Document:

ACE SECURITIES CORP.
                                    Depositor

                               THE PROVIDENT BANK
                                   a Servicer

                             OCWEN FEDERAL BANK FSB
                                   a Servicer

                WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION
                  Master Servicer and Securities Administrator

                         BANK ONE, NATIONAL ASSOCIATION
                                     Trustee

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

                         POOLING AND SERVICING AGREEMENT

                           Dated as of October 1, 2003

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

          ACE Securities Corp. Home Equity Loan Trust, Series 2003-NC1
                     Asset Backed Pass-Through Certificates

<PAGE>

<TABLE>
<CAPTION>
                                                     ARTICLE I

                                                    DEFINITIONS
<S>                                                                                                             <C>
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........................................................-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 Margin...................................................................-7-
                           Certificateholder" or "Holder........................................................-8-
                           Certificate Owner....................................................................-8-
                           Certificate Principal Balance........................................................-9-
                           Certificate Register.................................................................-9-
                           Class    ............................................................................-9-
                           Class A Certificate..................................................................-9-
                           Class A Principal Distribution Amount................................................-9-
                           Class A-1 Allocation Percentage......................................................-9-
                           Class A-1 Certificate................................................................-9-
                           Class A-1 Principal Distribution Amount..............................................-9-
                           Class A-2 Allocation Percentage.....................................................-10-
                           Class A-2 Certificate...............................................................-10-
                           Class A-2A Certificate..............................................................-10-
                           Class A-2B Certificate..............................................................-10-

                                                       -ii-

<PAGE>

                           Class A-2C Certificate..............................................................-10-
                           Class A-2 Principal Distribution Amount.............................................-10-
                           Class CE Certificate................................................................-10-
                           Class M Certificates................................................................-10-
                           Class M-1 Certificate...............................................................-10-
                           Class M-1 Principal Distribution Amount.............................................-11-
                           Class M-2 Certificate...............................................................-11-
                           Class M-2 Principal Distribution Amount.............................................-11-
                           Class M-3 Certificate...............................................................-11-
                           Class M-3 Principal Distribution Amount.............................................-11-
                           Class M-4 Certificate...............................................................-12-
                           Class M-4 Principal Distribution Amount.............................................-12-
                           Class M-5 Certificate...............................................................-12-
                           Class M-5 Principal Distribution Amount.............................................-13-
                           Class M-6 Certificate...............................................................-13-
                           Class M-6 Principal Distribution Amount.............................................-13-
                           Class P Certificate.................................................................-14-
                           Class R Certificates................................................................-14-
                           Class R-I Interest..................................................................-14-
                           Class R-II Interest.................................................................-14-
                           Closing Date........................................................................-14-
                           Code     ...........................................................................-14-
                           Collection Account..................................................................-14-
                           Commission..........................................................................-14-
                           Corporate Trust Office..............................................................-14-
                           Corresponding Certificate...........................................................-14-
                           Credit Enhancement Percentage.......................................................-15-
                           Credit Risk Management Agreement....................................................-15-
                           Credit Risk Management Fee..........................................................-15-
                           Credit Risk Management Fee Rate.....................................................-15-
                           Credit Risk Manager.................................................................-15-
                           Custodial Agreement.................................................................-15-
                           Custodian...........................................................................-15-
                           Cut-off Date........................................................................-15-
                           Debt Service Reduction..............................................................-15-
                           Deficient Valuation.................................................................-16-
                           Definitive Certificates.............................................................-16-
                           Deleted Mortgage Loan...............................................................-16-
                           Delinquency Percentage..............................................................-16-
                           Depositor...........................................................................-16-
                           Depository..........................................................................-16-
                           Depository Institution..............................................................-16-
                           Depository Participant..............................................................-16-
                           Determination Date..................................................................-16-
                           Directly Operate....................................................................-17-
                           Disqualified Organization...........................................................-17-

                                                       -iii-

<PAGE>

                           Distribution Account................................................................-17-
                           Distribution Date...................................................................-17-
                           Due Date ...........................................................................-17-
                           Due Period..........................................................................-18-
                           Eligible Account....................................................................-18-
                           ERISA    ...........................................................................-18-
                           Estate in Real Property.............................................................-18-
                           Excess Liquidation Proceeds.........................................................-18-
                           Expense Adjusted Mortgage Rate......................................................-18-
                           Extraordinary Trust Fund Expense....................................................-18-
                           Extra Principal Distribution Amount.................................................-18-
                           Fannie Mae..........................................................................-18-
                           FDIC     ...........................................................................-18-
                           Final Recovery Determination........................................................-18-
                           Fitch    ...........................................................................-19-
                           Freddie Mac.........................................................................-19-
                           Gross Margin........................................................................-19-
                           Group I Interest Remittance Amount..................................................-19-
                           Group I Mortgage Loans..............................................................-19-
                           Group I Principal Distribution Amount...............................................-19-
                           Group I Principal Remittance Amount.................................................-19-
                           Group II  Interest Remittance Amount................................................-19-
                           Group II Mortgage Loans.............................................................-20-
                           Group II Principal Distribution Amount..............................................-20-
                           Group II Principal Remittance Amount................................................-20-
                           Independent.........................................................................-20-
                           Independent Contractor..............................................................-20-
                           Index    ...........................................................................-21-
                           Insurance Proceeds..................................................................-21-
                           Interest Accrual Period.............................................................-21-
                           Interest Carry Forward Amount.......................................................-21-
                           Interest Determination Date.........................................................-21-
                           Interest Distribution Amount........................................................-22-
                           Interest Remittance Amount..........................................................-22-
                           Late Collections....................................................................-22-
                           Last Scheduled Distribution Date....................................................-22-
                           Liquidation Event...................................................................-22-
                           Liquidation Proceeds................................................................-22-
                           Loan-to-Value Ratio.................................................................-22-
                           London Business Day.................................................................-22-
                           Loss Severity Percentage............................................................-22-
                           Marker Rate.........................................................................-22-
                           Master Servicer.....................................................................-23-
                           Master Servicer Certification.......................................................-23-
                           Master Servicer Event of Default....................................................-23-
                           Master Servicer Fee Rate............................................................-23-

                                                       -iv-

<PAGE>

                           Master Servicing Fee................................................................-23-
                           Maximum I-LTZZ Uncertificated Interest Deferral Amount..............................-23-
                           Maximum Mortgage Rate...............................................................-24-
                           MERS     ...........................................................................-24-
                           MERS(R)System........................................................................-24-
                           Mezzanine Certificate...............................................................-24-
                           MGIC     ...........................................................................-24-
                           MGIC Fee ...........................................................................-24-
                           MGIC Fee Rate.......................................................................-24-
                           MGIC PMI Mortgage Loans.............................................................-24-
                           MGIC PMI Policy.....................................................................-24-
                           MIN      ...........................................................................-24-
                           Minimum Mortgage Rate...............................................................-25-
                           MOM Loan ...........................................................................-25-
                           Monthly Payment.....................................................................-25-
                           Moody's  ...........................................................................-25-
                           Mortgage ...........................................................................-25-
                           Mortgage File.......................................................................-25-
                           Mortgage Loan.......................................................................-25-
                           Mortgage Loan Documents.............................................................-25-
                           Mortgage Loan Purchase Agreement....................................................-25-
                           Mortgage Loan Schedule..............................................................-25-
                           Mortgage Note.......................................................................-28-
                           Mortgage Rate.......................................................................-28-
                           Mortgaged Property..................................................................-28-
                           Mortgagor...........................................................................-28-
                           Net Monthly Excess Cashflow.........................................................-28-
                           Net Mortgage Rate...................................................................-28-
                           Net WAC Pass-Through Rate...........................................................-28-
                           Net WAC Rate Carryover Amount.......................................................-29-
                           New Lease...........................................................................-29-
                           Nonrecoverable P&I Advance..........................................................-29-
                           Nonrecoverable Servicing Advance....................................................-30-
                           Non-United States Person............................................................-30-
                           Notional Amount.....................................................................-30-
                           Offered Certificates................................................................-30-
                           Officer's Certificate...............................................................-30-
                           One-Month LIBOR.....................................................................-30-
                           One-Month LIBOR Pass-Through Rate...................................................-31-
                           Opinion of Counsel..................................................................-32-
                           Optional Termination Date...........................................................-32-
                           Originator..........................................................................-32-
                           Overcollateralization Amount........................................................-32-
                           Overcollateralization Increase Amount...............................................-32-
                           Overcollateralization Reduction Amount..............................................-32-
                           Ownership Interest..................................................................-32-

                                                        -v-

<PAGE>

                           P&I Advance.........................................................................-32-
                           Pass-Through Rate...................................................................-32-
                           Percentage Interest.................................................................-34-
                           Periodic Rate Cap...................................................................-34-
                           Permitted Investments...............................................................-34-
                           Permitted Transferee................................................................-35-
                           Person   ...........................................................................-35-
                           Plan     ...........................................................................-36-
                           Prepayment Assumption...............................................................-36-
                           Prepayment Charge...................................................................-36-
                           Prepayment Charge Schedule..........................................................-36-
                           Prepayment Interest Shortfall.......................................................-37-
                           Prepayment Period...................................................................-37-
                           Principal Prepayment................................................................-37-
                           Principal Distribution Amount.......................................................-37-
                           Principal Remittance Amount.........................................................-37-
                           Purchase Price......................................................................-37-
                           Qualified Substitute Mortgage Loan..................................................-38-
                           Rate/Term Refinancing...............................................................-39-
                           Rating Agency or Rating Agencies....................................................-39-
                           Realized Loss.......................................................................-39-
                           Record Date.........................................................................-40-
                           Reference Banks.....................................................................-40-
                           Refinanced Mortgage Loan............................................................-40-
                           Regular Certificate.................................................................-40-
                           Regular Interest....................................................................-40-
                           Relief Act..........................................................................-41-
                           Relief Act Interest Shortfall.......................................................-41-
                           REMIC    ...........................................................................-41-
                           REMIC I  ...........................................................................-41-
                           REMIC I Interest Loss Allocation Amount.............................................-41-
                           REMIC I Overcollateralization Amount................................................-41-
                           REMIC I Principal Loss Allocation Amount............................................-42-
                           REMIC I Regular Interest............................................................-42-
                           REMIC I Regular Interest I-LTAA.....................................................-42-
                           REMIC I Regular Interest I-LTA......................................................-42-
                           REMIC I Regular Interest I-LTA2A....................................................-42-
                           REMIC I Regular Interest I-LTA2B....................................................-43-
                           REMIC I Regular Interest I-LTA2C....................................................-43-
                           REMIC I Regular Interest I-LTM1.....................................................-43-
                           REMIC I Regular Interest I-LTM2.....................................................-43-
                           REMIC I Regular Interest I-LTM3.....................................................-43-
                           REMIC I Regular Interest I-LTM4.....................................................-43-
                           REMIC I Regular Interest I-LTM5.....................................................-43-
                           REMIC I Regular Interest I-LTM6.....................................................-44-
                           REMIC I Regular Interest I-LTP......................................................-44-

                                                       -vi-

<PAGE>

                           REMIC I Regular Interest I-LTXX.....................................................-44-
                           REMIC I Regular Interest I-LTZZ.....................................................-44-
                           REMIC I Regular Interest I-LT1A.....................................................-44-
                           REMIC I Regular Interest I-LT1B.....................................................-44-
                           REMIC I Regular Interest I-LT2A.....................................................-45-
                           REMIC I Regular Interest I-LT2B.....................................................-45-
                           REMIC I Sub WAC Allocation Percentage...............................................-45-
                           REMIC I Subordinated Balance Ratio..................................................-45-
                           REMIC I Required Overcollateralization Amount.......................................-45-
                           REMIC II ...........................................................................-45-
                           REMIC II Certificate................................................................-45-
                           REMIC II Certificateholder..........................................................-46-
                           REMIC Provisions....................................................................-46-
                           Remittance Report...................................................................-46-
                           Rents from Real Property............................................................-46-
                           REO Account.........................................................................-46-
                           REO Disposition.....................................................................-46-
                           REO Imputed Interest................................................................-46-
                           REO Principal Amortization..........................................................-46-
                           REO Property........................................................................-46-
                           Required Overcollateralization Amount...............................................-46-
                           Reserve Fund........................................................................-47-
                           Reserve Interest Rate...............................................................-47-
                           Residential Dwelling................................................................-47-
                           Residual Certificate................................................................-47-
                           Residual Interest...................................................................-47-
                           Responsible Officer.................................................................-47-
                           S&P      ...........................................................................-47-
                           Scheduled Principal Balance.........................................................-47-
                           Securities Administrator............................................................-48-
                           Seller   ...........................................................................-48-
                           Senior Interest Distribution Amount.................................................-48-
                           Servicer ...........................................................................-48-
                           Servicer Event of Default...........................................................-48-
                           Servicer Remittance Date............................................................-48-
                           Servicer Report.....................................................................-48-
                           Servicing Advances..................................................................-49-
                           Servicing Fee.......................................................................-49-
                           Servicing Fee Rate..................................................................-49-
                           Servicing Officer...................................................................-49-
                           Single Certificate..................................................................-49-
                           Startup Day.........................................................................-49-
                           Stated Principal Balance............................................................-49-
                           Stepdown Date.......................................................................-50-
                           Sub-Servicer........................................................................-50-
                           Sub-Servicing Agreement.............................................................-50-

                                                       -vii-

<PAGE>

                           Substitution Shortfall Amount.......................................................-50-
                           Tax Returns.........................................................................-50-
                           Telerate Page 3750..................................................................-51-
                           Termination Price...................................................................-51-
                           Terminator..........................................................................-51-
                           Transfer ...........................................................................-51-
                           Transferee..........................................................................-51-
                           Transferor..........................................................................-51-
                           Trigger Event.......................................................................-51-
                           Trust    ...........................................................................-51-
                           Trust Fund..........................................................................-51-
                           Trust REMIC.........................................................................-51-
                           Trustee  ...........................................................................-51-
                           Uncertificated Balance..............................................................-52-
                           Uncertificated Interest.............................................................-52-
                           Uninsured Cause.....................................................................-52-
                           United States Person................................................................-52-
                           Value    ...........................................................................-53-
                           Voting Rights.......................................................................-53-
                           Wells Fargo.........................................................................-53-
SECTION 1.02.              Allocation of Certain Interest Shortfalls...........................................-53-

                                                    ARTICLE II

                                           CONVEYANCE OF MORTGAGE LOANS;

SECTION 2.01.     Conveyance of the Mortgage Loans.............................................................-55-
SECTION 2.02.     Acceptance of REMIC I by Trustee.............................................................-56-
SECTION 2.03.     Repurchase or Substitution of Mortgage Loans.................................................-56-
SECTION 2.04.     Representations and Warranties of the Master Servicer........................................-59-
SECTION 2.05.     Representations, Warranties and Covenants of the Servicers...................................-60-
SECTION 2.06.     Issuance of the REMIC I Regular Interests and the Class R-I Interest.........................-64-
SECTION 2.07.     Conveyance of the REMIC I Regular Interests; Acceptance of
                  REMIC I by the Trustee.......,...............................................................-64-
SECTION 2.08.     Issuance of Class R Certificates.............................................................-64-
SECTION 2.09.     Establishment of the Trust...................................................................-64-

                                                    ARTICLE III

                                           ADMINISTRATION AND SERVICING
                                          OF THE MORTGAGE LOANS; ACCOUNTS
SECTION 3.01.     Servicers to Act as Servicers................................................................-66-

                                                      -viii-

<PAGE>

SECTION 3.02.     Sub-Servicing Agreements Between Each Servicer and Sub-Servicers
                   ............................................................................................-68-
SECTION 3.03.     Successor Sub-Servicers......................................................................-68-
SECTION 3.04.     No Contractual Relationship Between Sub-Servicer, Trustee or the
                  Certificateholders...........................................................................-69-
SECTION 3.05.     Assumption or Termination of Sub-Servicing Agreement by Successor
                  Servicer.....................................................................................-69-
SECTION 3.06.     Collection of Certain Mortgage Loan Payments.................................................-69-
SECTION 3.07.     Collection of Taxes, Assessments and Similar Items; Servicing Accounts
                   ............................................................................................-70-
SECTION 3.08.     Collection Account and Distribution Account..................................................-71-
SECTION 3.09.     Withdrawals from the Collection Account and Distribution Account
                   ............................................................................................-73-
SECTION 3.10.     Investment of Funds in the Investment Accounts...............................................-75-
SECTION 3.11.     Maintenance of Hazard Insurance, Errors and Omissions and Fidelity
                  Coverage.....................................................................................-76-
SECTION 3.12.     Enforcement of Due-on-Sale Clauses; Assumption Agreements....................................-78-
SECTION 3.13.     Realization Upon Defaulted Mortgage Loans....................................................-79-
SECTION 3.14.     Trustee to Cooperate; Release of Mortgage Files..............................................-81-
SECTION 3.15.     Servicing Compensation.......................................................................-82-
SECTION 3.16.     Collection Account Statements................................................................-83-
SECTION 3.17.     Statement as to Compliance...................................................................-83-
SECTION 3.18.     Independent Public Accountants' Servicing Report.............................................-84-
SECTION 3.19      Annual Certification.........................................................................-84-
SECTION 3.20.     Access to Certain Documentation..............................................................-85-
SECTION 3.21.     Title, Management and Disposition of REO Property............................................-85-
SECTION 3.22.     Obligations of Each Servicer in Respect of Prepayment Interest Shortfalls;
                  Relief Act Interest Shortfalls...............................................................-88-
SECTION 3.23.     Obligations of Each Servicer in Respect of Mortgage Rates and  Monthly
                  Payments.....................................................................................-88-
SECTION 3.24.     Reserve Fund.................................................................................-89-
SECTION 3.25.     Advance Facility.............................................................................-90-
SECTION 3.26.     Servicer Indemnification.....................................................................-92-

                                                    ARTICLE IV

                                        ADMINISTRATION AND MASTER SERVICING
                                   OF THE MORTGAGE LOANS BY THE MASTER SERVICER
SECTION 4.01.     Master Servicer..............................................................................-93-
SECTION 4.02.     REMIC-Related Covenants......................................................................-94-
SECTION 4.03.     Monitoring of Servicer.......................................................................-94-
SECTION 4.04.     Fidelity Bond................................................................................-95-
SECTION 4.05.     Power to Act; Procedures.....................................................................-95-
SECTION 4.06.     Due-on-Sale Clauses; Assumption Agreements...................................................-96-
SECTION 4.07.     Reserved.....................................................................................-96-

                                                       -ix-

<PAGE>

SECTION 4.08.     Documents, Records and Funds in Possession of Master Servicer To Be Held
for Trustee....................................................................................................-96-
SECTION 4.09.     Standard Hazard Insurance and Flood Insurance Policies.......................................-97-
SECTION 4.10.     Presentment of Claims and Collection of Proceeds.............................................-97-
SECTION 4.11.     Maintenance of the Primary Mortgage Insurance Policies.......................................-97-
SECTION 4.12.     Trustee to Retain Possession of Certain Insurance Policies and Documents
................................................................................................................-98-
SECTION 4.13.     Realization Upon Defaulted Mortgage Loans....................................................-98-
SECTION 4.14.     Compensation for the Master Servicer.........................................................-98-
SECTION 4.15.     REO Property.................................................................................-99-
SECTION 4.16.     Annual Officer's Certificate as to Compliance................................................-99-
SECTION 4.17.     Annual Independent Accountant's Servicing Report............................................-100-
SECTION 4.18.     UCC.........................................................................................-100-
SECTION 4.19.     Obligation of the Master Servicer in Respect of Prepayment Interest Shortfalls
...............................................................................................................-100-
SECTION 4.20.     Collection Account..........................................................................-101-
SECTION 4.21.     Prepayment Penalty Verification.............................................................-101-

                                                     ARTICLE V

                                          PAYMENTS TO CERTIFICATEHOLDERS
SECTION 5.01.     Distributions...............................................................................-103-
SECTION 5.02.     Statements to Certificateholders............................................................-116-
SECTION 5.03.     Servicer Reports; P&I Advances..............................................................-119-
SECTION 5.04.     Allocation of Realized Losses...............................................................-121-
SECTION 5.05.     Compliance with Withholding Requirements....................................................-123-
SECTION 5.06.     Reports Filed with Securities and Exchange Commission.......................................-123-

                                                    ARTICLE VI

                                                 THE CERTIFICATES
SECTION 6.01.     The Certificates............................................................................-125-
SECTION 6.02.     Registration of Transfer and Exchange of Certificates.......................................-127-
SECTION 6.03.     Mutilated, Destroyed, Lost or Stolen Certificates...........................................-132-
SECTION 6.04.     Persons Deemed Owners.......................................................................-132-
SECTION 6.05.     Certain Available Information...............................................................-132-

                                                    ARTICLE VII

                               THE DEPOSITOR, THE SERVICERS AND THE MASTER SERVICER
SECTION 7.01.     Liability of the Depositor, the Servicers and the Master Servicer...........................-134-
SECTION 7.02.     Merger or Consolidation of the Depositor, the related Servicer or the Master
                  Servicer....................................................................................-134-

                                                        -x-

<PAGE>

SECTION 7.03.     Limitation on Liability of the Depositor, the Servicers, the Master Servicer
                  and Others..................................................................................-134-
SECTION 7.04.     Limitation on Resignation of the Servicers..................................................-135-
SECTION 7.05.     Limitation on Resignation of the Master Servicer............................................-136-
SECTION 7.06.     Assignment of Master Servicing..............................................................-136-
SECTION 7.07.     Rights of the Depositor in Respect of the Servicers and the Master Servicer.................-137-
SECTION 7.08.     Duties of the Credit Risk Manager...........................................................-138-
SECTION 7.09.     Limitation Upon Liability of the Credit Risk Manager........................................-138-
SECTION 7.10.     Removal of the Credit Risk Manager..........................................................-138-

                                                   ARTICLE VIII

                                                      DEFAULT
SECTION 8.01.     Servicer Events of Default..................................................................-140-
SECTION 8.02.     Master Servicer to Act; Appointment of Successor............................................-144-
SECTION 8.03.     Notification to Certificateholders..........................................................-146-
SECTION 8.04.     Waiver of Servicer Events of Default........................................................-146-

                                                    ARTICLE IX

                              CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR
SECTION 9.01.     Duties of Trustee and Securities Administrator..............................................-147-
SECTION 9.02.     Certain Matters Affecting Trustee and Securities Administrator..............................-148-
SECTION 9.03.     Trustee and Securities Administrator not Liable for Certificates or Mortgage Loans..........-150-
SECTION 9.04.     Trustee and Securities Administrator May Own Certificates...................................-150-
SECTION 9.05.     Fees and Expenses of Trustee and Securities Administrator...................................-151-
SECTION 9.06.     Eligibility Requirements for Trustee and Securities
                  Administrator...............................................................................-151-
SECTION 9.07.     Resignation and Removal of Trustee and Securities
                  Administrator...............................................................................-152-
SECTION 9.08.     Successor Trustee or Securities Administrator...............................................-153-
SECTION 9.09.     Merger or Consolidation of Trustee or Securities
                  Administrator...............................................................................-153-
SECTION 9.10.     Appointment of Co-Trustee or Separate Trustee...............................................-154-
SECTION 9.11.     Appointment of Office or Agency.............................................................-155-
SECTION 9.12.     Representations and Warranties..............................................................-155-

                                                     ARTICLE X

                                                    TERMINATION

SECTION 10.01.             Termination Upon Repurchase or Liquidation of All Mortgage
                           Loans..............................................................................-156-
SECTION 10.02.             Additional Termination Requirements................................................-158-

                                                    ARTICLE XI

                                                 REMIC PROVISIONS
SECTION 11.01.             REMIC Administration...............................................................-160-
SECTION 11.02.             Prohibited Transactions and Activities.............................................-162-
SECTION 11.03.             Indemnification....................................................................-163-

                                                    ARTICLE XII

                                             MISCELLANEOUS PROVISIONS
SECTION 12.01.             Amendment..........................................................................-164-
SECTION 12.02.             Recordation of Agreement; Counterparts.............................................-165-
SECTION 12.03.             Limitation on Rights of Certificateholders.........................................-165-
SECTION 12.04.             Governing Law......................................................................-166-
SECTION 12.05.             Notices............................................................................-166-
SECTION 12.06.             Severability of Provisions.........................................................-167-
SECTION 12.07.             Notice to Rating Agencies..........................................................-167-
SECTION 12.08.             Article and Section References.....................................................-168-
SECTION 12.09.             Grant of Security Interest.........................................................-168-
SECTION 12.10.             Survival of Indemnification........................................................-169-
</TABLE>

                                                       -xi-

<PAGE>

Exhibits
--------

Exhibit A-1       Form of Class A Certificate
Exhibit A-2       Form of Class M Certificate
Exhibit A-3       Form of Class CE Certificate
Exhibit A-4       Form of Class P Certificate
Exhibit A-5       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 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 P 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        MGIC PMI Mortgage Loans

                                     -xii-

<PAGE>

                  This Pooling and Servicing Agreement, is dated and effective
as of October 1, 2003, among ACE SECURITIES CORP. as Depositor, THE PROVIDENT
BANK as a Servicer, OCWEN FEDERAL BANK FSB, as a Servicer, WELLS FARGO BANK
MINNESOTA, NATIONAL ASSOCIATION as Master Servicer and Securities Administrator
and BANK ONE, 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.

<TABLE>
<CAPTION>
                           REMIC I                    Initial              Latest Possible
Designation             Remittance Rate        Uncertificated Balance      Maturity Date (1)
-----------             ---------------        ----------------------      -----------------
<S>                     <C>                    <C>                         <C>
I-LTAA                   Variable(2)              $417,891,024.18           July 25, 2033
I-LTA1                   Variable(2)              $  2,885,045.00           July 25, 2033
I-LTA2A                  Variable(2)              $    489,420.00           July 25, 2033
I-LTA2B                  Variable(2)              $    145,000.00           July 25, 2033
I-LTA2C                  Variable(2)              $    105,000.00           July 25, 2033
I-LTM1                   Variable(2)              $    213,205.00           July 25, 2033
I-LTM2                   Variable(2)              $    191,885.00           July 25, 2033
I-LTM3                   Variable(2)              $     42,640.00           July 25, 2033
I-LTM4                   Variable(2)              $     53,300.00           July 25, 2033
I-LTM5                   Variable(2)              $     53,300.00           July 25, 2033
I-LTM6                   Variable(2)              $     31,980.00           July 25, 2033
I-LTZZ                   Variable(2)              $  4,317,613.25           July 25, 2033
I-LTP                    Variable(2)              $        100.00           July 25, 2033
I-LT1A                   Variable(2)              $     10,182.89           July 25, 2033
I-LT1B                   Variable(2)              $     67,883.80           June 25, 2033

                                        -1-

<PAGE>

I-LT2A                   Variable(2)              $      2,611.69           June 25, 2033
I-LT2B                   Variable(2)              $     17,400.09           June 25, 2033
I-LTXX                   Variable(2)              $426,321,333.96           June 25, 2033
</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.

<TABLE>
<CAPTION>
                                                    Initial Aggregate
                          Pass Through            Certificate Principal           Latest Possible
  Designation                 Rate                       Balance                 Maturity Date (1)
  -----------                 ----                       -------                 -----------------
<S>                       <C>                     <C>                            <C>
Class A-1                 Variable(2)                $577,009,000.00               July 25, 2033
Class A-2A                Variable(2)                $ 97,884,000.00               July 25, 2033
Class A-2B                Variable(2)                $ 29,000,000.00               July 25, 2033
Class A-2C                Variable(2)                $ 21,000,000.00               July 25, 2033
Class M-1                 Variable(2)                $ 42,641,000.00               July 25, 2033
Class M-2                 Variable(2)                $ 38,377,000.00               July 25, 2033
Class M-3                 Variable(2)                $  8,528,000.00               July 25, 2033
Class M-4                 Variable(2)                $ 10,660,000.00               July 25, 2033
Class M-5                 Variable(2)                $ 10,660,000.00               July 25, 2033
Class M-6                 Variable(2)                $  6,396,000.00               July 25, 2033
Class P                        N/A(3)                $        100.00               July 25, 2033
Class CE                       N/A(4)                $ 10,683,824.86               July 25, 2033
</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

                                       -2-

<PAGE>

         REMIC I Regular Interests. 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 $678,837,990.01 and the Group II Mortgage
Loans had an aggregate Scheduled Principal Balance equal to $174,000,934.86.

         In consideration of the mutual agreements herein contained, the
Depositor, the Servicers, 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 a
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 or the Distribution Account
as the context may require.

                  "Accrued Certificate Interest": With respect to any Class A
Certificate, Mezzanine Certificate 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 and the
Mezzanine 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 and the Mezzanine Certificates will be
calculated on the basis of a 360-day year and the actual number of days in the
applicable Interest Accrual Period. All distributions of interest on the Class
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 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 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 MGIC Fee and (iv) the Credit Risk Management
Fee.

                  "Administration Fee Rate": The sum of (i) the Servicing Fee
Rate, (ii) the Master Servicing Fee Rate, (iii) the MGIC Fee Rate and (iv) the
Credit Risk Management Fee Rate.

                  "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.

                  "Authorized Officers": A managing director of the whole loan
trading desk and a managing director in global markets.

                                       -5-

<PAGE>

                  "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 a Servicer or the Master
Servicer in respect of Prepayment Interest Shortfalls for such Distribution Date
pursuant to Section 3.22 or Section 4.19, (c) the aggregate of any P&I Advances
for such Distribution Date made by a Servicer pursuant to Section 5.03 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, a Servicer, the Trustee, the
Master Servicer, the Securities Administrator or the Custodian pursuant to
Section 3.09 or 9.05 or otherwise payable in respect of Extraordinary Trust Fund
Expenses, (v) the Credit Risk Management Fee and the MGIC Fee, (vi) amounts
deposited in the Collection Account or the Distribution Account in error, (vii)
the amount of any Prepayment Charges collected by the Servicers, any Prepayment
Charges paid by the Servicers, in connection with the Principal Prepayment of
any of the Mortgage Loans and (viii) amounts reimbursable to a successor
Servicer (including the Master Servicer) pursuant to Section 8.02.

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

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

                  "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,
Florida, Maryland, Minnesota, New Jersey 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 and the

                                       -6-

<PAGE>

Mezzanine Certificates and (ii) the Cap Contract between the Trustee and the
counterparty thereunder, for the benefit of the Class A-2 Certificates and the
Mezzanine 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 the Depositor's Asset Backed
Pass-Through Certificates, Series 2003-NC1, Class A-1, Class A-2A, Class A-2B,
Class A-2C, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6,
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 Margin": With respect to the Class A-1
Certificates and, for purposes of the definition of "Marker Rate", REMIC I
Regular Interest I-LTA1, 0.34% in the case of each Distribution Date through and
including the Optional Termination Date and 0.68% in the case of each
Distribution Date thereafter.

                  With respect to the Class A-2A Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTA2A, 0.42% in
the case of each Distribution Date through and including the Optional
Termination Date and 0.84% in the case of each Distribution Date thereafter.

                  With respect to the Class A-2B Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTA2B, 0.18% in
the case of each Distribution Date through and including the Optional
Termination Date and 0.36% in the case of each Distribution Date thereafter.

                  With respect to the Class A-2C Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTA2C, 0.50% in
the case of each Distribution Date through and including the Optional
Termination Date and 1.00% 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, 0.78% in
the case of each Distribution Date through and including the Optional
Termination Date and 1.17% in the case of each Distribution Date thereafter.

                                       -7-

<PAGE>

                  With respect to the Class M-2 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTM2, 1.90% in
the case of each Distribution Date through and including the Optional
Termination Date and 2.85% 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, 2.05% in
the case of each Distribution Date through and including the Optional
Termination Date and 3.075% 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, 3.50% in
the case of each Distribution Date through and including the Optional
Termination Date and 5.25% 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, 3.75% in
the case of each Distribution Date through and including the Optional
Termination Date and 5.625% 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, 4.00% in
the case of each Distribution Date through and including the Optional
Termination Date and 6.00% 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, a 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 a
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.

                                       -8-

<PAGE>

                  "Certificate Principal Balance": With respect to each Class A
Certificate, Mezzanine Certificate or Class P Certificate as of any date of
determination, the Certificate Principal Balance of such Certificate on the
Distribution Date immediately prior to such date of determination, minus 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 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 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, Class A-2A, Class A-2B
or Class A-2C 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 one of the Class A-1 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-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 Certificate Principal Balance of the Class
A-1 Certificates immediately prior to such Distribution Date over (y) the lesser
of (A) the product of (i) 70.00% 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 $3,394,190.00.

                                       -9-

<PAGE>

                  "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 Class A-2A Certificate, Class
A-2B Certificate or Class A-2C Certificate.

                  "Class A-2A Certificate": Any one of the Class A-2A
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-2B Certificate": Any one of the Class A-2B
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-2C Certificate": Any one of the Class A-2C
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 aggregate 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) 70.00% 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
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$870,005.

                  "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-3 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

                                      -10-

<PAGE>

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) 80.00% 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 $4,264,195.

                  "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 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) 89.00% and (ii) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced and unscheduled collections of
principal received during the related Prepayment Period) and (B) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period (after giving effect to scheduled payments of principal due during
the related Due Period, to the extent received or advanced and unscheduled
collections of principal received during the related Prepayment Period) minus
$4,264,195.

                  "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

                                      -11-

<PAGE>

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)
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 $4,264,195.

                  "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) 93.50% 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 $4,264,195.

                  "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.

                                      -12-

<PAGE>

                  "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) 96.00% 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 $4,264,195.

                  "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) 97.50% 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

                                      -13-

<PAGE>

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 $4,264,195.

                  "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-4 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 form annexed hereto as Exhibit A-5, 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": October 10, 2003.

                  "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 each Servicer pursuant to
Section 3.08(a), which shall be entitled "The Provident Bank, as Servicer for
Bank One, National Association, as Trustee, in trust for the registered holders
of ACE Securities Corp., Home Equity Loan Trust, Series 2003-NC1, Asset Backed
Pass-Through Certificates" or "Ocwen Federal Bank FSB, as Servicer for Bank One,
National Association, as Trustee, in trust for the registered holders of ACE
Securities Corp., Home Equity Loan Trust, Series 2003-NC1, 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 1 Bank One Plaza, Mail Stop IL1- 0126, Chicago, Illinois 60670,
Attention: Global Corporate Trust Services, ACE Securities Corp., 2003-NC1, 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 Servicers. The office of the Securities Administrator,
which for purposes of Certificate transfers and surrender is located at Wells
Fargo Bank Minnesota, National Association, Sixth and Marquette Avenue,
Minneapolis, Minnesota 55479, Attention: Corporate Trust (ACE 2003-NC1), and for
all other purposes is located at Wells Fargo Bank Minnesota, National
Association, P.O. Box 98, Columbia, Maryland 21045, Attention: Corporate Trust
(ACE 2003-NC1) (or for overnight deliveries, at 9062 Old Annapolis Road,
Columbia, Maryland 21046, Attention: Corporate Trust (ACE 2003-NC1)).

                  "Corresponding Certificate": With respect to REMIC I Regular
Interest I-LTA1, REMIC I Regular Interest I-LTA2A, REMIC I Regular Interest
I-LTA2B, REMIC I Regular Interest

                                      -14-

<PAGE>

I-LTA2C, 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-LTP, the Class A-1 Certificates, Class A- 2A Certificates, Class A-2B
Certificates, Class A-2C Certificates, Class M-1 Certificates, Class M-2
Certificates, Class M-3 Certificates, Class M-4 Certificates, Class M-5
Certificates, Class M-6 Certificates and Class P Certificates, respectively.

                  "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 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 Agreement": The agreement between the
Credit Risk Manager and each 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 Agreement, 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
October 1, 2003, among the Trustee, the Custodian and the Servicers 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, October 1,
2003. 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

                                      -15-

<PAGE>

proceeding under the Bankruptcy Code, except such a reduction resulting from a
Deficient Valuation.

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

                  "Definitive Certificates": As defined in Section 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 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
and (i) Ocwen, the 15th day of the calendar month in which such Distribution
Date occurs, or if such 15th day is not a

                                      -16-

<PAGE>

Business Day, the Business Day immediately preceding such 15th day and (ii)
Provident, the 10th day of the calendar month on which such Distribution Date
occurs, or, if such 10th day is not a Business Day, the Business Day immediately
preceding such 10th day.

                  "Directly Operate": With respect to any REO Property, the
furnishing or rendering of services to the tenants thereof, the management or
operation of such REO Property, the holding of such REO Property primarily for
sale to customers, the performance of any construction work thereon or any use
of such REO Property in a trade or business conducted by REMIC I other than
through an Independent Contractor; provided, however, that the related Servicer,
on behalf of the Trustee, shall not be considered to Directly Operate an REO
Property solely because the related 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 Trustee for the benefit of the Certificateholders and designated
"Wells Fargo Bank Minnesota, National Association, in trust for registered
holders of ACE Securities Corp. Home Equity Loan Trust, Series 2003-NC1". 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 November 2003.

                  "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.

                                      -17-

<PAGE>

                  "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 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 related Servicer is
entitled to be reimbursed from Liquidation Proceeds with respect to such
liquidated Mortgage Loan pursuant to Section 3.09.

                  "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 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 Terminator pursuant to or as
contemplated by Section 2.03, 3.13(c) or Section 10.01), a determination made by
the related Servicer that all Insurance Proceeds, Liquidation Proceeds and other
payments or recoveries which the related Servicer, in its reasonable good faith
judgment, expects to be finally recoverable in respect thereof have been so
recovered, which determination

                                      -18-

<PAGE>

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.

                  "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 (after taking into account amounts payable or reimbursable to the
Trustee, the Custodian, the Securities Administrator, the Master Servicer or the
Servicers 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 Servicers 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 (after taking into account amounts payable or reimbursable to the
Trustee, the Custodian, the Securities Administrator, the Master Servicer or the
Servicers pursuant to this Agreement or the Custodial Agreement).

                                      -19-

<PAGE>

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

                  "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 Servicers 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 Servicers, 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 Servicers, the
Seller, the Originator or any Affiliate thereof, and (c) is not connected with
the Depositor, the Master Servicer, the Securities Administrator, the Servicers,
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 Servicers,
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 related
Servicer, the Seller, the Originator or any Affiliate thereof, as the case may
be.

                  "Independent Contractor": Either (i) any Person (other than a
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 a 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

                                      -20-

<PAGE>

cause such REO Property to cease to qualify as "foreclosure property" within the
meaning of Section 860G(a)(8) of the Code (determined without regard to the
exception applicable for purposes of Section 860D(a) of the Code), or cause any
income realized in respect of such REO Property to fail to qualify as Rents from
Real Property.

                  "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 (A) with respect to approximately 2.55% of the Adjustable Rate
Mortgage Loans, by aggregate principal balance as of the Cut-off Date, One-Month
LIBOR or (B) with respect to 97.45% of the Adjustable Rate Mortgage Loans, by
aggregate principal balance as of the Cut-off Date, the average of the interbank
offered rates for six-month United States dollar deposits in the London market
as published in THE WALL STREET JOURNAL and as most recently available 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.

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

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

                  "Interest Determination Date": With respect to the Class A
Certificates, the Mezzanine Certificates, REMIC I Regular Interest I-LTA1, REMIC
I Regular Interest I-LTA2A, REMIC I Regular Interest I-LTA2B, REMIC I Regular
Interest I-LTA2C, 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 any Interest
Accrual Period therefor, the second London Business Day preceding the
commencement of such Interest Accrual Period.

                                      -21-

<PAGE>

                  "Interest Distribution Amount": With respect to any
Distribution Date and any Class A Certificates, any Mezzanine 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.

                  "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.

                   "Last Scheduled Distribution Date": July 25, 2033.

                  "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 or amounts received in respect of the rental of any REO Property prior
to REO Disposition) received by the related Servicer in connection with (i) the
taking of all or a part of a Mortgaged Property by exercise of the power of
eminent domain or condemnation, (ii) the liquidation of a defaulted Mortgage
Loan through a trustee's sale, foreclosure sale or otherwise, or (iii) the
repurchase, substitution or sale of a Mortgage Loan or an REO Property pursuant
to or as contemplated by Section 2.03, Section 3.13(c), Section 3.21 or Section
10.01.

                  "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

                                      -22-

<PAGE>

each of REMIC I Regular Interest I-LTA1, REMIC I Regular Interest I-LTA2A, REMIC
I Regular Interest I-LTA2B, REMIC I Regular Interest I-LTA2C, 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-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 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
Minnesota, National Association 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 superceded by any subsequent statement, rule or
regulation of the Securities and Exchange Commission or any statement of a
division thereof, or (c) any future releases, rules and regulations are
published by the Securities and Exchange Commission from time to time pursuant
to the Sarbanes-Oxley Act of 2002, which in any such case affects the form or
substance of the required certification and results in the required
certification being, in the reasonable judgment of the Master Servicer,
materially more onerous than the form of the required certification as of the
Closing Date, the Master Servicer Certification shall be as agreed to by the
Master Servicer, the Depositor and the Seller following a negotiation in good
faith to determine how to comply with any such new requirements.

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

                  "Master Servicer Fee Rate": 0.0075% 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

                                      -23-

<PAGE>

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-LTA1, REMIC I Regular
Interest I-LTA2A, REMIC I Regular Interest I-LTA2B, REMIC I Regular Interest
I-LTA2C, 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 and REMIC I Regular Interest I-LTM6 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 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.

                  "MGIC": Mortgage Guaranty Insurance Corporation, a monoline
private insurance company organized and created under the laws of the State of
Wisconsin, or its successor in interest.

                  "MGIC Fee": With respect to each MGIC PMI Mortgage Loan and
each Distribution Date, an amount equal to one twelfth of the product of the
MGIC Fee Rate multiplied by the Scheduled Principal Balance of such MGIC PMI
Mortgage Loan as of the Due Date in the preceding calendar month.

                  "MGIC Fee Rate": With respect to each MGIC PMI Mortgage Loan,
the per annum percentage set forth on the Mortgage Loan Schedule.

                  "MGIC PMI Mortgage Loans": Each Mortgage Loan insured by MGIC
and identified on Schedule 3 attached hereto.

                  "MGIC PMI Policy": The Master Primary Mortgage Insurance
Policy (No. 12-670-4- 3443) with respect to the MGIC PMI Mortgage Loans and all
endorsements thereto dated the Closing Date, issued by MGIC.

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

                                      -24-

<PAGE>

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

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

                  "Monthly 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 related Servicer pursuant to Section 3.01; and (c)
on the assumption that all other amounts, if any, due under such Mortgage Loan
are paid when due.

                  "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 October 10, 2003, 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 related 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;

                                      -25-

<PAGE>

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

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

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

                  (vi) the original months to maturity;

                  (vii) the 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;

                                      -26-

<PAGE>

                  (xxii) the Mortgage Rate at origination;

                  (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) the related Servicer;

                  (xxxvi) whether such Mortgage Loan is a MGIC PMI Mortgage
Loan; and

                  (xxxvii) the MGIC Fee Rate with respect to each MGIC PMI
Mortgage Loan.

                  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.

                                      -27-

<PAGE>

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

                  "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 (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 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 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.

                                      -28-

<PAGE>

                  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 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 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 Net 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 Net 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 the Class A
Certificates and the Mezzanine Certificates 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 sum of (i) the excess of (x) the amount of interest the
Class A Certificates or any Class of Mezzanine Certificates 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 Certificates on such
Distribution Date over (y) the amount of interest paid 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
together with interest thereon at a rate equal to the Pass-Through Rate for such
class of Certificates for the most recently ended Interest Accrual Period.

                  "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 related 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.

                                      -29-

<PAGE>

                  "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 related 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 for such Distribution Date.

                  "Ocwen": Ocwen Federal Bank FSB or any successor thereto
appointed hereunder in connection with the servicing and administration of the
Ocwen Mortgage Loans.

                  "Ocwen Mortgage Loans": Those Mortgage Loans serviced by Ocwen
pursuant to the terms of this Agreement as specified on the Mortgage Loan
Schedule.

                  "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 related Servicer, the
Seller or the Depositor, as applicable.

                  "One-Month LIBOR": With respect to the Class A Certificates,
the Mezzanine Certificates, and for the purpose of the definition of "Marker
Rate,"REMIC I Regular Interest I-LTA1, REMIC I Regular Interest I-LTA2A, REMIC I
Regular Interest I-LTA2B, REMIC I Regular Interest I-LTA2C, 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 and
REMIC I Regular Interest I-LTM6 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-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

                                      -30-

<PAGE>

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-1 Certificates and, for purposes of the definition of "Marker Rate", REMIC I
Regular Interest I-LTA1, a per annum rate equal to One-Month LIBOR plus the
related Certificate Margin.

                  With respect to the Class A-2A Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTA2A, a per
annum rate equal to One-Month LIBOR plus the related Certificate Margin.

                  With respect to the Class A-2B Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTA2B, a per
annum rate equal to One-Month LIBOR plus the related Certificate Margin.

                  With respect to the Class A-2C Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTA2C, 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.

                  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.

                                      -31-

<PAGE>

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

                      "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": New Century Mortgage Corporation, a
California corporation.

                      "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 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 and the Mezzanine Certificates and any Distribution
Date is any amount of Net Monthly Excess Cashflow actually applied as an
accelerated payment of 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 related Servicer in respect of any Determination Date
pursuant to Section 5.03, 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 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 and the Mezzanine 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.

                                      -32-

<PAGE>

                      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 (xiii) below, and the denominator of which is the
aggregate Uncertificated Balances of REMIC I Regular Interest I-LTAA, REMIC I
Regular Interest I-LTA1, REMIC I Regular Interest I-LTA2A, REMIC I Regular
Interest I-LTA2B, REMIC I Regular Interest I-LTA2C, 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-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-LTA1 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTA1;

                  (iii) the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTA2A minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTA2A;

                  (iv) the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTA2B minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTA2B;

                  (v) the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTA2C minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTA2C;

                  (vi) 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;

                  (vii) 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;

                  (viii) 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;

                  (ix) 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;

                                      -33-

<PAGE>

                  (x) 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;

                  (xi) 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;

                  (xii) 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

                  (xiii) 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 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 and the Mezzanine
Certificates are issuable only in minimum Percentage Interests corresponding to
minimum initial Certificate Principal Balances of $25,000 and integral multiples
of $1.00 in excess thereof. The Class 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, a Servicer, the Master Servicer,
the Trustee or any of their respective Affiliates:

                                      -34-

<PAGE>

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

                      (ii) demand and time deposits in, certificates of deposit
         of, or bankers' acceptances issued by, any Depository Institution;

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

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

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

                      (vi) units of money market funds that have been rated
         "AAA" by Fitch (if rated by Fitch), and "AAAm" or "AAAm-G" 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.

                  "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.

                                      -35-

<PAGE>

                  "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.

                  "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 related 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 Ocwen, on any
Distribution Date, for each Ocwen 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 calendar month

                                      -36-

<PAGE>

in which such Distribution Date occurs and the Determination Date of the
calendar month in which such Distribution Date occurs, an amount equal to
interest (to the extent received) at the applicable Net Mortgage Rate on the
amount of such Principal Prepayment for the number of days commencing on the
first day of the calendar month in which such Distribution Date occurs and
ending on the last date through which interest is collected from the related
Mortgagor. Ocwen may withdraw such Prepayment Interest Excess from the related
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 related 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 related Servicer and the Master Servicer in respect of
any Prepayment Interest Shortfall are set forth in Section 3.22 and Section
4.19, respectively.

                  "Prepayment Period": With respect to any Distribution Date and
(i) Ocwen, the period commencing on the 16th day of the month prior to the month
in which the related Distribution Date occurs and ending on the 15th day of the
month in which such Distribution Date occurs, and (ii) Provident, the calendar
month immediately proceeding the month in which such Distribution Date occurs.

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

                  "Principal 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.

                  "Provident": The Provident Bank or any successor thereto
appointed hereunder in connection with the servicing and administration of the
Provident Mortgage Loans.

                  "Provident Mortgage Loans": Those Mortgage Loans serviced by
Provident pursuant to the terms of this Agreement as specified on the Mortgage
Loan Schedule.

                  "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)

                                      -37-

<PAGE>

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 related
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 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 related 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 related 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.

                  "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) have a Maximum Mortgage Rate not less
than the Maximum Mortgage Rate on the Deleted Mortgage Loan, (iv) have a Minimum
Mortgage Rate not less than the Minimum Mortgage Rate of the Deleted Mortgage
Loan, (v) have a Gross Margin equal to the Gross Margin of the Deleted Mortgage
Loan, (vi) 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 and (xiii) conform to each
representation and warranty set forth in Section 6 of the Mortgage Loan Purchase
Agreement applicable to the Deleted Mortgage Loan. In the event that one or more
mortgage loans are substituted for one or more Deleted Mortgage Loans, the
amounts described in clause (i) hereof shall be determined on the basis of
aggregate principal balances, the Mortgage Rates described in clause (ii) hereof
shall be determined on the basis of

                                      -38-

<PAGE>

weighted average Mortgage 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": Moody's, Fitch 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 related
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 related Servicer to the Master Servicer 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 related Servicer with respect to such Mortgage Loan
pursuant to Section 3.09(a)(iii).

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

                                      -39-

<PAGE>

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), 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 related Servicer in respect of such REO Property or the related Mortgage
Loan for which the related Servicer has been or, in connection with such Final
Recovery Determination, will be reimbursed pursuant to Section 3.21 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.

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

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

                  "Record Date": With respect to each Distribution Date and the
Class A Certificates and the Mezzanine 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.

                  "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 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.

                                      -40-

<PAGE>

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

                  "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 and any proceeds thereof; (iv) the
Depositor's rights under the Mortgage Loan Purchase Agreement (including any
security interest created thereby); and (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. Notwithstanding the
foregoing, however, REMIC I 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-LTA1, REMIC I
Regular Interest I-LTA2A, REMIC I Regular Interest I-LTA2B, REMIC I Regular
Interest I-LTA2C, 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-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-LTA1, REMIC I Regular Interest I-LTA2A,
REMIC I Regular Interest I-LTA2B, REMIC I Regular Interest I-LTA2C, REMIC I
Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular
Interest I-LTM3,

                                      -41-

<PAGE>

REMIC I Regular Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I
Regular Interest I-LTM6 and REMIC 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-LTA1,
REMIC I Regular Interest I-LTA2A, REMIC I Regular Interest I-LTA2B, REMIC I
Regular Interest I-LTA2C, 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 the
denominator of which is the aggregate of the Uncertificated Balances of REMIC I
Regular Interest I-LTA1, REMIC I Regular Interest I-LTA2A, REMIC I Regular
Interest I-LTA2B, REMIC I Regular Interest I-LTA2C, 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-LTZZ.

                  "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-LTA1": 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-LTA1
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-LTA2A": 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-LTA2A
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.

                                      -42-

<PAGE>

                  "REMIC I Regular Interest I-LTA2B": 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-LTA2B
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-LTA2C": 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-LTA2C
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

                                      -43-

<PAGE>

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 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.

                                      -44-

<PAGE>

                  "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 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-LTA1, REMIC I Regular Interest
I-LTA2A, REMIC I Regular Interest I-LTA2B, REMIC I Regular Interest I-LTA2C,
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-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 Net Mortgage Rates of the Mortgage Loans. With
respect to REMIC I Regular Interest I-LT1B, the weighted average of the Expense
Adjusted Net Mortgage Rates of the Group I Mortgage Loans. With respect to REMIC
I Regular Interest I-LT2B, the weighted average of the Expense Adjusted Net
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.

                                      -45-

<PAGE>

                  "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 Securities Administrator
pursuant to Section 5.03(f).

                  "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 related Servicer in respect of an REO Property pursuant
to Section 3.21.

                  "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 related
Servicer pursuant to Section 3.21(d) for unpaid Servicing Fees in respect of the
related Mortgage Loan and unreimbursed Servicing Advances and P&I Advances in
respect of such REO Property or the related Mortgage Loan, over (b) the REO
Imputed Interest in respect of such REO Property for such calendar month.

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

                  "Required Overcollateralization Amount": With respect to any
Distribution Date (i) prior to the Stepdown Date, $10,683,825, (ii) on or after
the Stepdown Date provided a Trigger Event is not in effect, the greater of (x)
2.50% of the aggregate Stated Principal Balance of the Mortgage Loans as of the
last day of the related Due Period and (y) $4,264,195, and (iii) on or after

                                      -46-

<PAGE>

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
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) an
attached, detached or semi-detached one-family dwelling, (ii) an attached,
detached or semi-detached two- to four-family dwelling, (iii) a one-family
dwelling unit in a Fannie Mae eligible condominium project, or (iv) an attached,
detached or semi-detached one-family dwelling in a planned unit development,
none of which is a co-operative, mobile or manufactured home (as defined in 42
United States Code, Section 5402(6)).

                  "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,
the Chairman or Vice Chairman of the Board of Directors (however denominated),
the Chairman or Vice Chairman of any Committee of the Board of Directors, the
President, the Chairman of any Committee on trust matters, any vice president,
any assistant vice president, the Secretary, any assistant secretary, the
Treasurer, any assistant treasurer, the Cashier, any assistant cashier, any
trust officer or assistant trust officer, the Controller and any assistant
controller or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above designated officers and in each
case having direct responsibility for the administration of this Agreement 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.

                  "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

                                      -47-

<PAGE>

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

                  "Securities Administrator": As of the Closing Date, Wells
Fargo Bank Minnesota, National Association 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": Deutsche Bank AG New York Branch 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": Either Provident or Ocwen.

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

                  "Servicer Remittance Date": With respect to Ocwen, on any
Distribution Date, by 12:00 p.m. New York time on the Business Day preceding the
related Distribution Date. With respect to Provident, on any Distribution Date,
by 12:00 p.m. New York time on the 22nd day of the month in which such
Distribution Date occurs, or if such 22nd day is not a Business Day, the
Business Day immediately preceding such 22nd day.

                  "Servicer Report": A report in form and substance acceptable
to the Master Servicer and Securities Administrator on an electronic data file
or tape prepared by the related Servicer

                                      -48-

<PAGE>

pursuant to Section 5.03(a) with such additions, deletions and modifications as
agreed to by the Master Servicer, the Securities Administrator and the related
Servicer.

                  "Servicing Advances": The customary and reasonable
"out-of-pocket" costs and expenses incurred by a Servicer in connection with a
default, delinquency or other unanticipated event by such 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. 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. Such 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 a Servicer involved in, or
responsible for, the administration and servicing or master servicing of
Mortgage Loans, whose name and specimen signature appear on a list of Servicing
Officers furnished by such 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 related Servicer

                                      -49-

<PAGE>

or a successor Servicer (including the Master Servicer) and distributed pursuant
to Section 5.01 on or before such date of determination, (ii) all Principal
Prepayments received after the Cut-off Date, to the extent distributed pursuant
to Section 5.01 on or before such date of determination, (iii) all Liquidation
Proceeds and Insurance Proceeds applied by the related Servicer as recoveries of
principal in accordance with the provisions of Section 3.13, to the extent
distributed pursuant to Section 5.01 on or before such date of determination,
and (iv) any Realized Loss incurred with respect thereto as a result of a
Deficient Valuation made during or prior to the Prepayment Period for the most
recent Distribution Date coinciding with or preceding such date of
determination; and (b) as of any date of determination coinciding with or
subsequent to the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such Mortgage Loan would be distributed, zero.
With respect to any REO Property: (a) as of any date of determination up to but
not including the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such REO Property would be distributed, an
amount (not less than zero) equal to the Stated Principal Balance of the related
Mortgage Loan as of the date on which such REO Property was acquired on behalf
of REMIC I, minus the sum of (i) if such REO Property was acquired before the
Distribution Date in any calendar month, the principal portion of the Monthly
Payment due on the Due Date in the calendar month of acquisition, to the extent
advanced by the related Servicer or a successor Servicer (including the Master
Servicer) and distributed pursuant to Section 5.01 on or before such date of
determination, and (ii) the aggregate amount of REO Principal Amortization in
respect of such REO Property for all previously ended calendar months, to the
extent distributed pursuant to Section 4.01 on or before such date of
determination; and (b) as of any date of determination coinciding with or
subsequent to the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such REO Property would be distributed, zero.

                  "Stepdown Date": The earlier to occur of (i) the later to
occur of (a) the Distribution Date occurring in November 2006 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 30.00% and (ii) the first
Distribution Date on which the aggregate Certificate Principal Balance of the
Class A Certificates has been reduced to zero.

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

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

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

                  "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

                                      -50-

<PAGE>

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.

                  "Terminator": As defined in Section 10.01.

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

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

                  "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 50.00% of
the Credit Enhancement Percentage 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 exceeds the applicable percentages set forth below with respect to such
Distribution Date:

<TABLE>
<CAPTION>
                  Distribution Date                                    Percentage
                  -----------------                                    ----------
<S>                                                                    <C>
                  November 2006 to October 2007                        2.75%, plus 1/12 of 1.00% for each
                                                                       month after October 2006
                  November 2007 to October 2008                        3.75%, plus 1/12 of 0.75% for each
                                                                       month after October 2007
                  November 2008 to October 2009                        4.50%, plus 1/12 of 0.25% for each
                                                                       month after October 2008
                  November 2009 and thereafter                         4.75%
</TABLE>

                  "Trust": ACE Securities Corp., Home Equity Loan Trust, Series
2003-NC1, the trust created hereunder.

                  "Trust Fund": Collectively, all of the assets of REMIC I,
REMIC II, 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": Bank One, National Association, a national banking
association, or its successor in interest, or any successor trustee appointed as
herein provided.

                                      -51-

<PAGE>

                  "Uncertificated Balance": The amount of the Uncertificated
REMIC Regular Interests outstanding as of any date of determination. As of the
Closing Date, the Uncertificated Balance of each Uncertificated REMIC 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 Uncertificated REMIC Regular Interest shall be
reduced by all distributions of principal made on such Uncertificated REMIC
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 I-LTZZ shall be increased by
interest deferrals as provided in Section 5.01(a)(1)(A)(i). The Uncertificated
Balance of each Uncertificated REMIC 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 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,
which have not yet been issued, a trust which was in existence on August 20,
1996 (other than a trust treated as owned by the grantor under subpart E of part
I of subchapter J of chapter 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

                                      -52-

<PAGE>

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 such 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 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 such 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.

                  "Wells Fargo": Wells Fargo Bank Minnesota, National
Association 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 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 related Servicer
pursuant to Section 3.22 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 based
on, and to the extent of, one month's interest at the then applicable respective
Pass-Through Rate on the Notional Amount thereof and, thereafter, among the
Class M-6

                                      -53-

<PAGE>

Certificates, Class M-5 Certificates, Class M-4 Certificates, the Class M-3
Certificates, the Class M-2 Certificates, the Class M-1 Certificates and the
Class A Certificates, in that order, in each case on a PRO RATA basis based on,
and to the extent of, one month's interest at the then applicable respective
Pass-Through Rate on the respective Certificate Principal Balance of each such
Certificate and (2) the aggregate amount of any Realized Losses allocated to the
Mezzanine Certificates and Net WAC Rate Carryover Amounts paid to the Class A
Certificates and the Mezzanine 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 Notional Amount thereof.

                  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 related Servicer pursuant to Section 3.22 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 first, to Uncertificated Interest payable
to REMIC I Regular Interest I-LTAA and REMIC II Regular Interest I-LTZZ up to an
aggregate amount equal to the REMIC I Interest Loss Allocation Amount, 98% and
2%, respectively, and thereafter among REMIC I Regular Interest I-LTA1, REMIC I
Regular Interest I-LTA2A, REMIC I Regular Interest I-LTA2B, REMIC I Regular
Interest I-LTA2C, 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-LTZZ PRO RATA based on, and to the extent of, one month's interest at
the then applicable respective REMIC II 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 related Servicer pursuant to Section 3.22 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.

                                      -54-

<PAGE>

                                   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, 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
related 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 Servicers an
executed copy of the Mortgage Loan Purchase Agreement and the MGIC 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 Servicers 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 related 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 Servicers shall not be responsible for any
custodian fees or other costs incurred in obtaining such documents and the
Depositor shall cause the Servicers to be reimbursed for any such costs the
Servicers may incur in connection with performing their respective obligations
under this Agreement.

                                      -55-

<PAGE>

                  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, the Trustee shall promptly notify the Seller and the
related 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 related Servicer for deposit
in the Collection Account and the Trustee, upon receipt of written certification
from the related Servicer of such deposit, shall release or cause the Custodian
(upon receipt of a request for release in the form attached to the Custodial
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
related Servicer or receipt of notice by the related 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

                                      -56-

<PAGE>

the interests of the Holders of the Class P Certificates in any Prepayment
Charge, the related 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 related
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 related 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 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 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
related 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
related 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

                                      -57-

<PAGE>

and Nonrecoverable Servicing Advances) related thereto. On the date of such
substitution, the Seller will deliver or cause to be delivered to the related
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 related 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 related
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 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, 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 related
Servicer or receipt of notice by the related Servicer of the breach of any
representation, warranty or covenant of the related 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 related
Servicer shall cure such breach in all material respects.

                                      -58-

<PAGE>

                  SECTION 2.04. Representations and Warranties of the Master
                                Servicer.

                  The Master Servicer hereby represents, warrants and covenants
to the Servicers, the Depositor and the Trustee, for the benefit of each of the
Trustee, 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
Depositor and the Trustee, constitutes a legal, valid and binding obligation of
the Master Servicer, enforceable against it in accordance with its terms except
as the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity;

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

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

                  (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,

                                      -59-

<PAGE>

                  (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
                                Servicers.

                  (a) Ocwen hereby represents, warrants and covenants to the
         Master Servicer, the Securities Administrator, the Depositor, Provident
         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) Ocwen is a federally chartered savings bank duly organized
         and validly existing under the laws of the United States and is duly
         authorized and qualified to transact any and all business contemplated
         by this Agreement to be conducted by Ocwen in any state in which a
         Mortgaged Property is located or is otherwise not required under
         applicable law to effect such qualification and, in any event, is in
         compliance with the doing business laws of any such state, to the
         extent necessary to ensure its ability to enforce each Ocwen Mortgage
         Loan and to service the Ocwen Mortgage Loans in accordance with the
         terms of this Agreement;

                  (ii) Ocwen 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. Ocwen has duly authorized the
         execution, delivery and performance of this Agreement, has duly
         executed and delivered this Agreement, and this Agreement, assuming due
         authorization, execution and delivery by the Depositor and the Trustee,
         constitutes a legal, valid and binding obligation of Ocwen, 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 Ocwen,
         the servicing of the Ocwen Mortgage Loans by Ocwen hereunder, the
         consummation by Ocwen of any other of

                                      -60-

<PAGE>

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

                  (iv) Ocwen 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 Ocwen that would
         materially and adversely affect the execution, delivery or
         enforceability of this Agreement or the ability of Ocwen to service the
         Ocwen 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, Ocwen 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 Ocwen 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 Ocwen of, or compliance by Ocwen 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; and

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

                                      -61-

<PAGE>

                  (b) Provident hereby represents, warrants and covenants to the
         Master Servicer, the Securities Administrator, the Depositor, Ocwen 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) Provident is a banking corporation duly organized and
         validly existing under the laws of the State of Ohio and is duly
         authorized and qualified to transact any and all business contemplated
         by this Agreement to be conducted by Provident in any state in which a
         Mortgaged Property is located or is otherwise not required under
         applicable law to effect such qualification and, in any event, is in
         compliance with the doing business laws of any such state, to the
         extent necessary to ensure its ability to enforce each Provident
         Mortgage Loan and to service the Provident Mortgage Loans in accordance
         with the terms of this Agreement;

                  (ii) Provident 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. Provident has duly authorized the
         execution, delivery and performance of this Agreement, has duly
         executed and delivered this Agreement, and this Agreement, assuming due
         authorization, execution and delivery by the Depositor and the Trustee,
         constitutes a legal, valid and binding obligation of Provident,
         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
         Provident, the servicing of the Provident Mortgage Loans by Provident
         hereunder, the consummation by Provident 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
         Provident and will not (A) result in a breach of any term or provision
         of the charter of by-laws of Provident 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
         Provident is a party or by which it may be bound, or any statute, order
         or regulation applicable to Provident of any court, regulatory body,
         administrative agency or governmental body having jurisdiction over
         Provident; and Provident is not a party to, bound by, or in breach or
         violation of any indenture or other agreement or instrument, or subject
         to or in violation of any statute, order or regulation of any court,
         regulatory body, administrative agency or governmental body having
         jurisdiction over it, which materially and adversely affects or, to
         Provident's knowledge, would in the future materially and adversely
         affect, (x) the ability of Provident to perform its obligations under
         this Agreement, (y) the business, operations, financial condition,
         properties or assets of Provident taken as a whole or (z) the legality,
         validity or enforceability of this Agreement;

                  (iv) Provident 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 Provident that would
         materially and adversely affect the execution, delivery or
         enforceability of this Agreement or the ability of Provident

                                      -62-

<PAGE>

         to service the Provident 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, Provident 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 Provident 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 Provident of, or compliance by Provident
         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) Provident 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) Provident 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 either Servicer set forth in Section 2.05(a)(ix) or Section
2.05(b)(ix) above is breached, the related 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 related Servicer or receipt of notice by the related Servicer of such
breach. Furthermore, notwithstanding any other provisions of this Agreement, any
payments made by the related 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. Upon discovery by any
such Person or the related 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, 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 related Servicer
set forth in Section 2.03(c) to cure breaches shall constitute the sole remedy
against the related Servicer

                                      -63-

<PAGE>

available to the Certificateholders, the Depositor or the Trustee on behalf of
the Certificateholders respecting a breach of the representations, warranties
and covenants contained in this Section 2.05.

                  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,

                                      -64-

<PAGE>

as "ACE Securities Corp., Home Equity Loan Trust, Series 2003-NC1" and does
hereby appoint Bank One, National Association, as Trustee in accordance with the
provisions of this Agreement.

                                      -65-

<PAGE>

                                   ARTICLE III

                          ADMINISTRATION AND SERVICING
                         OF THE MORTGAGE LOANS; ACCOUNTS

                  SECTION 3.01. Servicers to Act as Servicers.

                  The obligations of each of Ocwen and Provident hereunder to
service and administer the Mortgage Loans shall be limited to the Ocwen Mortgage
Loans and the Provident Mortgage Loans, respectively, and with respect to the
duties and obligations of each Servicer references herein to the related
Mortgage Loans shall be limited to the Ocwen Mortgage Loans (and the related
proceeds thereof and related REO Properties) in the case of Ocwen and the
Provident Mortgage Loans (and the related proceeds and related REO Properties)
in the case of Provident and in no event shall any Servicer have any
responsibility or liability with respect to any Mortgage Loans serviced by the
other Servicer hereunder.

                  The Servicers 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 each 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 related Servicer or any
         Affiliate of the related Servicer may have with the related Mortgagor;

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

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

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

                  To the extent consistent with the foregoing, each Servicer
shall also seek to maximize the timely and complete recovery of principal and
interest on the Mortgage Notes 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 (ii)
such waiver is related to a default or reasonably foreseeable default and would,
in the reasonable judgement of the related Servicer, maximize recovery of total
proceeds taking into account the value of such Prepayment Charge and the related
Mortgage Loan and, if such waiver is made in connection with a refinancing of
the related Mortgage Loan, such refinancing is related to a default or a
reasonably foreseeable default or (iii) such Prepayment Charge is unenforceable
in accordance with applicable law or the collection of such related Prepayment
Charge would otherwise violate applicable law. Notwithstanding any provision in
this Agreement to the contrary, in the event the Prepayment

                                      -66-

<PAGE>

Charge payable under the terms of the Mortgage Note is less than the amount of
the Prepayment Charge set forth in the Prepayment Charge Schedule or other
information provided to the related Servicer, the related 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 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 Mortgage Loans, the related 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. Without
limiting the generality of the foregoing, the related Servicer in its own name
is hereby authorized and empowered by the Trustee when the related 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, 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, the Certificateholders. The related 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 related 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 related Servicer, and
furnish to the related Servicer any special or limited powers of attorney and
other documents necessary or appropriate to enable the related Servicer to carry
out its servicing and administrative duties hereunder and furnished to the
Trustee by the related Servicer, and the Trustee shall not be liable for the
actions of the related Servicer under such powers of attorney and shall be
indemnified by the related Servicer for any cost, liability or expense incurred
by the Trustee in connection with the related Servicer's use or misuse of any
such power of attorney.

                  In accordance with Accepted Servicing Practices, the related
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 Mortgagors pursuant to Section 3.07, and
further as provided in Section 3.09; provided, however, the related Servicer
shall only make such Servicing Advance if the Mortgagor has not made such
payment, if the failure to make such Servicing Advance would result in the loss
of the Mortgaged Property due to a tax sale or foreclosure as result of a tax
lien. Any cost incurred by the related 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 a Mortgage Loan or distributions to
Certificateholders, be added to the unpaid principal balance of the related
Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit.

                  Notwithstanding anything in this Agreement to the contrary,
the related Servicer may not make any future advances with respect to a Mortgage
Loan and the related Servicer shall not permit any modification with respect to
any Mortgage Loan that would change the Mortgage Rate,

                                      -67-

<PAGE>

reduce or increase the principal balance (except for reductions resulting from
actual payments of principal) or change the final maturity date on such Mortgage
Loan (unless, as provided in Section 3.06, the Mortgagor is in default with
respect to the Mortgage Loan or such default is, in the judgment of the related
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.

                  SECTION 3.02. Sub-Servicing Agreements Between Each Servicer
                                and Sub-Servicers.

                  Each 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 related Servicer or a Sub-Servicer or
reference to actions taken through a related Servicer or otherwise, the related
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 related Servicer
alone were servicing and administering the Mortgage Loans. Every Sub-Servicing
Agreement entered into by the related 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 related Servicer with the same force and effect as if performed directly
by the related Servicer.

                  For purposes of this Agreement, the related 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 related Servicer.

                  SECTION 3.03. Successor Sub-Servicers.

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

                                      -68-

<PAGE>

be immediately terminated by a successor 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 related Servicer (or any successor Servicer)
shall, for any reason, no longer be the related Servicer (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 related Servicer alone and the Master
Servicer, 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 related
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
related Servicer's rights and obligations under any Sub-Servicing Agreement then
in force between the related 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 without cause or expense.

                  The related Servicer shall, upon the reasonable request of the
Master Servicer, but at the expense of the related Servicer, 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 Servicers shall make reasonable efforts to collect all
payments called for under the terms and provisions of the related 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 Servicers 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, in the event that any

                                      -69-

<PAGE>

Mortgage Loan is in default or, in the judgment of the related Servicer, such
default is reasonably foreseeable, the related 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 related Servicer's determination such
waiver, modification, postponement or indulgence is not materially adverse to
the interests of the Certificateholders (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 related Servicer shall establish and maintain one or more accounts
(the "Servicing Accounts"), into which all collections from the 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 related 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 the related Servicer out of related collections
for any 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 related 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 related 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
related Servicer shall not be obligated to collect Escrow Payments if the
related Mortgage Loan does not require such payments but the related Servicer
shall nevertheless be obligated to make Servicing Advances as provided in
Section 3.01 and Section 3.11. In the event the related 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 related Servicer (i) shall determine whether any such payments are
made by the Mortgagor in a manner and at a time that is necessary to avoid the
loss of the Mortgaged Property due to a tax sale or the foreclosure as a result
of a tax lien and (ii) shall ensure that all insurance required to be maintained
on the Mortgaged Property pursuant to this Agreement is maintained. If any such
payment has not

                                      -70-

<PAGE>

been made and the related Servicer receives notice of a tax lien with respect to
the Mortgage Loan being imposed, the related 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. The
Servicers assume 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, each Servicer shall establish
and maintain one or more accounts (such account or accounts, the "Collection
Account"), held in trust for the benefit of the Trustee and the
Certificateholders. On behalf of the Trust Fund, the Servicers shall deposit or
cause to be deposited in the related 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:

                           (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 with respect to Ocwen, 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 amounts paid by the related Servicer in
                  connection with a purchase of Mortgage Loans and REO
                  Properties pursuant to Section 10.01);

                           (iv) any amounts required to be deposited 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
                  related 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 related Servicer and all proceeds (net
                  of amounts payable or reimbursable to the related 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;
                  and

                           (vii) any Prepayment Charges collected by the related
                  Servicer in connection with the Principal Prepayment of any of
                  the Mortgage Loans or amounts required to be deposited by the
                  related Servicer in connection with a breach of its
                  obligations under Section 3.01.

