicing Agreement, dated as of July
1, 2004, among ACE Securities Corp. as Depositor, HomEq Servicing Corporation as
Servicer, Wells Fargo Bank, N.A. as Master Servicer and Securities Administrator
and HSBC Bank USA, National Association as trustee (the "Pooling and Servicing
Agreement"), pursuant to which Pooling and Servicing Agreement the Certificates
were issued.

<PAGE>

                  Capitalized terms used but not defined herein shall have the
meanings assigned thereto in the Pooling and Servicing Agreement.

                                   Very truly yours,

                                  [Transferor]

                                  By:
                                     -----------------------------
                                  Name:
                                  Title:

                                     B-1-2
<PAGE>

                    FORM OF TRANSFEREE REPRESENTATION LETTER

                                                     [Date]

Wells Fargo Bank, N.A.
Sixth and Marquette Avenue
Minneapolis, Minnesota 55479
Attention: Corporate Trust ACE 2004-RM1

          Re:  Ace Securities Corp. Home Equity Loan Trust, Series 2004-RM1
               Asset Backed Pass-Through Certificates Class B, Class Ce, Class P
               and Class R Certificates
               -----------------------------------------------------------------

Ladies and Gentlemen:

                  In connection with the purchase from
______________________________ (the "Transferor") on the date hereof of the
captioned trust certificates (the "Certificates"), (the "Transferee") hereby
certifies as follows:

                           1. The Transferee is a "qualified institutional
                  buyer" as that term is defined in Rule 144A ("Rule 144A")
                  under the Securities Act of 1933 (the "1933 Act") and has
                  completed either of the forms of certification to that effect
                  attached hereto as Annex 1 or Annex 2. The Transferee is aware
                  that the sale to it is being made in reliance on Rule 144A.
                  The Transferee is acquiring the Certificates for its own
                  account or for the account of a qualified institutional buyer,
                  and understands that such Certificate may be resold, pledged
                  or transferred only (i) to a person reasonably believed to be
                  a qualified institutional buyer that purchases for its own
                  account or for the account of a qualified institutional buyer
                  to whom notice is given that the resale, pledge or transfer is
                  being made in reliance on Rule 144A, or (ii) pursuant to
                  another exemption from registration under the 1933 Act.

                           2. The Transferee has been furnished with all
                  information regarding (a) the Certificates and distributions
                  thereon, (b) the nature, performance and servicing of the
                  Mortgage Loans, (c) the Pooling and Servicing Agreement
                  referred to below, and (d) any credit enhancement mechanism
                  associated with the Certificates, that it has requested.

                           3. The Transferee: (a) is not an employee benefit or
                  other plan subject to the prohibited transaction provisions of
                  the Employee Retirement Income Security Act of 1974, as
                  amended ("ERISA), or Section 4975 of the Internal Revenue Code
                  of 1986, as amended ("Plan"), or any other person (including
                  an investment manager, a named fiduciary or a trustee of any
                  Plan) acting, directly or indirectly, on behalf of or
                  purchasing any Certificate with "plan assets" of any Plan
                  within the meaning of the Department of Labor ("DOL")
                  regulation at 29 C.F.R. ss.2510.3-101 or (b) has provided the
                  Securities Administrator with an opinion of counsel on which
                  the Trustee, the Depositor, the Master Servicer, the
                  Securities Administrator and the Servicer may rely, acceptable
                  to and in form and substance satisfactory to the Trustee to
                  the effect that the purchase of Certificates is permissible
                  under applicable law, will not constitute or result in any
                  non-exempt prohibited transaction under ERISA or Section 4975
                  of the Code and will not subject the Trust Fund, the Trustee,
                  the Depositor, the Master Servicer, the

                                     B-1-4
<PAGE>

                  Securities Administrator or the Servicer to any obligation
                  or liability (including obligations or liabilities under
                  ERISA or Section 4975 of the Code) in addition to those
                  undertaken in the Pooling and Servicing Agreement.

                  In addition, the Transferee hereby certifies, represents and
warrants to, and covenants with, the Depositor, the Trustee, the Securities
Administrator, the Master Servicer and the Servicer that the Transferee will not
transfer such Certificates to any Plan or person unless such Plan or person
meets the requirements set forth in either 3(a) or (b) above.

                  All capitalized terms used but not otherwise defined herein
have the respective meanings assigned thereto in the Pooling and Servicing
Agreement, dated as of July 1, 2004, among ACE Securities Corp. as Depositor,
Wells Fargo Bank, N.A. as Master Servicer and Securities Administrator, HomEq
Servicing Corporation as Servicer and HSBC Bank USA, National Association as
Trustee, pursuant to which the Certificates were issued.

                                      [TRANSFEREE]

                                      By:
                                         ---------------------------------
                                      Name:
                                      Title:

<PAGE>

                                                       ANNEX 1 TO EXHIBIT B-1
                                                       ----------------------

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
            --------------------------------------------------------

          [For Transferees Other Than Registered Investment Companies]

                  The undersigned hereby certifies as follows to [name of
Transferor] (the "Transferor") and Wells Fargo Bank, N.A., as Securities
Administrator, with respect to the asset backed pass-through certificates (the
"Certificates") described in the Transferee Certificate to which this
certification relates and to which this certification is an Annex:

                  1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
entity purchasing the Certificates (the "Transferee").

                  2. In connection with purchases by the Transferee, the
Transferee is a "qualified institutional buyer" as that term is defined in Rule
144A under the Securities Act of 1933 ("Rule 144A") because (i) the Transferee
owned and/or invested on a discretionary basis $________________1 in securities
(except for the excluded securities referred to below) as of the end of the
Transferee's most recent fiscal year (such amount being calculated in accordance
with Rule 144A) and (ii) the Transferee satisfies the criteria in the category
marked below.

         ___      CORPORATION, ETC. The Transferee is a corporation (other than
                  a bank, savings and loan association or similar institution),
                  Massachusetts or similar business trust, partnership, or any
                  organization described in Section 501(c)(3) of the Internal
                  Revenue Code of 1986.

         ___      BANK. The Transferee (a) is a national bank or banking
                  institution organized under the laws of any State, territory
                  or the District of Columbia, the business of which is
                  substantially confined to banking and is supervised by the
                  State or territorial banking commission or similar official or
                  is a foreign bank or equivalent institution, and (b) has an
                  audited net worth of at least $25,000,000 as demonstrated in
                  its latest annual financial statements, A COPY OF WHICH IS
                  ATTACHED HERETO.

         ___      SAVINGS AND LOAN. The Transferee (a) is a savings and loan
                  association, building and loan association, cooperative bank,
                  homestead association or similar institution, which is
                  supervised and examined by a State or Federal authority having
                  supervision over any such institutions or is a foreign savings
                  and loan association or equivalent institution and (b) has an
                  audited net worth of at least $25,000,000 as demonstrated in
                  its latest annual financial statements, A COPY OF WHICH IS
                  ATTACHED HERETO.

-----------------------------------
1     Transferee must own and/or invest on a discretionary basis at least
      $100,000,000 in securities unless Transferee is a dealer, and, in that
      case, Transferee must own and/or invest on a discretionary basis at least
      $10,000,000 in securities.

                                     B-1-5
<PAGE>

          ___  BROKER-DEALER. The Transferee is a dealer registered pursuant to
               Section 15 of the Securities Exchange Act of 1934.

          ___  INSURANCE COMPANY. The Transferee is an insurance company whose
               primary and predominant business activity is the writing of
               insurance or the reinsuring of risks underwritten by insurance
               companies and which is subject to supervision by the insurance
               commissioner or a similar official or agency of a State,
               territory or the District of Columbia.

          ___  STATE OR LOCAL PLAN. The Transferee is a plan established and
               maintained by a State, its political subdivisions, or any agency
               or instrumentality of the State or its political subdivisions,
               for the benefit of its employees.

          ___  ERISA PLAN. The Transferee is an employee benefit plan within the
               meaning of Title I of the Employee Retirement Income Security Act
               of 1974.

          ___  INVESTMENT ADVISOR The Transferee is an investment advisor
               registered under the Investment Advisers Act of 1940.

