Document:

Exhibit 4.1

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                          LONG BEACH SECURITIES CORP.,
                                    Depositor

                          LONG BEACH MORTGAGE COMPANY,
                                 Master Servicer

                                       and

                            FIRST UNION NATIONAL BANK
                                     Trustee

                    BANKERS TRUST COMPANY OF CALIFORNIA, N.A.
                               Trust Administrator

                         POOLING AND SERVICING AGREEMENT

                          Dated as of December 1, 2000

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

                      Long Beach Mortgage Loan Trust 2000-1

                    Asset-Backed Certificates, Series 2000-1

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<TABLE>
<CAPTION>

                                                 TABLE OF CONTENTS

                                                                                                               Page

                                                     ARTICLE I

                                                    DEFINITIONS

<S>      <C>                                                                                                    <C>
         Section 1.01.     Defined Terms..........................................................................3
         Section 1.02.     Accounting............................................................................43
         Section 1.03.     Allocation of Certain Interest Shortfalls.............................................43

                                                    ARTICLE II

                                           CONVEYANCE OF MORTGAGE LOANS;
                                         ORIGINAL ISSUANCE OF CERTIFICATES

         Section 2.01.     Conveyance of Mortgage Loans..........................................................45
         Section 2.02.     Acceptance of REMIC 1 by the Trustee..................................................47
         Section 2.03.     Repurchase or Substitution of Mortgage Loans by the Seller or
                           the Depositor; Payment of Prepayment Charges in the event of breach...................48
         Section 2.04.     Intentionally Omitted.................................................................52
         Section 2.05.     Representations, Warranties and Covenants of the Master Servicer......................52
         Section 2.06.     Representations and Warranties of the Depositor.......................................54
         Section 2.07.     Issuance of Certificates..............................................................55
         Section 2.08.     Conveyance of  REMIC Regular Interests and Acceptance of REMIC 1
                           by the Trustee; Issuance of Certificates..............................................56

                                                    ARTICLE III

                                           ADMINISTRATION AND SERVICING
                                               OF THE MORTGAGE LOANS

         Section 3.01.     Master Servicer to Act as Master Servicer.............................................57
         Section 3.02.     Sub-Servicing Agreements Between the Master Servicer and
                           Sub-Servicers.........................................................................58
         Section 3.03.     Successor Sub-Servicers...............................................................60
         Section 3.04.     Liability of the Master Servicer......................................................60
         Section 3.05.     No Contractual Relationship Between Sub-Servicers and
                           Trust Administrator, the  Trustee or Certificateholders...............................60
         Section 3.06.     Assumption or Termination of Sub-Servicing Agreements by Trust
                           Administrator.........................................................................60
         Section 3.07.     Collection of Certain Mortgage Loan Payments..........................................61
         Section 3.08.     Sub-Servicing Accounts................................................................62
         Section 3.09.     Collection of Taxes, Assessments and Similar Items; Servicing
                           Accounts..............................................................................62

                                                         i

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         Section 3.10.     Collection Account and Distribution Account...........................................63
         Section 3.11.     Withdrawals from the Collection Account and Distribution Account......................65
         Section 3.12.     Investment of Funds in the Collection Account and the Distribution
                           Account...............................................................................67
         Section 3.13.     [Reserved]............................................................................68
         Section 3.14.     Maintenance of Hazard Insurance and Errors and Omissions and
                           Fidelity Coverage.....................................................................69
         Section 3.15.     Enforcement of Due-On-Sale Clauses; Assumption Agreements.............................70
         Section 3.16.     Realization Upon Defaulted Mortgage Loans.............................................71
         Section 3.17.     Trustee and Trust Administrator to Cooperate; Release of
                           Mortgage Files........................................................................73
         Section 3.18.     Servicing Compensation................................................................74
         Section 3.19.     Reports to the Trust Administrator and the Trustee; Collection Account
                           Statements............................................................................75
         Section 3.20.     Statement as to Compliance............................................................75
         Section 3.21.     Independent Public Accountants' Servicing Report......................................76
         Section 3.22.     Access to Certain Documentation.......................................................76
         Section 3.23.     Title, Management and Disposition of REO Property.....................................77
         Section 3.24.     Obligations of the Master Servicer in Respect of Prepayment Interest
                           Shortfalls............................................................................80
         Section 3.25.     Obligations of the Master Servicer in Respect of Mortgage Rates
                           and Monthly Payments..................................................................80
         Section 3.26.     Reserve Fund..........................................................................80
         Section 3.27.     Advance Facility......................................................................82
         Section 3.28.     PMI Policy; Claims Under the PMI Policy...............................................82

                                                    ARTICLE IV

                                                   FLOW OF FUNDS

         Section 4.01.     Distributions.........................................................................84
         Section 4.02.     Reserved..............................................................................90
         Section 4.03.     Statements............................................................................90
         Section 4.04.     Remittance Reports; Advances..........................................................93
         Section 4.05.     Distributions on the REMIC Regular Interests..........................................95
         Section 4.06.     Allocation of Realized Losses.........................................................96
         Section 4.07.     Compliance with Withholding Requirements..............................................97
         Section 4.08.     Commission Reporting..................................................................98

                                                     ARTICLE V

                                                 THE CERTIFICATES

         Section 5.01.     The Certificates......................................................................99
         Section 5.02.     Registration of Transfer and Exchange of Certificates................................101
         Section 5.03.     Mutilated, Destroyed, Lost or Stolen Certificates....................................104

                                                        ii

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         Section 5.04.     Persons Deemed Owners................................................................105

                                                    ARTICLE VI

                                       THE MASTER SERVICER AND THE DEPOSITOR

         Section 6.01.     Liability of the Master Servicer and the Depositor...................................106
         Section 6.02.     Merger or Consolidation of the Depositor or the Master Servicer......................106
         Section 6.03.     Limitation on Liability of the Depositor, the Master Servicer and
                           Others...............................................................................106
         Section 6.04.     Limitation on Resignation of Master Servicer.........................................107
         Section 6.05.     Rights of the Depositor in Respect of the Master Servicer............................108

                                                    ARTICLE VII

                                                      DEFAULT

         Section 7.01.     Master Servicer Events of Default....................................................109
         Section 7.02.     Trust Administrator or Trustee to Act; Appointment of Successor......................111
         Section 7.03.     Notification to Certificateholders...................................................113
         Section 7.04.     Waiver of Master Servicer Events of Default..........................................113

                                                   ARTICLE VIII

                                      THE TRUSTEE AND THE TRUST ADMINISTRATOR

         Section 8.01.     Duties of Trustee and Trust Administrator............................................115
         Section 8.02.     Certain Matters Affecting the Trustee and the Trust Administrator....................116
         Section 8.03.     Neither Trustee nor Trust Administrator Liable for Certificates or
                           Mortgage Loans.......................................................................117
         Section 8.04.     Trustee and Trust Administrator May Own Certificates.................................118
         Section 8.05.     Trustee's and Trust Administrator's Fees and Expenses................................118
         Section 8.06.     Eligibility Requirements for Trustee and Trust Administrator.........................119
         Section 8.07.     Resignation or Removal of Trustee and the Trust Administrator........................119
         Section 8.08.     Successor Trustee....................................................................120
         Section 8.09.     Merger or Consolidation of Trustee or Trust Administrator............................121
         Section 8.10.     Appointment of Co-Trustee or Separate Trustee........................................121
         Section 8.11.     Appointment of Custodians............................................................122
         Section 8.12.     Appointment of Office or Agency......................................................123
         Section 8.13.     Representations and Warranties of the Trustee........................................123

                                                    ARTICLE IX

                                                    TERMINATION

         Section 9.01.     Termination Upon Repurchase or Liquidation of All Mortgage Loans.....................124

                                                        iii

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         Section 9.02.     Additional Termination Requirements..................................................126

                                                     ARTICLE X

                                                 REMIC PROVISIONS

         Section 10.01.    REMIC Administration.................................................................127
         Section 10.02.    Prohibited Transactions and Activities...............................................130
         Section 10.03.    Master Servicer, Trust Administrator and Trustee Indemnification.....................130

                                                    ARTICLE XI

                                             MISCELLANEOUS PROVISIONS

         Section 11.01.    Amendment............................................................................132
         Section 11.02.    Recordation of Agreement; Counterparts...............................................133
         Section 11.03.    Limitation on Rights of Certificateholders...........................................133
         Section 11.04.    Governing Law; Jurisdiction..........................................................134
         Section 11.05.    Notices..............................................................................134
         Section 11.06.    Severability of Provisions...........................................................135
         Section 11.07.    Notice to the Rating Agencies........................................................135
         Section 11.08.    Article and Section References.......................................................136
         Section 11.09.    Third Party Rights...................................................................136
         Section 11.10.    Grant of Security Interest...........................................................136

</TABLE>

                                       iv

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EXHIBITS:

Exhibit A-1       Form of Class AF-1 Certificates
Exhibit A-2       Form of Class AF-2 Certificates
Exhibit A-3       Form of Class AF-3 Certificates
Exhibit A-4       Form of Class AF-4 Certificates
Exhibit A-5       Form of Class AV-1 Certificates
Exhibit A-6       Form of Class M-1 Certificates
Exhibit A-7       Form of Class M-2 Certificates
Exhibit A-8       Form of Class M-3 Certificates
Exhibit A-9       Form of Class C Certificates
Exhibit A-10      Form of Class P Certificates
Exhibit A-11      Form of Class R Certificates
Exhibit B         [Reserved]
Exhibit C         Form of Mortgage Loan Purchase Agreement
Exhibit D         Mortgage Loan Schedule
Exhibit E-1       Request for Release
Exhibit E-2       Request for Release for Mortgage Loans paid in full
Exhibit F-1       Form of Trust Administrator's Initial Certification
Exhibit F-2       Form of Trust Administrator's Final Certification
Exhibit G         [Reserved]
Exhibit H         Form of Lost Note Affidavit
Exhibit I         Form of ERISA Representation
Exhibit J         Form of Investment Letter
Exhibit K         Form of Class R Certificate Transfer Affidavit
Exhibit L         Form of Transferor Certificate

Schedule I        Prepayment Charge Schedule
Schedule II       PMI Mortgage Loans

                                        v

<PAGE>

         This Pooling and Servicing Agreement is dated as of December 1, 2000
(the "Agreement"), among LONG BEACH SECURITIES CORP., as depositor (the
"Depositor"), LONG BEACH MORTGAGE COMPANY, as master servicer (the "Master
Servicer"), FIRST UNION NATIONAL BANK, as trustee (the "Trustee") and BANKERS
TRUST COMPANY OF CALIFORNIA, N.A., as trust administrator (the "Trust
Administrator").

                             PRELIMINARY STATEMENT:

         The Depositor intends to sell pass-through certificates (collectively,
the "Certificates"), to be issued hereunder in multiple classes, which in the
aggregate will evidence the entire beneficial ownership interest in the Trust
Fund created hereunder. The Certificates will consist of eleven classes of
certificates, designated as (i) the Class AF-1 Certificates, (ii) the Class AF-2
Certificates, (iii) the Class AF-3 Certificates, (iv) the Class AF-4
Certificates, (v) the Class AV-1 Certificates, (vi) the Class M-1 Certificates,
(vii) the Class M-2 Certificates, (viii) the Class M-3 Certificates, (ix) the
Class P Certificates, (x) the Class C Certificates and (xi) the Class R
Certificates.

                                     REMIC 1

         As provided herein, the Trust Administrator will make an election to
treat the segregated pool of assets consisting of the Group I Mortgage Loans,
the Group II Mortgage Loans and certain other related assets subject to this
Agreement (exclusive of the Reserve Fund) as a real estate mortgage investment
conduit (a "REMIC") for federal income tax purposes, and such segregated pool of
assets will be designated as "REMIC 1." The Class R-1 Interest will represent
the sole class of "residual interests" in REMIC 1 for purposes of the REMIC
Provisions (as defined herein) under federal income tax law. The following table
irrevocably sets forth the designation, the Uncertificated REMIC 1 Pass-Through
Rate, the initial Uncertificated Principal Balance, and solely for purposes of
satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the "latest possible
maturity date" for each of the REMIC 1 Regular Interests. None of the REMIC 1
Regular Interests will be certificated.

<TABLE>
<CAPTION>

                         Uncertificated REMIC 1         Initial Uncertificated                 Assumed Final
    Designation             Pass-Through Rate              Principal Balance                 Maturity Date(1)
    -----------     -------------------------------- -----------------------------           ----------------
<S>   <C>                    <C>                         <C>                                 <C>
       LT1A                   Variable(2)                     $980,000,484.82                January 25, 2031
       LT1B                   Variable(2)                         $168,100.00                January 25, 2031
       LT1C                   Variable(2)                         $183,880.00                January 25, 2031
       LT1D                   Variable(2)                         $224,720.00                January 25, 2031
       LT1E                   Variable(2)                          $73,000.00                January 25, 2031
       LT1F                   Variable(2)                       $8,250,300.00                January 25, 2031
       LT1G                   Variable(2)                         $375,000.00                January 25, 2031
       LT1H                   Variable(2)                         $350,000.00                January 25, 2031
       LT1I                   Variable(2)                         $175,000.00                January 25, 2031
       LT1J                   Variable(2)                      $10,200,009.89                January 25, 2031
       LT1P                   Variable(2)                             $100.00                January 25, 2031
</TABLE>
-------------------

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

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

<PAGE>

                                     REMIC 2

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

         The following table sets forth (or describes) the Class designation,
Pass-Through Rate and Original Class Certificate Principal Balance for each
Class of Certificates that represents one or more of the "regular interests" in
REMIC 2 created hereunder:

<TABLE>
<CAPTION>

                                      Original Class
                                  Certificate Principal              Pass-Through                 Assumed Final
      Class Designation                  Balance                         Rate                    Maturity Date(1)
      -----------------                  -------                         ----                    ----------------
<S>                                      <C>                        <C>                          <C>
Class AF-1...................              $16,810,000.00               7.224%                   January 25, 2031
Class AF-2...................              $18,388,000.00               6.907%                   January 25, 2031
Class AF-3...................              $22,472,000.00               7.434%                   January 25, 2031
Class AF-4...................               $7,300,000.00               7.216%                   January 25, 2031
Class AV-1...................             $825,030,000.00             Variable(2)                January 25, 2031
Class M-1....................              $37,500,000.00             Variable(2)                January 25, 2031
Class M-2....................              $35,000,000.00             Variable(2)                January 25, 2031
Class M-3....................              $17,500,000.00             Variable(2)                January 25, 2031
Class C......................              $20,000,494.71(3)          Variable(2)                January 25, 2031
Class P......................                     $100.00               N/A(4)                   January 25, 2031
</TABLE>

(1)  Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
     regulations, the Distribution Date 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 that
     represents one or more of the "regular interests" in REMIC 2.
(2)  Calculated in accordance with the definition of "Pass-Through Rate" herein.
(3)  The Class C Certificates will accrue interest at their variable
     Pass-Through Rate on the Notional Amount of the Class C Certificates
     outstanding from time to time which shall equal the aggregate of the
     Uncertificated Principal Balances of the REMIC 1 Regular Interests. The
     Class C Certificates will not accrue interest on their Class Certificate
     Principal Balance.
(4)  The Class P Certificates will not accrue interest.

                                        2

<PAGE>

                                    ARTICLE I

                                   DEFINITIONS

         Section 1.01.     Defined Terms.

         Whenever used in this Agreement or in the Preliminary Statement, the
following words and phrases, unless the context otherwise requires, shall have
the meanings specified in this Article. Unless otherwise specified, all
calculations in respect of interest on the Class AV-1 Certificates and the
Mezzanine Certificates shall be made on the basis of the actual number of days
elapsed on the basis of a 360-day year and all other calculations of interest
described herein shall be made on the basis of a 360-day year consisting of
twelve 30-day months. The Class P Certificates and the Class R Certificates are
not entitled to distributions in respect of interest and, accordingly, will not
accrue interest.

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

         "Account":  Either of the Collection Account and Distribution Account.

         "Accrual Period": With respect to the Class AF-1 Certificates, the
Class AF-2 Certificates, the Class AF-3 Certificates, the Class AF-4
Certificates and the Class C Certificates and each Distribution Date, the
calendar month prior to the month of such Distribution Date. With respect to the
Class AV-1 Certificates and the Mezzanine Certificates and each Distribution
Date, the period commencing on the preceding Distribution Date (or in the case
of the first such Accrual Period, commencing on the Closing Date) and ending on
the day preceding the current Distribution Date.

         "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 for such Mortgage Loan
(or the Mortgage Rate in the case of any Group I Mortgage Loan) as of the first
day of the month preceding the month in which the related Distribution Date
occurs minus the sum of (i) the Servicing Fee Rate and (ii) the PMI Insurer Fee
Rate, if applicable.

         "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 for such Mortgage Loan as of the
first day of the month preceding the month in which the related Distribution
Date occurs minus the sum of (i) the Servicing Fee Rate and (ii) the PMI Insurer
Fee Rate, if applicable.

         "Adjustment Date": With respect to each Group II Mortgage Loan, each
adjustment date, on 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 Group II Mortgage Loan is set forth in the Mortgage Loan
Schedule.

         "Advance": As to any Mortgage Loan or REO Property, any advance made by
the Master Servicer in respect of any Distribution Date pursuant to Section
4.04.

                                        3

<PAGE>

         "Advancing Person":  As defined in Section 3.27 hereof.

         "Adverse REMIC Event": As defined in Section 10.01(f) hereof.

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

         "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 any Distribution Date and (ii) the
amount of any Allocated Realized Loss Amount for such Class of Certificates
remaining unpaid from the previous Distribution Date.

         "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 required pursuant to
Section 2.01 hereof or returned by the applicable recorder's office), which is
sufficient under the laws of the jurisdiction wherein the related Mortgaged
Property is located to reflect or record the sale of the Mortgage.

         "Balloon Mortgage Loan": A Mortgage Loan that provides for a Balloon
Payment.

         "Balloon Payment": With respect to any Balloon Mortgage Loan, the
payment of the unamortized principal balance of a Mortgage Loan in a single
payment at the maturity of such Mortgage Loan.

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

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

         "Basic Principal Distribution Amount": With respect to any Distribution
Date, the excess of (i) the Principal Remittance Amount for both Loan Groups for
such Distribution Date over (ii) the Overcollateralization Release Amount, if
any, for such Distribution Date.

         "Book-Entry Certificates": Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the ownership of which
is reflected on the books of the Depository or on the books of a Person
maintaining an account with the Depository (directly, as a "Depository
Participant", or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 5.02 hereof). On the Closing
Date, the Class A Certificates and the Mezzanine Certificates shall be
Book-Entry Certificates.

                                        4

<PAGE>

         "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 institutions in the State of Delaware, the State of New
York, the State of Maryland, the State of California, the State of Minnesota,
the Commonwealth of Pennsylvania or in the city in which the Corporate Trust
Office of the Trust Administrator or the Corporate Trust Office of the Trustee
is located, are authorized or obligated by law or executive order to be closed.

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

         "Certificate Group": Either the Group I Certificates or the Group II
Certificates.

         "Certificate Group I":  The Group I Certificates.

         "Certificate Group II":  The Group II Certificates.

         "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, the Trust Administrator 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, the Trust
Administrator and the NIMs Insurer shall be required to recognize as a "Holder"
or "Certificateholder" only the Person in whose name a Certificate is registered
in the Certificate Register.

         "Certificate Margin": With respect to the Class AV-1 Certificates on
each Distribution Date (A) on or prior to the Optional Termination Date, 0.260%
per annum and (B) after the Optional Termination Date, 0.520% per annum. With
respect to the Class M-1 Certificates on each Distribution Date (A) on or prior
to the Optional Termination Date, 0.660% per annum and (B) after the Optional
Termination Date, 0.990% per annum. With respect to the Class M-2 Certificates
on each Distribution Date (A) on or prior to the Optional Termination Date,
1.100% per annum and (B) after the Optional Termination Date, 1.650% per annum.
With respect to the Class M-3 Certificates on each Distribution Date (A) on or
prior to the Optional Termination Date, 1.950% per annum and (B) after the
Optional Termination Date, 2.925% per annum.

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

                                        5

<PAGE>

         "Certificate Principal Balance": With respect to any Class of Regular
Certificates (other than the Class C Certificates) immediately prior to any
Distribution Date, will be equal to the Initial Certificate Principal Balance
thereof reduced by the sum of all amounts actually distributed in respect of
principal of such Class and, in the case of a Mezzanine Certificate, Realized
Losses allocated thereto on all prior Distribution Dates. With respect to the
Class C Certificates as of any date of determination, an amount equal to the
excess, if any, of (A) the then aggregate Uncertificated Principal Balances of
the REMIC 1 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": The register maintained and registrar appointed
pursuant to Section 5.02 hereof.

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

         "Class A Certificate": Any one of the Class AF-1 Certificates, the
Class AF-2 Certificates, the Class AF-3 Certificates, the Class AF-4
Certificates or the Class AV-1 Certificates.

         "Class AF-1 Certificate": Any one of the Class AF-1 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-1, executed, authenticated and delivered by the Trust Administrator on
behalf of the Trustee, representing the right to distributions as set forth
herein and therein and evidencing a Regular Interest in REMIC 2.

         "Class AF-2 Certificate": Any one of the Class AF-2 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-2, executed, authenticated and delivered by the Trust Administrator on
behalf of the Trustee, representing the right to distributions as set forth
herein and therein and evidencing a Regular Interest in REMIC 2.

         "Class AF-3 Certificate": Any one of the Class AF-3 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-3, executed, authenticated and delivered by the Trust Administrator on
behalf of the Trustee, representing the right to distributions as set forth
herein and therein and evidencing a Regular Interest in REMIC 2.

         "Class AF-4 Certificate": Any one of the Class A-4 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-4, executed, authenticated and delivered by the Trust Administrator on
behalf of the Trustee, representing the right to distributions as set forth
herein and therein and evidencing a Regular Interest in REMIC 2.

         "Class AV-1 Certificate": Any one of the Class AV-1 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-5, executed, authenticated and delivered by the Trust Administrator on
behalf of the Trustee, representing the right to distributions as set forth
herein and therein and evidencing a Regular Interest in REMIC 2.

                                        6

<PAGE>

         "Class A Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the Certificate Principal Balance of the
Class A Certificates immediately prior to such Distribution Date over (y) the
lesser of (A) the product of (i) 78.00% and (ii) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) and (B) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period (after giving effect to scheduled payments of principal due during
the related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) minus
the Overcollateralization Floor.

         "Class C Certificate": Any one of the Class C Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-9, executed, authenticated and delivered by the Trust Administrator on
behalf of the Trustee, representing the right to distributions as set forth
herein and therein and evidencing a Regular Interest in REMIC 2.

         "Class M-1 Certificate": Any one of the Class M-1 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-6, executed, authenticated and delivered by the Trust Administrator on
behalf of the Trustee, representing the right to distributions as set forth
herein and therein and evidencing a Regular Interest in REMIC 2.

         "Class M-1 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the sum of (i) the Certificate Principal
Balance of the Class A Certificates (after 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)
85.50% and (ii) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) and (B) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) minus the Overcollateralization Floor.

         "Class M-2 Certificate": Any one of the Class M-2 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-7, executed, authenticated and delivered by the Trust Administrator on
behalf of the Trustee, representing the right to distributions as set forth
herein and therein and evidencing a Regular Interest in REMIC 2.

         "Class M-2 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the sum of (i) the Certificate Principal
Balance of the Class A Certificates (after taking into account the payment of
the Class A Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date) and (iii) the Certificate Principal Balance of the Class M-2
Certificates immediately prior to such Distribution Date over (y) the lesser of
(A) the product of (i) 92.50% and (ii) the aggregate Stated Principal

                                        7

<PAGE>

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

         "Class M-3 Certificate": Any one of the Class M-3 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-8, executed, authenticated and delivered by the Trust Administrator on
behalf of the Trustee, representing the right to distributions as set forth
herein and therein and evidencing a Regular Interest in REMIC 2.

         "Class M-3 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the sum of (i) the Certificate Principal
Balance of the Class A Certificates (after taking into account the payment of
the Class A Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date), (iii) the Certificate Principal Balance of the Class M-2
Certificates (after taking into account the payment of the Class M-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) 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 the Overcollateralization Floor.

         "Class P Certificate": Any one of the Class P Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-10, executed, authenticated and delivered by the Trust Administrator
on behalf of the Trustee, representing the right to distributions as set forth
herein and therein and evidencing a Regular Interest in REMIC 2.

         "Class R Certificate": Any one of the Class R Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-11, executed, authenticated and delivered by the Trust Administrator
on behalf of the Trustee, evidencing the ownership of the Class R-1 Interest and
the Class R-2 Interest.

         "Class R-1 Interest": The uncertificated Residual Interest in REMIC 1.

         "Class R-2 Interest": The uncertificated Residual Interest in REMIC 2.

         "Close of Business": As used herein, with respect to any Business Day,
5:00 p.m. (New York time).

                                        8

<PAGE>

         "Closing Date":  December 15, 2000.

         "Code":  The Internal Revenue Code of 1986.

         "Collection Account": The account or accounts created and maintained by
the Master Servicer pursuant to Section 3.10(a), which shall be entitled "First
Union National Bank, as Trustee, in trust for registered Holders of Long Beach
Mortgage Loan Trust 2000-LB1, Asset-Backed Certificates, Series 2000-LB1," which
must be an Eligible Account.

         "Commission":  The Securities and Exchange Commission.

         "Compensating Interest":  As defined in Section 3.24.

         "Corporate Trust Office": The principal corporate trust office of the
Trust Administrator or the Trustee, as the case may be, at which at any
particular time its corporate trust business in connection with this Agreement
shall be administered, which office, with respect to the Trust Administrator, at
the date of the execution of this instrument is located at 1761 East St. Andrew
Place, Santa Ana, California 92705, or at such other address as the Trust
Administrator may designate from time to time by notice to the
Certificateholders, the Depositor, the Master Servicer and the Trustee and, with
respect to the Trustee, at the date of the execution of this instrument is
located at 401 South Tryon Street, NC1179, 12th Floor, Charlotte, North Carolina
28288-1179, or such other address as the Trustee may designate from time to time
by notice to the Certificateholders, the Depositor, the Master Servicer and the
Trust Administrator.