                                      -71-

<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
related Servicer in the Collection Account and may be retained by the related
Servicer as additional compensation. In the event the related 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 Servicers
shall deliver to the Securities Administrator in immediately available funds for
deposit in the Distribution Account (i) with respect to Provident, on or before
12:00 noon New York time on the Servicer Remittance Date; and with respect to
Ocwen, on or before 12:00 p.m. 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 Accounts and the amount of all Prepayment Charges
collected by the related Servicer in connection with the Principal Prepayment of
any of the Mortgage Loans then on deposit in the Collection Accounts and the
amount of any funds reimbursable to an Advance Financing Person pursuant to
Section 3.25, and (ii) on each Business Day as of the commencement of which the
balance on deposit in a Collection Account exceeds $75,000 following any
withdrawals pursuant to the next succeeding sentence, the amount of such excess,
but only if such Collection Account constitutes an Eligible Account solely
pursuant to clause (ii) of the definition of "Eligible Account." If the balance
on deposit in a Collection Account exceeds $75,000 as of the commencement of
business on any Business Day and such Collection Account constitutes an Eligible
Account solely pursuant to clause (ii) of the definition of "Eligible Account,"
the related Servicer shall, on or before 5:00 p.m. New York time on such
Business Day, withdraw from such Collection Account any and all amounts payable
or reimbursable to the Depositor, the related 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 related Servicer. The related Servicer shall pay to the
Securities Administrator interest on any such late payment 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 related 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
related Servicer of any such interest, or the failure of the Securities
Administrator to notify the related Servicer of such interest, shall not be
deemed an extension of time for payment or a waiver of any Event of Default by
the related Servicer.

                                      -72-

<PAGE>

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

                  (d) Funds held in the Collection Accounts at any time may be
delivered by the Servicers in immediately available funds to the Securities
Administrator for deposit in the Distribution Account. In the event a 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 related Servicer in accordance with the immediately preceding
sentence. In addition, the related 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 Servicers shall, from time to time, make
withdrawals from the Collection Accounts 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 the
                  related Servicer (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;

                                      -73-

<PAGE>

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

                           (iv) to pay to the related Servicer 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 related Collection Account;

                           (v) to pay to the related Servicer 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 the related Servicer (including any
                  successor Servicer) for any P&I Advance or Servicing Advance
                  previously made by it which the related Servicer 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 the related Servicer or the
                  Depositor for expenses incurred by or reimbursable to the
                  related Servicer or the Depositor, as the case may be,
                  pursuant to Section 3.01 or Section 7.03;

                           (viii) to reimburse the related Servicer, the Master
                  Servicer, the Securities Administrator 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 the related Servicer for
                  advances in respect of, expenses incurred in connection with
                  any related Mortgage Loan pursuant to Section 3.13(b);

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

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

                  Each 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.

                                      -74-

<PAGE>

                           (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;

                           (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;

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

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

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

                           (viii) to pay the Credit Risk Management Fee to the
                  Credit Risk Manager;

                           (ix) to pay the MGIC Fee to MGIC; and

                           (x) 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 Accounts to invest the funds in the Collection
Accounts (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 thereon. 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

                                      -75-

<PAGE>

be entitled to sole possession over each such investment 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 a Collection Account are at any time invested in
a Permitted Investment payable on demand, the party with investment discretion
over such Investment Account shall:

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

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

                           (b) All income and gain realized from the investment
of funds deposited in the Collection Account held by or on behalf of the related
Servicer shall be for the benefit of the related Servicer and shall be subject
to its withdrawal in accordance with Section 3.09. The related Servicer shall
deposit in the related 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 related 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.

                                      -76-

<PAGE>

                  (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 related 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 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 related 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. Each 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 related 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 related 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 related 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 related 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 a 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 related 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 related
Servicer agrees to prepare and present, on behalf of itself, the Trustee, the
Trust Fund and the

                                      -77-

<PAGE>

Certificateholders, claims under any such blanket policy in a timely fashion in
accordance with the terms of such policy.

                  (b) Each 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 related Servicer, has obtained a waiver of such
requirements from Fannie Mae or Freddie Mac. Each Servicer shall each also
maintain a fidelity bond in the form and amount that would meet the requirements
of Fannie Mae or Freddie Mac, unless the related Servicer, has obtained a waiver
of such requirements from Fannie Mae or Freddie Mac. The related Servicer shall
be deemed to have complied with this provision if an Affiliate of the related
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 related 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) Each Servicer shall not take any action that would result
in noncoverage under the MGIC PMI Policy or any other applicable primary
mortgage insurance policy of any loss which, but for the actions of the related
Servicer would have been covered thereunder. Each Servicer shall use its best
efforts to keep in force and effect the MGIC PMI 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 related
Servicer shall not cancel or refuse to renew any such primary mortgage insurance
policy that is in effect at the date of the initial issuance of the Mortgage
Note and is required to be kept in force hereunder.

                  Each Servicer agrees to present on behalf of the Trustee and
the Certificateholders claims to MGIC under the MGIC PMI Policy or 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 the MGIC PMI Policy or any other primary mortgage insurance
policies respecting defaulted Mortgage Loans. Pursuant to Section 3.08, any
amounts collected by the related Servicer under the MGIC PMI Policy or any other
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.

                  Each Servicer shall, to the extent it has knowledge of any
conveyance of any Mortgaged Property by any Mortgagor (whether by absolute
conveyance or by contract of sale, and whether or not the Mortgagor remains or
is to remain liable under the Mortgage Note and/or the Mortgage), exercise its
rights to accelerate the maturity of such Mortgage Loan under the "due-on- sale"
clause, if any, applicable thereto; provided, however, that the related Servicer
shall not exercise any such rights if prohibited by law from doing so. If the
related 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 related Servicer shall enter
into an

                                      -78-

<PAGE>

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 related Servicer
is also authorized to enter into a substitution of liability agreement with such
person, pursuant to which the original Mortgagor is released from liability and
such person is substituted as the Mortgagor and becomes liable under the
Mortgage Note, provided that no such substitution shall be effective unless such
person satisfies the then current underwriting criteria of the related Servicer
for mortgage loans similar to the Mortgage Loans. In connection with any
assumption or substitution, the related Servicer shall apply such underwriting
standards and follow such practices and procedures as shall be normal and usual
in its general mortgage servicing activities and as it applies to other mortgage
loans owned solely by it. The related 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 related Servicer in respect of an assumption or
substitution of liability agreement will be retained by the related 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 related 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 related 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 related 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 related 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 related 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 related
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 related 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.

                                      -79-

<PAGE>

                  (b) Notwithstanding the foregoing provisions of this Section
         3.13 or any other provision of this Agreement, with respect to any
         Mortgage Loan as to which the related Servicer has received actual
         notice of, or has actual knowledge of, the presence of any toxic or
         hazardous substance on the related Mortgaged Property, the related
         Servicer shall not, on behalf of the Trust Fund, either (i) obtain
         title to such Mortgaged Property as a result of or in lieu of
         foreclosure or otherwise, or (ii) otherwise acquire possession of, or
         take any other action with respect to, such Mortgaged Property, if, as
         a result of any such action, the Trust Fund, the Trustee or the
         Certificateholders would be considered to hold title to, to be a
         "mortgagee-in-possession" of, or to be an "owner" or "operator" of such
         Mortgaged Property within the meaning of the Comprehensive
         Environmental Response, Compensation and Liability Act of 1980, as
         amended from time to time, or any comparable law, unless the related
         Servicer has also previously determined, based on its reasonable
         judgment and a prudent report prepared by an Independent Person who
         regularly conducts environmental audits using customary industry
         standards, that:

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

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

                  The cost of the environmental audit report contemplated by
this Section 3.13 shall be advanced by the related Servicer, subject to the
related Servicer's right to be reimbursed therefor from the Collection Account
as provided in Section 3.09(a)(ix), such right of reimbursement being prior to
the rights of Certificateholders to receive any amount in the Collection Account
received in respect of the affected Mortgage Loan or other Mortgage Loans.

                  If the related Servicer determines, as described above, that
it is in the best economic interest of the Trust Fund to take such actions as
are necessary to bring any such Mortgaged Property into compliance with
applicable environmental laws, or to take such action with respect to the
containment, clean-up or remediation of hazardous substances, hazardous
materials, hazardous wastes, or petroleum-based materials affecting any such
Mortgaged Property, then the related Servicer shall take such action as it deems
to be in the best economic interest of the Trust Fund. The cost of any such
compliance, containment, cleanup or remediation shall be advanced by the related
Servicer, subject to the related Servicer's right to be reimbursed therefor from
the Collection Account as provided in Sections 3.09(a)(iii) or 3.09(a)(ix), such
right of reimbursement being prior to the rights of Certificateholders to
receive any amount in the Collection Account received in respect of the affected
Mortgage Loan or other Mortgage Loans.

                  (c) Each Servicer shall have the right to purchase from REMIC
I any defaulted Mortgage Loan that is 90 days or more delinquent, which the
related Servicer determines in good

                                      -80-

<PAGE>

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 related 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 related Servicer of such
deposit, shall release or cause to be released to the related 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 related Servicer shall furnish and as shall be necessary to
vest in the related 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
related Servicer for any related unreimbursed Servicing Advances and P&I
Advances, pursuant to Section 3.09(a)(ii) or (a)(iii); second, to accrued and
unpaid interest on the Mortgage Loan, to the date of the Final Recovery
Determination, or to the Due Date prior to the Distribution Date on which such
amounts are to be distributed if not in connection with a Final Recovery
Determination; and third, as a recovery of principal of the Mortgage Loan. If
the amount of the recovery so allocated to interest is less than the full amount
of accrued and unpaid interest due on such Mortgage Loan, the amount of such
recovery will be allocated by the related 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 related 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 related Servicer for any related
unreimbursed Advances in accordance with Section 3.09(a)(ii) and any other
amounts reimbursable to the related 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 related 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 related 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
related Servicer the related Mortgage File. Upon receipt of such certification
and request, the Custodian, on behalf of the Trustee, shall promptly release the
related Mortgage File to the related Servicer and the Trustee and Custodian
shall have no further responsibility with regard to such Mortgage File. Upon any
such payment in full, the related 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)

                                      -81-

<PAGE>

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 related 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 related Servicer, and delivery to the Custodian, on behalf of the
Trustee, of two copies of a request for release signed by a Servicing Officer
substantially in the form attached to the Custodial Agreement (or in a mutually
agreeable electronic format which will, in lieu of a signature on its face,
originate from a Servicing Officer), release the related Mortgage File held in
its possession or control to the related Servicer. Such trust receipt shall
obligate the related Servicer to return the Mortgage File to the Custodian on
behalf of the Trustee, when the need therefor by the related 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 related 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 related Servicer fails
to do so.

                  Upon written certification of a Servicing Officer, the Trustee
shall execute and deliver to the related Servicer, any court pleadings, requests
for trustee's sale or other documents 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 Servicing Termination Event shall have occurred
and be continuing, the related 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 related 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 related 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

                                      -82-

<PAGE>

receive the Servicing Fee may not be transferred in whole or in part except in
connection with the transfer of all of the related Servicer's responsibilities
and obligations 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 related Servicer only to the extent such fees
or charges are received by the related Servicer. The related Servicer shall also
be entitled pursuant to Section 3.09(a)(iv) to withdraw from the related
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, Ocwen, shall be
entitled to retain or withdraw from the related Collection Account, pursuant to
Section 3.09(a)(x), any Prepayment Interest Excess with respect to the Ocwen
Mortgage Loans as additional servicing compensation. The related Servicer shall
be required to pay all expenses incurred by it in connection 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
related Servicer shall forward to the Master Servicer, the Securities
Administrator, the Trustee and the Depositor a statement prepared by the
institution at which the related Collection Account is maintained setting forth
the status of the related 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 related 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 related Servicer to the Securities
Administrator.

                  SECTION 3.17. Statement as to Compliance.

                  With respect to Ocwen, not later than March 15th, and with
respect to Provident, not later than February 28th of each calendar year
commencing in 2004, the related Servicer shall deliver to the Trustee, the
Master Servicer and the Depositor an Officers' Certificate (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 related 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 related Servicer
has fulfilled all of its obligations under this Agreement throughout such year,
or, if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officer and the nature and status
thereof. Copies of any such statement shall be provided by the Trustee to any
Certificateholder, upon request at the expense of the requesting party, provided
such statement is delivered by the related Servicer to the Trustee.

                                      -83-

<PAGE>

                  SECTION 3.18. Independent Public Accountants' Servicing
                                Report.

                  With respect to Ocwen, not later than March 15th, and with
respect to Provident, not later than February 28th of each calendar year
commencing in 2004, the related Servicer, at its expense, shall cause a
nationally recognized firm of independent certified public accountants to
furnish to the related Servicer a report stating that (i) it has obtained a
letter of representation regarding certain matters from the management of the
related Servicer which includes an assertion that the related 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 related Servicer has complied in all material respects,
subject to such exceptions and other qualifications that may be appropriate.
Immediately upon receipt of such report, the related 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 upon request at the related Servicer's expense, provided that
such statement is delivered by the Servicer to the Trustee.

                  SECTION 3.19 Annual Certification.

                  (a) The related Servicer shall deliver to the Master Servicer,
on or before March 15th with respect to Ocwen, and on or before February 28th
with respect to Provident, of each calendar year beginning in 2004 (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 earlier 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 related Servicer. In addition, the related Servicer shall provide such other
information with respect to the Mortgage Loans and the servicing and
administration thereof within the control of the related 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 related 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 related Servicer or any of its officers, directors, agents
or affiliates of its obligations under this Section 3.19 or the related
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 related
Servicer agrees that it shall contribute to the amount paid or payable by the
Master Servicer, the Trustee and the Depositor as a result of the losses,
claims, damages or

                                      -84-

<PAGE>

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 related Servicer on the other in connection
with a breach of the related Servicer's obligations under this Section 3.19.

                  SECTION 3.20. Access to Certain Documentation.

                  Each 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
related Servicer designated by it. Nothing in this Section 3.20 shall limit the
obligation of the related Servicer to comply with any applicable law prohibiting
disclosure of information regarding the Mortgagors and the failure of the
related Servicer to provide access as provided in this Section as a result of
such obligation shall not constitute a breach of this Section. Nothing in this
Section 3.20 shall require the related Servicer to collect, create, collate or
otherwise generate any information that it does not generate in its usual course
of business. The related 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 related 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 860(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 related 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
related 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 related 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

                                      -85-

<PAGE>

"REO Account"), which shall be an Eligible Account. The related Servicer shall
be permitted to allow the Collection Account to serve as the REO Account,
subject to separate ledgers for each REO Property. The related Servicer shall be
entitled to retain or withdraw any interest income paid on funds deposited in
the REO Account.

                  (c) The related 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 related Servicer manages
         and operates similar property owned by the related Servicer or any of
         its Affiliates, all on such terms and for such period as the related
         Servicer deems to be in the best interests of Certificateholders. In
         connection therewith, the related 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:

                  (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 related
Servicer shall advance from its own funds such amount as is necessary for such
purposes if, but only if, the related Servicer would make such advances if the
related Servicer owned the REO Property and if in the related 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 related
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

                                      -86-

<PAGE>

                  (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 related Servicer has obtained an Opinion of
Counsel, provided to the related 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 related Servicer may take such actions
as are specified in such Opinion of Counsel.

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

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

                  (ii) any such contract shall require, or shall be administered
         to require, that the Independent Contractor pay all costs and expenses
         incurred in connection with the operation and management of such REO
         Property, including those listed above and remit all related revenues
         (net of such costs and expenses) to the related 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 related 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 related 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.

                  Each 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 related Servicer by such
Independent Contractor, and nothing in this Agreement shall be deemed to limit
or modify such indemnification. Each Servicer shall be solely liable for all
fees owed by it to any such Independent Contractor, irrespective of whether the
related 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
related Servicer shall for any reason, no longer be the related Servicer
(including termination due to a Servicer Event of Default).

                  (d) In addition to the withdrawals permitted under Section
3.21(c), the related 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

                                      -87-

<PAGE>

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 related 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 related Servicer at
such price and upon such terms and conditions as the related 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 related 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 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 related 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 Each Servicer in Respect of
                                Prepayment Interest Shortfalls; Relief Act
                                Interest Shortfalls.

                  Each Servicer shall deliver to the Securities Administrator
for deposit into the Distribution Account on or before 12:00 noon New York time
on the Servicer Remittance Date, from its own funds an amount equal to the
lesser of (i) the aggregate of the Prepayment Interest Shortfalls attributable
to prepayments in full for the related Distribution Date resulting solely from
voluntary Principal Prepayments received by the related Servicer during the
related Prepayment Period and (ii) the aggregate Servicing Fee for the most
recently ended Prepayment Period. The related Servicer shall not have the right
to reimbursement for any amounts remitted to the Trustee in respect of this
Section 3.22. The related 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 Each 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

                                      -88-

<PAGE>

or Stated Principal Balances that were made by the related Servicer in a manner
not consistent with the terms of the related Mortgage Note and this Agreement,
the related 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 related 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 Minnesota, National Association, in
trust for the registered holders of ACE Securities Corp. Home Equity Loan Trust,
Series 2003-NC1, Asset Backed Pass-Through Certificates." On the Closing 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 Trustee under the Cap Contracts and deposited
into Reserve Fund for the benefit of the Offered Certificates.

                  (b) On each Distribution Date as to which there is a Net WAC
Rate Carryover Amount payable to the Class A-1 Certificates or the Class A-2
Certificates, the Securities Administrator shall deposit, into the Reserve Fund
the amounts described in Section 5.01(a)(7)(xxi), rather than distributing such
amounts to the Class CE Certificateholders. On each such Distribution Date, the
Securities Administrator shall hold all such amounts for the benefit of the
Holders of the Class A Certificates and the Mezzanine Certificates, and will
distribute such amounts to the Holders of the Class A Certificates and the
Mezzanine Certificates in the amounts and priorities set forth in Section
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 and the Mezzanine Certificates, all
amounts remaining on deposit in the Reserve Fund will be released by the Trust
Fund and distributed to the Class CE Certificateholders or their designees. The
Reserve Fund will be part of the Trust Fund but not part of any REMIC and any
payments to the Holders of the Class A Certificates or the Mezzanine
Certificates of Net WAC Rate Carryover Amounts will not be payments with respect
to a "regular interest" in a REMIC within the meaning of Code Section
860(G)(a)(1).

                                      -89-

<PAGE>

                  (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 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 and the Mezzanine Certificateholders to
receive payments from the Reserve Fund in respect of any Net WAC Rate Carryover
Amount shall be assigned a value of zero.

                  SECTION 3.25. Advance Facility.

                  (a) Notwithstanding anything to the contrary contained herein,
(i) each Servicer is hereby authorized to enter into an advance facility
("Advance Facility") under which (A) the related Servicer sells, assigns or
pledges to an advancing person the related Servicer's rights under this
Agreement to be reimbursed for any Advances or Servicing Advances and/or (B) an
advancing person agrees to fund some or all Advances or Servicing Advances
required to be made by the related Servicer pursuant to this Agreement and (ii)
the related Servicer is hereby authorized to assign its rights to the Servicing
Fee (which rights shall terminate upon the resignation, termination or removal
of the related 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 the portion of
the Servicing Fee so assigned. No consent of the Depositor, Trustee,
Certificateholders or any other party is required before the related Servicer
may enter into an Advance Facility, but the related 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. Notwithstanding
the existence of any Advance Facility under which an advancing person agrees to
fund Advances and/or Servicing Advances on the Servicer's behalf, the related
Servicer shall remain obligated pursuant to this Agreement to make 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.

                                      -90-

<PAGE>

                  (b) Reimbursement amounts shall consist solely of amounts in
respect of Advances and/or Servicing Advances made with respect to the Mortgage
Loans for which the related Servicer would be permitted to reimburse itself in
accordance with this Agreement, assuming the related Servicer had made the
related Advance(s) and/or Servicing Advance(s).

                  (c) Each Servicer shall maintain and provide to any successor
Servicer 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) The documentation establishing any Advance Facility shall
require that such reimbursement amounts distributed with respect to each
Mortgage Loan be allocated to outstanding unreimbursed Advances or Servicing
Advances (as the case may be) made with respect to that Mortgage Loan on a
"first-in, first out" (FIFO) basis. Such documentation shall also require the
related 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 related Servicer shall remain entitled to be reimbursed by
the advancing person or Advance Facility trustee for all Advances and Servicing
Advances funded by the related 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, and the related 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, 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 related Servicer shall notify the lender under such
facility in writing that: (a) the Advances financed by and/or pledged to the
lender are obligations owed to the related Servicer on a non-recourse basis
payable only from the cash flows and proceeds received under this Agreement for
reimbursement of Advances only to the extent provided herein, and the Trustee
and the Trust are not otherwise obligated or liable to repay any Advances
financed by the lender; (b) the related Servicer will be responsible for
remitting to the lender the applicable amounts collected by it as Servicing Fees
and as reimbursement for Advances

                                      -91-

<PAGE>

funded by the lender, as applicable, subject to the restrictions and priorities
created in this Agreement; and (c) the Trustee shall not have any responsibility
to track or monitor the administration of the financing arrangement between the
related Servicer and the lender.

                  SECTION 3.26. Servicer Indemnification.

                  Each Servicer agrees to indemnify the 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 related Servicer's willful misfeasance, bad faith or
gross negligence in the performance of its duties under this Agreement or by
reason of the related 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 related
Servicer, the Trustee, the Master Servicer and the Securities Administrator. Any
payment hereunder made by the related Servicer to any such Person shall be from
the related Servicer's own funds, without reimbursement from REMIC I therefor.

                                      -92-

<PAGE>

                                   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 Servicers to service and administer the Mortgage Loans in
accordance with the terms of the 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 Servicers and shall cause the Servicers to perform and observe the
covenants, obligations and conditions to be performed or observed by the
Servicers under this Agreement. The Master Servicer shall independently and
separately monitor each 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 related 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 related Servicer to the Distribution Account pursuant to the
terms hereof based on information provided to the Master Servicer by the Trustee
pursuant to the fourth paragraph of Section 9.01.

                  The Trustee shall furnish each 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 each 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 related Servicer pursuant to any such limited power of attorney and shall
be indemnified by the Master Servicer or the related 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

                                      -93-

<PAGE>

documentation and shall provide equipment for that purpose at a charge that
covers the Trustee's, the Custodian's or the Securities Administrator's actual
costs.

                  The Trustee shall execute and deliver to the related Servicer
or the Master Servicer upon request any court pleadings, requests for trustee's
sale or other documents necessary or desirable 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 Servicers 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 each Servicer with its duties under this Agreement. In the
review of each Servicer's activities, the Master Servicer may rely upon an
officer's certificate of the related Servicer with regard to the related
Servicer's compliance with the terms of this Agreement. In the event that the
Master Servicer, in its judgment, determines that the related 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 an Event of Default, the Master Servicer shall
notify the related Seller, 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 each Servicer under
this Agreement, and shall, in the event that the related Servicer fails to
perform its obligations in accordance with this Agreement, subject to the
preceding paragraph and Article VIII, cause the Trustee to terminate the rights
and obligations of the related 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,

                                      -94-

<PAGE>

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.

                  (c) The Master Servicer shall be entitled to be reimbursed by
the related Servicer (or from amounts on deposit in the Distribution Account if
the related 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 related 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 each Servicer to comply
with the remittance requirements and other obligations set forth in this
Agreement.

                  (e) If the Master Servicer acts as successor to a 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 related 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

                                      -95-

<PAGE>

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 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 empowering the Master Servicer or the related 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, as the Master
Servicer or the related 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 related Servicer and shall be indemnified
by the Master Servicer or the related 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 each 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 Trustee for deposit in the Distribution
Account. The Master Servicer shall, and, subject to Section 3.20, shall cause
the related Servicer to, provide access to information and

                                      -96-

<PAGE>

documentation regarding the Mortgage Loans to the Trustee, its agents and
accountants at any time upon reasonable request and during normal business
hours, and to Certificateholders that are savings and loan associations, banks
or insurance companies, the 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 each 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 each 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 the Primary Mortgage Insurance
                                Policies.

                  (a) The Master Servicer shall not take, or permit either
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
related Servicer, would have been covered thereunder. The Master Servicer shall
use its best reasonable efforts to cause the related Servicer to keep in force
and effect (to the extent that the Mortgage Loan requires the Mortgagor to
maintain such insurance), primary mortgage insurance

                                      -97-

<PAGE>

applicable to each Mortgage Loan in accordance with the provisions of this
Agreement. The Master Servicer shall not, and shall not permit the related
Servicer to, cancel or refuse to renew any primary mortgage insurance policy
that is in effect at the date of the initial issuance of the Mortgage Note and
is required to be kept in force hereunder except in accordance with the
provisions of this Agreement.

                  (b) The Master Servicer agrees to cause each 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
related 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 related 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.

                                      -98-

<PAGE>

                  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 shall cause the related 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
related 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 related 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 related 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 related 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 related Servicer to
deposit all funds collected and received in connection with the operation of any
REO Property in the Collection 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,
2004, 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

                                      -99-

<PAGE>

Servicer failed to provide such copies (unless (i) the Master Servicer shall
have failed to provide the Trustee with such statement or (ii) the Trustee shall
be unaware of the Master Servicer's failure to provide such statement).

                  SECTION 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, 2004
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. 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 a Prepayment Interest Shortfall, 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 related Servicer with respect to Prepayment Interest
Shortfalls attributable to Principal Prepayments on the related Mortgage Loans
for the related Distribution Date, and not so paid by the related Servicer and
(ii) the Master Servicing Fee for such Distribution Date, without reimbursement
therefor.

                                      -100-

<PAGE>

                  SECTION 4.20.             Collection Account.

                  The Master Servicer shall enforce the obligation of each
Servicer to establish and maintain a Collection Account in accordance with this
Agreement, with records to be kept with respect thereto on a Mortgage Loan by
Mortgage Loan basis, into which accounts shall be deposited within two Business
Days of receipt all collections of principal and interest on any Mortgage Loan
and with respect to any REO Property received by the related Servicer, including
Principal Prepayments, Insurance Proceeds, Liquidation Proceeds, and advances
made from the related Servicer's own funds (less servicing compensation as
permitted by Section 3.15) and all other amounts to be deposited in the
Collection Account.

                  SECTION 4.21. Prepayment Penalty Verification.

                  On or prior to each Servicer Remittance Date, each Servicer
shall provide in an electronic format acceptable to the Master Servicer and
related Servicer 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 related Servicer and shall notify the
related Servicer if the Master Servicer has determined that the related Servicer
did not deliver the appropriate Prepayment Charge to the Securities
Administrator in accordance with this Agreement to the Securities Administrator.
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 related Servicer agrees with the
verified amounts, the related Servicer shall adjust the immediately succeeding
Servicer Report and the amount remitted to the Trustee with respect to
prepayments accordingly. If the related Servicer disagrees with the
determination of the Master Servicer, the related Servicer shall, within five
(5) Business Days of its receipt of the Verification Report, notify the Master
Servicer of such disagreement and provide the Master Servicer with detailed
information to support such related Servicer's position. The related Servicer
and the Master Servicer shall cooperate to resolve any discrepancy on or prior
to the immediately succeeding Servicer Remittance Date, and the related 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 related 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 related Servicer in accordance with this

                                      -101-

<PAGE>

Section. The Master Servicer shall not be responsible for verifying the accuracy
of any of the information provided to it by the related Servicer.

                                      -102-

<PAGE>

                                    ARTICLE V

                         PAYMENTS TO CERTIFICATEHOLDERS

                  SECTION 5.01. Distributions.

                  (a)(1)(A) On each Distribution Date, the following amounts, in
         the following order of priority, shall be distributed by REMIC I to
         REMIC II on account of the REMIC I Regular Interests or withdrawn from
         the Distribution Account and distributed to the holders of the Class R
         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
         Regular Interest I-LTA1, REMIC I Regular Interest I-LTA2A, REMIC I
         Regular Interest I-LTA2B, REMIC I Regular Interest I-LTA2C, 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-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-LTA1, REMIC I Regular
         Interest I-LTA2A, REMIC I Regular Interest I-LTA2B, REMIC I Regular
         Interest I-LTA2C, 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 and REMIC I Regular
         Interest I-LTM6 in the same proportion as the Overcollateralization
         Increase Amount is allocated to the Corresponding Certificates;

                  (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:

                  (a) to the Holders of REMIC I Regular Interest I-LTAA, 98.00%
         of such remainder, until the Uncertificated Balance of such
         Uncertificated REMIC I Regular Interest is reduced to zero;

                  (b) to the Holders of REMIC I Regular Interest I-LTA1, REMIC I
         Regular Interest I-LTA2A, REMIC I Regular Interest I-LTA2B, REMIC I
         Regular Interest I-LTA2C, REMIC I

                                      -103-

<PAGE>

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 and REMIC I Regular Interest I-LTM6, 1.00% of such remainder, 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;

                  (c) to the Holders of REMIC I Regular Interest I-LTZZ, 1.00%
of such remainder, until the Uncertificated Balance of such REMIC I Regular
Interest is reduced to zero;

                  (d) 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

                  (e) 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 (i) 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.

                  (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 Holders of the Class A-1 Certificates, the Senior
         Interest Distribution Amount allocable to the Class A-1 Certificates;
         and

                                     -104-

<PAGE>

         SECOND, to the Holders of the Class A-2A, Class A-2B and Class A-2C
         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 II Interest Remittance Amount as set forth in clause SECOND 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, concurrently, to the Holders of the Class A-2A, Class A-2B and
         Class A-2C Certificates, the Senior Interest Distribution Amount
         allocable to each such Class, on a PRO RATA basis based on the
         entitlement of each such Class; and

         SECOND, to the Holders of the Class A-1 Certificates, the Senior
         Interest Distribution Amount allocable to the Class A-1 Certificates,
         to the extent remaining unpaid after the distribution of the Group I
         Interest Remittance Amount as set forth in clause FIRST of Section
         5.01(a)(2) above.

                  (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 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, to the Holders of the Class M-1 Certificates, the Interest
         Distribution Amount allocable to the Class M-1 Certificates;

         SECOND, to the Holders of the Class M-2 Certificates, the Interest
         Distribution Amount allocable to the Class M-2 Certificates;

         THIRD, to the Holders of the Class M-3 Certificates, the Interest
         Distribution Amount allocable to the Class M-3 Certificates;

         FOURTH, to the Holders of the Class M-4 Certificates, the Interest
         Distribution Amount allocable to the Class M-4 Certificates;

         FIFTH, to the Holders of the Class M-5 Certificates, the Interest
         Distribution Amount allocable to the Class M-5 Certificates; and

         SIXTH, to the Holders of the Class M-6 Certificates, the Interest
         Distribution Amount allocable to the Class M-6 Certificates.

                                      -105-

<PAGE>

                  (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, to the Holders of the Class A-1 Certificates,
                           until the Certificate Principal Balance of such Class
                           has been reduced to zero; and

                           SECOND, concurrently, (i) to the Holders of the Class
                           A-2A Certificates and (ii) sequentially, in the
                           following order, to the holders of the Class A-2B
                           Certificates and Class A-2C 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 II Principal Distribution
                           Amount pursuant to clause FIRST of Section
                           5.01(a)(5)(ii) below, until the Certificate Principal
                           Balance of each such Class has been reduced to zero.

                           (ii) The Group II Principal Distribution Amount shall
         be distributed in the following order of priority:

                           FIRST, concurrently, (i) to the Holders of the Class
                           A-2A Certificates and (ii) sequentially, in the
                           following order, to the holders of the Class A-2B
                           Certificates and Class A-2C 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;
                           and

                           SECOND, to the Holders of the Class A-1 Certificates,
                           after taking into account the distribution of the
                           Group I Principal Distribution Amount pursuant to
                           clause FIRST of Section 5.01(a)(5)(i) above, until
                           the Certificate Principal Balance of such Class has
                           been reduced to zero.

                           (iii) The Group I Principal Distribution Amount and
         Group II Principal Distribution Amount remaining after distributions
         pursuant to Section 5.01(a)(5)(i) and (ii) above shall be distributed
         in the following order of priority:

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

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

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

                                      -106-

<PAGE>

                           FOURTH, to the Holders of the Class M-4 Certificates,
                           until the Certificate Principal Balance of such Class
                           has been reduced to zero;

                           FIFTH, to the Holders of the Class M-5 Certificates,
                           until the Certificate Principal Balance of such Class
                           has been reduced to zero; and

                           SIXTH, to the Holders of the Class M-6 Certificates,
                           until the Certificate Principal Balance of 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, to the Holders of the Class A-1 Certificates,
                           the Class A-1 Principal Distribution Amount, until
                           the Certificate Principal Balance of such Class has
                           been reduced to zero;

                           SECOND, to the extent of the portion, if any, of the
                           Class A-1 Principal Distribution Amount remaining
                           undistributed pursuant to clause FIRST of this
                           Section 5.01(a)(6)(i), concurrently, (i) to the
                           Holders of the Class A-2A Certificates and (ii)
                           sequentially, in the following order, to the holders
                           of the Class A-2B Certificates and Class A-2C
                           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 II Principal Distribution Amount pursuant to
                           clause FIRST of Section 5.01(a)(6)(ii) below, until
                           the Certificate Principal Balance of each such Class
                           has been reduced to zero; and

                           THIRD, concurrently, (i) to the Holders of the Class
                           A-2A Certificates, and (ii) sequentially, in the
                           following order, to the holders of the Class A-2B
                           Certificates and Class A-2C 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 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 each such Class has
                           been reduced to zero.

                  (ii) The Group II Principal Distribution Amount shall be
         distributed in the following order of priority:

                                      -107-

<PAGE>

                           FIRST, concurrently, (i) to the Holders of the Class
                           A-2A Certificates, and (ii) sequentially, in the
                           following order, to the holders of the Class A-2B
                           Certificates and Class A-2C Certificates, on a PRO
                           RATA basis based on the Certificate Principal Balance
                           of each such Class, the Class A-2 Principal
                           Distribution Amount, until the Certificate Principal
                           Balance of each such Class has been reduced to zero;

                           SECOND, to the extent of the portion, if any, of the
                           Class A-2 Principal Distribution Amount remaining
                           undistributed pursuant to clause FIRST of this
                           Section 5.01(a)(6)(ii), to the Holders of the Class
                           A-1 Certificates, 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, until the Certificate Principal
                           Balance of such Class has been reduced to zero; and

                           THIRD, to the holders of the Class A-1 Certificates,
                           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 to
                           the amount, if any, of the Class A-1 Principal
                           Distribution Amount remaining unpaid on such
                           Distribution Date, until the Certificate Principal
                           Balance of such Class has been reduced to zero.

                  (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 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 Class M-2 Certificates, the lesser of
                           (x) the excess of (i) the remaining 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 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 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

                                      -108-

<PAGE>

                           Certificates pursuant to clause SECOND of this
                           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 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; and

                           SIXTH, to 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.

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

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

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

                                      -109-

<PAGE>

                           (v) to the Holders of the Class M-4 Certificates, in
                           an amount equal to the Interest Carry Forward Amount
                           allocable to such Class of Certificates;

                           (vi) to the Holders of the Class M-5 Certificates, in
                           an amount equal to the Interest Carry Forward Amount
                           allocable to such Class of Certificates;

                           (vii) to the Holders of the Class M-6 Certificates,
                           in an amount equal to the Interest Carry Forward
                           Amount allocable to such Class of Certificates;

                           (viii) to the Holders of the Class M-1 Certificates,
                           in an amount equal to the Allocated Realized Loss
                           Amount allocable to the Class M-1 Certificates;

                           (ix) to the Holders of the Class M-2 Certificates, in
                           an amount equal to the Allocated Realized Loss Amount
                           allocable to the Class M-2 Certificates;

                           (x) to the Holders of the Class M-3 Certificates, in
                           an amount equal to the Allocated Realized Loss Amount
                           allocable to the Class M-3 Certificates;

                           (xi) to the Holders of the Class M-4 Certificates, in
                           an amount equal to the Allocated Realized Loss Amount
                           allocable to the Class M-4 Certificates;

                           (xii) to the Holders of the Class M-5 Certificates,
                           in an amount equal to the Allocated Realized Loss
                           Amount allocable to the Class M-5 Certificates;

                           (xiii) to the Holders of the Class M-6 Certificates,
                           in an amount equal to the Allocated Realized Loss
                           Amount allocable to the Class M-6 Certificates;

                           (xiv) to the Holders of the Class A Certificates, in
                           an amount equal to the aggregate of any Prepayment
                           Interest Shortfalls (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 Section 1.02;

                           (xv) to the Holders of the Class M-1 Certificates, in
                           an amount equal to the aggregate of any Prepayment
                           Interest Shortfalls (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 Section 1.02;

                           (xvi) to the Holders of the Class M-2 Certificates,
                           in an amount equal to the aggregate of any Prepayment
                           Interest Shortfalls (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

                                      -110-

<PAGE>

                           Distribution Date and for any prior Distribution
                           Date, to the extent not previously reimbursed
                           pursuant to Section 1.02;

                           (xvii) to the Holders of the Class M-3 Certificates,
                           in an amount equal to the aggregate of any Prepayment
                           Interest Shortfalls (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 Section 1.02;

                           (xviii) to the Holders of the Class M-4 Certificates,
                           in an amount equal to the aggregate of any Prepayment
                           Interest Shortfalls (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 Section 1.02;

                           (xix) to the Holders of the Class M-5 Certificates,
                           in an amount equal to the aggregate of any Prepayment
                           Interest Shortfalls (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 Section 1.02;

                           (xx) to the Holders of the Class M-6 Certificates, in
                           an amount equal to the aggregate of any Prepayment
                           Interest Shortfalls (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 Section 1.02;

                           (xxi) to the Reserve Fund from amounts otherwise
                           payable to the Class CE Certificates, the amount by
                           which the sum of the Net WAC Rate Carryover Amounts
                           if any, with respect to the Offered Certificates
                           exceeds the sum of any amounts received by the
                           Trustee with respect to the Cap Agreements since the
                           Distribution Date and any amounts in the Reserve Fund
                           that were not distributed on prior Distribution
                           Dates;

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

                           (xxiii) 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

                                      -111-

<PAGE>

                           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, to the Class
A Certificates; 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 and seventh, to the Class M-6
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, to the Holders of the Class A Certificates,
                           until the Certificate Principal Balance of each such
                           Class has been reduced to zero;

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

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

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

                           FIFTH, to the Holders of the Class M-4 Certificates,
                           until the Certificate Principal Balance of such Class
                           has been reduced to zero;

                           SIXTH, to the Holders of the Class M-5 Certificates,
                           until the Certificate Principal Balance of such Class
                           has been reduced to zero; and

                           SEVENTH, to the Holders of the Class M-6
                           Certificates, until the Certificate Principal Balance
                           of such Class has been reduced to zero.

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

                                      -112-

<PAGE>

                           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-1 Certificates, until the
                           Certificate Principal Balance of such 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 concurrently (i) to the Holders of the
                           Class A- 2A Certificates, and (ii) sequentially, in
                           the following order, to the holders of the Class A-2B
                           Certificates and Class A-2C Certificates, on a PRO
                           RATA basis based on the aggregate Certificate
                           Principal Balance of each such Class, until the
                           Certificate Principal Balance of each such Class 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;

                                      -113-

<PAGE>

                           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
                           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; and

                           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.

                  (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.

                                      -114-

<PAGE>

                  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 Servicers, 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 Servicers, 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. 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

                                      -115-

<PAGE>

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 or a
Mezzanine Certificate be reduced more than once in respect of any particular
amount both (a) allocated to such Certificate in respect of Realized Losses
pursuant to Section 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)
shall make available to each Holder of the Certificates, 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 Fees received by the Servicers
         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;

                  (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

                                      -116-

<PAGE>

         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 and the Class CE
         Certificates for such Distribution Date and the Interest Carry Forward
         Amount, if any, with respect to the Class A Certificates and the
         Mezzanine Certificates on such Distribution Date, and in the case of
         the Class A Certificates and the Mezzanine 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 related Servicer pursuant to Section 3.22 or the Master
         Servicer pursuant to Section 4.19;

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

                                      -117-

<PAGE>

                  (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 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)(xxi);

                  (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; and

                  (xxix) the Aggregate Loss Severity Percentage.

                  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 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.

                                      -118-

<PAGE>

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

                  Within a reasonable period of time after the end of each
calendar year, the 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
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 12:00 noon New York time on the second
Business Day following each Determination Date, and with respect to Ocwen, in no
event later than 12:00 noon New York time on the 18th calendar day of each
month, each Servicer shall deliver to the Master Servicer and the Securities
Administrator by telecopy or electronic mail (or by such other means as the
related 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 related 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 related
Servicer and the Securities Administrator to fulfill its obligations hereunder
with respect to securities and tax reporting.

                  (b) The amount of P&I Advances to be made by the related
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 Fee), due
during the related Due Period in respect of the

                                      -119-

<PAGE>

Mortgage Loans, which Monthly Payments were delinquent as of the close of
business on the related Determination Date and (ii) with respect to each REO
Property, which REO Property was acquired during or prior to the related
Prepayment Period and as to which such REO Property 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 related Collection Account pursuant to Section 3.21 for distribution on such
Distribution Date; provided, however, the related 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.

                  With respect to Provident, by 12:00 noon New York time on the
Servicer Remittance Date, and with respect to Ocwen, by 12:00 p.m. New York time
on the Servicer Remittance Date, each 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
made in respect of the Mortgage Loans for the related Distribution Date either
(i) from its own funds or (ii) from the related 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 related
Collection Account that Amounts Held For Future Distribution have been, as
permitted by this Section 5.03, used by the related 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 related Servicer
with respect to the Mortgage Loans. In addition, Ocwen shall have the right to
reimburse itself for any outstanding P&I Advance made by it from its own funds
from Amounts Held for Future Distribution. Any Amounts Held For Future
Distribution used by the related Servicer to make P&I Advances, or with respect
to Ocwen, to reimburse itself for outstanding P&I Advances shall be
appropriately reflected in the related Servicer's records and replaced by the
related 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 related Servicer by the close of business on the Business Day
prior to the Distribution Date in the event that the amount remitted by the
related Servicer to the Securities Administrator on such date is less than the
P&I Advances required to be made by the related Servicer for the related
Distribution Date.

                  (c) The obligation of each 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
related 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 related Servicer that it has made a

                                      -120-

<PAGE>

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 related Servicer fails to make any such 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 related 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 related 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: (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 related 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, until the Certificate Principal Balance thereof has been reduced
to zero; third, to the Class M-6 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero; fourth, to the Class M-5 Certificates,
until the Certificate Principal Balance thereof has been reduced to zero; fifth,
to the Class M-4 Certificates, until the Certificate Principal Balance thereof
has been reduced to zero; sixth, to the Class M-3 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; seventh, to the
Class M-2 Certificates, until the Certificate Principal Balance thereof has been
reduced to zero; and eighth, to the Class M-1 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero. All Realized
Losses to be allocated to the Certificate Principal Balances of all Classes on
any Distribution Date shall be so allocated after the actual distributions to be
made on such date as provided above. All references above to the Certificate
Principal Balance of any Class of Certificates shall be to the Certificate
Principal Balance of such Class immediately prior to the relevant Distribution
Date, before reduction thereof by any Realized Losses, in each case to be
allocated to such Class of Certificates, on such Distribution Date.

                  Any allocation of Realized Losses to a Mezzanine Certificate
on any Distribution Date shall be made by reducing the Certificate Principal
Balance thereof by the amount so allocated; any allocation of Realized Losses to
a Class CE Certificates shall be made by reducing the amount otherwise payable
in respect thereof pursuant to Section 5.01(a)(7)(xxi). No allocations of any

                                      -121-

<PAGE>

Realized Losses shall be made to the Certificate Principal Balances of the Class
A Certificates or the Class P Certificates.

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

                  (c)(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% and 2%, 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% and 2%, respectively; third, 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%, 1.00% and 1%, respectively, until the
Uncertificated Balances of REMIC I Regular Interest I-LTM5 has been reduced to
zero; fourth, 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%, 1.00%
and 1%, respectively, until the Uncertificated Balances of REMIC I Regular
Interest I-LTM6 has been reduced to zero; fifth, 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%, 1.00% and 1%, respectively, until the
Uncertificated Balances of REMIC I Regular Interest I-LTM4 has been reduced to
zero; sixth 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%, 1.00%,
and 1%, respectively, until the Uncertificated Balance of REMIC I Regular
Interest I-LTM3 has been reduced to zero; seventh 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%, 1% and 1%, respectively, until the Uncertificated
Balance of REMIC I Regular Interest I-LTM2 has been reduced to zero; and eighth
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%, 1% and 1%,
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

                                      -122-

<PAGE>

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, 2004, 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, 2004 and (ii) unless and until a
Form 15 Suspension Notice shall have been filed, prior to March 20th of 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 related 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, 2004 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

                                      -123-

<PAGE>

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.

                                      -124-

<PAGE>

                                   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-5. 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 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
delivered to the Depositor,

                                      -125-

<PAGE>

the related 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.

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

                  If (i)(A) the Depositor advises the 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. Upon surrender to the Securities Administrator of the
Book-Entry Certificates by the Book-Entry Custodian or the Depository, as
applicable, accompanied by registration instructions from the Depository for
registration of transfer, the 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 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. None of the Depositor, the Servicers, 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

                                      -126-

<PAGE>

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 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 CE Certificate, Class P Certificate or Residual Certificate
is to be made without registration or qualification (other than in connection
with the initial transfer of any such Certificate by the Depositor), 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 and (iii) 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 a 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 each Servicer against any liability that may result if the transfer is not
so exempt or is not made in accordance with such federal and state laws.

                  (c) No transfer of a Class CE Certificate, Class P Certificate
or 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 the
Securities Administrator is provided with an Opinion of Counsel on which the
Depositor, the Master Servicer, the Securities Administrator, the Trustee and
each Servicer may rely, which establishes to the

                                      -127-

<PAGE>

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 Servicers, 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 the Code)
in addition to those undertaken in this Agreement, which Opinion of Counsel
shall not be an expense of the Depositor, the Servicers, the Trustee, the Master
Servicer, the Securities Administrator or the Trust Fund. 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 U.S. Department of Labor Prohibited
Transaction Class Exemption ("PTCE") 95-60, and (iii) the conditions set forth
in Sections I and III of PTCE 95-60 have been satisfied.

                  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 Mezzanine 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, each 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:

                                      -128-

<PAGE>

                                    (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

                                      -129-

<PAGE>

                  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 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 Trustee 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 Trustee to such purported Transferee. The terms
                           and conditions of any sale under this clause (iii)(B)
                           shall be determined in the sole discretion of the
                           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

                                      -130-

<PAGE>

                  Disqualified Organization. Reasonable compensation for
                  providing such information may be charged or collected by the
                  Securities Administrator.

                           (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

                                    (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.

                                      -131-

<PAGE>

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

                  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 bona fide 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 Servicers, 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 Servicers,
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,

                                      -132-

<PAGE>

(A) this Agreement and any amendments hereof entered into pursuant to Section
11.01, (B) all monthly statements required to be delivered to Certificateholders
of the relevant Class pursuant to Section 4.02 since the Closing Date, and all
other notices, reports, statements and written communications delivered to the
Certificateholders of the relevant Class pursuant to this Agreement since the
Closing Date and (C) any copies of all officers' certificates of the Servicers
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.

                                      -133-

<PAGE>

                                   ARTICLE VII

              THE DEPOSITOR, THE SERVICERS AND THE MASTER SERVICER

                  SECTION 7.01. Liability of the Depositor, the Servicers and
                                the Master Servicer.

                  The Depositor, the related 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, related Servicer and Master Servicer and undertaken
hereunder by the Depositor, the related Servicer and the Master Servicer herein.

                  SECTION 7.02. Merger or Consolidation of the Depositor, the
                                related 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 each Servicer will keep in full effect its existence, rights and franchises
as a federally chartered savings bank. 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 related 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, each 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 related Servicer or the
Master Servicer shall be a party, or any Person succeeding to the business of
the Depositor, the related Servicer or the Master Servicer, shall be the
successor of the Depositor, the related 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 related
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
                                Servicers, the Master Servicer and Others.

                  None of the Depositor, the Servicers, the Securities
Administrator, the Master Servicer or any of the directors, officers, employees
or agents of the Depositor, the Servicers, the Securities Administrator 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
Servicers, the Securities Administrator, the Master Servicer or any

                                      -134-

<PAGE>

such person against any breach of warranties, representations or covenants made
herein or against any 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, each Servicer, the Securities Administrator, the Master Servicer and
any director, officer, employee or agent of the Depositor, each 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, each
Servicer, the Securities Administrator, the Master Servicer and any director,
officer, employee or agent of the Depositor, each 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 or the Certificates 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 related 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 related 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 related 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
related Collection Account and the Distribution Account.

                  Notwithstanding anything to the contrary contained herein, the
related Servicer shall not be liable for any actions or inactions prior to the
Cut-off Date of any prior servicer of the Mortgage Loans.

                  SECTION 7.04. Limitation on Resignation of the Servicers.

                  (a) Neither Servicer shall resign from the obligations and
duties hereby imposed on it except 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 of the related Servicer shall be evidenced by an Opinion of
Counsel to such effect obtained at the expense of the related Servicer and
delivered to the Trustee and the Rating Agencies. No resignation of the related
Servicer shall become effective until the Trustee or a successor Servicer shall
have assumed the related Servicer's responsibilities, duties, liabilities (other
than those liabilities arising prior to the appointment of such successor) and
obligations under this Agreement.

                                      -135-

<PAGE>

                  (b) Except as expressly provided herein, the related 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 related Servicer
         hereunder. The foregoing prohibition on assignment shall not prohibit
         the related Servicer from designating a Sub-Servicer as payee of any
         indemnification amount payable to the related 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 Subservicer as an indemnitee
         under this Agreement.

                  (c) Notwithstanding anything to the contrary herein, the
         related 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 related Servicer, the Lender may direct the related
         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 related Servicer's appointment of a successor
         Servicer;

                  (2) the Lender's rights are subject to this Agreement; and

                  (3) the related 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 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 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 be a Person which shall be qualified to
service mortgage loans for Fannie Mae or Freddie Mac; (b) shall have a net worth
of not less than $15,000,000 (unless otherwise approved by each Rating Agency
pursuant to clause (ii) below); (c) shall be reasonably satisfactory to the
Trustee (as evidenced in a writing signed by the Trustee); and (d) shall execute
and deliver to the Trustee an agreement, in form and substance reasonably
satisfactory to the Trustee, which contains an assumption by such Person of the
due and punctual performance and observance of each covenant and condition to be
performed or observed by it as master servicer under this

                                      -136-

<PAGE>

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
                                Servicers and the Master Servicer.

                  Each of the Master Servicer and the related 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 related Servicer (and any such Sub-Servicer) in respect of the related
Servicer's rights and obligations hereunder and access to officers of the Master
Servicer or the related Servicer (and those of any such Sub-Servicer)
responsible for such obligations, and the Master Servicer shall have access to
all records maintained by the Servicers and any Sub-Servicers. Upon request,
each of the Master Servicer and the related Servicer shall furnish to the
Depositor and the Trustee its (and any such Sub-Servicer's) most recent
financial statements and such other information relating to the Master
Servicer's or related Servicer's capacity to perform its obligations under this
Agreement as it possesses (and that any such Sub-Servicer possesses). To the
extent such information is not otherwise available to the public, the Depositor
and the Trustee shall not disseminate any information obtained pursuant to the
preceding two sentences without the Master Servicer's or the related 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 related 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 related 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 related Servicer to comply with
any applicable law prohibiting disclosure of information regarding the
Mortgagors and the failure of the related 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 related
Servicer to collect,

                                      -137-

<PAGE>

create, collate or otherwise generate any information that it does not generate
in its usual course of business. The related 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 related
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 related Servicer under this Agreement or exercise the rights of the Master
Servicer or the related Servicer under this Agreement; provided that neither the
Master Servicer nor the related 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 related Servicer
and is not obligated to supervise the performance of the Master Servicer or the
related Servicer under this Agreement or otherwise.

                  SECTION 7.08. Duties of the Credit Risk Manager.

                  For and on behalf of the Depositor, pursuant to the Credit
Risk Management Agreement 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 Agreement, and
the Credit Risk Manager shall look solely to the related Servicer for all
information and data (including loss and delinquency information and data)
relating to the servicing of the related 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 related Servicer, the
Master Servicer, the Trustee, and each Rating Agency. Notwithstanding the
foregoing, the termination of the Credit Risk Manager pursuant to this Section
shall not become effective until the appointment of a successor Credit Risk
Manager.

                  SECTION 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 related Servicer under the 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 related Servicer
pursuant to the Credit Risk Management Agreement in the performance of its
duties thereunder and hereunder.

                  SECTION 7.10. Removal of the Credit Risk Manager.

                                      -138-

<PAGE>

                  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.

                                      -139-

<PAGE>

                                  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 related 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 related Servicer by
         the Depositor or the Trustee (in which case notice shall be provided by
         telecopy), or to the related 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 related Servicer
         duly to observe or perform in any material respect any other of the
         covenants or agreements on the part of the related Servicer contained
         in this Agreement, or the material breach by the related 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 related Servicer by the Depositor or the
         Trustee or to the related 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 related Servicer can demonstrate to
         the reasonable satisfaction of the Trustee that the related 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 related Servicer and such decree or order shall
         have remained in force undischarged or unstayed for a period of 90
         days; or

                           (iv) the related 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 related 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

                                      -140-

<PAGE>

         or reorganization statute, make an assignment for the benefit of its
         creditors, or voluntarily suspend payment of its obligations;

                           (vi) failure by the related 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 thirty
         (30) days after the date on which written notice of such failure,
         requiring the same to be remedied, shall have been given to the related
         Servicer by any party to this Agreement; or

                           (vii) any failure of the related 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
         12:00 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 related 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 related
Servicer in its capacity as related 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 related Servicer, the Depositor and
the Master Servicer, terminate all of the rights and obligations of the related
Servicer in its capacity as related 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 related Servicer of such written notice, all authority
and power of the related 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 related 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 related 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 related Servicer's functions under
this Agreement, and to cooperate with the Master Servicer in effecting the
termination of the related 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 related Servicer to the
related Collection Account held by or on behalf of the related Servicer or
thereafter be received with respect to the Mortgage Loans or any REO Property
(provided, however, that the related 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

                                      -141-

<PAGE>

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 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 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
related Servicer (or from amounts on deposit in the Distribution Account if the
related 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 a predecessor Servicer (or if the predecessor Servicer is the
Master Servicer, from the related 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.

                  (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

                                      -142-

<PAGE>

         or reorganization statute, make an assignment for the benefit of its
         creditors, or voluntarily suspend payment of its obligations.

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

                                      -143-

<PAGE>

Servicer, the Trustee shall be entitled to reimbursement of such costs and
expenses from the Distribution Account.

                  SECTION 8.02. Master Servicer to Act; Appointment of
                                Successor.

                  (a) On and after the time the related Servicer receives a
notice of termination, the Master Servicer shall be the successor in all
respects to the related Servicer in its capacity as related 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 related 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 3.23(c)) by the terms and
provisions hereof including, without limitation, the related 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 7.01 shall not be considered a default by the Master
Servicer as successor to the related 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 with respect to Provident, and not
to exceed 120 days with respect to Ocwen) 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 related 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 related 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 related 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 related Servicer under this Agreement in the assumption of all
or any part of the responsibilities, duties or liabilities of the related
Servicer under this Agreement.

Notwithstanding any provision in this Agreement to the contrary, for a period of
30 days following the date on which Ocwen shall have received a notice of
termination pursuant to Section 8.01, Ocwen or its designee may appoint a
successor Servicer that satisfies the eligibility criteria of a successor
Servicer set forth below, which appointment shall be subject to the consent of
the Depositor, the Seller, the Master Servicer, and the Trustee, which consent
shall not be unreasonably withheld or delayed; provided that such successor
Servicer agrees to fully effect the servicing transfer within 120 days following
the termination of Ocwen and to make all P&I Advances that would otherwise be
made by the Master Servicer under Section 8.01 as of the date of such
appointment, and to reimburse Ocwen and/or the Master Servicer for any
unreimbursed P&I Advances they have made and any reimburseable expenses that
they may have incurred in connection with this Section 8.02. Any proceeds
received in connection with the appointment of such successor Servicer shall be
the property of the Ocwen or its designee. This 30-day period shall terminate

                                      -144-

<PAGE>

immediately (i) at the close of business on the second Business Day of such
30-day period if (A) Ocwen was terminated because of an Event of Default
described in Section 8.01 (a)(vii) for failing to make a required P&I Advance,
and (B) Ocwen shall have failed to make (or cause to be made) such P&I Advance,
or shall fail to reimburse (or cause to be reimbursed) the Master Servicer for a
P&I Advance made by the Master Servicer, by the close of business on such second
Business Day, or (ii) at the close of business on the second Business Day
following the date (if any) during such 30-day period on which a P&I Advance is
due to be made, if Ocwen shall have failed to make (or caused to be made) such
P&I Advance, or Ocwen shall have failed to reimburse (or cause to be reimbursed)
the Master Servicer for such P&I Advance, by the close of business on such
second Business Day.

                  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, (iii) have a net worth
of not less than $15,000,000 and (iv) assume all the responsibilities, duties or
liabilities of the related Servicer (other than liabilities of the related
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.

                  (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 related Servicer
under this Agreement shall be effective until the assumption by the successor of
all of the related 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 related 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 related Servicer under this Agreement, the Master Servicer
shall act in such capacity as hereinabove provided.

                                      -145-

<PAGE>

                  SECTION 8.03. Notification to Certificateholders.

                  (a) Upon any termination of the related Servicer or the Master
Servicer pursuant to Section 8.01(a) or (b) or any appointment of a successor to
the related 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.

                                      -146-

<PAGE>

                                   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 related 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 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

                                      -147-

<PAGE>

                  nor the Securities Administrator shall be liable except for
                  the performance of such duties and obligations as are
                  specifically set forth in this Agreement, no implied covenants
                  or obligations shall be read into this Agreement against the
                  Trustee or the Securities Administrator and, in the absence of
                  bad faith on the part of the Trustee or the Securities
                  Administrator, respectively, the Trustee or the Securities
                  Administrator, respectively, may conclusively rely, as to the
                  truth of the statements and the correctness of the opinions
                  expressed therein, upon any certificates or opinions furnished
                  to the Trustee or the Securities Administrator, respectively,
                  that conform to the requirements of this Agreement;

                           (ii) Neither the Trustee nor the Securities
                  Administrator shall be liable for an error of judgment made in
                  good faith by a Responsible Officer or Responsible Officers of
                  the Trustee or an officer or officers of the Securities
                  Administrator, 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 8.01:

                           (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

                                      -148-

<PAGE>

                  of this Agreement, unless such Certificateholders shall have
                  offered to the Trustee or the Securities Administrator, as the
                  case may be, reasonable security or indemnity satisfactory to
                  it against the costs, expenses and liabilities which may be
                  incurred therein or thereby; nothing contained herein shall,
                  however, relieve the Trustee of the obligation, upon the
                  occurrence of a Master Servicer Event of Default (which has
                  not been cured or waived), to exercise such of the rights and
                  powers vested in it by this Agreement, and to use the same
                  degree of care and skill in their exercise as a prudent person
                  would exercise or use under the circumstances in the conduct
                  of such person's own affairs;

                           (iv) Neither the Trustee nor the Securities
                  Administrator shall be liable for any action taken, suffered
                  or omitted by it in good faith and believed by it to be
                  authorized or within the discretion or rights or powers
                  conferred upon it by this Agreement;

                           (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 at the direction of the related Servicer pursuant to
                  Section 3.23(c), for any loss resulting from the investment of
                  funds held in the Reserve Fund at the direction of the Holder
                  of the Class CE Certificate 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

                                      -149-

<PAGE>

                  of the Trustee has knowledge thereof or unless written notice
                  of any event which is in fact such a default is received by
                  the Trustee at the Corporate Trust Office of the Trustee, and
                  such notice references the Certificates and this Agreement;
                  and

                           (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.

                  (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 Contract on behalf of the Trust Fund in the form presented to it by the
Depositor and shall have no responsibility for the contents of such Cap
Contract, including, without limitation, the representations and warranties
contained therein. Any funds payable by the Trustee under the Cap Contract at
closing shall be paid by the Depositor. Notwithstanding anything to the contrary
contained herein or in the Cap Contract, the Trustee shall not be required to
make any payments to the counterparty under the Cap Contract.

                  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 related Servicer, other than any funds held by or on behalf of the
Trustee in accordance with Section 3.23 and 3.24.

                  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

                                      -150-

<PAGE>

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 the related 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. Such
indemnity shall survive the termination or discharge of this Agreement and the
resignation or removal of the Trustee. Any payment hereunder made by the Master
Servicer to the Trustee shall be from the Master Servicer's own funds, without
reimbursement from REMIC I therefor.

                  SECTION 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

                                      -151-

<PAGE>

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 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

                                      -152-

<PAGE>

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.

                  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

                                      -153-

<PAGE>

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.

                  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.

                                      -154-

<PAGE>

                  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 and the Depositor as applicable, as of
the Closing Date, that:

                  (i) It is a national banking association duly organized,
         validly existing and in good standing under the laws of the United
         States of America.

                  (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 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.

                                      -155-

<PAGE>

                                    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 related Servicer and
the Trustee (other than the obligations of the Master Servicer to the Trustee
pursuant to Section 9.05 and of the related 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 Terminator (as defined below) of all Mortgage Loans and each REO
Property remaining in REMIC I and (ii) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan or REO Property
remaining in REMIC I; provided, however, that in no event shall the trust
created hereby continue beyond the expiration of 21 years from the death of the
last survivor of the descendants of Joseph P. Kennedy, the late ambassador of
the United States to the Court of St. James, living on the date hereof. The
purchase by the Terminator of all Mortgage Loans and each REO Property remaining
in REMIC I shall be at a price (the "Termination Price") equal to the 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 Terminator and the Trustee in their reasonable discretion and
(B) the aggregate fair market value of all of the assets of REMIC I (as
determined by the Terminator and the Trustee, as of the close of business on the
third Business Day next preceding the date upon which notice of any such
termination is furnished to Certificateholders pursuant to the third paragraph
of this Section 9.01) plus (ii) any amounts due the related Servicer and the
Master Servicer in respect of unpaid Servicing Fees, Master Servicing Fees and
outstanding P&I Advances and Servicing Advances.

                  (b) The Class CE Certificateholder (so long as it is not an
Affiliate of the Seller) or (x) if the Class CE Certificateholder is an
Affiliate of the Seller or (y) the Class CE Certificateholder fails to exercise
such optional termination right, Ocwen (either the Class CE Certificateholder or
Ocwen, the "Terminator") 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 Terminator 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 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

                                      -156-

<PAGE>

the Class CE Certificates. Notwithstanding the foregoing, the optional
termination right may only be exercised by Ocwen if (i) it receives written
notification from the Class CE Certificateholder that it will not exercise such
optional termination right, (ii) it provides written notice to the Authorized
Officers of the Seller that it intends to exercise such optional termination
right and (iii) it receives written authorization from the Authorized Officers
of the Seller to exercise such optional termination right.

                  (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 Terminator,
not earlier than the 15th day and not later than the 25th day of the month next
preceding the month of the final distribution on the Certificates or (b)
otherwise during the month of such final distribution on or before the
Determination Date in such month, in each case specifying (i) the Distribution
Date upon which the Trust Fund will terminate and 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 Terminator, the
Terminator 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 related Servicer, the Master
Servicer, the Securities Administrator and the Custodian from such funds
deposited in the Distribution Account (i) any amounts which the related Servicer
would be permitted to withdraw and retain from the Collection Account pursuant
to Section 3.21 and (ii) any other amounts otherwise payable by the Securities
Administrator to the Master Servicer, the Trustee, the Custodian and the related
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 Securities Administrator by a
Servicing Officer of the making of such final deposit, the Trustee shall
promptly release to the Terminator the Mortgage Files for the remaining Mortgage
Loans, and Trustee shall execute all assignments, endorsements and other
instruments necessary to effectuate such transfer.

                  (d) Upon presentation of the Certificates by the
Certificateholders on the final Distribution Date, the 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 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,

                                      -157-

<PAGE>

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 Terminator purchases all the
Mortgage Loans and each REO Property or the final payment on or other
liquidation of the last Mortgage Loan or REO Property remaining in REMIC I
pursuant to Section 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 Terminator;

                           (ii) During such 90-day liquidation period and, at or
         prior to the time of making of the final payment on the Certificates,
         the Trustee shall sell all of the assets of REMIC I to the Terminator
         for cash; and

                           (iii) At the time of the making of the final payment
         on the Certificates, the Securities Administrator shall distribute or
         credit, or cause to be distributed or credited, to the Holders of the
         Residual Certificates all cash on hand in the Trust Fund (other than
         cash retained to meet claims), and the Trust Fund shall terminate at
         that time.

                  (b) At the expense of the requesting Terminator (or, if the
Trust Fund is being terminated as a result of the occurrence of the event
described in clause (ii) of the first paragraph of Section 10.01, at the expense
of the Trust Fund), the Terminator shall prepare or cause to be prepared the
documentation required in connection with the adoption of a plan of liquidation
of each 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.

                                      -158-

<PAGE>

                                   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 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 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

                                     -159-
<PAGE>

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.

                  (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

                                     -160-
<PAGE>

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 related
Servicer pursuant to Section 11.03, if such tax arises out of or results from a
breach by the related 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 related 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 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

                                     -161-
<PAGE>

accordance with Section 2.03), unless it has received an Opinion of Counsel,
addressed to the Trustee and the Trustee (at the expense of the party seeking to
cause such sale, disposition, substitution, acquisition or contribution but in
no event at the expense of the Trustee) that such sale, disposition,
substitution, acquisition or contribution will not (a) affect adversely the
status of any 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 related 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 related
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) Each 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 related Servicer's failure to
perform its covenants set forth in Article III in accordance with the standard
of care of the related Servicer set forth in this Agreement.

                  (c) The Master Servicer agrees to indemnify the Trust Fund,
the Depositor, the related 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 related 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 or the Trustee
including any reasonable attorneys fees imposed on or incurred by the Trust
Fund, the Depositor or the Trustee as a result of the Securities Administrator's
failure to perform its covenants set forth in this Article XI in accordance with
the standard of care of the Securities Administrator set forth in this
Agreement.

                                     -162-
<PAGE>

                                   ARTICLE XII

                            MISCELLANEOUS PROVISIONS

                  SECTION 12.01. Amendment.

                  This Agreement may be amended from time to time by the
Depositor, each 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 which shall not be
inconsistent with the provisions of this Agreement, provided that such action
shall not, as evidenced by an Opinion of Counsel delivered to the Trustee,
adversely affect in any material respect the interests of any Certificateholder;
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. 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, each 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 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.

                  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

                                     -163-
<PAGE>

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 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

                                     -164-
<PAGE>

partners or members of an association; nor shall any Certificateholder be under
any liability to any third person by reason of any action taken by the parties
to this Agreement pursuant to any provision hereof.

                  No Certificateholder shall have any right by virtue of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless 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 Servicers, the Master Servicer, the Securities Administrator
and the Trustee in writing by the Depositor, (b) in the case of Provident, The
Provident Bank, One East Fourth Street, Mail Drop 176D, Cincinnati, Ohio 45202,
Attention: Randy L. Decker (telecopy number: (800) 838-9727)), or such other
address or telecopy number as may hereafter be furnished to the Trustee, the
Master Servicer, the Securities Administrator and the Depositor in writing by
Provident, (c) in the case of Ocwen, Ocwen Federal Bank FSB, 1675 Palm Beach
Lakes Blvd., Suite 10A, West Palm Beach, Florida 33401, Attention: Secretary,
(telecopy number: (561) 682-8177), or such other address or telecopy number as
may hereafter be furnished to the Trustee, the Master Servicer, the Securities
Administrator and the Depositor in writing by Ocwen, (d) in the case of the

                                     -165-
<PAGE>

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., 2003-NC1 (telecopy number:
(410) 715-2380), or such other address or telecopy number as may hereafter be
furnished to the Trustee, the Depositor and the Servicers in writing by the
Master Servicer or the Securities Administrator and (e) 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 Servicers, 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 a 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;

                                     -166-
<PAGE>

                  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.

                  In addition, the Securities Administrator shall promptly make
available to each Rating Agency copies of each report to Certificateholders
described in Section 5.02.

                  Each Servicer shall make available to each Rating Agency
copies of the following:

                  1.       Each annual statement as to compliance described in
                           Section 3.17;

                  2.       Each annual independent public accountants' servicing
                           report described in Section 3.18; and

                  3.       Any change in the location of the related Collection
                           Account.

                  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 Moody's Investors Service, Inc., 99 Church
Street, New York, New York 10007 and to Fitch Ratings, 1 State Street Plaza, New
York, New York 10004 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

                                     -167-
<PAGE>

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 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.

                                     -168-
<PAGE>

                  IN WITNESS WHEREOF, the Depositor, the Servicers, 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:

                                                BANK ONE, NATIONAL ASSOCIATION,
                                                not in its individual capacity
                                                but solely as Trustee

                                                By:
                                                   -----------------------------
                                                Name:
                                                Title:

                                                WELLS FARGO BANK MINNESOTA,
                                                NATIONAL ASSOCIATION
                                                as Master Servicer and
                                                Securities Administrator

                                                By:
                                                   -----------------------------
                                                Name:
                                                Title:

<PAGE>

                                                THE PROVIDENT BANK,
                                                as a Servicer

                                                By:
                                                   -----------------------------
                                                Name:
                                                Title:

                                                OCWEN FEDERAL BANK FSB,
                                                as a Servicer

                                                By:
                                                   -----------------------------
                                                Name:
                                                Title:

                                                For purposes of Sections 7.08,
                                                7.09 and 7.10:

                                                THE MURRAYHILL COMPANY

                                                By:
                                                   -----------------------------
                                                Name:
                                                Title:

<PAGE>

STATE OF                )
                        ) ss.:
COUNTY OF               )

                  On the ___ day of October 2003, 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 October 2003, 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 October, 2003, before me, a notary public in
and for said State, personally appeared _______________ known to me to be a
_______________ of ________________, The Provident Bank, 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 October, 2003, before me, a notary public in
and for said State, personally appeared _______________ known to me to be a
_______________ of ________________, Ocwen Federal Bank FSB, 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 October, 2003, before me, a notary public in
and for said State, personally appeared ____________________, known to me to be
a __________________ of Wells Fargo Bank Minnesota, 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>

STATE OF                )
                        ) ss.:
COUNTY OF               )

                  On the ___ day of October, 2003, before me, a notary public in
and for said State, personally appeared ____________________, known to me to be
a __________________ of Bank One, 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>

STATE OF                )
                        ) ss.:
COUNTY OF               )

                  On the ___ day of October, 2003, before me, a notary public in
and for said State, personally appeared ____________________, known to me to be
a __________________ of The Murrayhill Company, one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.

                  IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                                ________________________________
                                                         Notary Public

[Notarial Seal]                                 My commission expires

<PAGE>

                                   EXHIBIT A-1
                                   -----------

                   FORM OF CLASS A-[1][2A][2B][2C] 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.

<TABLE>
<CAPTION>
<S>                                                       <C>
Series 2003-NC1, Class A-[1][2A][2B][2C]                  Aggregate Certificate Principal Balance of
                                                          the Class A-[1][2A][2B][2C]
                                                          Certificates as of the
Pass-Through Rate: Variable                               Issue Date:
                                                          $
Date of Pooling and Servicing Agreement and               Denomination: $
Cut-off Date: October 1, 2003
                                                          Master Servicer: Wells Fargo Bank Minnesota,
                                                          National Association
First Distribution Date:
November 25, 2003                                         Trustee: Bank One National Association

No.__                                                     Issue Date: October 10, 2003

                                                          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.

<PAGE>

          ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2003-NC1
                      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
SERVICERS, 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-[1][2A][2B][2C] Certificates as of the Issue Date) in that certain beneficial
ownership interest evidenced by all the Class A-[1][2A][B][C] 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 Minnesota, National Association as master
servicer (the "Master Servicer") and securities administrator (the "Securities
Administrator"), The Provident Bank as a servicer, Ocwen Federal Bank FSB as a
servicer (together, the "Servicers") and Bank One 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-[1][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

                                      A-1-2

<PAGE>

is the registered owner of Class A-[1][2A][2B][2C] Certificates the aggregate
initial Certificate Principal Balance of which is in excess of the lesser of (i)
$5,000,000 or (ii) two-thirds of the aggregate initial Certificate Principal
Balance of the Class A-[1][2A][2B][2C] 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 [_____]% per annum, 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, 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 Servicers 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 Servicers 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

                                      A-1-3

<PAGE>

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
Holders 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 Servicers and any agent of the Depositor, the
Master Servicer, the Trustee, the Securities Administrator or the Servicers 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 Servicers 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-1-4

<PAGE>

                  IN WITNESS WHEREOF, the Securities Administrator has caused
this Certificate to be duly executed.