                  3. The term "SECURITIES" as used herein DOES NOT INCLUDE (i)
securities of issuers that are affiliated with the Transferee, (ii) securities
that are part of an unsold allotment to or subscription by the Transferee, if
the Transferee is a dealer, (iii) securities issued or guaranteed by the U.S. or
any instrumentality thereof, (iv) bank deposit notes and certificates of
deposit, (v) loan participations, (vi) repurchase agreements, (vii) securities
owned but subject to a repurchase agreement and (viii) currency, interest rate
and commodity swaps.

                  4. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the Transferee, the
Transferee used the cost of such securities to the Transferee and did not
include any of the securities referred to in the preceding paragraph. Further,
in determining such aggregate amount, the Transferee may have included
securities owned by subsidiaries of the Transferee, but only if such
subsidiaries are consolidated with the Transferee in its financial statements
prepared in accordance with generally accepted accounting principles and if the
investments of such subsidiaries are managed under the Transferee's direction.
However, such securities were not included if the Transferee is a
majority-owned, consolidated subsidiary of another enterprise and the Transferee
is not itself a reporting company under the Securities Exchange Act of 1934.

                  5. The Transferee acknowledges that it is familiar with Rule
144A and understands that the Transferor and other parties related to the
Certificates are relying and will continue to rely on the statements made herein
because one or more sales to the Transferee may be in reliance on Rule 144A.

         ___      ___    Will the Transferee be purchasing the Certificates
         Yes      No     only for the Transferee's own account?

                  6. If the answer to the foregoing question is "no", the
Transferee agrees that, in connection with any purchase of securities sold to
the Transferee for the account of a third

                                     B-1-6
<PAGE>

party (including any separate account) in reliance on Rule 144A, the Transferee
will only purchase for the account of a third party that at the time is a
"qualified institutional buyer" within the meaning of Rule 144A. In addition,
the Transferee agrees that the Transferee will not purchase securities for a
third party unless the Transferee has obtained a current representation letter
from such third party or taken other appropriate steps contemplated by Rule 144A
to conclude that such third party independently meets the definition of
"qualified institutional buyer" set forth in Rule 144A.

                  7. The Transferee will notify each of the parties to which
this certification is made of any changes in the information and conclusions
herein. Until such notice is given, the Transferee's purchase of the
Certificates will constitute a reaffirmation of this certification as of the
date of such purchase. In addition, if the Transferee is a bank or savings and
loan as provided above, the Transferee agrees that it will furnish to such
parties updated annual financial statements promptly after they become
available.

Dated:
                                      --------------------------------------
                                      Print Name of Transferee

                                      By:
                                          ----------------------------------
                                      Name:
                                      Title:

<PAGE>

                                                          ANNEX 2 TO EXHIBIT B-1
                                                          ----------------------

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
            --------------------------------------------------------

           [For Transferees That Are Registered Investment Companies]

                  The undersigned hereby certifies as follows to [name of
Transferor] (the "Transferor") and Wells Fargo Bank, N.A., as Securities
Administrator, with respect to the asset backed pass-through certificates (the
"Certificates") described in the Transferee Certificate to which this
certification relates and to which this certification is an Annex:

                  1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the entity purchasing the
Certificates (the "Transferee") or, if the Transferee is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933 ("Rule 144A") because the Transferee is part of a Family of
Investment Companies (as defined below), is such an officer of the investment
adviser (the "Adviser").

                  2. In connection with purchases by the Transferee, the
Transferee is a "qualified institutional buyer" as defined in Rule 144A because
(i) the Transferee is an investment company registered under the Investment
Company Act of 1940, and (ii) as marked below, the Transferee alone, or the
Transferee's Family of Investment Companies, owned at least $100,000,000 in
securities (other than the excluded securities referred to below) as of the end
of the Transferee's most recent fiscal year. For purposes of determining the
amount of securities owned by the Transferee or the Transferee's Family of
Investment Companies, the cost of such securities was used.

          ___  The Transferee owned $________________________ in securities
               (other than the excluded securities referred to below) as of the
               end of the Transferee's most recent fiscal year (such amount
               being calculated in accordance with Rule 144A).

          ___  The Transferee is part of a Family of Investment Companies which
               owned in the aggregate $_______________ in securities (other than
               the excluded securities referred to below) as of the end of the
               Transferee's most recent fiscal year (such amount being
               calculated in accordance with Rule 144A).

                  3. The term "FAMILY OF INVESTMENT COMPANIES" as used herein
means two or more registered investment companies (or series thereof) that have
the same investment adviser or investment advisers that are affiliated (by
virtue of being majority owned subsidiaries of the same parent or because one
investment adviser is a majority owned subsidiary of the other).

                  4. The term "SECURITIES" as used herein does not include (i)
securities of issuers that are affiliated with the Transferee or are part of the
Transferee's Family of Investment Companies, (ii) securities issued or
guaranteed by the U.S. or any instrumentality thereof, (iii) bank deposit notes
and certificates of deposit, (iv) loan participations, (v) repurchase
agreements, (vi) securities owned but subject to a repurchase agreement and
(vii) currency, interest rate and commodity swaps.

                                     B-1-8
<PAGE>

                  5. The Transferee is familiar with Rule 144A and understands
that the parties to which this certification is being made are relying and will
continue to rely on the statements made herein because one or more sales to the
Transferee will be in reliance on Rule 144A. In addition, the Transferee will
only purchase for the Transferee's own account.

                  6. The undersigned will notify the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice, the Transferee's purchase of the Certificates will constitute
a reaffirmation of this certification by the undersigned as of the date of such
purchase.

Dated:
                                    ------------------------------------------
                                    Print Name of Transferee or Advisor

                                    By:
                                       ---------------------------------------
                                    Name:
                                    Title:

                                    IF AN ADVISER:

                                    ------------------------------------------
                                    Print Name of Transferee

                                     B-1-9
<PAGE>

                    FORM OF TRANSFEREE REPRESENTATION LETTER

                  The undersigned hereby certifies on behalf of the purchaser
named below (the "Purchaser") as follows:

                  1. I am an executive officer of the Purchaser.

                  2. The Purchaser is a "qualified institutional buyer", as
         defined in Rule 144A, ("Rule 144A") under the Securities Act of 1933,
         as amended.

                  3. As of the date specified below (which is not earlier than
         the last day of the Purchaser's most recent fiscal year), the amount of
         "securities", computed for purposes of Rule 144A, owned and invested on
         a discretionary basis by the Purchaser was in excess of $100,000,000.

Name of Purchaser
                  -------------------------------------------------------------

By: (Signature)
               ----------------------------------------------------------------

Name of Signatory
                  -------------------------------------------------------------

Title
     --------------------------------------------------------------------------

Date of this certificate
                         ------------------------------------------------------

Date of information provided in paragraph 3
                                            -----------------------------------

                                     B-1-10
<PAGE>

                    FORM OF REGULATION S TRANSFER CERTIFICATE

[Date]

Wells Fargo Bank Minnesota, National Association
Sixth and Marquette Avenue
Minneapolis, Minnesota 55479
Attention: Corporate Trust ACE 2004-RM1

          Re:  Ace Securities Corp. Home Equity Loan Trust, Series 2004-RM1
               Asset Backed Pass-Through Certificates, Class B Certificates
               ------------------------------------------------------------

Ladies and Gentlemen:

                  Reference is hereby made to the Pooling and Servicing
Agreement (the "Agreement"), dated as of July 1, 2004, among ACE Securities
Corp. (the "Depositor"), Wells Fargo Bank, N.A., as master servicer and
securities administrator (the "Master Servicer"), HomEq Servicing Corporation,
as servicer (the "Servicer") and HSBC Bank USA, National Association, as trustee
(the "Trustee"). Capitalized terms used herein but not defined herein shall have
the meanings assigned thereto in the Agreement.

                  This letter relates to U.S. $[__________] Certificate
Principal Balance of Class B Certificates (the "Certificates") which are held in
the name of [name of transferor] (the "Transferor") to effect the transfer of
the Certificates to a person who wishes to take delivery thereof in the form of
an equivalent beneficial interest [name of transferee] (the "Transferee").