         "Corresponding Certificate": With respect to REMIC 1 Regular Interest
LT1B, REMIC 1 Regular Interest LT1C, REMIC 1 Regular Interest LT1D, REMIC 1
Regular Interest LT1E, REMIC 1 Regular Interest LT1F, REMIC 1 Regular Interest
LT1G, REMIC 1 Regular Interest LT1H, REMIC 1 Regular Interest LT1I and REMIC 1
Regular Interest LT1P, the Class AF-1 Certificates, Class AF-2 Certificates,
Class AF-3 Certificates, Class AF-4 Certificates, Class AV-1 Certificates, Class
M-1 Certificates, Class M-2 Certificates, Class M-3 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 C Certificates, and the denominator of which is the aggregate Stated
Principal Balance of the Mortgage Loans, calculated prior to taking into account
payments of principal on the Mortgage Loans due on the related Due Date or
received during the related Prepayment Period and distribution of the Group I
Principal Distribution Amount and the Group II Principal Distribution Amount to
the Holders of the Certificates then entitled to distributions of principal on
such Distribution Date.

         "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.

                                        9

<PAGE>

         "Custodial Agreement": An agreement that may be entered into or an
agreement assigned to the Trustee with respect to the Mortgage Loans.

         "Custodian": A custodian, which shall not be the Depositor, the Master
Servicer, the Seller or any affiliate of any of them, appointed pursuant to a
Custodial Agreement.

         "Cut-off Date": With respect to each Mortgage Loan, the later of (i)
the date of origination of such Mortgage Loan or (ii) December 1, 2000.
Notwithstanding that certain Original Mortgage Loans were originated up to and
including December 5, 2000, for purposes of all calculations herein, the Cut-off
Date Principal Balance of such Mortgage Loan shall be the initial Principal
Balance.

         "Cut-off Date Aggregate Principal Balance": With respect to each Loan
Group, the aggregate of the Cut-off Date Principal Balances of the Mortgage
Loans in such Loan Group.

         "Cut-off Date Principal Balance": With respect to any Mortgage Loan,
the unpaid principal balance thereof as of the Cut-off Date of such Mortgage
Loan (or as of the applicable date of substitution with respect to a Qualified
Substitute Mortgage Loan), after giving effect to scheduled payments due on or
before the Cut-off Date, whether or not received.

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

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

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

         "Deleted Mortgage Loan": A Mortgage Loan replaced or to be replaced by
one or more Qualified Substitute Mortgage Loans.

         "Delinquency Percentage": For any Distribution Date, the percentage
obtained by dividing (x) the aggregate Principal Balance of Mortgage Loans
Delinquent 60 days or more by (y) the aggregate Principal Balance of the
Mortgage Loans, in each case, as of the last day of the previous calendar month.

         "Delinquent": With respect to any Mortgage Loan and related Monthly
Payment, the Monthly Payment due on a Due Date which is not made by the Close of
Business on the next scheduled Due Date for such Mortgage Loan. For example, a
Mortgage Loan is 60 or more days Delinquent if the Monthly Payment due on a Due
Date is not made by the Close of Business on the second scheduled Due Date after
such Due Date.

         "Depositor": Long Beach Securities Corp., a Delaware corporation, or
any successor in interest.

                                       10

<PAGE>

         "Depository": The initial Depository shall be The Depository Trust
Company, whose nominee is Cede & Co., or any other organization registered as a
"clearing agency" pursuant to Section 17A of the Securities Exchange Act of
1934, as amended. The Depository shall initially be the registered Holder of the
Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(3) of the Uniform Commercial Code of
the State of New York.

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

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

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

         "Disqualified Organization": A "disqualified organization" under
Section 860E of the Code, which as of the Closing Date is any of: (i) the United
States, any state or political subdivision thereof, any foreign government, any
international organization, or any agency or instrumentality of any of the
foregoing, (ii) any organization (other than a cooperative described in Section
521 of the Code) which is exempt from the tax imposed by Chapter 1 of the Code
unless such organization is subject to the tax imposed by Section 511 of the
Code, (iii) any organization described in Section 1381(a)(2)(C) of the Code,
(iv) an "electing large partnership" within the meaning of Section 775 of the
Code or (v) any other Person so designated by the Trustee or the Trust
Administrator based upon an Opinion of Counsel provided by nationally recognized
counsel to the Trustee that the holding of an ownership interest in a Class R
Certificate by such Person may cause the Trust Fund or any Person having an
ownership interest in any Class of Certificates (other than such Person) to
incur liability for any federal tax imposed under the Code that would not
otherwise be imposed but for the transfer of an ownership interest in the Class
R Certificate to such Person. A corporation will not be treated as an
instrumentality of the United States or of any state or political subdivision
thereof, if all of its activities are subject to tax and, a majority of its
board of directors is not selected by a governmental unit. The term "United
States", "state" and "international organizations" shall have the meanings set
forth in Section 7701 of the Code.

         "Distribution Account": The trust account or accounts created and
maintained by the Trust Administrator pursuant to Section 3.10(b) which shall be
entitled "Distribution Account, Bankers

                                       11

<PAGE>

Trust Company of California, N.A., as Trust Administrator for First Union
National Bank, in trust for the registered Certificateholders of Long Beach
Mortgage Loan Trust 2000-1, Asset-Backed Certificates, Series 2000-1" and which
must be an Eligible Account.

         "Distribution Date": The 21st day of any calendar month, or if such
21st day is not a Business Day, the Business Day immediately following such 21st
day, commencing in January 2001.

         "Due Date": With respect to each Distribution Date, the first day of
the calendar month in which such Distribution Date occurs, which is generally
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 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
federal or state chartered depository institution or trust company the
short-term unsecured debt obligations of which (or, in the case of a depository
institution or trust company that is the principal subsidiary of a holding
company, the short-term unsecured debt obligations of such holding company) are
rated P-1 by Moody's, F-1 by Fitch or 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 (to the limits established by such corporation), the
uninsured deposits in which account are otherwise secured such that, as
evidenced by an Opinion of Counsel delivered to the Trust Administrator and to
each Rating Agency, the Certificateholders will have a claim with respect to the
funds in such account or a perfected first priority security interest against
such collateral (which shall be limited to Permitted Investments) securing such
funds that is superior to claims of any other depositors or creditors of the
depository institution with which such account is maintained, (iii) a trust
account or accounts maintained with the trust department of a federal or state
chartered depository institution, national banking association or trust company
acting in its fiduciary capacity or (iv) an account otherwise acceptable to each
Rating Agency without reduction or withdrawal of their then current ratings of
the Certificates as evidenced by a letter from each Rating Agency to the Trust
Administrator. Eligible Accounts may bear interest.

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

         "Excess Overcollateralized Amount": With respect to the Class A
Certificates and the Mezzanine Certificates and any Distribution Date, the
excess, if any, of (i) the Overcollateralized Amount for such Distribution Date,
assuming that 100% of the aggregate Principal Remittance Amount for both Loan
Groups is applied as a principal payment on such Distribution Date over (ii) the
Overcollateralization Target Amount for such Distribution Date.

         "Extraordinary Trust Fund Expense": Any amounts reimbursable to the
Trustee or the Trust Administrator, or any director, officer, employee or agent
of the Trustee or the Trust Administrator, 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), any amounts payable from the
Distribution

                                       12

<PAGE>

Account in respect of any REMIC pursuant to Section 10.01(c) or (g), any amounts
payable from the Trust Fund as a trustee fee for any successor trustee and any
amounts payable by the Trustee or the Trust Administrator for the recording of
the assignments of mortgage pursuant to Section 2.01.

         "Extra Principal Distribution Amount": With respect to any Distribution
Date, the lesser of (x) the Monthly Interest Distributable Amount payable on the
Class C Certificates on such Distribution Date as reduced by Realized Losses
allocated thereto with respect to such Distribution Date pursuant to Section
4.08 and (y) the Overcollateralization Deficiency Amount for such Distribution
Date.

         "Fannie Mae": 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 or the Master Servicer pursuant to or as contemplated by Section
2.03 or 10.01), 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, Inc., or its successor in interest.

         "Formula Rate": For any Distribution Date and the Class AV-1
Certificates and the Mezzanine Certificates, the lesser of (i) LIBOR plus the
related Certificate Margin and (ii) the Maximum Cap Rate.

         "Freddie Mac": The Federal Home Loan Mortgage Corporation, or any
successor thereto.

         "Gross Margin": With respect to each Group II 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 Mortgage Loan.

         "Group I Available Funds": With respect to any Distribution Date, an
amount equal to the excess of (i) the sum of (a) the aggregate of the related
Monthly Payments on the Group I Mortgage Loans received on or prior to the
related Determination Date, (b) Liquidation Proceeds, Insurance Proceeds,
Principal Prepayments and other unscheduled recoveries of principal and interest
in respect of the Group I Mortgage Loans during the related Prepayment Period,
(c) the aggregate of any amounts received in respect of an REO Property acquired
in respect of a Group I Mortgage Loan withdrawn from any REO Account and
deposited in the Collection Account for such Distribution Date, (d) the
aggregate of any amounts deposited in the Collection Account by the Master
Servicer in respect of related Prepayment Interest Shortfalls on the Group I
Mortgage Loans for such Distribution Date, (e) the aggregate of any Advances
made by the Master Servicer for such Distribution Date with respect to the Group
I Mortgage Loans, (f) the aggregate of any related

                                       13

<PAGE>

advances made by the Trust Administrator for such Distribution Date with respect
to the Group I Mortgage Loans pursuant to Section 7.02(b) and (g) the amount of
any Prepayment Charges collected by the Master Servicer on the Group I Mortgage
Loans in connection with the full or partial prepayment of any of the Mortgage
Loans and any Master Servicer Prepayment Charge Payment Amount over (ii) the sum
of (a) amounts reimbursable or payable to the Depositor, the Master Servicer,
the Trustee, the Trust Administrator, the Seller or any Sub-Servicer pursuant to
Section 3.11 or Section 3.12 in respect of the Group I Mortgage Loans or
otherwise payable in respect of Extraordinary Trust Fund Expenses, (b) amounts
deposited in the Collection Account or the Distribution Account pursuant to
clauses (i)(a) through (g) above, as the case may be, in error, (c) the amount
of any Prepayment Charges collected by the Master Servicer in connection with
the full or partial prepayment of any of the Group I Mortgage Loans and any
Master Servicer Prepayment Charge Payment Amount, (d) Stayed Funds, (e) the PMI
Insurer Fee payable from the Distribution Account, (f) any indemnification
payments or expense reimbursements made by the Trust Fund pursuant to Section
8.05 and (h) amounts reimbursable to the Trust Administrator for an advance made
pursuant to Section 7.02(b) which advance the Trust Administrator has determined
to be nonrecoverable from the Stayed Funds in respect of which it was made.

         "Group I Basic Principal Distribution Amount": With respect to the
Group I Certificates and any Distribution Date, the Basic Principal Distribution
Amount multiplied by a fraction, the numerator of which is the Principal
Remittance Amount for the Group I Mortgage Loans and the denominator of which is
the Principal Remittance Amount for both Loan Groups for such Distribution Date.

         "Group I Certificates": The Class AF-1 Certificates, Class AF-2
Certificates, Class AF-3 Certificates and Class AF-4 Certificates.

         "Group I Class A Principal Distribution Amount": With respect to the
Group I Certificates and any Distribution Date, the Class A Principal
Distribution Amount multiplied by a fraction, the numerator of which is the
Principal Remittance Amount for the Group I Mortgage Loans and the denominator
of which is the Principal Remittance Amount for both Loan Groups for such
Distribution Date.

         "Group I Extra Principal Distribution Amount": With respect to the
Group I Certificates and any Distribution Date, the Extra Principal Distribution
Amount multiplied by a fraction, the numerator of which is the Principal
Remittance Amount for the Group I Mortgage Loans and the denominator of which is
the Principal Remittance Amount for both Loan Groups for such Distribution Date.

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

         "Group I Mortgage Loan": A Mortgage Loan which provides for a fixed
Mortgage Rate payable with respect thereto.

                                       14

<PAGE>

         "Group I Principal Distribution Amount": With respect to any
Distribution Date and the Group I Certificates, the related Basic Principal
Distribution Amount plus the related Extra Principal Distribution Amount.

         "Group II Available Funds": With respect to any Distribution Date, an
amount equal to the excess of (i) the sum of (a) the aggregate of the related
Monthly Payments on the Group II Mortgage Loans received on or prior to the
related Determination Date, (b) Liquidation Proceeds, Insurance Proceeds,
Principal Prepayments and other unscheduled recoveries of principal and interest
in respect of the Group II Mortgage Loans during the related Prepayment Period,
(c) the aggregate of any amounts received in respect of an REO Property acquired
in respect of a Group II Mortgage Loan withdrawn from any REO Account and
deposited in the Collection Account for such Distribution Date, (d) the
aggregate of any amounts deposited in the Collection Account by the Master
Servicer in respect of related Prepayment Interest Shortfalls on the Group II
Mortgage Loans for such Distribution Date, (e) the aggregate of any Advances
made by the Master Servicer for such Distribution Date with respect to the Group
II Mortgage Loans, (f) the aggregate of any related advances made by the Trust
Administrator for such Distribution Date with respect to the Group II Mortgage
Loans pursuant to Section 7.02(b) and (g) the amount of any Prepayment Charges
collected by the Master Servicer on the Group II Mortgage Loans in connection
with the full or partial prepayment of any of the Mortgage Loans and any Master
Servicer Prepayment Charge Payment Amount over (ii) the sum of (a) amounts
reimbursable or payable to the Depositor, the Master Servicer, the Trustee, the
Trust Administrator, the Seller or any Sub-Servicer pursuant to Section 3.11 or
Section 3.12 in respect of the Group II Mortgage Loans or otherwise payable in
respect of Extraordinary Trust Fund Expenses, (b) amounts deposited in the
Collection Account or the Distribution Account pursuant to clauses (i)(a)
through (g) above, as the case may be, in error, (c) the amount of any
Prepayment Charges collected by the Master Servicer in connection with the full
or partial prepayment of any of the Group II Mortgage Loans and any Master
Servicer Prepayment Charge Payment Amount, (d) Stayed Funds, (e) the PMI Insurer
Fee payable from the Distribution Account, (g) any indemnification payments or
expense reimbursements made by the Trust Fund pursuant to Section 8.05 and (h)
amounts reimbursable to the Trust Administrator for an advance made pursuant to
Section 7.02(b) which advance the Trust Administrator has determined to be
nonrecoverable from the Stayed Funds in respect of which it was made.

         "Group II Basic Principal Distribution Amount": With respect to the
Group II Certificates and any Distribution Date, the Basic Principal
Distribution Amount multiplied by a fraction, the numerator of which is the
Principal Remittance Amount for the Group II Mortgage Loans and the denominator
of which is the Principal Remittance Amount for both Loan Groups for such
Distribution Date.

         "Group II Certificates":  The Class AV-1 Certificates.

         "Group II Class A Principal Distribution Amount": With respect to the
Group II Certificates and any Distribution Date, the Class A Principal
Distribution Amount multiplied by a fraction, the numerator of which is the
Principal Remittance Amount for the Group II Mortgage Loans and the denominator
of which is the Principal Remittance Amount for both Loan Groups for such
Distribution Date.

                                       15

<PAGE>

         "Group II Extra Principal Distribution Amount": With respect to the
Group II Certificates and any Distribution Date, the Extra Principal
Distribution Amount multiplied by a fraction, the numerator of which is the
Principal Remittance Amount for the Group II Mortgage Loans and the denominator
of which is the Principal Remittance Amount for both Loan Groups for such
Distribution Date.

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

         "Group II Mortgage Loan": A Mortgage Loan which provides for an
adjustable Mortgage Rate payable with respect thereto.

         "Group II Principal Distribution Amount": With respect to any
Distribution Date and the Group II Certificates, the related Basic Principal
Distribution Amount plus the related Extra Principal Distribution Amount.

         "Indenture": The indenture relating to the issuance of the NIM Notes,
dated December 15, 2000, among Long Beach NIM Trust 2000-3 as issuer, the
Trustee as indenture trustee and the Trust Administrator as indenture trustee
administrator.

         "Independent": When used with respect to any specified Person, any such
Person who (a) is in fact independent of the Depositor, the Master Servicer and
their respective Affiliates, (b) does not have any direct financial interest in
or any material indirect financial interest in the Depositor or the Master
Servicer or any Affiliate thereof, and (c) is not connected with the Depositor
or the Master Servicer or any Affiliate thereof as an officer, employee,
promoter, underwriter, trustee, trust administrator, partner, director or Person
performing similar functions; provided, however, that a Person shall not fail to
be Independent of the Depositor or 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 any of the
REMICs created hereunder 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
each 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 and the
Trust Administrator have 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.

                                       16

<PAGE>

         "Index": With respect to each Group II Mortgage Loan and with respect
to each related Adjustment Date, the index as specified in the related Mortgage
Note.

         "Initial Certificate Principal Balance": With respect to any Regular
Certificate, the amount designated "Initial Certificate Principal Balance" on
the face thereof.

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

         "Interest Determination Date": With respect to the Class AV-1
Certificates and the Mezzanine Certificates and each Accrual Period, the second
LIBOR Business Day preceding the commencement of such Accrual Period.

         "Late Collections": With respect to any Mortgage Loan, all amounts
received subsequent to the Determination Date immediately following any related
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 on a
contractual basis for such Due Period and not previously recovered.

         "LIBOR": With respect to each Accrual Period, the rate determined by
the Trust Administrator on the related Interest Determination Date on the basis
of the London interbank offered rate for one-month United States dollar
deposits, as such rate appears on the Telerate Page 3750, as of 11:00 a.m.
(London time) on such Interest Determination Date. If such rate does not appear
on Telerate Page 3750, the rate for such Interest Determination Date will be
determined on the basis of the offered rates of the Reference Banks for
one-month United States dollar deposits, as of 11:00 a.m. (London time) on such
Interest Determination Date. The Trust Administrator will request the principal
London office of each of the Reference Banks to provide a quotation of its rate.
On such Interest Determination Date, LIBOR for the related Accrual Period will
be established by the Trust Administrator as follows:

                  (i) If on such Interest Determination Date two or more
         Reference Banks provide such offered quotations, LIBOR for the related
         Accrual Period shall be the arithmetic mean of such offered quotations
         (rounded upwards if necessary to the nearest whole multiple of
         0.0625%); and

                  (ii) If on such Interest Determination Date fewer than two
         Reference Banks provide such offered quotations, LIBOR for the related
         Accrual Period shall be the higher of (i) LIBOR as determined on the
         previous Interest Determination Date and (ii) the Reserve Interest
         Rate.

                                       17

<PAGE>

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

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

         "Liquidation 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 the Trust Fund by reason of its being purchased, sold or replaced
pursuant to or as contemplated by Section 2.03 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 the Trust Fund by reason of its being sold or purchased pursuant to
Section 3.23 or Section 9.01.

         "Liquidation Proceeds": The amount (other than amounts received in
respect of the rental of any REO Property prior to REO Disposition) received by
the Master Servicer in connection with (i) the taking of all or a part of a
Mortgaged Property by exercise of the power of eminent domain or condemnation,
(ii) the liquidation of a defaulted Mortgage Loan by means of 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 3.23 or Section 9.01.

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

         "Loan Group": Either Loan Group I or Loan Group II, 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.

         "Lockout Certificate Percentage": With respect to the Class AF-4
Certificates and each Distribution Date, the percentage equivalent of a
fraction, the numerator of which is (x) the Certificate Principal Balance of the
Class AF-4 Certificates immediately prior to such Distribution Date and the
denominator of which is (y) the aggregate Certificate Principal Balances of the
Class A Certificates in Certificate Group I immediately prior to such
Distribution Date.

         "Lockout Distribution Percentage": With respect to the Class AF-4
Certificates and each Distribution Date, the indicated percentage of the Lockout
Certificate Percentage for such Distribution Date:

                                       18

<PAGE>

                                                     PERCENTAGE OF LOCKOUT
DISTRIBUTION DATE                                   CERTIFICATE PERCENTAGE
-----------------                                   ----------------------
January 2001 to December 2002                                        0%
January 2003 to December 2004                                       20%
January 2005 to December 2005                                       80%
January 2006 to December 2006                                      100%
January 2007 and thereafter                                        300%

         Notwithstanding the foregoing, if the Certificate Principal Balances of
the Class A Certificates in Certificate Group I (other than the Class AF-4
Certificates) have been reduced to zero the Lockout Distribution Percentage will
be equal to 100%.

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

         "Marker Rate": With respect to the Class C Certificates and any
Distribution Date, a per annum rate equal to two (2) times the weighted average
of the Uncertificated REMIC 1 Pass-Through Rates for REMIC 1 Regular Interest
LT1B, REMIC 1 Regular Interest LT1C, REMIC 1 Regular Interest LT1D, REMIC 1
Regular Interest LT1E, REMIC 1 Regular Interest LT1F, REMIC 1 Regular Interest
LT1G, REMIC 1 Regular Interest LT1H, REMIC 1 Regular Interest LT1I and REMIC 1
Regular Interest LT1J,

        o         with the rate on REMIC 1 Regular Interest LT1B subject to a
                  cap equal to 7.224% per annum,

        o         with the rate on REMIC 1 Regular Interest LT1C subject to a
                  cap equal to 6.907% per annum,

         o        with the rate on REMIC 1 Regular Interest LT1D subject to a
                  cap equal to (a) on or prior to the Optional Termination Date,
                  the lesser of (x) 7.434% per annum and (y) the Net WAC Rate
                  and (b) after the Optional Termination Date, the lesser of (x)
                  7.934% per annum and (y) the Net WAC Rate,

         o        with the rate on REMIC 1 Regular Interest LT1E subject to a
                  cap equal to the lesser of (i) 7.216% per annum and (ii) the
                  related Net WAC Rate for the purpose of this calculation,

         o        with the rate on REMIC 1 Regular Interest LT1F subject to a
                  cap equal to the lesser of (i) the related Formula Rate and
                  (ii) the Net WAC Rate for the purpose of this
                  calculation,

                                       19

<PAGE>

         o        with the rate on REMIC 1 Regular Interest LT1G subject to a
                  cap equal to the lesser of (i) the related Formula Rate and
                  (ii) the Net WAC Rate for the purpose of this calculation,

         o        with the rate on REMIC 1 Regular Interest LT1H subject to a
                  cap equal to the lesser of (i) the related Formula Rate and
                  (ii) the Net WAC Rate for the purpose of this calculation,

         o        with the rate on REMIC 1 Regular Interest LT1I subject to a
                  cap equal to the lesser of (i) the related Formula Rate and
                  (ii) the Net WAC Rate for the purpose of this calculation and

         o        with the rate on REMIC 1 Regular Interest LT1J subject to a
                  cap of zero for the purpose of this calculation.

         "Master Servicer": Long Beach Mortgage Company, a Delaware corporation,
or any successor servicer appointed as herein provided, in its capacity as
Master Servicer hereunder.

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

         "Master Servicer Prepayment Charge Payment Amount": The amounts payable
by the Master Servicer in respect of any Prepayment Charges waived other than in
accordance with the standard set forth Section 2.03(c).

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

         "Master Servicer Termination Test": With respect to any Distribution
Date, the Master Servicer Termination Test will be failed with respect to the
Master Servicer if the Cumulative Loss Percentage exceeds [6.125]%.

         "Maximum Cap Rate": For any Distribution Date and the Class AV-1
Certificates and the Mezzanine Certificates, a per annum rate equal to the
product of (x) the weighted average of the Adjusted Net Maximum Mortgage Rates
of the Mortgage Loans in both Loan Groups, weighted on the basis of the Stated
Principal Balances thereof as of the Due Date preceding the month of such
Distribution Date 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 Accrual
Period.

         "Maximum LT1J Uncertificated Accrued Interest Deferral Amount": With
respect to any Distribution Date, the excess of (a) accrued interest at the
Uncertificated REMIC 1 Pass-Through Rate applicable to REMIC 1 Regular Interest
LT1J for such Distribution Date on a balance equal to the Uncertificated
Principal Balance of REMIC 1 Regular Interest LT1J minus the REMIC 1
Overcollateralized Amount, in each case for such Distribution Date, over (b) (I)
Uncertificated Accrued Interest on REMIC 1 Regular Interest LT1B with the rate
on REMIC 1 Regular Interest LT1B subject to a cap equal to 7.224% per annum for
the purpose of this calculation, (II) Uncertificated Accrued Interest on REMIC 1
Regular Interest LT1C with the rate on REMIC 1

                                       20

<PAGE>

Regular Interest LT1C subject to a cap equal to 6.907% per annum for the purpose
of this calculation, (III) Uncertificated Accrued Interest on REMIC 1 Regular
Interest LT1D with the rate on REMIC 1 Regular Interest LT1D subject to a cap
equal to (a) on or prior to the Optional Termination Date, the lesser of (x)
7.434% per annum and (y) the Net WAC Rate and (b) after the Optional Termination
Date, the lesser of (x) 7.934% per annum and (y) the Net WAC Rate, (IV)
Uncertificated Accrued Interest on REMIC 1 Regular Interest LT1E with the rate
on REMIC 1 Regular Interest LT1E subject to a cap equal to the lesser of (i)
7.216% per annum and (ii) the related Net WAC Rate for the purpose of this
calculation, (V) Uncertificated Accrued Interest on REMIC 1 Regular Interest
LT1F with the rate on REMIC 1 Regular Interest LT1F subject to a cap equal to
the lesser of (i) the related Formula Rate and (ii) the Net WAC Rate for the
purpose of this calculation, (VI) Uncertificated Accrued Interest on REMIC 1
Regular Interest LT1G with the rate on REMIC 1 Regular Interest LT1G subject to
a cap equal to the lesser of (i) the related Formula Rate and (ii) the Net WAC
Rate for the purpose of this calculation, (VII) Uncertificated Accrued Interest
on REMIC 1 Regular Interest LT1H with the rate on REMIC 1 Regular Interest LT1H
subject to a cap equal to the lesser of (i) the related Formula Rate and (ii)
the Net WAC Rate for the purpose of this calculation and (VIII) Uncertificated
Accrued Interest on REMIC 1 Regular Interest LT1I with the rate on REMIC 1
Regular Interest LT1I subject to a cap equal to the lesser of (i) the related
Formula Rate and (ii) the Net WAC Rate for the purpose of this calculation for
such Distribution Date.