Dated: October 10, 2003

                                        WELLS FARGO BANK MINNESOTA, NATIONAL
                                        ASSOCIATION
                                        as Securities Administrator

                                        By:_____________________________________
                                                    Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

                  This is one of the Class A-[1][2A][B][C] Certificates referred
to in the within-mentioned Agreement.

                                        WELLS FARGO BANK MINNESOTA, NATIONAL
                                        ASSOCIATION
                                        as Securities Administrator

                                        By:_____________________________________
                                                   Authorized Signatory

<PAGE>

                                  ABBREVIATIONS
                                  -------------

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:

<TABLE>
<CAPTION>
<S>                                               <C>
TEN COM   -  as tenants in common                 UNIF GIFT MIN ACT -        Custodian
                                                                             ---------
                                                                          (Cust) (Minor)
                                                                      under Uniform Gifts to
                                                                            Minors Act
TEN ENT   -  as tenants by the entireties
JT TEN    -  as joint tenants with right if                         _______________
             survivorship and not as tenants                        (State)
             in common
</TABLE>

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within 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.

<PAGE>

<TABLE>
<CAPTION>
<S>                                                       <C>
Series 2003-NC1, 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
Pass-Through Rate: Variable                               Issue Date: $______________

Date of Pooling and Servicing Agreement and               Denomination: $______________
Cut-off Date: October 1, 2003
                                                          Master Servicer: Wells Fargo Bank Minnesota,
                                                          National Association
First Distribution Date:
November 25, 2003                                         Trustee: Bank One National Association

No.___                                                    Issue Date: October 10, 2003

                                                          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-2-2

<PAGE>

          ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2003-NC1
                      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 SERVICERS, 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 Minnesota, National Association as
master servicer (the "Master Servicer") and securities administrator (the
"Securities Administrator"), The Provident Bank as a servicer, Ocwen Federal
Bank FSB, as a servicer (together, the "Servicers") and Bank One 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
immediately prior to such Distribution Date and

                                      A-2-3

<PAGE>

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 ____ % per annum, 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, 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 Servicers 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 Servicers 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

                                      A-2-4

<PAGE>

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 Servicers and any agent of the Depositor, the
Master Servicer, the Trustee, the Securities Administrator or the Servicers 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 Servicers 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-2-5

<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.

                                      A-2-6

<PAGE>

                  IN WITNESS WHEREOF, the Securities Administrator has caused
this Certificate to be duly executed.

Dated: October 10, 2003

                                        WELLS FARGO BANK MINNESOTA, NATIONAL
                                        ASSOCIATION
                                        as Securities Administrator

                                        By:_____________________________________
                                                    Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

                  This is one of the Class A-[1][2A][B][C] Certificates referred
to in the within-mentioned Agreement.

                                        WELLS FARGO BANK MINNESOTA, NATIONAL
                                        ASSOCIATION
                                        as Securities Administrator

                                        By:_____________________________________
                                                   Authorized Signatory

<PAGE>

                                  ABBREVIATIONS
                                  -------------

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:

<TABLE>
<CAPTION>
<S>                                               <C>
TEN COM   -  as tenants in common                 UNIF GIFT MIN ACT -        Custodian
                                                                             ---------
                                                                          (Cust) (Minor)
                                                                      under Uniform Gifts to
                                                                            Minors Act
TEN ENT   -  as tenants by the entireties
JT TEN    -  as joint tenants with right if                         _______________
             survivorship and not as tenants                        (State)
             in common
</TABLE>

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within 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 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, THE
             CLASS M-1 CERTIFICATES, THE CLASS M-2 CERTIFICATES, THE CLASS M-3
             CERTIFICATES, THE CLASS M-4 CERTIFICATES, THE CLASS M-5
             CERTIFICATES AND THE CLASS M-6 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 2003-NC1                                            Aggregate Certificate Principal Balance of the
                                                           Class CE Certificates as of the Issue Date:
Pass-Through Rate: Variable                                $_____________

Cut-off Date and date of Pooling and Servicing             Denomination: $_________________
Agreement: October 1, 2003
                                                           Master Servicer: Wells Fargo Bank Minnesota,
First Distribution Date: November 25, 2003                 National Association

No. __                                                     Trustee: Bank One National Association

Aggregate Notional Amount of the Class                     Issue Date: October 10, 2003
CE Certificates as of the Issue Date:
$_____________

Notional Amount: $_______________
</TABLE>

             DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF
             THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
             ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF
             AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE
             DENOMINATION OF THIS CERTIFICATE.

                                      A-4-2

<PAGE>

          ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2003-NC1
                      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 and fixed-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 SERVICERS, 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
Minnesota, National Association, as master servicer (the "Master Servicer") and
securities administrator (the "Securities Administrator"), The Provident Bank,
as a servicer, Ocwen Federal Bank FSB, as a servicer (together, the "Servicers")
and Bank One 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 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

                                      A-4-3

<PAGE>

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 Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee, the Securities
Administrator, the Servicers 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 Servicers 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 Act"), and an

                                      A-4-4

<PAGE>

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 Servicers and any agent of the Depositor, the
Master Servicer, the Trustee, the Securities Administrator or the Servicers 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 Servicers 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

                                      A-4-5

<PAGE>

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-4-6

<PAGE>

                  IN WITNESS WHEREOF, the Securities Administrator has caused
this Certificate to be duly executed.

Dated: October 10, 2003

                                        WELLS FARGO BANK MINNESOTA, NATIONAL
                                        ASSOCIATION
                                        as Securities Administrator

                                        By:_____________________________________
                                                    Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

                  This is one of the Class A-[1][2A][B][C] Certificates referred
to in the within-mentioned Agreement.

                                        WELLS FARGO BANK MINNESOTA, NATIONAL
                                        ASSOCIATION
                                        as Securities Administrator

                                        By:_____________________________________
                                                   Authorized Signatory

<PAGE>

                                  ABBREVIATIONS
                                  -------------

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:

<TABLE>
<CAPTION>
<S>                                               <C>
TEN COM   -  as tenants in common                 UNIF GIFT MIN ACT -        Custodian
                                                                             ---------
                                                                          (Cust) (Minor)
                                                                      under Uniform Gifts to
                                                                            Minors Act
TEN ENT   -  as tenants by the entireties
JT TEN    -  as joint tenants with right if                         _______________
             survivorship and not as tenants                        (State)
             in common
</TABLE>

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within 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
                                   -----------

                               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.

                                      A-5-1

<PAGE>

<TABLE>
<CAPTION>
<S>                                                        <C>
Series 2003-NC1                                            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: October 1, 2003                                 Denomination: $100.00

First Distribution Date: November 25, 2003                 Master Servicer: Wells Fargo Bank Minnesota,
                                                           National Association
No. __
                                                           Trustee: Bank One National Association

                                                           Issue Date: October 10, 2003
</TABLE>

             DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF
             THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
             ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF
             AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE
             DENOMINATION OF THIS CERTIFICATE.

                                      A-5-2

<PAGE>

          ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2003-NC1
                      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 and fixed-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 SERVICERS, 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
Minnesota, National Association, as master servicer (the "Master Servicer"), and
securities administrator (the "Securities Administrator"), The Provident Bank as
a servicer, Ocwen Federal Bank FSB, as a servicer (together, the "Servicers")
and Bank One 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

                                      A-5-3

<PAGE>

is the registered owner of Class P Certificates the aggregate initial
Certificate Principal Balance of which is in excess of the lesser of (i)
$5,000,000 or (ii) two-thirds of the aggregate initial Certificate Principal
Balance of the Class P Certificates, or otherwise by check mailed by first class
mail to the address of the Person entitled thereto, as such name and address
shall appear on the Certificate Register. Notwithstanding the above, the final
distribution on this Certificate will be made after due notice by the 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 Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee, the Securities
Administrator, the Servicers 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 Servicers 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 Act"), and an

                                      A-5-4

<PAGE>

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 Servicers and any agent of the Depositor, the
Master Servicer, the Trustee, the Securities Administrator or the Servicers 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 Servicers 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

                                      A-5-5

<PAGE>

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: October 10, 2003

                                        WELLS FARGO BANK MINNESOTA, NATIONAL
                                        ASSOCIATION
                                        as Securities Administrator

                                        By:_____________________________________
                                                    Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

                  This is one of the Class A-[1][2A][B][C] Certificates referred
to in the within-mentioned Agreement.

                                        WELLS FARGO BANK MINNESOTA, NATIONAL
                                        ASSOCIATION
                                        as Securities Administrator

                                        By:_____________________________________
                                                   Authorized Signatory

<PAGE>

                                  ABBREVIATIONS
                                  -------------

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:

<TABLE>
<CAPTION>
<S>                                               <C>
TEN COM   -  as tenants in common                 UNIF GIFT MIN ACT -        Custodian
                                                                             ---------
                                                                          (Cust) (Minor)
                                                                      under Uniform Gifts to
                                                                            Minors Act
TEN ENT   -  as tenants by the entireties
JT TEN    -  as joint tenants with right if                         _______________
             survivorship and not as tenants                        (State)
             in common
</TABLE>

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within 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
                                   -----------

                           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 OF THREE "REAL
             ESTATE MORTGAGE INVESTMENT CONDUITS" ("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,

                                      A-6-1

<PAGE>

             (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 2003-NC1, Class R                               Aggregate Percentage Interest of the Class R
                                                       Certificates as of the Issue Date: 100.00%
Date of Pooling and Servicing Agreement
and Cut-off Date: October 1, 2003                      Master Servicer: Wells Fargo Bank Minnesota,
                                                       National Association

First Distribution Date:                               Trustee: Bank One National Association
November 25, 2003
No __                                                  Issue Date: October 10, 2003
</TABLE>

                                      A-6-2

<PAGE>

          ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2003-NC1
                      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 SERVICERS, 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 Minnesota, National
Association, as master servicer (the "Master Servicer") and securities
administrator (the "Securities Administrator"), The Provident Bank as a
servicer, Ocwen Federal Bank FSB as a servicer (together, the "Servicers") and
Bank One 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 Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made

                                      A-6-4

<PAGE>

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 Servicers 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 Servicers 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
Holders 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 Administrator is obligated to register
or qualify the Class of

                                      A-6-5

<PAGE>

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 Servicers and any agent of the Depositor, the
Master Servicer, the Trustee, the Securities Administrator or the Servicers 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 Servicers nor any such agent shall be
affected by notice to the contrary.

                                      A-6-6

<PAGE>

                  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: October 10, 2003

                                        WELLS FARGO BANK MINNESOTA, NATIONAL
                                        ASSOCIATION
                                        as Securities Administrator

                                        By:_____________________________________
                                                    Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

                  This is one of the Class A-[1][2A][B][C] Certificates referred
to in the within-mentioned Agreement.

                                        WELLS FARGO BANK MINNESOTA, NATIONAL
                                        ASSOCIATION
                                        as Securities Administrator

                                        By:_____________________________________
                                                   Authorized Signatory

<PAGE>

                                  ABBREVIATIONS
                                  -------------

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:

<TABLE>
<CAPTION>
<S>                                               <C>
TEN COM   -  as tenants in common                 UNIF GIFT MIN ACT -        Custodian
                                                                             ---------
                                                                          (Cust) (Minor)
                                                                      under Uniform Gifts to
                                                                            Minors Act
TEN ENT   -  as tenants by the entireties
JT TEN    -  as joint tenants with right if                         _______________
             survivorship and not as tenants                        (State)
             in common
</TABLE>

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within 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 Minnesota, National Association
Sixth and Marquette Avenue
Minneapolis, Minnesota 55479
Attention: Corporate Trust ACE 2003-NC1

                  Re:  ACE Securities Corp. Home Equity Loan Trust,
                       Series 2003-NC1 Asset Backed Pass-Through Certificates,
                       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
October 1, 2003, among ACE Securities Corp. as Depositor, The Provident Bank as
a Servicer, Ocwen Federal Bank FSB as a Servicer, Wells Fargo Bank Minnesota,
National Association as Master Servicer and Securities Administrator and Bank
One 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 Minnesota, National Association
Sixth and Marquette Avenue
Minneapolis, Minnesota 55479
Attention: Corporate Trust ACE 2003-NC1

                  Re:  ACE Securities Corp. Home Equity Loan Trust,
                       Series 2003-NC1 Asset Backed Pass-Through Certificates,
                       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

                                      B-1-3

<PAGE>

             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 Servicers 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
             Securities Administrator or the Servicers 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 and the Servicers
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 October 1, 2003, among ACE Securities Corp. as Depositor, Wells
Fargo Bank Minnesota, National Association as Master Servicer and Securities
Administrator, The Provident Bank as a Servicer, Ocwen Federal Bank FSB as a
Servicer and Bank One National Association as Trustee, pursuant to which the
Certificates were issued.

                                                [TRANSFEREE]

                                                By:
                                                   -----------------------------
                                                Name:
                                                Title:

                                      B-1-4

<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 Minnesota, National
Association, 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?

                                      B-1-6

<PAGE>

                  6. If the answer to the foregoing question is "no", the
Transferee agrees that, in connection with any purchase of securities sold to
the Transferee for the account of a third party (including any separate account)
in reliance on Rule 144A, the Transferee will only purchase for the account of a
third party that at the time is a "qualified institutional buyer" within the
meaning of Rule 144A. In addition, the Transferee agrees that the Transferee
will not purchase securities for a third party unless the Transferee has
obtained a current representation letter from such third party or taken other
appropriate steps contemplated by Rule 144A to conclude that such third party
independently meets the definition of "qualified institutional buyer" set forth
in Rule 144A.

                  7. The Transferee will notify each of the parties to which
this certification is made of any changes in the information and conclusions
herein. Until such notice is given, the Transferee's purchase of the
Certificates will constitute a reaffirmation of this certification as of the
date of such purchase. In addition, if the Transferee is a bank or savings and
loan as provided above, the Transferee agrees that it will furnish to such
parties updated annual financial statements promptly after they become
available.

Dated:

                                                ________________________________
                                                Print Name of Transferee

                                                By:_____________________________
                                                Name:
                                                Title:

                                      B-1-7

<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 Minnesota, National
Association, 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

                                      B-1-8

<PAGE>

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.

                  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>

                                   EXHIBIT B-2
                                   -----------

                    FORM OF TRANSFEROR REPRESENTATION LETTER

                                                ____________, 20__

Wells Fargo Bank Minnesota, National Association
Sixth and Marquette Avenue
Minneapolis, Minnesota 55479
Attention: Corporate Trust ACE 2003-NC1

                  Re:  ACE Securities Corp. Home Equity Loan Trust,
                       Series 2003-NC1 Asset Backed Pass-Through Certificates,
                       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:

                                      B-2-1

<PAGE>

                            FORM OF TRANSFEREE LETTER

                                      _______________, 20__

Wells Fargo Bank Minnesota, National Association
Sixth and Marquette Avenue
Minneapolis, Minnesota 55479
Attention: Corporate Trust ACE 2003-NC1

                  Re:  ACE Securities Corp. Home Equity Loan Trust,
                       Series 2003-NC1 Asset Backed Pass-Through Certificates,
                       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

                                      B-2-2

<PAGE>

             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.

                  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 Servicers 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 Servicers 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 and the Servicers
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 2003-NC1, Asset Backed
                  Pass-Through Certificates, Series 2003-NC1, 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
                  March 31, 1988; (ii) that such tax would be on the transferor
                  or, if such transfer is through an agent (which person
                  includes a broker, nominee or middleman) for a non-Permitted
                  Transferee, on the agent; (iii) that

                                      B-3-1

<PAGE>

                  the person otherwise liable for the tax shall be relieved of
                  liability for the tax if the transferee furnishes to such
                  person an affidavit that the transferee is a Permitted
                  Transferee and, at the time of transfer, such person does not
                  have actual knowledge that the affidavit is false; and (iv)
                  that each of the Class R Certificates may be a "noneconomic
                  residual interest" within the meaning of proposed Treasury
                  regulations promulgated under the Code and that the transferor
                  of a "noneconomic residual interest" will remain liable for
                  any taxes due with respect to the income on such residual
                  interest, unless no significant purpose of the transfer is to
                  impede the assessment or collection of tax.

             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

                                      B-3-2

<PAGE>

                  hereby represents to and for the benefit of the person from
                  whom it acquired the Class R Certificates that the Owner
                  intends to pay taxes associated with holding such Class R
                  Certificates as they become due, fully understanding that it
                  may incur tax liabilities in excess of any cash flows
                  generated by the Class R Certificates.

             11.  The Owner has no present knowledge that it may become
                  insolvent or subject to a bankruptcy proceeding for so long as
                  it holds the Class R Certificates.

             12.  The Owner has no present knowledge or expectation that it will
                  be unable to pay any United States taxes owed by it so long as
                  any of the Certificates remain outstanding.

             13.  The Owner is not acquiring the Class R Certificates with the
                  intent to transfer the Class R Certificates to any person or
                  entity that will not have sufficient assets to pay any taxes
                  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

                                      B-3-3

<PAGE>

                  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-3-4

<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-3-5

<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-3-6

<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:

                                       H-1

<PAGE>

                                    EXHIBIT C

                         FORM OF SERVICER CERTIFICATION

Re:          ACE Securities Corp. Home Equity Loan Trust, Series 2003-NC1
             Asset Backed Pass-Through Certificates

             I, [identify the certifying individual], certify to ACE Securities
Corp. (the "Depositor"), Bank One National Association (the "Trustee") and Wells
Fargo Bank Minnesota, National Association (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, 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 Servicer
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 the Servicer under the Pooling and Servicing
Agreement has been provided to the Master Servicer.

             3. I am responsible for reviewing the activities performed by the
Servicer 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 Public
Accountant's Servicing Report submitted to the Master Servicer, the Servicer has
fulfilled its obligations under the Pooling and Servicing Agreement; and

             4. I have disclosed to the Master Servicer all significant
deficiencies relating to the Servicer'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.

                                       C-1

<PAGE>

             Capitalized terms used and not otherwise defined herein have the
meanings assigned thereto in the Pooling and Servicing Agreement, dated as of
October 1, 2003, among ACE Securities Corp., The Provident Bank, Wells Fargo
Bank Minnesota, National Association and Bank One National Association.

Date:        _________________________

_______________________________
[Signature] [Title]

                                       C-2AMERIQUEST MORTGAGE SECURITIES INC.

                                    Depositor

                           AMERIQUEST MORTGAGE COMPANY

                                 Master Servicer

                                       and

                      DEUTSCHE BANK NATIONAL TRUST COMPANY

                                     Trustee

                   ___________________________________________

                         POOLING AND SERVICING AGREEMENT
                           Dated as of October 1, 2003
                    _________________________________________

                     Asset-Backed Pass-Through Certificates

                                 Series 2003-10

<PAGE>

<TABLE>
<CAPTION>

                                                 TABLE OF CONTENTS

SECTION                                                                                                        PAGE

                                    ARTICLE I

                                                    DEFINITIONS

<S>                        <C>                                                                                 <C>
         SECTION 1.01.     Defined Terms..........................................................................3
         SECTION 1.02.     Allocation of Certain Interest Shortfalls.............................................54
         SECTION 1.03      Rights of the NIMS Insurer............................................................55

                                                    ARTICLE II

                                           CONVEYANCE OF MORTGAGE LOANS;
                                         ORIGINAL ISSUANCE OF CERTIFICATES

         SECTION 2.01.     Conveyance of Mortgage Loans..........................................................55
         SECTION 2.02.     Acceptance of REMIC I by the Trustee..................................................57
         SECTION 2.03.     Repurchase or Substitution of Mortgage Loans by the Seller or the
                           Depositor; Payment of Prepayment Charge Payment Amounts...............................59
         SECTION 2.04.     [Reserved]............................................................................62
         SECTION 2.05.     Representations, Warranties and Covenants of the Master Servicer.
                            .....................................................................................62
         SECTION 2.06.     Issuance of the REMIC I Regular Interests and the Class R-I Interest.
                            .....................................................................................65
         SECTION 2.07.     Conveyance of the REMIC I Regular Interests; Acceptance of
                           REMIC II by the Trustee...............................................................65
         SECTION 2.08.     Issuance of Class R Certificates......................................................65

                                                    ARTICLE III

                                           ADMINISTRATION AND SERVICING
                                               OF THE MORTGAGE LOANS

         SECTION 3.01.     Master Servicer to Act as Master Servicer.............................................66
         SECTION 3.02.     Collection of Certain Mortgage Loan Payments..........................................68
         SECTION 3.03.     [Reserved]............................................................................69
         SECTION 3.04.     Collection Account, Escrow Account and Distribution Account.
                            .....................................................................................69
         SECTION 3.05.     Permitted Withdrawals From the Collection Account, Escrow
                           Account and Distribution Account......................................................72
         SECTION 3.06.     Investment of Funds in the Collection Account, the Escrow Account,
                           the REO Account and the Distribution Account..........................................75
         SECTION 3.07.     Payment of Taxes, Insurance and Other Charges.........................................77

                                                        ii

<PAGE>

SECTION                                                                                                        PAGE

         SECTION 3.08.     Maintenance of Hazard Insurance.......................................................77
         SECTION 3.09.     Maintenance of Mortgage Blanket Insurance.............................................78
         SECTION 3.10.     Fidelity Bond; Errors and Omissions Insurance.........................................78
         SECTION 3.11.     Enforcement of Due-On-Sale Clauses; Assumption Agreements.
                            .....................................................................................79
         SECTION 3.12.     Realization Upon Defaulted Mortgage Loans.............................................80
         SECTION 3.13.     Title, Management and Disposition of REO Property.....................................81
         SECTION 3.14.     [Reserved]............................................................................84
         SECTION 3.15.     Reports of Foreclosure and Abandonment of Mortgaged Properties.
                            .....................................................................................85
         SECTION 3.16.     Optional Purchase of Defaulted Mortgage Loans.........................................85
         SECTION 3.17.     Trustee to Cooperate; Release of Mortgage Files.......................................86
         SECTION 3.18.     Servicing Compensation................................................................87
         SECTION 3.19.     Statement as to Compliance............................................................87
         SECTION 3.20.     Independent Public Accountants' Servicing Report......................................88
         SECTION 3.21.     Access to Certain Documentation.......................................................88
         SECTION 3.22.     [Reserved]............................................................................88
         SECTION 3.23.     Advance Facility......................................................................89

                                                    ARTICLE IV

                                          PAYMENTS TO CERTIFICATEHOLDERS

         SECTION 4.01.     Distributions.........................................................................91
         SECTION 4.02.     Statements to Certificateholders.....................................................102
         SECTION 4.03.     Remittance Reports and Other Reports to the Trustee; Advances;
                           Payments in Respect of Prepayment Interest Shortfalls................................106
         SECTION 4.04.     Allocation of Realized Losses........................................................108
         SECTION 4.05.     Compliance with Withholding Requirements.............................................110
         SECTION 4.06.     Commission Reporting.................................................................110
         SECTION 4.07.     [Reserved]...........................................................................112
         SECTION 4.08.     [Reserved]...........................................................................112
         SECTION 4.09.     [Reserved]...........................................................................112
         SECTION 4.10      Net WAC Rate Carryover Reserve Account...............................................112

                                                     ARTICLE V

                                                 THE CERTIFICATES

         SECTION 5.01.     The Certificates.....................................................................113
         SECTION 5.02.     Registration of Transfer and Exchange of Certificates................................115
         SECTION 5.03.     Mutilated, Destroyed, Lost or Stolen Certificates....................................120
         SECTION 5.04.     Persons Deemed Owners................................................................120
         SECTION 5.05.     Certain Available Information........................................................120

                                                        iii

<PAGE>

SECTION                                                                                                        PAGE

                                   ARTICLE VI

                      THE DEPOSITOR AND THE MASTER SERVICER

         SECTION 6.01.     Liability of the Depositor and the Master Servicer...................................122
         SECTION 6.02.     Merger or Consolidation of the Depositor or the Master Servicer.
                            ....................................................................................122
         SECTION 6.03.     Limitation on Liability of the Depositor, the Master Servicer and
                           Others...............................................................................122
         SECTION 6.04.     Limitation on Resignation of the Master Servicer.....................................123
         SECTION 6.05.     Rights of the Depositor in Respect of the Master Servicer............................124
         SECTION 6.06.     Sub-Servicing Agreements Between the Master Servicer and Sub-
                           Servicers............................................................................124
         SECTION 6.07.     Successor Sub-Servicers..............................................................126
         SECTION 6.08.     Liability of the Master Servicer.....................................................126
         SECTION 6.09.     No Contractual Relationship Between Sub-Servicers and the NIMS
                           Insurer, the Trustee or Certificateholders...........................................126
         SECTION 6.10.     Assumption or Termination of Sub-Servicing Agreements by Trustee.
                            ....................................................................................126
         SECTION 6.11.     Sub-Servicing Accounts...............................................................127

                                                    ARTICLE VII

                                                      DEFAULT

         SECTION 7.01.     Master Servicer Events of Default....................................................128
         SECTION 7.02.     Trustee to Act; Appointment of Successor.............................................130
         SECTION 7.03.     Notification to Certificateholders...................................................132
         SECTION 7.04.     Waiver of Master Servicer Events of Default..........................................132

                                        ARTICLE VIII CONCERNING THE TRUSTEE

         SECTION 8.01.     Duties of Trustee....................................................................133
         SECTION 8.02.     Certain Matters Affecting the Trustee................................................134
         SECTION 8.03.     The Trustee Not Liable for Certificates or Mortgage Loans............................135
         SECTION 8.04.     Trustee May Own Certificates.........................................................135
         SECTION 8.05.     Trustee's Fees and Expenses..........................................................135
         SECTION 8.06.     Eligibility Requirements for Trustee.................................................136
         SECTION 8.07.     Resignation and Removal of the Trustee...............................................136
         SECTION 8.08.     Successor Trustee....................................................................137
         SECTION 8.09.     Merger or Consolidation of Trustee...................................................138
         SECTION 8.10.     Appointment of Co-Trustee or Separate Trustee........................................138
         SECTION 8.11.     Appointment of Custodians............................................................139

                                                        iv

<PAGE>

SECTION                                                                                                        PAGE

         SECTION 8.12.     Appointment of Office or Agency......................................................139
         SECTION 8.13.     Representations and Warranties of the Trustee........................................140

                                                    ARTICLE IX

                                                    TERMINATION

         SECTION 9.01      Termination Upon Repurchase or Liquidation of All Mortgage Loans.
                            ....................................................................................141
         SECTION 9.02      Additional Termination Requirements..................................................143

                                                     ARTICLE X

                                                 REMIC PROVISIONS

         SECTION 10.01.             REMIC Administration........................................................144
         SECTION 10.02.             Prohibited Transactions and Activities......................................146
         SECTION 10.03.             Master Servicer and Trustee Indemnification.................................147

                                                    ARTICLE XI

                                             MISCELLANEOUS PROVISIONS

         SECTION 11.01.             Amendment...................................................................148
         SECTION 11.02.             Recordation of Agreement; Counterparts......................................149
         SECTION 11.03.             Limitation on Rights of Certificateholders..................................149
         SECTION 11.04.             Governing Law...............................................................150
         SECTION 11.05.             Notices.....................................................................150
         SECTION 11.06.             Severability of Provisions..................................................151
         SECTION 11.07.             Notice to Rating Agencies and the NIMS Insurer..............................151
         SECTION 11.08.             Article and Section References..............................................152
         SECTION 11.09.             Grant of Security Interest..................................................152
         SECTION 11.10     Third Party Rights...................................................................152

                                                         v
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

Exhibits

<S>               <C>
Exhibit A-1       Form of Class AV-1 Certificate
Exhibit A-2       Form of Class AV-2 Certificate
Exhibit A-3       Form of Class AF-1 Certificate
Exhibit A-4       Form of Class AF-2 Certificate
Exhibit A-5       Form of Class AF-3 Certificate
Exhibit A-6       Form of Class AF-4 Certificate
Exhibit A-7       Form of Class AF-5 Certificate
Exhibit A-8       Form of Class AF-6 Certificate
Exhibit A-9       Form of Class M-1 Certificate
Exhibit A-10      Form of Class M-2 Certificate
Exhibit A-11      Form of Class M-3 Certificate
Exhibit A-12      Form of Class M-4 Certificate
Exhibit A-13      Form of Class M-5 Certificate
Exhibit A-14      Form of Class MV-6 Certificate
Exhibit A-15      Form of Class MF-6 Certificate
Exhibit A-16      Form of Class CE Certificate
Exhibit A-17      Form of Class P Certificate
Exhibit A-18      Form of Class R Certificate
Exhibit B         Form of Lost Note Affidavit
Exhibit C-1       Form of Trustee's Initial Certification
Exhibit C-2       Form of Trustee's Final Certification
Exhibit C-3       Form of Trustee's Receipt of Mortgage Note
Exhibit D         Form of Mortgage Loan Purchase Agreement
Exhibit E         Request for Release
Exhibit           F-1 Form of Transferor Representation Letter and Form of
                  Transferee Representation Letter in Connection with Transfer
                  of Class CE and Class P Certificates Pursuant to Rule 144A
                  Under the 1933 Act
Exhibit F-2       Form of Transfer Affidavit and Agreement and Form of Transferor Affidavit in
                  Connection with Transfer of Residual Certificates
Exhibit G         Form of Certification with respect to ERISA and the Code
Exhibit H         Form of Cap Contracts
Exhibit I         Loss Mitigation Action Plan
Exhibit J-1       Form of Certification to Be Provided by the Depositor with Form 10-K
Exhibit J-2       Form of Certification to Be Provided to Depositor by the Trustee

Schedule 1        Mortgage Loan Schedule
Schedule 2        Prepayment Charge Schedule

</TABLE>

                                       vi

<PAGE>

                  This Pooling and Servicing Agreement, is dated and effective
as of October 1, 2003, among AMERIQUEST MORTGAGE SECURITIES INC., as Depositor,
AMERIQUEST MORTGAGE COMPANY, as Master Servicer and DEUTSCHE BANK NATIONAL TRUST
COMPANY, as Trustee.

                             PRELIMINARY STATEMENT:

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

<PAGE>

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

<TABLE>
<CAPTION>

                                      REMIC I                           Initial                    Latest Possible
       Designation                Remittance Rate               Uncertificated Balance            Maturity Date(1)
-------------------------- --------------------------- ---------------------------------------- -------------------------
<S>                               <C>                       <C>                                   <C>
         I-LTAA                     Variable(2)               $   587,999,862.90                    December 2033
         I-LTAV1                    Variable(2)               $     3,405,805.00                    December 2033
         I-LTAV2                    Variable(2)               $       516,385.00                    December 2033
         I-LTAF1                    Variable(2)               $       361,785.00                    December 2033
         I-LTAF2                    Variable(2)               $       124,270.00                    December 2033
         I-LTAF3                    Variable(2)               $       252,020.00                    December 2033
         I-LTAF4                    Variable(2)               $       135,960.00                    December 2033
         I-LTAF5                    Variable(2)               $       158,995.00                    December 2033
         I-LTAF6                    Variable(2)               $       114,780.00                    December 2033
         I-LTM1                     Variable(2)               $       318,000.00                    December 2033
         I-LTM2                     Variable(2)               $       270,000.00                    December 2033
         I-LTM3                     Variable(2)               $        60,000.00                    December 2033
         I-LTM4                     Variable(2)               $        66,000.00                    December 2033
         I-LTM5                     Variable(2)               $        60,000.00                    December 2033
         I-LTMV6                    Variable(2)               $        21,000.00                    December 2033
         I-LTMF6                    Variable(2)               $        45,000.00                    December 2033
         I-LTZZ                     Variable(2)               $     6,089,997.20                    December 2033
          I-LTP                     Variable(2)               $           100.00                    December 2033
        I-LT1SUB                    Variable(2)               $        12,494.70                    December 2033
        I-LT1GRP                    Variable(2)               $        80,610.81                    December 2033
        I-LT2SUB                    Variable(2)               $         1,894.40                    December 2033
        I-LT2GRP                    Variable(2)               $        12,222.10                    December 2033
        I-LT3SUB                    Variable(2)               $         4,210.87                    December 2033
        I-LT3GRP                    Variable(2)               $        27,167.07                    December 2033
         I-LTXX                     Variable(2)               $   599,861,260.15                    December 2033
________________
</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.

                                        2

<PAGE>

                                    REMIC II

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

<TABLE>
<CAPTION>

                                                                   Initial Aggregate
                                                                 Certificate Principal             Latest Possible
           Designation                 Pass-Through Rate              Balance                      Maturity Date(1)
---------------------------------- -------------------------- -----------------------------------------------------------
<S>                               <C>                       <C>                                   <C>

           Class AV-1                     Variable(2)                $ 681,161,000.00               December 2033
           Class AV-2                     Variable(2)                $ 103,277,000.00               December 2033
           Class AF-1                     Variable(2)                $  72,357,000.00               December 2033
           Class AF-2                     Variable(2)                $  24,854,000.00               December 2033
           Class AF-3                     Variable(2)                $  50,404,000.00               December 2033
           Class AF-4                     Variable(2)                $  27,192,000.00               December 2033
           Class AF-5                     Variable(2)                $  31,799,000.00               December 2033
           Class AF-6                     Variable(2)                $  22,956,000.00               December 2033
            Class M-1                     Variable(2)                $  63,600,000.00               December 2033
            Class M-2                     Variable(2)                $  54,000,000.00               December 2033
            Class M-3                     Variable(2)                $  12,000,000.00               December 2033
            Class M-4                     Variable(2)                $  13,200,000.00               December 2033
            Class M-5                     Variable(2)                $  12,000,000.00               December 2033
           Class MV-6                     Variable(2)                $   4,200,000.00               December 2033
           Class MF-6                     Variable(2)                $   9,000,000.00               December 2033
            Class CE                      Variable(3)                $  17,799,720.21               December 2033
             Class P                        N/A(4)                   $         100.00               December 2033
________________
</TABLE>

(1)      Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
         regulations, the Distribution Date immediately following the maturity
         date for the Mortgage Loans with the latest maturity date has been
         designated as the "latest possible maturity date" for each Class of
         Certificates.
(2)      Calculated in accordance with the definition of "Pass-Through Rate"
         herein.
(3)      The Class CE Certificates will accrue interest at its 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 II Regular Interests. The Class CE Certificates
         will not accrue interest on its Certificate Principal Balance.
(4)      The Class P Certificates will not accrue interest.

                  As of the Cut-off Date, the Group I Mortgage Loans had an
aggregate Scheduled Principal Balance equal to$806,108,084.26, the Group II
Mortgage Loans had an aggregate Scheduled Principal Balance equal to
$122,221,006.63 and the Group III Mortgage Loans had an aggregate Scheduled
Principal Balance equal to $271,670,729.32.

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

                                        3

<PAGE>

                                    ARTICLE I

                                   DEFINITIONS

                  SECTION 1.01.             Defined Terms.

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

                  "Accrued Certificate Interest": With respect to any Class of
Certificates (other than the Class P Certificates and the Residual Certificates)
and each Distribution Date, interest accrued during the related Interest Accrual
Period at the Pass-Through Rate for such Certificate for such Distribution Date
on the Certificate Principal Balance, in the case of the Class A Certificates
and the Mezzanine Certificates, or on the Notional Amount, in the case of the
Class 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 Adjustable-Rate 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 Fixed-Rate
Certificates and the Class CE Certificates will be based on a 360-day year
consisting of twelve 30-day months. Accrued Certificate Interest with respect to
each Distribution Date, as to any Class A Certificate, Mezzanine Certificate or
Class CE Certificate, shall be reduced by an amount equal to the portion
allocable to such Certificate pursuant to Section 1.02 hereof of the sum of (a)
the aggregate Prepayment Interest Shortfall, if any, for such Distribution Date
to the extent not covered by payments pursuant to Section 4.03(e) or allocated
to the Class CE Certificates and (b) the aggregate amount of any Relief Act
Interest Shortfall, if any, for such Distribution Date not allocated to the
Class CE Certificates pursuant to Section 1.02. In addition, Accrued Certificate
Interest with respect to each Distribution Date, as to any Class CE Certificate,
shall be reduced by an amount equal to the portion allocable to such Class CE
Certificate of Realized Losses, if any, pursuant to Section 4.04 hereof.

                  "Adjustable-Rate Certificates": The Class AV Certificates, the
Class AF-1 Certificates and the Mezzanine Certificates (other than the Class
MF-6 Certificates).

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

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

                                        4

<PAGE>

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

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

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

                  "Allocated Realized Loss Amount": With respect to any
Distribution Date and any Class of Mezzanine Certificates, the sum of (i) any
Realized Losses allocated to such Class of Certificates on such Distribution
Date and (ii) the amount of any Allocated Realized Loss Amount for such Class of
Certificates remaining unpaid from the previous Distribution Date.

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

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

                  "Available Funds": With respect to any Distribution Date, an
amount equal to (1) the sum of (a) the aggregate of the amounts on deposit in
the Collection Account and Distribution Account as of the close of business on
the related Determination Date, (b) the aggregate of any amounts received in
respect of an REO Property withdrawn from any REO Account and deposited in the
Distribution Account for such Distribution Date pursuant to Section 3.13, (c)
the aggregate of any amounts deposited in the Distribution Account by the Master
Servicer in respect of Prepayment Interest Shortfalls for such Distribution Date
pursuant to Section 4.03(e), (d) the aggregate of any Advances made by the
Master Servicer for such Distribution Date pursuant to Section 4.03 and (e) the
aggregate of any Advances made by the successor Master Servicer or the Trustee
for such Distribution Date pursuant to Section 7.02(b), reduced (to not less
than zero) by (2) the sum of (x) the portion of the amount described in clause
(1)(a) above that represents (i) Monthly Payments on the Mortgage Loans received
from a Mortgagor on or prior to the Determination Date but due during any Due
Period subsequent to the related Due Period, (ii) Principal Prepayments on the
Mortgage Loans received after the related Prepayment Period (together with any
interest

                                        5

<PAGE>

payments received with such Principal Prepayments to the extent they represent
the payment of interest accrued on the Mortgage Loans during a period subsequent
to the related Prepayment Period), (iii) Liquidation Proceeds and Insurance
Proceeds received in respect of the Mortgage Loans after the related Prepayment
Period, (iv) amounts reimbursable or payable to the Depositor, the Master
Servicer, the Trustee, the Seller or any Sub-Servicer pursuant to Section 3.05
or Section 3.06 or otherwise payable in respect of Extraordinary Trust Fund
Expenses, (v) Stayed Funds, (vi) the Trustee Fee payable from the Distribution
Account pursuant to Section 8.05, (vii) amounts deposited in the Collection
Account or the Distribution Account in error and (viii) the amount of any
Prepayment Charges collected by the Master Servicer and the amount of any Master
Servicer Prepayment Charge Payment Amounts and (y) amounts reimbursable to the
Trustee for an advance made pursuant to Section 7.02(b) which advance the
Trustee has determined to be nonrecoverable from the Stayed Funds in respect of
which it was made.

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

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

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

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

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

                  "Cap Contracts": Each of the cap contracts between Deutsche
Bank National Trust Company, as Trustee and the counterparty thereunder, which
is for the benefit of the Class AV Certificates and the Mezzanine Certificates
(other than the Class MF-6 Certificates), a form of which is attached hereto as
Exhibit H.

                  "Certificate": Any one of the Depositor's Asset-Backed
Pass-Through Certificates, Series 2003-10, Class AV-1, Class AV-2, Class AF-1,
Class AF-2, Class AF-3, Class AF-4, Class AF-5, Class AF-6, Class M-1, Class
M-2, Class M-3, Class M-4, Class M-5, Class MV-6, Class MF- 6, Class CE, Class P
and Class R, issued under this Agreement.

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

                                        6

<PAGE>

Certificates to be made on such Distribution Date), and the denominator of which
is the initial aggregate Certificate Principal Balance (or the Notional Amount,
in the case of the Class CE Certificates) of such Class of Certificates as of
the Closing Date.

                  "Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in the Certificate Register, except that a
Disqualified Organization or a Non-United States Person shall not be a Holder of
a Residual Certificate for any purposes hereof and, solely for the purposes of
giving any consent pursuant to this Agreement, any Certificate registered in the
name of the Depositor or the Master Servicer or any Affiliate thereof shall be
deemed not to be outstanding and the Voting Rights to which it is entitled shall
not be taken into account in determining whether the requisite percentage of
Voting Rights necessary to effect any such consent has been obtained, except as
otherwise provided in Section 11.01. The Trustee and the NIMS Insurer may
conclusively rely upon a certificate of the Depositor or the Master Servicer in
determining whether a Certificate is held by an Affiliate thereof. All
references herein to "Holders" or "Certificateholders" shall reflect the rights
of Certificate Owners as they may indirectly exercise such rights through the
Depository and participating members thereof, except as otherwise specified
herein; provided, however, that the Trustee and the NIMS Insurer shall be
required to recognize as a "Holder" or "Certificateholder" only the Person in
whose name a Certificate is registered in the Certificate Register.

                  "Certificate Margin": With respect to the Adjustable-Rate
Certificates and, for purposes of the Marker Rate, the specified REMIC I Regular
Interest, as follows:

<TABLE>
<CAPTION>

   Class               REMIC I Regular Interest                  Certificate Margin
---------    --------------------------------------            -----------------------
<S>          <C>                                               <C>
                                                               (1) (%) (2) (%)
   AV-1      REMIC I Regular Interest I-LTAV1                   0.380           0.760
   AV-2      REMIC I Regular Interest I-LTAV2                   0.350           0.700
   AF-1      REMIC I Regular Interest I-LTAF1                   0.160           0.320
    M-1      REMIC I Regular Interest I-LTM1                    0.700           1.050
    M-2      REMIC I Regular Interest I-LTM2                    1.700           2.550
    M-3      REMIC I Regular Interest I-LTM3                    1.950           2.925
    M-4      REMIC I Regular Interest I-LTM4                    3.050           4.575
    M-5      REMIC I Regular Interest I-LTM5                    3.750           5.625
   MV-6      REMIC I Regular Interest I-LTMV6                   3.750           5.625
</TABLE>
____________
(1) For each Distribution Date through and including the
Optional Termination Date. (2) For each Distribution Date
thereafter.

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

                  "Certificate Principal Balance": With respect to each Class A
Certificate, Mezzanine Certificate or Class P Certificate as of any date of
determination, the Certificate Principal Balance of such Certificate on the
Distribution Date immediately prior to such date of determination, minus all
distributions allocable to principal made thereon and in the case of a Mezzanine
Certificate, Realized Losses allocated thereto on such immediately prior
Distribution Date (or, in the case of any

                                        7

<PAGE>

date of determination up to and including the first Distribution Date, the
initial Certificate Principal Balance of such Certificate, as stated on the face
thereof). With respect to each Class CE Certificate as of any date of
determination, an amount equal to the Percentage Interest evidenced by such
Certificate times the excess, if any, of (A) the then aggregate Uncertificated
Balances of the REMIC I Regular Interests over (B) the then aggregate
Certificate Principal Balances of the Class A Certificates, the Mezzanine
Certificates and the Class P Certificates then outstanding.

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

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

                  "Class A Certificate": Any one of the Class AV Certificates or
the Class AF Certificates.

                  "Class A Principal Distribution Amount": With respect to any
Distribution Date, an amount equal to the sum of (i) the Class AV-1 Principal
Distribution Amount, (ii) the Class AV-2 Principal Distribution Amount and (iii)
the Class AF Principal Distribution Amount.

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

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

                  "Class AF Principal Distribution Amount" With respect to any
Distribution Date, the excess of (x) the aggregate Certificate Principal Balance
of the Class AF Certificates immediately prior to such Distribution Date over
(y) the lesser of (A) the product of (i) 69.00% and (ii) the aggregate Stated
Principal Balance of the Group III 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 III 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 $1,358,353.65.

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

                                       8

<PAGE>

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

                  "Class AF-3 Certificate": Any one of the Class AF-3
Certificates executed by the Trustee, and authenticated and delivered by the
Certificate Registrar, substantially in the form annexed hereto as Exhibit A-5
and evidencing a Regular Interest in REMIC II for purposes of the REMIC
Provisions.

                  "Class AF-4 Certificate": Any one of the Class AF-4
Certificates executed by the Trustee, and authenticated and delivered by the
Certificate Registrar, substantially in the form annexed hereto as Exhibit A-6
and evidencing a Regular Interest in REMIC II for purposes of the REMIC
Provisions.

                  "Class AF-5 Certificate": Any one of the Class AF-5
Certificates executed by the Trustee, and authenticated and delivered by the
Certificate Registrar, substantially in the form annexed hereto as Exhibit A-7
and evidencing a Regular Interest in REMIC II for purposes of the REMIC
Provisions.

                  "Class AF-6 Certificate": Any one of the Class AF-6
Certificates executed by the Trustee, and authenticated and delivered by the
Certificate Registrar, substantially in the form annexed hereto as Exhibit A-8
and evidencing a Regular Interest in REMIC II for purposes of the REMIC
Provisions.

                  "Class AV Certificates": The Class AV-1 Certificates and the
Class AV-2 Certificates.

                  "Class AV-1 Allocation Percentage": With respect to the Class
AV-1 Certificates and any Distribution Date, 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 AV-1 Certificate": Any one of the Class AV-1
Certificates executed by the Trustee, and authenticated and delivered by the
Certificate Registrar, substantially in the form annexed hereto as Exhibit A-1
and evidencing a Regular Interest in REMIC II for purposes of the REMIC
Provisions.

                  "Class AV-1 Principal Distribution Amount" With respect to any
Distribution Date, the excess of (x) the Certificate Principal Balance of the
Class AV-1 Certificates immediately prior to such Distribution Date over (y) the
lesser of (A) the product of (i) 69.00% 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

                                        9

<PAGE>

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 $4,030,540.42.

                  "Class AV-2 Allocation Percentage": With respect to the Class
AV-2 Certificates and any Distribution Date, 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 AV-2 Certificate": Any one of the Class AV-2
Certificates executed by the Trustee, and authenticated and delivered by the
Certificate Registrar, substantially in the form annexed hereto as Exhibit A-2
and evidencing a Regular Interest in REMIC II for purposes of the REMIC
Provisions.

                  "Class AV-2 Principal Distribution Amount" With respect to any
Distribution Date, the excess of (x) the Certificate Principal Balance of the
Class AV-2 Certificates immediately prior to such Distribution Date over (y) the
lesser of (A) the product of (i) 69.00% 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 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 $611,105.03.

                  "Class CE Certificate": Any one of the Class CE Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-16 and
evidencing a Regular Interest in REMIC II for purposes of the REMIC Provisions.

                  "Class M-1 Certificate": Any one of the Class M-1 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-9 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, 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) 79.60% 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

                                       10

<PAGE>

the related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) minus
$5,999,999.10.

                  "Class M-2 Certificate": Any one of the Class M-2 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-10 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, 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) 88.60% 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
$5,999,999.10.

                  "Class M-3 Certificate": Any one of the Class M-3 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-11 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, 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) 90.60% 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 $5,999,999.10.

                                       11

<PAGE>

                  "Class M-4 Certificate": Any one of the Class M-4 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-12 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, 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) 92.80% 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 $5,999,999.10.

                  "Class M-5 Certificate": Any one of the Class M-5 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-13 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, 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) 94.80% 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

                                       12

<PAGE>

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 $5,999,999.10.

                  "Class M-6 Principal Distribution Amount": With respect to any
Distribution Date, 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 aggregate
Certificate Principal Balance of the Class MV-6 Certificates and the Class MF-6
Certificates immediately prior to such Distribution Date over (y) the lesser of
(A) the product of (i) 97.20% 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
$5,999,999.10.

                  "Class MV-6 Certificate": Any one of the Class MV-6
Certificates executed by the Trustee, and authenticated and delivered by the
Certificate Registrar, substantially in the form annexed hereto as Exhibit A-14
and evidencing a Regular Interest in REMIC II for purposes of the REMIC
Provisions.

                  "Class MF-6 Certificate": Any one of the Class MF-6
Certificates executed by the Trustee, and authenticated and delivered by the
Certificate Registrar, substantially in the form annexed hereto as Exhibit A-15
and evidencing a Regular Interest in REMIC II for purposes of the REMIC
Provisions.

                  "Class P Certificate": Any one of the Class P Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-17,
representing the right to distributions as set forth herein and therein and
evidencing a regular interest in REMIC II.

                  "Class R Certificate": Any one of the Class R Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-18 and
evidencing the ownership of the Class R-I Interest and the Class R-II Interest.

                                       13

<PAGE>

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

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

                  "Closing Date": October 10, 2003.

                  "Code":  The Internal Revenue Code of 1986.

                  "Collection Account": The account or accounts created and
maintained by the Master Servicer pursuant to Section 3.04(a), which shall be
entitled "Ameriquest Mortgage Company, as Master Servicer for Deutsche Bank
National Trust Company, as Trustee, in trust for the registered Holders of
Ameriquest Mortgage Securities Inc., Asset-Backed Pass-Through Certificates,
Series 2003-10." The Collection Account must be an Eligible Account.

                  "Commission": The Securities and Exchange Commission.

                  "Compensating Interest": As defined in Section 4.03(e) hereof.

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

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

          REMIC I Regular Interest               Class
--------------------------------------  ---------------------

REMIC I Regular Interest I-LTAV1                 AV-1
REMIC I Regular Interest I-LTAV2                 AV-2
REMIC I Regular Interest I-LTAF1                 AF-1
REMIC I Regular Interest I-LTAF2                 AF-2
REMIC I Regular Interest I-LTAF3                 AF-3
REMIC I Regular Interest I-LTAF4                 AF-4
REMIC I Regular Interest I-LTAF5                 AF-5
REMIC I Regular Interest I-LTAF6                 AF-6
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-LTMV6                 MV-6
REMIC I Regular Interest I-LTMF6                 MF-6
REMIC I Regular Interest I-LTP                     P

                  "Credit Enhancement Percentage": For any Distribution Date,
the percentage equivalent of a fraction, calculated after taking into account
distributions of principal on the

                                       14

<PAGE>

Mortgage Loans and distribution of the Group I Principal Distribution Amount,
the Group II Principal Distribution Amount and the Group III Principal
Distribution Amount to the Certificates then entitled to distributions of
principal on such Distribution Date, the numerator of which is the sum of the
aggregate Certificate Principal Balances of the Mezzanine Certificates and the
Class CE Certificates, and the denominator of which is the 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).

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

                  "Custodian": A Custodian, which shall initially be Deutsche
Bank National Trust Company.

                  "Cut-off Date": With respect to any Mortgage Loan, the close
of business on October 1, 2003. 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 outstanding Stated Principal Balance of the
Mortgage Loan, which valuation results from a proceeding initiated under the
Bankruptcy Code.

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

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

                  "Delinquency Percentage": With respect to any Distribution
Date, the percentage equivalent of a fraction, the numerator of which is the
aggregate Stated Principal Balance of all Mortgage Loans as of the last day of
the previous calendar month that, as of such last day of the previous calendar
month, are 60 or more days delinquent (measured under the OTS delinquency
calculation methodology), 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; provided, however,
that any Mortgage Loan purchased by the Master Servicer or the NIMS

                                       15

<PAGE>

Insurer pursuant to Section 3.16 shall not be included in either the numerator
or the denominator for purposes of calculating the Delinquency Percentage.

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

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

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

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

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

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

                  "Disqualified Organization": Any of the following: (i) the
United States, any State or political subdivision thereof, any possession of the
United States, or any agency or instrumentality of any of the foregoing (other
than an instrumentality which is a corporation if all of its activities are
subject to tax and, except for Freddie Mac, a majority of its board of directors
is not selected by such governmental unit), (ii) any foreign government, any
international organization, or any agency or instrumentality of any of the
foregoing, (iii) any organization (other than certain farmers' cooperatives
described in Section 521 of the Code) which is exempt from the tax imposed by
Chapter 1 of the Code (including the tax imposed by Section 511 of the Code on
unrelated business

                                       16

<PAGE>

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 Trustee pursuant to Section 3.04(e) which shall be
entitled "Deutsche Bank National Trust Company, as Trustee, in trust for the
registered Holders of Ameriquest Mortgage Securities Inc., Asset-Backed
Pass-Through Certificates, Series 2003-10." The Distribution Account must be an
Eligible Account.

                  "Distribution Date": The 25th day of any month, or if such
25th day is not a Business Day, the next succeeding Business Day, commencing in
November 2003.

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

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

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

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

                  "Escrow Account": The account or accounts created and
maintained pursuant to Section 3.04(c).

                  "Escrow Payments": The amounts constituting taxes, and/or fire
and hazard insurance premiums escrowed by the Mortgagor with the mortgagee
pursuant to a voluntary escrow agreement related to any Mortgage Loan.

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

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

                                       17

<PAGE>

Amount for such Distribution Date (calculated for this purpose only after
assuming that 100% of the Principal Remittance Amount on such Distribution Date
has been distributed) over (ii) the Overcollateralization Target Amount for such
Distribution Date.

                  "Expense Adjusted 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 applicable Mortgage Rate thereon as of
the first day of the month preceding the month in which the Distribution Date
occurs minus the sum of (i) the Trustee Fee Rate and (ii) the Servicing Fee
Rate.

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

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

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

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

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

                  "Fitch": Fitch Ratings, or its successor in interest.

                  "Fixed-Rate Certificates": The Class AF Certificates (other
than the Class AF-1 Certificates) and the Class MF-6 Certificates.

                  "Fixed-Rate Mortgage Loan": Each of the Mortgage Loans
identified on the Mortgage Loan Schedule as having a fixed Mortgage Rate.

                  "Formula Rate": For any Distribution Date and each class of
Adjustable-Rate Certificates (other than the Class AF-1 Certificates), the
lesser of (i) LIBOR plus the related

                                       18

<PAGE>

Certificate Margin and (ii) the Maximum Cap Rate. The Formula Rate for any
Distribution Date and the Class AF-1 Certificates shall equal LIBOR plus the
related Certificate Margin.

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

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

                   "Group I Interest Remittance Amount": With respect to any
Distribution Date, that portion of the Available Funds for such Distribution
Date that represents interest received or advanced on the Group I Mortgage
Loans.

                  "Group I Mortgage Loan": A Mortgage Loan assigned to Loan
Group I with a principal balance at origination that conforms to Freddie Mac and
Fannie Mae loan limits.

                  "Group I Principal Distribution Amount": With respect to any
Distribution Date, the sum of (i) the principal portion of each Monthly Payment
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 Stated
Principal Balance of any Group I Mortgage Loan that was purchased during the
related Prepayment Period pursuant to or as contemplated by Section 2.03,
Section 3.16(a) or Section 9.01 and the amount of any shortfall deposited in the
Collection Account in connection with the substitution of a Deleted Mortgage
Loan in Loan Group I pursuant to Section 2.03 during the related Prepayment
Period; (iii) the principal portion of all other unscheduled collections
(including, without limitation, Principal Prepayments, Insurance Proceeds,
Liquidation Proceeds and REO Principal Amortization) received during the related
Prepayment Period on the Group I Mortgage Loans, net of any portion thereof that
represents a recovery of principal for which an advance was made by the Master
Servicer pursuant to Section 4.03 in respect of a preceding Distribution Date
and (iv) the Class AV-1 Allocation Percentage of the amount of any
Overcollateralization Increase Amount for such Distribution Date MINUS (v) the
Class AV-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, 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, that portion of the Available Funds for such Distribution
Date that represents interest received or advanced on the Group II Mortgage
Loans.

                  "Group II Mortgage Loan": A Mortgage Loan assigned to Loan
Group II with a principal balance at origination that may or may not conform to
Freddie Mac and Fannie Mae loan limits.

                                       19

<PAGE>

                  "Group II Principal Distribution Amount": With respect to any
Distribution Date, the sum of (i) the principal portion of each Monthly Payment
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 Stated
Principal Balance of any Group II Mortgage Loan that was purchased during the
related Prepayment Period pursuant to or as contemplated by Section 2.03,
Section 3.16(a) or Section 9.01 and the amount of any shortfall deposited in the
Collection Account in connection with the substitution of a Deleted Mortgage
Loan in Loan Group II pursuant to Section 2.03 during the related Prepayment
Period; (iii) the principal portion of all other unscheduled collections
(including, without limitation, Principal Prepayments, Insurance Proceeds,
Liquidation Proceeds and REO Principal Amortization) received during the related
Prepayment Period on the Group II Mortgage Loans, net of any portion thereof
that represents a recovery of principal for which an advance was made by the
Master Servicer pursuant to Section 4.03 in respect of a preceding Distribution
Date and (iv) the Class AV-2 Allocation Percentage of the amount of any
Overcollateralization Increase Amount for such Distribution Date MINUS (v) the
Class AV-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, the sum of the amounts described in clauses (i) through (iii)
of the definition of Group II Principal Distribution Amount.

                  "Group III Interest Remittance Amount": With respect to any
Distribution Date, that portion of the Available Funds for such Distribution
Date that represents interest received or advanced on the Group III Mortgage
Loans.

                  "Group III Mortgage Loan": An Adjustable-Rate Mortgage Loan
assigned to Loan Group III with a principal balance at origination that may or
may not conform to Fannie Mae or Freddie Mac loan limits.

                  "Group III Principal Distribution Amount": With respect to any
Distribution Date, the sum of (i) the principal portion of each Monthly Payment
on the Group III Mortgage Loans due during the related Due Period, whether or
not received on or prior to the related Determination Date; (ii) the Stated
Principal Balance of any Group III Mortgage Loan that was purchased during the
related Prepayment Period pursuant to or as contemplated by Section 2.03,
Section 3.16(a) or Section 9.01 and the amount of any shortfall deposited in the
Collection Account in connection with the substitution of a Deleted Mortgage
Loan in Loan Group III pursuant to Section 2.03 during the related Prepayment
Period; (iii) the principal portion of all other unscheduled collections
(including, without limitation, Principal Prepayments, Insurance Proceeds,
Liquidation Proceeds and REO Principal Amortization) received during the related
Prepayment Period on the Group III Mortgage Loans, net of any portion thereof
that represents a recovery of principal for which an advance was made by the
Master Servicer pursuant to Section 4.03 in respect of a preceding Distribution
Date and (iv) the Class AF Allocation Percentage of the amount of any
Overcollateralization Increase Amount for such Distribution Date MINUS (v) the
Class AF Allocation Percentage of the amount of any Overcollateralization
Reduction Amount for such Distribution Date.

                                       20

<PAGE>

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

                  "Indenture": An indenture relating to the issuance of notes
secured by the Class CE Certificates, the Class P Certificates and/or the Class
R Certificates (or any portion thereof) which may or may not be guaranteed by
the NIMS Insurer.

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

                  "Independent Contractor": Either (i) any Person (other than
the Master Servicer) that would be an "independent contractor" with respect to
REMIC I within the meaning of Section 856(d)(3) of the Code if such REMIC 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 such REMIC
does not receive or derive any income from such Person and provided that the
relationship between such Person and such REMIC is at arm's length, all within
the meaning of Treasury Regulation Section 1.856-4(b)(5), or (ii) any other
Person (including the Master Servicer) if the Trustee has received an Opinion of
Counsel to the effect that the taking of any action in respect of any REO
Property by such Person, subject to any conditions therein specified, that is
otherwise herein contemplated to be taken by an Independent Contractor will not
cause such REO Property to cease to qualify as "foreclosure property" within the
meaning of Section 860G(a)(8) of the Code (determined without regard to the
exception applicable for purposes of Section 860D(a) of the Code), or cause any
income realized in respect of such REO Property to fail to qualify as Rents from
Real Property.

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

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

                                       21

<PAGE>

                  "Interest Accrual Period": With respect to any Distribution
Date and the Adjustable- Rate Certificates, the period commencing on the
Distribution Date in 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 Fixed-Rate
Certificates, the Class CE Certificates and the REMIC I Regular Interests, the
one-month period ending on the last day of the calendar month preceding the
month in which such Distribution Date occurs.

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

                  "Interest Determination Date": With respect to the
Adjustable-Rate Certificates, and solely for purposes of calculating the Marker
Rate, REMIC I Regular Interest I-LTAV1, REMIC I Regular Interest I-LTAV2, REMIC
I Regular Interest I-LTAF1, 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 and REMIC I Regular Interest I-LTMV6 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 Certificate, any Mezzanine Certificate and any
Class CE Certificate, the aggregate Accrued Certificate Interest on the
Certificates of such Class for such Distribution Date.

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

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

                  "Liquidation Proceeds": The amount (other than Insurance
Proceeds or amounts received in respect of the rental of any REO Property prior
to REO Disposition) received by the

                                       22

<PAGE>

Master Servicer in connection with (i) the taking of all or a part of a
Mortgaged Property by exercise of the power of eminent domain or condemnation,
(ii) the liquidation of a defaulted Mortgage Loan through a trustee's sale,
foreclosure sale or otherwise, or (iii) the repurchase, substitution or sale of
a Mortgage Loan or an REO Property pursuant to or as contemplated by Section
2.03, Section 3.13, Section 3.16(a) or Section 9.01.

                  "Loan Group": Loan Group I, Loan Group II or Loan Group III,
as the context requires.

                  "Loan Group I": The group of Mortgage Loans identified in the
Mortgage Loan Schedule as having been assigned to Loan Group I.

                  "Loan Group II": The group of Mortgage Loans identified in the
Mortgage Loan Schedule as having been assigned to Loan Group II.

                  "Loan Group III": The group of Mortgage Loans identified in
the Mortgage Loan Schedule as having been assigned to Loan Group III.

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

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

                  "Lockout Distribution Percentage": With respect to the Class
AF-6 Certificates and any Distribution Date, the indicated percentage of the
Lockout Certificate Percentage for such Distribution Date:

    DISTRIBUTION DATE OCCURRING IN              PERCENTAGE
---------------------------------------   --------------------
November 2003 through October 2006                  0%
November 2006 through October 2008                  45%
November 2008 through October 2009                  80%
November 2009 through October 2010                 100%
November 2010 and thereafter                       300%

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

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

                                       23

<PAGE>

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

                  "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 REMIC I Regular Interest I-LTAV1,
REMIC I Regular Interest I-LTAV2, REMIC I Regular Interest I-LTAF1, REMIC I
Regular Interest I-LTAF2, REMIC I Regular Interest I-LTAF3, REMIC I Regular
Interest I-LTAF4, REMIC I Regular Interest I-LTAF5, REMIC I Regular Interest
I-LTAF6, 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-LTMV6, REMIC I Regular Interest
I-LTMF6 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 the
related Formula Rate (or in the case of REMIC I Regular Interest I-LTAF2, REMIC
I Regular Interest I-LTAF3, REMIC I Regular Interest I-LTAF4, REMIC I Regular
Interest I-LTAF5, REMIC I Regular Interest I-LTAF6 and REMIC I Regular Interest
I-LTMF6 the related fixed 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, that
solely for this purpose, calculations of the REMIC I Remittance Rate and the
related caps with respect to REMIC I Regular Interest I-LTAV1, REMIC I Regular
Interest I-LTAV2, 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 and REMIC I Regular Interest I-LTMV6 shall be
multiplied by a fraction, the numerator of which is the actual number of days in
the Interest Accrual Period and the denominator of which is 30.

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

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

                  "Master Servicer Prepayment Charge Payment Amount": The
amounts payable by the Master Servicer pursuant to Section 2.03(b) in respect of
any waived (or, with respect to subsequent changes of law, any unenforceable)
Prepayment Charges.

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

                  "Master Servicer Reporting Date": With respect to any
Distribution Date, 3:00 p.m. New York time on the 18th day of the calendar month
in which such Distribution Date occurs or, if such 18th day is not a Business
Day, the Business Day immediately succeeding such 18th day.

                                       24

<PAGE>

                  "Master Servicer Termination Test": With respect to any
Distribution Date, the Master Servicer Termination Test will be failed if the
Cumulative Loss Percentage exceeds 4.00%.

                  "Maximum Cap Rate": For any Distribution Date with respect to
the Class AV-1 Certificates, a per annum rate equal to the product of (x) the
weighted average of the Expense Adjusted Net Maximum Mortgage Rates of the Group
I Mortgage Loans, weighted on the basis of the outstanding Stated Principal
Balances of the Group I Mortgage Loans as of the first day of the month
preceding the month of 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) 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 any Distribution Date with respect to the Class AV-2
Certificates, a per annum rate equal to the product of (x) the weighted average
of the Expense Adjusted Net Maximum Mortgage Rates of the Group II Mortgage
Loans, weighted on the basis of the outstanding Stated Principal Balances of the
Group II Mortgage Loans as of the first day of the month preceding the month of
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) 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 any Distribution Date with respect to the Mezzanine
Certificates, a per annum rate equal to (x) the weighted average of the Expense
Adjusted Net Maximum Mortgage Rates of (i) the Group I Mortgage Loans (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), (ii) the Group II
Mortgage Loans (as of the first day of the month preceding the month of 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) and (iii) the Group III Mortgage Loans (as of the first day of the month
preceding the month of 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), in each case, weighted on the basis of the results
of subtracting from the aggregate Stated Principal Balance of each Loan Group
the current Certificate Principal Balance of the related Class A Certificates
and with respect to the Mezzanine Certificates (other than the Class MF-6
Certificates), multiplied by (y) a fraction, the numerator of which is 30 and
the denominator of which is the actual number of days elapsed in the related
Interest Accrual Period.

                  "Maximum 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-LTAV1, REMIC I Regular Interest I-LTAV2, REMIC I Regular
Interest I-LTAF1, REMIC I Regular Interest I-LTAF2, REMIC I Regular Interest
I-LTAF3, REMIC I Regular Interest I-LTAF4,

                                       25

<PAGE>

REMIC I Regular Interest I-LTAF5, REMIC I Regular Interest I-LTAF6, 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-LTMV6 and REMIC I Regular Interest I-LTMF6
for such Distribution Date, with the rate on each such REMIC I Regular Interest
subject to a cap equal to the related Formula Rate (or in the case of REMIC I
Regular Interest I-LTAF2, REMIC I Regular Interest I-LTAF3, REMIC I Regular
Interest I-LTAF4, REMIC I Regular Interest I-LTAF5, REMIC I Regular Interest
I-LTAF6 and REMIC I Regular Interest I-LTMF6 the related fixed rate), provided,
however, that solely for this purpose, calculations of the REMIC I Remittance
Rate and the related caps with respect to REMIC I Regular Interest I- LTAV1,
REMIC I Regular Interest I-LTAV2, 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 and REMIC I Regular Interest
I-LTMV6 shall be multiplied by a fraction, the numerator of which is the actual
number of days in the Interest Accrual Period and the denominator of which is
30.

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

                  "Mezzanine Certificate": Any one of the Class M-1
Certificates, the Class M-2 Certificates, the Class M-3 Certificates, the Class
M-4 Certificates, the Class M-5 Certificates, the Class MV-6 Certificates and
the Class MF-6 Certificates.

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

                  "Monthly Payment": With respect to any Mortgage Loan, the
scheduled monthly payment of principal and interest on such Mortgage Loan which
is payable by the related Mortgagor from time to time under the related Mortgage
Note, determined: (a) after giving effect to (i) any Deficient Valuation and/or
Debt Service Reduction with respect to such Mortgage Loan and (ii) any reduction
in the amount of interest collectible from the related Mortgagor pursuant to the
Relief Act; (b) without giving effect to any extension granted or agreed to by
the Master Servicer pursuant to Section 3.02; and (c) on the assumption that all
other amounts, if any, due under such Mortgage Loan are paid when due.

                  "Moody's": Moody's Investors Service, or its successor in
interest.

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

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

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

                                       26

<PAGE>

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

                  "Mortgage Loan Schedule": As of any date, the list of Mortgage
Loans included in REMIC I on such date, separately identifying the Group I
Mortgage Loans, the Group II Mortgage Loans and the Group III Mortgage Loans,
attached hereto as Schedule 1. The Mortgage Loan Schedule shall set forth the
following information with respect to each Mortgage Loan:

                  (1) the Seller's Mortgage Loan identifying number;

                  (2) [Reserved];

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

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

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

                  (6) the original months to maturity;

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

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

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

                  (10) the stated maturity date;

                  (11) the amount of the Monthly Payment due on the first Due
         Date after the Cut- off Date;

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

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

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

                  (15) with respect to the Adjustable-Rate Mortgage Loans, the
         Gross Margin;

                  (16) a code indicating the purpose of the Mortgage Loan (I.E.,
         purchase, refinance debt consolidation cashout, or refinance debt
         consolidation no cashout);

                                       27

<PAGE>

                  (17) with respect to the Adjustable-Rate Mortgage Loans, the
         Maximum Mortgage Rate;

                  (18) with respect to the Adjustable-Rate Mortgage Loans, the
         Minimum Mortgage Rate;

                  (19) the Mortgage Rate at origination;

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

                  (21) a code indicating the documentation program (I.E., Full
         Documentation, Limited Documentation or Stated Income);

                  (22) with respect to the Adjustable-Rate Mortgage Loans, the
         first Adjustment Date immediately following the Cut-off Date;

                  (23) the risk grade;

                  (24) the Value of the Mortgaged Property;

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

                  (26) the FICO score of the primary Mortgagor.

                  The Mortgage Loan Schedule shall set forth the following
information with respect to the Mortgage Loans by Loan Group and in the
aggregate as of the Cut-off Date: (1) the number of Mortgage Loans; (2) the
current Stated 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.

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

                  "Mortgage Rate": With respect to each Mortgage Loan, the
annual rate at which interest accrues on such Mortgage Loan from time to time in
accordance with the provisions of the related Mortgage Note, which rate (i) with
respect to the Fixed-Rate Mortgage Loans, shall remain constant at the rate set
forth in the Mortgage Loan Schedule as the Mortgage Rate in effect immediately
following the Cut-off Date and (ii) with respect to the Adjustable-Rate Mortgage
Loans, (A) as of any date of determination until the first Adjustment Date
following the Cut-off Date shall

                                       28

<PAGE>

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 the Adjustable-Rate
Mortgage Loans on any Adjustment Date shall never be more than the lesser of (i)
the sum of the Mortgage Rate in effect immediately prior to the Adjustment Date
plus the related Periodic Rate Cap, if any, and (ii) the related Maximum
Mortgage Rate, and shall never be less than the greater of (i) the Mortgage Rate
in effect immediately prior to the Adjustment Date less the Periodic Rate Cap,
if any, and (ii) the related Minimum Mortgage Rate. With respect to each
Mortgage Loan that becomes an REO Property, as of any date of determination, the
annual rate determined in accordance with the immediately preceding sentence as
of the date such Mortgage Loan became an REO Property.

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

                  "Mortgagor":  The obligor on a Mortgage Note.

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

                  "Net WAC Pass-Through Rate": For any Distribution Date with
respect to the Class AV-1 Certificates, a per annum rate equal to the product of
(x) the weighted average of the Expense Adjusted Net Mortgage Rates of the Group
I Mortgage Loans, weighted on the basis of the outstanding Stated Principal
Balances of the Group I Mortgage Loans as of the first day of the month
preceding the month of 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) 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 the REMIC
I Remittance Rate on REMIC I Regular Interest I-LT1GRP, weighted on the basis of
the Uncertificated Balance of such REMIC I Regular Interest.

                                       29

<PAGE>

                  For any Distribution Date with respect to the Class AV-2
Certificates, a per annum rate equal to the product of (x) the weighted average
of the Expense Adjusted Net Mortgage Rates of the Group II Mortgage Loans,
weighted on the basis of the outstanding Stated Principal Balances of the Group
II Mortgage Loans as of the first day of the month preceding the month of 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) 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 the REMIC I Remittance Rate on
REMIC I Regular Interest I-LT2GRP, weighted on the basis of the Uncertificated
Balance of such REMIC I Regular Interest.

                  For any Distribution Date with respect to the Class AF
Certificates, a per annum rate equal to the weighted average of the Expense
Adjusted Net Mortgage Rates of the Group III Mortgage Loans, weighted on the
basis of the outstanding Stated Principal Balances of the Group III Mortgage
Loans as of the first day of the month preceding the month of 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) and, in
the case of the Class AF-1 Certificates, multiplied by 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
the REMIC I Remittance Rate on REMIC I Regular Interest I-LT3GRP, weighted on
the basis of the Uncertificated Balance of such REMIC I Regular Interest.