                  In connection with such request, the Transferor hereby
certifies that such transfer has been effected in accordance with the transfer
restrictions set forth in the Agreement and the private placement memorandum
dated July __, 2004 relating to the Certificates and that the following
additional requirements (if applicable) were satisfied:

                  (a) the offer of the Certificates was not made to a person in
the United States;

                  (b) at the time the buy order was originated, the Transferee
was outside the United States or the Transferor and any person acting on its
behalf reasonably believed that the Transferee was outside the United States;

                  (c) no directed selling efforts were made in contravention of
the requirements of Rule 903(b) or 904(b) of Regulation S, as applicable;

                  (d) the transfer or exchange is not part of a plan or scheme
to evade the registration requirements of the Securities Act;

                  (e) the Transferee is not a U.S. Person, as defined in
Regulation S under the  Securities Act;

                                     B-1-11
<PAGE>

                  (f) the transfer was made in accordance with the applicable
provisions of Rule 903(b)(2) or (3) or Rule 904(b)(1), as the case may be; and

                  (g) the Transferee understands that the Certificates have not
been and will not be registered under the Securities Act, that any offers, sales
or deliveries of the Certificates purchased by the Transferee in the United
States or to U.S. persons prior to the date that is 40 days after the later of
(i) the commencement of the offering of the Certificates and (ii) the Closing
Date, may constitute a violation of United States law, and that (x)
distributions of principal and interest and (y) the exchange of beneficial
interests in a Temporary Regulation S Global Certificate for beneficial
interests in the related Permanent Regulation S Global Certificate, in each
case, will be made in respect of such Certificates only following the delivery
by the Holder of a certification of non-U.S. beneficial ownership, at the times
and in the manner set forth in the Agreement.

                                     B-1-12
<PAGE>

                  You are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.

                                      [Name of Transferor]

                                      By:
                                          --------------------------------
                                      Name:
                                      Title:

                                     B-1-13
<PAGE>

                                   EXHIBIT B-2
                                   -----------

                    FORM OF TRANSFEROR REPRESENTATION LETTER

                                           ____________, 20__

Wells Fargo Bank, N.A.
Sixth and Marquette Avenue
Minneapolis, Minnesota 55479
Attention: Corporate Trust ACE 2004-RM1

          Re:  Ace Securities Corp. Home Equity Loan Trust, Series 2004-RM1
               Asset Backed Pass-Through Certificates, Class B, Class Ce, Class
               P and Class R Certificates
               ----------------------------------------------------------------

Ladies and Gentlemen:

                  In connection with the transfer by ________________ (the
"Transferor") to __________________________ (the "Transferee") of the captioned
mortgage pass-through certificates (the "Certificates"), the Transferor hereby
certifies as follows:

                  Neither the Seller nor anyone acting on its behalf has (a)
offered, pledged, sold, disposed of or otherwise transferred any Certificate,
any interest in any Certificate or any other similar security to any person in
any manner, (b) has solicited any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c) has
otherwise approached or negotiated with respect to any Certificate, any interest
in any Certificate or any other similar security with any person in any manner,
(d) has made any general solicitation by means of general advertising or in any
other manner, or (e) has taken any other action, that (as to any of (a) through
(e) above) would constitute a distribution of the Certificates under the
Securities Act of 1933 (the "Act'), that would render the disposition of any
Certificate a violation of Section 5 of the Act or any state securities law, or
that would require registration or qualification pursuant thereto. The Seller
will not act, in any manner set forth in the foregoing sentence with respect to
any Certificate. The Seller has not and will not sell or otherwise transfer any
of the Certificates, except in compliance with the provisions of the Pooling and
Servicing Agreement.

                                    Very truly yours,

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

                                    By:
                                       ----------------------------------------
                                    Name:
                                    Title:

<PAGE>

                            FORM OF TRANSFEREE LETTER

                                     ____________, 20__

Wells Fargo Bank, N.A.
Sixth and Marquette Avenue
Minneapolis, Minnesota 55479
Attention: Corporate Trust ACE 2004-RM1

          Re:  Ace Securities Corp. Home Equity Loan Trust, Series 2004-RM1
               Asset Backed Pass-Through Certificates, Class B, Class CE, Class
               P and Class R Certificates
               ----------------------------------------------------------------

Ladies and Gentlemen:

                  In connection with the transfer by ______________________ (the
"Transferor") to __________________________ (the "Transferee") of the captioned
mortgage pass-through certificates (the "Certificates"), the Transferee hereby
certifies as follows:

                  1. The Transferee understands that (a) the Certificates have
         not been and will not be registered or qualified under the Securities
         Act of 1933, as amended (the "Act") or any state securities law, (b)
         the Depositor is not required to so register or qualify the
         Certificates, (c) the Certificates may be resold only if registered and
         qualified pursuant to the provisions of the Act or any state securities
         law, or if an exemption from such registration and qualification is
         available, (d) the Pooling and Servicing Agreement contains
         restrictions regarding the transfer of the Certificates and (e) the
         Certificates will bear a legend to the foregoing effect.

                  2. The Transferee is acquiring the Certificates for its own
         account for investment only and not with a view to or for sale in
         connection with any distribution thereof in any manner that would
         violate the Act or any applicable state securities laws.

                  3. The Transferee is (a) a substantial, sophisticated
         institutional investor having such knowledge and experience in
         financial and business matters, and, in particular, in such matters
         related to securities similar to the Certificates, such that it is
         capable of evaluating the merits and risks of investment in the
         Certificates, (b) able to bear the economic risks of such an investment
         and (c) an "accredited investor" within the meaning of Rule 501(a)
         promulgated pursuant to the Act.

                  4. The Transferee has been furnished with, and has had an
         opportunity to review (a) a copy of the Pooling and Servicing Agreement
         and (b) such other information concerning the Certificates, the
         Mortgage Loans and the Depositor as has been requested by the
         Transferee from the Depositor or the Transferor and is relevant to the
         Transferee's decision to purchase the Certificates. The Transferee has
         had any questions arising from such review answered by the Depositor or
         the Transferor to the satisfaction of the Transferee.

                                     B-2-2
<PAGE>

                  5. The Transferee has not and will not nor has it authorized
         or will it authorize any person to (a) offer, pledge, sell, dispose of
         or otherwise transfer any Certificate, any interest in any Certificate
         or any other similar security to any person in any manner, (b) solicit
         any offer to buy or to accept a pledge, disposition of other transfer
         of any Certificate, any interest in any Certificate or any other
         similar security from any person in any manner, (c) otherwise approach
         or negotiate with respect to any Certificate, any interest in any
         Certificate or any other similar security with any person in any
         manner, (d) make any general solicitation by means of general
         advertising or in any other manner or (e) take any other action, that
         (as to any of (a) through (e) above) would constitute a distribution of
         any Certificate under the Act, that would render the disposition of any
         Certificate a violation of Section 5 of the 1933 Act or any state
         securities law, or that would require registration or qualification
         pursuant thereto. The Transferee will not sell or otherwise transfer
         any of the Certificates, except in compliance with the provisions of
         the Pooling and Servicing Agreement.

                  6. The Transferee: (a) is not an employee benefit or other
         plan subject to the prohibited transaction provisions of the Employee
         Retirement Income Security Act of 1974, as amended ("ERISA"), or
         Section 4975 of the Internal Revenue Code of 1986, as amended ("Plan"),
         or any other person (including an investment manager, a named fiduciary
         or a trustee of any Plan) acting, directly or indirectly, on behalf of
         or purchasing any Certificate with "plan assets" of any Plan within the
         meaning of the Department of Labor ("DOL") regulation at 29 C.F.R.
         ss.2510.3-101 or (b) has provided the Trustee with an opinion of
         counsel on which the Depositor, the Master Servicer, the Securities
         Administrator, the Trustee and the Servicer may rely, acceptable to and
         in form and substance satisfactory to the Trustee to the effect that
         the purchase of Certificates is permissible under applicable law, will
         not constitute or result in any non-exempt prohibited transaction under
         ERISA or Section 4975 of the Code and will not subject the Trust Fund,
         the Trustee, the Master Servicer, the Securities Administrator, the
         Depositor or the Servicer to any obligation or liability (including
         obligations or liabilities under ERISA or Section 4975 of the Code) in
         addition to those undertaken in the Pooling and Servicing Agreement.

                  In addition, the Transferee hereby certifies, represents and
warrants to, and covenants with, the Depositor, the Trustee, the Securities
Administrator, the Master Servicer and the Servicer that the Transferee will not
transfer such Certificates to any Plan or person unless such Plan or person
meets the requirements set forth in either 6(a) or (b) above.