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

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

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

         "Monthly Interest Distributable Amount": With respect to the Class A
Certificates, Mezzanine Certificates, Class C Certificates and any Distribution
Date, the amount of interest accrued during the related Accrual Period at the
related Pass-Through Rate on the Certificate Principal Balance (or Notional
Amount in the case of the Class C Certificates) of such Class immediately prior
to such Distribution Date, in each case, reduced by any Net Prepayment Interest
Shortfalls and Relief Act Interest Shortfalls allocated to such Class (allocated
to such Certificate in accordance with Section 1.03).

         "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 Sections 3.01 and 3.07; and (c) on the
assumption that all other amounts, if any, due under such Mortgage Loan are paid
when due.

                                       21

<PAGE>

         "Moody's": Moody's Investors Service, Inc. 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 and delivered to the Trust Administrator pursuant to Section 2.01 or
Section 2.03(d) as from time to time held as a part of the Trust Fund, the
Mortgage Loans so held being identified in the Mortgage Loan Schedule.

         "Mortgage Loan Purchase Agreement": The agreement between the Master
Servicer, in its capacity as 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 attached hereto as Exhibit C.

         "Mortgage Loan Schedule": As of any date, the list of Mortgage Loans
included in REMIC 1 on such date, separately identifying the Group I Mortgage
Loans and the Group II Mortgage Loans, attached hereto as Exhibit D. The
Mortgage Loan Schedule shall be prepared by the Seller and shall set forth the
following information as of the Cut-off Date with respect to each Mortgage Loan,
as applicable:

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

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

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

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

                    (v)  the original months to maturity;

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

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

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

                   (ix) the stated maturity date;

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

                                       22

<PAGE>

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

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

                  (xiii) the Stated Principal Balance of the Mortgage Loan as
                         of the Close of Business on the Cut-off Date;

                   (xiv) with respect to each Group II Mortgage Loan: the Gross
                         Margin, the Maximum Mortgage Rate, the Minimum Mortgage
                         Rate, the Periodic Rate Cap, the maximum first
                         Adjustment Date Mortgage Rate adjustment and the first
                         Adjustment Date immediately following the Cut-off Date;

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

                   (xvi) the Mortgage Rate at origination;

                  (xvii) a code indicating the documentation program;

                 (xviii) the risk grade;

                   (xix) the Value of the Mortgaged Property;

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

                   (xxi) whether such Mortgage Loan is covered under the PMI
                         Policy.

         The Mortgage Loan Schedule shall set forth the following information,
with respect to the Mortgage Loans in the aggregate and for each Loan Group as
of the Cut-off Date: (1) the number of Mortgage Loans; (2) the Cut-off Date
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
Seller in accordance with the provisions of this Agreement. With respect to any
Qualified Substitute Mortgage Loan, 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
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.

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

         "Mortgage Rate": With respect to each Group I Mortgage Loan, the rate
set forth in the related Mortgage Note. With respect to each Group II Mortgage
Loan, the annual rate at which interest accrues on such Mortgage Loan from time
to time in accordance with the provisions of the

                                       23

<PAGE>

related Mortgage Note, which rate (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, to equal the sum, rounded
to the next highest or nearest 0.125% (as provided in the Mortgage Note), of the
Index, determined as set forth in the related Mortgage Note, plus the related
Gross Margin subject to the limitations set forth in the related Mortgage Note.
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 a fee simple estate in a parcel of
real property improved by a Residential Dwelling.

         "Mortgagor":  The obligor on a Mortgage Note.

         "Net Liquidation Proceeds": With respect to any Liquidated Mortgage
Loan or any other disposition of related Mortgaged Property (including REO
Property) the related Liquidation Proceeds net of Advances, Servicing Advances,
Servicing Fees and any other accrued and unpaid Servicing Fees received and
retained in connection with the liquidation of such Mortgage Loan or Mortgaged
Property in accordance with the terms of this Agreement.

         "Net Monthly Excess Cashflow": With respect to each Distribution Date,
the sum of (a) any Overcollateralization Release Amount for such Distribution
Date and (b) the excess of (x) Group I Available Funds plus Group II Available
Funds for such Distribution Date over (y) the sum for such Distribution Date of
(A) the Monthly Interest Distributable Amounts for the Class A Certificates and
the Mezzanine Certificates, (B) the Unpaid Interest Shortfall Amounts for the
Class A 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
Servicing Fee Rate.

         "Net Prepayment Interest Shortfall": With respect to any Distribution
Date, the excess, if any, of any Prepayment Interest Shortfalls for such date
over the related Compensating Interest.

         "Net WAC Rate": With respect to each Distribution Date and the Class
AF-3 Certificates, the Class AF-4 Certificates and the REMIC 1 Regular
Interests, a per annum rate equal to the weighted average of the Adjusted Net
Mortgage Rates of the Mortgage Loans in both Loan Groups, weighted on the basis
of the Stated Principal Balances thereof as of the Determination Date preceding
the month of such Distribution Date. With respect to each Distribution Date and
the Class AV-1 Certificates and the Mezzanine Certificates, a per annum rate
equal to the product of (i) the weighted average of the Adjusted Net Mortgage
Rates of the Mortgage Loans in both Loan Groups, weighted on the basis of the
Stated Principal Balances thereof as of the Determination Date preceding the
month of such Distribution Date and (ii) a fraction, the numerator of which is
30 and the denominator of which is the actual number of days elapsed in the
related Accrual Period.

                                       24

<PAGE>

         "Net WAC Rate Carryover Amount": With respect to the Class AV-1
Certificates and the Mezzanine Certificates and any Distribution Date, the sum
of (A) the positive excess of (i) the amount of interest payable to such Class
of Certificates on such Distribution Date calculated at the related Formula
Rate, over (ii) the amount of interest payable on such Class of Certificates at
the Net WAC Rate for such Distribution Date and (B) the related Net WAC Rate
Carryover Amount for the previous Distribution Date not previously paid,
together with interest thereon at a rate equal to the related Formula Rate for
such Class of Certificates for such Distribution Date.

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

         "NIM Notes":  The notes issued pursuant to the Indenture.

         "NIMs Insurer": Radian Insurance Inc. or any successor thereto that is
guaranteeing certain payments under notes issued by a trust, the principal
assets of which include percentage interests of the Class C Certificates and the
Class P Certificates.

         "Nonrecoverable Advance": Any Advance or 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 Advance, would not be ultimately recoverable from related
late payments, Insurance Proceeds or Liquidation Proceeds on such Mortgage Loan
or REO Property as provided herein.

         "Notional Amount": Immediately prior to any Distribution Date, with
respect to the Class C Certificates, the aggregate of the Uncertificated
Principal Balances of REMIC 1 Regular Interests.

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

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

         "Optional Termination Date": The first Distribution Date on which the
Terminator may elect to terminate the Trust Fund pursuant to Section 9.01.

         "Original Class Certificate Principal Balance": With respect to the
Class A Certificates, the Mezzanine Certificates, the Class C Certificates and
the Class P Certificates, the corresponding amounts set forth opposite such
Class above in the Preliminary Statement.

                                       25

<PAGE>

         "Original Mortgage Loan": Any of the Mortgage Loans included in the
Trust Fund as of the Closing Date. The aggregate principal balance of the
Original Mortgage Loans as of the Closing Date is equal to $1,000,000,594.71.

         "Original Notional Amount":  With respect to the Class C Certificates,
$1,000,000,594.71.

         "Overcollateralization Deficiency Amount": With respect to any
Distribution Date, the amount, if any, by which the Overcollateralization Target
Amount exceeds the Overcollateralized Amount on such Distribution Date (after
giving effect to distributions in respect of the Basic Principal Distribution
Amount on such Distribution Date).

         "Overcollateralization Floor": $5,000,000.

         "Overcollateralization Release Amount": With respect to any
Distribution Date, the lesser of (x) the aggregate Principal Remittance Amount
for both Loan Groups for such Distribution Date and (y) the Excess
Overcollateralized Amount.

         "Overcollateralization Target Amount": With respect to any Distribution
Date (i) prior to the Stepdown Date, $20,000,000, (ii) on or after the Stepdown
Date provided a Trigger Event is not in effect, the greater of (x) 4.00% of the
aggregate 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 (y) the Overcollateralization Floor, and (iii)
on or after the Stepdown Date if a Trigger Event is in effect, the
Overcollateralization Target Amount for the immediately preceding Distribution
Date. Notwithstanding the foregoing, the Overcollateralization Target Amount
shall never exceed the initial Overcollateralization Target Amount.

         "Overcollateralized Amount": For any Distribution Date, the amount, if
any, by which (i) the Pool Balance on 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) as of the related
Determination Date exceeds (ii) 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.

         "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":  As to any Distribution Date and with respect to:

         (i)      the Class AF-1 Certificates, 7.224% per annum;

         (ii)     the Class AF-2 Certificates, 6.907% per annum;

                                       26

<PAGE>

         (iii)    the Class AF-3 Certificates, (a) on or prior to the Optional
                  Termination Date, the lesser of (x) 7.434% per annum and (y)
                  the Net WAC Rate and (b) after the Optional Termination Date,
                  the lesser of (x) 7.934% per annum and (y) the Net WAC Rate;

         (iv)     the Class AF-4 Certificates, the lesser of (x) 7.216% per
                  annum and (y) the Net WAC Rate; and

         (v)      the Class AV-1 Certificates and the Mezzanine Certificates,
                  the lesser of (x) the related Formula Rate for such
                  Distribution Date and (y) the Net WAC Rate for such
                  Distribution Date.

         (vi)     With respect to the Class C Certificates and any
                  Distribution Date, a per annum rate equal to the percentage
                  equivalent of a fraction, the numerator of which is the sum
                  of the amounts calculated pursuant to clauses (A) through
                  (K) below, and the denominator of which is the aggregate of
                  the Uncertificated Principal Balances of REMIC 1 Regular
                  Interest LT1A, REMIC 1 Regular Interest LT1B, REMIC 1
                  Regular Interest LT1C, REMIC 1 Regular Interest LT1D, REMIC
                  1 Regular Interest LT1E, REMIC 1 Regular Interest LT1F,
                  REMIC 1 Regular Interest LT1G, REMIC 1 Regular Interest
                  LT1H, REMIC 1 Regular Interest LT1I, REMIC 1 Regular
                  Interest LT1J and REMIC 1 Regular Interest LT1P. For
                  purposes of calculating the Pass-Through Rate for the Class
                  C Certificates, the numerator is equal to the sum of the
                  following components:

                  (A)      the Uncertificated REMIC 1 Pass-Through Rate for
                           REMIC 1 Regular Interest LT1A minus the Marker Rate,
                           applied to an amount equal to the Uncertificated
                           Principal Balance of REMIC 1 Regular Interest LT1A;

                  (B)      the Uncertificated REMIC 1 Pass-Through Rate for
                           REMIC 1 Regular Interest LT1B minus the Marker Rate,
                           applied to an amount equal to the Uncertificated
                           Principal Balance of REMIC 1 Regular Interest LT1B;

                  (C)      the Uncertificated REMIC 1 Pass-Through Rate for
                           REMIC 1 Regular Interest LT1C minus the Marker Rate,
                           applied to an amount equal to the Uncertificated
                           Principal Balance of REMIC 1 Regular Interest LT1C;

                  (D)      the Uncertificated REMIC 1 Pass-Through Rate for
                           REMIC 1 Regular Interest LT1D minus the Marker Rate,
                           applied to an amount equal to the Uncertificated
                           Principal Balance of REMIC 1 Regular Interest LT1D;

                  (E)      the Uncertificated REMIC 1 Pass-Through Rate for
                           REMIC 1 Regular Interest LT1E minus the Marker Rate,
                           applied to an amount equal to the Uncertificated
                           Principal Balance of REMIC 1 Regular Interest LT1E;

                  (F)      the Uncertificated REMIC 1 Pass-Through Rate for
                           REMIC 1 Regular Interest LT1F minus the Marker Rate,
                           applied to an amount equal to the Uncertificated
                           Principal Balance of REMIC 1 Regular Interest LT1F;

                                       27

<PAGE>

                  (G)      the Uncertificated REMIC 1 Pass-Through Rate for
                           REMIC 1 Regular Interest LT1G minus the Marker Rate,
                           applied to an amount equal to the Uncertificated
                           Principal Balance of REMIC 1 Regular Interest LT1G;

                  (H)      the Uncertificated REMIC 1 Pass-Through Rate for
                           REMIC 1 Regular Interest LT1H minus the Marker Rate,
                           applied to an amount equal to the Uncertificated
                           Principal Balance of REMIC 1 Regular Interest LT1H;

                  (I)      the Uncertificated REMIC 1 Pass-Through Rate for
                           REMIC 1 Regular Interest LT1I minus the Marker Rate,
                           applied to an amount equal to the Uncertificated
                           Principal Balance of REMIC 1 Regular Interest LT1I;

                  (J)      the Uncertificated REMIC 1 Pass-Through Rate for
                           REMIC 1 Regular Interest LT1J minus the Marker Rate,
                           applied to an amount equal to the Uncertificated
                           Principal Balance of REMIC 1 Regular Interest LT1J;
                           and

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

         "Percentage Interest": With respect to any Certificate (other than a
Class R Certificate), a fraction, 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 Original Class Certificate
Principal Balance of the related Class. With respect to a Class R Certificate,
the portion of the Class evidenced thereby, expressed as a percentage, as stated
on the face of such Certificate; provided, however, that the sum of all such
percentages for each such Class totals 100%.

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

         "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 or managed by the Depositor, the Master Servicer, the NIMs
Insurer, the Trustee, the Trust Administrator or any of their respective
Affiliates or for which an Affiliate of the NIMs Insurer, the Trustee or the
Trust Administrator serves as an advisor:

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

                  (ii) (A) demand and time deposits in, certificates of deposit
         of, bankers' acceptances issued by or federal funds sold by any
         depository institution or trust company (including the Trustee, the
         Trust Administrator or either of their agents acting in their
         respective commercial capacities) incorporated under the laws of the
         United States of America or any state thereof and subject to
         supervision and examination by federal and/or

                                       28

<PAGE>

         state authorities, so long as, at the time of such investment or
         contractual commitment providing for such investment, such depository
         institution or trust company (or, if the only Rating Agency is S&P, in
         the case of the principal depository institution in a depository
         institution holding company, debt obligations of the depository
         institution holding company) or its ultimate parent has a short-term
         uninsured debt rating in one of the two highest available ratings of
         Fitch and the highest available rating category of Moody's and S&P and
         provided that each such investment has an original maturity of no more
         than 365 days; and provided further that, if the only Rating Agency is
         S&P and if the depository or trust company is a principal subsidiary of
         a bank holding company and the debt obligations of such subsidiary are
         not separately rated, the applicable rating shall be that of the bank
         holding company; and, provided further that, if the original maturity
         of such short-term obligations of a domestic branch of a foreign
         depository institution or trust company shall exceed 30 days, the
         short-term rating of such institution shall be A-1+ in the case of S&P
         if S&P is the Rating Agency; and (B) any other demand or time deposit
         or deposit which is fully insured by the FDIC;

                  (iii) repurchase obligations with a term not to exceed 30 days
         with respect to any security described in clause (i) above and entered
         into with a depository institution or trust company (acting as
         principal) rated F-1+ or higher by Fitch, rated A-1+ or higher by S&P
         and rated A2 or higher by Moody's;

                  (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 a Rating
         Agency in its highest long-term unsecured rating category 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 a Rating Agency in its highest
         short-term unsecured debt rating available at the time of such
         investment;

                  (vi) units of money market funds that have been rated "AAA" by
         Fitch (if rated by Fitch), "AAAm" or "AAAm-G" by S&P and "Aaa" by
         Moody's; and

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

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

                                       29

<PAGE>

         "Permitted Transferee": Any transferee of a Residual Certificate other
than a Disqualified Organization or a non-U.S. Person.

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

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

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

         "PMI Insurer Fee": The amount payable to the PMI Insurer on each
Distribution Date, which amount shall equal one twelfth of the product of (i)
the PMI Insurer Fee Rate, multiplied by (ii) the aggregate Stated Principal
Balance of the PMI Mortgage Loans and any related REO Properties as of the first
day of the related Due Period.

         "PMI Insurer Fee Rate": 1.06% per annum.

         "PMI Mortgage Loans": The list of Mortgage Loans insured by the PMI
Insurer attached hereto as Schedule 1.

         "PMI Policy": The Primary Mortgage Insurance Policy No. 32-110-4-1089
with respect to the PMI Mortgage Loans and all endorsements thereto dated the
Closing Date, issued by the PMI Insurer.

         "Pool Balance": As of any date of determination, the aggregate
principal balance of the Mortgage Loans as of such date.

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

         "Prepayment Charge": With respect to any Mortgage Loan, the charges or
premiums, if any, due in connection with a full or partial prepayment of such
Mortgage Loan in accordance with the terms thereof (other than any Master
Servicer Prepayment Charge Payment Amount).

         "Prepayment Charge Schedule": As of the Cut-off Date, a list attached
hereto as Schedule I (including the Prepayment Charge Summary attached thereto),
setting 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;

                                       30

<PAGE>

         (iii)    the state of origination of the related Mortgage Loan;

         (iv)     the date on which the first monthly payment was due on the
                  related Mortgage Loan;

         (v)      the term of the related Prepayment Charge; and

         (vi)     the 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.

         "Prepayment Interest Shortfall": With respect to any Distribution Date,
for each Mortgage Loan that was during the related Prepayment Period the subject
of a Principal Prepayment in full or in part that was applied by the Master
Servicer to reduce the outstanding principal balance of such 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 related Prepayment Period. The
obligations of the Master Servicer in respect of any Prepayment Interest
Shortfall are set forth in Section 3.24.

         "Prepayment Period": With respect to any Distribution Date, the
calendar month preceding the calendar month in which such Distribution Date
occurs.

         "Principal Balance": As to any Mortgage Loan other than a Liquidated
Mortgage Loan, and any day, the related Cut-off Date Principal Balance, MINUS
all collections credited against the Cut-off Date Principal Balance of any such
Mortgage Loan. For purposes of this definition, a Liquidated Mortgage Loan shall
be deemed to have a Principal Balance equal to the Principal Balance of the
related Mortgage Loan as of the final recovery of related Liquidation Proceeds
and a Principal Balance of zero thereafter. As to any REO Property and any day,
the Principal Balance of the related Mortgage Loan shall equal the Principal
Balance of the related Mortgage Loan immediately prior to such Mortgage Loan
becoming REO Property minus any REO Principal Amortization received with respect
thereto on or prior to such day.

         "Principal 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 each Loan Group and any
Distribution Date, the sum of (i) each scheduled payment of principal collected
or advanced on the Mortgage Loans by the Master Servicer that was due during the
related Due Period, (ii) the principal portion of all partial and full principal
prepayments of the Mortgage Loans applied by the Master Servicer during the
related Prepayment Period, (iii) the principal portion of all related Net
Liquidation Proceeds and Insurance Proceeds received during such Prepayment
Period, (iv) that portion of the Purchase Price, representing principal of any
repurchased Mortgage Loan in such Loan Group, deposited to the Collection
Account during such Prepayment Period, (v) the principal portion of any related

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<PAGE>

Substitution Adjustments deposited in the Collection Account during such
Prepayment Period and (vi) on the Distribution Date on which the Trust Fund is
to be terminated pursuant to Section 9.01, that portion of the Termination Price
received in respect of principal.

         "Prospectus Supplement": That certain Prospectus Supplement dated
December 12, 2000 relating to the public offering of the Class A Certificates
and the Mezzanine Certificates.

         "Purchase Price": With respect to any Mortgage Loan or REO Property to
be purchased pursuant to or as contemplated by Section 2.03, Section 3.16(c) or
Section 9.01, and as confirmed by an Officers' Certificate from the Master
Servicer to the Trustee and the Trust Administrator, 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 paid by the Mortgagor or by 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
paid by the Mortgagor or by an advance by the Master Servicer through the end of
the calendar month immediately preceding the calendar month in which such REO
Property was acquired, plus (2) REO Imputed Interest for such REO Property for
each calendar month commencing with the calendar month in which such REO
Property was acquired and ending with the calendar month in which such purchase
is to be effected, net of the total of all net rental income, Insurance
Proceeds, Liquidation Proceeds and P&I Advances that as of the date of purchase
had been distributed in respect of REO Imputed Interest pursuant to Section
4.01, (iii) any unreimbursed Servicing Advances, Advances and Nonrecoverable
Advances and any unpaid Servicing Fees allocable to such Mortgage Loan or REO
Property, (iv) any amounts previously withdrawn from the Collection Account in
respect of such Mortgage Loan or REO Property pursuant to Section 3.11(a)(ix)
and Section 3.16(b), and (v) in the case of a Mortgage Loan required to be
purchased pursuant to Section 2.03, enforcement expenses reasonably incurred or
to be incurred by the NIMs Insurer, the Master Servicer, the Trustee or the
Trust Administrator in respect of the breach or defect giving rise to the
purchase obligation.

         Notwithstanding the foregoing, if in excess of $15,000,008.92 in
aggregate principal balance of Mortgage Loans have previously been repurchased
or substituted for, then in addition to those requirements set forth above, the
Purchase Price shall include the amount of any related Prepayment Charge (other
than with respect to a Purchase Price paid in connection with Section 9.01).

         "Qualified Insurer": Any insurance company acceptable to Fannie Mae.

         "Qualified Substitute Mortgage Loan": A mortgage loan substituted for a
Deleted Mortgage Loan pursuant to the terms of this Agreement or the Mortgage
Loan Purchase Agreement which must, on the date of such substitution, (i) have
an outstanding principal balance (or in the case of a substitution of more than
one mortgage loan for a Deleted Mortgage Loan, an aggregate 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 outstanding
principal balance of the Deleted Mortgage

                                       32

<PAGE>

Loan as of the Due Date in the calendar month during which the substitution
occurs, (ii) have a Mortgage Rate not less than (and not more than one
percentage point in excess of) the Mortgage Rate of the Deleted Mortgage Loan,
(iii) if the Qualified Substitute Mortgage Loan is a Group II Mortgage Loan,
have a Maximum Mortgage Rate not less than the Maximum Mortgage Rate on the
Deleted Mortgage Loan, (iv) if the Qualified Substitute Mortgage Loan is a Group
II Mortgage Loan, have a Minimum Mortgage Rate not less than the Minimum
Mortgage Rate of the Deleted Mortgage Loan, (v) if the Qualified Substitute
Mortgage Loan is a Group II Mortgage Loan, have a Gross Margin equal to or
greater than the Gross Margin of the Deleted Mortgage Loan, (vi) if the
Qualified Substitute Mortgage Loan is a Group II 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) be current as of the date of substitution, (ix) have a Loan-to-Value
Ratio as of the date of substitution equal to or lower than the Loan-to-Value
Ratio of the Deleted Mortgage Loan as of such date, (x) have a risk grading
determined by the 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 or, as determined by the Seller, more
favorable, underwriting criteria and guidelines as the Deleted Mortgage Loan,
(xii) be covered by the PMI Policy if the Deleted Mortgage Loan was covered by
the PMI Policy and (xiii) conform to each representation and warranty set forth
in Section 3.01 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 clauses (ii) through (vi) hereof shall
be satisfied for each such mortgage loan, 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 term to maturity (provided that no such mortgage loan may have a
remaining term to maturity longer than the Deleted Mortgage Loan), 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 (xii) hereof
must be satisfied as to each Qualified Substitute Mortgage Loan or in the
aggregate, as the case may be.

         Notwithstanding the foregoing, if in excess of $15,000,008.92 in
aggregate principal balance of Mortgage Loans have previously been repurchased
or substituted for, then in addition to clauses (i) through (xiii) above, each
Qualified Substitute Mortgage Loan shall also have a Prepayment Charge provision
at least as favorable to the Holders of the Class P Certificates as the
Prepayment Charge provisions in the Deleted Mortgage Loan.

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

         "Realized Loss": With respect to any Liquidated Mortgage Loan, the
amount of loss realized equal to the portion of the Principal Balance remaining
unpaid after application of all Net Liquidation Proceeds in respect of such
Mortgage Loan.

                                       33

<PAGE>

         "Record Date": With respect to (i) the Group I Certificates, the Class
P Certificates, the Class C Certificates, the Class R Certificates and any
Definitive Certificates, the Close of Business on the last Business Day of the
calendar month preceding the month in which the related Distribution Date occurs
and (ii) with respect to the Group II Certificates and the Mezzanine
Certificates, the Close of Business on the Business Day immediately preceding
the related Distribution Date; provided, however, that following the date on
which Definitive Certificates for a Group II Certificate or a Mezzanine
Certificate are available pursuant to Section 5.02, the Record Date for such
Certificates shall be the last Business Day of the calendar month preceding the
month in which the related Distribution Date occurs.

         "Reference Banks": Those banks (i) with an established place of
business in London, England, (ii) not controlling, under the control of or under
common control with the Depositor, the Seller or the Master Servicer or any
affiliate thereof and (iii) which have been designated as such by the Trust
Administrator; provided, however, that if fewer than two of such banks provide a
LIBOR rate, then any leading banks selected by the Trust Administrator which are
engaged in transactions in United States dollar deposits in the international
Eurocurrency market.

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

         "Regular Certificate": Any of the Class A Certificates, Mezzanine
Certificates, Class C Certificates or Class P Certificates.

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

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

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

         "REMIC 1": 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
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, including the PMI Policy, 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 (subject to the last sentence of this definition) 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

                                       34

<PAGE>

with respect thereto. Notwithstanding the foregoing, however, a REMIC election
will not be made with respect to the Reserve Fund.