                  For any Distribution Date with respect to the Mezzanine
Certificates, a per annum rate equal to (x) the weighted average of the Expense
Adjusted Net Mortgage Rates of (i) the Group I Mortgage Loans (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), (ii) the Group II Mortgage Loans
(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 (iii) the Group III
Mortgage Loans (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), in each case, weighted on the basis of the results of subtracting from
the aggregate Stated Principal Balance of each Loan Group the current
Certificate Principal Balance of the related Class A Certificates and with
respect to the Mezzanine Certificates (other than the Class MF-6 Certificates),
multiplied by (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 the REMIC I Remittance Rates on
(a) REMIC I Regular Interest I- LT1SUB, subject to a cap and a floor equal to
the Expense Adjusted Net Mortgage Rates of the Group I Mortgage Loans, (b) REMIC
I Regular Interest I-LT2SUB, subject to a cap and a floor equal to the Expense
Adjusted Net Mortgage Rates of the Group II Mortgage Loans and (c) REMIC I
Regular Interest I-LT3SUB, subject to a cap and a floor equal to the Expense
Adjusted Net Mortgage

                                       30

<PAGE>

Rates of the Group III 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 of
Class A Certificates and the Mezzanine Certificates and any Distribution Date,
the sum of (A) the excess of (i) the amount of interest such Certificates would
have accrued for such Distribution Date had the related Pass-Through Rate been
calculated at the Formula Rate (in the case of the Adjustable-Rate Certificates)
or the related fixed rate (in the case of the Fixed-Rate Certificates), over
(ii) the amount of interest accrued on such Certificates at the related Net WAC
Pass-Through Rate for such Distribution Date and (B) the related Net WAC Rate
Carryover Amount for the previous Distribution Date not previously paid,
together with interest thereon at a rate equal to the Formula Rate (in the case
of the Adjustable-Rate Certificates) or the related fixed rate (in the case of
the Fixed-Rate Certificates) applicable for such class in each case for the
Interest Accrual Period for the current Distribution Date.

                  "Net WAC Rate Carryover Reserve Account": The Net WAC Rate
Carryover Reserve Account established and maintained pursuant to Section 4.10.

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

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

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

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

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

                  "Notional Amount": With respect to the Class CE Certificates
and any Distribution Date, the aggregate Uncertificated Balances of the REMIC I
Regular Interests immediately prior to such Distribution Date.

                  "Officers' Certificate": With respect to the Depositor, a
certificate signed by the Chairman of the Board, the Vice Chairman of the Board,
the President or a vice president (however

                                       31

<PAGE>

denominated), and by the Treasurer, the Secretary, or one of the assistant
treasurers or assistant secretaries. With respect to the Master Servicer, any
officer who is authorized to act for the Master Servicer in matters relating to
this Agreement, and whose action is binding upon the Master Servicer, initially
including those individuals whose names appear on the list of authorized
officers delivered at the closing.

                  "Offered Certificate": Any one of the Class A Certificates and
the Mezzanine Certificates, issued under this Agreement.

                  "One-Month LIBOR": With respect to the Adjustable-Rate
Certificates, REMIC I Regular Interest I-LTAV1, REMIC I Regular Interest
I-LTAV2, REMIC I Regular Interest I-LTAF1, 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 and REMIC I Regular
Interest I-LTMV6 and any Interest Accrual Period therefor, the rate determined
by the Trustee on the related Interest Determination Date on the basis of the
offered rate for one-month U.S. dollar deposits, as such rate appears on
Telerate Page 3750 as of 11:00 a.m. (London time) on such Interest Determination
Date; provided that if such rate does not appear on Telerate Page 3750, the rate
for such date will be determined on the basis of the offered rates of the
Reference Banks for one- month U.S. dollar deposits, as of 11:00 a.m. (London
time) on such Interest Determination Date. In such event, the Trustee will
request the principal London office of each of the Reference Banks to provide a
quotation of its rate. If on such Interest Determination Date, two or more
Reference Banks provide such offered quotations, One-Month LIBOR for the related
Interest Accrual Period shall be the arithmetic mean of such offered quotations
(rounded upwards if necessary to the nearest whole multiple of 1/16%). If on
such Interest Determination Date, fewer than two Reference Banks provide such
offered quotations, One-Month LIBOR for the related Interest Accrual Period
shall be the higher of (i) LIBOR as determined on the previous Interest
Determination Date and (ii) the Reserve Interest Rate. Notwithstanding the
foregoing, if, under the priorities described above, LIBOR for an Interest
Determination Date would be based on LIBOR for the previous Interest
Determination Date for the third consecutive Interest Determination Date, the
Trustee shall select, after consultation with the NIMS Insurer, an alternative
comparable index (over which the Trustee has no control), used for determining
one-month Eurodollar lending rates that is calculated and published (or
otherwise made available) by an independent party.

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

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

                  "Originators": Collectively Ameriquest Mortgage Company and
Town & Country Credit Corporation.

                                       32

<PAGE>

                  "Overcollateralized 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
(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) over (b) the sum of the
aggregate Certificate Principal Balances of the Class A Certificates, the
Mezzanine Certificates and the Class P Certificates as of such Distribution Date
(after giving effect to distributions to be made on such Distribution Date).

                  "Overcollateralization Deficiency Amount": With respect to any
Distribution Date, the excess, if any, of (a) the Overcollateralization Target
Amount applicable to such Distribution Date over (b) the Overcollateralized
Amount applicable to such Distribution Date (calculated for this purpose only,
after taking into account the distributions to be made of the Principal
Remittance Amount on such Distribution Date).

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

                  "Overcollateralization Reduction Amount": With respect to any
Distribution Date, an amount equal to the lesser of (a) the Excess
Overcollateralized Amount and (b) the Principal Remittance Amount.

                  "Overcollateralization Target Amount": With respect to any
Distribution Date (i) prior to the Stepdown Date, 1.50% of the aggregate Stated
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)
3.00% of the aggregate Stated Principal Balance of the Mortgage Loans as of the
last day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced
and unscheduled collections of principal received during the related Prepayment
Period) and (y) $5,999,999.10, or (iii) on or after the Stepdown Date and if a
Trigger Event is in effect, the Overcollateralization Target Amount for the
immediately preceding Distribution Date.

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

                  "Pass-Through Rate": With respect to the Adjustable-Rate
Certificates and any Distribution Date, the lesser of (x) the related Formula
Rate for such Distribution Date and (y) the Net WAC Pass-Through Rate for such
Distribution Date.

                                       33

<PAGE>

                  With respect to the Class AF-2 Certificates and any
Distribution Date, the lesser of (x) 2.540% per annum and (y) the Net WAC
Pass-Through Rate for such class for such Distribution Date.

                  With respect to the Class AF-3 Certificates and any
Distribution Date, the lesser of (x) 3.230% per annum and (y) the Net WAC
Pass-Through Rate for such class for such Distribution Date.

                  With respect to the Class AF-4 Certificates and any
Distribution Date, the lesser of (x) 4.440% per annum and (y) the Net WAC
Pass-Through Rate for such class for such Distribution Date.

                  With respect to the Class AF-5 Certificates and any
Distribution Date, the lesser of (x) 5.470% per annum in the case of each
Distribution Date through and including the Optional Termination Date, or 5.970%
per annum, in the case of any Distribution Date thereafter and (y) the Net WAC
Pass-Through Rate for such class for such Distribution Date.

                  With respect to the Class AF-6 Certificates and any
Distribution Date, the lesser of (x) 4.710% per annum in the case of each
Distribution Date through and including the Optional Termination Date, or 5.210%
per annum, in the case of any Distribution Date thereafter and (y) the Net WAC
Pass-Through Rate for such class for such Distribution Date.

                  With respect to the Class MF-6 Certificates and any
Distribution Date, the lesser of (x) 5.250% per annum in the case of each
Distribution Date through and including the Optional Termination Date, or 5.750%
per annum, in the case of any Distribution Date thereafter and (y) the Net WAC
Pass-Through Rate for such class 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 (xviii) below, and the denominator of which is the aggregate
Uncertificated Balance of REMIC I Regular Interests I-LTAA, I-LTAV1, I-LTAV2, I-
LTAF1, I-LTAF2, I-LTAF3, I-LTAF4, I-LTAF5, I-LTAF6, I-LTM1, I-LTM2, I-LTM3,
I-LTM4, I- LTM5, I-LTMV6 and I-LTMF6. 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 I Regular Interest I-LTAA;

                  ii. the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTAV1 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTAV1;

                  iii. the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTAV2 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTAV2;

                                       34

<PAGE>

                  iv. the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTAF1 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTAF1;

                  v. the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTAF2 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTAF2;

                  vi. the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTAF3 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTAF3;

                  vii. the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTAF4 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTAF4;

                  viii. the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTAF5 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTAF5;

                  ix. the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTAF6 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTAF6;

                  x. 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;

                  xi. 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;

                  xii. 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;

                  xiii. 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;

                  xiv. 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;

                                       35

<PAGE>

                  xv. the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTMV6 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTMV6;

                  xvi. the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTMF6 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTMF6;

                  xvii. 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

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

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

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

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

                                       36

<PAGE>

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

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

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

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

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

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

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

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

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

                  "Plan": Any employee benefit plan or certain other retirement
plans and arrangements, including individual retirement accounts and annuities,
Keogh plans and bank

                                       37

<PAGE>

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.

                  "Prepayment Assumption": As defined in the Prospectus
Supplement.

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

                  "Prepayment Charge Schedule": As of any date, the list of
Prepayment Charges included in the Trust Fund on such date, attached hereto as
Schedule 2 (including the prepayment charge summary attached thereto). The
Prepayment Charge Schedule shall set forth the following information with
respect to each Prepayment Charge:

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

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

                  (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;

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

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

                  "Prepayment Interest Excess": With respect to any Distribution
Date, for each Mortgage Loan that was the subject of a Principal Prepayment in
full during the portion of the related Prepayment Period occurring between the
first day of the calendar month in which such Distribution Date occurs and the
Determination Date of the calendar month in which such Distribution Date occurs,
an amount equal to interest (to the extent received) at the applicable Net
Mortgage Rate on the amount of such Principal Prepayment for the number of days
commencing on the first day of the calendar month in which such Distribution
Date occurs and ending on the last date through which interest is collected from
the related Mortgagor. The Master Servicer may withdraw such Prepayment Interest
Excess from the Collection Account in accordance with Section 3.05(a)(iv).

                  "Prepayment Interest Shortfall": With respect to any
Distribution Date, for each Mortgage Loan that was the subject of a Principal
Prepayment in full during the portion of the related

                                       38

<PAGE>

Prepayment Period occurring between the first day of the related Prepayment
Period and the last day of the calendar month preceding the month in which such
Distribution Date occurs, an amount equal to interest at the applicable Net
Mortgage Rate on the amount of such Principal Prepayment for the number of days
commencing on the day after the last date on which interest is collected from
the related Mortgagor and ending on the last day of the calendar month preceding
such Distribution Date. The obligations of the Master Servicer in respect of any
Prepayment Interest Shortfall are set forth in Section 4.03(e).

                  "Prepayment Period": With respect to any Distribution Date,
the period commencing on the day after the Determination Date in the calendar
month preceding the calendar month in which such Distribution Date occurs (or,
in the case of the first Distribution Date, commencing on October 1, 2003) and
ending on the Determination Date of the calendar month in which such
Distribution Date occurs.

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

                  "Principal Remittance Amount": With respect to any
Distribution Date, the sum of (i) the Group I Principal Remittance Amount, (ii)
the Group II Principal Remittance Amount and (iii) the Group III Principal
Remittance Amount.

                  "Prospectus Supplement": The Prospectus Supplement, dated
October 8, 2003, relating to the public offering of the Offered Certificates.

                  "PTCE": A Prohibited Transaction Class Exemption.

                  "Purchase Price": With respect to any Mortgage Loan or REO
Property to be purchased pursuant to or as contemplated by Section 2.03, Section
3.16(a) or Section 9.01, and as confirmed by an Officers' Certificate from the
Master Servicer to the Trustee, an amount equal to the sum of (i) 100% of the
Stated Principal Balance thereof as of the date of purchase (or such other price
as provided in Section 9.01), (ii) in the case of (x) a Mortgage Loan, accrued
interest on such Stated Principal Balance at the applicable Net Mortgage Rate in
effect from time to time from the Due Date as to which interest was last covered
by a payment by the Mortgagor or an advance by the Master Servicer, which
payment or advance had as of the date of purchase been distributed pursuant to
Section 4.01, through the end of the calendar month in which the purchase is to
be effected and (y) an REO Property, the sum of (1) accrued interest on such
Stated Principal Balance at the applicable Net Mortgage Rate in effect from time
to time from the Due Date as to which interest was last covered by a payment by
the Mortgagor or an advance by the Master Servicer through the end of the
calendar month immediately preceding the calendar month in which such REO
Property was acquired, plus (2) REO Imputed Interest for such REO Property for
each calendar month commencing with the calendar month in which such REO
Property was acquired and ending with the calendar month in which such purchase
is to be effected, net of the total of all net rental income, Insurance
Proceeds, Liquidation Proceeds and Advances that as of the date of purchase had
been distributed as or to cover REO Imputed Interest pursuant to Section 4.01,
(iii) any unreimbursed

                                       39

<PAGE>

Servicing Advances and Advances and any unpaid Servicing Fees allocable to such
Mortgage Loan or REO Property, (iv) any amounts previously withdrawn from the
Collection Account in respect of such Mortgage Loan or REO Property pursuant to
Sections 3.05(a)(v) and 3.16(a), and (v) in the case of a Mortgage Loan required
to be purchased pursuant to Section 2.03, expenses reasonably incurred or to be
incurred by the Master Servicer, the NIMS Insurer or the Trustee in respect of
the breach or defect giving rise to the purchase obligation, including any costs
and damages incurred by the Trust Fund in connection with any violation by such
loan of any predatory or abusive lending law.

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

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

                                       40

<PAGE>

                  "Realized Loss": With respect to each Mortgage Loan as to
which a Final Recovery Determination has been made, an amount (not less than
zero) equal to (i) the unpaid Stated 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 3.05(a)(v) and Section 3.12(c), minus
(iv) the proceeds, if any, received in respect of such Mortgage Loan during the
calendar month in which such Final Recovery Determination was made, net of
amounts that are payable therefrom to the Master Servicer with respect to such
Mortgage Loan pursuant to Section 3.05(a)(ii).

                  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 Stated Principal Balance of the related Mortgage Loan as of the date of
acquisition of such REO Property on behalf of REMIC I, plus (ii) accrued
interest from the Due Date as to which interest was last paid by the Mortgagor
in respect of the related Mortgage Loan through the end of the calendar month
immediately preceding the calendar month in which such REO Property was
acquired, calculated in the case of each calendar month during such period (A)
at an annual rate equal to the annual rate at which interest was then accruing
on the related Mortgage Loan and (B) on a principal amount equal to the Stated
Principal Balance of the related Mortgage Loan as of the close of business on
the Distribution Date during such calendar month, plus (iii) REO Imputed
Interest for such REO Property for each calendar month commencing with the
calendar month in which such REO Property was acquired and ending with the
calendar month in which such Final Recovery Determination was made, plus (iv)
any amounts previously withdrawn from the Collection Account in respect of the
related Mortgage Loan pursuant to Section 3.05(a)(v) and Section 3.12(c), minus
(v) the aggregate of all Advances made by the Master Servicer in respect of such
REO Property or the related Mortgage Loan for which the Master Servicer has been
or, in connection with such Final Recovery Determination, will be reimbursed
pursuant to Section 3.13 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 3.13.

                  With respect to each Mortgage Loan which has become the
subject of a Deficient Valuation, the difference between the Stated Principal
Balance of the Mortgage Loan outstanding immediately prior to such Deficient
Valuation and the Stated 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.

                                       41

<PAGE>

                  "Record Date": With respect to each Distribution Date and any
Book-Entry Certificate (other than the Fixed-Rate Certificates), the Business
Day immediately preceding such Distribution Date. With respect to each
Distribution Date and any other Class of Certificates, including any Definitive
Certificates, the last Business Day of the month immediately preceding the month
in which such Distribution Date occurs.

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

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

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

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

                  "Relief Act": The Soldiers' and Sailors' Civil Relief Act of
1940, as amended or any applicable state law providing similar relief.

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

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

                  "REMIC I": The segregated pool of assets subject hereto,
constituting the primary trust created hereby and to be administered hereunder,
with respect to which a REMIC election is to be made, consisting of: (i) such
Mortgage Loans and Prepayment Charges as from time to time are subject to this
Agreement, together with the Mortgage Files relating thereto, and together with
all collections thereon and proceeds thereof, (ii) any REO Property, together
with all collections thereon and proceeds thereof, (iii) the Trustee's rights
with respect to the Mortgage Loans under all insurance policies required to be
maintained pursuant to this Agreement and any proceeds thereof, (iv) the
Depositor's rights under the Mortgage Loan Purchase Agreement (including any
security interest created thereby) to the extent conveyed pursuant to Section
2.01 and (v) the Collection Account (other than any amounts representing any
Master Servicer Prepayment Charge Payment Amounts), the Distribution Account
(other than any amounts representing any Master Servicer Prepayment Charge
Payment Amounts) and any REO Account and such assets that are deposited therein
from time to time and any investments thereof, together with any and all income,
proceeds

                                       42

<PAGE>

and payments with respect thereto. Notwithstanding the foregoing, however, REMIC
I specifically excludes any Master Servicer Prepayment Charge Payment Amounts,
the Net WAC Rate Carryover Reserve Account, the Cap Contracts, all payments and
other collections of principal and interest due on the Mortgage Loans on or
before the Cut-off Date and all Prepayment Charges payable in connection with
Principal Prepayments made before the Cut-off Date.

                  "REMIC I Interest Loss Allocation Amount": With respect to any
Distribution Date, an amount (subject to adjustment based on the actual number
of days elapsed in the respective Interest Accrual Periods for the indicated
Regular Interests for such Distribution Date) equal to (a) the product of (i)
50% of 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": 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-LTAV1, REMIC I
Regular Interest I-LTAV2, REMIC I Regular Interest I-LTAF1, REMIC I Regular
Interest I-LTAF2, REMIC I Regular Interest I-LTAF3, REMIC I Regular Interest
I-LTAF4, REMIC I Regular Interest I-LTAF5, REMIC I Regular Interest I-LTAF6,
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-LTMV6, REMIC I Regular Interest
I-LTMF6, REMIC I Regular Interest I-LTZZ and REMIC I Regular Interest I-LTP.

                  "REMIC I Overcollateralization Target Amount": 0.50% of the
Overcollateralization Target Amount.

                  "REMIC I Overcollateralized 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-LTAV1, REMIC I Regular Interest I-LTAV2,
REMIC I Regular Interest I-LTAF1, REMIC I Regular Interest I-LTAF2, REMIC I
Regular Interest I-LTAF3, REMIC I Regular Interest I-LTAF4, REMIC I Regular
Interest I-LTAF5, REMIC I Regular Interest I-LTAF6, 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-LTMV6, REMIC I Regular Interest I-LTMF6 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 the product of (i) 50% of the
aggregate Stated Principal Balance of the Mortgage Loans and REO Properties then
outstanding and (ii) 1 minus a fraction, the numerator of which is two times the
aggregate of the Uncertificated Balances of REMIC I Regular Interest I- LTAV1,
REMIC I Regular Interest I-LTAV2, REMIC I Regular Interest I-LTAF1, REMIC I
Regular Interest I-LTAF2, REMIC I Regular Interest I-LTAF3, REMIC I Regular
Interest I-LTAF4, REMIC I Regular Interest I-LTAF5, REMIC I Regular Interest
I-LTAF6, 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-LTMV6 and REMIC I Regular Interest
I-LTMF6 and the denominator of which is the aggregate of the Uncertificated

                                       43

<PAGE>

Balances of REMIC I Regular Interest I-LTAV1, REMIC I Regular Interest I-LTAV2,
REMIC I Regular Interest I-LTAF1, REMIC I Regular Interest I-LTAF2, REMIC I
Regular Interest I-LTAF3, REMIC I Regular Interest I-LTAF4, REMIC I Regular
Interest I-LTAF5, REMIC I Regular Interest I-LTAF6, 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-LTMV6, REMIC I Regular Interest I-LTMF6 and REMIC I Regular Interest
I- LTZZ.

                  "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.

                  "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-LTAF1": 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-LTAF1
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-LTAF2": 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-LTAF2
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-LTAF3": 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-LTAF3
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-LTAF4": 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-LTAF4
shall accrue interest at the related REMIC I Remittance Rate in

                                       44

<PAGE>

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-LTAF5": 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-LTAF5
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-LTAF6": 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-LTAF6
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-LTAV1": 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-LTAV1
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-LTAV2": 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-LTAV2
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.

                                       45

<PAGE>

                  "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-LTMV6": 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-LTMV6
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-LTMF6": 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-LTMF6
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

                                       46

<PAGE>

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

                  "REMIC I Regular Interest I-LT1SUB": 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-LT1SUB
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-LT1GRP": 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-LT1GRP
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-LT2SUB": 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-LT2SUB
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-LT2GRP": 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-LT2GRP
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-LT3SUB": 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-LT3SUB
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-LT3GRP": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in

                                       47

<PAGE>

REMIC I. REMIC I Regular Interest I-LT3GRP 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-LTAV1, REMIC I Regular Interest
I-LTAV2, REMIC I Regular Interest I-LTAF1, REMIC I Regular Interest I-LTAF2,
REMIC I Regular Interest I-LTAF3, REMIC I Regular Interest I-LTAF4, REMIC I
Regular Interest I-LTAF5, REMIC I Regular Interest I-LTAF6, 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-LTMV6, REMIC I Regular Interest I-LTMF6, REMIC I Regular
Interest I-LTZZ, REMIC I Regular Interest I-LTP, REMIC I Regular Interest
I-LT1SUB, REMIC I Regular Interest I- LT2SUB, REMIC I Regular Interest I-LT3SUB
and REMIC I Regular Interest I-LTXX, the weighted average of the Expense
Adjusted Net Mortgage Rates of the Mortgage Loans

                  With respect to REMIC I Regular Interest I-LT1GRP, the
weighted average of the Expense Adjusted Net Mortgage Rates of the Group I
Mortgage Loans.

                  With respect to REMIC I Regular Interest I-LT2GRP, the
weighted average of the Expense Adjusted Net Mortgage Rates of the Group II
Mortgage Loans.

                  With respect to REMIC I Regular Interest I-LT3GRP, the
weighted average of the Expense Adjusted Net Mortgage Rates of the Group III
Mortgage Loans.

                  "REMIC I Sub WAC Allocation Percentage": 50% of any amount
payable from or loss attributable to the Mortgage Loans, which shall be
allocated to REMIC I Regular Interest I- LT1SUB, REMIC I Regular Interest
I-LT1GRP, REMIC I Regular Interest I-LT2SUB, REMIC I Regular Interest I-LT2GRP,
REMIC I Regular Interest I-LT3SUB, REMIC I Regular Interest I- LT3GRP 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 "SUB,", equal to the ratio among, with respect to each such REMIC I
Regular Interest, the excess of (x) the aggregate Stated Principal Balance of
the Mortgage Loans in the related Loan Group over (y) the current Certificate
Principal Balance of Class A Certificates in the related Loan Group.

                  "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 I Certificateholders pursuant to Section 2.09, and all amounts
deposited therein, with respect to which a separate REMIC election is to be
made.

                  "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.

                                       48

<PAGE>

                  "REMIC Regular Interest": Any REMIC I Regular Interest.

                  "REMIC Remittance Rate": The REMIC I Remittance Rate.

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

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

                  "REO Account": Each of the accounts maintained by the Master
Servicer in respect of an REO Property pursuant to Section 3.13 which account
may be the Collection Account subject to Section 3.13.

                  "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
9.01 that is allocable to such REO Property) or otherwise, net of any portion of
such amounts (i) payable pursuant to Section 3.13(c) in respect of the proper
operation, management and maintenance of such REO Property or (ii) payable or
reimbursable to the Master Servicer pursuant to Section 3.13(d) for unpaid
Servicing Fees in respect of the related Mortgage Loan and unreimbursed
Servicing Advances and Advances in respect of such REO Property or the related
Mortgage Loan, over (b) the REO Imputed Interest in respect of such REO Property
for such calendar month.

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

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

                  "Reserve Interest Rate": With respect to any Interest
Determination Date, the rate per annum that the Trustee determines to be either
(i) the arithmetic mean (rounded upwards if

                                       49

<PAGE>

necessary to the nearest whole multiple of 1/16%) of the one-month U.S. dollar
lending rates which New York City banks selected by the Trustee are quoting on
the relevant Interest Determination Date to the principal London offices of
leading banks in the London interbank market or (ii) in the event that the
Trustee can determine no such arithmetic mean, the lowest one-month U.S. dollar
lending rate which New York City banks selected by the Trustee are quoting on
such Interest Determination Date to leading European banks.

                  "Residential Dwelling": Any one of the following: (i) an
attached or detached one- family dwelling, (ii) a detached two- to four-family
dwelling, (iii) a one-family dwelling unit in a condominium project or (iv) a
detached or attached one-family dwelling in a planned unit development, none of
which is a co-operative, mobile or manufactured home (unless such mobile or
manufactured home is defined as real property under applicable state law).

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

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

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

                  "Scheduled Principal Balance": With respect to any Mortgage
Loan: (a) as of the Cut-off Date, the outstanding Stated 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

                                       50

<PAGE>

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

                  "Seller": Ameriquest Mortgage Company, 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 with respect to the Class A Certificates.

                  "Servicing Advances": The reasonable "out-of-pocket" costs and
expenses incurred by the Master Servicer in connection with a default,
delinquency or other unanticipated event by the Master Servicer in the
performance of its servicing obligations, including, but not limited to, the
cost of (i) the preservation, restoration and protection of a Mortgaged
Property, (ii) any enforcement or judicial proceedings, including foreclosures,
in respect of a particular Mortgage Loan, (iii) the management (including
reasonable fees in connection therewith) and liquidation of any REO Property and
(iv) the performance of its obligations under Section 3.01, Section 3.04(d),
Section 3.08, Section 3.12 and Section 3.13. The Master Servicer shall not be
required to make any Servicing Advance in respect of a Mortgage Loan or REO
Property that, in the good faith business judgment of the Master Servicer, would
not be ultimately recoverable from related Insurance Proceeds or Liquidation
Proceeds on such Mortgage Loan or REO Property as provided herein.

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

                  "Servicing Fee Rate": 0.50% per annum.

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

                  "Servicing Standard": The standards set forth in the first
paragraph of Section 3.01.

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

                                       51

<PAGE>

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

                  "Startup Day": With respect to each Trust REMIC, the day
designated as such pursuant to Section 10.01(b) hereof.

                  "Stated Principal Balance": With respect to any Mortgage Loan:
(a) as of any date of determination up to but not including the Distribution
Date on which the proceeds, if any, of a Liquidation Event with respect to such
Mortgage Loan would be distributed, the Scheduled Principal Balance of such
Mortgage Loan as of the Cut-off Date, as shown in the Mortgage Loan Schedule,
minus the sum of (i) the principal portion of each Monthly Payment due on a Due
Date subsequent to the Cut-off Date, to the extent received from the Mortgagor
or advanced by the Master Servicer and distributed pursuant to Section 4.01 on
or before such date of determination, (ii) all Principal Prepayments received
after the Cut-off Date, to the extent distributed pursuant to Section 4.01 on or
before such date of determination, (iii) all Liquidation Proceeds and Insurance
Proceeds applied by the Master Servicer as recoveries of principal in accordance
with the provisions of Section 3.12, to the extent distributed pursuant to
Section 4.01 on or before such date of determination and (iv) any Realized Loss
incurred with respect thereto as a result of a Deficient Valuation made during
or prior to the Prepayment Period for the most recent Distribution Date
coinciding with or preceding such date of determination; and (b) as of any date
of determination coinciding with or subsequent to the Distribution Date on which
the proceeds, if any, of a Liquidation Event with respect to such Mortgage Loan
would be distributed, zero. With respect to any REO Property: (a) as of any date
of determination up to but not including the Distribution Date on which the
proceeds, if any, of a Liquidation Event with respect to such REO Property would
be distributed, an amount (not less than zero) equal to the Stated Principal
Balance of the related Mortgage Loan as of the date on which such REO Property
was acquired on behalf of REMIC I, minus the sum of (i) if such REO Property was
acquired before the Distribution Date in any calendar month, the principal
portion of the Monthly Payment due on the Due Date in the calendar month of
acquisition, to the extent advanced by the Master Servicer and distributed
pursuant to Section 4.01 on or before such date of determination, and (ii) the
aggregate amount of REO Principal Amortization in respect of such REO Property
for all previously ended calendar months, to the extent distributed pursuant to
Section 4.01 on or before such date of determination; and (b) as of any date of
determination coinciding with or subsequent to the Distribution Date on which
the proceeds, if any, of a Liquidation Event with respect to such REO Property
would be distributed, zero.

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

                  "Stepdown Date": The earlier to occur of (i) the first
Distribution Date on which the aggregate Certificate Principal Balance of the
Class A Certificates has been reduced to zero and (ii) the later to occur of (a)
the Distribution Date occurring in November 2006 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

                                       52

<PAGE>

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 31.00%.

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

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

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

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

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

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

                  "Termination Price":  As defined in Section 9.01.

                  "Terminator":  As defined in Section 9.01.

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

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

                  "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:

                  (a) the Delinquency Percentage for the Mortgage Loans exceeds
44.00% of the then current Credit Enhancement Percentage; or

                                       53

<PAGE>

                  (b) the percentage equivalent of a fraction, the numerator of
which is the aggregate amount of Realized Losses incurred from the Cut-off Date
to the last day of the related Due Period and the denominator of which is the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date
exceeds the applicable percentages set forth below with respect to such
Distribution Date:

    DISTRIBUTION DATE OCCURRING IN              PERCENTAGE
----------------------------------------  ----------------------
November 2006 through October 2007                 2.25%
November 2007 through October 2008                 3.50%
November 2008 through October 2009                 4.75%
November 2009 through October 2010                 5.25%
November 2010 and thereafter                       5.50%

                  "Trust Fund": Collectively, all of the assets of each Trust
REMIC, Master Servicer Prepayment Charge Payment Amounts and the Net WAC Rate
Carryover Reserve Account (including any payments made under the Cap Contracts
deposited therein).

                  "Trust REMIC": Each of REMIC I and REMIC II.

                  "Trustee": Deutsche Bank National Trust Company, a national
banking association, or its successor in interest, or any successor Trustee
appointed as herein provided.

                  "Trustee Fee": The amount payable to the Trustee on each
Distribution Date pursuant to Section 8.05 as compensation for all services
rendered by it in the exercise and performance of any of the powers and duties
of the Trustee hereunder, which amount shall equal the Trustee Fee Rate accrued
for one month multiplied by the aggregate Scheduled Principal Balance of the
Mortgage Loans and any REO Properties as of the second preceding Due Date (or,
in the case of the initial Distribution Date, as of the Cut-off Date),
calculated on the basis of a 360-day year consisting of twelve 30-day months.

                  "Trustee Fee Rate": 0.0022% per annum.

                  "Uncertificated Balance": The amount of any REMIC Regular
Interest outstanding as of any date of determination. As of the Closing Date,
the Uncertificated Balance of each REMIC 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 each REMIC
Regular Interest shall be reduced by all distributions of principal made on such
REMIC Regular Interest on such Distribution Date pursuant to Section 4.01 and,
if and to the extent necessary and appropriate, shall be further reduced on such
Distribution Date by Realized Losses as provided in Section 4.04. The
Uncertificated Balance of REMIC I Regular Interest I-LTZZ shall be increased by
interest deferrals as provided in Section 4.01(a)(1)(i). The Uncertificated
Balance of each REMIC Regular Interest shall never be less than zero.

                  "Uncertificated Interest": With respect to any REMIC Regular
Interest for any Distribution Date, one month's interest at the REMIC Remittance
Rate applicable to such REMIC Regular Interest for such Distribution Date,
accrued on the Uncertificated Balance thereof

                                       54

<PAGE>

immediately prior to such Distribution Date. Uncertificated Interest in respect
of any REMIC Regular Interest 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 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 4.03(e) and (b) the aggregate amount of any Relief Act Interest
Shortfall, if any allocated, in each case, to such REMIC Regular Interest
pursuant to Section 1.02. In addition, Uncertificated Interest with respect to
each Distribution Date, as to any REMIC Regular Interest shall be reduced by
Realized Losses, if any, allocated to such REMIC Regular Interest pursuant to
Section 1.02 and Section 4.04.

                  "Underwriters' Exemption": Exemption issued by the United
States Department of Labor to Deutsche Bank Securities Inc. on April 18, 1991 as
FAN 97-03E (December 9, 1996) and amended on July 21, 1997 as PTE 97-34 at 62 F.
R. 39021 and further amended on November 13, 2000 by PTE 2000-58 at 65 F. R.
67765, and further amended on August 22, 2002 by PTE 2002-41 at 67 Fed. Reg.
54487, which generally provides an exemption for offerings in which Deutsche
Bank Securities Inc. or any person directly or indirectly, through one or more
intermediaries, controlling, controlled by or under common control with Deutsche
Bank Securities Inc. is an underwriter, placement agent or a manager or
co-manager of the underwriting syndicate or selling group where the entity and
the offered securities meet specified conditions.

                  "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
3.08.

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

                  "Value": With respect to any Mortgaged Property, the lesser of
(i) the value thereof as determined by an appraisal made for the related
Originator of the Mortgage Loan at the time of origination of the Mortgage Loan
by an appraiser who met the minimum requirements of the Financial Institutions
Reform, Recovery and Enforcement Act of 1989, and (ii) the purchase price

                                       55

<PAGE>

paid for the related Mortgaged Property by the Mortgagor with the proceeds of
the Mortgage Loan, provided, however, in the case of a Refinanced Mortgage Loan,
such value of the Mortgaged Property is based solely upon the value determined
by an appraisal made for the originator of such Refinanced Mortgage Loan at the
time of origination of such Refinanced Mortgage Loan by an appraiser who met the
minimum requirements of the Financial Institutions Reform, Recovery and
Enforcement Act of 1989 or, subject to the related Originator's underwriting
guidelines, an insured automated valuation model.

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

                  SECTION 1.02.      Allocation of Certain Interest Shortfalls.

                  For purposes of calculating the amount of Accrued Certificate
Interest and the amount of the Interest Distribution Amount for the Class A
Certificates, the Mezzanine Certificates and the Class CE Certificates for any
Distribution Date, (1) the aggregate amount of any Prepayment Interest
Shortfalls (to the extent not covered by payments by the Master Servicer
pursuant to Section 4.03(e)) and any Relief Act Interest Shortfall incurred in
respect of the Mortgage Loans for any Distribution Date shall be allocated
first, among the Class CE Certificates on a PRO RATA basis based on, and to the
extent of, one month's interest at the then applicable respective Pass-Through
Rate on the respective Notional Amount of each such Certificate and thereafter,
among the Class A Certificates and the Mezzanine Certificates on a PRO RATA
basis based on, and to the extent of, one month's interest at the then
applicable respective Pass-Through Rate on the respective Certificate Principal
Balance or Notional Amount of each such Certificate and (2) the aggregate amount
of any Realized Losses incurred for any Distribution Date and Net WAC Rate
Carryover Amounts incurred for any Distribution Date shall be allocated among
the Class CE Certificates on a PRO RATA basis based on, and to the extent of,
one month's interest at the then applicable respective Pass-Through Rate on the
respective Notional Amount of each such Certificate.

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

                  (A) The REMIC I Marker Allocation Percentage of the aggregate
         amount of any Prepayment Interest Shortfalls (to the extent not covered
         by payments by the Master Servicer pursuant to Section 4.03(e)) 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 first, to Uncertificated Interest
         payable to 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% and 2%, respectively, and thereafter among
         REMIC

                                       56

<PAGE>

         I Regular Interest I-LTAV1, REMIC I Regular Interest I-LTAV2, REMIC I
         Regular Interest I-LTAF1, REMIC I Regular Interest I-LTAF2, REMIC I
         Regular Interest I-LTAF3, REMIC I Regular Interest I-LTAF4, REMIC I
         Regular Interest I-LTAF5, REMIC I Regular Interest I-LTAF6, 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-LTMV6, REMIC I
         Regular Interest I-LTMF6 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 Master Servicer pursuant to Section 4.03(e)) 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-LT1SUB, REMIC I Regular Interest
         I-LT1GRP, REMIC I Regular Interest I-LT2SUB, REMIC I Regular Interest
         I-LT2GRP, REMIC I Regular Interest I-LT3SUB, REMIC I Regular Interest
         I-LT3GRP 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.

                  SECTION 1.03              Rights of the NIMS Insurer.

                  Each of the rights of the NIMS Insurer set forth in this
Agreement shall exist so long as (i) the NIMS Insurer has undertaken to
guarantee certain payments of notes issued pursuant to an Indenture and (ii) any
series of notes issued pursuant to one or more Indentures remain outstanding or
the NIMS Insurer is owed amounts in respect of its guarantee of payment on such
notes; provided, however, the NIMS Insurer shall not have any rights hereunder
(except pursuant to Section 11.01 in the case of clause (ii) below) during the
period of time, if any, that (i) the NIMS Insurer has not undertaken to
guarantee certain payments of notes issued pursuant to the Indenture or (ii) any
default has occurred and is continuing under the insurance policy issued by the
NIMS Insurer with respect to such notes.

                                   ARTICLE II

                          CONVEYANCE OF MORTGAGE LOANS;
                        ORIGINAL ISSUANCE OF CERTIFICATES

                  SECTION 2.01.             Conveyance of Mortgage Loans.

                  The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey to the
Trustee without recourse for the benefit of the Certificateholders all the
right, title and interest of the Depositor, including any security interest
therein for the benefit of the Depositor, in and to the Mortgage Loans
identified on the Mortgage

                                       57

<PAGE>

Loan Schedule, the rights of the Depositor under the Mortgage Loan Purchase
Agreement, all other assets included or to be included in REMIC I. Such
assignment includes all interest and principal received by the Depositor or the
Master Servicer on or with respect to the Mortgage Loans (other than payments of
principal and interest due on such Mortgage Loans on or before the Cut-off
Date). The Depositor herewith delivers to the Trustee an executed copy of the
Mortgage Loan Purchase Agreement and the Trustee, on behalf of the
Certificateholders, acknowledges receipt of the same.

                  In connection with such transfer and assignment, the Depositor
does hereby deliver to, and deposit with, the Trustee the following documents or
instruments with respect to each Mortgage Loan so transferred and assigned, the
following documents or instruments (a "Mortgage File"):

                  (i) the original Mortgage Note, endorsed in blank, without
         recourse, or in the following form: "Pay to the order of Deutsche Bank
         National Trust Company, as Trustee under the applicable agreement,
         without recourse," with all prior and intervening endorsements showing
         a complete chain of endorsement from the originator to the Person so
         endorsing to the Trustee, or with respect to any lost Mortgage Note, an
         original Lost Note Affidavit; provided however, that such substitutions
         of Lost Note Affidavits for original Mortgage Notes may occur only with
         respect to Mortgage Loans, the aggregate Cut-off Date Principal Balance
         of which is less than or equal to 2.00% of the Pool Balance as of the
         Cut- off Date;

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

                  (iii) an original Assignment of the Mortgage assigned in
         blank, without recourse;

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

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

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

                  If any of the documents referred to in Sections 2.01(ii),
(iii) or (iv) above has as of the Closing Date been submitted for recording but
either (x) has not been returned from the applicable public recording office or
(y) has been lost or such public recording office has retained

                                       58

<PAGE>

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

                  The Master Servicer (in its capacity as Seller) shall promptly
(and in no event later than thirty (30) Business Days, subject to extension upon
a mutual agreement between the Master Servicer and the Trustee, following the
later of (i) the Closing Date, (ii) the date on which the Seller receives the
Assignment from the Custodian and (iii) the date of receipt by the Master
Servicer of the recording information for a Mortgage) submit or cause to be
submitted for recording, at no expense to the Trust Fund or the Trustee, in the
appropriate public office for real property records, each Assignment referred to
in Sections 2.01(iii) and (iv) above and shall execute each original Assignment
referred to in section 2.01(iii) above in the following form: "Deutsche Bank
National Trust Company, as Trustee under the applicable agreement." In the event
that any such Assignment is lost or returned unrecorded because of a defect
therein, the Master Servicer (in its capacity as Seller) shall promptly prepare
or cause to be prepared a substitute Assignment or cure or cause to be cured
such defect, as the case may be, and thereafter cause each such Assignment to be
duly recorded. Notwithstanding the foregoing, however, for administrative
convenience and facilitation of servicing and to reduce closing costs, the
Assignments of Mortgage shall not be required to be submitted for recording
(except with respect to any Mortgage Loan located in Maryland) unless such
failure to record would result in a withdrawal or a downgrading by any Rating
Agency of the rating on any Class of Certificates; provided further, however,
each Assignment of Mortgage shall be submitted for recording by the Master
Servicer (in its capacity as Seller) in the manner described above, at no
expense to the Trust Fund or the Trustee, upon the earliest to occur of: (i)
reasonable direction by Holders of Certificates entitled to at least 25% of the
Voting Rights or the NIMS Insurer, (ii) failure of the Master Servicer
Termination Test, (iii) the occurrence of a bankruptcy, insolvency or
foreclosure relating to the Seller, (iv) the occurrence of a servicing transfer
as described in Section 7.02 hereof and (v) if the Seller is not the Master
Servicer and with respect to any one assignment or Mortgage, the occurrence of a
bankruptcy, insolvency or foreclosure relating to the Mortgagor under the
related Mortgage. Notwithstanding the foregoing, if the Master Servicer is
unable to pay the cost of recording the Assignments of Mortgage, such expense
will be paid by the Trustee and shall be reimbursable to the Trustee as an
Extraordinary Trust Fund Expense.

                  All original documents relating to the Mortgage Loans that are
not delivered to the Trustee, or to the appropriate Custodian on behalf of the
Trustee, are and shall be held by or on

                                       59

<PAGE>

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

                  SECTION 2.02.            Acceptance of REMIC I by the Trustee.

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

                  On or prior to the Closing Date, the Trustee agrees, for the
benefit of the Certificateholders, to execute and deliver (or cause the
Custodian to execute and deliver) to the Depositor and the NIMS Insurer an
acknowledgment of receipt of the Mortgage Note (with any exceptions noted),
substantially in the form attached as Exhibit C-3 hereto.

                  The Trustee agrees, for the benefit of the Certificateholders,
to review (or cause a Custodian on its behalf to review) each Mortgage Note
within 45 days of the Closing Date and to certify in substantially the form
attached hereto as Exhibit C-1 (or cause the Custodian to certify in the form of
the Initial Certification attached to the Custodial Agreement) that, as to each
Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan
paid in full or any Mortgage Loan specifically identified in the exception
report annexed thereto as not being covered by such certification), (i) all
documents constituting part of such Mortgage File (other than such documents
described in Section 2.01(v)) required to be delivered to it pursuant to this
Agreement are in its possession, (ii) such documents have been reviewed by it or
such Custodian and are not mutilated, torn or defaced unless initialed by the
related borrower and relate to such Mortgage Loan, (iii) based on its or the
Custodian's examination and only as to the foregoing, the information set forth
in the Mortgage Loan Schedule that corresponds to items (1) through (3), (6),
(9), (10), (13), (15) and (19) of the definition of "Mortgage Loan Schedule"
accurately reflects information set forth in the Mortgage File. It is herein
acknowledged that, in conducting such review, the Trustee or such Custodian was
under no duty or obligation (i) to inspect, review or examine any such
documents, instruments, certificates or other papers to determine whether they
are genuine, enforceable, or appropriate for the represented purpose or whether
they have actually been recorded or that they are other than what they purport
to be on their face or (ii) to determine whether any Mortgage File should
include any of the documents specified in clause (v) of Section 2.01.

                                       60

<PAGE>

                  Prior to the first anniversary date of this Agreement the
Trustee shall deliver to the Depositor, the Master Servicer and the NIMS Insurer
a final certification in the form annexed hereto as Exhibit C-2 (or shall cause
the Custodian to deliver to the Trustee, the Depositor, the Master Servicer and
the NIMS Insurer a final certification in the form attached to the Custodial
Agreement) evidencing the completeness of the Mortgage Files, with any
applicable exceptions noted thereon, with respect to all of the Mortgage Loans.
Upon the request of the Master Servicer, any exception report related to the
final certification shall be provided in an electronic computer readable format
as mutually agreed upon by the Master Servicer and the Trustee.

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

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

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

                  (a) Upon discovery or receipt of notice (including notice
under Section 2.02) of any materially defective document in, or that a document
is missing from, the Mortgage File or of the breach by the Seller of any
representation, warranty or covenant under the Mortgage Loan Purchase Agreement
in respect of any Mortgage Loan which materially adversely affects the value of
such Mortgage Loan or the interest therein of the Certificateholders, the
Trustee shall promptly notify the Seller, the NIMS Insurer and the Master
Servicer of such defect, missing document or breach and request that the Seller
deliver such missing document or cure such defect or breach within 90 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 Master Servicer (or, in
accordance with Section 6.06(b), 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 (subject to Section 2.03(d)) 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 deposited in the Collection Account, and the
Trustee, upon receipt of written certification from the Master Servicer of such
deposit, shall release to the Seller the related Mortgage File and shall execute
and deliver such instruments of transfer or assignment, in each case without
recourse, as the Seller shall furnish to it and as shall be

                                       61

<PAGE>

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(c).
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 document exists or as to which such a breach has
occurred and is continuing shall constitute the sole remedy respecting such
omission, defect or breach available to the Trustee on behalf of the
Certificateholders.

                  (b)(i) Promptly upon the earlier of discovery by the Master
         Servicer or receipt of notice by the Master Servicer of the breach of
         any representation, warranty or covenant of the Master Servicer set
         forth in Section 2.05 which materially and adversely affects the
         interests of the Certificateholders in any Mortgage Loan, the Master
         Servicer shall cure such breach in all material respects.

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

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

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

                  (iii) If with respect to any Prepayment Period,

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

                                       62

<PAGE>

                  (B) 5% of the total dollar amount of Prepayment Charges
         payable by Mortgagors in connection with Principal Prepayments on the
         related Mortgage Loans that occurred during such Prepayment Period,

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

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

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

                                       63

<PAGE>

if applicable, the Prepayment Charge Schedule, to reflect the removal of such
Deleted Mortgage Loan from the terms of this Agreement and the substitution of
the Qualified Substitute Mortgage Loan or Loans and shall deliver a copy of such
amended Mortgage Loan Schedule to the Trustee and the NIMS Insurer. Upon such
substitution, such Qualified Substitute Mortgage Loan or Loans shall constitute
part of the Mortgage Pool and shall be subject in all respects to the terms of
this Agreement and, in the case of a substitution effected by the Seller, the
Mortgage Loan Purchase Agreement, including all applicable representations and
warranties thereof.

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

                  In addition, the Depositor or the Seller, as the case may be,
shall obtain at its own expense and deliver to the Trustee and the NIMS Insurer
an Opinion of Counsel to the effect that such substitution will not cause (a)
any federal tax to be imposed on any 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.

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

                                       64

<PAGE>

                  SECTION 2.04.             [Reserved].

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

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

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

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

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

                                       65

<PAGE>

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

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

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

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

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

                  (viii) The Master Servicer will not waive any Prepayment
         Charge or part of a Prepayment Charge unless, (i) the enforceability
         thereof shall have been limited by bankruptcy, insolvency, moratorium,
         receivership and other similar laws relating to creditors' rights
         generally or (ii) the collectability thereof shall have been limited
         due to acceleration in connection with a foreclosure or other
         involuntary payment or (iii) in the Master Servicer's reasonable
         judgment as described in Section 3.01 hereof, (x) such waiver relates
         to a default or a reasonably foreseeable default, (y) such waiver would
         maximize recovery of total proceeds taking into account the value of
         such Prepayment Charge and related Mortgage Loan and (z) doing so is
         standard and customary in servicing similar Mortgage Loans (including
         any waiver of a Prepayment Charge in connection with a refinancing of a
         Mortgage Loan that is related to a default or a reasonably foreseeable
         default). In no event will the Master Servicer waive a Prepayment
         Charge in connection with a refinancing of a Mortgage Loan that is not
         related to a default or a reasonably foreseeable default;

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

                                       66

<PAGE>

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

                  (xi) The Master 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.

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

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

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

                                       67

<PAGE>

REMIC I Regular Interests, respectively, and all ownership interests evidenced
or constituted by the Class R-I Interest and the REMIC I Regular Interests,
shall be as set forth in this Agreement.

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

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

                  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
or the Trustee has executed, authenticated and delivered to or upon the order of
the Depositor, the Class R Certificates in authorized denominations. The
interests evidenced by the Class R Certificates, together with the REMIC II
Certificates, constitute the entire beneficial ownership interest in REMIC II.

                                       68

<PAGE>

                                   ARTICLE III

                          ADMINISTRATION AND SERVICING
                              OF THE MORTGAGE LOANS

                  SECTION 3.01. Master Servicer to Act as Master Servicer.

                  The Master Servicer shall service and administer the Mortgage
Loans on behalf of the Trustee and in the best interests of and for the benefit
of the Certificateholders (as determined by the Master Servicer in its
reasonable judgment) in accordance with (i) the terms of the respective Mortgage
Loans and any insurance policies related thereto, (ii) all Applicable
Regulations, (iii) the terms of this Agreement, (iv) the Loss Mitigation Action
Plan, if applicable, and (v) to the extent consistent with the preceding
requirements, in the same manner in which it services and administers similar
mortgage loans for its own portfolio, giving due consideration to customary and
usual standards of practice of prudent mortgage lenders and loan servicers
administering similar mortgage loans but without regard to:

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

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

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

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

                  Subject only to the above-described servicing standards and
the terms of this Agreement and of the respective Mortgage Loans, the Master
Servicer shall have full power and authority, acting alone or through
Sub-Servicers as provided in Section 6.06, to do or cause to be done any and all
things in connection with such servicing and administration which it may deem
necessary or desirable. Without limiting the generality of the foregoing, the
Master Servicer in its own name or in the name of a Sub-Servicer is hereby
authorized and empowered by the Trustee, in accordance with the servicing
standards set forth above, (i) to execute and deliver, on behalf of the
Certificateholders and the Trustee, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge, or of forbearance, or
of modification and all other comparable instruments, with respect to the
Mortgage Loans and the Mortgaged Properties, (ii) to institute foreclosure
proceedings or obtain a deed-in-lieu of foreclosure to convert the ownership of
such properties, and to hold or cause to be held title to such properties, in
the name of the Trust Fund, on behalf of the Trustee and the Certificateholders,
(iii) to market, sell and transfer title of REO Properties held in the name of
the Trust Fund to third party purchasers upon terms and conditions the Master
Servicer deems reasonable under the Servicing Standard, (4) to bring or respond
to civil actions or complaints (in its own name or that of the Trust Fund or the
Trustee on behalf of the Trust Fund) related to any Mortgage Loan, Mortgaged
Property or REO Property held by the Trust Fund

                                       69

<PAGE>

and (5) execute any other document necessary or appropriate to enable the Master
Servicer to carry out its servicing and administrative duties hereunder
consistent with the Servicing Standard.

                  At the written request of the Master Servicer, the Trustee
shall execute and furnish to the Master Servicer such documents as are necessary
or appropriate to enable the Master Servicer to carry out its servicing and
administrative duties hereunder. By execution of this Agreement, the Trustee, on
behalf of the Trust Fund, hereby grants to the Master Servicer a power of
attorney to execute any and all documents necessary to carry out any and all
servicing duties described in this Agreement (including the taking of and
transferring title of REO Properties to third parties held in the name of the
Trustee for the benefit of the Trust) and expressly confirms that this paragraph
along with the face page and a copy of the signature page (duly executed) to
this Agreement shall constitute the power of attorney for evidentiary and/or
recording purposes. The Trustee shall not be liable for the actions of the
Master Servicer or any Sub-Servicers under such powers of attorney.

                  Subject to Section 3.04(d) hereof, in accordance with the
Servicing Standard, the Master Servicer shall advance or cause to be advanced
funds as necessary for the purpose of effecting the timely payment of taxes and
assessments on the Mortgaged Properties, which advances shall be Servicing
Advances reimbursable in the first instance from related collections from the
Mortgagors pursuant to Section 3.04(d), and further as provided in Section
3.05(a). Any cost incurred by the Master Servicer or by Sub-Servicers in
effecting the timely payment of taxes and assessments on a Mortgaged Property
shall not, for the purpose of calculating distributions to Certificateholders,
be added to the unpaid Stated Principal Balance of the related Mortgage Loan,
notwithstanding that the terms of such Mortgage Loan so permit.

                  Consistent with the terms of this Agreement, the Master
Servicer may waive, modify or vary any term of any Mortgage Loan or consent to
the postponement of strict compliance with any such term or in any manner grant
indulgence to any Mortgagor if such waiver, modification, postponement or
indulgence is in conformity with the Servicing Standard; provided, however,
that:

                  (A) the Master Servicer shall not make future advances (except
         as provided in Section 4.03);

                  (B) the Master Servicer shall not permit any modification with
         respect to any Mortgage Loan that would change the Mortgage Rate, defer
         or forgive the payment of any principal or interest payments, reduce
         the outstanding Stated Principal Balance (except for reductions
         resulting from actual payments of principal) or extend the final
         maturity date on such Mortgage Loan (unless as provided in Section
         3.02, (i) the Mortgagor is in default with respect to the Mortgage Loan
         or (ii) such default is, in the judgment of the Master Servicer,
         reasonably foreseeable); and

                  (C) the Master Servicer shall not consent to (i) partial
         releases of Mortgages, (ii) alterations, (iii) removal, demolition or
         division of properties subject to Mortgages, (iv) modification or (v)
         second mortgage subordination agreements with respect to any Mortgage
         Loan that would: (i) affect adversely the status of any Trust REMIC as
         a REMIC,(ii) cause any Trust REMIC to be subject to a tax on
         "prohibited transactions" or "contributions" pursuant to the REMIC
         Provisions, or (iii) both (x) effect an exchange or reissuance of such

                                       70

<PAGE>

         Mortgage Loan under Section 1001 of the Code (or Treasury regulations
         promulgated thereunder) and (y) cause any Trust REMIC constituting part
         of the Trust Fund to fail to qualify as a REMIC under the Code or the
         imposition of any tax on "prohibited transactions" or "contributions"
         after the Startup Day under the REMIC Provisions.

                  To the extent consistent with the terms of this Agreement,
including Section 2.03 and Section 2.05, the Master Servicer may 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 (ii) such waiver relates to a default or a reasonably
foreseeable default and would, in the reasonable judgment of the Master
Servicer, maximize recovery of total proceeds taking into account the value of
such Prepayment Charge and the related Mortgage Loan.

                  The Master Servicer may delegate its responsibilities under
this Agreement; provided, however, that no such delegation shall release the
Master Servicer from the responsibilities or liabilities arising under this
Agreement. All references to Master Servicer in this Agreement shall be deemed
to include any Sub-Servicer duly appointed by the Master Servicer pursuant to
this Agreement.

                  SECTION 3.02. Collection of Certain Mortgage Loan Payments.

                  The Master Servicer shall make reasonable efforts to collect
all payments called for under the terms and provisions of the Mortgage Loans,
and shall, to the extent such procedures shall be consistent with this Agreement
and the terms and provisions of any applicable insurance policies, follow such
collection procedures as it would follow with respect to mortgage loans
comparable to the Mortgage Loans and held for its own account. Consistent with
the foregoing, the Master Servicer may in its discretion (i) waive any late
payment charge or, if applicable, penalty interest, or (ii) extend the due dates
for the Monthly Payments due on a Mortgage Note for a period of not greater than
180 days; provided that any extension pursuant to clause (ii) above shall not
affect the amortization schedule of any Mortgage Loan for purposes of any
computation hereunder. The NIMS Insurer's prior written consent shall be
required for any modification, waiver or amendment if the aggregate number of
outstanding Mortgage Loans which have been modified, waived or amended exceeds
5% of the number of Mortgage Loans as of the Cut-off Date. In the event of any
such arrangement pursuant to clause (ii) above, the Master Servicer shall make
timely advances on such Mortgage Loan during such extension pursuant to Section
4.03 and in accordance with the amortization schedule of such Mortgage Loan
without modification thereof by reason of such arrangements.

                  Notwithstanding the foregoing, in the event that any Mortgage
Loan is in default or, in the judgment of the Master Servicer, such default is
reasonably foreseeable, the Master Servicer, consistent with the Servicing
Standard, may also waive, modify or vary any term of such Mortgage Loan
(including modifications that would change the Mortgage Rate, forgive the
payment of principal or interest or extend the final maturity date of such
Mortgage Loan), accept payment from the related Mortgagor of an amount less than
the Stated Principal Balance in final satisfaction of such Mortgage Loan, or
consent to the postponement of strict compliance with any such term or otherwise
grant indulgence to any Mortgagor (any and all such waivers, modifications,
variances, forgiveness of principal or interest, postponements, or indulgences
collectively referred to herein as

                                       71

<PAGE>

"forbearance"), provided, however, that in determining which course of action
permitted by this sentence it shall pursue, the Master Servicer shall adhere to
the Loss Mitigation Action Plan. The Master Servicer's analysis supporting any
forbearance and the conclusion that any forbearance meets the standards of
Section 3.01 and the Loss Mitigation Action Plan shall be reflected in writing
in the Mortgage File.

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

                  SECTION 3.03. [Reserved].

                  SECTION 3.04. Collection Account, Escrow Account and
                                Distribution Account.

                  (a) Collection Account. On behalf of the Trust Fund, the
Master Servicer shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan separate and apart from any of its own funds and
general assets and shall establish and maintain in the name of the Trustee one
or more accounts (such account or accounts, the "Collection Account") in
accordance with this Section 3.04, held in trust for the benefit of the Trustee
and the Certificateholders.

                  (b) Deposits to the Collection Account. On behalf of the Trust
         Fund, the Master Servicer shall deposit or cause to be deposited in the
         clearing account (which account must be an Eligible Account) in which
         it customarily deposits payments and collections on mortgage loans in
         connection with its mortgage loan servicing activities on a daily
         basis, and in no event more than one Business Day after the Master
         Servicer's receipt thereof, and shall thereafter deposit in the
         Collection Account, in no event more than two Business Days after the
         deposit of such funds into the clearing account, as and when received
         or as otherwise required hereunder, and retain therein, the following
         payments and collections received or made by it subsequent to the
         Cut-off Date with respect to the Mortgage Loans, or payments (other
         than Principal Prepayments) received by it on or prior to the Cut-off
         Date but allocable to a Due Period subsequent thereto:

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

                  (ii) all payments on account of interest on the Mortgage Loans
         and REO Properties adjusted to the Net Mortgage Rate;

                  (iii) all Insurance Proceeds and Liquidation Proceeds (other
         than proceeds to be held in the Escrow Account and applied to the
         restoration or repair of the Mortgaged

                                       72

<PAGE>

         Property or released to the Mortgagor in accordance with the Servicing
         Standard) and any amounts received in respect of the rental of any REO
         Property prior to REO Disposition;

                  (iv) all proceeds related to the purchase, substitution or
         repurchase of any Mortgage Loan or REO Property in accordance with
         Section 2.03;

                  (v) any amounts required to be deposited by the Master
         Servicer pursuant to Section 3.09 in connection with the deductible
         clause in any blanket hazard insurance policy, such deposit being made
         from the Master Servicer's own funds, without reimbursement therefor;

                  (vi) any amounts required to be deposited by the Master
         Servicer pursuant to Section 3.06 in connection with any losses
         realized on Permitted Investments with respect to funds held in the
         Collection Account;

                  (vii) all amounts required to be deposited in connection with
         shortfalls in principal amount of Qualified Substitute Mortgage Loans
         pursuant to Section 2.03 (for purposes of this clause (vii), the
         Cut-off Date with respect to any Qualified Substitute Mortgage Loan
         shall be deemed to be the date of substitution); and

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

                  The foregoing requirements for deposit to 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, insufficient funds charges, modification fees and
other ancillary fees (but not Prepayment Charges) need not be deposited by the
Master Servicer in the Collection Account and shall upon collection, belong to
the Master Servicer as additional compensation for its servicing activities. In
the event the Master Servicer shall deposit in the Collection Account any amount
not required to be deposited therein, it may at any time withdraw such amount
from the Collection Account, any provision herein to the contrary
notwithstanding.

                  (c) Escrow Account. The Master Servicer shall segregate and
hold all funds collected and received pursuant to each Mortgage Loan which
constitute Escrow Payments separate and apart from any of its own funds and
general assets and shall establish and maintain in the name of the Trustee one
or more accounts (such account or accounts, the "Escrow Account") held in trust
for the benefit of the Certificateholders and the Trustee.

                  (d) Deposits to the Escrow Account. The Master Servicer shall
deposit or cause to be deposited in the clearing account (which account must be
an Eligible Account) in which it customarily deposits payments and collections
on mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the Master
Servicer's receipt thereof, and shall thereafter deposit in the Escrow Account,
in no event

                                       73

<PAGE>

more than two Business Days after the deposit of such funds into the clearing
account, as and when received or as otherwise required hereunder, and retain
therein:

                  (i) all Escrow Payments collected on account of the Mortgage
         Loans, for the purpose of effecting timely payment of any such items as
         required under the terms of this Agreement; and

                  (ii) all Insurance Proceeds which are to be applied to the
         restoration or repair of any Mortgaged Property.

                  (e) Distribution Account. On behalf of the Trust Fund, the
         Trustee shall segregate and hold all funds collected and received
         pursuant to this Agreement separate and apart from any of its own funds
         and general assets and shall establish and maintain in the name of the
         Trust Fund one or more segregated accounts (such account or accounts,
         the "Distribution Account"), held in trust for the benefit of the
         Certificateholders.

                  (f) Trustee Deposits to the Distribution Account. Upon
         receipt, the Trustee shall deposit or cause to be deposited into the
         Distribution Account all payments of any nature received from the
         Master Servicer in accordance with this Agreement. The Trustee shall
         deposit in the Distribution Account any amounts required to be
         deposited pursuant to Section 3.06 in connection with losses realized
         on Permitted Investments with respect to funds held in the Distribution
         Account. Furthermore, promptly upon receipt of any Stayed Funds,
         whether from the Master Servicer, a trustee in bankruptcy, or federal
         bankruptcy court or other source, the Trustee shall deposit such funds
         in the Distribution Account, subject to withdrawal thereof pursuant to
         Section 7.02(b) or as otherwise permitted hereunder.

                  (g) Master Servicer Transfer of Funds to the Distribution
         Account. On behalf of the Trust Fund, the Master Servicer shall deliver
         to the Trustee in immediately available funds for deposit in the
         Distribution Account by 3:00 p.m. (New York time) on the Master
         Servicer Remittance Date, (i) that portion of Available Funds
         (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, (ii) without duplication, the amount of all
         Prepayment Charges collected by the Master Servicer, all Prepayment
         Charges payable by the Master Servicer pursuant to Section
         2.03(b)(ii)(A) and all Master Servicer Prepayment Charge Payment
         Amounts payable by the Master Servicer pursuant to Section
         2.03(b)(ii)(B), subject to Section 2.03(b)(iii) (in each case to the
         extent not related to Principal Prepayments occurring after the related
         Prepayment Period) and (iii) any amounts reimbursable to an Advancing
         Person pursuant to Section 3.23 and the terms of the related Advance
         Facility.

                  In addition, the Master Servicer shall deliver to the Trustee
from time to time as required by this Agreement, for deposit and the Trustee
shall so deposit, in the Distribution Account:

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

                  (ii) any amounts required to be deposited pursuant to Section
         3.13 in connection with any REO Property;

                                       74

<PAGE>

                  (iii) any amounts to be paid in connection with a purchase of
         Mortgage Loans and REO Properties pursuant to Section 3.16 and Section
         9.01;

                  (iv) any Compensating Interest as required pursuant to Section
         4.03(e);

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

                  (vi) any amounts required to be paid by the Master Servicer
         pursuant to Section 3.06 in connection with any losses realized on
         Permitted Investments with respect to funds held in the Collection
         Account; and

                  (v) any amounts required to be paid to the Trustee from the
         assets of the Trust Fund on deposit in the Collection Account pursuant
         to this Agreement, including but not limited to amounts required to be
         paid to the Trustee pursuant to Section 7.02 and Section 8.05.

                  Funds held in the Collection Account pursuant to Section
3.04(b) may at any time be delivered by the Master Servicer to the Trustee for
deposit into the Distribution Account and for all purposes of this Agreement
shall be deemed to be a part of the Collection Account until the Business Day
prior to the Distribution Date; provided, however, that the Trustee shall have
the sole authority to withdraw any funds held pursuant to this paragraph. In the
event the Master Servicer shall deliver to the Trustee for deposit in the
Distribution Account any amount not required to be deposited therein, it may at
any time request that the Trustee withdraw such amount from the Distribution
Account and remit to it any such amount, any provision herein to the contrary
notwithstanding.

                  (h) Investment of Account Funds. Funds on deposit in the
Collection Account, the Distribution Account, any REO Account and any Escrow
Account may be invested in Permitted Investments in accordance with the
provisions set forth in Section 3.06. Any investment earnings or interest paid
on funds deposited in the Collection Account, any REO Account and any Escrow
Account (subject to Section 3.05(b)) shall accrue to the benefit of the Master
Servicer and the Master Servicer shall be entitled to retain and withdraw such
interest from each such account on a daily basis. Any investment earnings or
interest paid on funds deposited in the Distribution Account, shall accrue to
the benefit of the Trustee and the Trustee shall be entitled to retain and
withdraw such interest from each such account on a daily basis.

                  Funds on deposit in the Net WAC Rate Reserve Carryover Account
may be invested in Permitted Investments in accordance with Section 3.06 subject
to any limitations set forth in Section 4.10 and any investment earnings or
interest paid shall accrue to the benefit of the party designated in such
section.

                  (i) Creation, Location and Subsequent Transfers of Accounts.
Each account created pursuant to this Agreement must be an Eligible Account. On
or prior to the Closing Date, the Master Servicer and the Trustee shall give
notice, to each other, the NIMS Insurer and the Depositor of the location of any
account created by it pursuant to this Agreement. From time to

                                       75

<PAGE>

time, the Master Servicer and the Trustee may each transfer any account created
by it to a different depository institution provided that upon such transfer the
written notice is provided to all other parties listed in the preceding
sentence.

                  SECTION 3.05. Permitted Withdrawals From the Collection
                                Account, Escrow Account and Distribution
                                Account.

                  (a) Collection Account. The Master Servicer may, from time to
         time, withdraw from the Collection Account for the following purposes
         or as described in Section 4.03:

                  (i) to remit to the Trustee for deposit in the Distribution
         Account the amounts required to be so remitted pursuant to Section
         3.04(g) or permitted to be so remitted pursuant to the last paragraph
         of Section 3.04(g);

                  (ii) subject to Section 3.12(c), to reimburse itself for (a)
         any unpaid Servicing Fees, (b) any unreimbursed Servicing Advances and
         (c) any unreimbursed Advances, the Master Servicer's right to reimburse
         itself pursuant to this subclause (ii) being limited to any Late
         Collections, Liquidation Proceeds, and Insurance Proceeds received on
         the related Mortgage Loan and any amounts received in respect of the
         rental of the related REO Property prior to an REO Disposition that
         represent payments of principal and/or interest respecting which any
         such advance was made;

                  (iii) to reimburse itself for (a) any unpaid Servicing Fees to
         the extent not recoverable under Section 3.05(a)(ii) and (b) any unpaid
         Advances or Servicing Advances that have been deemed Nonrecoverable
         Advances or Nonrecoverable Servicing Advances;

                  (iv) to pay to itself any Prepayment Interest Excess;

                  (v) to reimburse itself for any amounts paid pursuant to
         Section 3.12(b) (and not otherwise previously reimbursed);

                  (vi) to pay to itself as servicing compensation any interest
         earned on funds in the Collection Account;

                  (vii) subject to Section 4.03(b), to reimburse the Master
         Servicer in respect of any unreimbursed Advances to the extent of funds
         held in the Collection Account for future distribution that were not
         included in Available Funds for the preceding Distribution Date;

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

                  (ix) to remit to the Trustee any amounts that the Trustee is
         permitted to be paid or reimbursed from the assets of the Trust Fund
         pursuant to the terms of this Agreement, including the terms of Section
         7.02(a) and Section 8.05 of this Agreement;

                                       76

<PAGE>

                  (x) to reimburse the NIMS Insurer, the Master Servicer (if the
         Master Servicer is not an Affiliate of the Seller) or the Trustee, as
         the case may be, for enforcement expenses reasonably incurred in
         respect of the breach or defect giving rise to the purchase obligation
         under Section 2.03 of this Agreement that were included in the Purchase
         Price of the Mortgage Loan, including any expenses arising out of the
         enforcement of the purchase obligation;

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

                  (xi) to transfer funds in the Collection Account maintained at
         a particular depository to the Collection Account maintained at a
         different depository, pursuant to Section 3.04(i);

                  (xii) [reserved];

                  (xii) [reserved]; and

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

                  On each Business Day as of the commencement of which the
balance on deposit in the Collection Account exceeds $75,000 following any
withdrawals pursuant to the next succeeding sentence, the amount of such excess
shall be remitted to the Trustee, but only if the Collection Account constitutes
an Eligible Account solely pursuant to clause (ii) of the definition of
"Eligible Account." If the balance on deposit in the Collection Account exceeds
$75,000 as of the commencement of business on any Business Day and the
Collection Account constitutes an Eligible Account solely pursuant to clause
(ii) of the definition of "Eligible Account," the Master Servicer shall, on or
before 3:00 p.m. New York time on such Business Day, withdraw from the
Collection Account any and all amounts payable or reimbursable to the Depositor,
the Master Servicer, the Trustee or any Sub-Servicer pursuant to Section 3.05
and shall pay such amounts to the Persons entitled thereto.

                  The foregoing requirements for withdrawal from the Collection
Account shall be exclusive. In the event the Master Servicer shall deposit in
the Collection Account any amount not required to be deposited therein, it may
at any time withdraw such amount from the Collection Account, any provision
herein to the contrary notwithstanding.

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

                                       77

<PAGE>

                  (b) Escrow Account. The Master Servicer may, from time to
         time, withdraw from the Escrow Account for the following purposes:

                  (i) to effect payments of ground rents, taxes, assessments,
         water rates, hazard insurance premiums and comparable items;

                  (ii) to reimburse the Master Servicer for any Servicing
         Advance made by the Master Servicer with respect to a related Mortgage
         Loan but only from amounts received on the related Mortgage Loan which
         represent late payments or Late Collections of Escrow Payments
         thereunder;

                  (iii) to refund to the Mortgagor any funds as may be
         determined to be overages;

                  (iv) for transfer to the Collection Account in accordance with
         the terms of this Agreement;

                  (v) for application to restoration or repair of the Mortgaged
         Property;

                  (vi) to pay to the Master Servicer, or to the Mortgagor to the
         extent required by the related Mortgage Loan or Applicable Regulations,
         any interest paid on the funds deposited in the Escrow Account;

                  (vii) to clear and terminate the Escrow Account on the
         termination of this Agreement; and

                  (viii) to transfer to the Collection Account any Insurance
         Proceeds.

                  In the event the Master Servicer shall deposit in an Escrow
Account any amount not required to be deposited therein, it may at any time
withdraw such amount from such Escrow Account, any provision herein to the
contrary notwithstanding. As part of its servicing duties, the Master Servicer
shall pay to the Mortgagor interest on funds in the Escrow Account, to the
extent required by the related Mortgage Loan or Applicable Regulations, and to
the extent that interest earned on funds in the Escrow Account is insufficient,
shall pay such interest from its own funds, without any reimbursement therefor.
The Master Servicer may pay to itself any excess interest on funds in the Escrow
Account, to the extent such action is in conformity with the Servicing Standard,
is permitted by law and such amounts are not required to be paid to Mortgagors
or used for any of the other purposes set forth above.

                  (c) Distribution Account. The Trustee shall, from time to
         time, make withdrawals from the Distribution Account, for any of the
         following purposes:

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

                  (ii) to pay to itself and the Trustee amounts to which it is
         entitled pursuant to Section 8.05;

                                       78

<PAGE>

                  (iii) to pay itself any interest income earned on funds
         deposited in the Distribution Account pursuant to Section 3.06;

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

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

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

                  SECTION 3.06. Investment of Funds in the Collection Account,
                                the Escrow Account, the REO Account and the
                                Distribution Account.

                  (a) The Master Servicer may direct any depository institution
         maintaining the Collection Account, the Escrow Account (subject to
         Section 3.05(b)), and the REO Account and the Trustee may direct any
         depository institution maintaining the Distribution Account, (for
         purposes of this Section 3.06, each an "Investment Account"), to invest
         the funds in such Investment Account in one or more Permitted
         Investments bearing interest or sold at a discount, and maturing,
         unless payable on demand, (i) no later than the Business Day
         immediately preceding the date on which such funds are required to be
         withdrawn from such account pursuant to this Agreement, if a Person
         other than the Trustee is the obligor thereon, and (ii) no later than
         the date on which such funds are required to be withdrawn from such
         Investment Account pursuant to this Agreement, if the Trustee is the
         obligor thereon. All such Permitted Investments shall be held to
         maturity, unless payable on demand. Any investment of funds in an
         Investment Account shall be made in the name of the Trustee (in its
         capacity as such) or in the name of a nominee of the Trustee. The
         Trustee shall be entitled to sole possession (except with respect to
         investment direction of funds held in the Collection Account, the
         Escrow Account, and the REO Account) over each such investment and
         (except with respect to the income on funds held in the Collection
         Account, the Escrow Account and the REO Account) the income thereon,
         and any certificate or other instrument evidencing any such investment
         shall be delivered directly to the Trustee or its agent, together with
         any document of transfer necessary to transfer title to such investment
         to the Trustee or its nominee. In the event amounts on deposit in an
         Investment Account are at any time invested in a Permitted Investment
         payable on demand, the Trustee shall:

                  (i) 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

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

                  (b) All income in the nature of interest from the investment
         of funds in the Collection Account, the Escrow Account (subject to
         Section 3.05(b)) and the REO Account shall be for the benefit of the
         Master Servicer as compensation for the Master Servicer's services
         pursuant to this Agreement. The Master Servicer shall deposit in the
         Collection Account, the Escrow

                                       79

<PAGE>

Account, and the REO Account from its own funds 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.