                                      Very truly yours,

                                      By:
                                         ----------------------------------
                                      Name:

                                      Title:

                                     B-2-3
<PAGE>

                                   EXHIBIT B-3
                                   -----------

                        TRANSFER AFFIDAVIT AND AGREEMENT

STATE OF NEW YORK          )
                           ss.:
COUNTY OF NEW YORK         )

         ___________________________ being duly sworn, deposes, represents and
warrants as follows:

         1.       I am a _____________________ of
                  _______________________________ (the "Owner") a corporation
                  duly organized and existing under the laws of
                  _________________________, the record owner of Ace Securities
                  Corp. Home Equity Loan Trust, Series 2004-RM1 Asset Backed
                  Pass-Through Certificates, Class R Certificates (the "Class R
                  Certificates"), on behalf of whom I make this affidavit and
                  agreement. Capitalized terms used but not defined herein have
                  the respective meanings assigned thereto in the Pooling and
                  Servicing Agreement pursuant to which the Class R Certificates
                  were issued.

         2.       The Owner (i) is and will be a "Permitted Transferee" as of
                  ____________________. ____ and (ii) is acquiring the Class R
                  Certificates for its own account or for the account of
                  another Owner from which it has received an affidavit in
                  substantially the same form as this affidavit. A "Permitted
                  Transferee" is any person other than a "disqualified
                  organization" or a possession of the United States. For this
                  purpose, a "disqualified organization" means the United
                  States, any state or political subdivision thereof, any
                  agency or instrumentality of any of the foregoing (other
                  than an instrumentality all of the activities of which are
                  subject to tax and, except for the Federal Home Loan
                  Mortgage Corporation, a majority of whose board of directors
                  is not selected by any such governmental entity) or any
                  foreign government, international organization or any agency
                  or instrumentality of such foreign government or
                  organization, any real electric or telephone cooperative, or
                  any organization (other than certain farmers' cooperatives)
                  that is generally exempt from federal income tax unless such
                  organization is subject to the tax on unrelated business
                  taxable income.

         3.       The  Owner is aware (i) of the tax that would be imposed on
                  transfers of the Class R Certificates to disqualified
                  organizations under the Internal Revenue Code of 1986 that
                  applies to all transfers of the Class R Certificates after
                  April 31, 1988; (ii) that such tax would be on the
                  transferor or, if such transfer is through an agent (which
                  person includes a broker, nominee or middleman) for a
                  non-Permitted Transferee, on the agent; (iii) that the
                  person otherwise liable for the tax shall be relieved of
                  liability for the tax if the transferee furnishes to such
                  person an affidavit that the transferee is a Permitted
                  Transferee and, at the time of transfer, such person does
                  not have actual knowledge that the affidavit is false; and
                  (iv) that each of the Class R Certificates may be a
                  "noneconomic residual interest" within the meaning of
                  proposed Treasury regulations promulgated under the Code and
                  that the transferor of a "noneconomic residual interest"
                  will remain liable for

                                      B-3-2
<PAGE>

                  any taxes due with respect to the income on such residual
                  interest, unless no significant purpose of the transfer is
                  to impede the assessment or collection of tax.

         4.       The Owner is aware of the tax imposed on a "pass-through
                  entity" holding the Class R Certificates if, at any time
                  during the taxable year of the pass-through entity, a
                  non-Permitted Transferee is the record holder of an interest
                  in such entity. (For this purpose, a "pass-through entity"
                  includes a regulated investment company, a real estate
                  investment trust or common trust fund, a partnership, trust or
                  estate, and certain cooperatives.)

         5.       The Owner is aware that the Securities Administrator will not
                  register the transfer of any Class R Certificate unless the
                  transferee, or the transferee's agent, delivers to the
                  Securities Administrator, among other things, an affidavit in
                  substantially the same form as this affidavit. The Owner
                  expressly agrees that it will not consummate any such transfer
                  if it knows or believes that any of the representations
                  contained in such affidavit and agreement are false.

         6.       The Owner consents to any additional restrictions or
                  arrangements that shall be deemed necessary upon advice of
                  counsel to constitute a reasonable arrangement to ensure that
                  the Class R Certificates will only be owned, directly or
                  indirectly, by an Owner that is a Permitted Transferee.

         7.       The Owner's taxpayer identification number is
                  ________________.

         8.       The Owner has reviewed the restrictions set forth on the face
                  of the Class R Certificates and the provisions of Section
                  6.02(d) of the Pooling and Servicing Agreement under which the
                  Class R Certificates were issued (in particular, clauses
                  (iii)(A) and (iii)(B) of Section 6.02(d) which authorize the
                  Securities Administrator to deliver payments to a person other
                  than the Owner and negotiate a mandatory sale by the
                  Securities Administrator in the event that the Owner holds
                  such Certificate in violation of Section 6.02(d)); and that
                  the Owner expressly agrees to be bound by and to comply with
                  such restrictions and provisions.

         9.       The Owner is not acquiring and will not transfer the Class R
                  Certificates in order to impede the assessment or collection
                  of any tax.

         10.      The Owner anticipates that it will, so long as it holds the
                  Class R Certificates, have sufficient assets to pay any taxes
                  owed by the holder of such Class R Certificates, and hereby
                  represents to and for the benefit of the person from whom it
                  acquired the Class R Certificates that the Owner intends to
                  pay taxes associated with holding such Class R Certificates as
                  they become due, fully understanding that it may incur tax
                  liabilities in excess of any cash flows generated by the Class
                  R Certificates.

         11.      The Owner has no present knowledge that it may become
                  insolvent or subject to a bankruptcy proceeding for so long as
                  it holds the Class R Certificates.

                                      B-3-3
<PAGE>

         12.      The Owner has no present knowledge or expectation that it will
                  be unable to pay any United States taxes owed by it so long as
                  any of the Certificates remain outstanding.

         13.      The Owner is not acquiring the Class R Certificates with the
                  intent to transfer the Class R Certificates to any person or
                  entity that will not have sufficient assets to pay any taxes
                  owed by the holder of such Class R Certificates, or that may
                  become insolvent or subject to a bankruptcy proceeding, for so
                  long as the Class R Certificates remain outstanding.

         14.      The Owner will, in connection with any transfer that it makes
                  of the Class R Certificates, obtain from its transferee the
                  representations required by Section 6.02(d) of the Pooling and
                  Servicing Agreement under which the Class R Certificate were
                  issued and will not consummate any such transfer if it knows,
                  or knows facts that should lead it to believe, that any such
                  representations are false.

         15.      The Owner will, in connection with any transfer that it makes
                  of the Class R Certificates, deliver to the Securities
                  Administrator an affidavit, which represents and warrants that
                  it is not transferring the Class R Certificates to impede the
                  assessment or collection of any tax and that it has no actual
                  knowledge that the proposed transferee: (i) has insufficient
                  assets to pay any taxes owed by such transferee as holder of
                  the Class R Certificates; (ii) may become insolvent or subject
                  to a bankruptcy proceeding for so long as the Class R
                  Certificates remains outstanding; and (iii) is not a
                  "Permitted Transferee".

         16.      The Owner is a citizen or resident of the United States, a
                  corporation, partnership or other entity created or organized
                  in, or under the laws of, the United States or any political
                  subdivision thereof, or an estate or trust whose income from
                  sources without the United States may be included in gross
                  income for United States federal income tax purposes
                  regardless of its connection with the conduct of a trade or
                  business within the United States.

         17.      The Owner of the Class R Certificate, hereby agrees that in
                  the event that the Trust Fund created by the Pooling and
                  Servicing Agreement is terminated pursuant to Section 10.01
                  thereof, the undersigned shall assign and transfer to the
                  Holders of the Class CE and the Class P Certificates any
                  amounts in excess of par received in connection with such
                  termination. Accordingly, in the event of such termination,
                  the Securities Administrator is hereby authorized to
                  withhold any such amounts in excess of par and to pay such
                  amounts directly to the Holders of the Class CE and the
                  Class P Certificates. This agreement shall bind and be
                  enforceable against any successor, transferee or assigned of
                  the undersigned in the Class R Certificate. In connection
                  with any transfer of the Class R Certificate, the Owner
                  shall obtain an agreement substantially similar to this
                  clause from any subsequent owner.