         "REMIC 1 Interest Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to (a) the product of (i) the aggregate
Principal Balance of the Mortgage Loans and related REO Properties then
outstanding and (ii) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1A minus the Marker Rate, divided by (b) 12.

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

         "REMIC 1 Overcollateralized Amount": With respect to any date of
determination, (i) 1% of the aggregate Uncertificated Principal Balances of the
REMIC 1 Regular Interests minus (ii) the aggregate of the Uncertificated
Principal Balances of REMIC 1 Regular Interest LT1B, REMIC 1 Regular Interest
LT1C, REMIC 1 Regular Interest LT1D, REMIC 1 Regular Interest LT1E, REMIC 1
Regular Interest LT1F, REMIC 1 Regular Interest LT1G, REMIC 1 Regular Interest
LT1H and REMIC 1 Regular Interest LT1I in each case as of such date of
determination.

         "REMIC 1 Principal Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to (a) the product of (i) the aggregate
Principal Balance of the Mortgage Loans and related REO Properties then
outstanding and (ii) 1 minus a fraction, the numerator of which is two times the
aggregate of the Uncertificated Principal Balances of REMIC 1 Regular Interest
LT1B, REMIC 1 Regular Interest LT1C, REMIC 1 Regular Interest LT1D, REMIC 1
Regular Interest LT1E, REMIC 1 Regular Interest LT1F, REMIC 1 Regular Interest
LT1G, REMIC 1 Regular Interest LT1H and REMIC 1 Regular Interest I-LT1I and the
denominator of which is the aggregate of the Uncertificated Principal Balances
of REMIC 1 Regular Interest LT1B, REMIC 1 Regular Interest LT1C, REMIC 1 Regular
Interest LT1D, REMIC 1 Regular Interest LT1E, REMIC 1 Regular Interest LT1F,
REMIC 1 Regular Interest LT1G, REMIC 1 Regular Interest LT1H, REMIC 1 Regular
Interest LT1I and REMIC 1 Regular Interest LT1J.

         "REMIC 1 Regular Interest LT1A": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1A shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         "REMIC 1 Regular Interest LT1B": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1B shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         "REMIC 1 Regular Interest LT1C": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC

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<PAGE>

1. REMIC 1 Regular Interest LT1C shall accrue interest at the related
Uncertificated REMIC 1 Pass-Through Rate in effect from time to time, and shall
be entitled to distributions of principal, subject to the terms and conditions
hereof, in an aggregate amount equal to its initial Uncertificated Principal
Balance as set forth in the Preliminary Statement hereto.

         "REMIC 1 Regular Interest LT1D": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1D shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         "REMIC 1 Regular Interest LT1E": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1E shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         "REMIC 1 Regular Interest LT1F": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1F shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         "REMIC 1 Regular Interest LT1G": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1G shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         "REMIC 1 Regular Interest LT1H": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1H shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         "REMIC 1 Regular Interest LT1I": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1I shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

                                       36

<PAGE>

         "REMIC 1 Regular Interest LT1J": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1J shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         "REMIC 1 Regular Interest LT1P": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1P shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to any amounts distributed to REMIC 1 Regular
Interest LT1P.

         "REMIC 1 Regular Interests": REMIC 1 Regular Interest LT1A, REMIC 1
Regular Interest LT1B, REMIC 1 Regular Interest LT1C, REMIC 1 Regular Interest
LT1D, REMIC 1 Regular Interest LT1E, REMIC 1 Regular Interest LT1F, REMIC 1
Regular Interest LT1G, REMIC 1 Regular Interest LT1H, REMIC 1 Regular Interest
LT1I, REMIC 1 Regular Interest LT1J and REMIC 1 Regular Interest LT1P.

         "REMIC 2": The segregated pool of assets consisting of all of the REMIC
1 Regular Interests conveyed in trust to the Trustee, for the benefit of the
Holders of the Regular Certificates and the Class R Certificate (in respect of
the Class R-2 Interest), pursuant to Article II hereunder, 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 Subchapter M of Chapter 1 of the Code, and related provisions, and
regulations and rulings promulgated thereunder, as the foregoing may be in
effect from time to time.

         "REMIC Regular Interests": The REMIC 1 Regular Interests.

         "Remittance Report": A report prepared by the Master Servicer and
delivered to the Trustee pursuant to Section 4.04.

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

         "REO Account": The account or accounts maintained by the Master
Servicer in respect of an REO Property pursuant to Section 3.23.

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

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

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<PAGE>

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

         "REO Principal Amortization": With respect to any REO Property, for any
calendar month, the excess, if any, of (a) the aggregate of all amounts received
in respect of such REO Property during such calendar month, whether in the form
of rental income, sale proceeds (including, without limitation, that portion of
the Termination Price paid in connection with a purchase of all of the Mortgage
Loans and REO Properties pursuant to Section 9.01 that is allocable to such REO
Property) or otherwise, net of any portion of such amounts (i) payable pursuant
to Section 3.23 in respect of the proper operation, management and maintenance
of such REO Property or (ii) payable or reimbursable to the Master Servicer
pursuant to Section 3.23 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 the Trust Fund through foreclosure or deed-in-lieu of foreclosure, as
described in Section 3.23.

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

         "Reserve Fund": The reserve fund established and maintained pursuant to
Section 3.26.

         "Reserve Interest Rate": With respect to any Interest Determination
Date, the rate per annum that the Trust Administrator determines to be either
(i) the arithmetic mean (rounded upwards if necessary to the nearest whole
multiple of 0.0625%) of the one-month United States dollar lending rates which
banks in The City of New York selected by the Trust Administrator 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 Trust
Administrator can determine no such arithmetic mean, in the case of any Interest
Determination Date after the initial Interest Determination Date, the lowest
one-month United States dollar lending rate which such New York banks selected
by the Trust Administrator are quoting on such Interest Determination Date to
leading European banks.

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

         "Residual Certificate":  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 or the
Trust Administrator, the Chairman or Vice Chairman of the Board of Directors or
Trustees, the Chairman or Vice Chairman of the Executive or Standing Committee
of the Board of Directors or Trustees, the

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<PAGE>

President, 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 or the Trust
Administrator 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.

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

         "Seller": Long Beach Mortgage Company, a Delaware corporation, or its
successor in interest, in its capacity as seller under the Mortgage Loan
Purchase Agreement.

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

         "Servicing Advances": All customary, reasonable and necessary "out of
pocket" costs and expenses (including reasonable attorneys' fees and expenses)
incurred by the Master Servicer in the performance of its servicing obligations
in connection with a default, delinquencies or other unanticipated event or
where reimbursement is otherwise permitted in accordance with any of the terms
of this Agreement, including, but not limited to, the cost of (i) the
preservation, restoration, inspection and protection of the Mortgaged Property,
(ii) any enforcement or judicial proceedings, including foreclosures, (iii) the
management and liquidation of the REO Property and (iv) compliance with the
obligations under Sections 3.01, 3.09, 3.16, and 3.23.

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

         "Startup Day": As defined in 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 Cut-off Date Principal Balance, 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

                                       39

<PAGE>

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 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 Due 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 the Trust Fund, minus 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 Distribution Date in January 2004.

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

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

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

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

         "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 the REMIC Taxable Income or Net Loss Allocation, or any successor
forms, to be filed by the Trustee on behalf of each REMIC, 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.

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<PAGE>

         "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(a) hereof.

         "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 the Delinquency Percentage exceeds 65% of the Credit
Enhancement Percentage.

         "Trust": Long Beach Mortgage Loan Trust 2000-1, the trust created
hereunder.

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

         "Trust Fund": All of the assets of the Trust, which is the trust
created hereunder consisting of REMIC 1 and REMIC 2 and the Reserve Fund.

         "Trustee": First Union National Bank, a national banking association,
or its successor in interest, or any successor trust administrator appointed as
herein provided.

         "Uncertificated Accrued Interest": With respect to each REMIC Regular
Interest on each Distribution Date, an amount equal to one month's interest at
the related Uncertificated Pass- Through Rate on the Uncertificated Principal
Balance of such REMIC Regular Interest. In each case, Uncertificated Accrued
Interest will be reduced by any Net Prepayment Interest Shortfalls and Relief
Act Interest Shortfalls (allocated to such REMIC Regular Interests based on
their respective entitlements to interest irrespective of any Net Prepayment
Interest Shortfalls and Relief Act Interest Shortfalls for such Distribution
Date).

         "Uncertificated Pass-Through Rate": The Uncertificated REMIC 1
Pass-Through Rate.

         "Uncertificated Principal Balance": With respect to each REMIC Regular
Interest the amount of such REMIC Regular Interest outstanding as of any date of
determination. As of the Closing Date, the Uncertificated Principal Balance of
each REMIC Regular Interest shall equal the amount set forth in the Preliminary
Statement hereto as its initial Uncertificated Principal Balance. On each
Distribution Date, the Uncertificated Principal Balance of each REMIC Regular
Interest

                                       41

<PAGE>

shall be reduced by all distributions of principal made on such REMIC Regular
Interest on such Distribution Date pursuant to Section 4.08 and, if and to the
extent necessary and appropriate, shall be further reduced on such Distribution
Date by Realized Losses as provided in Section 4.08, and the Uncertificated
Principal Balances of REMIC 1 Regular Interest LT1I shall be increased by
interest deferrals as provided in Section 4.08. The Uncertificated Principal
Balance of each REMIC Regular Interest that has an Uncertificated Principal
Balance shall never be less than zero.

         "Uncertificated REMIC 1 Pass-Through Rate": For any Distribution Date,
the related Net WAC Rate for such Distribution Date.

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

         "United States Person" or "U.S. Person": A citizen or resident of the
United States, a corporation, partnership (or other entity treated as a
corporation or partnership for United States 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, to
the extent provided in Treasury regulations) provided that, for purposes solely
of the restrictions on the transfer of Class R Certificates, no partnership or
other entity treated as a partnership for United States federal income tax
purposes shall be treated as a United States Person unless all persons that own
an interest in such partnership either directly or through any entity that is
not a corporation for United States federal income tax purposes are required by
the applicable operative agreement to be United States Persons, or an estate the
income of which from sources without the United States is includible 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, 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 authority to control all substantial decisions of the trust. The
term "United States" shall have the meaning set forth in Section 7701 of the
Code or successor provisions.

         "Unpaid Interest Shortfall Amount": With respect to the Class A
Certificates and the Mezzanine Certificates and (i) the first Distribution Date,
zero, and (ii) any Distribution Date after the first Distribution Date, the
amount, if any, by which (a) the sum of (1) the Monthly Interest Distributable
Amount for such Class for the immediately preceding Distribution Date and (2)
the outstanding Unpaid Interest Shortfall Amount, if any, for such Class for
such preceding Distribution Date exceeds (b) the aggregate amount distributed on
such Class in respect of interest pursuant to clause (a) of this definition on
such preceding Distribution Date, plus interest on the amount of interest due
but not paid on the Certificates of such Class on such preceding Distribution
Date, to the extent permitted by law, at the Pass-Through Rate for such Class
for the related Accrual Period.

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

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<PAGE>

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
Fannie Mae.

         "Voting Rights": The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. At all times the Class A
Certificates, the Mezzanine Certificates and the Class C Certificates shall have
98% of the Voting Rights (allocated among the Holders of the Class A
Certificates, the Mezzanine Certificates and the Class C Certificates in
proportion to the then outstanding Certificate Principal Balances of their
respective Certificates), the Class P Certificates shall have 1% of the Voting
Rights and the Class R Certificates shall have 1% of the Voting Rights.
The Voting Rights allocated to any Class of Certificates (other than the Class P
Certificates and the Class R Certificates) shall be allocated among all Holders
of each such Class in proportion to the outstanding Certificate Principal
Balance of such Certificates and the Voting Rights allocated to the Class P
Certificates and the Class R Certificates shall be allocated among all Holders
of each such Class in proportion to such Holders' respective Percentage
Interest; provided, however that when none of the Regular Certificates are
outstanding, 100% of the Voting Rights shall be allocated among Holders of the
Class R Certificates in accordance with such Holders' respective Percentage
Interests in the Certificates of such Class.

         Section 1.02.     Accounting.

         Unless otherwise specified herein, for the purpose of any definition or
calculation, whenever amounts are required to be netted, subtracted or added or
any distributions are taken into account such definition or calculation and any
related definitions or calculations shall be determined without duplication of
such functions.

         Section 1.03.     Allocation of Certain Interest Shortfalls.

         For purposes of calculating the amount of the Monthly Interest
Distributable Amount for the Class A Certificates, the Mezzanine Certificates
and the Class C Certificates for any Distribution Date, (1) the aggregate amount
of any Net Prepayment Interest Shortfalls and any Relief Act Interest Shortfalls
incurred in respect of the Mortgage Loans for any Distribution Date shall be
allocated first, among the Class C 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 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 of each such
Certificate and (2) the aggregate amount of any Realized Losses and Net WAC Rate
Carryover Amounts incurred for any Distribution Date shall be allocated among
the Class C 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 Notional Amount
of each such Certificate.

         For purposes of calculating the amount of Uncertificated Accrued
Interest for the Uncertificated REMIC 1 Regular Interests for any Distribution
Date, the aggregate amount of any Net Prepayment Interest Shortfalls and any
Relief Act Interest Shortfalls incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated first, to Uncertificated Accrued Interest
payable to REMIC 1 Regular Interest LT1A and REMIC 1 Regular Interest LT1J up to
an aggregate

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<PAGE>

amount equal to the REMIC 1 Interest Loss Allocation Amount, 98% and 2%,
respectively, and thereafter among REMIC 1 Regular Interest LT1A, REMIC 1
Regular Interest LT1B, REMIC 1 Regular Interest LT1C, REMIC 1 Regular Interest
LT1D, REMIC 1 Regular Interest LT1E, REMIC 1 Regular Interest LT1F, REMIC 1
Regular Interest LT1G, REMIC 1 Regular Interest LT1H, REMIC 1 Regular Interest
LT1I and REMIC 1 Regular Interest LT1J PRO RATA based on, and to the extent of,
one month's interest at the then applicable respective Uncertificated REMIC 1
Pass-Through Rate on the respective Uncertificated Principal Balance of each
such Uncertificated REMIC 1 Regular Interest.

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<PAGE>

                                   ARTICLE II

                          CONVEYANCE OF MORTGAGE LOANS;
                        ORIGINAL ISSUANCE OF CERTIFICATES

         Section 2.01.     Conveyance of Mortgage Loans.

         The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey to the Trustee
without recourse for the benefit of the Certificateholders all the right, title
and interest of the Depositor, including any security interest therein for the
benefit of the Depositor, in and to the Original Mortgage Loans identified on
the Mortgage Loan Schedule, the rights of the Depositor under the Mortgage Loan
Purchase Agreement (other than the Depositor's rights under Section 17 thereof),
and all other assets included or to be included in REMIC 1. Such assignment
includes all interest and principal received by the Depositor or the Master
Servicer on or with respect to the Original 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 Trust Administrator, on behalf of
the Trustee, an executed copy of the Mortgage Loan Purchase Agreement and the
PMI Policy.

         If the assignment and transfer of the Original Mortgage Loans and the
other property specified in Section 2.01 from the Depositor to the Trustee
pursuant to this Agreement is held or deemed not to be a sale or is held or
deemed to be a pledge of security for a loan, the Depositor intends that the
rights and obligations of the parties shall be established pursuant to the terms
of this Agreement and that, in such event, (i) the Depositor shall be deemed to
have granted and does hereby grant to the Trustee as of the Closing Date a
perfected, first priority security interest in the entire right, title and
interest of the Depositor in and to the Original Mortgage Loans and all other
property conveyed to the Trust Fund pursuant to this Section 2.01 and all
proceeds thereof and (ii) this Agreement shall constitute a security agreement
under applicable law.

         In connection with such transfer and assignment, the Depositor does
hereby deliver to, and deposit with, the Trust Administrator, as custodian for
the Trustee (in which capacity the Trust Administrator will, unless otherwise
specified, be acting under this Article II), the following documents or
instruments with respect to each Original Mortgage Loan so transferred and
assigned (each, a "Mortgage File"):

                  (a) the original Mortgage Note, endorsed in blank or in the
         following form: "Pay to the order of First Union National Bank, 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 a copy of such original Mortgage Note with an accompanying
         Lost Note Affidavit executed by the Seller;

                  (b) 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;

                  (c)      an original Assignment in blank;

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<PAGE>

                  (d) the original recorded Assignment or Assignments showing a
         complete chain of assignment from the originator to the Person
         assigning the Mortgage to the Trustee or in blank;

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

                  (f) the original lender's title insurance policy, together
         with all endorsements or riders issued with or subsequent to the
         issuance of such policy, insuring the priority of the Mortgage as a
         first lien on the Mortgaged Property represented therein as a fee
         interest vested in the Mortgagor, or in the event such original title
         policy is unavailable, a written commitment or uniform binder or
         preliminary report of title issued by the title insurance or escrow
         company.

         The 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 the Closing Date and 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, the Trustee, the Trust Administrator
or the Depositor, in the appropriate public office for real property records,
each Assignment referred to in Sections 2.01(c) and (d) above and shall execute
each original Assignment referred to in clause (c) above in the following form:
"First Union National Bank, 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 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 shall not be required to be completed and submitted for
recording with respect to any Mortgage Loan if the Trustee, the Trust
Administrator, the NIMs Insurer and each Rating Agency has received an opinion
of counsel, reasonably satisfactory to the Trustee, the Trust Administrator, the
NIMs Insurer and each Rating Agency, to the effect that the recordation of such
Assignments in any specific jurisdiction is not necessary to protect the Trust's
interest in the related Mortgage Note; provided further, however,
notwithstanding the delivery of any opinion of counsel, each Assignment 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, the Trustee or the
Trust Administrator, upon the earliest to occur of: (i) reasonable direction by
Holders of Certificates entitled to at least 25% of the Voting Rights, (ii) the
occurrence of a Master Servicer Event of Default, (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 (iv)
if the Seller is not the Master Servicer and with respect to any one Assignment,
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, such
expense will be paid by the Trust Administrator and shall be reimbursable to the
Trust Administrator as an Extraordinary Trust Fund Expense.

         If any of the documents referred to in Sections 2.01(b), (c) or (d)
above has as of the Closing Date been submitted for recording but either (x) has
not been returned from the applicable public

                                       46

<PAGE>

recording office or (y) has been lost or such public recording office has
retained the original of such document, the obligations of the Depositor to
deliver such documents shall be deemed to be satisfied upon (1) delivery to the
Trust Administrator, or to the appropriate Custodian on behalf of the Trust
Administrator, 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 Trust
Administrator, or to the appropriate Custodian on behalf of the Trust
Administrator, promptly upon receipt thereof, and in any event no later than one
year after the Closing Date, 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(f) above, the Depositor shall deliver or
cause to be delivered to the Trust Administrator, or to the appropriate
Custodian on behalf of the Trust Administrator, promptly after receipt thereof,
and in any event within 120 days after the Closing Date, the original lender's
title insurance policy. The Depositor shall deliver or cause to be delivered to
the Trust Administrator, or to the appropriate Custodian on behalf of the Trust
Administrator, promptly upon receipt thereof any other original documents
constituting a part of a Mortgage File received with respect to any Mortgage
Loan, including, but not limited to, any original documents evidencing an
assumption or modification of any Mortgage Loan.

         All original documents relating to the Mortgage Loans that are not
delivered to the Trust Administrator, or to the appropriate Custodian on behalf
of the Trust Administrator, are and shall be held by or on 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
Trust Administrator, or to the appropriate Custodian on behalf of the Trust
Administrator. 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 1 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 Trust
Administrator, on behalf of the Trustee, acknowledges receipt of the documents
referred to in Section 2.01 (other than such documents described in Section
2.01(e)) above and all other assets included in the definition of "REMIC 1"
under clauses (i), (iii), (iv) and (v) (to the extent of amounts deposited into
the Distribution Account) and declares that it, or such Custodian as its agent,
holds and will hold such documents and the other documents delivered to it
constituting the Mortgage File, and that it holds or will hold all such assets
and such other assets included in the definition of "REMIC 1" in trust for the
exclusive use and benefit of all present and future Certificateholders.

         The Trust Administrator agrees, for the benefit of the
Certificateholders, to review (or cause a Custodian on its behalf to review)
each Mortgage File on or before the Closing Date and to certify to the Trustee,
the NIMs Insurer, the Depositor and the Master Servicer in substantially the
form attached hereto as Exhibit F-1 that, as to each Original Mortgage Loan
listed in the Mortgage Loan Schedule (other than any Original Mortgage Loan paid
in full or any Original Mortgage Loan

                                       47

<PAGE>

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(e)) required
to be delivered to it pursuant to this Agreement are in its possession, (ii)
such documents have been reviewed by it or such Trust Administrator or
Custodian, as applicable, and are not mutilated, torn or defaced unless
initialed by the related borrower and relate to such Original Mortgage Loan and
(iii) based on its or the Trust Administrator's or Custodian's examination and
only as to the foregoing, the information set forth in the Mortgage Loan
Schedule that corresponds to items (i), (ii), (ix), (xii) (xiv) (to the extent
of the Periodic Rate Cap and the maximum first Adjustment Date Mortgage Rate
adjustment) and (xvi) 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 Trust Administrator or such Custodian, as
applicable, 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 (including with respect to Section 2.01(f), whether such title insurance
policy insures the priority of the Mortgage as a first lien) 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 (e) of Section 2.01.

         Prior to the first anniversary date of this Agreement, the Trust
Administrator shall deliver to the Depositor, the Master Servicer, the NIM
Insurer and the Trustee a final certification in the form annexed hereto as
Exhibit F-2 evidencing the completeness of the Mortgage Files, with any
applicable exceptions noted thereon.

         If in the process of reviewing the Mortgage Files and making or
preparing, as the case may be, the certifications referred to above, the Trust
Administrator or any Custodian, as applicable, finds any document or documents
constituting a part of a Mortgage File to be missing or defective in any
material respect, at the conclusion of its review the Trust Administrator (or a
Custodian on behalf of the Trust Administrator) shall so notify the Depositor,
the Seller, the NIMs Insurer, the Master Servicer and the Trustee. In addition,
upon the discovery by the Depositor, the Master Servicer, the NIMs Insurer, the
Trust Administrator 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 and adversely affects the value of such
Original Mortgage Loan or the interests of the related Certificateholders in
such Original Mortgage Loan, the party discovering such breach shall give prompt
written notice to the other parties.

         Section 2.03.     Repurchase or Substitution of Mortgage Loans by the
                           Seller or the Depositor; Payment of Prepayment
                           Charges in the Event of Breach.

         (a) Upon discovery or receipt of notice 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 and adversely affects the value of such Mortgage Loan or the interest
therein of the Certificateholders (in the case of any such representation or
warranty made to the knowledge or the best of knowledge of the Seller, as to
which the Seller has no knowledge, without regard to the Seller's lack of
knowledge with respect to the substance of such representation or warranty being

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<PAGE>

inaccurate at the time it was made), the Trust Administrator (or a Custodian on
behalf of the Trust Administrator) shall promptly notify the Depositor, the
Seller, the NIMs Insurer, the Master Servicer and the Trustee 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
3.02(b), the Trust Administrator) shall enforce the obligations of the Seller
under the Mortgage Loan Purchase Agreement to repurchase such Mortgage Loan from
REMIC 1 at the Purchase Price within 90 days after the date on which the Seller
was notified (subject to Section 2.03(e)) 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 Trust
Administrator, upon receipt of written certification from the Master Servicer of
such deposit, shall release to the Seller the related Mortgage File and the
Trust Administrator 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 necessary to vest in the Seller any Mortgage Loan released pursuant
hereto, and neither the Trustee nor the Trust Administrator shall 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 1 (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(d). 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 Certificateholders, the Trust
Administrator on behalf of the Trustee and the Trustee on behalf of the
Certificateholders.

         (b) Within 90 days of the earlier of discovery by the Depositor or
receipt of notice by the Depositor of the breach of any representation or
warranty of the Depositor set forth in Section 2.06 with respect to any Mortgage
Loan, which materially adversely affects the value of such Mortgage Loan or the
interest therein of the Certificateholders, the Depositor shall cure such breach
in all material respects.

         (c) As promptly as practicable (and no later than 90 days) after 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
value of any Mortgage Loan or the interests of the Certificateholders in any
Mortgage Loan, the Master Servicer shall cure such breach in all material
respects.

         Within 90 days of 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(a)(vii) or
(viii) which materially and adversely affects the interests of the Holders of
the Class P Certificates to any Prepayment Charge, the Master Servicer shall
cure such breach in all material respects. If the representation made by the
Master Servicer in Section 2.05(a)(vii) is breached, the Master Servicer shall
pay into the Collection Account the amount of the

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<PAGE>

scheduled Prepayment Charge, less any amount previously collected and paid by
the Master Servicer into the Collection Account; and if the covenant made by the
Master Servicer in Section 2.05(a)(viii) is breached, the Master Servicer shall
pay into the Collection Account the amount of the waived Prepayment Charge.

         (d) Any substitution of Qualified Substitute Mortgage Loans for Deleted
Mortgage Loans made pursuant to Section 2.03(a) shall be effected prior to the
date which is two years after the Startup Date for REMIC 1.

         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 Trust Administrator, on behalf of the Trustee
(or a Custodian on behalf of the Trust Administrator), 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
Trust Administrator (or a Custodian on behalf of the Trust Administrator) 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 Master Servicer, the NIMs Insurer
and the Trustee, with respect to such Qualified Substitute Mortgage Loan or
Loans, a certification substantially in the form attached hereto as Exhibit F-1,
with any applicable exceptions noted thereon. Within one year of the date of
substitution, the Trust Administrator shall deliver to the Depositor, the
Seller, the NIMs Insurer, the Master Servicer and the Trustee a certification
substantially in the form of Exhibit F-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 1 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 Master Servicer shall give or cause to be given written
notice to the NIMs Insurer and the Certificateholders that such substitution has
taken place, shall amend or cause to be amended 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
NIMs Insurer, the Trust Administrator and the Trustee. 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 the Mortgage Loan Purchase Agreement, including all applicable
representations and warranties thereof included in the Mortgage Loan Purchase
Agreement as of the date of substitution.