                  (c) All income in the nature of interest or earnings from the
investment of funds in the Distribution Account shall be for the benefit of the
Trustee as compensation for the Trustee's services pursuant to this Agreement.
The Trustee shall deposit in the Distribution Account from its own funds the
amount of any loss incurred on Permitted Investments in the Distribution
Account.

                  (d) Funds on deposit in the Net WAC Rate Carryover Reserve
Account may be invested in Permitted Investments in accordance with this Section
3.06 subject to any limitations set forth in Section 4.10 and any investment
earnings or interest paid shall accrue to the benefit of the party designated in
such section and the party so designated shall deposit in the related account
from its own funds the amount of any loss incurred on Permitted Investments in
such account.

                  (e) Except as otherwise expressly provided in this Agreement,
if any default occurs in the making of a payment due under any Permitted
Investment, or if a default occurs in any other performance required under any
Permitted Investment, the Trustee may and, subject to Section 8.01 and Section
8.02(a)(v), upon the request of the NIMS Insurer or the Holders of Certificates
representing more than 50% of the Voting Rights allocated to any Class of
Certificates, shall take such action as may be appropriate to enforce such
payment or performance, including the institution and prosecution of appropriate
proceedings.

                  (f) The Trustee or its Affiliates are permitted to receive
compensation that could be deemed to be in the Trustee'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 pursuant to Section 3.05.

                  SECTION 3.07. Payment of Taxes, Insurance and Other Charges.

                  With respect to each Mortgage Loan, the Master Servicer shall
maintain accurate records reflecting the status of ground rents, taxes,
assessments, water rates and other charges which are or may become a lien upon
the Mortgaged Property and the status of fire and hazard insurance coverage and,
as to those Mortgage Loans subject to a voluntary escrow agreement, shall
obtain, from time to time, all bills for the payment of such charges (including
renewal premiums) and shall effect payment thereof prior to the applicable
penalty or termination date and at a time appropriate for securing maximum
discounts allowable, employing for such purpose deposits of the Mortgagor in the
Escrow Account which shall have been estimated and accumulated by the Master
Servicer in amounts sufficient for such purposes, as allowed under the terms of
the Mortgage or Applicable Regulations. The Master Servicer assumes full
responsibility for the timely payment of all such bills and shall effect timely
payments of all such bills irrespective of the Mortgagor's faithful performance
in the payment of same or the making of the Escrow Payments and shall make
Servicing Advances from its own funds to effect such payments. To the extent
that the Mortgage does not provide for Escrow Payments, the Master Servicer
shall use reasonable efforts consistent with the Servicing

                                       80

<PAGE>

Standard to determine that any such payments are made by the Mortgagor at the
time they first become due and shall ensure that the Mortgaged Property is not
lost to a tax lien as a result of nonpayment and that such Mortgaged Property is
not left uninsured.

                  SECTION 3.08. Maintenance of Hazard Insurance.

                  The Master Servicer shall cause to be maintained for each
Mortgage Loan fire insurance with extended coverage on the related Mortgaged
Property in an amount which is at least equal to the least of (i) the current
Stated Principal Balance of such Mortgage Loan, (ii) the amount necessary to
fully compensate for any damage or loss to the improvements that are a part of
such property on a replacement cost basis and (iii) the maximum insurable value
of the improvements which are a part of such Mortgaged Property, in each case in
an amount not less than such amount as is necessary to avoid the application of
any coinsurance clause contained in the related hazard insurance policy. The
Master Servicer shall also cause to be maintained fire insurance with extended
coverage on each REO Property in an amount which is at least equal to the lesser
of (i) the maximum insurable value of the improvements which are a part of such
property and (ii) the outstanding Stated Principal Balance of the related
Mortgage Loan, plus accrued interest at the Mortgage Rate and related Servicing
Advances (each measured at the time it became an REO Property). The Master
Servicer will comply in the performance of this Agreement with all reasonable
rules and requirements of each insurer under any such hazard policies. Any
amounts to be collected by the Master Servicer under any such policies (other
than amounts to be applied to the restoration or repair of the property subject
to the related Mortgage or amounts to be released to the Mortgagor in accordance
with the procedures that the Master Servicer would follow in servicing loans
held for its own account, subject to the terms and conditions of the related
Mortgage and Mortgage Note) shall be deposited in the Collection Account,
subject to withdrawal pursuant to Section 3.05, if received in respect of a
Mortgage Loan, or in the REO Account, subject to withdrawal pursuant to Section
3.13, if received in respect of an REO Property. Any cost incurred by the Master
Servicer in maintaining any such insurance shall not, for the purpose of
calculating distributions to Certificateholders, be added to the unpaid Stated
Principal Balance of the related Mortgage Loan, notwithstanding that the terms
of such Mortgage Loan so permit. It is understood and agreed that no earthquake
or other additional insurance is to be required of any Mortgagor other than
pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance. If the Mortgaged Property
or REO Property is at any time in an area identified in the Federal Register by
the Federal Emergency Management Agency as having special flood hazards, the
Master Servicer will cause to be maintained a flood insurance policy in respect
thereof. Such flood insurance shall be in an amount equal to the lesser of (i)
the unpaid Stated Principal Balance of the related Mortgage Loan; (ii) the
maximum amount of such insurance available for the related Mortgaged Property
under the national flood insurance program (assuming that the area in which such
Mortgaged Property is located is participating in such program) and (iii) the
maximum insurable value of the improvements which are part of the related
Mortgaged Property.

                  SECTION 3.09. Maintenance of Mortgage Blanket Insurance.

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

                                       81

<PAGE>

it shall conclusively be deemed to have satisfied its obligations as set forth
in the first two sentences of Section 3.08, it being understood and agreed that
such policy may contain a deductible clause, in which case the Master Servicer
shall, in the event that there shall not have been maintained on the related
Mortgaged Property or REO Property a policy complying with the first two
sentences of Section 3.08, and there shall have been one or more losses which
would have been covered by such policy, deposit to the Collection Account from
its own funds the amount not otherwise payable under the blanket policy because
of such deductible clause. In connection with its activities as administrator
and servicer of the Mortgage Loans, the Master Servicer agrees to prepare and
present, on behalf of itself, the Trustee and Certificateholders, claims under
any such blanket policy in a timely fashion in accordance with the terms of such
policy.

                  SECTION 3.10. Fidelity Bond; Errors and Omissions Insurance.

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

                  SECTION 3.11. Enforcement of Due-On-Sale Clauses; Assumption
                                Agreements.

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

                                       82

<PAGE>

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

                  Notwithstanding the foregoing paragraph or any other provision
of this Agreement, the Master Servicer shall not be deemed to be in default,
breach or any other violation of its obligations hereunder by reason of any
assumption of a Mortgage Loan by operation of law or by the terms of the
Mortgage Note or any assumption which the Master Servicer may be restricted by
law from preventing, for any reason whatever. For purposes of this Section 3.11,
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 3.12.    Realization Upon Defaulted Mortgage Loans.

                  (a) The Master Servicer shall, consistent with the Servicing
Standard and the Loss Mitigation Action Plan, foreclose upon or otherwise
comparably convert the ownership of properties securing such of the Mortgage
Loans as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments pursuant to
Section 3.02. The Master Servicer shall be responsible for all costs and
expenses incurred by it in any such proceedings; provided, however, that such
costs and expenses will be recoverable as Servicing Advances by the Master
Servicer as contemplated in Section 3.05 and Section 3.13. The foregoing is
subject to the provision that, in any case in which Mortgaged Property shall
have suffered damage from an Uninsured Cause, the Master Servicer shall not be
required to expend its own funds toward the restoration of such property unless
it shall determine in its discretion that such restoration will increase the
proceeds of liquidation of the related Mortgage Loan after reimbursement to
itself for such expenses.

                  (b) Notwithstanding the foregoing provisions of this Section
3.12 or any other provision of this Agreement, with respect to any Mortgage Loan
as to which the Master Servicer has

                                       83

<PAGE>

received actual notice of, or has actual knowledge of, the presence of any toxic
or hazardous substance on the related Mortgaged Property, the Master Servicer
shall not, on behalf of the Trustee, either (i) obtain title to such Mortgaged
Property as a result of or in lieu of foreclosure or otherwise or (ii) otherwise
acquire possession of, or take any other action with respect to, such Mortgaged
Property, if, as a result of any such action, the Trustee, the Trust Fund or the
Certificateholders would be considered to hold title to, to be a
"mortgagee-in-possession" of, or to be an "owner" or "operator" of such
Mortgaged Property within the meaning of the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended from time to time,
or any comparable law, unless the Master Servicer has also previously
determined, based on its reasonable judgment and a report prepared by a Person
who regularly conducts environmental audits using customary industry standards,
that:

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

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

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

                  The cost of the environmental audit report contemplated by
this Section 3.12 shall be advanced by the Master Servicer, subject to the
Master Servicer's right to be reimbursed therefor from the Collection Account as
provided in Section 3.05(a)(v), such right of reimbursement being prior to the
rights of Certificateholders to receive any amount in the Collection Account
received in respect of the affected Mortgage Loan or other Mortgage Loans.

                  If the Master Servicer determines, as described above, that it
is in the best economic interest of the Trust Fund to take such actions as are
necessary to bring any such Mortgaged Property into compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials, hazardous
wastes or petroleum-based materials affecting any such Mortgaged Property, then
the Master Servicer shall take such action as it deems to be in the best
economic interest of the Trust Fund. The cost of any such compliance,
containment, cleanup or remediation shall be advanced by the Master Servicer,
subject to the Master Servicer's right to be reimbursed therefor from the
Collection Account as provided in Section 3.05(a)(v), such right of
reimbursement being prior to the rights of Certificateholders to receive any
amount in the Collection Account received in respect of the affected Mortgage
Loan or other Mortgage Loans.

                                       84

<PAGE>

                  (c) Proceeds received in connection with any Final Recovery
Determination, as well as any recovery resulting from a partial collection of
Insurance Proceeds or Liquidation Proceeds, in respect of any Mortgage Loan,
will be applied in the following order of priority: first, to reimburse the
Master Servicer or any Sub-Servicer for any related unreimbursed Servicing
Advances and Advances, pursuant to Section 3.05(a)(ii); second, to accrued and
unpaid interest on the Mortgage Loan, to the date of the Final Recovery
Determination, or to the Due Date prior to the Distribution Date on which such
amounts are to be distributed if not in connection with a Final Recovery
Determination; and third, as a recovery of principal of the Mortgage Loan. If
the amount of the recovery so allocated to interest is less than the full amount
of accrued and unpaid interest due on such Mortgage Loan, the amount of such
recovery will be allocated by the Master Servicer as follows: first, to unpaid
Servicing Fees; and second, to the balance of the interest then due and owing.
The portion of the recovery so allocated to unpaid Servicing Fees shall be
reimbursed to the Master Servicer or any Sub-Servicer pursuant to Section
3.05(a)(ii).

                  SECTION 3.13. Title, Management and Disposition of REO
                                Property.

                  (a) The deed or certificate of sale of any REO Property shall
be taken in the name of the Trustee, or its nominee, in trust for the benefit of
the Certificateholders. Pursuant to the power of attorney granted in Section
3.01, the Master Servicer is hereby authorized to transfer the title of any REO
Property taken in the name of the Trustee to a third party purchaser pursuant to
this Section 3.13 without further documentation of its authority as
attorney-in-fact for the Trustee on behalf of the Trust. The Master Servicer, on
behalf of the Trust Fund (and on behalf of the Trustee for the benefit of the
Certificateholders), shall either sell any REO Property before the close of the
third taxable year after the year the Trust Fund acquires ownership of such REO
Property for purposes of Section 860G(a)(8) of the Code or request from the
Internal Revenue Service, no later than 60 days before the day on which the
three-year grace period would otherwise expire, an extension of the three-year
grace period, unless the Master Servicer shall have delivered to the Trustee,
the NIMS Insurer and the Depositor an Opinion of Counsel, addressed to the
Trustee, the NIMS Insurer and the Depositor, to the effect that the holding by
the Trust Fund of such REO Property subsequent to three years after its
acquisition will not result in the imposition on any Trust REMIC of taxes on
"prohibited transactions" thereof, as defined in Section 860F of the Code, or
cause any Trust REMIC to fail to qualify as a REMIC under Federal law at any
time that any Certificates are outstanding. The Master Servicer shall manage,
conserve, protect and operate each REO Property for the benefit of the
Certificateholders and solely for the purpose of its prompt disposition and sale
in a manner which does not cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code or
result in the receipt by any Trust REMIC of any "income from non-permitted
assets" within the meaning of Section 860F(a)(2)(B) of the Code, or any "net
income from foreclosure property" which is subject to taxation under the REMIC
Provisions.

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

                                       85

<PAGE>

shall be entitled to retain or withdraw any interest income paid on funds
deposited in the REO Account.

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

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

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

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

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

                  Notwithstanding the Master Servicer's obligation to the
Certificateholders to manage and operate (including the collection of rents from
existing tenants and management of any leases acquired with the REO property to
the extent applicable) the REO Property from the date of acquisition until the
date of sale, neither the Master Servicer nor the Trustee shall knowingly:

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

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

                  (iii) authorize any construction on any REO Property, other
         than the completion of a building or other improvement thereon, and
         then only if more than ten percent of the

                                       86

<PAGE>

         construction of such building or other improvement was completed before
         default on the related Mortgage Loan became imminent, all within the
         meaning of Section 856(e)(4)(B) of the Code; or

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

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

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

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

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

                  (iii) none of the provisions of this Section 3.13(c) relating
         to any such contract or to actions taken through any such Independent
         Contractor shall be deemed to relieve the Master Servicer of any of its
         duties and obligations to the Trustee on behalf of the
         Certificateholders with respect to the operation and management of any
         such REO Property; and

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

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

                                       87

<PAGE>

                  (d) In addition to the withdrawals permitted under Section
3.13(c), the Master Servicer may from time to time make withdrawals from the REO
Account for any REO Property: (i) to pay itself or any Sub-Servicer unpaid
Servicing Fees in respect of the related Mortgage Loan; and (ii) to reimburse
itself or any Sub-Servicer for unreimbursed Servicing Advances and Advances made
in respect of such REO Property or the related Mortgage Loan. On the Master
Servicer Remittance Date, the Master Servicer shall withdraw from each REO
Account maintained by it and deposit into the Distribution Account in accordance
with Section 3.04(g)(ii), for distribution on the related Distribution Date in
accordance with Section 4.01, the income from the related REO Property received
during the prior calendar month, net of any withdrawals made pursuant to Section
3.13(c) or this Section 3.13(d).

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

                  (f) The proceeds from the REO Disposition, net of any amount
required by law to be remitted to the Mortgagor under the related Mortgage Loan
and net of any payment or reimbursement to the Master Servicer or any
Sub-Servicer as provided above, shall be deposited in the Distribution Account
in accordance with Section 3.04(g)(ii) on the Master Servicer Remittance Date in
the month following the receipt thereof for distribution on the related
Distribution Date in accordance with Section 4.01. Any REO Disposition shall be
for cash only (unless changes in the REMIC Provisions made subsequent to the
Startup Day allow a sale for other consideration).

                  SECTION 3.14. [Reserved].

                  SECTION 3.15. Reports of Foreclosure and Abandonment of
                                Mortgaged Properties.

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

                  SECTION 3.16. Optional Purchase of Defaulted Mortgage Loans.

                  (a)(i) The NIMS Insurer may, at its option, purchase a
Mortgage Loan which has become 90 or more days delinquent or for which the
Master Servicer has accepted a deed in lieu of foreclosure. Prior to purchase
pursuant to this Section 3.16(a)(i), the Master Servicer shall be required to
continue to make Advances pursuant to Section 4.03. The NIMS Insurer shall not
use any procedure in selecting Mortgage Loans to be repurchased which is
materially adverse to the interests of the Certificateholders. The NIMS Insurer
shall purchase such delinquent Mortgage Loan

                                       88

<PAGE>

at a price equal to the Purchase Price of such Mortgage Loan. Any such purchase
of a Mortgage Loan pursuant to this Section 3.16(a)(i) shall be accomplished by
remittance to the Master Servicer for deposit in the Collection Account of the
amount of the Purchase Price. The Trustee shall effectuate the conveyance of
such delinquent Mortgage Loan to the NIMS Insurer to the extent necessary, as
requested, and the Trustee shall promptly deliver all documentation to the NIMS
Insurer.

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

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

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

                  (a) Upon the payment in full of any Mortgage Loan, or the
receipt by the Master Servicer of a notification that payment in full shall be
escrowed in a manner customary for such purposes, the Master Servicer will
promptly notify the Trustee and any related Custodian by a certification in the
form of Exhibit E or such other form supplied by the Master Servicer provided
that it does not differ from the substantive content of Exhibit E, (which
certification shall include a statement to the effect that all amounts received
or to be received in connection with such payment which are required to be
deposited in the Collection Account pursuant to Section 3.04(b) have been or
will be so deposited) of a Servicing Officer and shall request delivery to it of
the Mortgage File. Upon receipt of such certification and request, the Trustee
or such Custodian, as the case may be, shall promptly release (and in no event
more than three (3) Business Days thereafter) the related Mortgage File to the
Master Servicer. No expenses incurred in connection with any instrument of
satisfaction or deed of reconveyance shall be chargeable to the Collection
Account or the Distribution Account.

                                       89

<PAGE>

                  (b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any insurance policy relating to the Mortgage Loans, the Trustee and any related
Custodian shall, upon request of the Master Servicer and delivery to the Trustee
or such Custodian, as the case may be, of a Request for Release in the form of
Exhibit E or such other form supplied by the Master Servicer provided that it
does not differ from the substantive content of Exhibit E, release the related
Mortgage File to the Master Servicer, and the Trustee shall, at the direction of
the Master Servicer, execute such documents as shall be necessary to the
prosecution of any such proceedings and the Master Servicer shall retain such
Mortgage File in trust for the benefit of the Certificateholders. Such Request
for Release shall obligate the Master Servicer to return each and every document
previously requested from the Mortgage File to the Trustee or to such Custodian
when the need therefor by the Master Servicer no longer exists, unless the
Mortgage Loan has been liquidated and the Liquidation Proceeds relating to the
Mortgage Loan have been deposited in the Collection Account or the Mortgage File
or such document has been delivered to an attorney, or to a public trustee or
other public official as required by law, for purposes of initiating or pursuing
legal action or other proceedings for the foreclosure of the Mortgaged Property
either judicially or non-judicially, and the Master Servicer has delivered to
the Trustee a certificate of a Servicing Officer certifying as to the name and
address of the Person to which such Mortgage File or such document was delivered
and the purpose or purposes of such delivery. Upon receipt of a certificate of a
Servicing Officer stating that such Mortgage Loan was liquidated and that all
amounts received or to be received in connection with such liquidation that are
required to be deposited into the Collection Account have been so deposited, or
that such Mortgage Loan has become an REO Property, upon request, a copy of the
Request for Release shall be released by the Trustee or such Custodian to the
Master Servicer.

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

                  (d) The Trustee and the Master Servicer may mutually agree on
policies and procedures (commercially reasonable in nature) to allow the
submission of any and all requests for the release of a Mortgage File
electronically with a digital signature or other identifier to designate the
Servicing Officer of the Master Servicer requesting such collateral.

                  SECTION 3.18. Servicing Compensation.

                  As compensation for the activities of the Master Servicer
hereunder, the Master Servicer shall be entitled to the Servicing Fee with
respect to each Mortgage Loan payable solely from payments of interest in
respect of such Mortgage Loan, subject to Section 4.03(e). In addition, the
Master Servicer shall be entitled to recover unpaid Servicing Fees out of
Insurance Proceeds or

                                       90

<PAGE>

Liquidation Proceeds to the extent permitted by Section 3.05(a)(ii), out of
general funds in the Collection Account to the extent permitted by Section
3.05(a) and out of amounts derived from the operation and sale of an REO
Property to the extent permitted by Section 3.13. The right to receive the
Servicing Fee may not be transferred in whole or in part except in connection
with the transfer of all of the Master Servicer's responsibilities and
obligations under this Agreement.

                  Additional servicing compensation in the form of assumption
fees, late payment charges, insufficient funds fees, reconveyance fees and other
similar fees and charges (other than Prepayment Charges) shall be retained by
the Master Servicer only to the extent such fees or charges are received by the
Master Servicer. The Master Servicer shall also be entitled pursuant to Section
3.05(a)(vi) to withdraw from the Collection Account, pursuant to Section 3.04(h)
to withdraw from any Escrow Account and pursuant to Section 3.13(b) to withdraw
from any REO Account, as additional servicing compensation, interest or other
income earned on deposits therein, subject to Section 3.06. The Master Servicer
shall be required to pay all expenses incurred by it in connection with its
servicing activities hereunder (including premiums for the insurance required by
Section 3.08, Section 3.09 and Section 3.10, to the extent such premiums are not
paid by the related Mortgagors or by a Sub-Servicer, servicing compensation of
each Sub-Servicer, and to the extent provided in Section 8.05, the fees and
expenses of the Trustee) and shall not be entitled to reimbursement therefor
except as specifically provided herein.

                  SECTION 3.19. Statement as to Compliance.

                  The Master Servicer will deliver to the Trustee, the NIMS
Insurer, the Depositor and each Rating Agency on or before March 15th of each
calendar year commencing in 2004, an Officers' Certificate, in a form similar to
Exhibit M attached hereto agreeable to the parties hereto, stating, as to each
signatory thereof, that (i) a review of the activities of the Master Servicer
during the preceding calendar year and of performance under this Agreement has
been made under such officers' supervision and (ii) to the best of such
officers' knowledge, based on such review, the Master Servicer has fulfilled all
of its obligations under this Agreement throughout such year, or, if there has
been a default in the fulfillment of any such obligation, specifying each such
default known to such officer and the nature and status thereof. Copies of any
such statement shall be provided by the Trustee to any Certificateholder and to
any Person identified to the Trustee as a prospective transferee of a
Certificate, upon the request and at the expense of the requesting party,
provided that such statement is delivered by the Master Servicer to the Trustee.

                  SECTION 3.20. Independent Public Accountants' Servicing
                                Report.

                  Not later than March 15th of each calendar year commencing in
2004, the Master Servicer, at its expense, shall cause a nationally recognized
firm of independent certified public accountants to furnish to the Master
Servicer a report stating that (i) it has obtained a letter of representation
regarding certain matters from the management of the Master Servicer which
includes an assertion that the Master Servicer has complied with certain minimum
residential mortgage loan servicing standards, identified in the Uniform Single
Attestation Program for Mortgage Bankers established by the Mortgage Bankers
Association of America, with respect to the servicing of residential mortgage
loans during the most recently completed calendar year and (ii) on the basis of
an examination conducted by such firm in accordance with standards established
by the American

                                       91

<PAGE>

Institute of Certified Public Accountants, such representation is fairly stated
in all material respects, subject to such exceptions and other qualifications
that may be appropriate. In rendering its report such firm may rely, as to
matters relating to the direct servicing of residential mortgage loans by Sub-
Servicers, upon comparable reports of firms of independent certified public
accountants rendered on the basis of examinations conducted in accordance with
the same standards (rendered within one year of such report) with respect to
those Sub-Servicers. Immediately upon receipt of such report, the Master
Servicer shall furnish a copy of such report to the Trustee, the NIMS Insurer
and each Rating Agency. Copies of such statement shall be provided by the
Trustee to any Certificateholder upon request at the Master Servicer's expense,
provided that such statement is delivered by the Master Servicer to the Trustee.
In the event such firm of independent certified public accountants requires the
Trustee to agree to the procedures performed by such firm, the Master Servicer
shall direct the Trustee in writing to so agree; it being understood and agreed
that the Trustee will deliver such letter of agreement in conclusive reliance
upon the direction of the Master Servicer, and the Trustee has not made any
independent inquiry or investigation as to, and shall have no obligation or
liability in respect of, the sufficiency, validity or correctness of such
procedures.

                  SECTION 3.21.  Access to Certain Documentation.

                  The Master Servicer shall provide to the Office of Thrift
Supervision, the FDIC, and any other federal or state banking or insurance
regulatory authority that may exercise authority over any Certificateholder or
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 Master Servicer designated by it. In addition,
access to the documentation regarding the Mortgage Loans will be provided to any
Certificateholder, Certificate Owner, the Trustee, the NIMS Insurer and to any
Person identified to the Master Servicer as a prospective transferee of a
Certificate, upon reasonable request during normal business hours at the offices
of the Master Servicer designated by it at the expense of the Person requesting
such access. In each case, access to any documentation regarding the Mortgage
Loans may be conditioned upon the requesting party's acknowledgment in writing
of a confidentiality agreement regarding any information that is required to
remain confidential under the Gramm-Leach-Bliley Act of 1999.

                  SECTION 3.22. [Reserved].

                  SECTION 3.23. Advance Facility.

                  (a) The Master Servicer and/or the Trustee on behalf of the
Trust Fund, in either case, with the consent of the NIMS Insurer and the Master
Servicer in the case of the Trustee, is hereby authorized to enter into a
facility (an "Advance Facility") with any Person which provides that such Person
(an "Advancing Person") may fund Advances and/or Servicing Advances to the Trust
Fund under this Agreement, although no such facility shall reduce or otherwise
affect the Master Servicer's obligation to fund such Advances and/or Servicing
Advances. If the Master Servicer enters into such an Advance Facility pursuant
to this Section 3.23, upon reasonable request of the Advancing Person, the
Trustee shall execute a letter of acknowledgment, confirming its receipt of
notice of the existence of such Advance Facility. To the extent that an
Advancing Person funds any Advance or any Servicing Advance and provides the
Trustee with notice acknowledged by the

                                       92

<PAGE>

Master Servicer that such Advancing Person is entitled to reimbursement directly
from the Trustee pursuant to the terms of the Advance Facility, such Advancing
Person shall be entitled to receive reimbursement pursuant to this Agreement for
such amount to the extent provided in Section 3.23(b). Such notice from the
Advancing Person must specify the amount of the reimbursement, the Section of
this Agreement that permits the applicable Advance or Servicing Advance to be
reimbursed and the section(s) of the Advance Facility that entitle the Advancing
Person to request reimbursement from the Trustee, rather than the Master
Servicer, and include the Master Servicer's acknowledgment thereto or proof of
an Event of Default under the Advance Facility. The Trustee shall have no duty
or liability with respect to any calculation of any reimbursement to be paid to
an Advancing Person and shall be entitled to rely without independent
investigation on the Advancing Person's notice provided pursuant to this Section
3.23. An Advancing Person whose obligations hereunder are limited to the funding
of Advances and/or Servicing Advances shall not be required to meet the
qualifications of a Master Servicer or a Sub-Servicer pursuant to Section 6.06
hereof and will not be deemed to be a Sub-Servicer under this Agreement. If the
terms of a facility proposed to be entered into with an Advancing Person by the
Trust Fund would not materially and adversely affect the interests of any
Certificateholder, then the NIMS Insurer shall not withhold its consent to the
Trust Fund's entering such facility.

                  (b) If, pursuant to the terms of the Advance Facility, an
Advancing Person is entitled to reimbursement directly from the Trustee, then
the Master Servicer shall not reimburse itself therefor under Section
3.05(a)(ii), Section 3.05(a)(iii), Section 3.05(a)(v) or Section 3.05(a)(vii)
prior to the remittance to the Trust Fund, but instead the Master Servicer shall
include such amounts in the applicable remittance to the Trustee made pursuant
to Section 3.04(g) to the extent of amounts on deposit in the Collection Account
on the related Master Servicer Remittance Date. The Trustee is hereby authorized
to pay to the Advancing Person reimbursements for Advances and Servicing
Advances from the Distribution Account, to the extent permitted under the terms
of the Advance Facility, to the same extent the Master Servicer would have been
permitted to reimburse itself for such Advances and/or Servicing Advances in
accordance with Section 3.05(a)(ii), Section 3.05(a)(iii), Section 3.05(a)(v) or
Section 3.05(a)(vii), as the case may be, had the Master Servicer itself funded
such Advance or Servicing Advance. The Trustee is hereby authorized to pay
directly to the Advancing Person such portion of the Servicing Fee as the
parties to any advancing facility agree to in writing delivered to the Trustee.

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

                  (d) In the event the Master Servicer is terminated pursuant to
Section 7.01, the Advancing Person shall succeed to the terminated Master
Servicer's right of reimbursement set forth in Section 7.02(c) to the extent of
such Advancing Person's financing of Advances or Servicing Advances hereunder
then remaining unreimbursed.

                  (e) Any amendment to this Section 3.23 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 3.23,
including amendments to add provisions relating to a successor master servicer,
may be entered into by the Trustee and the Master Servicer without the consent
of any Certificateholder but with the consent of the NIMS Insurer and written
confirmation

                                       93

<PAGE>

from each Rating Agency that the amendment will not result in the reduction or
withdrawal of the then-current ratings of any outstanding Class of Certificates
or any other notes secured by collateral which includes all or a portion of the
Class CE Certificates, the Class P Certificates and/or the Residual
Certificates, notwithstanding anything to the contrary in this Agreement.

                                       94

<PAGE>

                                   ARTICLE IV

                         PAYMENTS TO CERTIFICATEHOLDERS

                  SECTION 4.01.  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-LTAV1, REMIC I
         Regular Interest I-LTAV2, REMIC I Regular Interest I-LTAF1, REMIC I
         Regular Interest I-LTAF2, REMIC I Regular Interest I-LTAF3, REMIC I
         Regular Interest I-LTAF4, REMIC I Regular Interest I-LTAF5, REMIC I
         Regular Interest I-LTAF6, 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-LTMV6, REMIC I Regular Interest I-LTMF6, 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 and deferred when the REMIC I Overcollateralized
         Amount is less than the REMIC I Overcollateralization Target 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-LTAV1, REMIC I
         Regular Interest I-LTAV2, REMIC I Regular Interest I-LTAF1, REMIC I
         Regular Interest I-LTAF2, REMIC I Regular Interest I-LTAF3, REMIC I
         Regular Interest I-LTAF4, REMIC I Regular Interest I-LTAF5, REMIC I
         Regular Interest I-LTAF6, 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- LTMV6 and REMIC I Regular Interest I-LTMF6 in the
         same proportion as the Overcollateralization Increase Amount is
         allocated to the Corresponding Certificates; and

                  (ii) to Holders of REMIC I Regular Interest I-LT1SUB, REMIC I
         Regular Interest I-LT1GRP, REMIC I Regular Interest I-LT2SUB, REMIC I
         Regular Interest I-LT2GRP, REMIC I Regular Interest I-LT3SUB, REMIC I
         Regular Interest I-LT3GRP 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 Available Funds for such Distribution Date after the
         distributions made pursuant to clause (i) above, allocated as follows:

                                       95

<PAGE>

                           (a) to the Holders of REMIC I Regular Interest I-LTAA
                  and REMIC I Regular Interest I-LTP, 98.00% of such remainder
                  (other than amounts payable under clause (iv) below), until
                  the Uncertificated Balance of such REMIC I Regular Interest is
                  reduced to zero, provided, however, that REMIC I Regular
                  Interest I-LTP shall not be reduced until the Distribution
                  Date immediately following the expiration of the latest
                  Prepayment Charge as identified on the Prepayment Charge
                  Schedule or any Distribution Date thereafter, at which point
                  such amount shall be distributed to REMIC I Regular Interest
                  I-LTP, until $100 has been distributed pursuant to this
                  clause;

                           (b) to the Holders of REMIC I Regular Interest
                  I-LTAV1, REMIC I Regular Interest I-LTAV2, REMIC I Regular
                  Interest I-LTAF1, REMIC I Regular Interest I-LTAF2, REMIC I
                  Regular Interest I-LTAF3, REMIC I Regular Interest I- LTAF4,
                  REMIC I Regular Interest I-LTAF5, REMIC I Regular Interest
                  I-LTAF6, 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-LTMV6 and REMIC I Regular Interest
                  I-LTMF6, 1.00% of such remainder (other than amounts payable
                  under clause (iv) below), 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;

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

                           (d) any remaining amount to the Holders of the Class
                  R Certificates (in respect of the Class R-I Interest);

provided, however, that (i) 98.00% and (ii) 2.00% of any principal payments that
are attributable to an Overcollateralization Reduction Amount shall be allocated
to Holders of (i) REMIC I Regular Interest I-LTAA and REMIC I Regular Interest
I-LTP, in that order and (ii) REMIC I Regular Interest I-LTZZ, respectively;
provided that REMIC I Regular Interest I-LTP shall not be reduced until the
Distribution Date immediately following the expiration of the latest Prepayment
Charge as identified on the Prepayment Charge Schedule or any Distribution Date
thereafter, at which point such amount shall be distributed to REMIC I Regular
Interest I-LTP, until $100 has been distributed pursuant to this clause; and

                  (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 (i) 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 "GRP" 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 "SUB," so that the Uncertificated Balance of each such
         REMIC I Regular

                                       96

<PAGE>

         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.

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

                  (i) to the Holders of the Class AV-1 Certificates, the Senior
         Interest Distribution Amount allocable to such Certificates; and

                  (ii) concurrently, to the Holders of the Class AV-2
         Certificates and the Class AF Certificates, the Senior Interest
         Distribution Amount allocable to such Certificates, on a PRO RATA basis
         based on the entitlement of each such Class, to the extent remaining
         unpaid after the distribution of the Group II Interest Remittance
         Amount as set forth in Section 4.01(a)(2)(II)(i) below and the Group
         III Interest Remittance Amount as set forth in Section
         4.01(a)(2)(III)(i) below.

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

                  (i) to the Holders of the Class AV-2 Certificates, the Senior
         Interest Distribution Amount allocable to such Certificates; and

                  (ii) concurrently, to the Holders of the Class AV-1
         Certificates and the Class AF Certificates, the Senior Interest
         Distribution Amount allocable to such Certificates, 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 Section 4.01(a)(2)(I)(i) above and the Group III
         Interest Remittance Amount as set forth in Section 4.01(a)(2)(III)(i)
         below.

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

                  (i) concurrently, to the Holders of the Class AF Certificates,
         the Senior Interest Distribution Amount allocable to such Certificates,
         on a PRO RATA basis based on the entitlement of each such Class; and

                  (ii) concurrently, to the Holders of the Class AV-1
         Certificates and the Class AV- 2 Certificates, the Senior Interest
         Distribution Amount allocable to such Certificates, on a

                                       97

<PAGE>

         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 Section 4.01(a)(2)(I)(i) above and
         the Group II Interest Remittance Amount as set forth in Section
         4.01(a)(2)(II)(i) above.

                  (IV) On each Distribution Date, following the distributions
         made pursuant to Section 4.01(a)(2)(I), (II) and (III) above, the
         Trustee shall withdraw from the Distribution Account an amount equal to
         any remaining Group I Interest Remittance Amount, Group II Interest
         Remittance Amount and Group III Interest Remittance Amount and
         distribute to the Certificateholders the following amounts, in the
         following order of priority:

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

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

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

                  (iv) to the Holders of the Class M-4 Certificates, an amount
         equal to the Interest Distribution Amount allocable to the Class M-4
         Certificates;

                  (v) to the Holders of the Class M-5 Certificates, an amount
         equal to the Interest Distribution Amount allocable to the Class M-5
         Certificates; and

                  (vi) concurrently, to the Holders of the Class MV-6
         Certificates and the Class MF- 6 Certificates, on a PRO RATA basis,
         based on the entitlement of each such Class.

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

                  (i) to the Holders of the Class AV-1 Certificates, until the
         Certificate Principal Balance of such Class has been reduced to zero;
         and

                  (ii) concurrently, to the Holders of the Class AV-2
         Certificates and the Class AF Certificates (allocated among the Class
         AF Certificates in the priority set forth below), on a PRO RATA basis
         based on the Certificate Principal Balance of each such Class after
         taking into account the distribution of the Group II Principal
         Distribution Amount pursuant to Section 4.01(a)(3)(II) below and the
         Group III Principal Distribution Amount pursuant to Section
         4.01(a)(3)(III) below, until the Certificate Principal Balances of such
         Classes have been reduced to zero.

                                       98

<PAGE>

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

                  (i) to the Holders of the Class AV-2 Certificates, until the
         Certificate Principal Balance of such Class has been reduced to zero;
         and

                  (ii) concurrently, to the Holders of the Class AV-1
         Certificates and the Class AF Certificates (allocated among the Class
         AF Certificates in the priority set forth below), 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 Section 4.01(a)(3)(I) above and the
         Group III Principal Distribution Amount pursuant to Section
         4.01(a)(3)(III) below, until the Certificate Principal Balances of such
         Classes have been reduced to zero.

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

                  (i) to the Holders of the Class AF Certificates (allocated
         among the Class AF Certificates in the priority set forth below), until
         the Certificate Principal Balances of each such Classes have been
         reduced to zero; and

                  (ii) concurrently, to the Holders of the Class AV-1
         Certificates and the Class AV- 2 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 Section 4.01(a)(3)(I) above and the
         Group II Principal Distribution Amount pursuant to Section
         4.01(a)(3)(II) above, until the Certificate Principal Balances of such
         Classes have been reduced to zero.

                  (IV) On each Distribution Date (a) prior to the Stepdown Date
         or (b) on which a Trigger Event is in effect, the sum of the Group I
         Principal Distribution Amount, the Group II Principal Distribution
         Amount and the Group III Principal Distribution Amount remaining
         undistributed for such Distribution Date shall be distributed in the
         following order of priority:

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

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

                  (iii) to the Holders of the Class M-3 Certificates, until the
         Certificate Principal Balance of such Class has been reduced to zero;

                  (iv) to the Holders of the Class M-4 Certificates, until the
         Certificate Principal Balance of such Class has been reduced to zero;

                                       99

<PAGE>

                  (v) to the Holders of the Class M-5 Certificates, until the
         Certificate Principal Balance of such Class has been reduced to zero;
         and

                  (vi) concurrently, to the Holders of the Class MV-6
         Certificates and the Class MF- 6 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.

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

                  (i) to the Holders of the Class AV-1 Certificates, the Class
         AV-1 Principal Distribution Amount until the Certificate Principal
         Balance of such Class has been reduced to zero;

                  (ii) to the extent of the portion, if any, of the Class AV-1
         Principal Distribution Amount remaining undistributed pursuant to
         Section 4.01(a)(3)(V)(i) above, concurrently, to the Holders of the
         Class AV-2 Certificates and the Class AF Certificates (allocated among
         the Class AF Certificates in the priority set forth below), on a PRO
         RATA basis based on the Certificate Principal Balance of each such
         Class, after taking into account the distribution of the Group II
         Principal Distribution Amount pursuant to Section 4.01(a)(3)(VI)(i)
         below and the Group III Principal Distribution Amount pursuant to
         Section 4.01(a)(3)(VII)(i) below, until the Certificate Principal
         Balances of such Classes have been reduced to zero; and

                  (iii) concurrently, to the Holders of the Class AV-2
         Certificates and the Class AF Certificates (allocated among the Class
         AF Certificates in the priority set forth below), on a PRO RATA basis
         based on the Certificate Principal Balance of each such Class, after
         taking into account the distribution of the Group II Principal
         Distribution Amount pursuant to Section 4.01(a)(3)(VI)(i) below and the
         Group II Principal Distribution Amount pursuant to Section
         4.01(a)(3)(VII)(i) below, up to an amount equal to the Class AV-2
         Principal Distribution Amount and the Class AF Principal Distribution
         Amount, as applicable, until the Certificate Principal Balances of such
         Classes have been reduced to zero.

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

                  (i) to the Holders of the Class AV-2 Certificates, the Class
         AV-2 Principal Distribution Amount, until the Certificate Principal
         Balance of such Class has been reduced to zero;

                  (ii) to the extent of the portion, if any, of the Class AV-2
         Principal Distribution Amount remaining undistributed pursuant to
         Section 4.01(a)(3)(VI)(i) above, concurrently to the Holders of the
         Class AV-1 Certificates and the Class AF Certificates (allocated among
         the Class AF Certificates in the priority set forth below), on a PRO
         RATA basis based on the Certificate Principal Balance of each such
         Class, after taking into account the distribution of

                                       100

<PAGE>

         the Group I Principal Distribution Amount pursuant to Section
         4.01(a)(3)(V)(i) above and the Group III Principal Distribution Amount
         pursuant to Section 4.01(a)(3)(VII)(i) below, until the Certificate
         Principal Balances of such Classes have been reduced to zero; and

                  (iii) concurrently, to the Holders of the Class AV-1
         Certificates and the Class AF Certificates (allocated among the Class
         AF Certificates in the priority set forth below), 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 Section 4.01(a)(3)(V)(i) above and the
         Group III Principal Distribution Amount pursuant to Section
         4.01(a)(3)(VII)(i) below, up to an amount equal to the Class AV-1
         Principal Distribution Amount and the Class AF Principal Distribution
         Amount, as applicable, until the Certificate Principal Balances of such
         Classes have been reduced to zero.

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

                  (i) to the Holders of the Class AF Certificates (allocated
         among the Class AF Certificates in the priority set forth below), the
         Class AF Principal Distribution Amount, until the Certificate Principal
         Balances of such Classes have been reduced to zero;

                  (ii) to the extent of the portion, if any, of the Class AF
         Principal Distribution Amount remaining undistributed pursuant to
         Section 4.01(a)(3)(VII)(i) above, concurrently, to the Holders of the
         Class AV-1 Certificates and the Class AV-2 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 Section 4.01(a)(3)(V)(i) above and the
         Group II Principal Distribution Amount pursuant to Section
         4.01(a)(3)(VI)(i) above, until the Certificate Principal Balances of
         such Classes have been reduced to zero; and

                  (iii) concurrently, to the Holders of the Class AV-1
         Certificates and the Class AV- 2 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 Section 4.01(a)(3)(V)(i) above and the
         Group II Principal Distribution Amount pursuant to Section
         4.01(a)(3)(VI)(i) above, up to an amount equal to the Class AV-1
         Principal Distribution Amount and the Class AV-2 Principal Distribution
         Amount, as applicable, until the Certificate Principal Balances of such
         Classes have been reduced to zero.

                  (VIII) On each Distribution Date (a) on or after the Stepdown
         Date and (b) on which a Trigger Event is not in effect, the sum of the
         Group I Principal Distribution Amount, the Group II Principal
         Distribution Amount and the Group III Principal Distribution Amount
         remaining undistributed for such Distribution Date shall be distributed
         in the following order of priority:

                  (i) to the Holders of the Class M-1 Certificates, the Class
         M-1 Principal Distribution Amount until the Certificate Principal
         Balance thereof has been reduced to zero;

                                       101

<PAGE>

                  (ii) to the Holders of the Class M-2 Certificates, the Class
         M-2 Principal Distribution Amount until the Certificate Principal
         Balance thereof has been reduced to zero;

                  (iii) to the Holders of the Class M-3 Certificates, the Class
         M-3 Principal Distribution Amount until the Certificate Principal
         Balance thereof has been reduced to zero;

                  (iv) to the Holders of the Class M-4 Certificates, the Class
         M-4 Principal Distribution Amount until the Certificate Principal
         Balance thereof has been reduced to zero;

                  (v) to the Holders of the Class M-5 Certificates, the Class
         M-5 Principal Distribution Amount until the Certificate Principal
         Balance thereof has been reduced to zero; and

                  (vi) concurrently, to the Holders of the Class MV-6
         Certificates and the Class MF- 6 Certificates, the Class M-6 Principal
         Distribution Amount, 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.

         With respect to the Class AF Certificates, all principal distributions
will be distributed as follows: first, to the Holders of the Class AF-6
Certificates, the Lockout Distribution Percentage, until the Certificate
Principal Balance of the Class AF-6 Certificates has been reduced to zero;
second, to the Class AF-1 Certificates, until the Certificate Principal Balance
of the Class AF-1 Certificates has been reduced to zero; third, to the Holders
of the Class AF-2 Certificates, until the Certificate Principal Balance of the
Class AF-2 Certificates has been reduced to zero; fourth, to the Holders of the
Class AF-3 Certificates, until the Certificate Principal Balance of the Class
AF-3 Certificates has been reduced to zero; fifth, to the Holders of the Class
AF-4 Certificates, until the Certificate Principal Balance of the Class AF-4
Certificates has been reduced to zero; sixth, to the Holders of the Class AF-5
Certificates, until the Certificate Principal Balance of the Class AF-5
Certificates has been reduced to zero; and sixth, to the Holders of the Class
AF-6 Certificates, until the Certificate Principal Balance of the Class AF-6
Certificates has been reduced to zero.

                  (4) On each Distribution Date, the Net Monthly Excess Cashflow
         shall be distributed as follows:

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

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

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

                                       102

<PAGE>

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

                  (V) to the Holders of the Class M-4 Certificates, in an amount
         equal to the Interest Carry Forward Amount allocable to such Class of
         Certificates;

                  (VI) to the Holders of the Class M-5 Certificates, in an
         amount equal to the Interest Carry Forward Amount allocable to such
         Class of Certificates;

                  (VII) concurrently, to the Holders of the Class MV-6
         Certificates and the Class MV-6 Certificates, on a PRO RATA basis based
         on the Interest Carry Forward Amount allocable to each such Class of
         Certificates;

                  (VIII) to the Holders of the Class M-1 Certificates, in an
         amount equal to the Allocated Realized Loss Amount allocable to such
         Certificates;

                  (IX) to the Holders of the Class M-2 Certificates, in an
         amount equal to the Allocated Realized Loss Amount allocable to such
         Certificates;

                  (X) to the Holders of the Class M-3 Certificates, in an amount
         equal to the Allocated Realized Loss Amount allocable to such
         Certificates;

                  (XI) to the Holders of the Class M-4 Certificates, in an
         amount equal to the Allocated Realized Loss Amount allocable to such
         Certificates;

                  (XII) to the Holders of the Class M-5 Certificates, in an
         amount equal to the Allocated Realized Loss Amount allocable to such
         Certificates;

                  (XIII) concurrently, to the Holders of the Class MV-6
         Certificates and the Class MF- 6 Certificates, on a PRO RATA basis
         based on the Allocated Realized Loss Amount allocable to each such
         Class of Certificates;

                  (XIV) to the Net WAC Rate Carryover Reserve Account, the
         amount required by Section 4.10(b), after taking into account amounts
         received under the Cap Contracts;

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

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

                                       103

<PAGE>

                  (b) On each Distribution Date, after making the distributions
of the Available Funds as set forth above, the Trustee will FIRST, withdraw from
the Net WAC Rate Carryover Reserve Account all income from the investment of
funds in the Net WAC Rate Carryover Reserve Account and distribute such amount
to the Holders of the Class CE Certificates, and SECOND, withdraw from the Net
WAC Rate Carryover Reserve Account, 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 as follows:

                  (i), concurrently, to the Class A Certificates, on a PRO RATA
basis based on the respective Net WAC Rate Carryover Amounts for such Classes of
Certificates, first, with respect to the Class AV Certificates, from payments
made under the related Cap Contracts, second, with respect to the Class A
Certificates, from payments made under the other Cap Contracts, to the extent
not otherwise paid to the classes of Certificates to which such Cap Contracts
relate and third, with respect to the Class A Certificates from amounts on
deposit in the Net WAC Rate Carryover Reserve Account, but only to the extent of
amounts on deposit in the Net WAC Rate Carryover Reserve Account other than
amounts paid under the Cap Contracts;

                  (ii), to the Class M-1 Certificates, to the extent the Net WAC
Carryover Amount is allocable to such Class, first, from payments made under the
related Cap Contract, second, from payments made under the other Cap Contracts,
to the extent not otherwise paid to the classes of Certificates to which such
Cap Contracts relate or paid pursuant to clause (i) above and third, from
amounts on deposit in the Net WAC Rate Carryover Reserve Account but only to the
extent of amounts on deposit in the Net WAC Rate Carryover Reserve Account other
than amounts paid under the Cap Contracts;

                  (iii), to the Class M-2 Certificates, to the extent the Net
WAC Carryover Amount is allocable to such Class, first, from payments made under
the related Cap Contract, second, from payments made under the other Cap
Contracts, to the extent not otherwise paid to the classes of Certificates to
which such Cap Contracts relate or paid pursuant to clauses (i) and (ii) above
and third, from amounts on deposit in the Net WAC Rate Carryover Reserve Account
but only to the extent of amounts on deposit in the Net WAC Rate Carryover
Reserve Account other than amounts paid under the Cap Contracts;

                  (iv), to the Class M-3 Certificates, to the extent the Net WAC
Carryover Amount is allocable to such Class, first, from payments made under the
related Cap Contract, second, from payments made under the other Cap Contracts,
to the extent not otherwise paid to the classes of Certificates to which such
Cap Contracts relate or paid pursuant to clauses (i) through (iii) above and
third, from amounts on deposit in the Net WAC Rate Carryover Reserve Account but
only to the extent of amounts on deposit in the Net WAC Rate Carryover Reserve
Account other than amounts paid under the Cap Contracts;

                  (v), to the Class M-4 Certificates, to the extent the Net WAC
Carryover Amount is allocable to such Class, first, from payments made under the
related Cap Contract, second, from payments made under the other Cap Contracts,
to the extent not otherwise paid to the classes of Certificates to which such
Cap Contracts relate or paid pursuant to clauses (i) through (iv) above and
third, from amounts on deposit in the Net WAC Rate Carryover Reserve Account but
only to the

                                       104

<PAGE>

extent of amounts on deposit in the Net WAC Rate Carryover Reserve Account other
than amounts paid under the Cap Contracts;

                  (vi), to the Class M-5 Certificates, to the extent the Net WAC
Carryover Amount is allocable to such Class, first, from payments made under the
related Cap Contract, second, from payments made under the other Cap Contracts,
to the extent not otherwise paid to the classes of Certificates to which such
Cap Contracts relate or paid pursuant to clauses (i) through (v) above and
third, from amounts on deposit in the Net WAC Rate Carryover Reserve Account but
only to the extent of amounts on deposit in the Net WAC Rate Carryover Reserve
Account other than amounts paid under the Cap Contracts; and

                  (vii), concurrently, to the Class MV-6 Certificates and the
MF-6 Certificates, on a PRO RATA basis based on the Net WAC Carryover Amount
allocable to each such Class, first, with respect to the Class MV-6
Certificates, from payments made under the related Cap Contract, second, with
respect to both the Class MV-6 Certificates and the MF-6 Certificates, from
payments made under the other Cap Contracts, to the extent not otherwise paid to
the classes of Certificates to which such Cap Contracts relate or paid pursuant
to clauses (i) through (vi) above and third, with respect to both the Class MV-6
Certificates and the MF-6 Certificates, from amounts on deposit in the Net WAC
Rate Carryover Reserve Account but only to the extent of amounts on deposit in
the Net WAC Rate Carryover Reserve Account other than amounts paid under the Cap
Contracts.

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

                  (c) All distributions made with respect to each Class of
Certificates on each Distribution Date shall be allocated PRO RATA among the
outstanding Certificates in such Class based on their respective Percentage
Interests. Payments in respect of each Class of Certificates on each
Distribution Date will be made to the Holders of the respective Class of record
on the related Record Date (except as otherwise provided in Section 4.01(e) or
Section 9.01 respecting the final distribution on such Class), based on the
aggregate Percentage Interest represented by their respective Certificates, and
shall be made by wire transfer of immediately available funds to the account of
any such Holder at a bank or other entity having appropriate facilities
therefor, if such Holder shall have so notified the Trustee in writing at least
five Business Days prior to the Record Date immediately prior to such
Distribution Date, 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 office of the Trustee
maintained for such purpose pursuant to Section 8.12 or such other location
specified in the notice to Certificateholders of such final distribution.

                                       105

<PAGE>

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

                  (d) The rights of the Certificateholders to receive
distributions in respect of the Certificates, and all interests of the
Certificateholders in such distributions, shall be as set forth in this
Agreement. Neither the Holders of any Class of Certificates nor the Trustee nor
the Master Servicer shall in any way be responsible or liable to the Holders of
any other Class of Certificates in respect of amounts properly previously
distributed on the Certificates.

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

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

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

                  Any funds not distributed to any Holder or Holders of
Certificates of such Class on such Distribution Date because of the failure of
such Holder or Holders to tender their Certificates shall, on such date, be set
aside and held in trust by the Trustee and credited to the account of the
appropriate non-tendering Holder or Holders. If any Certificates as to which
notice has been given pursuant to this Section 4.01(e) shall not have been
surrendered for cancellation within six months after the time specified in such
notice, the Trustee shall mail a second notice to the remaining non- tendering
Certificateholders to surrender their Certificates for cancellation in order to
receive the final distribution with respect thereto. If within one year after
the second notice all such Certificates shall not have been surrendered for
cancellation, the Trustee shall, directly or through an agent, mail a final
notice to remaining non-tendering Certificateholders concerning surrender of
their Certificates but shall continue to hold any remaining funds for the
benefit of non-tendering Certificateholders. The costs and expenses of
maintaining the funds in trust and of contacting such Certificateholders shall
be paid out of the assets remaining in such trust fund. If within one year after
the final notice any such Certificates shall not have been surrendered for
cancellation, the Trustee shall pay to Deutsche Bank Securities Inc. all such
amounts, and all rights of non-tendering Certificateholders in or to such
amounts shall thereupon cease. No interest shall accrue or be payable to any
Certificateholder on any amount held in trust by the Trustee as a result of such
Certificateholder's

                                       106

<PAGE>

failure to surrender its Certificate(s) for final payment thereof in accordance
with this Section 4.01(e).

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

                  SECTION 4.02. Statements to Certificateholders.

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

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

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

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

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

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

               (vi) the number, aggregate Principal Balance, weighted average
         remaining term to maturity and weighted average Mortgage Rate of the
         Mortgage Loans as of the related Due Date;

              (vii) the number and aggregate unpaid Stated Principal Balance of
         Mortgage Loans (a) delinquent 30-59 days, (b) delinquent 60-89 days,
         (c) delinquent 90 or more days in each case, as of the last day of the
         preceding calendar month, (d) as to which foreclosure proceedings have
         been commenced and (e) with respect to which the related Mortgagor has

                                       107

<PAGE>

         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 Stated Principal Balance and the Stated
         Principal Balance of such Mortgage Loan as of the date it became an REO
         Property;

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

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

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

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

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

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

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

              (xvi) the aggregate amount of any Prepayment Interest Shortfall
         for such Distribution Date, to the extent not covered by payments by
         the Master Servicer pursuant to Section 4.03(e) or allocated to the
         Class CE Certificates;

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

                                       108

<PAGE>

            (xviii) the Overcollateralization Target Amount and the Credit
         Enhancement Percentage for such Distribution Date;

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

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

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

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

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

             (xxiv) the amount on deposit in the Net WAC Rate Carryover Reserve
         Account as of the Determination Date;

              (xxv)        [Reserved]; and

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

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

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

                                       109

<PAGE>

                  Within a reasonable period of time after the end of each
calendar year, the Trustee shall furnish to the NIMS Insurer and each Person who
at any time during the calendar year was a Holder of a Regular Certificate a
statement containing the information set forth in subclauses (i) through (iii)
above, aggregated for such calendar year or applicable portion thereof during
which such person was a Certificateholder. Such obligation of the Trustee shall
be deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Trustee pursuant to any requirements of the
Code as from time to time are in force.

                  Within a reasonable period of time after the end of each
calendar year, the Trustee shall furnish to the NIMS Insurer and each Person who
at any time during the calendar year was a Holder of a Residual Certificate a
statement setting forth the amount, if any, actually distributed with respect to
the Residual Certificates, as appropriate, aggregated for such calendar year or
applicable portion thereof during which such Person was a Certificateholder.
Such obligation of the Trustee shall be deemed to have been satisfied to the
extent that substantially comparable information shall be prepared by the
Trustee and furnished to such Holders pursuant to the rules and regulations of
the Code as are in force from time to time.

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

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

                  SECTION 4.03. Remittance Reports and Other Reports to the
                                Trustee; Advances; Payments in Respect of
                                Prepayment Interest Shortfalls.

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

                                       110

<PAGE>

                  Not later than fifteen days after each Distribution Date, the
Master Servicer shall forward to the Trustee, the NIMS Insurer and the Depositor
a statement prepared by the Master Servicer setting forth the status of the
Collection Account as of the close of business on such Distribution Date and
showing, for the period covered by such statement, the aggregate amount of
deposits into and withdrawals from the Collection Account of each category of
deposit specified in Section 3.04(b) and each category of withdrawal specified
in Section 3.05. Such statement may be in the form of the then current Fannie
Mae Monthly Accounting Report for its Guaranteed Mortgage Pass-Through Program
with appropriate additions and changes, and shall also include information as to
the aggregate of the outstanding Stated Principal Balances of all of the
Mortgage Loans as of the last day of the calendar month immediately preceding
such Distribution Date. Copies of such statement shall be provided by the
Trustee to any Certificateholder and to any Person identified to the Trustee as
a prospective transferee of a Certificate, upon request at the expense of the
requesting party, provided such statement is delivered by the Master Servicer to
the Trustee.

                  (b) The amount of Advances to be made by the Master Servicer
for any Distribution Date shall equal, subject to Section 4.03(d), the sum of
(i) the aggregate amount of Monthly Payments (with each interest portion thereof
net of the related Servicing Fee), due on the related Due Date in respect of the
Mortgage Loans, which Monthly Payments were delinquent as of the close of
business on the related Determination Date and (ii) with respect to each REO
Property, which REO Property was acquired during or prior to the related
Prepayment Period and as to which such REO Property an REO Disposition did not
occur during the related Prepayment Period, an amount equal to the excess, if
any, of the Monthly Payments (with each interest portion thereof net of the
related Servicing Fee) that would have been due on the related Due Date in
respect of the related Mortgage Loans, over the net income from such REO
Property transferred to the Distribution Account pursuant to Section 3.13 for
distribution on such Distribution Date.

                  On or before 3:00 p.m. New York time on the Master Servicer
Remittance Date, the Master Servicer shall remit in immediately available funds
to the Trustee for deposit in the Distribution Account an amount equal to the
aggregate amount of Advances, if any, to be made in respect of the Mortgage
Loans and REO Properties for the related Distribution Date either (i) from its
own funds or (ii) from the Collection Account, to the extent of funds held
therein for future distribution (in which case, it will cause to be made an
appropriate entry in the records of Collection Account that amounts held for
future distribution have been, as permitted by this Section 4.03, used by the
Master Servicer in discharge of any such Advance) or (iii) in the form of any
combination of (i) and (ii) aggregating the total amount of Advances to be made
by the Master Servicer with respect to the Mortgage Loans and REO Properties.
Any amounts held for future distribution used by the Master Servicer to make a
Advance as permitted in the preceding sentence or withdrawn by the Master
Servicer as permitted in Section 3.05(a)(vii) in reimbursement of Advances
previously made shall be appropriately reflected in the Master Servicer's
records and replaced by the Master Servicer by deposit in the Collection Account
on or before any future Master Servicer Remittance Date to the extent that the
Available Funds for the related Distribution Date (determined without regard to
Advances to be made on the Master Servicer Remittance Date) shall be less than
the total amount that would be distributed to the Classes of Certificateholders
pursuant to Section 4.01 on such Distribution Date if such amounts held for
future distributions had not been so used to make Advances. The Trustee will
provide notice to the Master Servicer and the NIMS Insurer by telecopy by the
close of business on any Master Servicer Remittance Date in the event that the
amount

                                       111

<PAGE>

remitted by the Master Servicer to the Trustee on such date is less than the
Advances required to be made by the Master Servicer for the related Distribution
Date.

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

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

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

                  SECTION 4.04. Allocation of Realized Losses.

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

                                       112

<PAGE>

                  (b) All Realized Losses on the Mortgage Loans shall be
allocated by the Trustee on each Distribution Date as follows: first, among the
Class CE Certificates on a PRO RATA basis based on, and to the extent of, one
month's interest at the then applicable Pass-Through Rate on the respective
Notional Amount of each such Certificate pursuant to Section 1.02; second, to
the Class CE Certificates, until the Certificate Principal Balance thereof has
been reduced to zero; third, to the Class MV-6 Certificates and the MF-6
Certificates, on a PRO RATA basis based on the Certificate Principal Balance of
each such Class, until the Certificate Principal Balances of such Classes have
been reduced to zero; fourth, to the Class M-5 Certificates, until the
Certificate Principal Balances thereof has been reduced to zero; fifth, to the
Class M-4 Certificates, until the Certificate Principal Balance thereof has been
reduced to zero; sixth, to the Class M-3 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero; seventh, to the Class M-2
Certificates, until the Certificate Principal Balance thereof has been reduced
to zero and eighth, to the Class M-1 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero. All Realized Losses to be
allocated to the Certificate Principal Balances of all Classes on any
Distribution Date shall be so allocated after the actual distributions to be
made on such date as provided above. All references above to the Certificate
Principal Balance of any Class of Certificates shall be to the Certificate
Principal Balance of such Class immediately prior to the relevant Distribution
Date, before reduction thereof by any Realized Losses, in each case to be
allocated to such Class of Certificates, on such Distribution Date.

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

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

                  (c)(i) The REMIC I Marker Percentage of all Realized Losses on
the Mortgage Loans shall be allocated by the Trustee on each Distribution Date
to the following REMIC I Regular Interests in the specified percentages, as
follows: first, to Uncertificated 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% and 2%, 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% and 2%, respectively; third, to
the Uncertificated Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular
Interest I-LTMV6, REMIC I Regular Interest I-LTMF6 and REMIC I Regular Interest
I- LTZZ, 98% (to REMIC I Regular Interest I-LTAA), 1.00% (PRO RATA among REMIC I
Regular Interest I-LTMV6 and REMIC I Regular Interest I-LTMF6) and 1% (to REMIC
I Regular Interest

                                       113

<PAGE>

I-LTZZ), respectively, until the Uncertificated Balances of REMIC I Regular
Interest I-LTMV6 and REMIC I Regular Interest I-LTMF6 have been reduced to zero;
fourth 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%, 1.00%, and
1%, respectively, until the Uncertificated Balance of REMIC I Regular Interest
I-LTM5 has been reduced to zero; fifth 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%, 1% and 1%, respectively, until the Uncertificated Balance
of REMIC I Regular Interest I-LTM4 has been reduced to zero; sixth 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%, 1% and 1%,
respectively, until the Uncertificated Balance of REMIC I Regular Interest
I-LTM3 has been reduced to zero; seventh 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%, 1% and 1%, respectively, until the Uncertificated Balance
of REMIC I Regular Interest I-LTM2 has been reduced to zero and eighth, 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%, 1% and 1%,
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 "GRP" 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
"SUB," 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 4.05. Compliance with Withholding Requirements.

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

                  SECTION 4.06. Commission Reporting.

                  (a) The Trustee shall reasonably cooperate with the Depositor
in connection with the Trust's satisfying the reporting requirements under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Trustee
shall prepare on behalf of the Trust any Forms 8-K and 10-K customary for
similar securities as required by the Exchange Act and the Rules and Regulations

                                       114

<PAGE>

of the Securities and Exchange Commission thereunder, and the Depositor shall
sign (or shall cause another entity acceptable to the Securities and Exchange
Commission to sign) and the Trustee shall file (via the Securities and Exchange
Commission's Electronic Data Gathering and Retrieval System) such forms on
behalf of the Depositor (or such other entity). The Depositor hereby grants to
the Trustee a limited power of attorney to execute any Form 8-K and file each
such document on behalf of the Depositor. Such power of attorney shall continue
until the earlier of (i) receipt by the Trustee from the Depositor of written
termination of such power of attorney and (ii) the termination of the Trust.
Notwithstanding anything herein to the contrary, the Depositor, and not the
Trustee, shall be responsible for executing each Form 10-K filed on behalf of
the Trust.

                  (b) Each Form 8-K shall be filed by the Trustee within 15 days
after each Distribution Date, with a copy of the statement to the
Certificateholders for such Distribution Date as an exhibit thereto. Prior to
March 30th of each year (or such earlier date as may be required by the Exchange
Act and the Rules and Regulations of the Securities and Exchange Commission),
the Trustee shall file a Form 10-K, in substance as required by applicable law
or applicable Securities and Exchange Commission staff's interpretations. Such
Form 10-K shall include as exhibits the Master Servicer's annual statement of
compliance described under Section 3.19 and the accountant's report described
under Section 3.20, in each case to the extent they have been timely delivered
to the Trustee. If they are not so timely delivered, the Trustee shall file an
amended Form 10-K including such documents as exhibits reasonably promptly after
they are delivered to the Trustee. The Trustee shall have no liability with
respect to any failure to properly prepare or file such periodic reports
resulting from or relating to the Trustee's inability or failure to obtain any
information not resulting from its own negligence or willful misconduct. The
Form 10-K shall also include a certification in the form attached hereto as
Exhibit J-1 (the "Certification"), which shall be signed by the senior officer
of the Depositor in charge of securitization.

                  (c) In addition, the Trustee shall sign a certification (in
the form attached hereto as Exhibit J-2) for the benefit of the Depositor and
its officers, directors and Affiliates regarding certain aspects of items 1
through 3 of the Certification (provided, however, that the Trustee shall not
undertake an analysis of the accountant's report attached as an exhibit to the
Form 10-K). The Trustee's certification shall be delivered to the Depositor by
no later than March 18th of each year (or if such day is not a Business Day, the
immediately preceding Business Day) and the Depositor shall deliver the
Certification to the Trustee for filing no later than March 20th of each year
(or if such day is not a Business Day, the immediately preceding Business Day).

                  In addition, the Trustee shall indemnify and hold harmless the
Depositor and its officers, directors and Affiliates from and against any
losses, damages, penalties, fines, forfeitures, reasonable and necessary legal
fees and related costs, judgments and other costs and expenses arising out of or
based upon a breach of the Trustee's obligations under this Section 4.06 or the
Trustee's negligence, bad faith or willful misconduct in connection therewith.
The Depositor shall indemnify and hold harmless the Trustee and its officers,
directors and Affiliates from and against any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments
and other costs and expenses arising out of or based upon a breach of the
Depositor's obligations under this Section 4.06 or the Depositor's negligence,
bad faith or willful misconduct in connection therewith. If the indemnification
provided for herein is unavailable or insufficient to hold harmless the
Depositor or the Trustee, as applicable, then the other party, in connection
with

                                       115

<PAGE>

a breach of its respective obligations under this Section 4.06 or its respective
negligence, bad faith or willful misconduct in connection therewith, agrees that
it shall contribute to the amount paid or payable by the other party as a result
of the losses, claims, damages or liabilities of the other party in such
proportion as is appropriate to reflect the relative fault of the Depositor on
the one hand and the Trustee on the other.

                  (d) Upon any filing with the Securities and Exchange
Commission, the Trustee shall promptly deliver to the Depositor a copy of any
executed report, statement or information.

                  (e) Prior to January 30 of the first year in which the Trustee
is able to do so under applicable law, the Trustee shall file a Form 15
Suspension Notification with respect to the Trust.

                  (f) To the extent that, following the Closing Date, the
Depositor certifies that reports and certifications differing from those
required under this Section 4.06 comply with the reporting requirements under
the Exchange Act, the Trustee hereby agrees that it will reasonably cooperate to
amend the provisions of this Section 4.06 (in accordance with Section 11.01) in
order to comply with such amended reporting requirements and such amendment of
this Section 4.06. Any such amendment may result in the reduction of the reports
filed by the Depositor under the Exchange Act. Notwithstanding the foregoing,
the Trustee shall not be obligated to enter into any amendment pursuant to this
Section that adversely affects its obligations and immunities under this
Agreement.

                  SECTION 4.07.     [Reserved].

                  SECTION 4.08.     [Reserved].

                  SECTION 4.09.     [Reserved].

                  SECTION 4.10      Net WAC Rate Carryover Reserve Account.

                  (a) No later than the Closing Date, the Trustee shall
establish and maintain with itself, as agent for the Trustee, a separate,
segregated trust account titled, "Net WAC Rate Carryover Reserve Account,
Deutsche Bank National Trust Company, as Trustee, in trust for the registered
Holders of Ameriquest Mortgage Securities Inc., Asset-Backed Pass-Through
Certificates, Series 2003-10." On the Closing Date, the Depositor will deposit,
or cause to be deposited, into the Net WAC Rate Carryover Reserve Account
$1,000. In addition, the Trustee shall deposit into the Net WAC Rate Carryover
Reserve Account any payments received by it under the Cap Contracts.

                  (b) On each Distribution Date as to which there is a Net WAC
Rate Carryover Amount payable to the Class A Certificates or the Mezzanine
Certificates, the Trustee has been directed by the Class CE Certificateholders
to, and therefore will, deposit into the Net WAC Rate Carryover Reserve Account
the amount of such Net WAC Rate Carryover Amount (after taking into account
amounts received under the Cap Contracts), rather than distributing such amounts
to the Class CE Certificateholders. On each such Distribution Date, the Trustee
shall hold all such amounts for the benefit of the Holders of the Class A
Certificates and the Mezzanine Certificates, and will distribute such amounts to
the Holders of the Class A Certificates and the Mezzanine Certificates in the
amounts and priorities set forth in Section 4.01(a). If no Net WAC Rate
Carryover

                                       116

<PAGE>

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

                  (d) By accepting a Class CE Certificate, each Class CE
Certificateholder hereby agrees to direct the Trustee, and the Trustee hereby is
directed, to deposit into the Net WAC Rate Carryover Reserve Account the amounts
described above on each Distribution Date as to which there is any Net WAC Rate
Carryover Amount rather than distributing such amounts to the Class CE
Certificateholders. By accepting a Class CE Certificate, each Class CE
Certificateholder further agrees that such direction is given for good and
valuable consideration, the receipt and sufficiency of which is acknowledged by
such acceptance.

                  (e) At the written direction of the Holders of a majority in
Percentage Interest in the Class CE Certificates, the Trustee shall direct any
depository institution maintaining the Net WAC Rate Carryover Reserve Account to
invest the funds in such account in one or more Permitted Investments bearing
interest or sold at a discount, and maturing, unless payable on demand, (i) no
later than the Business Day immediately preceding the date on which such funds
are required to be withdrawn from such account pursuant to this Agreement, if a
Person other than the Trustee or an Affiliate manages or advises such
investment, and (ii) no later than the date on which such funds are required to
be withdrawn from such account pursuant to this Agreement, if the Trustee or an
Affiliate manages or advises such investment. If no investment direction of the
Holders of a majority in Percentage Interest in the Class CE Certificates with
respect to the Net WAC Rate Carryover Reserve Account is received by the
Trustee, the Trustee shall invest the funds in the Deutsche Bank Institutional
Cash Management Fund 541 so long as it is a Permitted Investment. Interest
earned on such investment shall be deposited into the Net WAC Rate Carryover
Reserve Account.

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

                                    ARTICLE V

                                       117

<PAGE>

                                THE CERTIFICATES

                  SECTION 5.01.             The Certificates.

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

                  The Certificates will be substantially in the forms annexed
hereto as Exhibits A-1 through A-18. The Certificates of each Class will be
issuable in registered form only, in denominations of authorized Percentage
Interests as described in the definition thereof. Each Certificate will share
ratably in all rights of the related Class.