                                      B-3-3

<PAGE>

                  IN WITNESS WHEREOF, the Owner has caused this instrument to
be executed on its behalf, pursuant to the authority of its Board of Directors,
by its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
_________________, ____.

                                     [OWNER]

                                      By:
                                         ------------------------------------
                                      Name:
                                      Title:            [Vice] President

ATTEST:

By:
    ------------------------------------
Name:
Title:            [Assistant] Secretary

                  Personally appeared before me the above-named
__________________, known or proved to me to be the same person who executed the
foregoing instrument and to be a [Vice] President of the Owner, and acknowledged
to me that [he/she] executed the same as [his/her] free act and deed and the
free act and deed of the Owner.

                  Subscribed and sworn before me this ___ day of _____, ____.

                                         ------------------------------------
                                                  Notary Public

                                         County of
                                                  ---------------------------
                                         State of
                                                  ---------------------------

                                         My Commission expires:

                                      B-3-4

<PAGE>

                          FORM OF TRANSFEROR AFFIDAVIT

STATE OF NEW YORK          )
                           : ss.:
COUNTY OF NEW YORK         )

                  _________________________, being duly sworn, deposes,
represents and warrants as follows:

                  1. I am a ____________________ of _________________________
(the "Owner"), a corporation duly organized and existing under the laws of
_____________, on behalf of whom I make this affidavit.

                  2. The Owner is not transferring the Class R Certificates (the
"Residual Certificates") to impede the assessment or collection of any tax.

                  3. The Owner has no actual knowledge that the Person that is
the proposed transferee (the "Purchaser") of the Residual Certificates: (i) has
insufficient assets to pay any taxes owed by such proposed transferee as holder
of the Residual Certificates; (ii) may become insolvent or subject to a
bankruptcy proceeding for so long as the Residual Certificates remain
outstanding and (iii) is not a Permitted Transferee.

                  4. The Owner understands that the Purchaser has delivered to
the Trustee or a transfer affidavit and agreement in the form attached to the
Pooling and Servicing Agreement as Exhibit B-2. The Owner does not know or
believe that any representation contained therein is false.

                  5. At the time of transfer, the Owner has conducted a
reasonable investigation of the financial condition of the Purchaser as
contemplated by Treasury Regulations Section 1.860E-1(c)(4)(i) and, as a result
of that investigation, the Owner has determined that the Purchaser has
historically paid its debts as they became due and has found no significant
evidence to indicate that the Purchaser will not continue to pay its debts as
they become due in the future. The Owner understands that the transfer of a
Residual Certificate may not be respected for United States income tax purposes
(and the Owner may continue to be liable for United States income taxes
associated therewith) unless the Owner has conducted such an investigation.

                  6. Capitalized terms not otherwise defined herein shall have
the meanings ascribed to them in the Pooling and Servicing Agreement.

                                      B-3-5

<PAGE>

                  IN WITNESS WHEREOF,  the Owner has caused this instrument to
be executed on its behalf, pursuant to the authority of its Board of Directors,
by its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
________________, ____.

                                      [OWNER]

                                      By:
                                         -----------------------------------
                                      Name:
                                      Title:            [Vice] President

ATTEST:

By:
    -------------------------------------
Name:
Title.   [Assistant] Secretary

                  Personally appeared before me the above-named
_________________, known or proved to me to be the same person who executed the
foregoing instrument and to be a [Vice] President of the Owner, and acknowledged
to me that [he/she] executed the same as [his/her] free act and deed and the
free act and deed of the Owner.

                  Subscribed and sworn before me this ______ day of _____, ____.

                                         -----------------------------------
                                         Notary Public

                                         County of
                                                   -------------------------
                                         State of
                                                   -------------------------

                                        My Commission expires:

<PAGE>

                                    EXHIBIT C

                         FORM OF SERVICER CERTIFICATION

Re:      ACE Securities Corp. Home Equity Loan Trust, Series 2004-RM1
         Asset Backed Pass-Through Certificates, Series 2004-RM1

         I, [identify the certifying individual] certify to ACE Securities
Corp. (the "Depositor"), HSBC Bank USA (the "Trustee"), National Association and
Wells Fargo Bank, N.A. (the "Master Servicer"), and their respective officers,
directors and affiliates and with the knowledge and intent that they will rely
upon this certification that:

         1. Based on my knowledge, the information in the Annual Statement of
Compliance, the Annual Independent Public Accountant's Servicing Report and all
servicing reports, officer's certificates and other information relating to the
servicing of the Mortgage Loans submitted to the Master Servicer taken as a
whole pursuant to the Pooling and Servicing Agreement, does not contain any
untrue statement of a material fact or omit to state a material fact
constituting information required to be provided by the HomeEq Servicing
Corporation under the Pooling and Servicing Agreement necessary to make the
statements made, in light of the circumstances under which such statements were
made, not misleading as of the date of this certification;

         2. Based on my knowledge, the servicing information required to be
provided to the Master Servicer by HomeEq Servicing Corporation under the
Pooling and Servicing Agreement has been provided to the Master Servicer;

         3. I am responsible for reviewing the activities performed by
HomeEq Servicing Corporation under the Pooling and Servicing Agreement and based
upon my knowledge and the review required by the Pooling and Servicing
Agreement, and except as disclosed in the Annual Statement of Compliance or the
Annual Independent Certified Public Accountants' Servicing Report submitted to
the Master Servicer, HomeEq Servicing Corporation has fulfilled its obligations
under the Pooling and Servicing Agreement; and

         4. HomeEq Servicing Corporation has disclosed to its certified public
accountants and the Master Servicer all significant deficiencies relating to
HomeEq Servicing Corporation's compliance with the minimum servicing standards
in accordance with a review conducted in compliance with the Uniform Single
Attestation Program for Mortgage Bankers or similar standard as set forth in the
Pooling and Servicing Agreement.

         Capitalized terms used but not defined herein have the meanings
ascribed to them in the Pooling and Servicing Agreement, dated July 1, 2004 (the
"Pooling and Servicing Agreement"), among ACE Securities Corp., as depositor,
HomEq Servicing Corporation, as servicer, Wells Fargo Bank, N.A. as master
servicer and securities administrator, and HSBC Bank USA, National Association,
as trustee.

                                 HOMEQ SERVICING CORPORATION

                                 By:___________________________
                                 Name:  _______________________
                                 Title:  ______________________
                                 Date:  _______________________