         For any month in which 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

                                       50

<PAGE>

Stated Principal Balance thereof as of the date of substitution, together with
one month's interest on such Stated Principal Balance at the applicable Net
Mortgage Rate, plus all outstanding Advances and Servicing Advances. On the date
of such substitution, the Seller 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 Trust Administrator, 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 the Trust
Administrator 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 NIMs Insurer, the Trustee and the
Trust Administrator an Opinion of Counsel to the effect that such substitution
will not cause (a) any federal tax to be imposed on any of REMIC 1, created
hereunder, 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 REMIC
hereunder to fail to qualify as a REMIC at any time that any Certificate is
outstanding.

         (e) Upon discovery by the Depositor, the Seller, the Master Servicer,
the NIMs Insurer, the Trust Administrator 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 Depositor shall cause the Seller to repurchase or, subject to the
limitations set forth in Section 2.03(d), 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. Any such repurchase or substitution shall be made in the same
manner as set forth in Section 2.03(a). The Trustee and the Trust Administrator
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.

         Section 2.04.     Intentionally Omitted.

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

         (a) The Master Servicer hereby represents, warrants and covenants to
the Trust Administrator and the Trustee, for the benefit of each of the Trust
Administrator, the Trustee and 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 its
incorporation, is duly authorized and qualified to transact any and all business
contemplated by this Agreement and has all licenses necessary to carry on its
business as now being conducted and is licensed, qualified and in good standing
in the states

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<PAGE>

where the Mortgaged Properties are located if the laws of such state require
licensing or qualification in order to conduct business of the type conducted by
the Master Servicer or to ensure the enforceability or validity of each Mortgage
Loan 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 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 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,
the Trust Administrator 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 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 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 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) 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;

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<PAGE>

                  (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 by the Master Servicer 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 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 under applicable law
upon the Mortgagor's full and voluntary principal prepayment (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; (2) the collectability thereof may be limited due
to acceleration in connection with a foreclosure or other involuntary
prepayment; or (3) subsequent changes in applicable law may limit or prohibit
enforceability thereof); and

                  (viii) The Master Servicer will not waive any Prepayment
Charge or part of a Prepayment Charge unless such waiver would maximize recovery
of total proceeds taking into account the value of such Prepayment Charge and
related Mortgage Loan and doing so is standard and customary in servicing
mortgage loans similar to the Mortgage Loans (including any waiver of a
Prepayment Charge in connection with a refinancing of a Mortgage Loan that is
related to a default or a reasonably foreseeable default), and in no event will
it waive a Prepayment Charge in connection with a refinancing of a Mortgage Loan
that is not related to a default or a reasonably foreseeable default.

         (b) 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 Trust Administrator or to a Custodian, as the case may be,
and shall inure to the benefit of the Trust Administrator, the Trustee, the
Depositor and the Certificateholders. Upon discovery by any of the Depositor,
the Master Servicer, the NIMs Insurer, the Trust Administrator or the Trustee of
a breach of any of the foregoing representations, warranties and covenants which
materially and adversely affects the value of any Mortgage Loan, Prepayment
Charge or the interests therein of the Certificateholders, the party discovering
such breach shall give prompt written notice (but in no event later than two
Business Days following such discovery) to the other of such parties. The
obligation of the Master Servicer set forth in Section 2.03(c) to cure breaches
(or, in the case of (vii) or (viii) above, to pay a Master Servicer Prepayment
Charge Payment Amount) shall constitute the sole remedy against the Master
Servicer available to the Certificateholders, the Depositor, the Trust
Administrator 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, the Trust Administrator or
the Trustee on behalf of the Certificateholders, 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 the Mortgage Loan
Purchase Agreement or pursuant to Section 7.01 hereof.

         Section 2.06.     Representations and Warranties of the Depositor.

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<PAGE>

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

                  (i) Each of this agreement and the Mortgage Loan Purchase
Agreement constitutes a legal, valid and binding obligation of the Depositor,
enforceable against the Depositor in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
affecting the enforcement of creditors' rights in general an except as such
enforceability may be limited by general principles of equity (whether
considered in a proceeding at law or in equity);

                  (ii) Immediately prior to the sale and assignment by the
Depositor to the Trustee on behalf of the Trust of each Mortgage Loan, the
Depositor had good and marketable title to each Mortgage Loan (insofar as such
title was conveyed to it by the Seller) subject to no prior lien, claim,
participation interest, mortgage, security interest, pledge, charge or other
encumbrance or other interest of any nature;

                  (iii) As of the Closing Date, the Depositor has transferred
all right, title interest in the Mortgage Loans to the Trustee on behalf of the
Trust;

                  (iv)     The Depositor is solvent and will not be made
insolvent by the transfer of the Mortgage Loans. The Depositor has not
transferred the Mortgage Loans to the Trustee with any intent to hinder, delay
or defraud any of its creditors;

                  (v) The Depositor has been duly incorporated and is validly
existing as a corporation in good standing under the laws of Delaware, with full
corporate power and authority to own its assets and conduct its business as
presently being conducted;

                  (vi) The Depositor is not in violation of its articles of
incorporation or by-laws or in default in the performance or observance of any
material obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to which
the Depositor is a party or by which it or its properties may be bound, which
default might result in any material adverse changes in the financial condition,
earnings, affairs or business of the Depositor or which might materially and
adversely affect the properties or assets, taken as a whole, of the Depositor;

                  (vii) The execution, delivery and performance of this
Agreement and the Mortgage Loan Purchase Agreement by the Depositor, and the
consummation of the transactions contemplated thereby, do not and will not
result in a material breach or violation of any of the terms or provisions of,
or, to the knowledge of the Depositor, constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Depositor is a party or by which the Depositor is bound
or to which any of the property or assets of the Depositor is subject, nor will
such actions result in any violation of the provisions of the articles of
incorporation or by-laws of the Depositor or, to the best of the Depositor's
knowledge without independent investigation, any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
the Depositor or any of its properties or assets (except for such

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<PAGE>

conflicts, breaches, violations and defaults as would not have a material
adverse effect on the ability of the Depositor to perform its obligations under
this Agreement);

                  (viii) To the best of the Depositor's knowledge without any
independent investigation, no consent, approval, authorization, order,
registration or qualification of or with any court or governmental agency or
body of the United States or any other jurisdiction is required for the issuance
of the Certificates, or the consummation by the Depositor of the other
transactions contemplated by this Agreement or the Mortgage Loan Purchase
Agreement, except such consents, approvals, authorizations, registrations or
qualifications as (a) may be required under State securities or blue sky laws,
(b) have been previously obtained or (c) the failure of which to obtain would
not have a material adverse effect on the performance by the Depositor of its
obligations under, or the validity or enforceability of, this Agreement or the
Mortgage Loan Purchase Agreement; and

                  (ix) There are no actions, proceedings or investigations
pending before or, to the Depositor's knowledge, threatened by any court,
administrative agency or other tribunal to which the Depositor is a party or of
which any of its properties is the subject: (a) which if determined adversely to
the Depositor would have a material adverse effect on the business, results of
operations or financial condition of the Depositor; (b) asserting the invalidity
of this Agreement or the Certificates; (c) seeking to prevent the issuance of
the Certificates or the consummation by the Depositor of any of the transactions
contemplated by this Agreement, as the case may be; or (d) which might
materially and adversely affect the performance by the Depositor of its
obligations under, or the validity or enforceability of, this Agreement or the
Mortgage Loan Purchase Agreement.

         Section 2.07.     Issuance of Certificates.

         The Trustee acknowledges the assignment to it of the Mortgage Loans and
the delivery to it (or the Trust Administrator) of the Mortgage Files, subject
to the provisions of Sections 2.01 and 2.02, together with the assignment to it
of all other assets included in the Trust Fund, receipt of which is hereby
acknowledged. Concurrently with such assignment and delivery and in exchange
therefor, the Trust Administrator, 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 Certificates in
authorized denominations. The interests evidenced by the Certificates constitute
the entire beneficial ownership interest in the Trust Fund.

         Section           2.08. Conveyance of REMIC Regular Interests and
                           Acceptance of REMIC 1 by the Trustee; Issuance of
                           Certificates.

         (a) 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 1 Regular Interests for the benefit of the Holders of the
Certificates. The Trustee acknowledges receipt of the REMIC 1 Regular Interests
(which are uncertificated) and declares that it holds and will hold the same in
trust for the exclusive use and benefit of the holders of the Certificates. The
interests evidenced by the Class R-2 Interest, together with the Regular
Certificates, constitute the entire beneficial ownership interest in REMIC 2.

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<PAGE>

         (b) In exchange for the REMIC 1 Regular Interests and, concurrently
with the assignment to the Trustee thereof, pursuant to the written request of
the Depositor executed by an officer of the Depositor, the Trust Administrator,
on behalf of the Trustee, has executed, authenticated and delivered to or upon
the order of the Depositor, the Regular Certificates in authorized denominations
evidencing (together with the Class R-2 Interest) the entire beneficial
ownership interest in REMIC 2.

         (c) Concurrently with (i) the assignment and delivery to the Trustee of
REMIC 1 (including the Residual Interest therein represented by the Class R-1
Interest) and the acceptance by the Trustee thereof, pursuant to Section 2.01,
Section 2.02 and Section 2.08(a) and (ii) the assignment and delivery to the
Trustee of REMIC 2 (including the Residual Interest therein represented by the
Class R-2 Interest) and the acceptance by the Trustee thereof, pursuant to
Section 2.08(b), the Trust Administrator, on behalf of 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 Certificates in authorized denominations evidencing the Class R-1
Interest and the Class R-2 Interest.

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<PAGE>

                                   ARTICLE III

                          ADMINISTRATION AND SERVICING
                              OF THE MORTGAGE LOANS

         Section 3.01.     Master Servicer to Act as Master Servicer.

         The Master Servicer shall service and administer the Mortgage Loans on
behalf of the Trustee and the Trust Administrator and in the best interests of
and for the benefit of the Certificateholders (as determined by the Master
Servicer in its reasonable judgment) in accordance with the terms of this
Agreement and the respective Mortgage Loans and, to the extent consistent with
such terms, in the same manner in which it services and administers similar
mortgage loans for its own portfolio, giving due consideration to customary and
usual standards of practice of 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 or non-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.

         To the extent consistent with the foregoing, the Master Servicer shall
seek to maximize the timely and complete recovery of principal and interest on
the Mortgage Notes. Subject only to the above-described servicing standards and
the terms of this Agreement and of the respective Mortgage Loans, the Master
Servicer shall have full power and authority, acting alone or through
Sub-Servicers as provided in Section 3.02, to do or cause to be done any and all
things in connection with such servicing and administration which it may deem
necessary or desirable. Without limiting the generality of the foregoing, the
Master Servicer in its own name or in the name of a Sub-Servicer is hereby
authorized and empowered by the Trustee and the Trust Administrator when the
Master Servicer believes it appropriate in its best judgment in accordance with
the servicing standards set forth above, to execute and deliver, on behalf of
the Certificateholders, the Trustee and the Trust Administrator, and upon notice
to the Trustee and the Trust Administrator, 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 and Certificateholders. The Master Servicer shall service and administer
the Mortgage Loans in accordance with applicable state and federal law and shall
provide to the Mortgagors any reports required to be provided to them thereby.
The Master Servicer shall also comply in the performance of this Agreement with
all reasonable rules and requirements of each insurer under any standard

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<PAGE>

hazard insurance policy. Subject to Section 3.17, the Trust Administrator, on
behalf of the Trustee, shall execute, at the written request of the Master
Servicer, and furnish to the Master Servicer and any Sub-Servicer such documents
as are necessary or appropriate to enable the Master Servicer or any
Sub-Servicer to carry out their servicing and administrative duties hereunder,
and the Trust Administrator, on behalf of the Trustee, hereby grants to the
Master Servicer a power of attorney to carry out such duties including a power
of attorney to take title to Mortgaged Properties after foreclosure on behalf of
the Trust Administrator, on behalf of the Trustee and the Certificateholders.
The Trust Administrator, on behalf of the Trustee, shall execute a separate
power of attorney in favor of the Master Servicer for the purposes described
herein to the extent necessary or desirable to enable the Master Servicer to
perform its duties hereunder. Neither the Trustee nor the Trust Administrator
shall be liable for the actions of the Master Servicer or any Sub-Servicers
under such powers of attorney.

         None of the provisions contained in this Agreement shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability, in each case of the kind that would be reimbursable under Section
8.05, in the performance of any of its duties hereunder or in the exercise of
any of its rights or powers if there is reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.

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

         Notwithstanding anything in this Agreement to the contrary, the Master
Servicer may not make any future advances with respect to a Mortgage Loan
(except as provided in Section 4.04) and the Master Servicer shall not (i)
permit any modification with respect to any Mortgage Loan that would change the
Mortgage Rate, reduce or increase the principal balance (except for reductions
resulting from actual payments of principal) or change the final maturity date
on such Mortgage Loan (unless, as provided in Section 3.07, the Mortgagor is in
default with respect to the Mortgage Loan or such default is, in the judgment of
the Master Servicer, reasonably foreseeable) or (ii) permit any modification,
waiver or amendment of any term of any Mortgage Loan that would both (A) effect
an exchange or reissuance of such Mortgage Loan under Section 1001 of the Code
(or final, temporary or proposed Treasury regulations promulgated thereunder)
and (B) cause any of REMIC 1 or REMIC 2 to fail to qualify as a REMIC under the
Code or the imposition of any tax on "prohibited transactions" or "contributions
after the startup date" under the REMIC Provisions.

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

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

         (a) The Master Servicer may enter into Sub-Servicing Agreements
(provided that such agreements would not result in a withdrawal or a downgrading
by any Rating Agency of the ratings on any Class of Certificates or the NIM
Notes, as evidenced by a letter to that effect delivered by each Rating Agency
to the Depositor, the NIMs Insurer and the Trust Administrator and that the NIMs
Insurer shall have consented to such Sub-Servicing Agreement, which consent
shall not be unreasonably withheld) with Sub-Servicers, for the servicing and
administration of the Mortgage Loans. The Trust Administrator and the Trustee
are hereby authorized to acknowledge, at the request of the Master Servicer, any
Sub-Servicing Agreement that meets the requirements applicable to Sub-Servicing
Agreements set forth in this Agreement and that is otherwise permitted under
this Agreement.

         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 3.08. The Master
Servicer will examine each Sub-Servicing Agreement and will be familiar with the
terms thereof. The terms of any Sub-Servicing Agreement will not be inconsistent
with any of the provisions of this Agreement. The Master Servicer and the
Sub-Servicers may enter into and make amendments to the Sub-Servicing Agreements
or enter into different forms of Sub-Servicing Agreements; provided, however,
that any such amendments or different forms shall be consistent with and not
violate the provisions of this Agreement, and that no such amendment or
different form shall be made or entered into which could be reasonably expected
to be materially adverse to the interests of the Certificateholders, without the
consent of the Holders of Certificates entitled to at least 66% of the Voting
Rights. Any variation without the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights from the provisions set forth in
Section 3.08 relating to insurance or priority requirements of Sub-Servicing
Accounts, or credits and charges to the Sub- Servicing Accounts or the timing
and amount of remittances by the Sub-Servicers to the Master Servicer, are
conclusively deemed to be inconsistent with this Agreement and therefore
prohibited. The Master Servicer shall deliver to the NIMs Insurer, the Trustee
and the Trust Administrator 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, the Trust Administrator and the Certificateholders,
shall enforce the obligations of each Sub-Servicer under the related
Sub-Servicing Agreement and, subject to the last sentence of this paragraph, 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

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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 Trust
Administrator, in accordance with the foregoing provisions of this paragraph.

         Section 3.03.     Successor Sub-Servicers.

         The Master Servicer 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 3.02.

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

         Section 3.04.     Liability of the Master Servicer.

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

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         Section 3.05.     No Contractual Relationship Between Sub-Servicers and
                           Trust Administrator, 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 Trust Administrator, the Trustee, the NIMs
Insurer and the Certificateholders shall not be deemed parties thereto and shall
have no claims, rights, obligations, duties or liabilities with respect to the
Sub-Servicer except as set forth in Section 3.06. The Master Servicer shall be
solely liable for all fees owed by it to any Sub- Servicer, irrespective of
whether the Master Servicer's compensation pursuant to this Agreement is
sufficient to pay such fees.

         Section 3.06.     Assumption or Termination of Sub-Servicing Agreements
                           by Trust Administrator.

         In the event the Master Servicer shall for any reason no longer be the
master servicer (including by reason of the occurrence of a Master Servicer
Event of Default), the Trust Administrator or its designee shall thereupon
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 Trust Administrator or the Trustee elects to terminate any Sub-Servicing
Agreement in accordance with its terms as provided in Section 3.03. Upon such
assumption, the Trust Administrator, its designee or the successor servicer for
the Trust Administrator appointed pursuant to Section 7.02 shall be deemed,
subject to Section 3.03, to have assumed all of the Master Servicer's interest
therein and to have replaced the Master Servicer as a party to each
Sub-Servicing Agreement to the same extent as if each Sub-Servicing Agreement
had been assigned to the assuming party, except that (i) the Master Servicer
shall not thereby be relieved of any liability or obligations under any
Sub-Servicing Agreement that arose before it ceased to be the Master Servicer
and (ii) none of the Trust Administrator, 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 Trust
Administrator, deliver to the assuming party all documents and records relating
to each Sub-Servicing Agreement and the Mortgage Loans then being serviced and
an accounting of amounts collected and held by or on behalf of it, and otherwise
use its best efforts to effect the orderly and efficient transfer of the Sub-
Servicing Agreements to the assuming party.

         Section 3.07.     Collection of Certain Mortgage Loan Payments.

         The Master Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Mortgage Loans, and
shall, to the extent such procedures shall be consistent with this Agreement and
the terms and provisions of any applicable insurance policies, follow such
collection procedures as it would follow with respect to mortgage loans
comparable to the Mortgage Loans and held for its own account. Consistent with
the foregoing, the Master Servicer may in its discretion (i) waive any late
payment charge or, if applicable, any penalty interest, or (ii)

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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 (ii) shall not affect the amortization schedule of any Mortgage Loan
for purposes of any computation hereunder, except as provided below; provided
further that 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 4.04
and in accordance with the amortization schedule of such Mortgage Loan without
modification thereof by reason of such arrangements, subject to Section 4.04(d)
pursuant to which the Master Servicer shall not be required to make any such
advances that are Nonrecoverable Advances. Notwithstanding the foregoing, in the
event that any Mortgage Loan is in default or, in the judgment of the Master
Servicer, such default is reasonably foreseeable, the Master Servicer,
consistent with the standards set forth in Section 3.01, may also waive, modify
or vary any term of such Mortgage Loan (including modifications that would
change the Mortgage Rate, forgive the payment of principal or interest or extend
the final maturity date of such Mortgage Loan), accept payment from the related
Mortgagor of an amount less than the Stated Principal Balance in final
satisfaction of such Mortgage Loan (such payment, a "Short Pay-off") or consent
to the postponement of strict compliance with any such term or otherwise grant
indulgence to any Mortgagor.

         Section 3.08.     Sub-Servicing Accounts.

         In those cases where a Sub-Servicer is servicing a Mortgage Loan
pursuant to a Sub- Servicing Agreement, the Sub-Servicer shall be required to
establish and maintain one or more accounts (collectively, the "Sub-Servicing
Account"). The Sub-Servicing Account shall be an Eligible Account. The
Sub-Servicer shall be required to 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 be
required to deposit such proceeds in the Collection Account or remit such
proceeds to the Master Servicer for deposit in the Collection Account not later
than two Business Days after the deposit of such amounts in the Sub-Servicing
Account. For purposes of this Agreement, the Master Servicer shall be deemed to
have received payments on the Mortgage Loans when the Sub-Servicer receives such
payments.

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

         The Master Servicer shall establish and maintain, or cause to be
established and maintained, one or more accounts (the "Servicing Accounts").
Servicing Accounts shall be Eligible Accounts.
The Master Servicer shall deposit in the clearing account (which account must be
an Eligible Account) in which it customarily deposits payments and collections
on mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business

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Day after the Master Servicer's receipt thereof, all collections from the
Mortgagors (or related advances from Sub-Servicers) for the payment of taxes,
assessments, hazard insurance premiums and comparable items for the account of
the Mortgagors ("Escrow Payments") collected on account of the Mortgage Loans
and shall thereafter deposit such Escrow Payments in the Servicing Accounts, in
no event more than two Business Days after the deposit of such funds in the
clearing account, for the purpose of effecting the payment of any such items as
required under the terms of this Agreement. Withdrawals of amounts from a
Servicing Account may be made only to (i) effect payment of taxes, assessments,
hazard insurance premiums, and comparable items; (ii) reimburse the Master
Servicer (or a Sub-Servicer to the extent provided in the related Sub-Servicing
Agreement) out of related collections for any advances made pursuant to Section
3.01 (with respect to taxes and assessments) and Section 3.14 (with respect to
hazard insurance); (iii) refund to Mortgagors any sums as may be determined to
be overages; (iv) pay interest, if required and as described below, to
Mortgagors on balances in the Servicing Account; (v) clear and terminate the
Servicing Account upon the termination of the Master Servicer's obligations and
responsibilities in respect of the Mortgage Loans under this Agreement in
accordance with Article IX or (vi) recover amounts deposited in error. As part
of its servicing duties, the Master Servicer or Sub-Servicers shall pay to the
Mortgagors interest on funds in Servicing Accounts, to the extent required by
law and, to the extent that interest earned on funds in the Servicing Accounts
is insufficient, to pay such interest from its or their own funds, without any
reimbursement therefor. To the extent that a Mortgage does not provide for
Escrow Payments, the Master Servicer shall determine whether any such payments
are made by the Mortgagor in a manner and at a time that avoids the loss of the
Mortgaged Property due to a tax sale or the foreclosure of a tax lien. The
Master Servicer assumes full responsibility for the payment of all such bills
within such time and shall effect payments of all such bills irrespective of the
Mortgagor's faithful performance in the payment of same or the making of the
Escrow Payments and shall make advances from its own funds to effect such
payments; provided, however, that such advances shall constitute Servicing
Advances.

         Section 3.10.     Collection Account and Distribution Account.

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

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

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

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

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

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

                    (vii) all Substitution Shortfall Amounts;

                    (viii) all Prepayment Charges collected by the Master
                    Servicer; and

                    (ix) without duplication, all payments of claims received by
                    the Master Servicer under the PMI Policy.

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

         The foregoing requirements for deposit in the Collection Accounts shall
be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of late payment charges, NSF
fees, reconveyance fees, assumption fees and other similar fees and charges
(other than 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.

         (b) On behalf of the Trust Fund, the Trust Administrator, as agent for
the Trustee, shall establish and maintain one or more accounts (such account or
accounts, the "Distribution Account"), held in trust for the benefit of the
Trustee and the Certificateholders. On behalf of the Trust Fund, the Master
Servicer shall deliver to the Trust Administrator in immediately available funds
for deposit in the Distribution Account on or before 3:00 p.m. New York time on
the Master Servicer Remittance Date, (i) that portion of the Group I Available
Funds and the Group II Available Funds (calculated without regard to the
references in the definitions thereof to amounts that may be withdrawn from the
Distribution Account) for the related Distribution Date then on deposit in the
Collection Account, the amount of all Prepayment Charges on the Prepayment
Charge Schedule

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collected by the Master Servicer in connection with the voluntary Principal
Prepayment in full of any of the Mortgage Loans and any Master Servicer
Prepayment Charge Payment Amount then on deposit in the Collection Account and
the amount of any funds reimbursable to an Advancing Person pursuant to Section
3.27, and (ii) on each Business Day as of the commencement of which the balance
on deposit in the Collection Account exceeds $75,000 following any withdrawals
pursuant to the next succeeding sentence, the amount of such excess, but only if
the Collection Account constitutes an Eligible Account solely pursuant to clause
(ii) of the definition of "Eligible Account." If the balance on deposit in the
Collection Account exceeds $75,000 as of the commencement of business on any
Business Day and the Collection Account constitutes an Eligible Account solely
pursuant to clause (ii) of the definition of "Eligible Account," the Master
Servicer shall, on or before 3:00 p.m. New York time on such Business Day,
withdraw from the Collection Account any and all amounts payable or reimbursable
to the Depositor, the Master Servicer, the Trustee, the Trust Administrator, the
Seller or any Sub-Servicer pursuant to Section 3.11 and shall pay such amounts
to the Persons entitled thereto.

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

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

                    (i) any Advances, as required pursuant to Section 4.04,
                    unless delivered directly to the Trustee by an Advancing
                    Person;

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

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

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

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

         (e) Promptly upon receipt of any Stayed Funds, whether from the Master
Servicer, a trustee in bankruptcy, federal bankruptcy court or other source, the
Trust Administrator shall deposit such funds in the Distribution Account,
subject to withdrawal thereof pursuant to Section 7.02(b) or as otherwise
permitted hereunder.

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

         (a) The Master Servicer shall, from time to time, make withdrawals from
the Collection Account, for any of the following purposes or as described in
Section 4.04, without priority:

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

                    (ii) subject to Section 3.16(d), to reimburse the Master
                    Servicer for Advances, but only to the extent of amounts
                    received which represent Late Collections (net of the
                    related Servicing Fees) of Monthly Payments on Mortgage
                    Loans with respect to which such Advances were made in
                    accordance with the provisions of Section 4.04;

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

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

                    (v) 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(c) all amounts received
                    thereon subsequent to the date of purchase or substitution,
                    as the case may be;

                    (vi) to reimburse the Master Servicer for any Advance or
                    Servicing Advance previously made which the Master Servicer
                    has determined to be a Nonrecoverable Advance in accordance
                    with the provisions of Section 4.04;

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

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

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

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

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

         (b) The Trust 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 4.01;

                    (ii) to pay to itself and the Trustee amounts to which it is
                    entitled pursuant to Section 8.05 or to pay Extraordinary
                    Trust Fund Expenses;

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

                    (iv) to reimburse itself or the Trustee pursuant to Section
                    7.02 or pursuant to Section 7.01 to the extent such amounts
                    in Section 7.01 were not reimbursed by the Master Servicer;

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

                    (vi) to remit to the Master Servicer any amount deposited in
                    the Distribution Account by the Master Servicer but not
                    required to be deposited therein in accordance with Section
                    3.10(d);

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<PAGE>

                    (vii) to pay to an Advancing Person reimbursements for
                    Advances and/or Servicing Advances pursuant to Section 3.27;

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

                    (ix) to pay the PMI Insurer the PMI Insurer Fee based on
                    information received from the Master Servicer.