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

                  (b) The Class A Certificates and the Mezzanine Certificates
shall initially be issued as one or more Certificates held by the Book-Entry
Custodian or, if appointed to hold such Certificates as provided below, the
Depository and registered in the name of the Depository or its nominee and,
except as provided below, registration of such Certificates may not be
transferred by the Trustee except to another Depository that agrees to hold such
Certificates for the respective Certificate Owners with Ownership Interests
therein. The Certificate Owners shall hold their respective Ownership Interests
in and to such Certificates through the book-entry facilities of the Depository
and, except as provided below, shall not be entitled to definitive, fully
registered Certificates ("Definitive Certificates") in respect of such Ownership
Interests. All transfers by Certificate Owners of their respective Ownership
Interests in the Book-Entry Certificates shall be made in accordance with the
procedures established by the Depository Participant or brokerage firm
representing such Certificate Owner. Each Depository Participant shall only
transfer the Ownership Interests in the Book-Entry Certificates of Certificate
Owners it represents or of brokerage firms for which it acts as agent in
accordance with the Depository's normal procedures. The Trustee is hereby
initially appointed as the Book-Entry Custodian and hereby agrees to act as such
in accordance herewith and in accordance with the agreement that it has with the
Depository authorizing it to act as such. The Book-Entry Custodian may, and if
it is no longer qualified to act as such, the Book- Entry Custodian shall,
appoint, by a written instrument delivered to the Depositor, the Master

                                       118

<PAGE>

Servicer, the Trustee (if the Trustee is not the Book-Entry Custodian) and any
other transfer agent (including the Depository or any successor Depository) to
act as Book-Entry Custodian under such conditions as the predecessor Book-Entry
Custodian and the Depository or any successor Depository may prescribe, provided
that the predecessor Book-Entry Custodian shall not be relieved of any of its
duties or responsibilities by reason of any such appointment of other than the
Depository. If the Trustee resigns or is removed in accordance with the terms
hereof, if it so elects, the Depository shall immediately succeed to its
predecessor's duties as Book-Entry Custodian. The Depositor shall have the right
to inspect, and to obtain copies of, any Certificates held as Book-Entry
Certificates by the Book-Entry Custodian.

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

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

                                       119

<PAGE>

                  SECTION 5.02. Registration of Transfer and Exchange of
                                Certificates.

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

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

                  Notwithstanding the foregoing, no certification or Opinion of
Counsel described in this Section 5.02(b) will be required in connection with
the transfer, on the Closing Date, of any Class R Certificate by the Depositor
to an "accredited investor" within the meaning of Rule 501(d) of the 1933 Act.

                                       120

<PAGE>

                  (c) No transfer of a Class CE Certificate, Class P Certificate
or Residual Certificate or any interest therein shall be made to any Plan
subject to ERISA or Section 4975 of the Code, any Person acting, directly or
indirectly, on behalf of any such Plan or any Person acquiring such Certificates
with "Plan Assets" of a Plan within the meaning of the Department of Labor
regulation promulgated at 29 C.F.R. ss. 2510.3-101 ("Plan Assets"), as certified
by such transferee in the form of Exhibit G, unless the Trustee is provided with
an Opinion of Counsel for the benefit of the Depositor, the Trustee and the
Master Servicer and on which they may rely, which shall be to the effect that
the purchase and holding of such 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 Depositor, the
Master Servicer, the NIMS Insurer, the Trustee or the Trust Fund to any
obligation or liability (including obligations or liabilities under ERISA or
Section 4975 of the Code) in addition to those undertaken in this Agreement,
which Opinion of Counsel shall not be an expense of the Depositor, the Master
Servicer, the NIMS Insurer, the Trustee or the Trust Fund. Neither an Opinion of
Counsel nor any certification will be required in connection with the initial
transfer of any such Certificate by the Depositor to an affiliate of the
Depositor (in which case, the Depositor or any affiliate thereof shall have
deemed to have represented that such affiliate is not a Plan or a Person
investing Plan Assets) and the Trustee shall be entitled to conclusively rely
upon a representation (which, upon the request of the Trustee, shall be a
written representation) from the Depositor of the status of such transferee as
an affiliate of the Depositor.

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

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

                  (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 Certificate
Registrar or its designee under clause (iii)(A) below to deliver payments to a
Person other than such

                                       121

<PAGE>

Person and to negotiate the terms of any mandatory sale under clause (iii)(B)
below and to execute all instruments of Transfer and to do all other things
necessary in connection with any such sale. The rights of each Person acquiring
any Ownership Interest in a Residual Certificate are expressly subject to the
following provisions:

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

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

                  (D) Each Person holding or acquiring any Ownership Interest in
         a Residual Certificate shall agree (x) to require a Transfer Affidavit
         and Agreement from any other Person to whom such Person attempts to
         transfer its Ownership Interest in a Residual Certificate and (y) not
         to transfer its Ownership Interest unless it provides a Transferor
         Affidavit (in the form attached hereto as Exhibit F-2), to the
         Certificate Registrar 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 Certificate Registrar 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 Certificate Registrar 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 Certificate Registrar as a condition to
         such registration. In addition, no Transfer of a Residual Certificate
         shall be made unless the Certificate Registrar shall

                                       122

<PAGE>

have received a representation letter from the Transferee of such Certificate to
the effect that such Transferee is a Permitted Transferee.

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

                  (B) If any purported Transferee shall become a Holder of a
         Residual Certificate in violation of the restrictions in this Section
         5.02(d) and to the extent that the retroactive restoration of the
         rights of the Holder of such Residual Certificate as described in
         clause (iii)(A) above shall be invalid, illegal or unenforceable, then
         the Certificate Registrar 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 Certificate
         Registrar on such terms as the Certificate Registrar may choose. Such
         purported Transferee shall promptly endorse and deliver each Residual
         Certificate in accordance with the instructions of the Certificate
         Registrar. Such purchaser may be the Certificate Registrar itself or
         any Affiliate of the Certificate Registrar. The proceeds of such sale,
         net of the commissions (which may include commissions payable to the
         Certificate Registrar or its Affiliates), expenses and taxes due, if
         any, will be remitted by the Certificate Registrar 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 Certificate
         Registrar, and the Certificate Registrar shall not be liable to any
         Person having an Ownership Interest in a Residual Certificate as a
         result of its exercise of such discretion.

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

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

                                       123

<PAGE>

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

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

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

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

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

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

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

                  (i) The Trustee will cause the Certificate Registrar (unless
the Trustee is acting as Certificate Registrar) to provide notice to the Trustee
of each transfer of a Certificate and to

                                       124

<PAGE>

provide the Trustee with an updated copy of the Certificate Register on the
first Business Day in March and August of each year, commencing in March 2004.

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

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

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

                  SECTION 5.04. Persons Deemed Owners.

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

                  SECTION 5.05. Certain Available Information.

                  On or prior to the date of the first sale of any Class CE
Certificate, Class P Certificate or Residual Certificate to an Independent third
party, the Depositor shall provide to the Trustee ten copies of any private
placement memorandum or other disclosure document used by the Depositor in
connection with the offer and sale of the Class CE Certificates, the Class P
Certificates or the Residual Certificates. In addition, if any such private
placement memorandum or disclosure document is revised, amended or supplemented
at any time following the delivery thereof to the Trustee, the Depositor
promptly shall inform the Trustee of such event and shall deliver to the Trustee
ten copies of the private placement memorandum or disclosure document, as
revised, amended or supplemented. The Trustee shall maintain at its Corporate
Trust Office and shall make available free of charge during normal business
hours for review by any Holder of a Certificate and/or Certificate Owner or any
Person identified to the Trustee as a prospective transferee of a

                                       125

<PAGE>

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

                                       126

<PAGE>

                                   ARTICLE VI

                      THE DEPOSITOR AND THE MASTER SERVICER

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

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

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

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

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

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

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

                                       127

<PAGE>

would otherwise be imposed by reason of willful misfeasance, bad faith or
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder. The Depositor, the NIMS Insurer, the Master
Servicer or the Trustee and any director, officer, employee or agent of the
Depositor, the NIMS Insurer, the Master Servicer or the Trustee may rely in good
faith on any document of any kind which, PRIMA FACIE, is properly executed and
submitted by any Person respecting any matters arising hereunder.

                  The Depositor, the NIMS Insurer, the Master Servicer and any
director, officer, employee or agent of the Depositor, the NIMS Insurer or the
Master Servicer shall be indemnified and held harmless by the Trust Fund against
any loss, liability or expense incurred in connection with any legal action
relating to this Agreement or the Certificates, other than any loss, liability
or expense relating to any specific Mortgage Loan or Mortgage Loans (except as
any such loss, liability or expense shall be otherwise reimbursable pursuant to
this Agreement) or any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or negligence in the performance of duties hereunder or
by reason of reckless disregard of obligations and duties hereunder. Neither the
Depositor, the NIMS Insurer nor the Master Servicer shall be under any
obligation to appear in, prosecute or defend any legal action unless such action
is related to its respective duties under this Agreement and, in its opinion,
does not involve it in any expense or liability; provided, however, that each of
the Depositor, the NIMS Insurer and the Master Servicer may in its discretion
undertake any such action which it may deem necessary or desirable with respect
to this Agreement and the rights and duties of the parties hereto and the
interests of the Certificateholders hereunder. In such event, unless the
Depositor or the Master Servicer acts without the consent of Holders of
Certificates entitled to at least 51% of the Voting Rights (which consent shall
not be necessary in the case of litigation or other legal action by either to
enforce their respective rights or defend themselves hereunder), the legal
expenses and costs of such action and any liability resulting therefrom (except
any loss, liability or expense incurred by reason of willful misfeasance, bad
faith or negligence in the performance of duties hereunder or by reason of
reckless disregard of obligations and duties hereunder) shall be expenses, costs
and liabilities of the Trust Fund, and the Depositor, the NIMS Insurer and the
Master Servicer shall be entitled to be reimbursed therefor from the Collection
Account as and to the extent provided in Section 3.05, any such right of
reimbursement being prior to the rights of the Certificateholders to receive any
amount in the Collection Account.

                  SECTION 6.04. Limitation on Resignation of the Master
                                Servicer.

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

                                       128

<PAGE>

those liabilities arising prior to the appointment of such successor) and
obligations under this Agreement.

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

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

                  The Master Servicer shall afford (and any Sub-Servicing
Agreement shall provide that each Sub-Servicer shall afford) the Depositor, the
NIMS Insurer and the Trustee, upon reasonable notice, during normal business
hours, access to all records maintained by the Master Servicer (and any such
Sub-Servicer) in respect of the Master Servicer's rights and obligations
hereunder and access to officers of the Master Servicer (and those of any such
Sub-Servicer) responsible for such obligations. Upon request, the Master
Servicer shall furnish to the Depositor, the NIMS Insurer and the Trustee its
(and any such Sub-Servicer's) most recent financial statements and such other
information relating to the Master Servicer's capacity to perform its
obligations under this Agreement that it possesses. To the extent such
information is not otherwise available to the public, the Depositor, the NIMS
Insurer and the Trustee shall not disseminate any information obtained pursuant
to the preceding two sentences without the Master Servicer's (or any such
Sub-Servicer's) written consent, except as required pursuant to this Agreement
or to the extent that it is appropriate to do so (i) in working with legal
counsel, auditors, taxing authorities or other governmental agencies, rating
agencies or reinsurers or (ii) pursuant to any law, rule, regulation, order,
judgment, writ, injunction or decree of any court or governmental authority
having jurisdiction over the Depositor, the Trustee or the Trust Fund, and in
either case, the Depositor, the NIMS Insurer or the Trustee, as the case may be,
shall use its best efforts to assure the confidentiality of any such
disseminated non-public information. The Depositor may, but is not obligated to,
enforce the obligations of the Master Servicer under this Agreement and may, but
is not obligated to, perform, or cause a designee to perform, any defaulted
obligation of the Master Servicer under this Agreement or exercise the rights of
the Master Servicer under this Agreement; provided that the Master Servicer
shall not be relieved of any of its obligations under this Agreement by virtue
of such performance by the Depositor or its designee. The Depositor shall not
have any responsibility or liability for any action or failure to act by the
Master Servicer and is not obligated to supervise the performance of the Master
Servicer under this Agreement or otherwise.

                  SECTION 6.06. Sub-Servicing Agreements Between the Master
                                Servicer and Sub-Servicers.

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

                                       129

<PAGE>

                  Each Sub-Servicer shall be (i) authorized to transact business
in the state or states in which the related Mortgaged Properties it is to
service are situated, if and to the extent required by applicable law to enable
the Sub-Servicer to perform its obligations hereunder and under the Sub-
Servicing Agreement, (ii) an institution approved as a mortgage loan originator
by the Federal Housing Administration or an institution the deposit accounts in
which are insured by the FDIC and (iii) a Freddie Mac or Fannie Mae approved
mortgage servicer. Each Sub-Servicing Agreement must impose on the Sub-Servicer
requirements conforming to the provisions set forth in Section 6.11 and provide
for servicing of the Mortgage Loans consistent with the terms of this Agreement.
The Master Servicer will examine each Sub-Servicing Agreement and will be
familiar with the terms thereof. The terms of any Sub-Servicing Agreement will
not be inconsistent with any of the provisions of this Agreement. The Master
Servicer and the Sub-Servicers may enter into and make amendments to the
Sub-Servicing Agreements or enter into different forms of Sub-Servicing
Agreements; provided, however, that any such amendments or different forms shall
be consistent with and not violate the provisions of this Agreement, and that no
such amendment or different form shall be made or entered into which could be
reasonably expected to be materially adverse to the interests of the
Certificateholders, without the consent of the Holders of Certificates entitled
to at least 66% of the Voting Rights. Any variation without the consent of the
Holders of Certificates entitled to at least 66% of the Voting Rights from the
provisions set forth in Section 6.11 relating to insurance or priority
requirements of Sub-Servicing Accounts, or credits and charges to the Sub-
Servicing Accounts or the timing and amount of remittances by the Sub-Servicers
to the Master Servicer, are conclusively deemed to be inconsistent with this
Agreement and therefore prohibited. The Master Servicer shall deliver to the
Trustee and the NIMS Insurer copies of all Sub-Servicing Agreements, and any
amendments or modifications thereof, promptly upon the Master Servicer's
execution and delivery of such instruments.

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

                                       130

<PAGE>

                  SECTION 6.07. Successor Sub-Servicers.

                  The Master Servicer, with the consent of the NIMS Insurer,
shall be entitled to terminate any Sub-Servicing Agreement and the rights and
obligations of any Sub-Servicer pursuant to any Sub-Servicing Agreement in
accordance with the terms and conditions of such Sub-Servicing Agreement. In the
event of termination of any Sub-Servicer, all servicing obligations of such Sub-
Servicer shall be assumed simultaneously by the Master Servicer without any act
or deed on the part of such Sub-Servicer or the Master Servicer, and the Master
Servicer either shall service directly the related Mortgage Loans or shall enter
into a Sub-Servicing Agreement with a successor Sub-Servicer which qualifies
under Section 6.06.

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

                  SECTION 6.08. Liability of the Master Servicer.

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

                  SECTION 6.09. No Contractual Relationship Between
                                Sub-Servicers and the NIMS Insurer, the
                                Trustee or Certificateholders.

                  Any Sub-Servicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Sub-Servicer
in its capacity as such shall be deemed to be between the Sub-Servicer and the
Master Servicer alone, and the NIMS Insurer, the Trustee and Certificateholders
shall not be deemed parties thereto and shall have no claims, rights,
obligations, duties or liabilities with respect to the Sub-Servicer except as
set forth in Section 6.10. The Master Servicer shall be solely liable for all
fees owed by it to any Sub-Servicer, irrespective of whether the Master
Servicer's compensation pursuant to this Agreement is sufficient to pay such
fees.

                                       131

<PAGE>

                  SECTION 6.10. Assumption or Termination of Sub-Servicing
                                Agreements by Trustee.

                  In the event the Master Servicer shall for any reason no
longer be the master servicer (including termination due to a Master Servicer
Event of Default), the Trustee or its designee shall thereupon assume (or cause
its designee or the successor master servicer for the Trustee appointed pursuant
to Section 7.02 to assume) all of the rights and obligations of the Master
Servicer under each Sub-Servicing Agreement that the Master Servicer may have
entered into, unless the Trustee elects to terminate any Sub-Servicing Agreement
in accordance with its terms as provided in Section 6.07. Upon such assumption,
the Trustee, its designee or the successor servicer for the Trustee appointed
pursuant to Section 7.02 shall be deemed, subject to Section 6.07, to have
assumed all of the Master Servicer's interest therein and to have replaced the
Master Servicer as a party to each Sub-Servicing Agreement to the same extent as
if each Sub-Servicing Agreement had been assigned to the assuming party, except
that (i) the Master Servicer shall not thereby be relieved of any liability or
obligations under any Sub-Servicing Agreement and (ii) none of the Trustee, its
designee or any successor Master Servicer shall be deemed to have assumed any
liability or obligation of the Master Servicer that arose before it ceased to be
the Master Servicer.

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

                  SECTION 6.11. Sub-Servicing Accounts.

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

                                       132

<PAGE>

                                   ARTICLE VII

                                     DEFAULT

                  SECTION 7.01. Master Servicer Events of Default.

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

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

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

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

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

                                       133

<PAGE>

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

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

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

                  If a Master Servicer Event of Default described in clauses (i)
through (vi) of this Section shall occur, then, and in each and every such case,
so long as such Master Servicer Event of Default shall not have been remedied,
the Depositor, the NIMS Insurer or the Trustee may, and at the written direction
of the Holders of Certificates entitled to at least 51% of Voting Rights, or at
the direction of the NIMS Insurer, the Trustee shall, by notice in writing to
the Master Servicer and the Depositor, terminate all of the rights and
obligations of the Master Servicer in its capacity as Master Servicer under this
Agreement, to the extent permitted by law, and in and to the Mortgage Loans and
the proceeds thereof. If a Master Servicer Event of Default described in clause
(vii) hereof shall occur, the Trustee shall, by notice in writing to the Master
Servicer and the Depositor, terminate all of the rights and obligations of the
Master Servicer in its capacity as Master Servicer under this Agreement and in
and to the Mortgage Loans and the proceeds thereof and the Trustee or a
successor Master Servicer appointed in accordance with Section 7.02, shall
immediately make such Advance and assume, pursuant to Section 7.02, the duties
of a successor Master Servicer. On or after the receipt by the Master Servicer
of such written notice, all authority and power of the Master Servicer under
this Agreement, whether with respect to the Certificates (other than as a Holder
of any Certificate) or the Mortgage Loans or otherwise, shall pass to and be
vested in the Trustee pursuant to and under this Section and, without
limitation, the Trustee is hereby authorized and empowered, as attorney-in-fact
or otherwise, to execute and deliver on behalf of and at the expense of the
Master Servicer, any and all documents and other instruments and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Mortgage Loans and related documents, or
otherwise. The Master Servicer agrees, at its sole cost and expense, promptly
(and in any event no later than ten Business Days subsequent to such notice) to
provide the Trustee with all documents and records requested by it to enable it
to assume the Master Servicer's functions under this Agreement, and to cooperate
with the Trustee in effecting the termination of the Master Servicer's
responsibilities and rights under this Agreement, including, without limitation,
the transfer within one Business Day to the Trustee for administration by it of
all cash amounts which at the time shall be or should have been credited by the
Master Servicer to the Collection Account held by or on behalf of the Master
Servicer, the Distribution Account or any REO Account or Servicing Account held
by or on behalf of the Master Servicer or thereafter be received with respect to
the Mortgage Loans or any REO Property serviced by the Master Servicer
(provided, however, that the Master Servicer shall continue to be entitled to
receive all amounts accrued or owing to it under this Agreement on or prior to
the date of such termination, whether in respect of Advances or otherwise, and
shall continue to be entitled to the benefits of Section 6.03, notwithstanding
any such

                                       134

<PAGE>

termination, with respect to events occurring prior to such termination). For
purposes of this Section 7.01, the Trustee shall not be deemed to have knowledge
of a 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 is received by the Trustee of
any such event and such notice references the Certificates, REMIC I or this
Agreement.

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

                  SECTION 7.02. Trustee to Act; Appointment of Successor.

                  (a) On and after the time the Master Servicer receives a
notice of termination, the Trustee shall be the successor in all respects to the
Master Servicer in its capacity as Master Servicer under this Agreement and the
transactions set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto and arising thereafter
placed on the Master Servicer (except for any representations or warranties of
the Master Servicer under this Agreement, the responsibilities, duties and
liabilities contained in Section 2.03(c) and its obligation to deposit amounts
in respect of losses pursuant to Section 3.06) by the terms and provisions
hereof including, without limitation, the Master Servicer's obligations to make
Advances pursuant to Section 4.03; provided, however, that if the Trustee is
prohibited by law or regulation from obligating itself to make advances
regarding delinquent mortgage loans, then the Trustee shall not be obligated to
make Advances pursuant to Section 4.03; and provided further, that any failure
to perform such duties or responsibilities caused by the Master Servicer's
failure to provide information required by Section 7.01 shall not be considered
a default by the Trustee as successor to the Master Servicer hereunder;
provided, however, it is understood and acknowledged by the parties that there
will be a period of transition (not to exceed 90 days) before the servicing
transfer is fully effected. As compensation therefor, effective from and after
the time the Master Servicer receives a notice of termination or immediately
upon assumption of the obligations to make Advances, the Trustee shall be
entitled to the Servicing Fee and all funds relating to the Mortgage Loans to
which the Master Servicer would have been entitled if it had continued to act
hereunder (other than amounts which were due or would become due to the Master
Servicer prior to its termination or resignation). Notwithstanding the above and
subject to the next paragraph, the Trustee may, if it shall be unwilling to so
act, or shall, if it is unable to so act or if it is prohibited by law from
making advances regarding delinquent mortgage loans, or if the Holders of
Certificates entitled to at least 51% of the Voting Rights or the NIMS Insurer
so request in writing to the Trustee promptly appoint or petition a court of
competent jurisdiction to appoint, an established mortgage loan servicing
institution acceptable to each Rating Agency and the NIMS Insurer and having a
net worth of not less than $15,000,000 as the successor to the Master Servicer
under this Agreement in the assumption of all or any part of the
responsibilities, duties or liabilities of the Master Servicer under this
Agreement. No appointment of a successor to the Master Servicer under this
Agreement shall be effective until the assumption by the successor of all of the
Master Servicer's responsibilities, duties and liabilities hereunder. In
connection with such appointment and assumption described herein, the Trustee
may make such

                                       135

<PAGE>

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

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

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

                                       136

<PAGE>

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

                  (c) If the Master Servicer is terminated pursuant to Section
7.01, then the successor Master Servicer shall not be permitted to reimburse
itself directly for Advances or Servicing Advances under Section 3.05(a)(ii),
Section 3.05(a)(iii), Section 3.05(a)(v) or Section 3.05(a)(vii) if the Master
Servicer has not been fully reimbursed for its Advances and Servicing Advances,
but instead the successor Master Servicer shall include such amounts in the
applicable remittance to the Trustee made pursuant to Section 3.04(g) to the
extent of amounts on deposit in the Collection Account on the related Master
Servicer Remittance Date. The Trustee is hereby authorized to pay to the
terminated Master Servicer (or the related Advancing Person in accordance with
Section 3.23) and the successor Master Servicer, as applicable, reimbursements
for Advances and Servicing Advances from the Distribution Account to the same
extent each such Master Servicer would have been permitted to reimburse itself
for such Advances and/or Servicing Advances in accordance with Section
3.05(a)(ii), Section 3.05(a)(iii), Section 3.05(a)(v) or Section 3.05(a)(vii),
as the case may be. All Advances and Servicing Advances made pursuant to the
terms of this Agreement shall be deemed made and shall be reimbursed on a "first
in-first out" (FIFO) basis. At such time as the Master Servicer (or related
Advancing Person) has been reimbursed for all Advances and Servicing Advances
made by it, the successor Master Servicer shall no longer be required to remit
in accordance with the first sentence of this Section 7.02(c) and shall then be
permitted to reimburse itself directly for Advances and Servicing Advances in
accordance with Section 3.05(a)(ii), Section 3.05(a)(iii), Section 3.05(a)(v) or
Section 3.05(a)(vii).

                  SECTION 7.03. Notification to Certificateholders.

                  (a) Upon any termination of the Master Servicer pursuant to
Section 7.01 above or any appointment of a successor to the Master Servicer
pursuant to Section 7.02 above, the Trustee shall give prompt written notice
thereof to Certificateholders and the NIMS Insurer at their respective addresses
appearing in the Certificate Register.

                  (b) Not later than the later of 60 days after the occurrence
of any event, which constitutes or which, with notice or lapse of time or both,
would constitute a Master Servicer Event of Default or five days after a
Responsible Officer of the Trustee becomes aware of the occurrence of such an
event, the Trustee shall transmit by mail to the NIMS Insurer and to all Holders
of Certificates notice of each such occurrence, unless such default or Master
Servicer Event of Default shall have been cured or waived.

                  SECTION 7.04. Waiver of Master Servicer Events of Default.

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

                                       137

<PAGE>

Servicer Event of Default or impair any right consequent thereon except to the
extent expressly so waived.

                                  ARTICLE VIII

                             CONCERNING THE TRUSTEE

                  SECTION 8.01. Duties of Trustee.

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

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

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

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

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

                  (iii) The Trustee shall not be personally liable with respect
         to any action taken, suffered or omitted to be taken by it in good
         faith in accordance with the direction of the NIMS Insurer or the
         Holders of Certificates entitled to at least 25% of the Voting Rights

                                       138

<PAGE>

         relating to the time, method and place of conducting any proceeding for
         any remedy available to the Trustee or exercising any trust or power
         conferred upon it, under this Agreement.

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

                  SECTION 8.02. Certain Matters Affecting the Trustee.

                  (a) Except as otherwise provided in Section 8.01:

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

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

                  (iii) The Trustee shall not 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 or the NIMS Insurer, pursuant to the provisions of
         this Agreement, unless such Certificateholders or the NIMS Insurer, as
         applicable, shall have offered to the Trustee security or indemnity
         reasonably satisfactory to it against the costs, expenses and
         liabilities which may be incurred therein or thereby; nothing contained
         herein shall, however, relieve the Trustee of the obligation, upon the
         occurrence of a Master Servicer Event of Default (which has not been
         cured or waived), to exercise such of the rights and powers vested in
         it by this Agreement, and to use the same degree of care and skill in
         their exercise as a prudent person would exercise or use under the
         circumstances in the conduct of such person's own affairs;

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

                  (v) Prior to the occurrence of a Master Servicer Event of
         Default hereunder and after the curing of all Master Servicer Events of
         Default which may have occurred, the Trustee shall not be bound to make
         any investigation into the facts or matters stated in any resolution,
         certificate, statement, instrument, opinion, report, notice, request,
         consent, order,

                                       139

<PAGE>

         approval, bond or other paper or document, unless requested in writing
         to do so by the NIMS Insurer or the Holders of Certificates entitled to
         at least 25% of the Voting Rights; provided, however, that if the
         payment within a reasonable time to the Trustee of the costs, expenses
         or liabilities likely to be incurred by it in the making of such
         investigation is, in the opinion of the Trustee not reasonably assured
         to the Trustee by such Certificateholders, the Trustee may require
         reasonable indemnity against such expense, or liability from such
         Certificateholders or the NIMS Insurer as a condition to taking any
         such action;

                  (vi) The Trustee may execute any of the trusts or powers
         hereunder or perform any duties hereunder either directly or by or
         through agents or attorneys; and

                  (vii) The Trustee shall not be personally liable for any loss
         resulting from the investment of funds held in the Collection Account,
         the Escrow Account or the REO Account made at the direction of the
         Master Servicer pursuant to Section 3.06.

                  (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 the name of the Trustee 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
         and deliver the Cap Contracts on behalf of the Trust Fund in the
         respective forms 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 Cap Contracts, and the performance of its duties and
         satisfaction of its obligations thereunder.

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

                  The recitals contained herein and in the Certificates (other
than the signature of the Trustee, the authentication of the Certificate
Registrar on the Certificates, the acknowledgments of the Trustee contained in
Article II and the representations and warranties of the Trustee in Section
8.13) shall be taken as the statements of the Depositor and the Trustee assumes
no responsibility for their correctness. The Trustee makes no representations or
warranties as to the validity or sufficiency of this Agreement (other than as
specifically set forth with respect to such party in Section 8.13) or of the
Certificates (other than the signature of the Trustee and authentication of the
Certificate Registrar on the Certificates) or of any Mortgage Loan or related
document. The Trustee shall not be accountable for the use or application by the
Depositor of any of the Certificates or of the proceeds of such Certificates, or
for the use or application of any funds paid to the Depositor or the Master
Servicer in respect of the Mortgage Loans or deposited in or withdrawn from the
Collection Account by the Master Servicer, other than, subject to Section 8.01,
any funds held by or on behalf of the Trustee in accordance with Section 3.04.

                                       140

<PAGE>

                  SECTION 8.04. Trustee May Own Certificates.

                                       141

<PAGE>

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

                  SECTION 8.05. Trustee's Fees and Expenses.

                  (a) The Trustee shall withdraw from the Distribution Account
on each Distribution Date and pay to itself the Trustee Fee and, to the extent
that the funds therein are at any time insufficient for such purpose, the
Depositor shall pay such fees. The Trustee, or any director, officer, employee
or agent of the Trustee shall be indemnified by REMIC I and held harmless
against any loss, liability or expense (not including expenses, disbursements
and advances incurred or made by the Trustee including the compensation and the
expenses and disbursements of its agents and counsel, in the ordinary course of
the Trustee's performance in accordance with the provisions of this Agreement)
incurred by the Trustee in connection with any claim or legal action or any
pending or threatened claim or legal action arising out of or in connection with
the acceptance or administration of its obligations and duties under this
Agreement (up to a limit of $600,000 per calendar year so long as any notes
issued pursuant to the Indenture are insured by a NIMS Insurer), other than any
loss, liability or expense (i) resulting from a breach of the Master Servicer's
obligations and duties under this Agreement and the Mortgage Loans (for which
the Master Servicer shall indemnify pursuant to Section 8.05(b)), (ii) that
constitutes a specific liability of the Trustee pursuant to Section 10.01(c) or
(iii) any loss, liability or expense incurred by reason of its willful
misfeasance, bad faith or negligence in the performance of its duties hereunder
or by reason of reckless disregard of its obligations and duties hereunder or as
a result of a breach of its obligations under Article X hereof. Any amounts
payable to the Trustee, or any director, officer, employee or agent of the
Trustee in respect of the indemnification provided by this paragraph (a), or
pursuant to any other right of reimbursement from the Trust Fund that the
Trustee, or any director, officer, employee or agent of the Trustee may have
hereunder in its capacity as such, may be withdrawn by the Trustee from the
Distribution Account at any time.

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

                  (c) The Master Servicer shall pay any annual rating agency
fees of the Rating Agencies for ongoing surveillance from its own funds without
right of reimbursement.

                  SECTION 8.06. Eligibility Requirements for Trustee.

                  The Trustee hereunder shall at all times be a corporation or
an association (other than the Depositor, the 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 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

                                      142

<PAGE>

capital and surplus of such corporation or association shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
conditions so published. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect specified in Section 8.07.

                  SECTION 8.07. Resignation and Removal of the Trustee.

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

                  If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.06 and shall fail to resign after
written request therefor by the Depositor or the NIMS Insurer, or if at any time
the Trustee shall become incapable of acting, or shall be adjudged bankrupt or
insolvent, or a receiver of the Trustee or of its respective property shall be
appointed, or any public officer shall take charge or control of the Trustee or
of its respective property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Depositor or the NIMS Insurer may remove
the Trustee and appoint a successor trustee acceptable to the NIMS Insurer by
written instrument, in duplicate, which instrument shall be delivered to the
Trustee so removed and to the successor trustee. A copy of such instrument shall
be delivered to the Certificateholders and the Master Servicer by the Depositor.

                  The Holders of Certificates entitled to at least 51% of the
Voting Rights (or the NIMS Insurer upon failure of the Trustee to perform its
obligations hereunder) may at any time remove the Trustee and appoint a
successor trustee acceptable to the NIMS Insurer by written instrument or
instruments, in triplicate, signed by such Holders or their attorneys-in-fact
duly authorized, one complete set of which instruments shall be delivered to the
Depositor, one complete set to the Trustee so removed and one complete set to
the successor so appointed. A copy of such instrument shall be delivered to the
Certificateholders and the Master Servicer by the Depositor.

                  Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall not
become effective until acceptance of appointment by the successor trustee as
provided in Section 8.08.

                  SECTION 8.08. Successor Trustee.

                  Any successor trustee appointed as provided in Section 8.07
shall execute, acknowledge and deliver to the Depositor, the NIMS Insurer and to
its predecessor trustee an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor trustee shall become
effective and such successor trustee without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its

                                       143

<PAGE>

predecessor hereunder, with the like effect as if originally named as trustee
herein. The predecessor trustee shall deliver to the successor trustee all
Mortgage Files and related documents and statements, as well as all moneys, held
by it hereunder (other than any Mortgage Files at the time held by a Custodian,
which Custodian shall become the agent of any successor trustee hereunder), and
the Depositor and the predecessor trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for more
fully and certainly vesting and confirming in the successor trustee all such
rights, powers, duties and obligations.

                  No successor trustee shall accept appointment as provided in
this Section unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 8.06 and the appointment of such
successor trustee shall not result in a downgrading of any Class of Certificates
by either Rating Agency, as evidenced by a letter from each Rating Agency.

                  Upon acceptance of appointment by a successor trustee as
provided in this Section, the Depositor shall mail notice of the succession of
such trustee hereunder to all Holders of Certificates at their addresses as
shown in the Certificate Register. If the Depositor fails to mail such notice
within 10 days after acceptance of appointment by the successor trustee, the
successor trustee shall cause such notice to be mailed at the expense of the
Depositor.

                  SECTION 8.09. Merger or Consolidation of Trustee.

                  Any corporation or association into which the Trustee may be
merged or converted or with which it may be consolidated or any corporation or
association resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation or association succeeding to the
business of the Trustee shall be the successor of the Trustee hereunder,
provided such corporation or association shall be eligible under the provisions
of Section 8.06, without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding.

                  SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.

                  Notwithstanding any other provisions hereof, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of REMIC I or property securing the same may at the time be located, the
Master Servicer and the Trustee acting jointly shall have the power and shall
execute and deliver all instruments to appoint one or more Persons approved by
the Trustee and the NIMS Insurer to act as co-trustee or co-trustees, jointly
with the Trustee, or separate trustee or separate trustees, of all or any part
of REMIC I, and to vest in such Person or Persons, in such capacity, such title
to REMIC I, or any part thereof, and, subject to the other provisions of this
Section 8.10, such powers, duties, obligations, rights and trusts as the Master
Servicer and the Trustee may consider necessary or desirable. Any such
co-trustee or separate trustee shall be subject to the written approval of the
Master Servicer and the NIMS Insurer. If the Master Servicer and the NIMS
Insurer shall not have joined in such appointment within 15 days after the
receipt by it of a request so to do, or in case a Master Servicer Event of
Default shall have occurred and be continuing, the Trustee alone shall have the
power to make such appointment. No co-trustee or separate trustee hereunder
shall be required to meet the terms of eligibility as a successor trustee under
Section 8.06 hereunder and no notice to Holders of Certificates of the
appointment of co-trustee(s) or separate trustee(s) shall be required under
Section 8.08 hereof.

                                       144

<PAGE>

                  In the case of any appointment of a co-trustee or separate
trustee pursuant to this Section 8.10 all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed by the Trustee (whether as
Trustee hereunder or as successor to the Master Servicer hereunder), the Trustee
shall be incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including the holding of title to
REMIC I or any portion thereof in any such jurisdiction) shall be exercised and
performed by such separate trustee or co-trustee at the direction of the
Trustee.

                  Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VIII. Each separate trustee and co-trustee, upon
its acceptance of the trust conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Trustee. Every such instrument shall be filed with the Trustee and a
copy thereof given to the Depositor, the Master Servicer and the NIMS Insurer.

                  Any separate trustee or co-trustee may, at any time,
constitute the Trustee, its agent or attorney-in-fact, with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.

                  SECTION 8.11. Appointment of Custodians.

                  The Trustee may, with the consent of the Depositor and the
Master Servicer appoint one or more Custodians to hold all or a portion of the
Mortgage Files as agent for the Trustee, by entering into a Custodial Agreement.
The appointment of any Custodian may at any time be terminated and a substitute
Custodian appointed therefor upon the reasonable request of the Master Servicer
to the Trustee, the consent to which shall not be unreasonably withheld. The
Trustee shall pay any and all fees and expenses of any Custodian in accordance
with each Custodial Agreement (provided that if expenses of the kind that would
be reimbursable to the Trustee pursuant to Section 8.05 if incurred by the
Trustee are incurred by the Custodian, the Trustee shall be entitled to
reimbursement under Section 8.05 for such kind of expenses to the extent the
Trustee has paid such expenses on behalf of the Custodian or for which the
Trustee has reimbursed the Custodian). The Trustee initially appoints the
Custodian as Custodian, and the Depositor and the Master Servicer consent to
such appointment. Subject to Article VIII hereof, the Trustee agrees to comply
with the terms of each Custodial Agreement and to enforce the terms and
provisions thereof against the Custodian for the benefit of the
Certificateholders having an interest in any Mortgage File held by such
Custodian. Each Custodian shall be a depository institution or trust company
subject to supervision by federal or state authority, shall have combined
capital and surplus of at least $10,000,000 and shall be qualified to do
business in the jurisdiction in which it holds any Mortgage

                                       145

<PAGE>

File. Each Custodial Agreement may be amended only as provided in Section 11.01.
In no event shall the appointment of any Custodian pursuant to a Custodial
Agreement diminish the obligations of the Trustee hereunder.

                  SECTION 8.12. Appointment of Office or Agency.

                  The Trustee will designate an office or agency in the City of
New York where the Certificates may be surrendered for registration of transfer
or exchange, and presented for final distribution, and where notices and demands
to or upon the Trustee in respect of the Certificates and this Agreement may be
delivered. As of the Closing Date, the Trustee designates the office of its
agent located c/o DTC Transfer Agent Services, 55 Water Street, Jeanette Park
Entrance, New York, NY 10041 for such purposes.

                  SECTION 8.13. Representations and Warranties of the Trustee.

                  The Trustee hereby represents and warrants, to the Master
Servicer and the Depositor, as of the Closing Date, that:

                  (i) It is a national banking association duly organized,
         validly existing and in good standing under the laws of the United
         States.

                  (ii) The execution and delivery of this Agreement by it, and
         the performance and compliance with the terms of this Agreement by it,
         will not violate its charter or bylaws or constitute a default (or an
         event which, with notice or lapse of time, or both, would constitute a
         default) under, or result in the breach of, any material agreement or
         other instrument to which it is a party or which is applicable to it or
         any of its assets.

                  (iii) It has the full power and authority to enter into and
         consummate all transactions contemplated by this Agreement, has duly
         authorized the execution, delivery and performance of this Agreement,
         and has duly executed and delivered this Agreement.

                  (iv) This Agreement, assuming due authorization, execution and
         delivery by the other parties hereto, constitutes a valid, legal and
         binding obligation of it, enforceable against it in accordance with the
         terms hereof, subject to (A) applicable bankruptcy, insolvency,
         receivership, reorganization, moratorium and other laws affecting the
         enforcement of creditors' rights generally, and (B) general principles
         of equity, regardless of whether such enforcement is considered in a
         proceeding in equity or at law.

                  (v) It is not in violation of, and its execution and delivery
         of this Agreement and its performance and compliance with the terms of
         this Agreement will not constitute a violation of, any law, any order
         or decree of any court or arbiter, or any order, regulation or demand
         of any federal, state or local governmental or regulatory authority,
         which violation, in its good faith and reasonable judgment, is likely
         to affect materially and adversely either the ability of it to perform
         its obligations under this Agreement or its financial condition.

                  (vi) No litigation is pending or, to the best knowledge,
         threatened against it which would prohibit it from entering into this
         Agreement or, in its good faith reasonable judgment,

                                       146

<PAGE>

         is likely to materially and adversely affect either its ability to
         perform its obligations under this Agreement or its financial
         condition.

                                       147

<PAGE>

                                   ARTICLE IX

                                   TERMINATION

                  SECTION 9.01 Termination Upon Repurchase or Liquidation of All
                               Mortgage Loans.

                  (a) Subject to Section 9.02, the respective obligations and
responsibilities under this Agreement of the Depositor, the Master Servicer and
the Trustee (other than the obligations of the Master Servicer to the Trustee
pursuant to Section 8.05 and of the Master Servicer to provide for and the
Trustee to make payments in respect of the REMIC I Regular Interests, the REMIC
II Regular Interests or the Classes of Certificates as hereinafter set forth)
shall terminate upon payment to the Certificateholders and the deposit of all
amounts held by or on behalf of the Trustee and required hereunder to be so paid
or deposited on the Distribution Date coinciding with or following the earlier
to occur of (i) the purchase by the Terminator (as defined below) of all
Mortgage Loans and each REO Property remaining in REMIC I and (ii) the final
payment or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan or REO Property remaining in REMIC I; provided, however, that in
no event shall the trust created hereby continue beyond the expiration of 21
years from the death of the last survivor of the descendants of Joseph P.
Kennedy, the late ambassador of the United States to the Court of St. James,
living on the date hereof. The purchase by the Terminator of all Mortgage Loans
and each REO Property remaining in REMIC I shall be at a price (the "Termination
Price") equal to greater of (A) the aggregate fair market value of all of the
assets of REMIC I and (B) the sum of the Stated Principal Balance of the
Mortgage Loans (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 the appraised fair market value of the REO Properties plus accrued
interest through the end of the calendar month preceding the month of the final
Distribution Date (in the case of fair market values required to be determined
under (A) or (B) above, as determined by the Terminator, the Trustee and, if the
Terminator is not the NIMS Insurer, the NIMS Insurer, as of the close of
business on the third Business Day next preceding the date upon which notice of
any such termination is furnished to Certificateholders pursuant to the third
paragraph of this Section 9.01); provided, however, such option may only be
exercised if the Termination Price is sufficient to pay all interest accrued on,
as well as amounts necessary to retire the note balance of, each class of notes
issued pursuant to the Indenture and any amounts owed to the NIMS Insurer at the
time the option is exercised.

                  (b) The Master Servicer (or if the Master Servicer fails to
exercise such right, the NIMS Insurer) shall have the right (the party
exercising such right, the "Terminator"), to purchase all of the Mortgage Loans
and each REO Property remaining in REMIC I pursuant to clause (i) of the
preceding paragraph no later than the Determination Date in the month
immediately preceding the Distribution Date on which the Certificates will be
retired; provided, however, that the Terminator may elect to purchase all of the
Mortgage Loans and each REO Property remaining in REMIC I pursuant to clause (i)
above only (A) if the aggregate Stated Principal Balance of the Mortgage Loans
and each REO Property remaining in the Trust Fund at the time of such election
is less than 10% of the aggregate Stated Principal Balance of the Mortgage Loans
as of the Cut-off Date and (B) if the Terminator is the Master Servicer and is
an affiliate of the Seller, the Master Servicer shall have delivered to the
Trustee and the NIMS Insurer a written certification that the

                                       148

<PAGE>

burdens of servicing the Mortgage Loans and REO Properties remaining in REMIC I
exceed the benefits of the Servicing Fees that would be realized by the Master
Servicer if it continued to service such assets on behalf of the Trust Fund. By
acceptance of the Residual Certificates, the Holders of the Residual
Certificates agree, in connection with any termination hereunder, to assign and
transfer any amounts in excess of par, and to the extent received in respect of
such termination, to pay any such amounts to the Holders of the Class CE
Certificates.

                  (c) Notice of the liquidation of the REMIC I Regular Interests
shall be given promptly by the Trustee by letter to Certificateholders mailed
(a) in the event such notice is given in connection with the purchase of the
Mortgage Loans and each REO Property by the Terminator, not earlier than the
15th day and not later than the 25th day of the month next preceding the month
of the final distribution on the Certificates or (b) otherwise during the month
of such final distribution on or before the Determination Date in such month, in
each case specifying (i) the Distribution Date upon which the Trust Fund will
terminate and final payment in respect of the REMIC I Regular Interests, the
REMIC II Regular Interests and the Certificates will be made upon presentation
and surrender of the related Certificates at the office of the Trustee therein
designated, (ii) the amount of any such final payment, (iii) that no interest
shall accrue in respect of the REMIC I Regular Interests, the REMIC II Regular
Interests or the Certificates from and after the Interest Accrual Period
relating to the final Distribution Date therefor and (iv) that the Record Date
otherwise applicable to such Distribution Date is not applicable, payments being
made only upon presentation and surrender of the Certificates at the office of
the Trustee. The Trustee shall give such notice to the Certificate Registrar at
the time such notice is given to Certificateholders. In the event such notice is
given in connection with the purchase of all of the Mortgage Loans and each REO
Property remaining in REMIC I by the Terminator, the Terminator shall deliver to
the Trustee for deposit in the Distribution Account not later than the last
Business Day preceding the final Distribution Date on the Certificates an amount
in immediately available funds equal to the above-described purchase price. Upon
certification to the Trustee by a Servicing Officer of the making of such final
deposit, the Trustee shall promptly release or cause to be released to the
Terminator the Mortgage Files for the remaining Mortgage Loans, and the Trustee
shall execute all assignments, endorsements and other instruments necessary to
effectuate such transfer.

                  (d) Upon presentation of the Certificates by the
Certificateholders on the final Distribution Date, the Trustee shall distribute
to each Certificateholder so presenting and surrendering its Certificates the
amount otherwise distributable on such Distribution Date in accordance with
Section 4.01 in respect of the Certificates so presented and surrendered. Any
funds not distributed to any Holder or Holders of Certificates being retired on
such Distribution Date because of the failure of such Holder or Holders to
tender their Certificates shall, on such date, be set aside and held in trust by
the Trustee and credited to the account of the appropriate non-tendering Holder
or Holders. If any Certificates as to which notice has been given pursuant to
this Section 9.01 shall not have been surrendered for cancellation within six
months after the time specified in such notice, the Trustee shall mail a second
notice to the remaining non-tendering Certificateholders to surrender their
Certificates for cancellation in order to receive the final distribution with
respect thereto. If within one year after the second notice all such
Certificates shall not have been surrendered for cancellation, the Trustee
shall, directly or through an agent, mail a final notice to remaining related
non-tendering Certificateholders concerning surrender of their Certificates. The
costs and expenses of maintaining the funds in trust and of contacting such
Certificateholders shall be paid out of the assets remaining in the trust funds.
If within one year after the final notice any

                                       149

<PAGE>

such Certificates shall not have been surrendered for cancellation, the Trustee
shall pay to Deutsche Bank Securities Inc. all such amounts, and all rights of
non-tendering Certificateholders in or to such amounts shall thereupon cease. No
interest shall accrue or be payable to any Certificateholder on any amount held
in trust by the Trustee as a result of such Certificateholder's failure to
surrender its Certificate(s) for final payment thereof in accordance with this
Section 9.01.

                  Immediately following the deposit of funds in trust hereunder
in respect of the Certificates, the Trust Fund shall terminate.

                  SECTION 9.02 Additional Termination Requirements.

                  (a) In the event that the Terminator purchases all the
         Mortgage Loans and each REO Property or the final payment on or other
         liquidation of the last Mortgage Loan or REO Property remaining in
         REMIC I pursuant to Section 9.01, the Trust Fund shall be terminated in
         accordance with the following additional requirements:

                  (i) The Trustee shall specify the first day in the 90-day
         liquidation period in a statement attached to 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 at the expense of the Terminator;

                  (ii) During such 90-day liquidation period, and at or prior to
         the time of making of the final payment on the Certificates, the
         Trustee shall sell all of the assets of REMIC I to the Terminator for
         cash; and

                  (iii) At the time of the making of the final payment on the
         Certificates, the Trustee shall distribute or credit, or cause to be
         distributed or credited, to the Holders of the Residual Certificates
         all cash on hand in the Trust Fund (other than cash retained to meet
         claims), and the Trust Fund shall terminate at that time.

                  (b) At the expense of the applicable Terminator (or in the
         event of termination under Section 9.01(a)(ii), at the expense of the
         Trustee), the Trustee shall prepare or cause to be prepared the
         documentation required in connection with the adoption of a plan of
         liquidation of each Trust REMIC pursuant to this Section 9.02.

                  (c) By their acceptance of Certificates, the Holders thereof
         hereby agree to authorize the Trustee to specify the 90-day liquidation
         period for each Trust REMIC which authorization shall be binding upon
         all successor Certificateholders.

                                       150

<PAGE>

                                    ARTICLE X

                                REMIC PROVISIONS

                  SECTION 10.01. 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 Trustee on Form 1066 or other appropriate federal
tax or information return or any appropriate state return for the taxable year
ending on the last day of the calendar year in which the Certificates are
issued. For the purposes of the REMIC election in respect of REMIC I, the REMIC
I Regular Interests shall be designated as the Regular Interests in REMIC I and
the Class R-I Interest shall be designated as the Residual Interest in REMIC I.
The Class A Certificates, the Mezzanine Certificates, the Class CE Certificates
and the Class P Certificates shall be designated as the Regular Interests in
REMIC II and the Class R-II Interest shall be designated as the Residual
Interest in REMIC II. The Trustee shall not permit the creation of any
"interests" in any 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 Trustee shall pay out of its own funds, without any
right of reimbursement, any and all expenses relating to any tax audit of the
Trust Fund caused by the Trustee (including, but not limited to, any
professional fees or any administrative or judicial proceedings with respect to
any Trust REMIC that involve the Internal Revenue Service or state tax
authorities), other than the expense of obtaining any tax related Opinion of
Counsel except as specified herein. The Trustee, as agent for 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 Trustee or an Affiliate as
its agent to perform all of the duties of the tax matters person for the Trust
Fund.

                  (d) The Trustee shall prepare, sign and file all of the Tax
Returns in respect of each REMIC created hereunder. The expenses of preparing
and filing such returns shall be borne by the Trustee without any right of
reimbursement therefor. The Master Servicer shall provide on a timely basis to
the Trustee or its designee such information with respect to the assets of the
Trust Fund as is in its possession and reasonably required by the Trustee to
enable it to perform its obligations under this Article.

                  (e) The Trustee shall perform on behalf of each Trust REMIC
all reporting and other tax compliance duties that are the responsibility of
such REMIC under the Code, the REMIC

                                       151

<PAGE>

Provisions or other compliance guidance issued by the Internal Revenue Service
or any state or local taxing authority. Among its other duties, as required by
the Code, the REMIC Provisions or other such compliance guidance, the Trustee
shall provide (i) to any Transferor of a Residual Certificate such information
as is necessary for the application of any tax relating to the transfer of a
Residual Certificate to any Person who is not a Permitted Transferee, (ii) to
the Certificateholders such information or reports as are required by the Code
or the REMIC Provisions including reports relating to interest, original issue
discount and market discount or premium (using the Prepayment Assumption as
required) and (iii) to the Internal Revenue Service the name, title, address and
telephone number of the person who will serve as the representative of each
Trust REMIC. The Master Servicer shall provide on a timely basis to the Trustee
such information with respect to the assets of the Trust Fund, including,
without limitation, the Mortgage Loans, as is in its possession and reasonably
required by the Trustee to enable each of them to perform their respective
obligations under this subsection. In addition, the Depositor shall provide or
cause to be provided to the Trustee, within ten (10) days after the Closing
Date, all information or data that the Trustee reasonably determines to be
relevant for tax purposes as to the valuations and issue prices of the
Certificates, including, without limitation, the price, yield, prepayment
assumption and projected cash flow of the Certificates.

                  (f) The Trustee shall take such action and shall cause each
REMIC created hereunder to take such action as shall be necessary to create or
maintain the status thereof as a REMIC under the REMIC Provisions (and the
Master Servicer shall assist it, to the extent reasonably requested by it). The
Trustee shall not take any action, cause the Trust Fund to take any action or
fail to take (or fail to cause to be taken) any action that, under the REMIC
Provisions, if taken or not taken, as the case may be, could (i) endanger the
status of any Trust REMIC as a REMIC or (ii) result in the imposition of a tax
upon the Trust Fund (including but not limited to the tax on prohibited
transactions as defined in Section 860F(a)(2) of the Code and the tax on
contributions to a REMIC set forth in Section 860G(d) of the Code) (either such
event, an "Adverse REMIC Event") unless the Trustee and the NIMS Insurer have
received an Opinion of Counsel, addressed to the Trustee (at the expense of the
party seeking to take such action but in no event at the expense of the Trustee)
to the effect that the contemplated action will not, with respect to any Trust
REMIC, endanger such status or result in the imposition of such a tax, nor shall
the Master Servicer take or fail to take any action (whether or not authorized
hereunder) as to which the Trustee and the NIMS Insurer has advised it in
writing that it has received an Opinion of Counsel to the effect that an Adverse
REMIC Event could occur with respect to such action. In addition, prior to
taking any action with respect to 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 Master Servicer will consult with the
Trustee, the NIMS Insurer or its designee, in writing, with respect to whether
such action could cause an Adverse REMIC Event to occur with respect to any
Trust REMIC, and the Master Servicer shall not take any such action or cause any
Trust REMIC to take any such action as to which the Trustee or the NIMS Insurer
has advised it in writing that an Adverse REMIC Event could occur. The Trustee
or the NIMS Insurer may consult with counsel to make such written advice, and
the cost of same shall be borne by the party seeking to take the action not
permitted by this Agreement, but in no event shall such cost be an expense of
the Trustee. At all times as may be required by the Code, the Master Servicer
(in its capacity as Seller) on behalf of the Trustee will ensure that
substantially all of the assets of any Trust REMIC will consist of "qualified
mortgages" as defined in Section 860G(a)(3) of the Code and "permitted
investments" as defined in Section 860G(a)(5) of the Code.

                                       152

<PAGE>

                  (g) In the event that any tax is imposed on "prohibited
transactions" of any Trust REMIC created hereunder as defined in Section
860F(a)(2) of the Code, on the "net income from foreclosure property" of such
REMIC as defined in Section 860G(c) of the Code, on any contributions to any
such REMIC after the Startup Day therefor pursuant to Section 860G(d) of the
Code, or any other tax is imposed by the Code or any applicable provisions of
state or local tax laws, such tax shall be charged (i) to the Trustee pursuant
to Section 10.03 hereof, if such tax arises out of or results from a breach by
the Trustee of any of its obligations under this Article X, (ii) to the Master
Servicer pursuant to Section 10.03 hereof, if such tax arises out of or results
from a breach by the Master Servicer of any of its obligations under Article III
or this Article X, or otherwise (iii) against amounts on deposit in the
Distribution Account and shall be paid by withdrawal therefrom.

                  (h) On or before April 15th of each calendar year, commencing
April 15, 2004, the Trustee shall deliver to the Master Servicer, the NIMS
Insurer and each Rating Agency a Certificate from a Responsible Officer of the
Trustee stating, without regard to any action taken by any party other than the
Trustee, the Trustee's compliance with this Article X.

                  (i) The Trustee shall, for federal income tax purposes,
maintain books and records with respect to each Trust REMIC on a calendar year
and on an accrual basis. The Trustee will apply for an Employer Identification
Number for the Trust Fund from the Internal Revenue Service via a Form SS-4 or
such other form as is appropriate.

                  (j) Following the Startup Day, the Trustee shall not accept
any contributions of assets to any 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.

                  (k) Neither the Trustee nor the Master Servicer shall enter
into any arrangement by which any Trust REMIC will receive a fee or other
compensation for services nor permit any such REMIC to receive any income from
assets other than the Mortgage Pool which are deemed to constitute "qualified
mortgages" as defined in Section 860G(a)(3) of the Code or "permitted
investments" as defined in Section 860G(a)(5) of the Code.

                  SECTION 10.02. Prohibited Transactions and Activities.

                  None of the Depositor, the Master Servicer or the Trustee
shall sell, dispose of or substitute for any of the Mortgage Loans (except in
connection with (i) the foreclosure of a Mortgage Loan, including but not
limited to, the acquisition or sale of a Mortgaged Property acquired by deed in
lieu of foreclosure, (ii) the bankruptcy of REMIC I, (iii) the termination of
REMIC I pursuant to Article IX of this Agreement, (iv) a substitution pursuant
to Article II of this Agreement or (v) a purchase of Mortgage Loans pursuant to
Article II or III of this Agreement), nor acquire any assets for any 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

                                       153

<PAGE>

Opinion of Counsel, addressed to the Trustee and the NIMS Insurer (at the
expense of the party seeking to cause such sale, disposition, substitution,
acquisition or contribution but in no event at the expense of the Trustee) that
such sale, disposition, substitution, acquisition or contribution will not (a)
affect adversely the status of any 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 10.03. Master Servicer and Trustee Indemnification.

                  (a) The Trustee agrees to indemnify the Trust Fund, the NIMS
Insurer, the Depositor and the Master Servicer for any taxes and costs
including, without limitation, any reasonable attorneys fees imposed on or
incurred by the Trust Fund, the Depositor or the Master Servicer, caused solely
by the Trustee's failure to act in accordance with its standard of care set
forth in this Article X or any state, local or franchise taxes imposed upon the
Trust as a result of the location of the Trustee.

                  (b) The Master Servicer agrees to indemnify the Trust Fund,
the NIMS Insurer, the Depositor and the Trustee for any taxes and costs
including, without limitation, any reasonable attorneys' fees imposed on or
incurred by the Trust Fund, the Depositor or the Trustee, as a result of a
breach of the Master Servicer's covenants set forth in Article III or this
Article X or any state, local or franchise taxes imposed upon the Trust as a
result of the location of the Master Servicer or any subservicer.

                                       154

<PAGE>

                                   ARTICLE XI

                            MISCELLANEOUS PROVISIONS

                  SECTION 11.01. Amendment.

                   This Agreement or any Custodial Agreement may be amended from
time to time by the Depositor, the Master Servicer, the Trustee and, if
applicable, the Custodian with the consent of the NIMS Insurer and without the
consent of any of the Certificateholders, (i) to cure any ambiguity or defect,
(ii) to correct, modify or supplement any provisions herein (including to give
effect to the expectations of Certificateholders), or in any Custodial
Agreement, or (iii) to make any other provisions with respect to matters or
questions arising under this Agreement or in any Custodial Agreement which shall
not be inconsistent with the provisions of this Agreement or such Custodial
Agreement, provided that such action shall not adversely affect in any material
respect the interests of any Certificateholder, as evidenced by either (i) an
Opinion of Counsel delivered to the Master Servicer and the Trustee to such
effect or (ii) confirmation from the Rating Agencies that such amendment will
not result in the reduction or withdrawal of the rating of any outstanding Class
of Certificates. No amendment shall be deemed to adversely affect in any
material respect the interests of any Certificateholder who shall have consented
thereto, and no Opinion of Counsel shall be required to address the effect of
any such amendment on any such consenting Certificateholder.

                   This Agreement or any Custodial Agreement may also be amended
from time to time by the Depositor, the Master Servicer, the NIMS Insurer and
the Trustee with the consent of the NIMS Insurer and the Holders of Certificates
entitled to at least 66% of the Voting Rights for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement or any Custodial Agreement or of modifying in any manner the
rights of the Holders of Certificates; provided, however, that no such amendment
shall (i) reduce in any manner the amount of, or delay the timing of, payments
received on Mortgage Loans which are required to be distributed on any
Certificate without the consent of the Holder of such Certificate, (ii)
adversely affect in any material respect the interests of the Holders of any
Class of Certificates (as evidenced by either (i) an Opinion of Counsel
delivered to the Trustee or (ii) written notice to the Depositor, the Servicer
and the Trustee from the Rating Agencies that such action will not result in the
reduction or withdrawal of the rating of any outstanding Class of Certificates
with respect to which it is a Rating Agency) in a manner other than as described
in (i), or (iii) modify the consents required by the immediately preceding
clauses (i) and (ii) without the consent of the Holders of all Certificates then
outstanding. Notwithstanding any other provision of this Agreement, for purposes
of the giving or withholding of consents pursuant to this Section 11.01,
Certificates registered in the name of the Depositor or the Master Servicer or
any Affiliate thereof shall be entitled to Voting Rights with respect to matters
affecting such Certificates.

                  Notwithstanding any contrary provision of this Agreement,
neither the Trustee nor the NIMS Insurer shall consent to any amendment to this
Agreement unless it shall have first received an Opinion of Counsel satisfactory
to the NIMS Insurer to the effect that such amendment will not result in the
imposition of any tax on any 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.

                                       155

<PAGE>

                  Notwithstanding any of the other provisions of this Section
11.01, none of the Depositor, the Master Servicer or the Trustee shall enter
into any amendment of this Agreement that would significantly change the
permitted activities of the Trust Fund without the consent of the NIMS Insurer
and the Holders of Certificates that represent more than 50.00% of the aggregate
Certificate Principal Balance of all Certificates.

                  Promptly after the execution of any such amendment the Trustee
shall furnish a copy of such amendment to each Certificateholder.

                  It shall not be necessary for the consent of
Certificateholders under this Section 11.01 to approve the particular form of
any proposed amendment, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable regulations as the Trustee may prescribe.

                  The cost of any Opinion of Counsel to be delivered pursuant to
this Section 11.01 shall be borne by the Person seeking the related amendment,
but in no event shall such Opinion of Counsel be an expense of the Trustee.

                  The Trustee may, but shall not be obligated to enter into any
amendment pursuant to this Section that affects its respective rights, duties
and immunities under this Agreement or otherwise.

                  SECTION 11.02. Recordation of Agreement; Counterparts.

                  To the extent permitted by applicable law, this Agreement is
subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the properties subject to the Mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Master Servicer at the expense of the Certificateholders, but
only upon direction of the Trustee accompanied by an Opinion of Counsel to the
effect that such recordation materially and beneficially affects the interests
of the Certificateholders.

                  For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.

                  SECTION 11.03. Limitation on Rights of Certificateholders.

                  The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the Trust Fund, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of the
Trust Fund, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.

                                       156

<PAGE>

                  No Certificateholder shall have any right to vote (except as
expressly provided for herein) or in any manner otherwise control the operation
and management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of any of the
Certificates, be construed so as to constitute the Certificateholders from time
to time as partners or members of an association; nor shall any
Certificateholder be under any liability to any third person by reason of any
action taken by the parties to this Agreement pursuant to any provision hereof.

                  No Certificateholder shall have any right by virtue of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless (i)
such Holder previously shall have given to the Trustee a written notice of
default and of the continuance thereof, as hereinbefore provided, and (ii) the
Holders of Certificates entitled to at least 25% of the Voting Rights shall have
made written request upon the Trustee to institute such action, suit or
proceeding in the name of the Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for 15 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding. It is
understood and intended, and expressly covenanted by each Certificateholder with
every other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatsoever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, or to enforce any right
under this Agreement, except in the manner herein provided and for the equal,
ratable and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section, each and every Certificateholder
and the Trustee shall be entitled to such relief as can be given either at law
or in equity.

                  SECTION 11.04. Governing Law.

                  This Agreement shall be construed in accordance with the laws
of the State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws excluding the choice
of laws provisions therein.

                  SECTION 11.05. Notices.

                  All directions, demands, requests, authorizations and notices
hereunder shall be in writing and shall be deemed to have been duly given when
received if personally delivered at or mailed by first class mail, postage
prepaid, or by express delivery service, facsimile, electronic mail or delivered
in any other manner specified herein, to (a) in the case of the Depositor, 1100
Town & Country Road, Suite 1100, Orange, California 92868, Attention: Capital
Markets (telecopy number (714) 245-0198), or such other address or telecopy
number as may hereafter be furnished to the Master Servicer, the NIMS Insurer
and the Trustee in writing by the Depositor, (b) in the case of the Master
Servicer, 1100 Town & Country Road, 11th Floor, Orange, California 92868,
Attention: General Counsel (telecopy number: (714) 564-9639), or such other
address or telecopy number as may hereafter be furnished to the Trustee, the
NIMS Insurer and the Depositor in writing by the Master Servicer, (c) in the
case of the Trustee, Deutsche Bank National Trust Company, 1761 East St. Andrew
Place, Santa Ana, CA 92705-4934, Attention: Trust Administration-AQ0310
(telecopy

                                       157

<PAGE>

number: (714) 247-6009), or such other address or telecopy number as may
hereafter be furnished to the Master Servicer, the NIMS Insurer and the
Depositor in writing by the Trustee and (d) in the case of the NIMS Insurer,
such address furnished to the Depositor, the Master Servicer and the Trustee in
writing by the NIMS Insurer. Any notice required or permitted to be given to a
Certificateholder shall be given by first class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given when mailed, whether or not the
Certificateholder receives such notice. A copy of any notice required to be
telecopied hereunder also shall be mailed to the appropriate party in the manner
set forth above.

                  SECTION 11.06. Severability of Provisions.

                  If any one or more of the covenants, agreements, provisions or
terms of this Agreement shall be for any reason whatsoever held invalid, then
such covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions of
this Agreement or of the Certificates or the rights of the Holders thereof.

                  SECTION 11.07. Notice to Rating Agencies and the NIMS Insurer.

                  The Trustee shall use its best efforts promptly to provide
notice to the Rating Agencies and the NIMS Insurer with respect to each of the
following of which it has actual knowledge:

         1. Any material change or amendment to this Agreement;

         2. The occurrence of any Master Servicer Event of Default that has not
been cured or waived;

         3. The resignation or termination of the Master Servicer or the
Trustee;

         4. The repurchase or substitution of Mortgage Loans pursuant to or as
contemplated by Section 2.03;

         5. The final payment to the Holders of any Class of Certificates;

         6. Any change in the location of the Collection Account or the
Distribution Account;

         7. Any event that would result in the inability of the Trustee, were it
to succeed as Master Servicer, to make advances regarding delinquent Mortgage
Loans; and

         8. The filing of any claim under the Master Servicer's blanket bond and
errors and omissions insurance policy required by Section 3.09 or the
cancellation or material modification of coverage under any such instrument.

                  In addition, the Trustee shall promptly furnish to each Rating
Agency and the NIMS Insurer copies of each report to Certificateholders
described in Section 4.02 and the Master Servicer,

                                       158

<PAGE>

as required pursuant to Section 3.19 and Section 3.20, shall promptly furnish to
each Rating Agency copies of the following:

                  1. Each annual statement as to compliance described in Section
3.19; and

                  2. Each annual independent public accountants' servicing
report described in Section 3.20.

                  Any such notice pursuant to this Section 11.07 shall be in
writing and shall be deemed to have been duly given if personally delivered at
or mailed by first class mail, postage prepaid, or by express delivery service
to Moody's Investors Service, 99 Church Street, New York, New York 10007, to
Fitch Ratings, 1 State Street Plaza, New York, New York 10004 and to Standard &
Poor's, a division of the McGraw-Hill Companies, Inc., 25 Broadway, New York,
New York 10004, or such other addresses as the Rating Agencies may designate in
writing to the parties hereto.

                  SECTION 11.08. Article and Section References.

                  All article and section references used in this Agreement,
unless otherwise provided, are to articles and sections in this Agreement.

                  SECTION 11.09. Grant of Security Interest.

                  It is the express intent of the parties hereto that the
conveyance of the Mortgage Loans by the Depositor to the Trustee be, and be
construed as, a sale of the Mortgage Loans by the Depositor and not a pledge of
the Mortgage Loans by the Depositor to secure a debt or other obligation of the
Depositor or the Seller. However, in the event that, notwithstanding the
aforementioned intent of the parties, the Mortgage Loans are held to be property
of the Depositor or the Seller, then, (a) it is the express intent of the
parties that such conveyance be deemed a pledge of the Mortgage Loans by the
Depositor to the Trustee to secure a debt or other obligation of the Depositor
or the Seller and (b)(1) this Agreement shall also be deemed to be a security
agreement within the meaning of Articles 8 and 9 of the Uniform Commercial Code
as in effect from time to time in the State of New York; (2) the conveyance
provided for in Section 2.01 hereof shall be deemed to be a grant by the Seller
and the Depositor to the Trustee of a security interest in all of the Seller's
and the Depositor's right, title and interest in and to the Mortgage Loans and
all amounts payable to the Holders of the Mortgage Loans in accordance with the
terms thereof and all proceeds of the conversion, voluntary or involuntary, of
the foregoing into cash, instruments, securities or other property, including
without limitation all amounts, other than investment earnings, from time to
time held or invested in the Collection Account and the Distribution Account,
whether in the form of cash, instruments, securities or other property; (3) the
obligations secured by such security agreement shall be deemed to be all of the
Depositor's obligations under this Agreement, including the obligation to
provide to the Certificateholders the benefits of this Agreement relating to the
Mortgage Loans and the Trust Fund; and (4) notifications to persons holding such
property, and acknowledgments, receipts or confirmations from persons holding
such property, shall be deemed notifications to, or acknowledgments, receipts or
confirmations from, financial intermediaries, bailees or agents (as applicable)
of the Trustee for the purpose of perfecting such security interest under
applicable law. Accordingly, the Depositor hereby grants to the Trustee a
security interest in the Mortgage Loans and all other property described in
clause (2) of the preceding sentence, for the

                                       159

<PAGE>

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
and the transfer pursuant to the Mortgage Loan Purchase Agreement to be a true,
absolute and unconditional sale of the Mortgage Loans and assets constituting
the Trust Fund by the Depositor to the Trustee.

                  SECTION 11.10 Third Party Rights.

                  The NIMS Insurer shall be deemed a third-party beneficiary of
this Agreement to the same extent as if it were a party hereto, and shall have
the right to enforce the provisions of this Agreement.

                                       160

<PAGE>

                  IN WITNESS WHEREOF, the Depositor, the Master Servicer and the
Trustee have caused their names to be signed hereto by their respective officers
thereunto duly authorized, in each case as of the day and year first above
written.

                                  AMERIQUEST MORTGAGE SECURITIES INC.,
                                  as Depositor

                                  By:  /s/ Jule J. Keen
                                      ---------------------------------------
                                  Name:    Jule J. Keen
                                  Title:   EVP

                                  AMERIQUEST MORTGAGE COMPANY,
                                  as Master Servicer

                                  By:  /s/ Jule J. Keen
                                      ---------------------------------------
                                  Name:    Jule J. Keen
                                  Title:   EVP

                                  DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                  as Trustee

                                  By:  /s/ Ronaldo Reyes
                                      ---------------------------------------
                                  Name:    Ronaldo Reyes
                                  Title:   Assistant Vice President

                                  By:  /s/ Valerie Delgado
                                      ---------------------------------------
                                  Name:    Valerie Delgado
                                  Title:   Associate

                                       161

<PAGE>

STATE OF CALIFORNIA                 )
                                    ) ss.:
COUNTY OF ORANGE                    )

                  On the ___ day of ____________ 2003, before me, a notary
public in and for said State, personally appeared ____________, known to me to
be an ________________ of Ameriquest Mortgage Securities Inc., one of the
corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.

                  IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                      ---------------------------------------
                                              Notary Public

[Notarial Seal]

                                       162

<PAGE>

STATE OF CALIFORNIA                 )
                                    ) ss.:
COUNTY OF ORANGE                    )

                  On the __th day of ____________ 2003, before me, a notary
public in and for said State, personally appeared __________________, known to
me to be a _________________ of Ameriquest Mortgage Company, one of the
corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.

                  IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                      ---------------------------------------
                                                Notary Public

[Notarial Seal]

                                       163

<PAGE>

STATE OF CALIFORNIA         )
                            ) ss.:
COUNTY OF                   )

                  On the ___ day of ____________ 2003, before me, a notary
public in and for said State, personally appeared _________________, known to me
to be an ____________________ of Deutsche Bank National Trust Company, one of
the entities that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such entity executed the within instrument.

                  IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                      ---------------------------------------
                                                Notary Public

[Notarial Seal]

                                       164

<PAGE>
                                   EXHIBIT A-1

                         FORM OF CLASS AV-1 CERTIFICATE

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
         "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
         THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
         INTERNAL REVENUE CODE OF 1986 (THE "CODE").

<TABLE>
<CAPTION>

<S>                                                       <C>
Series 2003-10, Class AV-1                                Aggregate Certificate
                                                          Principal Balance of
                                                          the Class AV-1
                                                          Certificates as of the
                                                          Issue Date:
Pass-Through Rate: Variable                               $681,161,000.00

Date of Pooling and Servicing Agreement and Cut-off       Denomination: $681,161,000.00
Date: October 1, 2003
                                                          Master Servicer: Ameriquest Mortgage Company
First Distribution Date: November 25, 2003
                                                          Trustee: Deutsche Bank National Trust Company
No. 1
                                                          Issue Date: October 10, 2003

                                                          CUSIP: 03072S KH 7

</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.

                                     AV-1-1

<PAGE>

                      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
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
         AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER SERVICER, THE
         TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
         CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY
         ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Cede & Co. 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 AV-1 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class AV-1 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among
Ameriquest Mortgage Securities Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer and
the Trustee, a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class AV-1 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

                  The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
be the lesser of (x) the related Formula Rate for such Distribution Date and (y)
the Net WAC Pass-Through Rate for such Distribution Date. For any Distribution
Date and this Certificate, the Formula Rate is One-Month LIBOR plus the
Certificate Margin. The Certificate Margin for this Certificate is 0.380% in the
case of each Distribution Date through and including the Optional Termination
Date, or 0.760%, in the case of any Distribution Date thereafter.

                  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, 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

                                     AV-1-2

<PAGE>

than distributions to Certificateholders, such purposes including reimbursement
of advances made, or certain expenses incurred, with respect to the Mortgage
Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

                  No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right cannot be exercised until the Optional Termination Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

                                     AV-1-3

<PAGE>

                  IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.