                                      C-1

<PAGE>

                                   SCHEDULE 1

                             MORTGAGE LOAN SCHEDULE

                                      C-2

<PAGE>

                                   SCHEDULE 2

                           PREPAYMENT CHARGE SCHEDULE

                                      C-3

<PAGE>

                                   SCHEDULE 3

                               PMI MORTGAGE LOANS

                                      C-4

<PAGE>

<TABLE>
<CAPTION>

                                   SCHEDULE 4

                   STANDARD FILE LAYOUT- DELINQUENCY REPORTING

EXHIBIT 1: STANDARD FILE LAYOUT - DELINQUENCY REPORTING

----------------------------------------------------------------------------------------------------------------------------------
COLUMN/HEADER NAME                                              DESCRIPTION                            DECIMAL    FORMAT COMMENT
----------------------------------------------------------------------------------------------------------------------------------
<S>                                    <C>                                                             <C>         <C>
SERVICER_LOAN_NBR                      A unique number assigned  to a loan by the Servicer.  This
                                       may be different than the LOAN_NBR
----------------------------------------------------------------------------------------------------------------------------------
LOAN_NBR                               A unique identifier assigned to each loan by the originator.
----------------------------------------------------------------------------------------------------------------------------------
CLIENT_NBR                             Servicer Client Number
----------------------------------------------------------------------------------------------------------------------------------
SERV_INVESTOR_NBR                      Contains a unique number as
                                       assigned by an external servicer
                                       to identify a group of loans in
                                       their system.
----------------------------------------------------------------------------------------------------------------------------------
BORROWER_FIRST_NAME                    First Name of the Borrower.
----------------------------------------------------------------------------------------------------------------------------------
BORROWER_LAST_NAME                     Last name of the borrower.
----------------------------------------------------------------------------------------------------------------------------------
PROP_ADDRESS                           Street Name and Number of Property
----------------------------------------------------------------------------------------------------------------------------------
PROP_STATE                             The state where the  property located.
----------------------------------------------------------------------------------------------------------------------------------
PROP_ZIP                               Zip code where the property is located.
----------------------------------------------------------------------------------------------------------------------------------
BORR_NEXT_PAY_DUE_DATE                 The date that the borrower's next payment is due to the
                                       MM/DD/YYYY servicer at the end of processing
                                       cycle, as reported by Servicer.
----------------------------------------------------------------------------------------------------------------------------------
LOAN_TYPE                              Loan Type (i.e. FHA, VA, Conv)
----------------------------------------------------------------------------------------------------------------------------------
BANKRUPTCY_FILED_DATE                  The date a particular bankruptcy claim was filed.                          MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------
BANKRUPTCY_CHAPTER_CODE                The chapter under which the bankruptcy was filed.
----------------------------------------------------------------------------------------------------------------------------------
BANKRUPTCY_CASE_NBR                    The case number assigned by the court to the bankruptcy
                                       filing.
----------------------------------------------------------------------------------------------------------------------------------
POST_PETITION_DUE_DATE                 The payment due date once the  bankruptcy has been approved               MM/DD/YYYY
                                       by the courts
----------------------------------------------------------------------------------------------------------------------------------
BANKRUPTCY_DCHRG_DISM_DATE             The Date The Loan Is Removed From Bankruptcy.  Either by                  MM/DD/YYYY
                                       Dismissal, Discharged and/or a Motion For Relief Was
                                       Granted.
----------------------------------------------------------------------------------------------------------------------------------
LOSS_MIT_APPR_DATE                     The Date The Loss Mitigation Was Approved By The Servicer                  MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------
LOSS_MIT_TYPE                          The Type Of Loss Mitigation Approved For A Loan Such As;
----------------------------------------------------------------------------------------------------------------------------------
LOSS_MIT_EST_COMP_DATE                 The Date The Loss Mitigation /Plan Is Scheduled To End/Close               MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------
LOSS_MIT_ACT_COMP_DATE                 The Date The Loss Mitigation Is Actually Completed                         MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------
FRCLSR_APPROVED_DATE                   The date DA Admin sends a letter to the servicer with MM/DD/YYYY
                                       instructions to begin foreclosure proceedings.
----------------------------------------------------------------------------------------------------------------------------------
ATTORNEY_REFERRAL_DATE                 Date File Was Referred To Attorney to Pursue Foreclosure                   MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------
FIRST_LEGAL_DATE                       Notice of 1st legal filed by an Attorney  in a  Foreclosure                MM/DD/YYYY
                                       Action
----------------------------------------------------------------------------------------------------------------------------------
FRCLSR_SALE_EXPECTED_DATE              The date by which a foreclosure sale is expected to occur.                 MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------
FRCLSR_SALE_DATE                       The actual date of the foreclosure sale.                                   MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------
FRCLSR_SALE_AMT                        The amount a property sold for at the foreclosure sale.            2       No commas(,)
                                                                                                                  or dollar
                                                                                                                  signs ($)
----------------------------------------------------------------------------------------------------------------------------------
EVICTION_START_DATE                    The date the servicer initiates eviction of the borrower.                  MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------
EVICTION_COMPLETED_DATE                The date the court revokes legal possession of the property
                                       MM/DD/YYYY from the borrower.
----------------------------------------------------------------------------------------------------------------------------------
LIST_PRICE                             The price at which an REO property is marketed.                    2       No commas(,)
                                                                                                                  or dollar
                                                                                                                  signs ($)
----------------------------------------------------------------------------------------------------------------------------------
LIST_DATE                              The date an REO property is listed at a particular price.                  MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------

                                      C-5

<PAGE>

----------------------------------------------------------------------------------------------------------------------------------
OFFER_AMT                              The dollar value of an offer for an REO property.                  2       No commas(,)
                                                                                                                  or dollar
                                                                                                                  signs ($)
----------------------------------------------------------------------------------------------------------------------------------
OFFER_DATE_TIME                        The date an offer is received by DA Admin or by the Servicer.              MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------
REO_CLOSING_DATE                       The date the REO sale of the property is scheduled to close.               MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------
REO_ACTUAL_CLOSING_DATE                Actual Date Of REO Sale                                                    MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------
OCCUPANT_CODE                          Classification of how the property is occupied.
----------------------------------------------------------------------------------------------------------------------------------
PROP_CONDITION_CODE                    A code that indicates the condition of the property.
----------------------------------------------------------------------------------------------------------------------------------
PROP_INSPECTION_DATE                   The date a  property inspection is performed.                              MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------
APPRAISAL_DATE                         The date the appraisal was done.                                           MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------
CURR_PROP_VAL                          The current "as is" value of the  property  based on brokers      2
                                       price opinion or appraisal.
----------------------------------------------------------------------------------------------------------------------------------
REPAIRED_PROP_VAL                      The amount the property would be worth if repairs are 2
                                       completed pursuant to a broker's price opinion or appraisal.
----------------------------------------------------------------------------------------------------------------------------------
IF APPLICABLE:
----------------------------------------------------------------------------------------------------------------------------------
DELINQ_STATUS_CODE                     FNMA Code Describing Status of Loan
----------------------------------------------------------------------------------------------------------------------------------
DELINQ_REASON_CODE                     The circumstances which caused a borrower to stop paying on a loan.
                                       Code indicates the reason why the loan is in default for this cycle.
----------------------------------------------------------------------------------------------------------------------------------
MI_CLAIM_FILED_DATE                    Date Mortgage Insurance Claim Was Filed With Mortgage                      MM/DD/YYYY
                                       Insurance Company.
----------------------------------------------------------------------------------------------------------------------------------
MI_CLAIM_AMT                           Amount of Mortgage Insurance Claim Filed                                   No commas(,)
                                                                                                                  or dollar
                                                                                                                  signs ($)
----------------------------------------------------------------------------------------------------------------------------------
MI_CLAIM_PAID_DATE                     Date Mortgage Insurance Company Disbursed Claim Payment                    MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------
MI_CLAIM_AMT_PAID                      Amount Mortgage Insurance Company Paid On Claim                    2       No commas(,)
                                                                                                                  or dollar
                                                                                                                  signs ($)
----------------------------------------------------------------------------------------------------------------------------------
POOL_CLAIM_FILED_DATE                  Date Claim Was Filed With Pool Insurance Company                           MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------
POOL_CLAIM_AMT                         Amount of Claim Filed With Pool Insurance Company                  2       No commas(,)
                                                                                                                  or dollar
                                                                                                                  signs ($)
----------------------------------------------------------------------------------------------------------------------------------
POOL_CLAIM_PAID_DATE                   Date Claim Was  Settled  and The Check Was Issued By The Pool              MM/DD/YYYY
                                       Insurer
----------------------------------------------------------------------------------------------------------------------------------
POOL_CLAIM_AMT_PAID                    Amount Paid On Claim By Pool Insurance Company                     2       No commas(,)
                                                                                                                  or dollar
                                                                                                                  signs ($)
----------------------------------------------------------------------------------------------------------------------------------
FHA_PART_A_CLAIM_FILED_DATE             Date FHA Part A Claim Was Filed With HUD                                  MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------
FHA_PART_A_CLAIM_AMT                    Amount of FHA Part A Claim Filed                                  2       No commas(,)
                                                                                                                  or dollar
                                                                                                                  signs ($)
----------------------------------------------------------------------------------------------------------------------------------
FHA_PART_A_CLAIM_PAID_DATE              Date HUD Disbursed Part A Claim Payment                                   MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------
FHA_PART_A_CLAIM_PAID_AMT               Amount HUD Paid on Part A Claim                                   2       No commas(,)
                                                                                                                  or dollar
                                                                                                                  signs ($)
----------------------------------------------------------------------------------------------------------------------------------
FHA_PART_B_CLAIM_FILED_DATE              Date FHA Part B Claim Was Filed With HUD                                 MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------
FHA_PART_B_CLAIM_AMT                     Amount of FHA Part B Claim Filed                                 2       No commas(,)
                                                                                                                  or dollar
                                                                                                                  signs ($)
----------------------------------------------------------------------------------------------------------------------------------
FHA_PART_B_CLAIM_PAID_DATE              Date HUD Disbursed Part B Claim Payment                                   MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------
FHA_PART_B_CLAIM_PAID_AMT               Amount HUD Paid on Part B Claim                                   2       No commas(,)
                                                                                                                  or dollar
                                                                                                                  signs ($)
----------------------------------------------------------------------------------------------------------------------------------
VA_CLAIM_FILED_DATE                     Date VA Claim Was Filed With the Veterans Admin                           MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------
VA_CLAIM_PAID_DATE                      Date Veterans Admin. Disbursed VA Claim Payment                           MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------
VA_CLAIM_PAID_AMT                       Amount Veterans Admin. Paid on VA Claim                           2       No commas(,)
                                                                                                                  or dollar
                                                                                                                  signs ($)
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      C-5