         Section 3.12. Investment of Funds in the Collection Account and the
Distribution Account.

         (a) The Master Servicer may direct any depository institution
maintaining the Collection Account and any REO Account (for purposes of this
Section 3.12, an "Investment Account"), and the Trust Administrator, in its
individual capacity, may direct any depository institution maintaining the
Distribution Account (for purposes of this Section 3.12, also 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 Trust
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 Trust Administrator 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 Trust
Administrator (in its capacity as such), as agent for the Trustee, or in the
name of a nominee of the Trust Administrator. The Trust Administrator shall be
entitled to sole possession (except with respect to investment direction of
funds held in the Collection Account and any REO Account and any income and gain
realized thereon) over each such investment, and any certificate or other
instrument evidencing any such investment shall be delivered directly to the
Trust Administrator or its agent, together with any document of transfer
necessary to transfer title to such investment to the Trust Administrator 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 Trust
Administrator 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
                           Trust Administrator 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 and any REO Account held by or on behalf of the Master
Servicer shall be for the benefit of the Master Servicer and shall be subject to
its withdrawal in accordance with Section 3.11 or Section 3.23, as applicable or
withdrawal by the Trust Administrator in accordance with Section

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3.11. The Master Servicer shall deposit in the Collection Account or any REO
Account, as applicable, the amount of any loss of principal incurred in respect
of any such Permitted Investment made with funds in such accounts immediately
upon realization of such loss.

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

         (d) Except as otherwise expressly provided in this Agreement, if any
default occurs in the making of a payment due under any Permitted Investment, or
if a default occurs in any other performance required under any Permitted
Investment, the Trust Administrator may and, subject to Section 8.01 and Section
8.02(v), upon the request of 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.

         Section 3.13.     [Reserved].

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

         (a) The Master Servicer shall cause to be maintained for each Mortgage
Loan fire insurance with extended coverage on the related Mortgaged Property in
an amount which is at least equal to the least of (i) the then current principal
balance of such Mortgage Loan, (ii) the amount necessary to fully compensate for
any damage or loss to the improvements that are a part of such property on a
replacement cost basis and (iii) the maximum insurable value of the improvements
which are a part of such Mortgaged Property, in each case in an amount not less
than such amount as is necessary to avoid the application of any coinsurance
clause contained in the related hazard insurance policy. The Master Servicer
shall also cause to be maintained fire insurance with extended coverage on each
REO Property in an amount which is at least equal to the lesser of (i) the
maximum insurable value of the improvements which are a part of such property
and (ii) the outstanding principal balance of the related Mortgage Loan at the
time it became an REO Property, plus accrued interest at the Mortgage Rate and
related Servicing Advances. The Master Servicer will comply in the performance
of this Agreement with all reasonable rules and requirements of each insurer
under any such hazard policies. Any amounts to be collected by the Master
Servicer under any such policies (other than amounts to be applied to the
restoration or repair of the property subject to the related Mortgage or amounts
to be released to the Mortgagor in accordance with the procedures that the
Master Servicer would follow in servicing loans held for its own account,
subject to the terms and conditions of the related Mortgage and Mortgage Note)
shall be deposited in the Collection Account, subject to withdrawal pursuant to
Section 3.11, if received in respect of a Mortgage Loan, or in the REO Account,
subject to withdrawal pursuant to Section 3.23, if received in respect of an REO
Property. Any cost incurred by the Master Servicer in maintaining any such
insurance shall not, for the purpose of calculating distributions to
Certificateholders, be added to the unpaid

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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 and
flood insurance has been made available, the Master Servicer will cause to be
maintained a flood insurance policy in respect thereof. Such flood insurance
shall be in an amount equal to the lesser of (i) the unpaid principal balance of
the related Mortgage Loan and (ii) the maximum amount of such insurance
available for the related Mortgaged Property under the national flood insurance
program (assuming that the area in which such Mortgaged Property is located is
participating in such program).

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

         (b) The Master Servicer shall keep in force during the term of this
Agreement a policy or policies of insurance covering errors and omissions for
failure in the performance of the Master Servicer's obligations under this
Agreement, which policy or policies shall be in such form and amount that would
meet the requirements of Fannie Mae or Freddie Mac if it were the purchaser of
the Mortgage Loans, unless the Master Servicer has obtained a waiver of such
requirements from Fannie Mae or Freddie Mac. The Master Servicer shall also
maintain a fidelity bond in the form and amount that would meet the requirements
of Fannie Mae or Freddie Mac, unless the Master Servicer has obtained a waiver
of such requirements from Fannie Mae or Freddie Mac. The Master Servicer shall
provide the Trust Administrator and the Trustee (upon the such party's
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 and the
Trust Administrator. The Master Servicer shall also cause each Sub-Servicer to
maintain a policy of insurance covering errors and omissions and a fidelity bond
meeting such requirements.

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

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         The Master Servicer shall, 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 be required to take such action if in its
sole business judgment the Master Servicer believes it is not in the best
interests of the Trust Fund and shall not exercise any such rights if prohibited
by law from doing so. If the Master Servicer reasonably believes it is unable
under applicable law to enforce such "due-on-sale" clause, or if any of the
other conditions set forth in the proviso to the preceding sentence apply, the
Master Servicer will enter into 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 may also 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 underwriting criteria of the
Master Servicer and has a credit risk rating at least equal to that of the
original Mortgagor. In connection with any assumption, modification 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 under the
circumstances) it shall have received confirmation, in writing, of the continued
effectiveness of any applicable hazard insurance policy, or a new policy meeting
the requirements of this Section is obtained. Any fee collected by the Master
Servicer in respect of any 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. The Master Servicer shall notify the NIMs
Insurer, the Trustee, the Trust Administrator and any respective Custodian that
any such substitution, modification or assumption agreement has been completed
by forwarding to the Trust Administrator or to such Custodian, as the case may
be (with a copy to the Trustee and the NIMs Insurer), the executed original of
such substitution or assumption agreement, which document shall be added to the
related Mortgage File and shall, for all purposes, be considered a part of such
Mortgage File to the same extent as all other documents and instruments
constituting a part thereof.

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

         Section 3.16.     Realization Upon Defaulted Mortgage Loans.

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<PAGE>

         (a) The Master Servicer shall use reasonable efforts consistent with
the servicing standard set forth in Section 3.01, to foreclose upon or otherwise
comparably convert the ownership of properties securing such of the Mortgage
Loans (including selling any such Mortgage Loan rather than converting the
ownership of the related properties if such sale would maximize the timely and
complete recovery of principal and interest on the related Mortgage Note in
accordance with the servicing standard set forth in Section 3.01) as come into
and continue in default and as to which no satisfactory arrangements can be made
for collection of delinquent payments pursuant to Section 3.07. The Master
Servicer shall be responsible for all costs and expenses incurred by it in any
such proceedings; provided, however, that such costs and expenses will
constitute and be recoverable as Servicing Advances by the Master Servicer as
contemplated in Section 3.11 and Section 3.23. The foregoing is subject to the
provision that, in any case in which Mortgaged Property shall have suffered
damage from an Uninsured Cause, the Master Servicer shall not be required to
expend its own funds toward the restoration of such property unless it shall
determine in its sole and absolute discretion that such restoration will
increase the proceeds of liquidation of the related Mortgage Loan after
reimbursement to itself for such expenses.

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

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<PAGE>

within one mile of the site of such wastes or substances, the Master Servicer
shall not foreclose or accept a deed in lieu of foreclosure without the prior
written consent of the NIMs Insurer.

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

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

         (c) The Master Servicer may at its option purchase from REMIC 1 any
Mortgage Loan or related REO Property that is 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 Trust Administrator and the Trustee prior to purchase), at a
price equal to the Purchase Price; provided, however, that the Master Servicer
shall purchase any such Mortgage Loans or related REO Properties on the basis of
delinquency, purchasing the most delinquent Mortgage Loans or related REO
Properties first. The Purchase Price for any Mortgage Loan or related REO
Property purchased hereunder shall be deposited in the Collection Account, and
the Trust Administrator, upon receipt of written certification from the Master
Servicer of such deposit, shall release or cause to be released to the Master
Servicer the related Mortgage File and the Trustee shall execute and the Trust
Administrator shall 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.

         (d) Proceeds received (other than any Prepayment Charges 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 3.11(a)(ii) or (a)(iii); second, to accrued and unpaid interest on the
Mortgage Loan, to the date of the Final Recovery Determination, or to the Due
Date prior to the Distribution Date on which such amounts are to be distributed
if not in connection with a Final Recovery Determination; and third, as a
recovery of

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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 3.11(a)(iii).

         Section 3.17. Trustee and Trust Administrator 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 immediately
notify the Trust Administrator and the Trustee and any related Custodian by a
certification in the form of Exhibit E-2 (which certification shall include a
statement to the effect that all amounts received or to be received in
connection with such payment which are required to be deposited in the
Collection Account pursuant to Section 3.10 have been or will be so deposited)
of a Servicing Officer and shall request delivery to it of the Mortgage File.
Upon receipt of such certification and request, the Trust Administrator or such
Custodian, as the case may be, shall promptly release the related Mortgage File
to the Master Servicer. No expenses incurred in connection with any instrument
of satisfaction or deed of reconveyance shall be chargeable to the Collection
Account or the Distribution Account.

         (b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any insurance policy relating to the Mortgage Loans, the Trust Administrator and
any related Custodian shall, upon request of the Master Servicer and delivery to
the Trust Administrator or such Custodian, as the case may be, of a Request for
Release in the form of Exhibit E-l, release the related Mortgage File to the
Master Servicer, and the Trustee or the Trust Administrator, on behalf of 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 Trust Administrator 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 Trust Administrator
a certificate of a Servicing Officer certifying as to the name and address of
the Person to which such Mortgage File or such document was delivered and the
purpose or purposes of such delivery. Upon receipt of a certificate of a
Servicing Officer stating that such Mortgage Loan was liquidated and that all
amounts received or to be received in connection with such liquidation that are
required to be deposited into the Collection Account have been so deposited, or
that such Mortgage Loan has become an REO Property, a copy of the Request for
Release shall be released by the Trust Administrator or such Custodian to the
Master Servicer or its designee.

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<PAGE>

         (c) Upon written certification of a Servicing Officer, the Trust
Administrator 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, or shall exercise and deliver to the Master
Servicer a power of attorney sufficient to authorize the Master Servicer to
execute such documents on its behalf, provided that the Trust Administrator
shall be obligated to execute the documents identified above if necessary to
enable the Master Servicer to perform its duties hereunder. Each such
certification shall include a request that such pleadings or documents be
executed by the Trust Administrator and a statement as to the reason such
documents or pleadings are required.

         Section 3.18.     Servicing Compensation.

         As compensation for the activities of the Master Servicer hereunder,
the Master Servicer shall be entitled to the Servicing Fee with respect to each
Mortgage Loan payable solely from payments of interest in respect of such
Mortgage Loan, subject to Section 3.24. In addition, the Master Servicer shall
be entitled to recover unpaid Servicing Fees out of Late Collections, Insurance
Proceeds or Liquidation Proceeds to the extent permitted by Section 3.11(a)(iii)
and out of amounts derived from the operation and sale of an REO Property to the
extent permitted by Section 3.23. The right to receive the Servicing Fee may not
be transferred in whole or in part except in connection with the transfer of all
of the Master Servicer's responsibilities and obligations under this Agreement;
provided, however, that the Master Servicer may pay from the Servicing Fee any
amounts due to a Sub-Servicer pursuant to a Sub-Servicing Agreement entered into
under Section 3.02.

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

         Section 3.19. Reports to the Trust Administrator and the Trustee;
Collection Account Statements.

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<PAGE>

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

         Section 3.20.     Statement as to Compliance.

         The Master Servicer shall deliver to the NIMs Insurer, the Trust
Administrator, the Trustee, the Depositor and each Rating Agency on or before
April 15 of each calendar year commencing in 2001, an Officers' Certificate
stating, as to each signatory thereof, that (i) a review of the activities of
the Master Servicer during the preceding year and of performance under this
Agreement has been made under such officers' supervision and (ii) to the best of
such officers' knowledge, based on such review, the Master Servicer has
fulfilled all of its obligations under this Agreement throughout such year, or,
if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officer and the nature and status
thereof. Copies of any such statement shall be provided by the Trust
Administrator to any Certificateholder and to any Person identified to the Trust
Administrator 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 Trust Administrator.

         Section 3.21.     Independent Public Accountants' Servicing Report.

         Not later than April 15 of each calendar year commencing in 2001, the
Master Servicer, at its expense, shall cause a nationally recognized firm of
independent certified public accountants to furnish to the Master Servicer a
report stating that (i) it has obtained a letter of representation regarding
certain matters from the management of the Master Servicer which includes an
assertion that the Master Servicer has complied with certain minimum residential
mortgage loan servicing standards, identified in the Uniform Single Attestation
Program for Mortgage Bankers established by the Mortgage Bankers Association of
America, with respect to the servicing of residential mortgage loans during the
most recently completed fiscal year and (ii) on the basis of an examination
conducted by such firm in accordance with standards established by the American
Institute of Certified Public Accountants, such representation is fairly stated
in all material respects, subject to such exceptions and other qualifications
that may be appropriate. In rendering its report such firm may rely, as to
matters relating to the direct servicing of residential mortgage loans by
Sub-Servicers, upon comparable reports of firms of independent certified public
accountants rendered on the basis of examinations conducted in accordance with
the same standards (rendered within one year of such

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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 NIMs
Insurer, the Trust Administrator, the Trustee and each Rating Agency. Copies of
such statement shall be provided by the Trust Administrator to any
Certificateholder upon request at the Master Servicer's expense, provided that
such statement is delivered by the Master Servicer to the Trust Administrator.
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 Trust Administrator in writing to so agree; it being understood
and agreed that the Trust Administrator will deliver such letter of agreement in
conclusive reliance upon the direction of the Master Servicer, and the Trust
Administrator 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 3.22.     Access to Certain Documentation.

         The Master Servicer shall provide to the Office of Thrift Supervision,
the FDIC, and any other federal or state banking or insurance regulatory
authority that may exercise authority over any Certificateholder, access to the
documentation regarding the Mortgage Loans serviced by the Master Servicer under
this Agreement, as may be 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
serviced by the Master Servicer under this Agreement will be provided to any
Certificateholder, the NIMs Insurer, the Trust Administrator, the Trustee 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.

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

         (a) The deed or certificate of sale of any REO Property shall be taken
in the name of the Trustee, or its nominee, in trust for the benefit of the
Certificateholders. The Master Servicer, on behalf of REMIC 1 (and on behalf of
the Trustee for the benefit of the Certificateholders), shall either sell any
REO Property before the close of the third taxable year after the year REMIC 1
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 NIMs Insurer, the Trust Administrator, the Trustee and the
Depositor an Opinion of Counsel, addressed to the NIMs Insurer, the Trust
Administrator, the Trustee and the Depositor, to the effect that the holding by
REMIC 1 of such REO Property subsequent to three years after its acquisition
will not result in the imposition on REMIC 1 or REMIC 2 of taxes on "prohibited
transactions" thereof, as defined in Section 860F of the Code, or cause any of
REMIC 1 or REMIC 2 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 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 REMIC
1 or REMIC 2 of any "income from non-permitted assets" within the meaning of
Section 860F(a)(2)(B)

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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, or
cause to be established and maintained, 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 may
allow the Collection Account to serve as the REO Account, subject to separate
ledgers for each REO Property. The Master Servicer may 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, 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. 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 as Servicing
Advances 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 such Servicing Advance would not constitute a Nonrecoverable
Advance.

         Notwithstanding the foregoing, none of the Master Servicer, the Trust
Administrator or the Trustee shall:

                    (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;

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                    (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
                    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
(the cost of which shall constitute a Servicing Advance), provided to the NIMs
Insurer, the Trust Administrator 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 1, in which case the Master Servicer may take such actions as are
specified in such Opinion of Counsel.

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

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

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

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

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

         The Master Servicer shall be entitled to enter into any agreement with
any Independent Contractor performing services for it related to its duties and
obligations hereunder for indemnification of the Master Servicer by such
Independent Contractor, and nothing in this Agreement shall be deemed to limit
or modify such indemnification. The Master Servicer shall be

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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; provided, however, that to the extent that
any payments made by such Independent Contractor would constitute Servicing
Advances if made by the Master Servicer, such amounts shall be reimbursable as
Servicing Advances made by the Master Servicer.

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

         (e) Subject to the time constraints set forth in Section 3.23(a), each
REO Disposition shall be carried out by the Master Servicer at such price and
upon such terms and conditions as the Master Servicer shall deem necessary or
advisable, as shall be normal and usual in its general servicing activities for
similar properties.

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

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

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

         The Master Servicer shall deliver to the Trust Administrator 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.

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

         In the event that a shortfall in any collection on or liability with
respect to any Mortgage Loan results from or is attributable to adjustments to
Mortgage Rates, Monthly Payments or Stated Principal Balances that were made by
the Master Servicer in a manner not consistent with the terms of the related
Mortgage Note and this Agreement, the Master Servicer, upon discovery or receipt
of notice thereof, immediately shall deliver to the Trust 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 Trust
Administrator, 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. Notwithstanding the foregoing, this Section 3.25
shall not limit the ability of the Master Servicer to seek recovery of any such
amounts from the related Mortgagor under the terms of the related Mortgage Note,
as permitted by law.

         Section 3.26.     Reserve Fund.

         No later than the Closing Date, the Trust Administrator, on behalf of
the Trustee, on behalf of the Certificateholders, shall establish and maintain
with itself a separate, segregated trust account titled, "Reserve Fund, Bankers
Trust Company of California, N.A., as Trust Administrator for First Union
National Bank, as Trustee in trust for registered Holders of Long Beach Mortgage
Loan Trust 2000-1, Asset-Backed Certificates, Series 2000-1." On the Closing
Date, the Depositor shall deposit, or cause to be deposited, into the Reserve
Fund $1,000.

         On each Distribution Date as to which there is a Net WAC Rate Carryover
Amount payable to the Class AV-1 Certificates or the Mezzanine Certificates, the
Trust Administrator has been directed by the Class C Certificateholders to, and
therefore will, deposit into the Reserve Fund the amounts described in Section
4.01(d)(viii), rather than distributing such amounts to the Class C
Certificateholders. On each such Distribution Date, the Trust Administrator
shall hold all such amounts for the benefit of the Holders of the Class AV-1
Certificates and the Mezzanine Certificates, and will distribute such amounts to
the Holders of the Class AV-1 Certificates and the Mezzanine Certificates in the
amounts and priorities set forth in Section 4.01(d). If no Net WAC Rate
Carryover Amounts are payable on a Distribution Date, the Trust Administrator
shall deposit into the Reserve Fund on behalf of the Class C Certificateholders,
from amounts otherwise distributable to the Class C 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.

         For federal and state income tax purposes, the Class C
Certificateholders shall 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 2 to the Holders of
the Class C Certificates. Upon the termination of the Trust, or the payment in
full of the Class AV-1 Certificates and the Mezzanine Certificates, all amounts
remaining on deposit in the Reserve Fund will be released by the Trust
Administrator and distributed to the Class C Certificateholders or their
designees. The Reserve Fund will be part of the Trust but not part of any REMIC
and any payments to the Holders of the Class AV-1 Certificates or the Mezzanine

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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).

         By accepting a Class C Certificate, each Class C Certificateholder
shall be deemed to have directed the Trust Administrator, and the Trust
Administrator shall pursuant to such direction, deposit into the Reserve Fund
the amounts described above on each Distribution Date as to which there is any
Net WAC Rate Carryover Amount rather than distributing such amounts to the Class
C Certificateholders. By accepting a Class C Certificate, each Class C
Certificateholder further agrees that such direction is given for good and
valuable consideration, the receipt and sufficiency of which is acknowledged by
such acceptance.

         At the direction of the Holders of a majority in Percentage Interest in
the Class C Certificates, the Trust 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 Trust
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 Trust Administrator or an Affiliate
manages or advises such investment. If no investment direction of the Holders of
a majority in Percentage Interest in the Class C Certificates with respect to
the Reserve Fund is received by the Trust Administrator, the Trust Administrator
shall invest the funds in such account in Permitted Investments managed by the
Trust Administrator or an Affiliate of the kind described in clause (vi) of the
definition of Permitted Investments. Notwithstanding the foregoing, any funds in
the Reserve Fund shall be invested in Bankers Trust's Institutional Cash
Management Fund 1679.

         For federal tax return and information reporting, the right of the
Holders of the Class AV-1 Certificates and the Holders of the Mezzanine
Certificates to receive payments from the Reserve Fund in respect of any Net Wac
Rate Carryover Amount shall be assigned a value of zero.

         Section 3.27.     Advance Facility.

         (a) The Trust Administrator, on behalf of the Trustee and the Trust
Fund, at the direction of the Master Servicer, is hereby authorized to enter
into a facility with any Person which provides that such Person (an "Advancing
Person") may make all or a portion of the 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. To the extent that an Advancing Person makes all or a
portion of any Advance or any Servicing Advance and provides the Trust
Administrator with notice acknowledged by the Master Servicer that such
Advancing Person is entitled to reimbursement, such Advancing Person shall be
entitled to receive reimbursement pursuant to this Agreement for such amount to
the extent provided in Section 3.27(b). Such notice from the Advancing Person
shall specify the amount of the reimbursement and shall specify which Section of
this Agreement permits the applicable Advance or Servicing Advance to be
reimbursed. The Trust Administrator shall be entitled to rely without
independent investigation on the Advancing Person's statement with respect to
the amount of any reimbursement pursuant to this Section 3.27 and with respect
to the Advancing Person's statement

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with respect to the Section of this Agreement that permits the applicable
Advance or Servicing Advance to be reimbursed. An Advancing Person whose
obligations are limited to the making 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.

         (b) If an advancing facility is entered into, then the Master Servicer
shall not be permitted to reimburse itself under any Section specified or for
any amount specified by the Advancing Person in the notice described under
Section 3.27(a) above and acknowledged by the Master Servicer 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
3.10(a). The Trust Administrator is hereby authorized to pay to the Advancing
Person reimbursements for Advances and Servicing Advances from the Distribution
Account to the same extent the Master Servicer would have been permitted to
reimburse itself for such Advances and/or Servicing Advances in accordance with
the specified Sections had the Master Servicer itself made such Advance or
Servicing Advance. The Trust Administrator is hereby authorized to pay directly
to the Advancing Person such portion of the Servicing Fee as the parties to any
advancing facility may agree.

         (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.

         Section 3.28.     PMI Policy; Claims Under the PMI Policy.

         Notwithstanding anything to the contrary elsewhere in this Article III,
the Master Servicer shall not agree to any modification or assumption of a PMI
Mortgage Loan or take any other action with respect to a PMI Mortgage Loan that
could result in denial of coverage under the PMI Policy.
The Master Servicer shall notify the PMI Insurer that the Trustee, on behalf of
the Certificateholders, is the insured, as that term is defined in the PMI
Policy, of each PMI Mortgage Loan. The Master Servicer shall, on behalf of the
Trustee, prepare and file on a timely basis with the PMI Insurer, with a copy to
the Trustee, all claims which may be made under the PMI Policy with respect to
the PMI Mortgage Loans. The Master Servicer shall take all actions required
under the PMI Policy as a condition to the payment of any such claim. Any amount
received from the PMI Insurer with respect to any such PMI Mortgage Loan shall
be deposited by the Master Servicer, no later than two Business Days following
receipt thereof, into the Collection Account.

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                                   ARTICLE IV

                                  FLOW OF FUNDS

         Section 4.01.     Distributions.

         (a)(I) On each Distribution Date, the Trust Administrator shall
withdraw from the Distribution Account that portion of Group I Available Funds
for such Distribution Date consisting of the Group I Interest Remittance Amount
for such Distribution Date, 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:

                  (i) CONCURRENTLY, to the holders of the Group I Certificates,
         the related Monthly Interest Distributable Amount for such Certificates
         and the Unpaid Interest Shortfall Amount, if any, for such
         Certificates, in each case on a PRO RATA basis based on the entitlement
         of each such class pursuant to this clause (i); and

                  (ii) to the holders of the Group II Certificates, an amount
         equal to the excess, if any, of (x) the amount required to be
         distributed pursuant to Section 4.01(a)(II)(i) below for such
         Distribution Date over (y) the amount actually distributed pursuant to
         such clause from the Group II Interest Remittance Amount.

         (II) On each Distribution Date the Trust Administrator shall withdraw
from the Distribution Account that portion of Group II Available Funds for such
Distribution Date consisting of the Group II Interest Remittance Amount for such
Distribution Date, 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.

                  (i) CONCURRENTLY, to the holders of the Group II Certificates,
         the related Monthly Interest Distributable Amount for such Certificates
         and the Unpaid Interest Shortfall Amount, if any, for such
         Certificates, in each case on a pro rata basis based on the entitlement
         of each such class pursuant to this clause (i); and

                  (ii) to the holders of the Group I Certificates, an amount
         equal to the excess, if any, of (x) the amount required to be
         distributed pursuant to Section 4.01(a)(I)(i) above for such
         Distribution Date over (y) the amount actually distributed pursuant to
         such clause from the Group I Interest Remittance Amount.

         (III) On each Distribution Date, following the distributions made
pursuant to Section 4.01(a)(I) and (II) above, the Trust Administrator shall
make the following disbursements and transfers in the order of priority
described below, in each case to the extent of the sum of the Group I Interest
Remittance Amount and the Group II Interest Remittance Amount remaining
undistributed for such Distribution Date.