Dated: _______________, 2003

                                   DEUTSCHE BANK NATIONAL TRUST
                                   COMPANY
                                   as Trustee

                                   By:__________________________
                                            Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

                  This is one of the Certificates referred to in the
within-mentioned Agreement.

                                   DEUTSCHE BANK NATIONAL TRUST
                                   COMPANY
                                   as Certificate Registrar

                                   By:__________________________
                                            Authorized Signatory

                                     AV-1-4

<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)
         TEN ENT -         as tenants by the entireties                                          under Uniform Gifts to
                                                                                        Minors Act
         JT TEN -          as joint tenants with right if                                _________________
                           survivorship and not as tenants                                       (State)
                           in common
</TABLE>

                  Additional abbreviations may also be used though not in the
above list.

                                   ASSIGNMENT

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to____% evidenced by the within 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 Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:

Dated:

                                      ________________________
                                      Signature by or on behalf of assignor

                                      ________________________
                                      Signature Guaranteed

                            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.

                                     AV-1-5

<PAGE>

                                   EXHIBIT A-2

                         FORM OF CLASS AV-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").
<TABLE>
<CAPTION>

<S>                                                       <C>
Series 2003-10, Class AV-2                                Aggregate Certificate
                                                          Principal Balance of
                                                          the Class AV-2
                                                          Certificates as of the
                                                          Issue Date:
Pass-Through Rate: Variable                               $103,277,000.00

Date of Pooling and Servicing Agreement and Cut-off       Denomination: $103,277,000.00
Date: October 1, 2003
                                                          Master Servicer: Ameriquest Mortgage Company
First Distribution Date: November 25, 2003
                                                          Trustee: Deutsche Bank National Trust Company
No. 1
                                                          Issue Date: October 10, 2003

                                                          CUSIP: 03072S KJ 3

</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.

                                     AV-2-1

<PAGE>

                      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
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
         AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER SERVICER, THE
         TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
         CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY
         ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Cede & Co. 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 AV-2 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class AV-2 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among
Ameriquest Mortgage Securities Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer and
the Trustee, a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class AV-2 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

                  The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
be the lesser of (x) the related Formula Rate for such Distribution Date and (y)
the Net WAC Pass-Through Rate for such Distribution Date. For any Distribution
Date and this Certificate, the Formula Rate is One-Month LIBOR plus the
Certificate Margin. The Certificate Margin for this Certificate is 0.350% in the
case of each Distribution Date through and including the Optional Termination
Date, or 0.700%, in the case of any Distribution Date thereafter.

                  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, 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

                                     AV-2-2

<PAGE>

than distributions to Certificateholders, such purposes including reimbursement
of advances made, or certain expenses incurred, with respect to the Mortgage
Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

                  No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right cannot be exercised until the Optional Termination Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

                                     AV-2-3

<PAGE>

                 IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.

Dated: _______________, 2003

                                    DEUTSCHE BANK NATIONAL TRUST
                                    COMPANY
                                    as Trustee

                                    By:__________________________
                                             Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

                  This is one of the Certificates referred to in the
within-mentioned Agreement.

                                    DEUTSCHE BANK NATIONAL TRUST
                                    COMPANY
                                    as Certificate Registrar

                                    By:__________________________
                                             Authorized Signatory

                                     AV-2-4

<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)
         TEN ENT -         as tenants by the entireties                                          under Uniform Gifts to
                                                                                        Minors Act
         JT TEN -          as joint tenants with right if                                _________________
                           survivorship and not as tenants                                       (State)
                           in common
</TABLE>

                  Additional abbreviations may also be used though not in the
above list.

                                   ASSIGNMENT

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to____% evidenced by the within 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 Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:

Dated:

                                      ________________________
                                      Signature by or on behalf of assignor

                                      ________________________
                                      Signature Guaranteed

                            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.

                                     AV-2-5

<PAGE>

                                   EXHIBIT A-3

                         FORM OF CLASS AF-1 CERTIFICATE

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
         "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
         THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
         INTERNAL REVENUE CODE OF 1986 (THE "CODE").

<TABLE>
<CAPTION>

<S>                                                        <C>
Series 2003-10, Class AF-1                                 Aggregate Certificate
                                                           Principal Balance of
                                                           the Class AF-1
                                                           Certificates as of
                                                           the Issue Date:
Pass-Through Rate: Variable                                $72,357,000.00

Date of Pooling and Servicing Agreement and Cut-off        Denomination: $72,357,000.00
Date: October 1, 2003
                                                           Master Servicer: Ameriquest Mortgage Company
First Distribution Date: November 25, 2003
                                                           Trustee: Deutsche Bank National Trust Company
No. 1
                                                           Issue Date: October 10, 2003

                                                           CUSIP: 03072S KK 0

</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.

                                     AF-1-1

<PAGE>

                      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
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
         AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER SERVICER, THE
         TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
         CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY
         ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Cede & Co. 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 AF-1 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class AF-1 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among
Ameriquest Mortgage Securities Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer and
the Trustee, a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class AF-1 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

                  The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
be the lesser of (x) the related Formula Rate for such Distribution Date and (y)
the Net WAC Pass-Through Rate for such Distribution Date. For any Distribution
Date and this Certificate, the Formula Rate is One-Month LIBOR plus the
Certificate Margin. The Certificate Margin for this Certificate is 0.160% in the
case of each Distribution Date through and including the Optional Termination
Date, or 0.320%, in the case of any Distribution Date thereafter.

                  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, 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

                                     AF-1-2

<PAGE>

than distributions to Certificateholders, such purposes including reimbursement
of advances made, or certain expenses incurred, with respect to the Mortgage
Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

                  No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right cannot be exercised until the Optional Termination Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

                                     AF-1-3

<PAGE>

                  IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.

Dated: ___________, 2003

                                        DEUTSCHE BANK NATIONAL TRUST
                                        COMPANY
                                        as Trustee

                                        By:__________________________
                                                 Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

                  This is one of the Certificates referred to in the
within-mentioned Agreement.

                                        DEUTSCHE BANK NATIONAL TRUST
                                        COMPANY
                                        as Certificate Registrar

                                        By:__________________________
                                                 Authorized Signatory

                                     AF-1-4

<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)
         TEN ENT -         as tenants by the entireties                                 under Uniform Gifts to
                                                                                        Minors Act
         JT TEN -          as joint tenants with right if                                _________________
                           survivorship and not as tenants                                       (State)
                           in common
</TABLE>

                  Additional abbreviations may also be used though not in the
above list.

                                   ASSIGNMENT

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to____% evidenced by the within 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 Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:

Dated:

                                      ________________________
                                      Signature by or on behalf of assignor

                                      ________________________
                                      Signature Guaranteed

                            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.

                                     AF-1-5

<PAGE>

                                   EXHIBIT A-4

                         FORM OF CLASS AF-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").

<TABLE>
<CAPTION>

<S>                                                        <C>
Series 2003-10, Class AF-2                                 Aggregate Certificate
                                                           Principal Balance of
                                                           the Class AF-2
                                                           Certificates as of
                                                           the Issue Date:
Pass-Through Rate: 2.540% per annum                        $24,854,000.00

Date of Pooling and Servicing Agreement and Cut-off        Denomination: $24,854,000.00
Date: October 1, 2003
                                                           Master Servicer: Ameriquest Mortgage Company
First Distribution Date: November 25, 2003
                                                           Trustee: Deutsche Bank National Trust Company
No. 1
                                                           Issue Date: October 10, 2003

                                                           CUSIP: 03072S KL 8

</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.

                                     AF-2-1

<PAGE>

                      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
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
         AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER SERVICER, THE
         TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
         CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY
         ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Cede & Co. 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 AF-2 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class AF-2 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among
Ameriquest Mortgage Securities Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer and
the Trustee, a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class AF-2 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

                  The Pass-Through Rate with respect to this Certificate and any
Distribution Date shall be the lesser of (x) 2.540% per annum and (y) the 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, 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.

                                     AF-2-2

<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 and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

                  No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right cannot be exercised until the Optional Termination Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

                                     AF-2-3

<PAGE>

                  IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.

Dated: _______________, 2003

                                          DEUTSCHE BANK NATIONAL TRUST
                                          COMPANY
                                          as Trustee

                                          By:__________________________
                                                   Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

                  This is one of the Certificates referred to in the
within-mentioned Agreement.

                                          DEUTSCHE BANK NATIONAL TRUST
                                          COMPANY
                                          as Certificate Registrar

                                          By:__________________________
                                                   Authorized Signatory

                                     AF-2-4

<PAGE>

<TABLE>
<CAPTION>

                                  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:

<S>     <C>                                                  <C>                        <C>
         TEN COM -         as tenants in common               UNIF GIFT MIN ACT -             Custodian
                                                                                        (Cust)   (Minor)
         TEN ENT -         as tenants by the entireties                                 under Uniform Gifts to
                                                                                        Minors Act
         JT TEN -          as joint tenants with right if                                _________________
                           survivorship and not as tenants                                       (State)
                           in common
</TABLE>

                  Additional abbreviations may also be used though not in the
above list.

                                   ASSIGNMENT

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to____% evidenced by the within 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 Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:

Dated:

                                      ________________________
                                      Signature by or on behalf of assignor

                                      ________________________
                                      Signature Guaranteed

                            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.

                                     AF-2-5

<PAGE>

                                   EXHIBIT A-5

                         FORM OF CLASS AF-3 CERTIFICATE

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
         "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
         THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
         INTERNAL REVENUE CODE OF 1986 (THE "CODE").

<TABLE>
<CAPTION>

<S>                                                        <C>
Series 2003-10, Class AF-3                                 Aggregate Certificate
                                                           Principal Balance of
                                                           the Class AF-3
                                                           Certificates as of
                                                           the Issue Date:
Pass-Through Rate: 3.230% per annum                        $50,404,000.00

Date of Pooling and Servicing Agreement and Cut-off        Denomination: $50,404,000.00
Date: October 1, 2003
                                                           Master Servicer: Ameriquest Mortgage Company
First Distribution Date: November 25, 2003
                                                           Trustee: Deutsche Bank National Trust Company
No. 1
                                                           Issue Date: October 10, 2003

                                                           CUSIP: 03072S KM 6

</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.

                                     AF-3-1

<PAGE>

                      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
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
         AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER SERVICER, THE
         TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
         CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY
         ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Cede & Co. 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 AF-3 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class AF-3 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among
Ameriquest Mortgage Securities Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer and
the Trustee, a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class AF-3 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

                  The Pass-Through Rate with respect to this Certificate and any
Distribution Date shall be the lesser of (x) 3.230% per annum and (y) the 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, 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.

                                     AF-3-2

<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 and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

                  No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right cannot be exercised until the Optional Termination Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

                                     AF-3-3

<PAGE>

                  IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.

Dated: _______________, 2003

                                   DEUTSCHE BANK NATIONAL TRUST
                                   COMPANY
                                   as Trustee

                                   By:__________________________
                                            Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

                  This is one of the Certificates referred to in the
within-mentioned Agreement.

                                   DEUTSCHE BANK NATIONAL TRUST
                                   COMPANY
                                   as Certificate Registrar

                                   By:__________________________
                                            Authorized Signatory

                                     AF-3-4

<PAGE>

<TABLE>
<CAPTION>

                                  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:

<S>     <C>                                                  <C>                        <C>
         TEN COM -         as tenants in common               UNIF GIFT MIN ACT -             Custodian
                                                                                        (Cust)   (Minor)
         TEN ENT -         as tenants by the entireties                                 under Uniform Gifts to
                                                                                        Minors Act
         JT TEN -          as joint tenants with right if                                _________________
                           survivorship and not as tenants                                       (State)
                           in common
</TABLE>

                  Additional abbreviations may also be used though not in the
above list.

                                   ASSIGNMENT

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to____% evidenced by the within 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 Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:

Dated:

                                      ________________________
                                      Signature by or on behalf of assignor

                                      ________________________
                                      Signature Guaranteed

                            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.

                                     AF-3-5

<PAGE>

                                   EXHIBIT A-6

                         FORM OF CLASS AF-4 CERTIFICATE

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
         "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
         THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
         INTERNAL REVENUE CODE OF 1986 (THE "CODE").

<TABLE>
<CAPTION>

<S>                                                        <C>
Series 2003-10, Class AF-4                                 Aggregate Certificate
                                                           Principal Balance of
                                                           the Class AF-4
                                                           Certificates as of
                                                           the Issue Date:
Pass-Through Rate: 4.440% per annum                        $27,192,000.00

Date of Pooling and Servicing Agreement and Cut-off        Denomination: $27,192,000.00
Date: October 1, 2003
                                                           Master Servicer: Ameriquest Mortgage Company
First Distribution Date: November 25, 2003
                                                           Trustee: Deutsche Bank National Trust Company
No. 1
                                                           Issue Date: October 10, 2003

                                                           CUSIP: 03072S KN 4

</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.

                                     AF-4-1

<PAGE>

                      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
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
         AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER SERVICER, THE
         TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
         CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY
         ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Cede & Co. 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 AF-4 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class AF-4 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among
Ameriquest Mortgage Securities Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer and
the Trustee, a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class AF-4 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

                  The Pass-Through Rate with respect to this Certificate and any
Distribution Date shall be the lesser of (x) 4.440% per annum and (y) the 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, 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.

                                     AF-4-2

<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 and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

                  No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right cannot be exercised until the Optional Termination Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

                                     AF-4-3

<PAGE>

                  IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.

Dated: _______________, 2003

                                   DEUTSCHE BANK NATIONAL TRUST
                                   COMPANY
                                   as Trustee

                                   By:__________________________
                                            Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

                  This is one of the Certificates referred to in the
within-mentioned Agreement.

                                   DEUTSCHE BANK NATIONAL TRUST
                                   COMPANY
                                   as Certificate Registrar

                                   By:__________________________
                                            Authorized Signatory

                                     AF-4-4

<PAGE>

<TABLE>
<CAPTION>

                                  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:

<S>     <C>                                                  <C>                        <C>
         TEN COM -         as tenants in common               UNIF GIFT MIN ACT -             Custodian
                                                                                        (Cust)   (Minor)
         TEN ENT -         as tenants by the entireties                                 under Uniform Gifts to
                                                                                        Minors Act
         JT TEN -          as joint tenants with right if                                _________________
                           survivorship and not as tenants                                       (State)
                           in common
</TABLE>

                  Additional abbreviations may also be used though not in the
above list.

                                   ASSIGNMENT

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to____% evidenced by the within 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 Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:

Dated:

                                      ________________________
                                      Signature by or on behalf of assignor

                                      ________________________
                                      Signature Guaranteed

                            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.

                                     AF-4-5

<PAGE>

                                   EXHIBIT A-7

                         FORM OF CLASS AF-5 CERTIFICATE

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
         "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
         THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
         INTERNAL REVENUE CODE OF 1986 (THE "CODE").

<TABLE>
<CAPTION>

<S>                                                        <C>
Series 2003-10, Class AF-5                                 Aggregate Certificate
                                                           Principal Balance of
                                                           the Class AF-5
                                                           Certificates as of
                                                           the Issue Date:
Pass-Through Rate: 5.470% per annum                        $31,799,000.00

Date of Pooling and Servicing Agreement and Cut-off        Denomination: $31,799,000.00
Date: October 1, 2003
                                                           Master Servicer: Ameriquest Mortgage Company
First Distribution Date: November 25, 2003
                                                           Trustee: Deutsche Bank National Trust Company
No. 1
                                                           Issue Date: October 10, 2003

                                                           CUSIP: 03072S KP 9
</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.

                                     AF-5-1

<PAGE>

                      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
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
         AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER SERVICER, THE
         TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
         CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY
         ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Cede & Co. 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 AF-5 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class AF-5 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among
Ameriquest Mortgage Securities Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer and
the Trustee, a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class AF-5 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

                  The Pass-Through Rate with respect to this Certificate and any
Distribution Date shall be the lesser of (x) 5.470% per annum through and
including the Optional Termination Date and 5.970% per annum thereafter and (y)
the 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, 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.

                                     AF-5-2

<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 and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

                  No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right cannot be exercised until the Optional Termination Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

                                     AF-5-3

<PAGE>

                  IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.

Dated: _______________, 2003

                                   DEUTSCHE BANK NATIONAL TRUST
                                   COMPANY
                                   as Trustee

                                   By:__________________________
                                            Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

                  This is one of the Certificates referred to in the
within-mentioned Agreement.

                                   DEUTSCHE BANK NATIONAL TRUST
                                   COMPANY
                                   as Certificate Registrar

                                   By:__________________________
                                            Authorized Signatory

                                     AF-5-4

<PAGE>

<TABLE>
<CAPTION>

                                  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:

<S>     <C>                                                  <C>                        <C>
         TEN COM -         as tenants in common               UNIF GIFT MIN ACT -             Custodian
                                                                                        (Cust)   (Minor)
         TEN ENT -         as tenants by the entireties                                 under Uniform Gifts to
                                                                                        Minors Act
         JT TEN -          as joint tenants with right if                                _________________
                           survivorship and not as tenants                                       (State)
                           in common
</TABLE>

                  Additional abbreviations may also be used though not in the
above list.

                                   ASSIGNMENT

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to____% evidenced by the within 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 Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:

Dated:

                                      ________________________
                                      Signature by or on behalf of assignor

                                      ________________________
                                      Signature Guaranteed

                            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.

                                     AF-5-5

<PAGE>

                                   EXHIBIT A-8

                         FORM OF CLASS AF-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").

<TABLE>
<CAPTION>

<S>                                                        <C>
Serie 2003-10, Class AF-6                                  Aggregate Certificate
                                                           Principal Balance of
                                                           the Class AF-6
                                                           Certificates as of
                                                           the Issue Date:
Pass-Through Rate: 4.710% per annum                        $22,956,000.00

Date of Pooling and Servicing Agreement and Cut-off        Denomination: $22,956,000.00
Date: October 1, 2003
                                                           Master Servicer: Ameriquest Mortgage Company
First Distribution Date: November 25, 2003
                                                           Trustee: Deutsche Bank National Trust Company
No. 1
                                                           Issue Date: October 10, 2003

                                                           CUSIP: 03072S KQ 7

</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.

                                     AF-6-1

<PAGE>

                      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
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST
         IN AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER SERVICER, THE
         TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
         CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED
         BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Cede & Co. 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 AF-6 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class AF-6 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among
Ameriquest Mortgage Securities Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer and
the Trustee, a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class AF-6 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

                  The Pass-Through Rate with respect to this Certificate and any
Distribution Date shall be the lesser of (x) 4.710% per annum through and
including the Optional Termination Date and 5.210% per annum thereafter and (y)
the 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, 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.

                                     AF-6-2

<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 and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

                  No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right cannot be exercised until the Optional Termination Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

                                     AF-6-3

<PAGE>

                  IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.

Dated: _______________, 2003

                                   DEUTSCHE BANK NATIONAL TRUST
                                   COMPANY
                                   as Trustee

                                   By:__________________________
                                            Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

                  This is one of the Certificates referred to in the
within-mentioned Agreement.

                                   DEUTSCHE BANK NATIONAL TRUST
                                   COMPANY
                                   as Certificate Registrar

                                   By:__________________________
                                            Authorized Signatory

                                     AF-6-4

<PAGE>

<TABLE>
<CAPTION>

                                  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:

<S>     <C>                                                  <C>                        <C>
         TEN COM -         as tenants in common               UNIF GIFT MIN ACT -             Custodian
                                                                                        (Cust)   (Minor)
         TEN ENT -         as tenants by the entireties                                 under Uniform Gifts to
                                                                                        Minors Act
         JT TEN -          as joint tenants with right if                                _________________
                           survivorship and not as tenants                                       (State)
                           in common
</TABLE>

                  Additional abbreviations may also be used though not in the
above list.

                                   ASSIGNMENT

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to____% evidenced by the within 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 Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:

Dated:

                                      ________________________
                                      Signature by or on behalf of assignor

                                      ________________________
                                      Signature Guaranteed

                            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.

                                     AF-6-5

<PAGE>

                                   EXHIBIT A-9

                          FORM OF CLASS M-1 CERTIFICATE

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
         "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
         THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
         INTERNAL REVENUE CODE OF 1986 (THE "CODE").

         THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES TO THE
         EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED
         TO HEREIN.

<TABLE>
<CAPTION>

<S>                                                      <C>
Series 2003-10, Class M-1                                Aggregate Certificate Principal Balance of the Class M-1
                                                         Certificates as of the Issue Date: $63,600,000.00
Pass-Through Rate: Variable
                                                         Denomination: $63,600,000.00
Date of Pooling and Servicing Agreement and Cut-
off Date: October 1, 2003                                Master Servicer: Ameriquest Mortgage Company

First Distribution Date: November 25, 2003               Trustee: Deutsche Bank National Trust Company

No. 1                                                    Issue Date: October 10, 2003

                                                         CUSIP: 03072S KR 5
</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.

                                      M-1-1

<PAGE>

                      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
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST
         IN AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER SERVICER, THE
         TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
         CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED
         BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Cede & Co. is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class M-1 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class M-1 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among
Ameriquest Mortgage Securities Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer and
the Trustee, a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-1 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

                  The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
be the lesser of (x) the related Formula Rate for such Distribution Date and (y)
the Net WAC Pass-Through Rate for such Distribution Date. For any Distribution
Date and this Certificate, the Formula Rate is One-Month LIBOR plus the
Certificate Margin. The Certificate Margin for this Certificate is 0.700% in the
case of each Distribution Date through and including Optional Termination Date,
or 1.050%, in the case of any Distribution Date thereafter.

                  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, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement,

                                      M-1-2

<PAGE>

withdrawals from the Collection Account and the Distribution Account may be made
from time to time for purposes other than distributions to Certificateholders,
such purposes including reimbursement of advances made, or certain expenses
incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

                  No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right cannot be exercised until the Optional Termination Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

                                      M-1-3

<PAGE>

                  IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.

Dated: _______________, 2003

                                   DEUTSCHE BANK NATIONAL TRUST
                                   COMPANY
                                   as Trustee

                                   By:__________________________
                                            Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

                  This is one of the Certificates referred to in the
within-mentioned Agreement.

                                   DEUTSCHE BANK NATIONAL TRUST
                                   COMPANY
                                   as Certificate Registrar

                                   By:__________________________
                                            Authorized Signatory

                                      M-1-4

<PAGE>

<TABLE>
<CAPTION>

                                  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:

<S>     <C>                                                  <C>                        <C>
         TEN COM -         as tenants in common               UNIF GIFT MIN ACT -             Custodian
                                                                                        (Cust)   (Minor)
         TEN ENT -         as tenants by the entireties                                 under Uniform Gifts to
                                                                                        Minors Act
         JT TEN -          as joint tenants with right if                                _________________
                           survivorship and not as tenants                                       (State)
                           in common
</TABLE>

                  Additional abbreviations may also be used though not in the
above list.

                                   ASSIGNMENT

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to____% evidenced by the within 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 Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:

Dated:

                                      ________________________
                                      Signature by or on behalf of assignor

                                      ________________________
                                      Signature Guaranteed

                            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.

                                      M-1-5

<PAGE>

                                  EXHIBIT A-10

                          FORM OF CLASS M-2 CERTIFICATE

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
         "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
         THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
         INTERNAL REVENUE CODE OF 1986 (THE "CODE").

         THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES AND THE
         CLASS M-1 CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND
         SERVICING AGREEMENT REFERRED TO HEREIN.

<TABLE>
<CAPTION>

<S>                                                      <C>
Series 2003-10, Class M-2                                Aggregate Certificate Principal Balance of the Class M-2
                                                         Certificates as of the Issue Date: $54,000,000.00
Pass-Through Rate: Variable
                                                         Denomination: $54,000,000.00
Date of Pooling and Servicing Agreement and Cut-
off Date: October 1, 2003                                Master Servicer: Ameriquest Mortgage Company

First Distribution Date: November 25, 2003               Trustee: Deutsche Bank National Trust Company

No. 1                                                    Issue Date: October 10, 2003

                                                         CUSIP: 03072S KS 3
</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.

                                      M-2-1

<PAGE>

                      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
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST
         IN AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER SERVICER, THE
         TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
         CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED
         BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Cede & Co. is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class M-2 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class M-2 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among
Ameriquest Mortgage Securities Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer and
the Trustee, a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-2 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

                  The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
be the lesser of (x) the related Formula Rate for such Distribution Date and (y)
the Net WAC Pass-Through Rate for such Distribution Date. For any Distribution
Date and this Certificate, the Formula Rate is One-Month LIBOR plus the
Certificate Margin. The Certificate Margin for this Certificate is 1.700% in the
case of each Distribution Date through and including the Optional Termination
Date, or 2.550%, in the case of any Distribution Date thereafter.

                  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, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement,

                                      M-2-2

<PAGE>

withdrawals from the Collection Account and the Distribution Account may be made
from time to time for purposes other than distributions to Certificateholders,
such purposes including reimbursement of advances made, or certain expenses
incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

                  No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right cannot be exercised until the Optional Termination Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

                                      M-2-3

<PAGE>

                  IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.

Dated: _______________, 2003

                                   DEUTSCHE BANK NATIONAL TRUST
                                   COMPANY
                                   as Trustee

                                   By:__________________________
                                            Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

                  This is one of the Certificates referred to in the
within-mentioned Agreement.

                                   DEUTSCHE BANK NATIONAL TRUST
                                   COMPANY
                                   as Certificate Registrar

                                   By:__________________________
                                            Authorized Signatory

                                      M-2-4

<PAGE>

<TABLE>
<CAPTION>

                                  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:

<S>     <C>                                                  <C>                        <C>
         TEN COM -         as tenants in common               UNIF GIFT MIN ACT -             Custodian
                                                                                        (Cust)   (Minor)
         TEN ENT -         as tenants by the entireties                                 under Uniform Gifts to
                                                                                        Minors Act
         JT TEN -          as joint tenants with right if                                _________________
                           survivorship and not as tenants                                       (State)
                           in common
</TABLE>

                  Additional abbreviations may also be used though not in the
above list.

                                   ASSIGNMENT

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to____% evidenced by the within 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 Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:

Dated:

                                      ________________________
                                      Signature by or on behalf of assignor

                                      ________________________
                                      Signature Guaranteed

                            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.

                                      M-2-5

<PAGE>

                                  EXHIBIT A-11

                          FORM OF CLASS M-3 CERTIFICATE

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
         "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
         THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
         INTERNAL REVENUE CODE OF 1986 (THE "CODE").

         THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE
         CLASS M-1 CERTIFICATES AND THE CLASS M-2 CERTIFICATES TO THE EXTENT
         DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
         HEREIN.

<TABLE>
<CAPTION>

<S>                                                      <C>
Series 2003-10, Class M-3                                Aggregate Certificate Principal Balance of the Class M-3
                                                         Certificates as of the Issue Date: $12,000,000.00
Pass-Through Rate: Variable
                                                         Denomination: $12,000,000.00
Date of Pooling and Servicing Agreement and Cut-
off Date: October 1, 2003                                Master Servicer: Ameriquest Mortgage Company

First Distribution Date: November 25, 2003               Trustee: Deutsche Bank National Trust Company

No. 1                                                    Issue Date: October 10, 2003

                                                         CUSIP: 03072S KT 1
</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.

                                      M-3-1

<PAGE>

                      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
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST
         IN AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER SERVICER, THE
         TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
         CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED
         BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Cede & Co. is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class M-3 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class M-3 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among
Ameriquest Mortgage Securities Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer and
the Trustee, a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-3 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

                  The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
be the lesser of (x) the related Formula Rate for such Distribution Date and (y)
the Net WAC Pass-Through Rate for such Distribution Date. For any Distribution
Date and this Certificate, the Formula Rate is One-Month LIBOR plus the
Certificate Margin. The Certificate Margin for this Certificate is 1.950% in the
case of each Distribution Date through and including the Optional Termination
Date, or 2.925%, in the case of any Distribution Date thereafter.

                  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, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement,

                                      M-3-2

<PAGE>

withdrawals from the Collection Account and the Distribution Account may be made
from time to time for purposes other than distributions to Certificateholders,
such purposes including reimbursement of advances made, or certain expenses
incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

                  No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right cannot be exercised until the Optional Termination Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

                                      M-3-3

<PAGE>

                  IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.

Dated: _______________, 2003

                                   DEUTSCHE BANK NATIONAL TRUST
                                   COMPANY
                                   as Trustee

                                   By:__________________________
                                            Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

                  This is one of the Certificates referred to in the
within-mentioned Agreement.

                                   DEUTSCHE BANK NATIONAL TRUST
                                   COMPANY
                                   as Certificate Registrar

                                   By:__________________________
                                            Authorized Signatory

                                      M-3-4

<PAGE>

<TABLE>
<CAPTION>

                                  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:

<S>     <C>                                                  <C>                        <C>
         TEN COM -         as tenants in common               UNIF GIFT MIN ACT -             Custodian
                                                                                        (Cust)   (Minor)
         TEN ENT -         as tenants by the entireties                                 under Uniform Gifts to
                                                                                        Minors Act
         JT TEN -          as joint tenants with right if                                _________________
                           survivorship and not as tenants                                       (State)
                           in common
</TABLE>

                  Additional abbreviations may also be used though not in the
above list.

                                   ASSIGNMENT

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to____% evidenced by the within 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 Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:

Dated:

                                      ________________________
                                      Signature by or on behalf of assignor

                                      ________________________
                                      Signature Guaranteed

                            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.

                                      M-3-5

<PAGE>

                                  EXHIBIT A-12

                          FORM OF CLASS M-4 CERTIFICATE

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
         "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
         THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
         INTERNAL REVENUE CODE OF 1986 (THE "CODE").

         THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE
         CLASS M-1 CERTIFICATES, THE CLASS M-2 CERTIFICATES AND THE M-3
         CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING
         AGREEMENT REFERRED TO HEREIN.

<TABLE>
<CAPTION>

<S>                                                      <C>
Series 2003-10, Class M-4                                Aggregate Certificate Principal Balance of the Class M-4
                                                         Certificates as of the Issue Date: $13,200,000.00
Pass-Through Rate: Variable
                                                         Denomination: $13,200,000.00
Date of Pooling and Servicing Agreement and Cut-
off Date: October 1, 2003                                Master Servicer: Ameriquest Mortgage Company

First Distribution Date: November 25, 2003               Trustee: Deutsche Bank National Trust Company

No. 1                                                    Issue Date: October 10, 2003

                                                         CUSIP: 03072S KU 8
</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.

                                      M-4-1

<PAGE>

                      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
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST
         IN AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER SERVICER, THE
         TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
         CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED
         BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Cede & Co. 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-4 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class M-4 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among
Ameriquest Mortgage Securities Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer and
the Trustee, a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-4 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

                  The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
be the lesser of (x) the related Formula Rate for such Distribution Date and (y)
the Net WAC Pass-Through Rate for such Distribution Date. For any Distribution
Date and this Certificate, the Formula Rate is One-Month LIBOR plus the
Certificate Margin. The Certificate Margin for this Certificate is 3.050% in the
case of each Distribution Date through and including the Optional Termination
Date, or 4.575%, in the case of any Distribution Date thereafter.

                  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, 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

                                      M-4-2

<PAGE>

than distributions to Certificateholders, such purposes including reimbursement
of advances made, or certain expenses incurred, with respect to the Mortgage
Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

                  No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right cannot be exercised until the Optional Termination Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

                                      M-4-3

<PAGE>

                  IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.

Dated: _______________, 2003

                                   DEUTSCHE BANK NATIONAL TRUST
                                   COMPANY
                                   as Trustee

                                   By:__________________________
                                            Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

                  This is one of the Certificates referred to in the
within-mentioned Agreement.

                                   DEUTSCHE BANK NATIONAL TRUST
                                   COMPANY
                                   as Certificate Registrar

                                   By:__________________________
                                            Authorized Signatory

                                      M-4-4

<PAGE>

<TABLE>
<CAPTION>

                                  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:

<S>     <C>                                                  <C>                        <C>
         TEN COM -         as tenants in common               UNIF GIFT MIN ACT -             Custodian
                                                                                        (Cust)   (Minor)
         TEN ENT -         as tenants by the entireties                                 under Uniform Gifts to
                                                                                        Minors Act
         JT TEN -          as joint tenants with right if                                _________________
                           survivorship and not as tenants                                       (State)
                           in common
</TABLE>

                  Additional abbreviations may also be used though not in the
above list.

                                   ASSIGNMENT

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to____% evidenced by the within 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 Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:

Dated:

                                      ________________________
                                      Signature by or on behalf of assignor

                                      ________________________
                                      Signature Guaranteed

                            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.

                                      M-4-5

<PAGE>

                                  EXHIBIT A-13

                          FORM OF CLASS M-5 CERTIFICATE

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
         "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
         THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
         INTERNAL REVENUE CODE OF 1986 (THE "CODE").

         THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE CLASS
         M-1 CERTIFICATES, THE CLASS M-2 CERTIFICATES, THE CLASS M-3
         CERTIFICATES AND THE CLASS M-4 CERTIFICATES TO THE EXTENT DESCRIBED IN
         THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

<TABLE>
<CAPTION>

<S>                                                      <C>
Series 2003-10, Class M-5                                Aggregate Certificate Principal Balance of the Class M-5
                                                         Certificates as of the Issue Date: $12,000,000.00
Pass-Through Rate: Variable
                                                         Denomination: $12,000,000.00
Date of Pooling and Servicing Agreement and Cut-
off Date: October 1, 2003                                Master Servicer: Ameriquest Mortgage Company

First Distribution Date: November 25, 2003               Trustee: Deutsche Bank National Trust Company

No. 1                                                    Issue Date: October 10, 2003

                                                         CUSIP: 03072S KV 6
</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.

                                      M-5-1

<PAGE>

                      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
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST
         IN AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER SERVICER, THE
         TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
         CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED
         BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Cede & Co. 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-5 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class M-5 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among
Ameriquest Mortgage Securities Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer and
the Trustee, a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-5 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

                  The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
be the lesser of (x) the related Formula Rate for such Distribution Date and (y)
the Net WAC Pass-Through Rate for such Distribution Date. For any Distribution
Date and this Certificate, the Formula Rate is One-Month LIBOR plus the
Certificate Margin. The Certificate Margin for this Certificate is 3.750% in the
case of each Distribution Date through and including the Optional Termination
Date, or 5.625%, in the case of any Distribution Date thereafter.

                  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, 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

                                      M-5-2

<PAGE>

than distributions to Certificateholders, such purposes including reimbursement
of advances made, or certain expenses incurred, with respect to the Mortgage
Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

                  No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right cannot be exercised until the Optional Termination Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

                                      M-5-3

<PAGE>

                  IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.

Dated: _______________, 2003

                                   DEUTSCHE BANK NATIONAL TRUST
                                   COMPANY
                                   as Trustee

                                   By:__________________________
                                            Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

                  This is one of the Certificates referred to in the
within-mentioned Agreement.

                                   DEUTSCHE BANK NATIONAL TRUST
                                   COMPANY
                                   as Certificate Registrar

                                   By:__________________________
                                            Authorized Signatory

                                      M-5-4

<PAGE>

<TABLE>
<CAPTION>

                                  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:

<S>     <C>                                                  <C>                        <C>
         TEN COM -         as tenants in common               UNIF GIFT MIN ACT -             Custodian
                                                                                        (Cust)   (Minor)
         TEN ENT -         as tenants by the entireties                                 under Uniform Gifts to
                                                                                        Minors Act
         JT TEN -          as joint tenants with right if                                _________________
                           survivorship and not as tenants                                       (State)
                           in common
</TABLE>

                  Additional abbreviations may also be used though not in the
above list.

                                   ASSIGNMENT

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to____% evidenced by the within 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 Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:

Dated:

                                      ________________________
                                      Signature by or on behalf of assignor

                                      ________________________
                                      Signature Guaranteed

                            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.

                                      M-5-5

<PAGE>

                                  EXHIBIT A-14

                         FORM OF CLASS MV-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").

         THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE CLASS
         M-1 CERTIFICATES, THE CLASS M-2 CERTIFICATES, THE CLASS M-3
         CERTIFICATES, THE CLASS  M-4 CERTIFICATES AND THE CLASS M-5
         CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING
         AGREEMENT REFERRED TO HEREIN.

<TABLE>
<CAPTION>

<S>                                                      <C>
Series 2003-10, Class MV-6                               Aggregate Certificate Principal Balance of the Class MV-
                                                         6 Certificates as of the Issue Date: $4,200,000.00
Pass-Through Rate: Variable
                                                         Denomination: $4,200,000.00
Date of Pooling and Servicing Agreement and Cut-
off Date: October 1, 2003                                Master Servicer: Ameriquest Mortgage Company

First Distribution Date: November 25, 2003               Trustee: Deutsche Bank National Trust Company

No. 1                                                    Issue Date: October 10, 2003

                                                         CUSIP: 03072S KW 4
</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.

                                     MV-6-1

<PAGE>

                      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
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST
         IN AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER SERVICER, THE
         TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
         CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED
         BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Cede & Co. 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 MV-6 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class MV-6 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among
Ameriquest Mortgage Securities Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer and
the Trustee, a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class MV-6 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

                  The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
be the lesser of (x) the related Formula Rate for such Distribution Date and (y)
the Net WAC Pass-Through Rate for such Distribution Date. For any Distribution
Date and this Certificate, the Formula Rate is One-Month LIBOR plus the
Certificate Margin. The Certificate Margin for this Certificate is 3.750% in the
case of each Distribution Date through and including the Optional Termination
Date, or 5.625%, in the case of any Distribution Date thereafter.

                  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, 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

                                     MV-6-2

<PAGE>

than distributions to Certificateholders, such purposes including reimbursement
of advances made, or certain expenses incurred, with respect to the Mortgage
Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

                  No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right cannot be exercised until the Optional Termination Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

                                     MV-6-3

<PAGE>

                  IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.

Dated: _______________, 2003

                                   DEUTSCHE BANK NATIONAL TRUST
                                   COMPANY
                                   as Trustee

                                   By:__________________________
                                            Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

                  This is one of the Certificates referred to in the
within-mentioned Agreement.

                                   DEUTSCHE BANK NATIONAL TRUST
                                   COMPANY
                                   as Certificate Registrar

                                   By:__________________________
                                            Authorized Signatory

                                     MV-6-4

<PAGE>

<TABLE>
<CAPTION>

                                  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:

<S>     <C>                                                  <C>                        <C>
         TEN COM -         as tenants in common               UNIF GIFT MIN ACT -             Custodian
                                                                                        (Cust)   (Minor)
         TEN ENT -         as tenants by the entireties                                 under Uniform Gifts to
                                                                                        Minors Act
         JT TEN -          as joint tenants with right if                                _________________
                           survivorship and not as tenants                                       (State)
                           in common
</TABLE>

                  Additional abbreviations may also be used though not in the
above list.

                                   ASSIGNMENT

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to____% evidenced by the within 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 Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:

Dated:

                                      ________________________
                                      Signature by or on behalf of assignor

                                      ________________________
                                      Signature Guaranteed

                            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.

                                     MV-6-5

<PAGE>

                                  EXHIBIT A-15

                         FORM OF CLASS MF-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").

<TABLE>
<CAPTION>

<S>                                                      <C>
Series 2003-10, Class MF-6                                 Aggregate Certificate
                                                           Principal Balance of
                                                           the Class MF-6
                                                           Certificates as of
                                                           the Issue Date:
Pass-Through Rate: 5.250% per annum                        $9,000,000.00

Date of Pooling and Servicing Agreement and Cut-off        Denomination: $9,000,000.00
Date: October 1, 2003
                                                           Master Servicer: Ameriquest Mortgage Company
First Distribution Date: November 25, 2003
                                                           Trustee: Deutsche Bank National Trust Company
No. 1
                                                           Issue Date: October 10, 2003

                                                           CUSIP: 03072S KX 2
</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.

                                     MF-6-1

<PAGE>

                      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
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
         AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER SERVICER, THE
         TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
         CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY
         ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Cede & Co. 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 MF-6 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class MF-6 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among
Ameriquest Mortgage Securities Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer and
the Trustee, a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class MF-6 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

                  The Pass-Through Rate with respect to this Certificate and any
Distribution Date shall be the lesser of (x) 5.250% per annum through and
including the Optional Termination Date and 5.750% per annum thereafter and (y)
the 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, 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.

                                     MF-6-2

<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 and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

                  No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right cannot be exercised until the Optional Termination Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

                                     MF-6-3

<PAGE>

                  IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.

Dated: _______________, 2003

                                   DEUTSCHE BANK NATIONAL TRUST
                                   COMPANY
                                   as Trustee

                                   By:__________________________
                                            Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

                  This is one of the Certificates referred to in the
within-mentioned Agreement.

                                   DEUTSCHE BANK NATIONAL TRUST
                                   COMPANY
                                   as Certificate Registrar

                                   By:__________________________
                                            Authorized Signatory

                                     MF-6-4

<PAGE>

<TABLE>
<CAPTION>

                                  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:

<S>     <C>                                                  <C>                        <C>
         TEN COM -         as tenants in common               UNIF GIFT MIN ACT -             Custodian
                                                                                        (Cust)   (Minor)
         TEN ENT -         as tenants by the entireties                                 under Uniform Gifts to
                                                                                        Minors Act
         JT TEN -          as joint tenants with right if                                _________________
                           survivorship and not as tenants                                       (State)
                           in common
</TABLE>

                  Additional abbreviations may also be used though not in the
above list.

                                   ASSIGNMENT

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to____% evidenced by the within 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 Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:

Dated:

                                      ________________________
                                      Signature by or on behalf of assignor

                                      ________________________
                                      Signature Guaranteed

                            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.

                                     MF-6-5

<PAGE>

                                  EXHIBIT A-16

                          FORM OF CLASS CE CERTIFICATE

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
         "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT", AS
         THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
         INTERNAL REVENUE CODE OF 1986 (THE "CODE").

         THIS CERTIFICATE IS SUBORDINATE TO THE A CERTIFICATES, THE CLASS S
         CERTIFICATES AND THE MEZZANINE CERTIFICATES TO THE EXTENT DESCRIBED
         IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

         THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
         SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE
         AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT
         TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE
         EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW
         AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF
         THE AGREEMENT.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
         RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE
         RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE
         CODE WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES
         DESCRIBED HEREIN.

<TABLE>
<CAPTION>

<S>                                                      <C>
Series 2003-10, Class CE                                    Initial Notional Amount of the Class CE Certificates
                                                            as of the Issue Date: $17,999,902.00
Date of Pooling and Servicing Agreement and Cut-off
Date: October 1, 2003                                       Denomination: $17,999,902.00

First Distribution Date: November 25, 2003                  Master Servicer: Ameriquest Mortgage Company

No. 1                                                       Trustee: Deutsche Bank National Trust Company

                                                            Issue Date: October 10, 2003

</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.

                                      CE-1

<PAGE>

                      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
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
         AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER SERVICER, THE
         TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
         CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY
         ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Ameriquest Mortgage Company 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 Ameriquest Mortgage Securities Inc. (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class CE Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as 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, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of

                                      CE-2

<PAGE>

this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

                  No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee and the Certificate Registrar shall
require receipt of (i) if such transfer is purportedly being made in reliance
upon Rule 144A under the 1933 Act, written certifications from the Holder of the
Certificate desiring to effect the transfer, and from such Holder's prospective
transferee, substantially in the forms attached to the Agreement as Exhibit F-1,
and (ii) in all other cases, an Opinion of Counsel satisfactory to it that such
transfer may be made without such registration or qualification (which Opinion
of Counsel shall not be an expense of the Trust Fund or of the Depositor, the
Trustee or the Master Servicer in their respective capacities as such), together
with copies of the written certification(s) of the Holder of the Certificate
desiring to effect the transfer and/or such Holder's prospective transferee upon
which such Opinion of Counsel is based. None of the Depositor, the Certificate
Registrar or the Trustee is obligated to register or qualify the Class of
Certificates specified on the face hereof under the 1933 Act or any other
securities law or to take any action not otherwise required under the Agreement
to permit the transfer of such Certificates without registration or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Depositor, the Certificate
Registrar and the Master Servicer against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws.

                  No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 5.02(c) of the Agreement.

                  No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined

                                      CE-3

<PAGE>

as provided in the Agreement. The exercise of such right will effect early
retirement of the Certificates; however, such right cannot be exercised until
the Optional Termination Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

                                      CE-4

<PAGE>

                  IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.

Dated: _______________, 2003

                                   DEUTSCHE BANK NATIONAL TRUST
                                   COMPANY
                                   as Trustee

                                   By:__________________________
                                            Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

                  This is one of the Certificates referred to in the
within-mentioned Agreement.

                                   DEUTSCHE BANK NATIONAL TRUST
                                   COMPANY
                                   as Certificate Registrar

                                   By:__________________________
                                            Authorized Signatory

                                      CE-5

<PAGE>

<TABLE>
<CAPTION>

                                  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:

<S>     <C>                                                  <C>                        <C>
         TEN COM -         as tenants in common               UNIF GIFT MIN ACT -             Custodian
                                                                                        (Cust)   (Minor)
         TEN ENT -         as tenants by the entireties                                 under Uniform Gifts to
                                                                                        Minors Act
         JT TEN -          as joint tenants with right if                                _________________
                           survivorship and not as tenants                                       (State)
                           in common
</TABLE>

                  Additional abbreviations may also be used though not in the
above list.

                                   ASSIGNMENT

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to____% evidenced by the within 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 Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:

Dated:

                                      ________________________
                                      Signature by or on behalf of assignor

                                      ________________________
                                      Signature Guaranteed

                            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.

                                      CE-6

<PAGE>

                                  EXHIBIT A-17

                           FORM OF CLASS P CERTIFICATE

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
         "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT", AS
         THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
         INTERNAL REVENUE CODE OF 1986 (THE "CODE").

         THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
         SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE
         AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT
         TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE
         EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW
         AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF
         THE AGREEMENT.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
         RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE
         RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE
         CODE WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES
         DESCRIBED HEREIN.

<TABLE>
<CAPTION>

<S>                                                      <C>
Series 2003-10, Class P                                  Aggregate Certificate Principal Balance of the Class P
                                                         Certificates as of the Issue Date: $100.00
Date of Pooling and Servicing Agreement and Cut-
off Date: October 1, 2003                                Denomination: $100.00

First Distribution Date: November 25, 2003               Master Servicer: Ameriquest Mortgage Company
No. 1
                                                         Trustee: Deutsche Bank National Trust Company

                                                         Issue Date: October 10, 2003
</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.

                                       P-1

<PAGE>

                      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
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
         AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER SERVICER, THE
         TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
         CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY
         ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Ameriquest Mortgage Company 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 Ameriquest Mortgage Securities Inc. (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class P Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as 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, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of

                                       P-2

<PAGE>

this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

                  No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee and the Certificate Registrar shall
require receipt of (i) if such transfer is purportedly being made in reliance
upon Rule 144A under the 1933 Act, written certifications from the Holder of the
Certificate desiring to effect the transfer, and from such Holder's prospective
transferee, substantially in the forms attached to the Agreement as Exhibit F-1,
and (ii) in all other cases, an Opinion of Counsel satisfactory to it that such
transfer may be made without such registration or qualification (which Opinion
of Counsel shall not be an expense of the Trust Fund or of the Depositor, the
Trustee or the Master Servicer in their respective capacities as such), together
with copies of the written certification(s) of the Holder of the Certificate
desiring to effect the transfer and/or such Holder's prospective transferee upon
which such Opinion of Counsel is based. None of the Depositor, the Certificate
Registrar or the Trustee is obligated to register or qualify the Class of
Certificates specified on the face hereof under the 1933 Act or any other
securities law or to take any action not otherwise required under the Agreement
to permit the transfer of such Certificates without registration or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Depositor, the Certificate
Registrar and the Master Servicer against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws.

                  No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 5.02(c) of the Agreement.

                  No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined

                                       P-3

<PAGE>

as provided in the Agreement. The exercise of such right will effect early
retirement of the Certificates; however, such right cannot be exercised until
the Optional Termination Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

                                       P-4

<PAGE>

                  IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.

Dated: _______________, 2003

                                   DEUTSCHE BANK NATIONAL TRUST
                                   COMPANY
                                   as Trustee

                                   By:__________________________
                                            Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

                  This is one of the Certificates referred to in the
within-mentioned Agreement.

                                   DEUTSCHE BANK NATIONAL TRUST
                                   COMPANY
                                   as Certificate Registrar

                                   By:__________________________
                                            Authorized Signatory

                                       P-5

<PAGE>

<TABLE>
<CAPTION>

                                  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:

<S>     <C>                                                  <C>                        <C>
         TEN COM -         as tenants in common               UNIF GIFT MIN ACT -             Custodian
                                                                                        (Cust)   (Minor)
         TEN ENT -         as tenants by the entireties                                 under Uniform Gifts to
                                                                                        Minors Act
         JT TEN -          as joint tenants with right if                                _________________
                           survivorship and not as tenants                                       (State)
                           in common
</TABLE>

                  Additional abbreviations may also be used though not in the
above list.

                                   ASSIGNMENT

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to____% evidenced by the within 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 Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:

Dated:

                                      ________________________
                                      Signature by or on behalf of assignor

                                      ________________________
                                      Signature Guaranteed

                            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.

                                       P-6

<PAGE>

                                  EXHIBIT A-18

                           FORM OF CLASS R CERTIFICATE

         THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON- UNITED STATES
         PERSON.

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
         "RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT"
         ("REMIC"), AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G
         AND 860D OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE").

         THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
         SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE
         AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT
         TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE
         EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW
         AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF
         THE AGREEMENT.

         ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
         MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE
         POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
         RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE
         RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE
         CODE WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES
         DESCRIBED HEREIN.

                                       R-1

<PAGE>

         ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
         MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (I) AN AFFIDAVIT TO THE
         TRUSTEE THAT (A) SUCH TRANSFEREE IS NOT (1) THE UNITED STATES OR ANY
         POSSESSION THEREOF, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY
         FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR
         INSTRUMENTALITY OF ANY OF THE FOREGOING, (2) ANY ORGANIZATION (OTHER
         THAN A COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) THAT IS EXEMPT
         FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH ORGANIZATION
         IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE, (3) ANY
         ORGANIZATION DESCRIBED IN SECTION 1381(A)(2)(C) OF THE CODE (ANY
         SUCHPERSON DESCRIBED IN THE FOREGOING CLAUSES (1), (2) OR (3) SHALL
         HEREINAFTER BE REFERRED TO AS A "DISQUALIFIED ORGANIZATION") OR (4) AN
         AGENT OF A DISQUALIFIED ORGANIZATION AND (B) NO PURPOSE OF SUCH
         TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX, AND (II)
         SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO THE
         FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE
         REGISTRATION IN THE CERTIFICATE REGISTER OF ANY TRANSFER, SALE OR OTHER
         DISPOSITION OF THIS CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN
         AGENT OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED
         TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT
         BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER,
         INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
         CERTIFICATE. EACH HOLDER OF THIS CERTIFICATE BY ACCEPTANCE HEREOF SHALL
         BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH AND THE
         PROVISIONS OF SECTION 5.02(D) OF THE POOLING AND SERVICING AGREEMENT
         REFERRED TO HEREIN. ANY PERSON THAT IS A DISQUALIFIED ORGANIZATION IS
         PROHIBITED FROM ACQUIRING BENEFICIAL OWNERSHIP OF THIS CERTIFICATE.

<TABLE>
<CAPTION>

<S>                                                      <C>
Series 2003-10, Class R                                  Aggregate Percentage Interest of the Class R Certificates
                                                         as of the Issue Date: 100.00% Percentage Interest
Date of Pooling and Servicing Agreement and Cut-
off Date: October 1, 2003                                Denomination: 100% Percentage Interest

First Distribution Date: November 25, 2003               Master Servicer: Ameriquest Mortgage Company

No. 1                                                    Trustee: Deutsche Bank National Trust Company

                                                         Issue Date: October 10, 2003

</TABLE>

                                       R-2

<PAGE>

                      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
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
         AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER SERVICER, THE
         TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
         CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY
         ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Ameriquest Mortgage Company is the
registered owner of a Percentage Interest specified above in that certain
beneficial ownership interest evidenced by all the Class R Certificates in REMIC
II created pursuant to a Pooling and Servicing Agreement, dated as specified
above (the "Agreement"), among Ameriquest Mortgage Securities Inc. (hereinafter
called the "Depositor," which term includes any successor entity under the
Agreement), the Master Servicer and the Trustee, a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class R Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as 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, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any

                                       R-3

<PAGE>

Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

                  No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee and the Certificate Registrar shall
require receipt of (i) if such transfer is purportedly being made in reliance
upon Rule 144A under the 1933 Act, written certifications from the Holder of the
Certificate desiring to effect the transfer, and from such Holder's prospective
transferee, substantially in the forms attached to the Agreement as Exhibit F-1,
and (ii) in all other cases, an Opinion of Counsel satisfactory to it that such
transfer may be made without such registration or qualification (which Opinion
of Counsel shall not be an expense of the Trust Fund or of the Depositor, the
Trustee or the Master Servicer in their respective capacities as such), together
with copies of the written certification(s) of the Holder of the Certificate
desiring to effect the transfer and/or such Holder's prospective transferee upon
which such Opinion of Counsel is based. None of the Depositor, the Certificate
Registrar or the Trustee is obligated to register or qualify the Class of
Certificates specified on the face hereof under the 1933 Act or any other
securities law or to take any action not otherwise required under the Agreement
to permit the transfer of such Certificates without registration or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Depositor, the Certificate
Registrar and the Master Servicer against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws.

                  No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 5.02(c) of the Agreement.

                  Prior to registration of any transfer, sale or other
disposition of this Certificate, the proposed transferee shall provide to the
Trustee (i) an affidavit to the effect that such transferee is any Person other
than a Disqualified Organization or the agent (including a broker, nominee or
middleman) of a Disqualified Organization, and (ii) a certificate that
acknowledges that (A) the Class R Certificates have been designated as a
residual interest in a REMIC, (B) it will include in its income a PRO RATA share
of the net income of the Trust Fund and that such income may be an "excess
inclusion," as defined in the Code, that, with certain exceptions, cannot be
offset by other losses or benefits from any tax exemption, and (C) it expects to
have the financial means to satisfy all of its tax obligations including those
relating to holding the Class R Certificates. Notwithstanding the registration
in the Certificate Register of any transfer, sale or other disposition of this
Certificate to a Disqualified Organization or an agent (including a broker,
nominee or middleman) of a Disqualified Organization, such registration shall be
deemed to be of no legal force or effect whatsoever and such Person shall not be
deemed to be a Certificateholder for any purpose, including, but not limited to,
the receipt of distributions in respect of this Certificate.

                  The Holder of this Certificate, by its acceptance hereof,
shall be deemed to have consented to the provisions of Section 5.02 of the
Agreement and to any amendment of the Agreement deemed necessary by counsel of
the Depositor to ensure that the transfer of this Certificate to any Person
other than a Permitted Transferee or any other Person will not cause the Trust
Fund to cease to qualify as a REMIC or cause the imposition of a tax upon the
REMIC.

                                       R-4

<PAGE>

                  No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 5.02(c) of the Agreement.

                  No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right cannot be exercised until the Optional Termination Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

                                       R-5

<PAGE>

                  IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.

Dated: _______________, 2003

                                   DEUTSCHE BANK NATIONAL TRUST
                                   COMPANY
                                   as Trustee

                                   By:__________________________
                                            Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

                  This is one of the Certificates referred to in the
within-mentioned Agreement.

                                   DEUTSCHE BANK NATIONAL TRUST
                                   COMPANY
                                   as Certificate Registrar

                                   By:__________________________
                                            Authorized Signatory

                                       R-6

<PAGE>

<TABLE>
<CAPTION>

                                  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:

<S>     <C>                                                  <C>                        <C>
         TEN COM -         as tenants in common               UNIF GIFT MIN ACT -             Custodian
                                                                                        (Cust)   (Minor)
         TEN ENT -         as tenants by the entireties                                 under Uniform Gifts to
                                                                                        Minors Act
         JT TEN -          as joint tenants with right if                                _________________
                           survivorship and not as tenants                                       (State)
                           in common
</TABLE>

                  Additional abbreviations may also be used though not in the
above list.

                                   ASSIGNMENT

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to____% evidenced by the within 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 Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:

Dated:

                                      ________________________
                                      Signature by or on behalf of assignor

                                      ________________________
                                      Signature Guaranteed

                            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.

                                       R-7

<PAGE>

                                    EXHIBIT B

                           FORM OF LOST NOTE AFFIDAVIT

Loan #: _______________
Borrower: _____________

                               LOST NOTE AFFIDAVIT

                  I, as ____________________ of ______________________, a
_______________ corporation am authorized to make this Affidavit on behalf of
_____________________ (the "Seller"). In connection with the administration of
the Mortgage Loans held by ____________________, a _________________ corporation
as Seller on behalf of Ameriquest Mortgage Securities Inc. (the "Purchaser"),
_____________________ (the "Deponent"), being duly sworn, deposes and says that:

         1. The Seller's address is: _____________________
                                            _____________________
                                            _____________________

         2. The Seller previously delivered to the Purchaser a signed Initial
Certification with respect to such Mortgage and/or Assignment of Mortgage;

         3. Such Mortgage Note and/or Assignment of Mortgage was assigned or
sold to the Purchaser by ________________________, a ____________ corporation
pursuant to the terms and provisions of a Mortgage Loan Purchase Agreement dated
as of __________ __, _____;

         4. Such Mortgage Note and/or Assignment of Mortgage is not outstanding
pursuant to a request for release of Documents;

         5. Aforesaid Mortgage Note and/or Assignment of Mortgage (the
"Original") has been lost;

         6. Deponent has made or caused to be made a diligent search for the
Original and has been unable to find or recover same;

         7. The Seller was the Seller of the Original at the time of the loss;
and

         8. Deponent agrees that, if said Original should ever come into
Seller's possession, custody or power, Seller will immediately and without
consideration surrender the Original to the Purchaser.

         9. Attached hereto is a true and correct copy of (i) the Note, endorsed
in blank by the Mortgagee and (ii) the Mortgage or Deed of Trust (strike one)
which secures the Note, which Mortgage or Deed of Trust is recorded in the
county where the property is located.

         10. Deponent hereby agrees that the Seller (a) shall indemnify and hold
harmless the Purchaser, its successors and assigns, against any loss, liability
or damage, including reasonable attorney's fees, resulting from the
unavailability of any Notes, including but not limited to any loss, liability or
damage arising from (i) any false statement contained in this Affidavit, (ii)
any claim of any party that has already purchased a mortgage loan evidenced by
the Lost Note or any interest in such mortgage loan, (iii) any claim of any
borrower with respect to the existence of terms of a mortgage loan evidenced by
the Lost Note on the related property to the fact that the mortgage loan is not
evidenced by an original note and (iv) the issuance of a new instrument in lieu
thereof (items (i) through (iv) above hereinafter referred to as the "Losses")
and (b) if required by any Rating Agency in connection with placing such Lost
Note into a Pass- Through Transfer, shall obtain a surety from an insurer
acceptable to the applicable Rating Agency to cover any Losses with respect to
such Lost Note.

                                       B-1

<PAGE>

         11. This Affidavit is intended to be relied upon by the Purchaser, its
successors and assigns. _____________________, a ______________ corporation
represents and warrants that it has the authority to perform its obligations
under this Affidavit of Lost Note.

Executed this ____ day, of ___________ ______.

                                           SELLER

                                           By:______________________
                                           Name:
                                           Title:

                  On this _____ day of ________, _____, before me appeared
_________________ to me personally known, who being duly sworn did say that he
is the _____________________ of ____________________ a ______________
corporation and that said Affidavit of Lost Note was signed and sealed on behalf
of such corporation and said acknowledged this instrument to be the free act and
deed of said corporation.

                                            Signature:

                                            [Seal]

                                       B-1

<PAGE>

                                   EXHIBIT C-1

                     FORM OF TRUSTEE'S INITIAL CERTIFICATION

                                                                       [Date]

Ameriquest Mortgage Securities Inc.
1100 Town & Country Road, Suite 1100
Orange, California 92868

Ameriquest Mortgage Company
1100 Town & Country Road
Orange, California 92868

          Re:  Pooling and Servicing Agreement, dated as of October 1, 2003,
               among Ameriquest Mortgage Securities Inc., Ameriquest Mortgage
               Company and Deutsche Bank National Trust Company, Asset-Backed
               Mortgage Pass-Through Certificates, Series 2003-10

Ladies and Gentlemen:

                  Pursuant to Section 2.01 of the Pooling and Servicing
Agreement, dated as of October 1, 2003, among Ameriquest Mortgage Securities
Inc. as Depositor, Ameriquest Mortgage Company, as master servicer and Deutsche
Bank National Trust Company as trustee, we hereby acknowledge that as to each
Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan
paid in full or any Mortgage Loan specifically identified in the exception
report annexed thereto as not being covered by such certification), (i) all
documents constituting part of such Mortgage File (other than such documents
described in Section 2.01(v)) required to be delivered to it pursuant to this
Agreement are in its possession, (ii) such documents have been reviewed by it or
such Custodian and are not mutilated, torn or defaced unless initialed by the
related borrower and relate to such Mortgage Loan, (iii) based on its or the
Custodian's examination and only as to the foregoing, the information set forth
in the Mortgage Loan Schedule that corresponds to items (1) through (3), (6),
(9), (10), (13), (15) and (19) of the definition of "Mortgage Loan Schedule"
accurately reflects information set forth in the Mortgage File.

                  The Trustee has made no independent examination of any
documents contained in each Mortgage File beyond the review specifically
required in the above-referenced Pooling and Servicing Agreement. The Trustee
makes no representations as to: (i) the validity, legality, sufficiency,
recordability, enforceability or genuineness of any of the documents contained
in the Mortgage File of any of the Mortgage Loans identified on the Mortgage
Loan Schedule, or (ii) the collectability, insurability, perfection, priority,
effectiveness or suitability of any such Mortgage Loan.

                  The Trustee was under no duty or obligation (i) to inspect,
review or examine any such documents, instruments, certificates or other papers
to determine whether they are genuine, enforceable, or appropriate for the
represented purpose or whether they have actually been recorded or that they are
other than what they purport to be on their face or (ii) to determine whether
any Mortgage File should include any of the documents specified in clause (v) of
Section 2.01.

                                      C-1-2

<PAGE>

                  Capitalized terms used but not defined herein shall have the
meanings assigned to them in the Pooling and Servicing Agreement.

                                       DEUTSCHE BANK NATIONAL TRUST
                                       COMPANY, as Trustee

                                       By:______________________________
                                       Name:
                                       Title:

                                      C-1-2

<PAGE>

                                   EXHIBIT C-2

                      FORM OF TRUSTEE'S FINAL CERTIFICATION

                                                  [Date]

Ameriquest Mortgage Securities Inc.
1100 Town & Country Road, Suite 1100
Orange, California 92868

Ameriquest Mortgage Company
1100 Town & Country Road
Orange, California 92868

          Re:  Pooling and Servicing Agreement, dated as of October 1, 2003,
               among Ameriquest Mortgage Securities Inc., Ameriquest Mortgage
               Company and Deutsche Bank National Trust Company, Asset-Backed
               Mortgage Pass-Through Certificates, Series 2003-10

Ladies and Gentlemen:

                  In accordance with Section 2.02 of the above-captioned Pooling
and Servicing Agreement, the undersigned, as Trustee, hereby certifies that as
to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or listed on the attachment hereto), it or a
Custodian on its behalf has received each of the documents listed in Section
2.01.

                  The Trustee has made no independent examination of any
documents contained in each Mortgage File beyond the review specifically
required in the above-referenced Pooling and Servicing Agreement. The Trustee
makes no representations as to: (i) the validity, legality, sufficiency,
recordability, enforceability or genuineness of any of the documents contained
in the Mortgage File of any of the Mortgage Loans identified on the Mortgage
Loan Schedule, or (ii) the collectability, insurability, perfection, priority,
effectiveness or suitability of any such Mortgage Loan.

                  Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Pooling and
Servicing Agreement.

                                     DEUTSCHE BANK NATIONAL TRUST
                                     COMPANY, as Trustee

                                     By:______________________________
                                     Name:
                                     Title:

                                      C-2-1

<PAGE>

                                   EXHIBIT C-3

                   FORM OF TRUSTEE'S RECEIPT OF MORTGAGE NOTE

                                                      [Date]

Ameriquest Mortgage Securities Inc.
1100 Town & Country Road
Orange, California 92868

Ameriquest Mortgage Company
1100 Town & Country Road
Orange, California 92868

          Re:  Pooling and Servicing Agreement, dated as of October 1, 2003,
               among Ameriquest Mortgage Securities Inc., Ameriquest Mortgage
               Company and Deutsche Bank National Trust Company, Asset-Backed
               Mortgage Pass-Through Certificates, Series 2003-10

Ladies and Gentlemen:

                  Pursuant to Section 2.01 of the Pooling and Servicing
Agreement, dated as of October 1, 2003, among Ameriquest Mortgage Securities
Inc. as Depositor, Ameriquest Mortgage Company, as master servicer and Deutsche
Bank National Trust Company as trustee, we hereby acknowledge the receipt of the
original Mortgage Note for each Mortgage Loan with any exceptions thereto listed
on Exhibit 1.

                  Capitalized terms used but not defined herein shall have the
meanings assigned to them in the Pooling and Servicing Agreement.

                                   DEUTSCHE BANK NATIONAL TRUST
                                   COMPANY, as Trustee

                                   By:______________________________
                                   Name:
                                   Title:

                                      C-3-1

<PAGE>

                                    EXHIBIT D

                    FORM OF MORTGAGE LOAN PURCHASE AGREEMENT

                                       D-1

<PAGE>

                        MORTGAGE LOAN PURCHASE AGREEMENT

                  This is a Mortgage Loan Purchase Agreement (the "Agreement"),
dated October 8, 2003, between Ameriquest Mortgage Company, a Delaware
corporation (the "Seller") and Ameriquest Mortgage Securities Inc., a Delaware
corporation (the "Purchaser").

                              Preliminary Statement

                  The Seller intends to sell the Mortgage Loans (as hereinafter
defined) to the Purchaser on the terms and subject to the conditions set forth
in this Agreement. The Purchaser shall deposit the Mortgage Loans into a
mortgage pool constituting the Trust Fund. The Trust Fund will be evidenced by a
single series of asset-backed pass-through certificates designated as Series
2003-10 (the "Certificates"). The Certificates will consist of eighteen classes
of certificates. The Class CE Certificates, the Class P Certificates and the
Class R Certificates (collectively, the "Non-Offered Certificates") will be
delivered to the Seller or its designee as partial consideration for the
Mortgage Loans as further described below.

                  The Certificates will be issued pursuant to a Pooling and
Servicing Agreement relating to the Series 2003-10 Certificates, dated as of
October 1, 2003 (the "Pooling and Servicing Agreement"), among the Purchaser as
depositor (in such capacity, the "Depositor"), the Seller as master servicer (in
such capacity the "Master Servicer") and Deutsche Bank National Trust Company as
Trustee (the "Trustee"). Pursuant to the Pooling and Servicing Agreement, the
Depositor will assign all of its right, title and interest in and to the
Mortgage Loans, together with its rights under this Agreement, to the Trustee
for the benefit of the Certificateholders. Capitalized terms used but not
defined herein shall have the meanings set forth in the Pooling and Servicing
Agreement.

                  The parties hereto agree as follows:

                  SECTION 1. Agreement to Purchase. The Seller hereby sells, and
the Purchaser hereby purchases, as of October 10, 2003 (the "Closing Date"),
certain adjustable-rate and fixed-rate conventional, one- to four-family,
residential mortgage loans (the "Mortgage Loans"), having an aggregate principal
balance as of the close of business on October 1, 2003 (the "Cut-off Date") of
$1,199,999,820.21, after giving effect to all payments due on the Mortgage Loans
on or before the Cut- off Date (the "Closing Balance"), whether or not received
including the right to any Prepayment Charges collected after the Cut-off Date
from the Mortgagors in connection with any Principal Prepayments on the Mortgage
Loans. Any payments (including Prepayment Charges) collected on or before the
Cut-off Date, including all scheduled payments of principal and interest due on
or before the Cut-off Date and collected after the Cut-off Date, shall belong to
the Seller. In addition to the sale of the Mortgage Loans, the Seller will cause
the Cap Contracts to be transferred to the Purchaser.

                  SECTION 2. Mortgage Loan Schedule and Prepayment Charge
Schedule. The Purchaser and the Seller have agreed upon which of the mortgage
loans owned by the Seller are to be purchased by the Purchaser pursuant to this
Agreement, and the Seller shall prepare or cause to be prepared on or prior to
the Closing Date a final schedule (the "Closing Schedule") describing such
Mortgage Loans and setting forth all of the Mortgage Loans to be purchased under
this Agreement.

<PAGE>

                                       -2-

The Closing Schedule shall conform to the requirements set forth in this
Agreement and to the definition of "Mortgage Loan Schedule" under the Pooling
and Servicing Agreement. The Closing Schedule shall be used as the Mortgage Loan
Schedule under the Pooling and Servicing Agreement. The Seller shall also
prepare or cause to be prepared on or prior to the Closing Date a final schedule
(the "Prepayment Charge Schedule") setting forth each Mortgage Loan containing a
Prepayment Charge and conforming to the definition of Prepayment Charge Schedule
under the Pooling and Servicing Agreement.

                  SECTION 3.        Consideration.

                           (a) In consideration for the Mortgage Loans to be
purchased hereunder, the Purchaser shall, as described in Section 8, (i) pay to
or upon the order of the Seller in immediately available funds an amount equal
to the net sale proceeds of the Class AV-1 Certificates, the Class AV-2
Certificates, the Class AF-1 Certificates, the Class AF-2 Certificates, the
Class AF-3 Certificates, the Class AF-4 Certificates, the Class AF-5
Certificates, the Class AF-6 Certificates, the Class M-1 Certificates, the Class
M-2 Certificates, the Class M-3 Certificates, the Class M-4 Certificates, the
Class M-5 Certificates, the Class MV-6 Certificates and the Class MF-6
Certificates and (ii) deliver to the Seller or its designee, the Non-Offered
Certificates.

                           (b)      [Reserved].

                  SECTION 4.        Transfer of the Mortgage Loans.

                           (a) Possession of Mortgage Files. The Seller does
hereby sell to the Purchaser, without recourse but subject to the terms of this
Agreement, all of its right, title and interest in, to and under the Mortgage
Loans, including the related Prepayment Charges collected after the Cut- off
Date. The contents of each Mortgage File not delivered to the Purchaser or to
any assignee, transferee or designee of the Purchaser on or prior to the Closing
Date are and shall be held in trust by the Seller for the benefit of the
Purchaser or any assignee, transferee or designee of the Purchaser. Upon the
sale and contribution of the Mortgage Loans the ownership of each Mortgage Note,
the related Mortgage and the other contents of the related Mortgage File is
vested in the Purchaser and the ownership of all records and documents with
respect to the related Mortgage Loan prepared by or that come into the
possession of the Seller on or after the Closing Date shall immediately vest in
the Purchaser and shall be delivered immediately to the Purchaser or as
otherwise directed by the Purchaser.

                           (b) Delivery of Mortgage Loan Documents. The Seller
will, on or prior to the Closing Date, deliver or cause to be delivered to the
Purchaser or any assignee, transferee or designee of the Purchaser each of the
following documents for each Mortgage Loan:

                  (i) the original Mortgage Note, endorsed in blank without
         recourse or in the following form: "Pay to the order of Deutsche Bank
         National Trust Company, as Trustee under the applicable agreement,
         without recourse," with all prior and intervening endorsements

<PAGE>

                                       -3-

         showing a complete chain of endorsement from the originator to the
         Person so endorsing to the Trustee, or with respect to any lost
         Mortgage Note, an original Lost Note Affidavit; provided however, that
         such substitutions of Lost Note Affidavits for original Mortgage Notes
         may occur only with respect to Mortgage Loans, the aggregate Cut-off
         Date Principal Balance of which is less than or equal to 2.00% of the
         Pool Balance as of the Cut-off Date;

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

                  (iii) an original Assignment of the Mortgage assigned in
         blank, without recourse;

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

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

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

                  If any document referred to in Section 4(b)(ii), 4(b)(iii) or
4(b)(iv) above has been submitted for recording but either (x) has not been
returned from the applicable public recording office or (y) has been lost or
such public recording office has retained the original of such document, the
obligations of the Seller hereunder shall be deemed to have been satisfied upon
(1) delivery by or on behalf of the Seller promptly upon receipt thereof to the
Purchaser or any assignee, transferee or designee of the Purchaser of either the
original or a copy of such document certified by the Seller in the case of (x)
above or the public recording office in the case of (y) above to be a true and
complete copy of the recorded original thereof and (2) if such delivered copy is
certified by the Seller then in addition thereto delivery promptly upon receipt
thereof of either the original or a copy of such document certified by the
public recording office to be a true and complete copy of the original. In the
event that the original lender's title insurance policy has not yet been issued,
the Seller shall deliver to the Purchaser or any assignee, transferee or
designee of the Purchaser a written commitment or interim binder or preliminary
report of title issued by the title insurance or escrow company. Promptly upon
receipt by the Seller of any such original title insurance policy the Seller
shall deliver such to the Purchaser or any assignee, transferee or designee of
the Purchaser.