<PAGE>

EXHIBIT 2: STANDARD FILE CODES - DELINQUENCY REPORTING

The LOSS MIT TYPE field should show the approved Loss Mitigation Code as
follows:
o        ASUM-   Approved Assumption
o        BAP-    Borrower Assistance Program
o        CO-     Charge Off
o        DIL-    Deed-in-Lieu
o        FFA-    Formal Forbearance Agreement
o        MOD-    Loan Modification
o        PRE-    Pre-Sale
o        SS-     Short Sale
o        MISC-   Anything else approved by the PMI or Pool Insurer

NOTE: Wells Fargo Bank will accept alternative Loss Mitigation Types to those
above, provided that they are consistent with industry standards. If Loss
Mitigation Types other than those above are used, the Servicer must supply Wells
Fargo Bank with a description of each of the Loss Mitigation Types prior to
sending the file.

The OCCUPANT CODE field should show the current status of the property code as
follows:
o        Mortgagor
o        Tenant
o        Unknown
o        Vacant

The PROPERTY CONDITION field should show the last reported condition of the
property as follows:
o        Damaged
o        Excellent
o        Fair
o        Gone
o        Good
o        Poor
o        Special Hazard
o        Unknown

                                      C-6

<PAGE>

EXHIBIT 2: STANDARD FILE CODES - DELINQUENCY REPORTING, CONTINUED

The FNMA DELINQUENT REASON CODE field should show the Reason for Delinquency as
follows:

           --------------------------------------------------------------------
           DELINQUENCY CODE        DELINQUENCY DESCRIPTION

           --------------------------------------------------------------------
           001                     FNMA-Death of principal mortgagor
           --------------------------------------------------------------------
           002                     FNMA-Illness of principal mortgagor
           --------------------------------------------------------------------
           003                     FNMA-Illness of mortgagor's family member
           --------------------------------------------------------------------
           004                     FNMA-Death of mortgagor's family member
           --------------------------------------------------------------------
           005                     FNMA-Marital difficulties
           --------------------------------------------------------------------
           006                     FNMA-Curtailment of income
           --------------------------------------------------------------------
           007                     FNMA-Excessive Obligation
           --------------------------------------------------------------------
           008                     FNMA-Abandonment of property
           --------------------------------------------------------------------
           009                     FNMA-Distant employee transfer
           --------------------------------------------------------------------
           011                     FNMA-Property problem
           --------------------------------------------------------------------
           012                     FNMA-Inability to sell property
           --------------------------------------------------------------------
           013                     FNMA-Inability to rent property
           --------------------------------------------------------------------
           014                     FNMA-Military Service
           --------------------------------------------------------------------
           015                     FNMA-Other
           --------------------------------------------------------------------
           016                     FNMA-Unemployment
           --------------------------------------------------------------------
           017                     FNMA-Business failure
           --------------------------------------------------------------------
           019                     FNMA-Casualty loss
           --------------------------------------------------------------------
           022                     FNMA-Energy environment costs
           --------------------------------------------------------------------
           023                     FNMA-Servicing problems
           --------------------------------------------------------------------
           026                     FNMA-Payment adjustment
           --------------------------------------------------------------------
           027                     FNMA-Payment dispute
           --------------------------------------------------------------------
           029                     FNMA-Transfer of ownership pending
           --------------------------------------------------------------------
           030                     FNMA-Fraud
           --------------------------------------------------------------------
           031                     FNMA-Unable to contact borrower
           --------------------------------------------------------------------
           INC                     FNMA-Incarceration
           --------------------------------------------------------------------

                                      C-7

<PAGE>

EXHIBIT 2: STANDARD FILE CODES - DELINQUENCY REPORTING, CONTINUED

The FNMA DELINQUENT STATUS CODE field should show the Status of Default as
follows:

          --------------------------------------------------------------------
                STATUS CODE        STATUS DESCRIPTION
          --------------------------------------------------------------------
                    09             Forbearance
          --------------------------------------------------------------------
                    17             Pre-foreclosure Sale Closing Plan Accepted
          --------------------------------------------------------------------
                    24             Government Seizure
          --------------------------------------------------------------------
                    26             Refinance
          --------------------------------------------------------------------
                    27             Assumption
          --------------------------------------------------------------------
                    28             Modification
          --------------------------------------------------------------------
                    29             Charge-Off
          --------------------------------------------------------------------
                    30             Third Party Sale
          --------------------------------------------------------------------
                    31             Probate
          --------------------------------------------------------------------
                    32             Military Indulgence
          --------------------------------------------------------------------
                    43             Foreclosure Started
          --------------------------------------------------------------------
                    44             Deed-in-Lieu Started
          --------------------------------------------------------------------
                    49             Assignment Completed
          --------------------------------------------------------------------
                    61             Second Lien Considerations
          --------------------------------------------------------------------
                    62             Veteran's Affairs-No Bid
          --------------------------------------------------------------------
                    63             Veteran's Affairs-Refund
          --------------------------------------------------------------------
                    64             Veteran's Affairs-Buydown
          --------------------------------------------------------------------
                    65             Chapter 7 Bankruptcy
          --------------------------------------------------------------------
                    66             Chapter 11 Bankruptcy
          --------------------------------------------------------------------
                    67             Chapter 13 Bankruptcy
          --------------------------------------------------------------------

                                      C-8

<PAGE>

EXHIBIT 3: CALCULATION OF REALIZED LOSS/GAIN FORM 332- INSTRUCTION SHEET
1.       The numbers on the form correspond with the numbers listed below.

         LIQUIDATION AND ACQUISITION EXPENSES:
         1.       The Actual Unpaid Principal Balance of the Mortgage Loan. For
                  documentation, an Amortization Schedule from date of default
                  through liquidation breaking out the net interest and
                  servicing fees advanced is required.

         2.       The Total Interest Due less the aggregate amount of servicing
                  fee that would have been earned if all delinquent payments had
                  been made as agreed. For documentation, an Amortization
                  Schedule from date of default through liquidation breaking out
                  the net interest and servicing fees advanced is required.

         3.       Accrued Servicing Fees based upon the Scheduled Principal
                  Balance of the Mortgage Loan as calculated on a monthly basis.
                  For documentation, an Amortization Schedule from date of
                  default through liquidation breaking out the net interest and
                  servicing fees advanced is required.

         4-12.    Complete as applicable. All line entries must be supported by
                  copies of appropriate statements, vouchers, receipts, bills,
                  canceled checks, etc., to document the expense. Entries not
                  properly documented will not be reimbursed to the Servicer.

         13.      The total of lines 1 through 12.

2.       CREDITS:

         14-21.   Complete as applicable. All line entries must be supported by
                  copies of the appropriate claims forms, EOBs, HUD-1 and/or
                  other proceeds verification, statements, payment checks, etc.
                  to document the credit. If the Mortgage Loan is subject to a
                  Bankruptcy Deficiency, the difference between the Unpaid
                  Principal Balance of the Note prior to the Bankruptcy
                  Deficiency and the Unpaid Principal Balance as reduced by the
                  Bankruptcy Deficiency should be input on line 20.

         22.      The total of lines 14 through 21.

         PLEASE   NOTE: For HUD/VA loans, use line (15) for Part A/Initial
                  proceeds and line (16) for Part B/Supplemental proceeds.
3.       TOTAL REALIZED LOSS (OR AMOUNT OF ANY GAIN)

         23.      The total derived from subtracting line 22 from 13. If the
                  amount represents a realized gain, show the amount in
                  parenthesis ( ).