                  (i) to the Holders of the Class M-1 Certificates, the Monthly
         Interest Distributable Amount allocable to such Certificates;

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                  (ii) to the Holders of the Class M-2 Certificates, the Monthly
         Interest Distributable Amount allocable to such Certificates; and

                  (iii) to the Holders of the Class M-3 Certificates, the
         Monthly Interest Distributable Amount allocable to such Certificates.

         (b)(I) On each Distribution Date (a) prior to the Stepdown Date or (b)
on which a Trigger Event is in effect, the holders of the Class A Certificates
in Certificate Group I shall be entitled to receive distributions in respect of
principal to the extent of the Group I Principal Distribution Amount in the
following amounts and order of priority:

                  (i) first, to the holders of the Group I Certificates,
         allocated among the classes of Group I Certificates as described in
         Section 4.01(e), until the Certificate Principal Balances thereof have
         been reduced to zero;

                  (ii) second, to the holders of the Group II Certificates, an
         amount equal to the excess, if any, of (x) the amount required to be
         distributed pursuant to Section 4.01(b)(II)(i) below for such
         Distribution Date over (y) the amount actually distributed pursuant to
         such clause from the Group II Principal Distribution Amount.

         (II) On each Distribution Date (a) prior to the Stepdown Date or (b) on
which a Trigger Event is in effect, the holders of the Class A Certificates in
Certificate Group II shall be entitled to receive distributions in respect of
principal to the extent of the Group II Principal Distribution Amount in the
following amounts and order of priority:

                  (i) first, to the holders of the Group II Certificates, until
         the Certificate Principal Balance thereof has been reduced to zero;

                  (ii) second, to the holders of the Group I Certificates, an
         amount equal to the excess, if any, of (x) the amount required to be
         distributed pursuant to Section 4.01(b)(I)(i) above for such
         Distribution Date over (y) the amount actually distributed pursuant to
         such clause from the Group I Principal Distribution Amount.

         (III) On each Distribution Date (a) prior to the Stepdown Date or (b)
on which a Trigger Event is in effect, the holders of each class of Mezzanine
Certificates shall be entitled to receive distributions in respect of principal
to the extent of the sum of the Group I Principal Distribution Amount and the
Group II Principal Distribution Amount remaining undistributed for such
Distribution Date in the following amounts and order of priority:

                  (i) first, to the holders of the Class M-1 Certificates, until
         the Certificate Principal Balance thereof has been reduced to zero;

                  (ii) second, to the holders of the Class M-2 Certificates,
         until the Certificate Principal Balance thereof has been reduced to
         zero; and

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                  (iii) third, to the holders of the Class M-3 Certificates,
         until the Certificate Principal Balance thereof has been reduced to
         zero.

         (c)(I) On each Distribution Date (a) on or after the Stepdown Date and
(b) on which a Trigger Event is not in effect, the holders of the Class A
Certificates in Certificate Group I shall be entitled to receive distributions
in respect of principal to the extent of the Group I Principal Distribution
Amount in the following amounts and order of priority:

                  (i) first, to the holders of the Group I Certificates, the
         Group I Class A Principal Distribution Amount until the Certificate
         Principal Balancea thereof have been reduced to zero;

                  (ii) second, to the holders of the Group II Certificates, an
         amount equal to the excess, if any, of (x) the amount required to be
         distributed pursuant to Section 4.01(c)(II)(i) below for such
         Distribution Date over (y) the amount actually distributed pursuant to
         such clause from the Group II Principal Distribution Amount.

         (II) On each Distribution Date (a) on or after the Stepdown Date and
(b) on which a Trigger Event is not in effect, the holders of the Class A
Certificates in Certificate Group II shall be entitled to receive distributions
in respect of principal to the extent of the Group II Principal Distribution
Amount in the following amounts and order of priority:

                  (i) first, to the holders of the Group II Certificates, the
         Group II Class A Principal Distribution Amount until the Certificate
         Principal Balance thereof has been reduced to zero;

                  (ii) second, to the holders of the Group I Certificates, an
         amount equal to the excess, if any, of (x) the amount required to be
         distributed pursuant to Section 4.01(c)(I)(i) above for such
         Distribution Date over (y) the amount actually distributed pursuant to
         such clause from the Group I Principal Distribution Amount.

         (III) On each Distribution Date (a) on or after the Stepdown Date and
(b) on which a Trigger Event is not in effect, the holders of each class of
Mezzanine Certificates shall be entitled to receive distributions in respect of
principal to the extent of the sum of the Group I Principal Distribution Amount
and the Group II Principal Distribution Amount remaining undistributed for such
Distribution Date in the following amounts and order of priority:

                  (i) first, 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;

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

                  (iii) third, 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.

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         (d)      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 any Extra Principal Distribution Amount, payable to
         such Holders as part of the Group I Principal Distribution Amount
         and/or the Group II Principal Distribution Amount as described under
         Section 4.01(b) and Section 4.01(c) above;

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

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

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

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

                  (vi) to the Holders of the Class M-3 Certificates, in an
         amount equal to the Unpaid Interest Shortfall Amount allocable to such
         Certificates;

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

                  (viii) to the Reserve Fund, the amount of any Net WAC Rate
         Carryover Amount;

                  (ix) to the Holders of the Class C Certificates, the Monthly
         Interest Distributable Amount after amounts payable pursuant to (viii)
         above for such Class and any remaining Overcollateralization Release
         Amount for such Distribution Date;

                  (x) if such Distribution Date follows the Prepayment Period
         during which occurs the latest date on which a Prepayment Charge may be
         required to be paid in respect of any Mortgage Loans, to the Holders of
         the Class P Certificates, in reduction of the Certificate Principal
         Balance thereof, until the Certificate Principal Balance thereof is
         reduced to zero; and

                  (xi) any remaining amounts to the Holders of the Residual
         Certificates (in respect of the appropriate Class R Interest).

         On each Distribution Date, after making the distributions of the Group
I Available Funds and the Group II Available Funds as described above, the Trust
Administrator will withdraw from the Reserve Fund the amount on deposit therein
and will distribute such amounts to the holders of the Class AV-1 Certificates
and the Mezzanine Certificates in the following order and priority, in each

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case to the extent of amounts remaining in the Reserve Fund and in each case to
the extent of the Net WAC Carryforward Amount for such Class for such
Distribution Date: first, to the Class AV-1 Certificates; second, to the Class
M-1 Certificates; third, to the Class M-2 Certificates; and fourth, to the Class
M-3 Certificates. Any remaining amount shall be re-deposited into the Reserve
Fund (to the extent of the required amount of $1,000).

         On each Distribution Date, all amounts representing Prepayment Charges
in respect of the Mortgage Loans received during the related Prepayment Period
and any Master Servicer Prepayment Charge Amounts paid by the Master Servicer
during the related Prepayment Period will be withdrawn from the Distribution
Account and distributed by the Trust Administrator to the Holders of the Class P
Certificates and shall not be available for distribution to the Holders of any
other Class of Certificates. The payment of the foregoing amounts to the Holders
of the Class P Certificates shall not reduce the Certificate Principal Balances
thereof.

         Without limiting the provisions of Section 9.01(b), by acceptance of
the Residual Certificates, the Holders of the Residual Certificates agree, for
so long as (i) the NIM Notes are outstanding or any amounts are reimbursable or
payable to the Note Insurer under the Insurance Agreement (as defined in the
Indenture) and (ii) a Note Insurer Default (as defined in the Indenture) shall
not have occurred and be continuing, in connection with any amount distributable
to the Holders of the Residual Certificates pursuant to clause (xi) above, to
assign and transfer any such amounts, and to the extent received to pay any such
amounts, to the Holders of the Class C Certificates.

         (e) The distributions to the Group I Certificates set forth in Section
4.01(b)(I)(i) and Section 4.01(c)(I)(i) shall be paid as follows: (i) first, to
the holders of the Class AF-4 Certificates, the Lockout Distribution Percentage
of the amount to be distributed pursuant to such subclause, until the
Certificate Principal Balance of the Class AF-4 Certificates has been reduced to
zero; (ii) second, to the holders of the Class AF-1 Certificates until the
Certificate Principal Balance of the Class AF-1 Certificates has been reduced to
zero, (iii) 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, (iv) 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 and (v) 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.

         (f) 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 Trust 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 or Notional Amount that is in excess of the lesser of (i)
$5,000,000 or (ii) two-thirds of the initial Certificate Principal Balance or

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Notional Amount 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 Trust Administrator or such other location
specified in the notice to Certificateholders of such final distribution.

         Each distribution with respect to a Book-Entry Certificate shall be
paid to the Depository, which shall credit the amount of such distribution to
the accounts of its Depository Participants in accordance with its normal
procedures. Each Depository Participant shall be responsible for disbursing such
distribution to the Certificate Owners that it represents and to each indirect
participating brokerage firm (a "brokerage firm" or "indirect participating
firm") for which it acts as agent. Each brokerage firm shall be responsible for
disbursing funds to the Certificate Owners that it represents. All such credits
and disbursements with respect to a Book-Entry Certificate are to be made by the
Depository and the Depository Participants in accordance with the provisions of
the Certificates. None of the Trustee, the Trust Administrator, the Depositor,
the Master Servicer or the Seller shall have any responsibility therefor except
as otherwise provided by applicable law.

         (g) 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 Trust Administrator, the Trustee 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.

         (h) Except as otherwise provided in Section 9.01, whenever the Trust
Administrator expects that the final distribution with respect to any Class of
Certificates will be made on the next Distribution Date, the Trust Administrator
shall, no later than three (3) days before the related Distribution Date, mail
to the NIMs Insurer and each Holder on such date of such Class of Certificates a
notice to the effect that:

                (i) the Trust 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 Trust Administrator therein
         specified, and

                  (ii) no interest shall accrue on such Certificates from and
         after the end of the related 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 Trust 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 4.01(h) shall not have been
surrendered for cancellation within six months after the time specified in such
notice, the Trust 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 Trust Administrator shall, directly or
through an agent, mail a final notice to the remaining non-tendering
Certificateholders

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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 Trust Administrator 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 Trust Administrator as a result of such Certificateholder's failure to
surrender its Certificate(s) for final payment thereof in accordance with this
Section 4.01(h).

         (i) Notwithstanding anything to the contrary herein, (i) in no event
shall the Certificate Principal Balance of a Class A Certificate or a Mezzanine
Certificate be reduced more than once in respect of any particular amount both
(a) allocated to such Certificate in respect of Realized Losses pursuant to
Section 4.06 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
Principal Balance of a REMIC 2 Regular Interest be reduced more than once in
respect of any particular amount both (a) allocated to such REMIC 2 Regular
Interest in respect of Realized Losses pursuant to Section 4.06 and (b)
distributed on such REMIC 2 Regular Interest in reduction of the Uncertificated
Principal Balance thereof pursuant to this Section 4.01.

         Section 4.02.     Preference Claims.

         The Trustee and the Trust Administrator shall promptly notify the NIMs
Insurer of any proceeding or the institution of any action, of which a
Responsible Officer of the Trustee or the Trust Administrator, as applicable,
has actual knowledge, seeking the avoidance as a preferential transfer under
applicable bankruptcy, insolvency, receivership or similar law (a "Preference
Claim") of any distribution made with respect to the Class C Certificates or
Class P Certificates. Each Holder of the Class C Certificates or the Class P
Certificates, by its purchase of such Certificates, the Master Servicer, the
Trust Administrator and the Trustee hereby agree that the NIMs Insurer may at
any time during the continuation of any proceeding relating to a Preference
Claim direct all matters relating to such Preference Claim, including, without
limitation, (i) the direction of any appeal of any order relating to such
Preference Claim and (ii) the posting of any surety, supersedeas or performance
bond pending any such appeal. In addition and without limitation of the
foregoing, the NIMs Insurer shall be subrogated to the rights of the Master
Servicer, the Trustee, the Trust Administrator and each Holder of the Class C
Certificates and Class P Certificates in the conduct of any such Preference
Claim, including, without limitation, all rights of any party to an adversary
proceeding action with respect to any court order issued in connection with any
such Preference Claim; provided, however, that the NIMs Insurer will not have
any rights with respect to any Preference Claim set forth in this paragraph
unless the Trustee or Trust Administrator, as indenture trustee or indenture
trustee administrator, respectively, with respect to the NIM Notes or the holder
of any NIM Notes has been required to relinquish a distribution made on the
Class C Certificates, the Class P Certificates or the NIM Notes, as applicable,
and the NIMs Insurer made a payment in respect of such relinquished amount.

         Section 4.03.     Statements.

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         (a) On each Distribution Date, based, as applicable, on information
provided to it by the Master Servicer, the Trust Administrator shall prepare and
make available to each Holder of the Regular Certificates, the Master Servicer,
the Trustee and the Rating Agencies, a statement as to the distributions made on
such Distribution Date:

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

                  (ii) the amount of the distribution made on such Distribution
         Date to the Holders of each Class of Regular Certificates (other than
         the Class P Certificates) allocable to interest, separately identified;

                  (iii) the Overcollateralized Amount, the Overcollateralization
         Release Amount, the Overcollateralization Deficiency Amount and the
         Overcollateralization Target Amount as of such Distribution Date and
         the Excess Overcollateralized Amount for the Mortgage Pool for such
         Distribution Date;

                  (iv) the aggregate amount of servicing compensation received
         by the Master Servicer with respect to the related Due Period and such
         other customary information as the Trust Administrator deems necessary
         or desirable, or which a Certificateholder reasonably requests, to
         enable Certificateholders to prepare their tax returns;

                  (v) the aggregate amount of Advances for the related Due
         Period;

                  (vi) the Pool Balance at the Close of Business at the end of
         the related Due Period;

                  (vii) the number, aggregate principal balance, weighted
         average remaining term to maturity and weighted average Mortgage Rate
         of the Mortgage Loans as of the related Determination Date;

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

                  (ix) with respect to any Mortgage Loan that became an REO
         Property during the preceding Prepayment Period, the unpaid principal
         balance and the Principal Balance of such Mortgage Loan as of the date
         it became an REO Property;

                  (x) the total number and cumulative principal balance of all
         REO Properties as of the Close of Business of the last day of the
         preceding Prepayment Period;

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

                  (xii) the aggregate amount of Realized Losses incurred during
         the related Prepayment Period and the cumulative amount of Realized
         Losses;

                  (xiii) the aggregate amount of extraordinary Trust Fund
         expenses withdrawn from the Collection Account for such Distribution
         Date;

                  (xiv) the Certificate Principal Balance of the Class A
         Certificates, the Mezzanine Certificates and the Class C Certificates,
         after giving effect to the distributions made on such Distribution
         Date;

                  (xv) the Monthly Interest Distributable Amount in respect of
         the Class A Certificates, the Mezzanine Certificates and the Class C
         Certificates for such Distribution Date and the Unpaid Interest
         Shortfall Amount, if any, with respect to the Class A Certificates, the
         Mezzanine Certificates and the Class C Certificates for such
         Distribution Date;

                  (xvi) the aggregate amount of any Prepayment Interest
         Shortfalls for such Distribution Date, to the extent not covered by
         payments by the Master Servicer pursuant to Section 3.24;

                  (xvii) the Credit Enhancement Percentage for such Distribution
         Date;

                  (xviii) the Net WAC Rate Carryover Amount for the Class AV-1
         Certificates and the Mezzanine Certificates, if any, for such
         Distribution Date and the amount remaining unpaid after reimbursements
         therefor on such Distribution Date;

                  (xix) (A) the Overcollateralization Target Amount, (B) the
         Overcollateralized Amount and (C) the amount, if any, by which the
         Overcollateralization Target Amount exceeds the Overcollateralized
         Amount, in each case after giving effect to the distribution made on
         the Regular Certificates on such Distribution Date;

                  (xx) when the Stepdown Date or a Trigger Event has occurred;

                  (xxi) the Group I Available Funds and the Group II Available
         Funds;

                  (xxii) the respective Pass-Through Rates applicable to the
         Class A Certificates, the Mezzanine Certificates and the Class C
         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;

                  (xxiii) (A) the amount of payments received related to claims
         under the PMI Policy during the related Prepayment Period (and the
         number of Mortgage Loans to which such payments related) and (B) the
         cumulative amount of payments received related to claims

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         under the PMI Policy since the Closing Date (and the number of Mortgage
         Loans to which such payments related); and

                  (xxiv) (A) the dollar amount of claims made under the PMI
         Policy that were denied during the Prepayment Period (and the number of
         Mortgage Loans to which such denials related) and (B) the dollar amount
         of the cumulative claims made under the PMI Policy that were denied
         since the Closing Date (and the number of Mortgage Loans to which such
         denials related).

         The Trust Administrator 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 Master Servicer, the Trustee and
the Rating Agencies via the Trust Administrator's internet website. The Trust
Administrator's internet website shall initially be located at "http:\\www-
apps.gis.deutsche-bank.com/invr. Assistance in using the website can be obtained
by calling the Trust Administrator'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 Trust 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
Trust Administrator shall provide timely and adequate notification to all above
parties regarding any such changes.

         In the case of information furnished pursuant to subclauses (i) through
(iii) above, the amounts shall be expressed in a separate section of the report
as a dollar amount for each Class for each $1,000 original dollar amount as of
the Cut-off Date.

         (b) Within a reasonable period of time after the end of each calendar
year, the Trust Administrator shall, upon written request, furnish to each
Person who at any time during the calendar year was a Certificateholder of a
Regular Certificate, if requested in writing by such Person, such information as
is reasonably necessary to provide to such Person a statement containing the
information set forth in subclauses (i) through (iii) above, aggregated for such
calendar year or applicable portion thereof during which such Person was a
Certificateholder. Such obligation of the Trust Administrator shall be deemed to
have been satisfied to the extent that substantially comparable information
shall be prepared and furnished by the Trust Administrator to Certificateholders
pursuant to any requirements of the Code as are in force from time to time.

         (c) On each Distribution Date, the Trust Administrator shall forward to
the Class R Certificateholders and the NIMs Insurer a copy of the reports
forwarded to the Regular Certificateholders in respect of such Distribution Date
with such other information as the Trustee deems necessary or appropriate.

         (d) Within a reasonable period of time after the end of each calendar
year, the Trust Administrator shall deliver to each Person who at any time
during the calendar year was a Class R Certificateholder, if requested in
writing by such Person, such information as is reasonably necessary to provide
to such Person a statement containing the information provided pursuant to the
previous paragraph aggregated for such calendar year or applicable portion
thereof during which such Person was a Class R Certificateholder. Such
obligation of the Trust Administrator shall be deemed to have

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been satisfied to the extent that substantially comparable information shall be
prepared and furnished to Certificateholders by the Trust Administrator pursuant
to any requirements of the Code as from time to time in force.

         On each Distribution Date the Trust 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 Trust Administrator and Bloomberg.

         Section 4.04.     Remittance Reports; Advances.

         (a) Within two Business Days after the Determination Date, but in no
event later than such date which would allow the Trust Administrator to submit a
claim to the NIMs Insurer under the Indenture, the Master Servicer shall deliver
to the NIMs Insurer, the Trust Administrator and the Trustee by telecopy or
electronic mail (or by such other means as the Master Servicer, the Trust
Administrator and the Trustee, as the case may be, may agree from time to time)
a Remittance Report with respect to the related Distribution Date. Not later
than the Master Servicer Remittance Date (or, in the case of some information,
as agreed between the Trust Administrator and the Master Servicer, not later
than five Business Days after the beginning of every calendar month), the Master
Servicer shall deliver or cause to be delivered to the Trust Administrator in
addition to the information provided on the Remittance Report, such other
information reasonably available to it with respect to the Mortgage Loans as the
Trust Administrator 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 4.03. The Trust
Administrator shall not be responsible to recompute, recalculate or verify any
information provided to it by the Master Servicer.

         (b) The amount of Advances to be made by the Master Servicer for any
Distribution Date shall equal, subject to Section 4.04(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 (other than with respect to any Balloon Loan with a delinquent
Balloon Payment as described in clause (iii) below), which Monthly Payments were
delinquent as of the close of business on the related Determination Date, plus
(ii) with respect to each REO Property (other than with respect to any REO
Property relating to a Balloon Loan with a delinquent Balloon Payment as
described in clause (iv) below), 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 3.23 for distribution on such Distribution Date, plus (iii) with respect
to each Balloon Loan with a delinquent Balloon Payment, an amount equal to the
assumed monthly principal and interest payment (with each interest portion
thereof net of the related Servicing Fee) that would have been due on the
related Due Date based on the original principal amortization schedule for such
Balloon Loan assuming such Mortgage Loan was not a Balloon Loan, plus (iv) with
respect to each REO Property relating to a Balloon Loan with a delinquent
Balloon Payment, which REO Property was acquired during or prior

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to the related Prepayment Period and as to which REO Property an REO Disposition
did not occur during the related Prepayment Period, an amount equal to the
excess, if any, of the assumed monthly principal and interest payment (with each
interest portion thereof net of the related Servicing Fee) that would have been
due on the related Due Date based on the original principal amortization
schedule for the related Balloon Loan assuming such Mortgage Loan was not a
Balloon Loan, over the net income from such REO Property transferred to the
Distribution Account pursuant to Section 3.23 for distribution on such
Distribution Date.

         On or before 3:00 p.m. New York time on the Master Servicer Remittance
Date, the Master Servicer shall remit in immediately available funds to the
Trust Administrator 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 4.04, 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 and so used 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 Group I Available Funds and the Group II
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 Trust
Administrator will provide notice to the NIMs Insurer, the Master Servicer and
the Trustee by telecopy by the close of business on any Master Servicer
Remittance Date in the event that the amount remitted by the Master Servicer to
the Trust Administrator 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, shall continue until the
Mortgage Loan is paid in full or until the recovery of all Liquidation Proceeds
thereon.

         (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. The determination by the Master Servicer that it has made a
Nonrecoverable Advance or that any proposed Advance or Servicing Advance, if
made, would constitute a Nonrecoverable Advance, shall be evidenced by an
Officers' Certificate of the Master Servicer delivered to the NIMs Insurer, the
Depositor, the Trust Administrator and the Trustee.

         Section 4.05.     Distributions on the REMIC Regular Interests.

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         (a) On each Distribution Date, the Trust Administrator shall cause in
the following order of priority, the following amounts to be distributed by
REMIC 1 to REMIC 2 on account of the REMIC 1 Regular Interests or withdrawn from
the Distribution Account and distributed to the holders of the Class R
Certificates (in respect of the Class R-1 Interest), as the case may be:

                  (i) first, to the extent of Available Funds, to Holders of
         REMIC 1 Regular Interest LT1A, REMIC 1 Regular Interest LT1B, REMIC 1
         Regular Interest LT1C, REMIC 1 Regular Interest LT1D, REMIC 1 Regular
         Interest LT1E, REMIC 1 Regular Interest LT1F, REMIC 1 Regular Interest
         LT1G, REMIC 1 Regular Interest LT1H, REMIC 1 Regular Interest LT1I and
         REMIC 1 Regular Interest LT1J and REMIC 1 Regular Interest LT1P, PRO
         RATA, in an amount equal to (A) the Uncertificated Accrued Interest for
         such Distribution Date, plus (B) any amounts in respect thereof
         remaining unpaid from previous Distribution Dates. Amounts payable as
         Uncertificated Accrued Interest in respect of REMIC 1 Regular Interest
         LT1J shall be reduced when the REMIC 1 Overcollateralized Amount is
         less than the REMIC 1 Target Overcollateralized Amount, by the lesser
         of (x) the amount of such difference and (y) the Maximum LT1J
         Uncertificated Accrued Interest Deferral Amount; and

                  (ii) second, to the Holders of REMIC 1 Regular Interests, in
         an amount equal to the remainder of the Available Funds for such
         Distribution Date after the distributions made pursuant to clause (i)
         above, allocated as follows:

                           (a)      to the Holders of REMIC 1 Regular Interest
                  LT1A, 98.00% of such remainder, until the Uncertificated
                  Principal Balance of such Uncertificated REMIC 1 Regular
                  Interest is reduced to zero;

                           (b) to the Holders of REMIC 1 Regular Interest LT1B,
                  REMIC 1 Regular Interest LT1C, REMIC 1 Regular Interest
                  LT1D, REMIC 1 Regular Interest LT1E, REMIC 1 Regular
                  Interest LT1F, REMIC 1 Regular Interest LT1G, REMIC 1
                  Regular Interest LT1H and REMIC 1 Regular Interest LT1I,
                  1.00% of such remainder, in the same proportion as principal
                  payments are allocated to the Corresponding Certificates,
                  until the Uncertificated Principal Balances of such REMIC 1
                  Regular Interests are reduced to zero;

                           (c) to the Holders of REMIC 1 Regular Interest LT1J,
                  1.00% of such remainder, until the Uncertificated Principal
                  Balance of such REMIC 1 Regular Interest is reduced to zero;

                           (d) to the Holders of REMIC 1 Regular Interest LT1P,
                  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 Certificates (in respect of the Class R-1 Interest);

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provided, however, that 98.00% and 2.00% of any principal payments that are
attributable to an Overcollateralization Release Amount shall be allocated to
Holders of REMIC 1 Regular Interest LT1A and REMIC 1 Regular Interest LT1J,
respectively.

         Section 4.06.     Allocation of Realized Losses.

         (a) Prior to 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. Prior to each Determination Date, the Master 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. 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 NIMs Insurer, the Trust
Administrator and the Trustee by the Master Servicer prior to the Determination
Date immediately following the end of (i) in the case of Bankruptcy Losses
allocable to interest, the Due Period during which any such Realized Loss was
incurred, and (ii) in the case of all other Realized Losses, the Prepayment
Period during which any such Realized Loss was incurred.