<PAGE>

                                       -4-

                  The Seller shall promptly (and in no event later than thirty
(30) Business Days, subject to extension upon mutual agreement between the
Seller and the Trustee, following the later of (i) the Closing Date, (ii) the
date on which the Seller receives the Assignment from the Trustee and (iii) the
date of receipt by the Seller of the recording information for a Mortgage)
submit or cause to be submitted for recording, at no expense to the Trust Fund
or the Trustee, in the appropriate public office for real property records, each
Assignment referred to in (iii) and (iv) above and shall execute each original
Assignment referred to in (iii) in the following form: "Deutsche Bank National
Trust Company, as Trustee under the applicable agreement without recourse". In
the event that any such Assignment is lost or returned unrecorded because of a
defect therein, the Seller shall promptly prepare or cause to be prepared a
substitute Assignment or cure or cause to be cured such defect, as the case may
be, and thereafter cause each such Assignment to be duly recorded.
Notwithstanding the foregoing, however, for administrative convenience and
facilitation of servicing and to reduce closing costs, the Assignments of
Mortgage shall not be required to be submitted for recording (except with
respect to any Mortgage Loan located in Maryland) unless such failure to record
would result in a withdrawal or a downgrading by any Rating Agency of the rating
on any Class of Certificates; provided further, however, each Assignment of
Mortgage shall be submitted for recording by the Seller in the manner described
above, at no expense to the Trust Fund or the Trustee, upon the earliest to
occur of: (i) reasonable direction by Holders of Certificates entitled to at
least 25% of the Voting Rights or the NIMS Insurer, (ii) failure of the Master
Servicer Termination Test, (iii) the occurrence of the bankruptcy or insolvency
of the Seller, (iv) the occurrence of a servicing transfer as described in
Section 7.02 of the Pooling and Servicing Agreement, and (v) if the Seller is
not the Master Servicer and with respect to any one assignment or Mortgage, the
occurrence of a bankruptcy, insolvency or foreclosure relating to the Mortgagor
under the related Mortgage.

                  Each original document relating to a Mortgage Loan which is
not delivered to the Purchaser or its assignee, transferee or designee, if held
by the Seller, shall be so held for the benefit of the Purchaser or its
assignee, transferee or designee.

                           (c) Acceptance of Mortgage Loans. The documents
delivered pursuant to Section 4(b) hereof shall be reviewed by the Purchaser or
any assignee, transferee or designee of the Purchaser at any time before or
after the Closing Date (and with respect to each document permitted to be
delivered after the Closing Date within seven days of its delivery) to ascertain
that all required documents have been executed and received and that such
documents relate to the Mortgage Loans identified on the Mortgage Loan Schedule.

                           (d) Reserved.

                           (e) Transfer of Interest in Agreements. The Purchaser
has the right to assign its interest under this Agreement, in whole or in part,
to the Trustee, as may be required to effect the purposes of the Pooling and
Servicing Agreement, without the consent of the Seller, and the assignee shall
succeed to the rights and obligations hereunder of the Purchaser. Any expense
reasonably incurred by or on behalf of the Purchaser or the Trustee in
connection with enforcing any obligations of the Seller under this Agreement
will be promptly reimbursed by the Seller.

<PAGE>

                                       -5-

                           (f) Examination of Mortgage Files. Prior to the
Closing Date, the Seller shall either (i) deliver in escrow to the Purchaser or
to any assignee, transferee or designee of the Purchaser, for examination, the
Mortgage File pertaining to each Mortgage Loan or (ii) make such Mortgage Files
available to the Purchaser or to any assignee, transferee or designee of the
Purchaser for examination at the Trustee's offices in Santa Ana, California.
Such examination may be made by the Purchaser, and its respective designees,
upon reasonable notice to the Seller and the Trustee during normal business
hours before the Closing Date and within 60 days after the Closing Date. If any
such person makes such examination prior to the Closing Date and identifies any
Mortgage Loans that do not conform to the requirements of the Purchaser as
described in this Agreement, such Mortgage Loans shall be deleted from the
Closing Schedule. The Purchaser may, at its option and without notice to the
Seller, purchase all or part of the Mortgage Loans without conducting any
partial or complete examination. The fact that the Purchaser or any person has
conducted or has failed to conduct any partial or complete examination of the
Mortgage Files shall not affect the rights of the Purchaser or any assignee,
transferee or designee of the Purchaser to demand repurchase or other relief as
provided herein or under the Pooling and Servicing Agreement.

                  SECTION 5. Representations, Warranties and Covenants
                             of the Seller.

                  The Seller hereby represents and warrants to the Purchaser
with respect to the Mortgage Loans as of the Closing Date or as of such date
specifically provided herein:

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

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

                  (iii) The execution and delivery of this Agreement by the
Seller, the servicing of the Mortgage Loans by the Seller under the Pooling and
Servicing Agreement, the consummation of any

<PAGE>

                                      -6-

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
Seller and will not (A) result in a breach of any term or provision of the
charter or by-laws of the Seller or (B) conflict with, result in a breach,
violation or acceleration of, or result in a default under, the terms of any
other material agreement or instrument to which the Seller is a party or by
which it may be bound, or any statute, order or regulation applicable to the
Seller of any court, regulatory body, administrative agency or governmental body
having jurisdiction over the Seller; and the Seller is not a party to, bound by,
or in breach or violation of any indenture or other agreement or instrument, or
subject to or in violation of any statute, order or regulation of any court,
regulatory body, administrative agency or governmental body having jurisdiction
over it, which materially and adversely affects or, to the Seller's knowledge,
would in the future materially and adversely affect, (x) the ability of the
Seller to perform its obligations under this Agreement or (y) the business,
operations, financial condition, properties or assets of the Seller taken as a
whole;

                  (iv) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery and
performance by the Seller of, or compliance by the Seller with, this Agreement
or the consummation of the transactions contemplated hereby, or if any such
consent, approval, authorization or order is required, the Seller has obtained
the same;

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

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

                  SECTION 6.        Representations and Warranties of the Seller
                                    Relating to the Mortgage Loans.

                  (a) The Seller hereby represents and warrants to the
Purchaser, with respect to the Mortgage Loans as of the Closing Date or as of
such date specifically provided herein:

                           (i) The information set forth on the Mortgage Loan
Schedule with respect to each Mortgage Loan is true and correct in all material
respects;

                           (ii)   [Reserved];

                           (iii) No material error, omission, misrepresentation,
negligence, fraud or similar occurrence with respect to a Mortgage Loan has
taken place on the part of any person, including without limitation, the
Mortgagor, any appraiser, any builder or developer, or any other

<PAGE>

                                       -7-

party involved in the origination of the Mortgage Loan or in the application of
any insurance in relation to such Mortgage Loan;

                           (iv) All payments due prior to the Cut-off Date have
been made and none of the Mortgage Loans will have been contractually delinquent
for more than one calendar month more than once since the origination thereof;

                           (v) Each Mortgage is a valid and enforceable first
lien on the Mortgaged Property, including all improvements thereon, subject only
to (a) the lien of nondelinquent current real property taxes and assessments,
(b) covenants, conditions and restrictions, rights of way, easements and other
matters of public record as of the date of recording of such Mortgage, such
exceptions appearing of record being acceptable to mortgage lending institutions
generally or specifically reflected in the appraisal made in connection with the
origination of the related Mortgage Loan, and (c) other matters to which like
properties are commonly subject which do not materially interfere with the
benefits of the security intended to be provided by such Mortgage;

                           (vi) Immediately prior to the sale of the Mortgage
Loans to the Purchaser, the Seller had good title to, and was the sole legal and
beneficial owner of, each Mortgage Loan free and clear of any pledge, lien,
encumbrance or security interest and has full right and authority, subject to no
interest or participation of, or agreement with, any other party to sell and
assign the same;

                           (vii) There is no delinquent tax or assessment lien
against any Mortgaged Property;

                           (viii) There is no valid offset, defense or
counterclaim to any Mortgage Note or Mortgage, including the obligation of the
Mortgagor to pay the unpaid principal of or interest on such Mortgage Note, nor
will the operation of any of the terms of the Mortgage Note and the Mortgage, or
the exercise of any right thereunder, render the Mortgage unenforceable, in
whole or in part, or subject to any valid right of rescission, set-off,
counterclaim or defense, including the defense of usury and no such valid right
of rescission, set-off, counterclaim or defense has been asserted with respect
thereto;

                           (ix) There are no mechanics' liens or claims for
work, labor or material rendered to the Mortgaged Property affecting any
Mortgaged Property which are or may be a lien prior to, or equal with, the lien
of the related Mortgage, except those which are insured against by the title
insurance policy referred to in (xiii) below;

                           (x) Subject to the Escrow Withhold referred to in
(xx) below, each Mortgaged Property is free of material damage and is in good
repair;

                           (xi) Each Mortgage Loan at origination complied in
all material respects with applicable local, state and federal laws, including,
without limitation, usury, equal credit opportunity, real estate settlement
procedures, truth-in-lending, disclosure laws and all applicable predatory and

<PAGE>

                                       -8-

abusive lending laws, and consummation of the transactions contemplated hereby
will not involve the violation of any such laws;

                           (xii) Neither the Seller nor any prior holder of any
Mortgage has modified the Mortgage in any material respect (except that a
Mortgage Loan may have been modified by a written instrument which has been
recorded, if necessary, to protect the interests of the Purchaser and which has
been delivered to the Trustee); satisfied, canceled or subordinated such
Mortgage in whole or in part; released the related Mortgaged Property in whole
or in part from the lien of such Mortgage; or executed any instrument of
release, cancellation, modification or satisfaction with respect thereto;

                           (xiii) A lender's policy of title insurance together
with a condominium endorsement, extended coverage endorsement, and an adjustable
rate mortgage endorsement (each as applicable) in an amount at least equal to
the Cut-off Date principal balance of each such Mortgage Loan or a commitment
(binder) to issue the same was effective on the date of the origination of each
Mortgage Loan, each such policy is valid and remains in full force and effect,
the transfer of the related Mortgage Loan to the Purchaser will not affect the
validity or enforceability of such policy and each such policy was issued by a
title insurer qualified to do business in the jurisdiction where the Mortgaged
Property is located and in a form acceptable to Fannie Mae or Freddie Mac, which
policy insures the Seller and successor owners of indebtedness secured by the
insured Mortgage, as to the first priority lien of the Mortgage; no claims have
been made under such lender's title insurance policy and no prior holder of the
related Mortgage, including the Seller, has done, by act or omission, anything
which would impair the coverage of such lender's title insurance policy;

                           (xiv) Each Mortgage Loan was originated by the Seller
(or, if generated by an entity other than the Seller, in accordance with the
underwriting standards set forth in the Prospectus Supplement or, if generated
on behalf of the Seller by a person other than the Seller, is subject to the
same underwriting standards and procedures used by the Seller in originating
mortgage loans directly) or by a savings and loan association, savings bank,
commercial bank, credit union, insurance company or similar institution which is
supervised and examined by a federal or state authority (including a mortgage
broker), or by a mortgagee approved by the Secretary of Housing and Urban
Development pursuant to Sections 203 and 211 of the National Housing Act;

                           (xv) With respect to each Adjustable-Rate Mortgage
Loan, on each adjustment date, the Mortgage Rate will be adjusted to equal the
Index plus the Gross Margin, rounded to the nearest 0.125%, subject to the
Periodic Rate Cap, the Maximum Mortgage Rate and the Minimum Mortgage Rate. The
related Mortgage Note is payable on the first day of each month in self-
amortizing monthly installments of principal and interest, with interest payable
in arrears, and requires a monthly payment which is sufficient to fully amortize
the outstanding principal balance of the Mortgage Loan over its remaining term
and to pay interest at the applicable Mortgage Rate. No Mortgage Loan is subject
to negative amortization;

                           (xvi) All of the improvements which were included for
the purpose of determining the appraised value of the Mortgaged Property lie
wholly within the boundaries and

<PAGE>

                                       -9-

building restriction lines of such property, and no improvements on adjoining
properties encroach upon the Mortgaged Property, except those, if any, which are
insured against by the lender's title insurance policy referred to in (xiii)
above.

                           (xvii) All inspections, licenses and certificates
required to be made or issued with respect to all occupied portions of the
Mortgaged Property including but not limited to certificates of occupancy, have
been made or obtained from the appropriate authorities and the Mortgaged
Property is lawfully occupied under applicable law except as may otherwise be
insured against by the lender's title insurance policy referred to in (xiii)
above.

                           (xviii) All parties which have had any interest in
the Mortgage, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) in
compliance with any and all applicable licensing requirements of the laws of the
state wherein the Mortgaged Property is located;

                           (xix) The Mortgage Note and the related Mortgage are
genuine, and each is the legal, valid and binding obligation of the maker
thereof, enforceable in accordance with its terms and with applicable laws. All
parties to the Mortgage Note and the Mortgage had legal capacity to execute the
Mortgage Note and the Mortgage and each Mortgage Note and Mortgage have been
duly and properly executed by such parties;

                           (xx) The proceeds of each Mortgage Loan have been
fully disbursed, there is no requirement for future advances thereunder and any
and all requirements as to completion of any on-site or off-site improvements
and as to disbursements of any escrow funds therefor have been complied with,
except any Mortgaged Property or Mortgage Loan subject to an Escrow Withhold as
defined in the Originators' underwriting guidelines. All costs, fees and
expenses incurred in making, closing or recording the Mortgage Loans were paid;

                           (xxi) The related Mortgage contains customary and
enforceable provisions which render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security, including, (i) in the case of a Mortgage designated as
a deed of trust, by trustee's sale, and (ii) otherwise by judicial foreclosure.
There is no homestead or other exemption available to the Mortgagor which would
materially interfere with the right to sell the Mortgaged Property at a
trustee's sale or the right to foreclose the Mortgage;

                           (xxii) With respect to each Mortgage constituting a
deed of trust, a trustee, duly qualified under applicable law to serve as such,
has been properly designated and currently so serves and is named in such
Mortgage, and no fees or expenses are or will become payable by the Purchaser to
the trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;

                           (xxiii) There exist no deficiencies with respect to
escrow deposits and payments, if such are required, for which customary
arrangements for repayment thereof have not been

<PAGE>

                                      -10-

made, and no escrow deposits or payments of other charges or payments due the
Seller have been capitalized under the Mortgage or the related Mortgage Note;

                           (xxiv) The origination, collection and servicing
practices used by the Seller with respect to each Mortgage Loan have been in all
material respects legal, proper, reasonable and customary in the subprime
mortgage origination and servicing business;

                           (xxv) There is no pledged account or other security
other than real estate securing the Mortgagor's obligations;

                           (xxvi) No Mortgage Loan has a shared appreciation
feature, or other contingent interest feature;

                           (xxvii) The improvements upon each Mortgaged Property
are covered by a valid and existing hazard insurance policy with a generally
acceptable carrier that provides for fire extended coverage and such other
hazards as are customary in the area where the Mortgaged Property is located
representing coverage not less than the lesser of the outstanding principal
balance of the related Mortgage Loan or the minimum amount required to
compensate for damage or loss on a replacement cost basis. All individual
insurance policies and flood policies referred to in clause (xxviii) below
contain a standard mortgagee clause naming the Seller or the original mortgagee,
and its successors in interest, as mortgagee, and the Seller has received no
notice that any premiums due and payable thereon have not been paid; the
Mortgage obligates the Mortgagor thereunder to maintain all such insurance,
including flood insurance, at the Mortgagor's cost and expense, and upon the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to obtain
and maintain such insurance at the Mortgagor's cost and expense and to seek
reimbursement therefor from the Mortgagor, except as may be limited or
restricted by applicable law;

                           (xxviii) If the Mortgaged Property is in an area
identified in the Federal Register by the Federal Emergency Management Agency as
having special flood hazards, a flood insurance policy in a form meeting the
requirements of the current guidelines of the Flood Insurance Administration is
in effect with respect to such Mortgaged Property with a generally acceptable
carrier in an amount representing coverage not less than the least of (A) the
original outstanding principal balance of the Mortgage Loan, (B) the minimum
amount required to compensate for damage or loss on a replacement cost basis or
(C) the maximum amount of insurance that is available under the Flood Disaster
Protection Act of 1973;

                           (xxix) There is no default, breach, violation or
event of acceleration existing under the Mortgage or the related Mortgage Note;
and the Seller has not waived any default, breach, violation or event of
acceleration;

                           (xxx) Each Mortgaged Property is improved by a one-
to four-family residential dwelling, including condominium units and dwelling
units in planned unit developments, which does not include (a) cooperatives or
(b) mobile homes and manufactured homes (as defined in

<PAGE>

                                      -11-

the Fannie Mae Seller-Servicer's Guide), except when the appraisal indicates
that (i) the mobile or manufactured home was built under the Federal
Manufactured Home Construction and Safety Standards of 1976 or (ii) otherwise
assumes the characteristics of site-built housing and meets local building
codes, is readily marketable, has been permanently affixed to the site, is not
in a mobile home "park," and is treated as real property under the applicable
state law. With respect to any Mortgage Loan that is secured by a leasehold
estate, (a) the lease is valid, in full force and effect; (b) all rents and
other payments due under the lease have been paid; (c) the lessee is not in
default under any provision of the lease; (d) the term of the lease exceeds the
maturity date of the related Mortgage Loan by at least five years and (e) the
Mortgagee under the Mortgage Loan is given notice and an opportunity to cure any
defaults under the lease;

                           (xxxi) There is no obligation on the part of the
Seller or any other party under the terms of the Mortgage or related Mortgage
Note to make payments in lieu of or in addition to those made by the Mortgagor;

                           (xxxii) Any future advances made prior to the related
Purchase Date have been consolidated with the outstanding principal amount
secured by the Mortgage, and the secured principal amount, as consolidated,
bears a single interest rate and single repayment term reflected on the Mortgage
Loan Schedule. The consolidated principal amount does not exceed the original
principal amount of the Mortgage Loan;

                           (xxxiii) Each Mortgage Loan was underwritten in
accordance with the Seller's underwriting guidelines;

                           (xxxiv) The Mortgage File contains an appraisal which
was performed by either (i) an appraiser who satisfied, and which was conducted
in accordance with, all of the applicable requirements of the Financial
Institutions Reform, Recovery and Enforcement Act of 1989, as amended or (ii) an
insured valuation model;

                           (xxxv) None of the Mortgage Loans is a graduated
payment mortgage loan, nor is any Mortgage Loan subject to a temporary buydown
or similar arrangement;

                           (xxxvi)   [Reserved].

                           (xxxvii) The Mortgage Loans comply in all material
respects with the description set forth under the heading "The Mortgage Pool" in
the Depositor's Prospectus Supplement, dated the date hereof (the "Prospectus
Supplement");

                           (xxxviii) The Mortgage contains an enforceable
provision for the acceleration of the payment of the unpaid principal balance of
the Mortgage Loan in the event that the Mortgaged Property is sold or
transferred without the prior written consent of the mortgagee thereunder,
except as may be limited by applicable law;

<PAGE>

                                      -12-

                           (xxxix) The information set forth in the Prepayment
Charge Schedule is complete, true and correct in all material respects at the
date or dates respecting which such information is furnished and each Prepayment
Charge is permissible and enforceable in accordance with its terms upon the full
and voluntary prepayment by the Mortgagor under applicable law (except to the
extent that: (1) the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditors' rights generally; or (2) the collectability thereof may be limited
due to acceleration in connection with a foreclosure or other involuntary
payoff;

                           (xl) Each Mortgage Loan is an obligation that is
principally secured by real property for purposes of the REMIC Provisions of the
Code;

                           (xli) The Mortgage Loans are not subject to the
requirements of the Home Ownership and Equity Protection Act of 1994 ("HOEPA")
and no Mortgage Loan is subject to, or in violation of, any applicable state or
local law, ordinance or regulation similar to HOEPA. No Mortgage Loan is a High
Cost Loan as defined by the HOEPA or any other applicable predatory or abusive
lending laws;

                           (xlii) No proceeds from any Mortgage Loan were used
to finance single- premium credit insurance policies;

                           (xliii) No Mortgage Loan originated before October 1,
2002 will impose a Prepayment Charge for a term in excess of five years and no
Mortgage Loan originated on or after October 1, 2002 will impose a Prepayment
Charge for a term in excess of three years;

                           (xliv) No Mortgage Loan that is secured by property
located in the State of Georgia is either a "Covered Loan" or "High Cost Home
Loan" within the meaning of the Georgia Fair Lending Act, as amended (the
"Georgia Act");

                           (xlv) No Mortgagor has currently requested any relief
under the Soldiers' and Sailors' Civil Relief Act of 1940 or similar state laws;

                           (xlvi) No Mortgage Loan secured by a Mortgaged
Property located in Georgia was originated on or after October 1, 2002 and
before March 7, 2003;

                           (xlvii) Each Group I Mortgage Loan is in compliance
with the anti-predatory lending eligibility for purchase requirements of Fannie
Mae's Selling Guide;

                           (xlviii) No Group I Mortgage Loan is a "High Cost
Home Loan" as defined in New York Banking Law 6-1;

                           (xlix) The methodology used in underwriting the
extension of credit for each Group I Mortgage Loan employs objective
mathematical principles which relate the Mortgagor's

<PAGE>

                                      -13-

income, assets and liabilities to the proposed payment and such underwriting
methodology does not rely on the extent of the Mortgagor's equity in the
collateral as the principal determining factor in approving such credit
extension. Such underwriting methodology confirmed that at the time of
origination (application/approval) the Mortgagor had a reasonable ability to
make timely payments on the Group I Mortgage Loan;

                           (l) With respect to any Group I Mortgage Loan that
contains a provision permitting imposition of a charge upon a prepayment prior
to maturity: (i) prior to the Group I Mortgage Loan's origination, the Mortgagor
agreed to such charge in exchange for a monetary benefit, including but not
limited to a rate or fee reduction, (ii) prior to the Group I Mortgage Loan's
origination, the Mortgagor was offered the option of obtaining a mortgage loan
that did not require payment of such a charge, (iii) the prepayment charge is
disclosed to the Mortgagor in the loan documents pursuant to applicable state
and federal law, and (iv) notwithstanding any state or federal law to the
contrary, the Master Servicer shall not impose such prepayment charge in any
instance when the mortgage debt is accelerated as the result of the Mortgagor's
default in making the loan payments;

                           (li) No Mortgagor was required to purchase any credit
life, disability, accident or health insurance product as a condition of
obtaining the extension of credit. No Mortgagor obtained a prepaid single
premium credit life, disability, accident or health insurance policy in
connection with the origination of the Group I Mortgage Loan. No proceeds from
any Group I Mortgage Loan were used to purchase single premium credit insurance
policies as part of the origination of, or as a condition to closing, such Group
I Mortgage Loan;

                           (lii) All points and fees related to each Group I
Mortgage Loan were disclosed in writing to the Mortgagor in accordance with
applicable state and federal law and regulation. Except in the case of a Group I
Mortgage Loan in an original principal amount of less than $60,000 which would
have resulted in an unprofitable origination, no Mortgagor was charged "points
and fees" (whether or not financed) in an amount greater than 5% of the
principal amount of such loan and such 5% limitation is calculated in accordance
with Fannie Mae's anti-predatory lending requirements as set forth in the Fannie
Mae Selling Guide;

                           (lii) All fees and charges (including finance
charges) and whether or not financed, assessed, collected or to be collected in
connection with the origination and servicing of each Group I Mortgage Loan has
been disclosed in writing to the Mortgagor in accordance with applicable state
and federal law and regulation; and

                           (liv) The Master Servicer will transmit full-file
credit reporting data for each Group I Mortgage Loan pursuant to Fannie Mae
Guide Announcement 95-19 and that for each Group I Mortgage Loan, the Master
Servicer agrees it shall report one of the following statuses each month as
follows: new origination, current, delinquent (30-, 60-, 90-days, etc.),
foreclosed, or charged-off.

                  SECTION 7. Repurchase Obligation for Defective
                             Documentation and for Breach of Representation and
                             Warranty.

<PAGE>

                                      -14-

                  (a) The representations and warranties contained in Section 6
shall not be impaired by any review and examination of loan files or other
documents evidencing or relating to the Mortgage Loans or any failure on the
part of the Purchaser to review or examine such documents and shall inure to the
benefit of any assignee, transferee or designee of the Purchaser, including the
Trustee for the benefit of the Certificateholders.

                  Upon discovery by the Seller, the Purchaser or any assignee,
transferee or designee of the Purchaser of any materially defective document in,
or that any material document was not transferred by the Seller (as listed on
the Trustee's Preliminary Exception Report), as part of, any Mortgage File or of
a breach of any of the representations and warranties contained in Section 5 or
Section 6 that materially and adversely affects the value of any Mortgage Loan
or the interest therein of the Purchaser or the Purchaser's assignee, transferee
or designee (it being understood that with respect to the representations and
warranties set forth in (xli), (xlii), (xliii), (xliv) and (xlvi) of Section
6(a) herein, a breach of any such representation or warranty shall in and of
itself be deemed to materially adversely affect the interest therein of the
Purchaser and the Purchaser's assignee, transferee or designee), the party
discovering the breach shall give prompt written notice to the other. Within
ninety (90) days of its discovery or its receipt of notice of any such missing
documentation which was not transferred to the Purchaser as described above or
materially defective documentation or any such breach of a representation and
warranty (it being understood that with respect to the representations and
warranties set forth in (xli), (xlii), (xliii), (xliv) and (xlvi) of Section
6(a) herein, a breach of any such representation or warranty shall in and of
itself be deemed to materially adversely affect the interest therein of the
Purchaser and the Purchaser's assignee, transferee or designee), the Seller
promptly shall deliver such missing document or cure such defect or breach in
all material respects, or in the event the Seller cannot deliver such missing
document or such defect or breach cannot be cured, the Seller shall, within 90
days of its discovery or receipt of notice, either (i) repurchase the affected
Mortgage Loan at a price equal to the Purchase Price or (ii) pursuant to the
provisions of the Pooling and Servicing Agreement, cause the removal of such
Mortgage Loan from the Trust Fund and substitute one or more Qualified
Substitute Mortgage Loans. In the event that any Mortgage Loan is subject to a
breach of the representation and warranty in Section 6(a)(xxxix) resulting in
the Master Servicer's inability to collect all or part of the Prepayment Charge
from the Mortgagor, in lieu of repurchase, the Seller shall be obligated to
remit to the Master Servicer (for deposit in the Collection Account) any
shortfall in the Prepayment Charge collected upon the Mortgagor's voluntary
Principal Prepayment.

                  The Seller shall amend the Closing Schedule to reflect the
withdrawal of such Mortgage Loan from the terms of this Agreement and the
Pooling and Servicing Agreement and the addition, if any, of a Qualified
Substitute Mortgage Loan. The Seller shall deliver to the Purchaser such amended
Closing Schedule and shall deliver such other documents as are required by this
Agreement or the Pooling and Servicing Agreement within five (5) days of any
such amendment. Any repurchase pursuant to this Section 7(a) shall be
accomplished by deposit in the Collection Account of the amount of the Purchase
Price in accordance with Section 2.03 of the Pooling and Servicing Agreement.
Any repurchase or substitution required by this Section shall be made in a
manner consistent with Section 2.03 of the Pooling and Servicing Agreement.

<PAGE>

                                      -15-

                  In addition, upon discovery by the Seller, the Purchaser, or
any assignee, transferee or designee of the Purchaser that any Mortgage Loan
does not constitute a "qualified mortgage" within the meaning of Section
860G(a)(3) of the Code, the party discovering the breach shall give prompt
written notice within five Business Days to the others. Within ninety (90) days
of its discovery or its receipt of notice, the Seller promptly shall either (i)
repurchase the affected Mortgage Loan at the Purchase Price (as such term is
defined in the Pooling and Servicing Agreement) or (ii) pursuant to the
provisions of the Pooling and Servicing Agreement, cause the removal of such
Mortgage Loan from the Trust Fund and substitute one or more Qualified
Substitute Mortgage Loans.

                  (b) It is understood and agreed that the obligations of the
Seller set forth in this Section 7 to cure, remit a Prepayment Charge shortfall,
repurchase or substitute for a defective Mortgage Loan constitute the sole
remedies of the Purchaser against the Seller respecting a missing or defective
material document or a breach of the representations and warranties contained in
Section 5 or Section 6.

                  SECTION 8. Closing; Payment for the Mortgage Loans. The
closing of the purchase and sale of the Mortgage Loans shall be held at the New
York City office of Thacher Proffitt & Wood LLP at 10:00 AM New York City time
on the Closing Date.

                  The closing shall be subject to each of the following
conditions:

                  (a)      All of the representations and warranties of the
                           Seller under this Agreement shall be true and correct
                           in all material respects as of the date as of which
                           they are made and no event shall have occurred which,
                           with notice or the passage of time, would constitute
                           a default under this Agreement;

                  (b)      The Purchaser shall have received, or the attorneys
                           of the Purchaser shall have received in escrow (to be
                           released from escrow at the time of closing), all
                           Closing Documents as specified in Section 9 of this
                           Agreement, in such forms as are agreed upon and
                           acceptable to the Purchaser, duly executed by all
                           signatories other than the Purchaser as required
                           pursuant to the respective terms thereof;

                  (c)      The Seller shall have delivered or caused to be
                           delivered and released to the Purchaser or to its
                           designee, all documents (including without
                           limitation, the Mortgage Loans) required to be so
                           delivered by the Purchaser pursuant to Section 2.01
                           of the Pooling and Servicing Agreement; and

                  (d)      All other terms and conditions of this Agreement
                           shall have been complied with.

                  Subject to the foregoing conditions, the Purchaser shall
deliver or cause to be delivered to the Seller on the Closing Date, against
delivery and release by the Seller to the Trustee

<PAGE>

                                      -16-

of all documents required pursuant to the Pooling and Servicing Agreement, the
consideration for the Mortgage Loans as specified in Section 3 of this
Agreement, by delivery to the Seller of the Purchase Price.

                  SECTION 9. Closing Documents. Without limiting the generality
of Section 8 hereof, the closing shall be subject to delivery of each of the
following documents:

                    (a)  (i) An Officers' Certificate of the Seller, dated the
                         Closing Date, in form satisfactory to and upon which
                         the Purchaser and the Underwriters may rely, and
                         attached thereto copies of the certificate of
                         incorporation, by-laws and certificate of good standing
                         of the Seller under the laws of Delaware and stating
                         that the information contained in the Prospectus
                         Supplement, relating to the Mortgage Loans, the Seller,
                         and its loan portfolio, is true and accurate in all
                         material respects and does not contain any untrue
                         statement of a material fact or omit to state a
                         material fact required to be stated therein or
                         necessary to make the statements therein, in light of
                         the circumstances under which they were made, not
                         misleading and (ii) if the Class CE Certificates and
                         Class P Certificates are offered on the Closing Date
                         pursuant to a Private Placement Memorandum, the Seller
                         shall deliver an Officer's Certificate stating that the
                         same information contained in such Private Placement
                         Memorandum is true and accurate in all material
                         respects;

                    (b)  An Officers' Certificate of the Seller, dated the
                         Closing Date, in form satisfactory to and upon which
                         the Purchaser and the Underwriters may rely, with
                         respect to certain facts regarding the sale of the
                         Mortgage Loans by the Seller to the Purchaser;

                    (c)  An Opinion of Counsel of the Seller, dated the Closing
                         Date, in form satisfactory to and addressed to the
                         Purchaser and the Underwriters;

                    (d)  Such opinions of counsel from the Purchaser's or
                         Seller's counsel as the Rating Agencies may request in
                         connection with the sale of the Mortgage Loans by the
                         Seller to the Purchaser or the Seller's execution and
                         delivery of, or performance under, this Agreement and
                         upon which the Underwriters may rely;

                    (e)  A letter from Deloitte & Touche L.L.P., certified
                         public accountants, dated the date hereof and to the
                         effect that they have performed certain specified
                         procedures as a result of which they determined that
                         certain information of an accounting, financial or
                         statistical nature set forth in the Prospectus
                         Supplement, under the captions "Summary of Prospectus
                         Supplement", "Risk Factors", "The Mortgage Pool",
                         "Yield on the Certificates", "Description of

<PAGE>

                                      -17-

                         the Certificates", and "Pooling and Servicing
                         Agreement--The Seller and Master Servicer", agrees with
                         the records of the Seller;

                    (f)  The Seller shall deliver for inclusion in the
                         Prospectus Supplement under the captions "The Mortgage
                         Pool--Underwriting Standards; Representations" and
                         "Pooling and Servicing Agreement--The Seller and Master
                         Servicer", or for inclusion in other offering material
                         such publicly available information regarding its
                         financial condition and its mortgage loan delinquency,
                         foreclosure and loss experience, underwriting
                         standards, lending activities and loan sales,
                         production, and servicing and collection practices, and
                         any similar nonpublic, unaudited financial information;
                         and

                    (g)  Such further information, certificates, opinions and
                         documents as the Purchaser or the Underwriters may
                         reasonably request.

                  SECTION 10. Costs. The Seller shall pay (or shall reimburse
the Purchaser or any other Person to the extent that the Purchaser or such other
Person shall pay) all costs and expenses incurred in connection with the
transfer and delivery of the Mortgage Loans, including without limitation,
assignment of mortgage recording costs and/or fees for title policy endorsements
and continuations, the fees and expenses of the Seller's in-house accountants
and in-house attorneys, the costs and expenses incurred in connection with
producing the Seller's loan loss, foreclosure and delinquency experience, and
the costs and expenses incurred in connection with obtaining the documents
referred to in Sections 9(d) and 9(e) to the extent such costs and expenses were
not previously paid by the Seller. The Seller shall pay (or shall reimburse the
Purchaser or any other Person to the extent that the Purchaser or such other
Person shall pay) the costs and expenses of printing (or otherwise reproducing)
and delivering this Agreement, the Pooling and Servicing Agreement, the
Certificates, the prospectus, the prospectus supplement, and the private
placement memorandum relating to the Certificates and other related documents,
the initial fees, costs and expenses of the Trustee relating to the issuance of
the initial certification of the Trustee under Section 2.02 of the Pooling and
Servicing Agreement, the fees and expenses of the Seller's counsel in connection
with the preparation of all documents relating to the securitization of the
Mortgage Loans, the filing fee charged by the Securities and Exchange Commission
for registration of the Certificates, the cost of outside special counsel that
may be required for the Purchaser, the cost of obtaining the documents referred
to in Section 9(g) and the fees charged by any rating agency to rate the
Certificates. All other costs and expenses in connection with the transactions
contemplated hereunder shall be borne by the party incurring such expense.

                  SECTION 11.  [Reserved]

                  SECTION 12.  [Reserved]

                  SECTION 13.  Mandatory Delivery; Grant of Security
Interest. The sale and delivery on the Closing Date of the Mortgage Loans
described on the Mortgage Loan Schedule in accordance

<PAGE>

                                      -18-

with the terms and conditions of this Agreement is mandatory. It is specifically
understood and agreed that each Mortgage Loan is unique and identifiable on the
date hereof and that an award of money damages would be insufficient to
compensate the Purchaser for the losses and damages incurred by the Purchaser in
the event of the Seller's failure to deliver the Mortgage Loans on or before the
Closing Date. The Seller hereby grants to the Purchaser a lien on and a
continuing security interest in the Seller's interest in each Mortgage Loan and
each document and instrument evidencing each such Mortgage Loan to secure the
performance by the Seller of its obligation hereunder, and the Seller agrees
that it holds such Mortgage Loans in custody for the Purchaser, subject to the
Purchaser's (i) right, prior to the Closing Date, to reject any Mortgage Loan to
the extent permitted by this Agreement, and (ii) obligation to deliver or cause
to be delivered the consideration for the Mortgage Loans pursuant to Section 8
hereof. Any Mortgage Loans rejected by the Purchaser shall concurrently
therewith be released from the security interest created hereby. The Seller
agrees that, upon acceptance of the Mortgage Loans by the Purchaser or its
designee and delivery of payment to the Seller, that its security interest in
the Mortgage Loans shall be released. All rights and remedies of the Purchaser
under this Agreement are distinct from, and cumulative with, any other rights or
remedies under this Agreement or afforded by law or equity and all such rights
and remedies may be exercised concurrently, independently or successively.

         Notwithstanding the foregoing, if on the Closing Date, each of the
conditions set forth in Section 8 hereof shall have been satisfied and the
Purchaser shall not have paid or caused to be paid the Purchase Price, or any
such condition shall not have been waived or satisfied and the Purchaser
determines not to pay or cause to be paid the Purchase Price, the Purchaser
shall immediately effect the redelivery of the Mortgage Loans, if delivery to
the Purchaser has occurred and the security interest created by this Section 13
shall be deemed to have been released.

                  SECTION 14. Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered to or mailed by registered mail, postage prepaid, or
transmitted by telex or telegraph and confirmed by a similar mailed writing, if
to the Purchaser, addressed to the Purchaser at 1100 Town & Country Road, Suite
1100, Orange, California 92868, Facsimile: (714) 564-9639, Attention: General
Counsel, or such other address as may hereafter be furnished to the Seller in
writing by the Purchaser; if to the Seller, addressed to the Seller at 1100 Town
& Country Road, Suite 1100, Orange, California 92868, Facsimile: (714) 564-9639,
Attention: General Counsel, or to such other address as the Seller may designate
in writing to the Purchaser.

                  SECTION 15. Severability of Provisions. Any part, provision,
representation or warranty of this Agreement which is prohibited or which is
held to be void or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof. Any part, provision, representation or warranty of this Agreement which
is prohibited or unenforceable or is held to be void or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other

<PAGE>

                                      -19-

jurisdiction. To the extent permitted by applicable law, the parties hereto
waive any provision of law which prohibits or renders void or unenforceable any
provision hereof.

                  SECTION 16. Agreement of Parties. The Seller and the Purchaser
agree to execute and deliver such instruments and take such actions as either of
the others may, from time to time, reasonably request in order to effectuate the
purpose and to carry out the terms of this Agreement and the Pooling and
Servicing Agreement.

                  SECTION 17. Survival. The Seller agrees that the
representations, warranties and agreements made by it herein and in any
certificate or other instrument delivered pursuant hereto shall be deemed to be
relied upon by the Purchaser, notwithstanding any investigation heretofore or
hereafter made by the Purchaser or on its behalf, and that the representations,
warranties and agreements made by the Seller herein or in any such certificate
or other instrument shall survive the delivery of and payment for the Mortgage
Loans and shall continue in full force and effect, notwithstanding any
restrictive or qualified endorsement on the Mortgage Notes and notwithstanding
subsequent termination of this Agreement, the Pooling and Servicing Agreement or
the Trust Fund.

                  SECTION 18. GOVERNING LAW.   THIS AGREEMENT AND THE RIGHTS,
DUTIES, OBLIGATIONS AND RESPONSIBILITIES OF THE PARTIES HERETO SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS (EXCLUDING THE CHOICE OF LAW
PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK. THE PARTIES HERETO INTEND
THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW
SHALL APPLY TO THIS AGREEMENT.

                  SECTION 19. Miscellaneous. This Agreement may be executed in
two or more counterparts, each of which when so executed and delivered shall be
an original, but all of which together shall constitute one and the same
instrument. This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns. This Agreement
supersedes all prior agreements and understandings relating to the subject
matter hereof. Neither this Agreement nor any term hereof may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against whom enforcement of the change, waiver, discharge or
termination is sought. The headings in this Agreement are for purposes of
reference only and shall not limit or otherwise affect the meaning hereof. The
NIMS Insurer, if any, shall be a third party beneficiary hereof and may enforce
the terms hereof as if a party hereto.

                  It is the express intent of the parties hereto that the
conveyance of the Mortgage Loans by the Seller to the Purchaser as provided in
Section 4 hereof be, and be construed as, a sale of the Mortgage Loans by the
Seller to the Purchaser and not as a pledge of the Mortgage Loans by the Seller
to the Purchaser to secure a debt or other obligation of the Seller. However, in
the event that, notwithstanding the aforementioned intent of the parties, the
Mortgage Loans are held to be property of the Seller, then, (a) it is the
express intent of the parties that such conveyance be deemed a pledge of the
Mortgage Loans by the Seller to the Purchaser to secure a debt or other
obligation of the Seller

<PAGE>

                                      -20-

and (b) (1) this Agreement shall also be deemed to be a security agreement
within the meaning of Articles 8 and 9 of the New York Uniform Commercial Code;
(2) the conveyance provided for in Section 4 hereof shall be deemed to be a
grant by the Seller to the Purchaser of a security interest in all of the
Seller's right, title and interest in and to the Mortgage Loans and all amounts
payable to the holders of the Mortgage Loans in accordance with the terms
thereof and all proceeds of the conversion, voluntary or involuntary, of the
foregoing into cash, instruments, securities or other property, including
without limitation all amounts, other than investment earnings, from time to
time held or invested in the Collection Account whether in the form of cash,
instruments, securities or other property; (3) the possession by the Purchaser
or its agent of Mortgage Notes, the related Mortgages and such other items of
property that constitute instruments, money, negotiable documents or chattel
paper shall be deemed to be "possession" for purposes of perfecting the security
interest pursuant to the New York Uniform Commercial Code; and (4) notifications
to persons holding such property, and acknowledgments, receipts or confirmations
from persons holding such property, shall be deemed notifications to, or
acknowledgments, receipts or confirmations from, financial intermediaries,
bailees or agents (as applicable) of the Purchaser for the purpose of perfecting
such security interest under applicable law. Any assignment of the interest of
the Purchaser pursuant to Section 4(d) hereof shall also be deemed to be an
assignment of any security interest created hereby. The Seller and the Purchaser
shall, to the extent consistent with this Agreement, take such actions as may be
necessary to ensure that, if this Agreement were deemed to create a security
interest in the Mortgage Loans, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of this Agreement and the Pooling and
Servicing Agreement.

<PAGE>

                  IN WITNESS WHEREOF, the Seller and the Purchaser have caused
their names to be signed by their respective officers thereunto duly authorized
as of the date first above written.

                                        AMERIQUEST MORTGAGE COMPANY

                                        By:
                                           ----------------------------------
                                        Name:
                                        Title:

                                        AMERIQUEST MORTGAGE SECURITIES
                                        INC.

                                        By:
                                           ----------------------------------
                                        Name:
                                        Title:

 <PAGE>

                                    EXHIBIT E

                        REQUEST FOR RELEASE OF DOCUMENTS

         To:   Deutsche Bank National Trust Company,
               1761 East St. Andrew Place
               Santa Ana, CA 92705-4934
               Attn: Trust Administration - AQ0306

          Re:  Pooling and Servicing Agreement dated as of October 1, 2003 among
               Ameriquest Mortgage Securities Inc., as Depositor, Ameriquest
               Mortgage Company, as Originator and Master Servicer, and Deutsche
               Bank National Trust Company, as Trustee

                  In connection with the administration of the Mortgage Loans
held by you as Trustee pursuant to the above-captioned Trustee Agreement, we
request the release, and hereby acknowledge receipt, of the Trustee's Mortgage
File for the Mortgage Loan described below, for the reason indicated.

Mortgage Loan Number:

Mortgagor Name. Address & Zip Code:

Reason for Requesting Documents (check one):

         1. Mortgage Paid in Full

         2. Foreclosure

         3. Substitution

         4. Other Liquidation (Repurchases, etc.)

         5. Nonliquidation Reason:

Address to which Trustee should deliver the Trustee's Mortgage File:

By:
                  (authorized signer)

Issuer:
Address:
Date:

Trustee

Deutsche Bank National Trust Company

         Please acknowledge the execution of the above request by your signature
and date below:

         Signature                                   Date

         Documents returned to Trustee:

         Trustee                                     Date

                                       E-1

<PAGE>

                                   EXHIBIT F-1

                    FORM OF TRANSFEROR REPRESENTATION LETTER

                                                           [DATED]

Deutsche Bank National Trust Company
1761 East St. Andrew Place
Santa Ana, California 92705-4934

          Re:  Ameriquest Mortgage Securities Inc., Asset-Backed Pass-Through
               Certificates, Series 2003-10, Class CE,P,R, representing a ___%
               Percentage Interest Ladies and Gentlemen:
               ----------------------------------------------------------------

                  In connection with the transfer by ________________ (the
"Transferor") to ________________ (the "Transferee") of the captioned mortgage
pass-through certificates (the "Certificates"), the Transferor hereby certifies
as follows:

                  Neither the Transferor nor anyone acting on its behalf has (a)
offered, pledged, sold, disposed of or otherwise transferred any Certificate,
any interest in any Certificate or any other similar security to any person in
any manner, (b) has solicited any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c) has
otherwise approached or negotiated with respect to any Certificate, any interest
in any Certificate or any other similar security with any person in any manner,
(d) has made any general solicitation by means of general advertising or in any
other manner, (e) has taken any other action, that (in the case of each of
subclauses (a) through (e) above) would constitute a distribution of the
Certificates under the Securities Act of 1933, as amended (the "1933 Act"), or
would render the disposition of any Certificate a violation of Section 5 of the
1933 Act or any state securities law or would require registration or
qualification pursuant thereto. The Transferor will not act, nor has it
authorized or will it authorize any person to act, in any manner set forth in
the foregoing sentence with respect to any Certificate. The Transferor will not
sell or otherwise transfer any of the Certificates, except in compliance with
the provisions of that certain Pooling and Servicing Agreement, dated as of
October 1, 2003, among Ameriquest Mortgage Securities Inc. as Depositor,
Ameriquest Mortgage Company as Master Servicer and Deutsche Bank National Trust
Company as Trustee (the "Pooling and Servicing Agreement"), pursuant to which
Pooling and Servicing Agreement the Certificates were issued.

                                      F-1-1

<PAGE>

                  Capitalized terms used but not defined herein shall have the
meanings assigned thereto in the Pooling and Servicing Agreement.

                                       Very truly yours,

                                       [Transferor]

                                       By:______________________________
                                       Name:
                                       Title:

                                      F-1-2

<PAGE>

                    FORM OF TRANSFEREE REPRESENTATION LETTER

                                                [Date]

Deutsche Bank National Trust Company
1761 East St. Andrew Place
Santa Ana, California 92705-4934

          Re:  Ameriquest Mortgage Securities Inc., Asset-Backed Pass-Through
               Certificates, Series 2003- 10, Class CE,P,R, representing a ___%
               Percentage Interest

Ladies and Gentlemen:

                  In connection with the purchase from ______________________
(the "Transferor") on the date hereof of the captioned trust certificates (the
"Certificates"), _______________ (the "Transferee") hereby certifies as follows:

                  1. The Transferee is a "qualified institutional buyer" as that
         term is defined in Rule 144A ("Rule 144A") under the Securities Act of
         1933 (the "1933 Act") and has completed either of the forms of
         certification to that effect attached hereto as Annex 1 or Annex 2. The
         Transferee is aware that the sale to it is being made in reliance on
         Rule 144A. The Transferee is acquiring the Certificates for its own
         account or for the account of a qualified institutional buyer, and
         understands that such Certificate may be resold, pledged or transferred
         only (i) to a person reasonably believed to be a qualified
         institutional buyer that purchases for its own account or for the
         account of a qualified institutional buyer to whom notice is given that
         the resale, pledge or transfer is being made in reliance on Rule 144A,
         or (ii) pursuant to another exemption from registration under the 1933
         Act.

                  2. The Transferee has been furnished with all information
         regarding (a) the Certificates and distributions thereon, (b) the
         nature, performance and servicing of the Mortgage Loans, (c) the
         Pooling and Servicing Agreement referred to below, and (d) any credit
         enhancement mechanism associated with the Certificates, that it has
         requested.

                  All capitalized terms used but not otherwise defined herein
have the respective meanings assigned thereto in the Pooling and Servicing
Agreement, dated as of October 1, 2003, among Ameriquest Mortgage Securities
Inc. as Depositor, Ameriquest Mortgage Company as Master Servicer and Deutsche
Bank National Trust Company as Trustee, pursuant to which the Certificates were
issued.

                                        [TRANSFEREE]

                                        By: ______________________________
                                        Name:
                                        Title:

                                      F-1-3

<PAGE>

                             ANNEX 1 TO EXHIBIT F-1

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

          [For Transferees Other Than Registered Investment Companies]

                  The undersigned hereby certifies as follows to [name of
Transferor] (the "Transferor") and Deutsche Bank National Trust Company as
Trustee, with respect to the mortgage pass-through certificates (the
"Certificates") described in the Transferee Certificate to which this
certification relates and to which this certification is an Annex:

                  1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
entity purchasing the Certificates (the "Transferee").

                  2. In connection with purchases by the Transferee, the
Transferee is a "qualified institutional buyer" as that term is defined in Rule
144A under the Securities Act of 1933 ("Rule 144A") because (i) the Transferee
owned and/or invested on a discretionary basis $______________________ in
securities (except for the excluded securities referred to below) as of the end
of the Transferee's most recent fiscal year (such amount being calculated in
accordance with Rule 144A) and (ii) the Transferee satisfies the criteria in the
category marked below.

         ___      CORPORATION, ETC. The Transferee is a corporation (other than
                  a bank, savings and loan association or similar institution),
                  Massachusetts or similar business trust, partnership, or any
                  organization described in Section 501(c)(3) of the Internal
                  Revenue Code of 1986.

         ___      BANK. The Transferee (a) is a national bank or banking
                  institution organized under the laws of any State, territory
                  or the District of Columbia, the business of which is
                  substantially confined to banking and is supervised by the
                  State or territorial banking commission or similar official or
                  is a foreign bank or equivalent institution, and (b) has an
                  audited net worth of at least $25,000,000 as demonstrated in
                  its latest annual financial statements, a copy of which is
                  attached hereto.

         ___      SAVINGS AND LOAN. The Transferee (a) is a savings and loan
                  association, building and loan association, cooperative bank,
                  homestead association or similar institution, which is
                  supervised and examined by a State or Federal authority having
                  supervision over any such institutions or is a foreign savings
                  and loan association or equivalent institution and (b) has an
                  audited net worth of at least 1Transferee must own and/or
                  invest on a discretionary basis at least $100,000,000 in
                  securities unless Transferee is a dealer, and, in that case,
                  Transferee must own and/or invest on a discretionary basis at
                  least $10,000,000 in securities. $25,000,000 as demonstrated
                  in its latest annual financial statements, a copy of which is
                  attached hereto.

         ___      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.

                                   Annex -1-1

<PAGE>

                  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 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:

                                   Annex -1-2

<PAGE>

                             ANNEX 2 TO EXHIBIT F-1

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

           [For Transferees That Are Registered Investment Companies]

                  The undersigned hereby certifies as follows to [name of
Transferor] (the "Transferor") and Deutsche Bank National Trust Company, as
Trustee, with respect to the mortgage pass-through certificates (the
"Certificates") described in the Transferee Certificate to which this
certification relates and to which this certification is an Annex:

                  1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the entity purchasing the
Certificates (the "Transferee") or, if the Transferee is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933 ("Rule 144A") because the Transferee is part of a Family of
Investment Companies (as defined below), is such an officer of the investment
adviser (the "Adviser").

                  2. In connection with purchases by the Transferee, the
Transferee is a "qualified institutional buyer" as defined in Rule 144A because
(i) the Transferee is an investment company registered under the Investment
Company Act of 1940, and (ii) as marked below, the Transferee alone, or the
Transferee's Family of Investment Companies, owned at least $100,000,000 in
securities (other than the excluded securities referred to below) as of the end
of the Transferee's most recent fiscal year. For purposes of determining the
amount of securities owned by the Transferee or the Transferee's Family of
Investment Companies, the cost of such securities was used.

         ____ The Transferee owned $___________________ in securities (other
than the excluded securities referred to below) as of the end of the
Transferee's most recent fiscal year (such amount being calculated in accordance
with Rule 144A).

         ____ The Transferee is part of a Family of Investment Companies which
owned in the aggregate $______________ in securities (other than the excluded
securities referred to below) as of the end of the Transferee's most recent
fiscal year (such amount being calculated in accordance with Rule 144A).

                  3. The term "Family of Investment Companies" as used herein
means two or more registered investment companies (or series thereof) that have
the same investment adviser or investment advisers that are affiliated (by
virtue of being majority owned subsidiaries of the same parent or because one
investment adviser is a majority owned subsidiary of the other).

                  4. The term "Securities" as used herein does not include (i)
securities of issuers that are affiliated with the Transferee or are part of the
Transferee's Family of Investment Companies, (ii) securities issued or
guaranteed by the U.S. or any instrumentality thereof, (iii) bank deposit notes
and certificates of deposit, (iv) loan participations, (v) repurchase
agreements, (vi) securities owned but subject to a repurchase agreement and
(vii) currency, interest rate and commodity swaps.

                  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.

                                   Annex -2-1

<PAGE>

Dated:

                            Print Name of Transferee or Advisor

                            By: ____________________________
                            Name:
                            Title:

                            IF AN ADVISER:

                            _______________________________________
                            Print Name of Transferee

                                   Annex -2-2

<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          ______________________

                                   Annex -2-3

<PAGE>

                                   EXHIBIT F-2

                    FORM OF TRANSFER AFFIDAVIT AND AGREEMENT

STATE OF NEW YORK                    )
                                     : ss.:
COUNTY OF NEW YORK                   )

                  ____________________________, being duly sworn, deposes,
represents and warrants as follows:

                  1. I am a ______________________ of
____________________________ (the "Owner") a corporation duly organized and
existing under the laws of ______________, the record owner of Ameriquest
Mortgage Securities Inc., Asset-Backed Pass-Through Certificates, Series
2003-10, Class R (the "Class R Certificates"), on behalf of whom I make this
affidavit and agreement. Capitalized terms used but not defined herein have the
respective meanings assigned thereto in the Pooling and Servicing Agreement
pursuant to which the Class R Certificates were issued.

                  2. The Owner (i) is and will be a "Permitted Transferee" as of
____________________, 2003 and (ii) is acquiring the Class R Certificates for
its own account or for the account of another Owner from which it has received
an affidavit in substantially the same form as this affidavit. A "Permitted
Transferee" is any person other than a "disqualified organization" or a
possession of the United States. For this purpose, a "disqualified organization"
means the United States, any state or political subdivision thereof, any agency
or instrumentality of any of the foregoing (other than an instrumentality all of
the activities of which are subject to tax and, except for the Federal Home Loan
Mortgage Corporation, a majority of whose board of directors is not selected by
any such governmental entity) or any foreign government, international
organization or any agency or instrumentality of such foreign government or
organization, any rural electric or telephone cooperative, or any organization
(other than certain farmers' cooperatives) that is generally exempt from federal
income tax unless such organization is subject to the tax on unrelated business
taxable income.

                  3. The Owner is aware (i) of the tax that would be imposed on
transfers of the Class R Certificates to disqualified organizations under the
Internal Revenue Code of 1986 that applies to all transfers of the Class R
Certificates after March 31, 1988; (ii) that such tax would be on the transferor
or, if such transfer is through an agent (which person includes a broker,
nominee or middleman) for a non-Permitted Transferee, on the agent; (iii) that
the person otherwise liable for the tax shall be relieved of liability for the
tax if the transferee furnishes to such person an affidavit that the transferee
is a Permitted Transferee and, at the time of transfer, such person does not
have actual knowledge that the affidavit is false; and (iv) that each of the
Class R Certificates may be a "noneconomic residual interest" within the meaning
of proposed Treasury regulations promulgated under the Code and that the
transferor of a "noneconomic residual interest" will remain liable for any taxes
due with respect to the income on such residual interest, unless no significant
purpose of the transfer is to impede the assessment or collection of tax.

                  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 Certificate Registrar will not
register the transfer of any Class R Certificate unless the transferee, or the
transferee's agent, delivers to the Certificate Registrar, among other things,
an affidavit in substantially the same form as this affidavit. The Owner
expressly agrees that it will not consummate any such transfer if it knows or
believes that any of the representations contained in such affidavit and
agreement are false.

                  6. The Owner consents to any additional restrictions or
arrangements that shall be deemed necessary upon advice of counsel to constitute
a reasonable arrangement to ensure that the Class R Certificates will only be
owned, directly or indirectly, by an Owner that is a Permitted Transferee.

                  7. The Owner's taxpayer identification number is ____________.

                  8. The Owner has reviewed the restrictions set forth on the
face of the Class R Certificates and the provisions of Section 5.02(d) of the
Pooling and Servicing Agreement under which the Class R Certificates were

                                      F-2-1

<PAGE>

issued (in particular, clauses (iii)(A) and (iii)(B) of Section 5.02(d) which
authorize the Trustee to deliver payments to a person other than the Owner and
negotiate a mandatory sale by the Trustee in the event that the Owner holds such
Certificate in violation of Section 5.02(d)); and that the Owner expressly
agrees to be bound by and to comply with such restrictions and provisions.

                  9. The Owner is not acquiring and will not transfer the Class
R Certificates in order to impede the assessment or collection of any tax.

                  10. The Owner anticipates that it will, so long as it holds
the Class R Certificates, have sufficient assets to pay any taxes owed by the
holder of such Class R Certificates, and hereby represents to and for the
benefit of the person from whom it acquired the Class R Certificates that the
Owner intends to pay taxes associated with holding such Class R Certificates as
they become due, fully understanding that it may incur tax liabilities in excess
of any cash flows generated by the Class R Certificates.

                  11. The Owner has no present knowledge that it may become
insolvent or subject to a bankruptcy proceeding for so long as it holds the
Class R Certificates.

                  12. The Owner has no present knowledge or expectation that it
will be unable to pay any United States taxes owed by it so long as any of the
Certificates remain outstanding.

                  13. The Owner is not acquiring the Class R Certificates with
the intent to transfer the Class R Certificates to any person or entity that
will not have sufficient assets to pay any taxes owed by the holder of such
Class R Certificates, or that may become insolvent or subject to a bankruptcy
proceeding, for so long as the Class R Certificates remain outstanding.

                  14. The Owner will, in connection with any transfer that it
makes of the Class R Certificates, obtain from its transferee the
representations required by Section 5.02(d) of the Pooling and Servicing
Agreement under which the Class R Certificate were issued and will not
consummate any such transfer if it knows, or knows facts that should lead it to
believe, that any such representations are false.

                  15. The Owner will, in connection with any transfer that it
makes of the Class R Certificates, deliver to the Certificate Registrar an
affidavit, which represents and warrants that it is not transferring the Class R
Certificates to impede the assessment or collection of any tax and that it has
no actual knowledge that the proposed transferee: (i) has insufficient assets to
pay any taxes owed by such transferee as holder of the Class R Certificates;
(ii) may become insolvent or subject to a bankruptcy proceeding for so long as
the Class R Certificates remains outstanding; and (iii) is not a "Permitted
Transferee".

                  16. The Owner is a citizen or resident of the United States, a
corporation or partnership (or other entity treated as a corporation or
partnership for federal income tax purposes) created or organized in, or under
the laws of, the United States, any state thereof or the District of Columbia
(except, in the case of a partnership or entity treated as a partnership, to the
extent provided in regulations), an estate the income of which is subject to
United States federal income taxation regardless of its source or a trust other
than a "foreign trust" described in section 7701(a)(31) of the Code.

                                      F-2-2

<PAGE>

                  IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
__________, 200__.

                                          [OWNER]

                                          By:______________________________
                                          Name:
                                          Title:   [Vice] President

ATTEST:

By:      ______________________________
Name:
Title:   [Assistant] Secretary

                  Personally appeared before me the above-named , known or
proved to me to be the same person who executed the foregoing instrument and to
be a [Vice] President of the Owner, and acknowledged to me that [he/she]
executed the same as [his/her] free act and deed and the free act and deed of
the Owner.

                  Subscribed and sworn before me this ____ day of _____, 200__.

                                   _______________________
                                        Notary Public

                                   County of ____________________
                                   State of _____________________

                                   My Commission expires:

                                      F-2-3

<PAGE>

FORM OF TRANSFEROR AFFIDAVIT

STATE OF NEW YORK                    )
                                     : ss. :
COUNTY OF NEW YORK                   )

                  _______________________________________, being duly sworn,
deposes, represents and warrants _____________________________ as follows:

                  1. I am a ____________________ of (the "Owner"), a corporation
duly organized and existing under the laws of ______________, on behalf of whom
I make this affidavit.

                  2. The Owner is not transferring the Class R (the "Residual
Certificates") to impede the assessment or collection of any tax.

                  3. The Owner has no actual knowledge that the Person that is
the proposed transferee (the "Purchaser") of the Residual Certificates: (i) has
insufficient assets to pay any taxes owed by such proposed transferee as holder
of the Residual Certificates; (ii) may become insolvent or subject to a
bankruptcy proceeding for so long as the Residual Certificates remain
outstanding and (iii) is not a Permitted Transferee.

                  4. The Owner understands that the Purchaser has delivered to
the Certificate Registrar a transfer affidavit and agreement in the form
attached to the Pooling and Servicing Agreement as Exhibit F-2. The Owner does
not know or believe that any representation contained therein is false.

                  5. At the time of transfer, the Owner has conducted a
reasonable investigation of the financial condition of the Purchaser as
contemplated by Treasury Regulations Section 1.860E-1(c)(4)(i) and, as a result
of that investigation, the Owner has determined that the Purchaser has
historically paid its debts as they became due and has found no significant
evidence to indicate that the Purchaser will not continue to pay its debts as
they become due in the future. The Owner understands that the transfer of a
Residual Certificate may not be respected for United States income tax purposes
(and the Owner may continue to be liable for United States income taxes
associated therewith) unless the Owner has conducted such an investigation.

                  6. Capitalized terms not otherwise defined herein shall have
the meanings ascribed to them in the Pooling and Servicing Agreement.

                                      F-2-4

<PAGE>

                  IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
___________, 200__.

                                         [OWNER]

                                         By:      ______________________________
                                         Name:
                                         Title:   [Vice] President

ATTEST:

By:      ______________________________
Name:
Title:   [Assistant] Secretary

                  Personally appeared before me the above-named , known or
proved to me to be the same person who executed the foregoing instrument and to
be a [Vice] President of the Owner, and acknowledged to me that [he/she]
executed the same as [his/her] free act and deed and the free act and deed of
the Owner.

                  Subscribed and sworn before me this ____ day of ____, 200__.

                                         ______________________________
                                                           Notary Public

                                         County of  _____________________
                                         State of _______________________

                                         My Commission expires:

                                      F-2-5

<PAGE>

                                    EXHIBIT G

            FORM OF CERTIFICATION WITH RESPECT TO ERISA AND THE CODE

                                           _____________, 200__

Ameriquest Mortgage Securities Inc.     Deutsche Bank National Trust Company
1100 Town & Country Road                1761 East St. Andrew Place
Orange, California 92868                Santa Ana, California 92705-4934
Ameriquest Mortgage Company
1100 Town & Country Road
Orange, California 92868

          Re:  Ameriquest Mortgage Securities Inc., Asset-Backed Pass- Through
               Certificates, Series 2003-10, Class CE,P,R

Dear Ladies and Gentlemen:

         __________________________________ (the "Transferee") intends to
acquire from _____________________ (the "Transferor") $____________ Initial
Certificate Principal Balance of Ameriquest Mortgage Securities Inc., Asset-
Backed Pass-Through Certificates, Series 2003-10, Class ___ (the
"Certificates"), issued pursuant to a Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement") dated as of October 1, 2003 among Ameriquest
Mortgage Securities Inc. as depositor (the "Depositor"), Ameriquest Mortgage
Company as master servicer (the "Master Servicer") and Deutsche Bank National
Trust Company as trustee (the "Trustee"). Capitalized terms used herein and not
otherwise defined shall have the meanings assigned thereto in the Pooling and
Servicing Agreement. The Transferee hereby certifies, represents and warrants
to, and covenants with the Depositor, the Trustee and the Master Servicer that
the following statements in either (1) or (2) are accurate:

                  The Certificates (i) are not being acquired by, and will not
be transferred to, any employee benefit plan within the meaning of section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or
other retirement arrangement, including individual retirement accounts and
annuities, Keogh plans and bank collective investment funds and insurance
company general or separate accounts in which such plans, accounts or
arrangements are invested, that is subject to Section 406 of ERISA or Section
4975 of the Internal Revenue Code of 1986 (the "Code") (any of the foregoing, a
"Plan"), (ii) are not being acquired with "plan assets" of a Plan within the
meaning of the Department of Labor ("DOL") regulation, 29 C.F.R. ss. 2510.3-101,
and (iii) will not be transferred to any entity that is deemed to be investing
in plan assets within the meaning of the DOL regulation at 29
C.F.R.ss.2510.3-101.

                                     Very truly yours,

                                     By: ______________________________
                                     Name:
                                     Title:

                                       G-1

<PAGE>

                                    EXHIBIT H

                              FORM OF CAP CONTRACTS

                             Available Upon Request

                                       H-1

<PAGE>

                                    EXHIBIT I

                           LOSS MITIGATION ACTION PLAN
<TABLE>
<CAPTION>

<S>                                                    <C>
DEFAULT MITIGATION ACTION                              SUPPORTING STANDARDS
Forbearance Workout                                    Borrower  documents a temporary financial hardship
Defer any of the following:                            resulting in request for a forbearance
1.accrued interest                                     Borrower documents financial ability to pay under the
2.past due principal                                   proposed forbearance terms
3.escrow advances                                      Borrower expresses a willingness to perform.
4.corporate advances                                   Current monthly payments  are scheduled to  be made prior
5.ancillary fees                                       to late charge date during the forbearance term
6.any combination of the above
Loan Modification Workout                              Borrower documents a  non-temporary financial hardship
Any of the following:                                  resulting in the request for  a loan modification
1.waive accrued interest                               Borrower documents financial ability to pay under the
2.waive past due principal                             proposed loan modification terms
3.waive corporate advances                             Borrower does not have the ability to pay under the original
4.waive ancillary fees                                 loan terms
5.reduce principal                                     Borrower expresses a willingness to perform
6.reduce interest rate                                 No waiver of escrow advances (taxes and insurance) is
7.any combination of the above items                   allowed
8.any combination with the Forbearance items
Short Sale Disposal                                    Sale to a third party
Waive or negotiate a reduced amount of any of the      Independent appraisal supports sale price
following:                                             No cash to seller (borrower), excluding costs necessary to
1.accrued interest                                     close
2.principal                                            Borrower does not have the ability and/or willingness to
3.escrow advances                                      pay
4.corporate advances                                   Borrower no longer wants property
5.ancillary fees
6.prepayment charges
7.any combination of the above items
Short pay-off Disposal                                 Refinance by independent third party Lender
Waive or negotiate a reduced amount of any of the      Independent appraisal supports new loan amount
following:                                             New loan is no cash out (i.e. no cash to borrower excluding
1.accrued interest                                     costs necessary to close)
2.principal                                            Borrower  has expressed his/her unwillingness to pay
3.escrow advances                                      Anticipated refinance time frame is less than anticipated
4.corporate advances                                   foreclosure time frame
5.ancillary fees
6.prepayment charges
7.any combination of the above items

                                       I-1

<PAGE>

DEFAULT MITIGATION ACTION                              SUPPORTING STANDARDS
Deed-in-lieu Disposal                                  Borrower has already  or will abandon the property or is
                                                       willing to vacate the property (in a broom sweep condition)
                                                       on a mutually agreeable date
                                                       Borrower does not have the ability and/or willingness to
                                                       pay
                                                       Independent appraisal confirms property  has a value
                                                       Title is clean
                                                       Property appears to be resalable based on condition and
                                                       value shown in independent appraisal
                                                       Property does not appear to have any environmental or
                                                       hazardous conditions (or such conditions appear to be
                                                       curable)
Foreclosure Disposal                                   Borrower has already  or will abandon the property (which
                                                       may be by an eviction proceeding or mutual agreement)
                                                       Borrower does not have the ability and/or willingness to
                                                       pay
                                                       Independent appraisal confirms property has a value
                                                       Property appears to be resalable based on condition and
                                                       value shown in independent appraisal
                                                       Property does not appear to have any environmental or
                                                       hazardous conditions (or such conditions appear to be
                                                       curable)
</TABLE>

         Workouts in the form of either a Forbearance or Loan Modification
require that the Borrower document the existence of a financial hardship leading
to the payment delinquency and document the ability to make the payments
required under the proposed Forbearance or Loan Modification. If the Borrower
fails to meet both of these conditions or the Borrower is uncooperative, a
Disposal Loss Mitigation Action will be employed to liquidate the delinquent
loan, assuming the Borrower does not otherwise cure the existing default. Each
of the Default Mitigation Actions and Supporting Standards may not be applicable
to each and every loan subject to a default in its monthly payments and in those
cases where a Default Mitigation Action or Supporting Standard may be
applicable, each is subject to amendment and/or waiver on an individual basis
pursuant to applicable federal, state and local laws, decisional authorities,
court orders, instructions of regulatory and/or other governmental authorities,
the advice of legal counsel, instructions from the Trustee and changes in the
loan servicing standards.

                                       I-2

<PAGE>

                                   EXHIBIT J-1

        FORM CERTIFICATION TO BE PROVIDED BY THE DEPOSITOR WITH FORM 10-K

                  Re:      Ameriquest Mortgage Securities Inc., Series 2003-10
                           Asset-Backed Certificates, Series 2003-10

                  I, John Grazer, the senior officer of Ameriquest Mortgage
Securities Inc. (the "Registrant") in charge of securitizations, certify that:

                  l. I have reviewed this annual report on Form 10-K, and all
reports on Form 8-K containing distribution and servicing reports filed in
respect of periods included in the year covered by this annual report, of
Registrant;

                  2. Based on my knowledge, the information in these reports,
taken as a whole, does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of
the circumstances under which such statements were made, not misleading as of
the last day of the period covered by this annual report;

                  3. Based on my knowledge, the distribution information and the
servicing information required to be provided to the Trustee by the Master
Servicer under the Pooling and Servicing Agreement is included in these reports;

                  4. I am responsible for reviewing the activities performed by
the Master Servicer under the Pooling and Servicing Agreement and based upon the
review required under the Pooling and Servicing Agreement, and except as
disclosed in the report, the Master Servicer has fulfilled its obligations under
the Pooling and Servicing Agreement; and

                  5. I have disclosed to the Registrant's certified public
accountants all significant deficiencies relating to the Master Servicer'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 October
1, 2003 (the "Pooling and Servicing Agreement"), among the Registrant as
depositor, Ameriquest Mortgage Company as master servicer and Deutsche Bank
National Trust Company as trustee.

                                    AMERIQUEST MORTGAGE SECURITIES INC.

                                    By:_______________________________
                                    Name:
                                    Title:
                                    Date:

                                      J-1-1

<PAGE>

                                   EXHIBIT J-2

                            FORM CERTIFICATION TO BE
                      PROVIDED TO DEPOSITOR BY THE TRUSTEE

                  Re:      Ameriquest Mortgage Securities Inc., Series 2003-10
                           Asset-Backed Certificates, Series 2003-10

                  I, [identify the certifying individual], a [title] of Deutsche
Bank National Trust Company, as Trustee, hereby certify to Ameriquest Mortgage
Securities Inc. (the "Depositor"), and its officers, directors and affiliates,
and with the knowledge and intent that they will rely upon this certification,
that:

                  1. I have reviewed the annual report on Form 10-K for the
fiscal year [___], and all reports on Form 8-K containing distribution reports
filed in respect of periods included in the year covered by that annual report,
of the Depositor relating to the above-referenced trust;

                  2. Based on my knowledge, the information in these
distribution reports prepared by the Trustee, taken as a whole, does not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading as of the last day of the period
covered by that annual report; and

                  3. Based on my knowledge, the distribution information
required to be provided by the Trustee under the Pooling and Servicing Agreement
is included in these distribution reports.

                  Capitalized terms used but not defined herein have the
meanings ascribed to them in the Pooling and Servicing Agreement, dated October
1, 2003 (the "Pooling and Servicing Agreement"), among the Registrant as
depositor, Ameriquest Mortgage Company as master servicer and Deutsche Bank
National Trust Company as trustee.

                                     DEUTSCHE BANK NATIONAL TRUST COMPANY, as
                                     Trustee

                                     By:__________________________________
                                     Name:
                                     Title:
                                     Date:

                                      J-2-1

<PAGE>

                                   SCHEDULE 1

                             MORTGAGE LOAN SCHEDULE

                                 Filed By Paper

                                  Schedule-1-1

<PAGE>

                                   SCHEDULE 2

                           PREPAYMENT CHARGE SCHEDULE

                             Available Upon Request

                                  Schedule-2-1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00057-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00057-of-00352.parquet"}]]