                                      C-9

<PAGE>

EXHIBIT 3A: CALCULATION OF REALIZED LOSS/GAIN FORM 332

                             WELLS FARGO BANK, N.A.
                        CALCULATION OF REALIZED LOSS/GAIN

         Prepared by:  __________________                     Date:  ________
         Phone:  ______________________   Email Address:_____________________

                 __________________   ________________    ______________________
                 Servicer Loan No.    Servicer Name       Servicer Address

                 __________________   ________________    ______________________

         WELLS FARGO BANK, N.A. Loan No._____________________________
         Borrower's Name:______________________________________________________
         Property Address:_____________________________________________________
<TABLE>
<CAPTION>

         LIQUIDATION AND ACQUISITION EXPENSES:
<S>      <C>                                                           <C>
         (1)  Actual Unpaid Principal Balance of Mortgage Loan         $_______________ (1)
         (2)  Interest accrued at Net Rate                              ________________(2)
         (3)  Accrued Servicing Fees                                    ________________(3)
         (4)  Attorney's Fees                                           ________________(4)
         (5)  Taxes                                                     ________________(5)
         (6)  Property Maintenance                                      ________________(6)
         (7)  MI/Hazard Insurance Premiums                              ________________(7)
         (8)  Utility Expenses                                          ________________(8)
         (9)  Appraisal/BPO                                             ________________(9)
         (10) Property Inspections                                      ________________(10)
         (11) FC Costs/Other Legal Expenses                             ________________(11)
         (12) Other (itemize)                                          $________________(12)
                  Cash for Keys__________________________               ________________
                  HOA/Condo Fees_______________________                 ________________
                  ______________________________________                ________________
                  ______________________________________                ________________
                  TOTAL EXPENSES                                       $________________(13)
         CREDITS:
         (14) Escrow Balance                                           $ _______________(14)
         (15) HIP Refund                                                 ______________ (15)
         (16) Rental Receipts                                            ______________ (16)
         (17) Hazard Loss Proceeds                                       ______________ (17)
         (18) Primary Mortgage Insurance Proceeds                        ______________ (18)
         (19) Pool Insurance Proceeds                                    ______________ (19)
         (20) Proceeds from Sale of Acquired Property                    ______________ (20)
         (21) Other (itemize)                                            ______________ (21)
              _________________________________________                  ______________
              _________________________________________                  ______________
              TOTAL CREDITS                                             $______________(22)

                                      C-10
<PAGE>
         TOTAL REALIZED LOSS (OR AMOUNT OF GAIN)                        $______________(23)
</TABLE>

                                      C-11
<PAGE>
                                  SCHEDULE 5
<TABLE>
<CAPTION>

                    STANDARD FILE LAYOUT- SCHEDULED/SCHEDULED

EXHIBIT 1: STANDARD FILE LAYOUT - SCHEDULED/SCHEDULED
----------------------------------------------------------------------------------------------------------------------------------
COLUMN NAME                                        DESCRIPTION                      DECIMAL    FORMAT COMMENT
----------------------------------------------------------------------------------------------------------------------------------
<S>                             <C>                                               <C>         <C>
LOAN_NBR                        Loan Number assigned by investor                               Text up to 10 digits
----------------------------------------------------------------------------------------------------------------------------------
SERVICER LOAN_NBR               Servicer Loan Number                                           Text up to 10 digits
----------------------------------------------------------------------------------------------------------------------------------
BORROWER_NAME                   Mortgagor name assigned to Note                                Max length of 30
----------------------------------------------------------------------------------------------------------------------------------
SCHED_PMT_AMT                   P&I constant                                           2       No commas(,) or dollar signs ($)
----------------------------------------------------------------------------------------------------------------------------------
NOTE_INT_RATE                   Gross Interest Rate                                    4       Max length of 6
----------------------------------------------------------------------------------------------------------------------------------
NET_RATE                        Gross Interest Rate less the Service Fee Rate          4       Max length of 6
----------------------------------------------------------------------------------------------------------------------------------
SERV_FEE_RATE                   Service Fee Rate                                       4       Max length of 6
----------------------------------------------------------------------------------------------------------------------------------
NEW_PAY_AMT                     ARM loan's forecasted P&I constant                     2       No commas(,) or dollar signs ($)
----------------------------------------------------------------------------------------------------------------------------------
NEW_LOAN_RATE                   ARM loan's forecasted Gross Interest Rate              4       Max length of 6
----------------------------------------------------------------------------------------------------------------------------------
ARM_INDEX_RATE                  ARM loan's index Rate used                             4       Max length of 6
----------------------------------------------------------------------------------------------------------------------------------
ACTL_BEG_BAL                    Beginning Actual Balance                               2       No commas(,) or dollar signs ($)
----------------------------------------------------------------------------------------------------------------------------------
ACTL_END_BAL                    Ending Actual Balance                                  2       No commas(,) or dollar signs ($)
----------------------------------------------------------------------------------------------------------------------------------
NEXT_DUE_DATE                   Borrower's next due date                                       MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------
CURT_AMT_1                      Curtailment Amount                                     2       No commas(,) or dollar signs ($)
----------------------------------------------------------------------------------------------------------------------------------
CURT_DATE_1                     Due date Curtailment was applied to                            MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------
CURT_ADJ_ AMT_1                 Curtailment Interest if applicable                     2       No commas(,) or dollar signs ($)
----------------------------------------------------------------------------------------------------------------------------------
CURT_AMT_2                      Curtailment Amount 2                                   2       No commas(,) or dollar signs ($)
----------------------------------------------------------------------------------------------------------------------------------
CURT_DATE_2                     Due date Curtailment was applied to                            MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------
CURT_ADJ_ AMT2                  Curtailment Interest if applicable                     2       No commas(,) or dollar signs ($)
----------------------------------------------------------------------------------------------------------------------------------
CURT_AMT_3                      Curtailment Amount 3                                   2       No commas(,) or dollar signs ($)
----------------------------------------------------------------------------------------------------------------------------------
CURT_DATE_3                     Due date Curtailment was applied to                            MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------
CURT_ADJ_AMT3                   Curtailment Interest, if applicable                    2       No commas(,) or dollar signs ($)
----------------------------------------------------------------------------------------------------------------------------------
SCHED_BEG_BAL                   Beginning Scheduled Balance                            2       No commas(,) or dollar signs ($)
----------------------------------------------------------------------------------------------------------------------------------
SCHED_END_BAL                   Ending Scheduled Balance                               2       No commas(,) or dollar signs ($)
----------------------------------------------------------------------------------------------------------------------------------
SCHED_PRIN_AMT                  Scheduled Principal portion of P&I                     2       No commas(,) or dollar signs ($)
----------------------------------------------------------------------------------------------------------------------------------
                                Scheduled Net Interest (less Service Fee)
SCHED_NET_INT                   portion of P&I                                         2       No commas(,) or dollar signs ($)
----------------------------------------------------------------------------------------------------------------------------------
                                Liquidation  Principal  Amt to bring  balance  to
LIQ_AMT                         zero                                                   2       No commas(,) or dollar signs ($)
----------------------------------------------------------------------------------------------------------------------------------
PIF_DATE                        Liquidation Date                                               MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------
ACTION_CODE                     Either 60 for liquidation or 65 for Repurchase                 Max length of 2
----------------------------------------------------------------------------------------------------------------------------------
PRIN_ADJ_AMT                    Principal Adjustments made to loan, if applicable      2       No commas(,) or dollar signs ($)
----------------------------------------------------------------------------------------------------------------------------------
INT_ADJ_AMT                     Interest Adjustment made to loan, if applicable        2       No commas(,) or dollar signs ($)
----------------------------------------------------------------------------------------------------------------------------------
PREPAYMENT PENALTY AMT          Prepayment penalty amount, if applicable               2       No commas(,) or dollar signs ($)
----------------------------------------------------------------------------------------------------------------------------------
SOILDER_SAILOR ADJ AMT          Soldier and Sailor Adjustment amount, if
                                applicable                                             2       No commas(,) or dollar signs ($)
----------------------------------------------------------------------------------------------------------------------------------
NON ADV LOAN AMT                Non Recoverable Loan Amount, if applicable             2       No commas(,) or dollar signs ($)
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      C-11

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