         (b) All Realized Losses on the Mortgage Loans allocated to any Regular
Certificate shall be allocated by the Trust Administrator on each Distribution
Date as follows: first, to Net Monthly Excess Cashflow; second, to the Class C
Certificates, until the Certificate Principal Balance thereof has been reduced
to zero; third, to the Class M-3 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero; fourth, to the Class M-2 Certificates,
until the Certificate Principal Balance thereof has been reduced to zero; and
fifth, 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
C Certificate shall be made by reducing the amount otherwise payable in respect
thereof pursuant to Section 4.01(d)(ix). No allocations of any Realized Losses
shall be made to the Certificate Principal Balances of the Class A Certificates
or the Class P Certificates.

         (c) All Realized Losses on the Mortgage Loans shall be deemed to have
been allocated in the specified percentages, as follows: first, to
Uncertificated Accrued Interest payable to the REMIC 1 Regular Interest LT1A and
REMIC 1 Regular Interest LT1J up to an aggregate amount equal to the REMIC 1
Interest Loss Allocation Amount, 98% and 2%, respectively; second, to the

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Uncertificated Principal Balances of REMIC 1 Regular Interest LT1A and REMIC 1
Regular Interest LT1J up to an aggregate amount equal to the REMIC 1 Principal
Loss Allocation Amount, 98% and 1%, respectively; third, to the Uncertificated
Principal Balances of REMIC 1 Regular Interest LT1A, REMIC 1 Regular Interest
LT1I and REMIC 1 Regular Interest LT1J, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1I has been
reduced to zero; fourth, to the Uncertificated Principal Balances of REMIC 1
Regular Interest LT1A, REMIC 1 Regular Interest LT1H and REMIC 1 Regular
Interest LT1J, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC 1 Regular Interest LT1H has been reduced to zero; fifth, to the
Uncertificated Principal Balances of REMIC 1 Regular Interest LT1A, REMIC 1
Regular Interest LT1G and REMIC 1 Regular Interest LT1J, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC 1 Regular
Interest LT1G has been reduced to zero.

         Section 4.07.     Compliance with Withholding Requirements.

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

         Section 4.08.     Commission Reporting.

         Within 15 days after each Distribution Date, the Trust Administrator
shall, in accordance with industry standards, file with the Commission via the
Electronic Data Gathering Analysis and Retrieval system, a Form 8-K with a copy
of the statement to Certificateholders for such Distribution Date as an exhibit
thereto. Prior to January 30, 2001, the Trust Administrator shall in accordance
with industry standards file a Form 15 Suspension Notification with respect to
the Trust Fund, if applicable. Prior to March 30, 2001, the Trust Administrator
shall file a Form 10-K, in substance conforming to industry standards, with
respect to the Trust Fund. The Depositor hereby grants to the Trust
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 the
earlier of (i) receipt by the Trust 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 Trust Administrator, from
time to time upon request, such further information, reports and financial
statements within its control related to this Agreement and the Mortgage Loans
as the Trust Administrator reasonably deems appropriate to prepare and file all
necessary reports with the Commission. The Trust Administrator shall have no
responsibility to file any items other than those specified in this Section.

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                                    ARTICLE V

                                THE CERTIFICATES

         Section 5.01.     The Certificates.

         (a) The Certificates in the aggregate will represent the entire
beneficial ownership interest in the Mortgage Loans and all other assets
included in REMIC 1. 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-11. 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 by the Trust
Administrator on behalf of the Trustee, and authenticated and delivered by the
Trust Administrator, to or upon the order of the Depositor. The Certificates
shall be executed and attested by manual or facsimile signature on behalf of the
Trust Administrator by an authorized signatory. Certificates bearing the manual
or facsimile signatures of individuals who were at any time the proper officers
of the Trust Administrator shall bind the Trust Administrator, 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 Trustee or the Trust 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 Trust
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 Trust 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

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authorizing it to act as such. The Book-Entry Custodian may, and if it is no
longer qualified to act as such, the Book-Entry Custodian shall, appoint, by a
written instrument delivered to the Depositor, the Master Servicer, the Trustee
and if the Trust Administrator is not the Book-Entry Custodian, the Trust
Administrator 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 Trust Administrator
resigns or is removed in accordance with the terms hereof, the Trustee, the
successor trust 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 Trust Administrator, 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 Trust 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 Trust 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 Trust
Administrator 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 Trust
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 Trust 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 Trust 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
Trust Administrator shall issue the Definitive Certificates.
Such Definitive Certificates will be issued in minimum denominations of $50,000,
except that any beneficial ownership that was represented by a Book-Entry
Certificate in an amount less than $50,000 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, the Trust 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

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obligations imposed upon or to be performed by the Depository shall be deemed to
be imposed upon and performed by the Trust Administrator, to the extent
applicable with respect to such Definitive Certificates, and the Trust
Administrator shall recognize the Holders of the Definitive Certificates as
Certificateholders hereunder.

         Section 5.02.   Registration of Transfer and Exchange of Certificates.

         (a) The Trust Administrator shall cause to be kept at one of the
offices or agencies to be appointed by the Trust Administrator 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 Trust
Administrator shall provide for the registration of Certificates and of
transfers and exchanges of Certificates as herein provided.

         (b) No transfer, sale, pledge or other disposition of any Class C
Certificate, Class P Certificate or Class R Certificate shall be made unless
such disposition is exempt from the registration requirements of the Securities
Act of 1933, as amended (the "1933 Act"), and any applicable state securities
laws or is made in accordance with the 1933 Act and laws. In the event of any
such transfer (other than in connection with the initial transfer of any Class C
Certificate, Class P Certificate or Class R Certificates by the Depositor to the
Seller or by the Seller to an affiliate of the Seller or to a trust, the
Depositor of which is an affiliate of the Seller) (i) unless such transfer is
made in reliance upon Rule 144A (as evidenced by the investment letter delivered
to the Trustee, in substantially the form attached hereto as Exhibit J) under
the 1933 Act, the Trust Administrator, the Trustee and the Depositor shall
require a written Opinion of Counsel (which may be in-house counsel) acceptable
to and in form and substance reasonably satisfactory to the Trust Administrator,
the Trustee and the Depositor that such transfer may be made pursuant to an
exemption, describing the applicable exemption and the basis therefor, from the
1933 Act or is being made pursuant to the 1933 Act, which Opinion of Counsel
shall not be an expense of the Trust Administrator, the Trustee or the Depositor
or (ii) the Trust Administrator shall require the transferor to execute a
transferor certificate (in substantially the form attached hereto as Exhibit L)
and the transferee to execute an investment letter (in substantially the form
attached hereto as Exhibit J) acceptable to and in form and substance reasonably
satisfactory to the Depositor, the Trust Administrator and the Trustee
certifying to the Depositor, the Trust Administrator and the Trustee the facts
surrounding such transfer, which investment letter shall not be an expense of
the Trust Administrator, the Trustee or the Depositor. The Holder of a Class C
Certificate, Class P Certificate or Class R Certificate desiring to effect such
transfer shall, and does hereby agree to, indemnify the Trust Administrator, the
Trustee and the Depositor against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state laws.

         (c) 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") 97-34, 62
Fed. Reg. 39021 (July 21, 1997), as amended by PTE 2000-58, 65 Fed. Reg. 67765
(November 13, 2000) (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

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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.

         No transfer of a Class C Certificate, Class P Certificate or Class R
Certificate or any interest therein shall be made to any Plan subject to ERISA
or Section 4975 of the Code, any Person acting, directly or indirectly, on
behalf of any such Plan or any Person acquiring such Certificates with "Plan
Assets" of a Plan within the meaning of the Department of Labor regulation
promulgated at 29 C.F.R. ss. 2510.3-101 ("Plan Assets") unless the Depositor,
the Trust Administrator, the Trustee and the Master Servicer are provided with
an Opinion of Counsel which establishes to the satisfaction of the Depositor,
the Trust Administrator, the Trustee and the Master Servicer that the purchase
of such Certificates is permissible under applicable law, will not constitute or
result in any prohibited transaction under ERISA or Section 4975 of the Code and
will not subject the Depositor, the Master Servicer, the Trust Administrator,
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 Trust Administrator, 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 Trust
Administrator shall be entitled to conclusively rely upon a representation
(which, upon the request of the Trust 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 Class C Certificate, Class P
Certificate or Class R Certificate shall sign a letter substantially in the form
of Exhibit I to demonstrate its compliance with this Section 5.02(c) (other than
in connection with the initial transfer of any Class C Certificate, Class P
Certificate or Class R Certificates by the Depositor to the Seller or by the
Seller to an affiliate of the Seller or to a trust, the Depositor of which is an
affiliate of the Seller).

         If any Class C Certificate, Class P Certificate or Class R 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 Trust Administrator, the
Trustee and the Trust from and against any and all liabilities, claims, costs or
expenses incurred by those parties as a result of that acquisition or holding .

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

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                  (i) Each Person holding or acquiring any Ownership Interest in
         a Class R Certificate shall be a Permitted Transferee and shall
         promptly notify the Trust Administrator of any change or impending
         change in its status as a Permitted Transferee.

                  (ii) No Person shall acquire an Ownership Interest in a Class
         R Certificate unless such Ownership Interest is a PRO RATA undivided
         interest.

                  (iii) In connection with any proposed transfer of any
         Ownership Interest in a Class R Certificate, the Trust Administrator
         shall as a condition to registration of the transfer, require delivery
         to it, in form and substance satisfactory to it, of each of the
         following:

                           A. an affidavit in the form of Exhibit K hereto from
                  the proposed transferee to the effect that such transferee is
                  a Permitted Transferee and that it is not acquiring its
                  Ownership Interest in the Class R Certificate that is the
                  subject of the proposed transfer as a nominee, trustee or
                  agent for any Person who is not a Permitted Transferee; and

                           B.  a covenant of the proposed transferee to the
                  effect that the proposed transferee agrees to be bound by
                  and to abide by the transfer restrictions applicable to the
                  Class R Certificates.

                  (iv) Any attempted or purported transfer of any Ownership
         Interest in a Class R Certificate in violation of the provisions of
         this Section shall be absolutely null and void and shall vest no rights
         in the purported transferee. If any purported transferee shall, in
         violation of the provisions of this Section, become a Holder of a Class
         R Certificate, then the prior Holder of such Class R Certificate that
         is a Permitted Transferee shall, upon discovery that the registration
         of transfer of such Class R Certificate was not in fact permitted by
         this Section, be restored to all rights as Holder thereof retroactive
         to the date of registration of transfer of such Class R Certificate.
         The Trust Administrator shall be under no liability to any Person for
         any registration of transfer of a Class R Certificate that is in fact
         not permitted by this Section or for making any distributions due on
         such Class R Certificate to the Holder thereof or taking any other
         action with respect to such Holder under the provisions of this
         Agreement so long as the Trust Administrator received the documents
         specified in clause (iii). The Trust Administrator shall be entitled to
         recover from any Holder of a Class R Certificate that was in fact not a
         Permitted Transferee at the time such distributions were made all
         distributions made on such Class R Certificate. Any such distributions
         so recovered by the Trust Administrator shall be distributed and
         delivered by the Trust Administrator to the prior Holder of such Class
         R Certificate that is a Permitted Transferee.

                  (v) If any Person other than a Permitted Transferee acquires
         any Ownership Interest in a Class R Certificate in violation of the
         restrictions in this Section, then the Trust Administrator shall have
         the right but not the obligation, without notice to the Holder of such
         Class R Certificate or any other Person having an Ownership Interest
         therein, to notify the Depositor to arrange for the sale of such Class
         R Certificate. The proceeds of such sale, net of commissions (which may
         include commissions payable to the Depositor or its affiliates in
         connection with such sale), expenses and taxes due, if any, will be
         remitted by the Trust

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         Administrator to the previous Holder of such Class R Certificate that
         is a Permitted Transferee, except that in the event that the Trust
         Administrator determines that the Holder of such Class R Certificate
         may be liable for any amount due under this Section or any other
         provisions of this Agreement, the Trust Administrator may withhold a
         corresponding amount from such remittance as security for such claim.
         The terms and conditions of any sale under this clause (v) shall be
         determined in the sole discretion of the Trust Administrator and it
         shall not be liable to any Person having an Ownership Interest in a
         Class R Certificate as a result of its exercise of such discretion.

                  (vi) If any Person other than a Permitted Transferee acquires
         any Ownership Interest in a Class R Certificate in violation of the
         restrictions in this Section, then the Trust Administrator upon receipt
         of reasonable compensation will provide to the Internal Revenue
         Service, and to the persons specified in Sections 860E(e)(3) and (6) of
         the Code, information needed to compute the tax imposed under Section
         860E(e)(5) of the Code on transfers of residual interests to
         disqualified organizations.

         The foregoing provisions of this Section shall cease to apply to
transfers occurring on or after the date on which there shall have been
delivered to the Trust Administrator, in form and substance satisfactory to the
Trust Administrator, (i) written notification from each Rating Agency that the
removal of the restrictions on Transfer set forth in this Section will not cause
such Rating Agency to downgrade its rating of the NIM Notes or the Certificates
and (ii) an Opinion of Counsel to the effect that such removal will not cause
any REMIC created hereunder to fail to qualify as a REMIC.

         (e) Subject to the preceding subsections, upon surrender for
registration of transfer of any Certificate at any office or agency of the Trust
Administrator maintained for such purpose pursuant to Section 8.12, the Trust
Administrator on behalf of the Trustee shall execute and 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 Trust Administrator maintained for
such purpose pursuant to Section 8.12. Whenever any Certificates are so
surrendered for exchange the Trust Administrator on behalf of the Trustee 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 Trust
Administrator) be duly endorsed by, or be accompanied by a written instrument of
transfer in the form satisfactory to the Trust Administrator duly executed by,
the Holder thereof or his attorney duly authorized in writing.

         (g) No service charge shall be made for any registration of transfer or
exchange of Certificates of any Class, but the Trust 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.

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         All Certificates surrendered for registration of transfer or exchange
shall be canceled by the Trust Administrator and disposed of pursuant to its
standard procedures.

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

         If (i) any mutilated Certificate is surrendered to the Trust
Administrator or the Trust Administrator receives evidence to its satisfaction
of the destruction, loss or theft of any Certificate and (ii) there is delivered
to the Trustee, the Trust Administrator and the Depositor such security or
indemnity as may be required by them to save each of them harmless, then, in the
absence of notice to the Trust Administrator that such Certificate has been
acquired by a bona fide purchaser, the Trust Administrator, on behalf of the
Trustee, shall execute and authenticate and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Certificate, a new Certificate
of like tenor and Percentage Interest. Upon the issuance of any new Certificate
under this Section, the Trust 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
Trustee and the Trust Administrator) in connection therewith. Any duplicate
Certificate issued pursuant to this Section, shall constitute complete and
indefeasible evidence of ownership in the Trust, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.

         Section 5.04.     Persons Deemed Owners.

         The Master Servicer, the Depositor, the Trustee, the Trust
Administrator and any agent of the Master Servicer, the Depositor, the Trustee,
the Trust Administrator may treat the Person, including a Depository, in whose
name any Certificate is registered as the owner of such Certificate for the
purpose of receiving distributions pursuant to Section 4.01 and for all other
purposes whatsoever, and none of the Master Servicer, the Trust Administrator,
the Trustee nor any agent of any of them shall be affected by notice to the
contrary.

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                                   ARTICLE VI

                      THE MASTER SERVICER AND THE DEPOSITOR

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

         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 NIM Notes, 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 to the Trust Administrator).

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

         None of the Depositor, 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 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 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 Master Servicer and any director,

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officer, employee or agent of the Depositor or the Master Servicer may rely in
good faith on any document of any kind which, PRIMA FACIE, is properly executed
and submitted by any Person respecting any matters arising hereunder. The
Depositor, the Master Servicer and any director, officer, employee or agent of
the Depositor 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 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 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 and the Master Servicer
shall be entitled to be reimbursed therefor from the Collection Account as and
to the extent provided in Section 3.11, any such right of reimbursement being
prior to the rights of the Certificateholders to receive any amount in the
Collection Account.

         Section 6.04.     Limitation on Resignation of 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 Trust Administrator and written confirmation from each Rating Agency (which
confirmation shall be furnished to the Depositor and the Trust Administrator)
that such resignation will not cause such Rating Agency to reduce the then
current rating of the NIM Notes, 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 Trust Administrator. No
resignation of the Master Servicer shall become effective until the Trust
Administrator or a successor 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.

         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. The foregoing prohibition on
assignment shall not

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prohibit the Master Servicer from designating a Sub-Servicer as payee of any
indemnification amount payable to the Master Servicer hereunder; provided,
however, that as provided in Section 3.06 hereof, no Sub-Servicer shall be a
third-party beneficiary hereunder and the parties hereto shall not be required
to recognize any Sub-Servicer as an indemnitee under this Agreement. 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,
the Trust Administrator 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, the Trust
Administrator 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, the Trust Administrator 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 necessary 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 NIMs Insurer, the Trust Administrator, the Trustee or the Trust
Fund, and in either case, the Depositor, the NIMs Insurer, the Trust
Administrator or the Trustee, as the case may be, shall use its best efforts to
assure the confidentiality of any such disseminated non-public information. The
Depositor may, but is not obligated to, enforce the obligations of the Master
Servicer under this Agreement and may, but is not obligated to, perform, or
cause a designee to perform, any defaulted obligation of the Master Servicer
under this Agreement or exercise the rights of the Master Servicer under this
Agreement; provided that the Master Servicer shall not be relieved of any of its
obligations under this Agreement by virtue of such performance by the Depositor
or its designee. The Depositor shall not have any responsibility or liability
for any action or failure to act by the Master Servicer and is not obligated to
supervise the performance of the Master Servicer under this Agreement or
otherwise.

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                                   ARTICLE VII

                                     DEFAULT

         Section 7.01.     Master Servicer Events of Default.

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

                  (i) any failure by the Master Servicer to remit to the Trust
         Administrator 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 4.04) 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, the Trust Administrator or the Trustee (in which case notice
         shall be provided by telecopy), or to the Master Servicer, the
         Depositor, the Trust Administrator and the Trustee by 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 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 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, the Trust
         Administrator or the Trustee, or to the Master Servicer, the Depositor,
         the Trust Administrator and the Trustee by 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, marshaling 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, marshaling 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

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

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

                  (vii) any failure of the Master Servicer to make any Advance
         on any Master Servicer Remittance Date required to be made from its own
         funds pursuant to Section 4.04 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 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 NIMs Insurer and the Master Servicer (and to the
Depositor and the Trust Administrator if given by the Trustee or to the Trustee
and the Trust Administrator if given by 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 Trust Administrator shall, by notice in
writing to the NIMs Insurer, the Master Servicer, the Trustee and the Depositor,
terminate all of the rights and obligations of the Master Servicer in its
capacity as Master Servicer under this Agreement and in and to the Mortgage
Loans and the proceeds thereof. On or after the receipt by the Master Servicer
of such written notice, all authority and power of the Master Servicer under
this Agreement, whether with respect to the Certificates (other than as a Holder
of any Certificate) or the Mortgage Loans or otherwise, shall pass to and be
vested in the Trust Administrator pursuant to and under this Section and,
without limitation, the Trust Administrator 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 Trust Administrator 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 Trust Administrator and 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 Trust Administrator 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 (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

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entitled to the benefits of Section 6.03, notwithstanding any such termination,
with respect to events occurring prior to such termination). For purposes of
this Section 7.01, each of the Trustee and the Trust Administrator shall not be
deemed to have knowledge of a Master Servicer Event of Default unless a
Responsible Officer of the Trustee or the Trust Administrator, as applicable,
assigned to and working in the Trustee's or the Trust Administrator's, as the
case may be, 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 or the Trust Administrator, as applicable,
and such notice references the Certificates, REMIC 1 or this Agreement.

         The Trustee or the Trust Administrator, as applicable, 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 master 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 or the Trust Administrator
to correct any errors or insufficiencies in the servicing data or otherwise to
enable the Trustee or the Trust Administrator, as applicable, to service the
Mortgage Loans properly and effectively.

         Section 7.02.     Trust Administrator to Act; Appointment of Successor.

         (a) On and after the time the Master Servicer receives a notice of
termination, the Trust Administrator 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 shall be assumed by the Trust Administrator (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 3.12) by
the terms and provisions hereof including, without limitation, the Master
Servicer's obligations to make Advances pursuant to Section 4.04; provided,
however, that if the Trust Administrator is prohibited by law or regulation from
obligating itself to make advances regarding delinquent Mortgage Loans, then the
Trust Administrator shall not be obligated to make Advances pursuant to Section
4.04; 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 Trust
Administrator 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, the Trust Administrator 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 anything herein to the contrary, in no event shall the Trust
Administrator 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. Notwithstanding the above and
subject to the next paragraph, the Trust Administrator 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 so

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request in writing to the Trust Administrator promptly appoint or petition a
court of competent jurisdiction to appoint, an established Mortgage Loan
servicing institution acceptable to each Rating Agency, having a net worth of
not less than $15,000,000 and reasonably acceptable to the NIMs Insurer 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 Trust
Administrator may make such arrangements for the compensation of such successor
out of payments on Mortgage Loans as it and such successor shall agree;
provided, however, that no such compensation shall be in excess of that
permitted the Master Servicer as such hereunder. The Depositor, the Trust
Administrator, 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 Trust Administrator shall act in such capacity as hereinabove provided.

         Upon removal or resignation of the Master Servicer, the Trust
Administrator, 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 Trust Administrator 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 Trust
Administrator, the Trustee or any affiliate thereof). Such public announcement
shall specify that the successor Master Servicer shall be entitled to the
servicing compensation agreed upon between the Trust Administrator, 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 Trust Administrator 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 Trust Administrator, 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 Trust Administrator 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 Trust
Administrator to the Master Servicer at the time of such sale.

         (b) If the Master Servicer fails to remit to the Trust Administrator
for distribution to the Certificateholders any payment required to be made under
the terms of this Agreement (for purposes of this Section 7.02(b), a
"Remittance") because the Master Servicer is the subject of a proceeding under
the Bankruptcy Code and the making of such Remittance is prohibited by Section
362 of the Bankruptcy Code, the Trust Administrator 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 Trust
Administrator shall be obligated to make such advance only if (i) such advance,
in the

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good faith judgment of the Trust Administrator can reasonably be expected to be
ultimately recoverable from Stayed Funds and (ii) the Trust Administrator is not
prohibited by law from making such advance or obligating itself to do so. Upon
remittance of the Stayed Funds to the Trust Administrator or the deposit thereof
in the Distribution Account by the Master Servicer, a trustee in bankruptcy or a
federal bankruptcy court, the Trust Administrator 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 Trust
Administrator's rights to recover from the Master Servicer's own funds interest
on the amount of any such advance. If the Trust Administrator 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 Trust Administrator shall be entitled to
reimburse itself for such advance, without interest, by withdrawing from the
Distribution Account, out of amounts on deposit therein, an amount equal to the
portion of such advance attributable to the Stayed Funds.

         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 Trust Administrator shall give prompt written notice
thereof to Certificateholders at their respective addresses appearing in the
Certificate Register and to the NIMs Insurer.

         (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 or the Trust Administrator becomes aware of the
occurrence of such an event, the Trust Administrator shall transmit by mail to
all Holders of Certificates and to the NIMs Insurer 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 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. Upon any such waiver of a default or Master Servicer
Event of Default, such default or Master Servicer Event of Default shall cease
to exist and shall be deemed to have been remedied for every purpose hereunder.
No such waiver shall extend to any subsequent or other default or Master
Servicer Event of Default or impair any right consequent thereon except to the
extent expressly so waived.

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                                  ARTICLE VIII

                     THE TRUSTEE AND THE TRUST ADMINISTRATOR

         Section 8.01.     Duties of Trustee and Trust Administrator.

         Each of the Trustee and the Trust Administrator, 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, each of the Trustee and
the Trust Administrator 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 or
the Trust Administrator enumerated in this Agreement shall not be construed as a
duty.

         Each of the Trustee and the Trust Administrator, upon receipt of all
resolutions, certificates, statements, opinions, reports, documents, orders or
other instruments furnished to the Trust Administrator 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 Trust Administrator shall take such
action as it deems appropriate to have the instrument corrected, and if the
instrument is not corrected to the Trust Administrator's satisfaction, the Trust
Administrator will provide notice thereof to the Certificateholders.

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

                  (i) Prior to the occurrence of a Master Servicer Event of
         Default, and after the curing of all such Master Servicer Events of
         Default which may have occurred, the duties and obligations of the
         Trustee and the Trust Administrator shall be determined solely by the
         express provisions of this Agreement, neither the Trust Administrator
         nor 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 or the Trust Administrator and, in the absence of
         bad faith on the part of the Trustee or the Trust Administrator, as
         applicable, the Trustee or the Trust Administrator, as the case may be,
         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 Trust Administrator, as the
         case may be, that conform to the requirements of this Agreement;

                  (ii) Neither the Trustee nor the Trust Administrator shall be
         personally liable for an error of judgment made in good faith by a
         Responsible Officer or Responsible Officers of the Trustee or the Trust
         Administrator, as applicable, unless it shall be proved that the
         Trustee or the Trust Administrator, as applicable, was negligent in
         ascertaining the pertinent facts; and

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                  (iii) Neither the Trustee nor the Trust Administrator shall 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
         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 Trust Administrator, or
         exercising any trust or power conferred upon the Trustee or the Trust
         Administrator, under this Agreement.

         Section 8.02.     Certain Matters Affecting the Trustee and the Trust
                           Administrator.

         (a)      Except as otherwise provided in Section 8.01:

                  (i) Each of the Trustee and the Trust Administrator may
         request and rely conclusively upon and shall be fully 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 and the manner of obtaining consents and evidencing
         the authorization of the execution thereof shall be subject to such
         reasonable regulations as the Trustee or the Trust Administrator, as
         applicable, may prescribe;

                  (ii) Each of the Trustee and the Trust Administrator 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) Neither the Trustee nor the Trust Administrator shall be
         under any obligation to exercise any of the trusts or powers vested in
         it by this Agreement or to institute, conduct or defend any litigation
         hereunder or in relation hereto at the request, order or direction of
         any of the Certificateholders, pursuant to the provisions of this
         Agreement, unless such Certificateholders shall have offered to the
         Trustee or the Trust Administrator, as applicable, 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 or the Trust Administrator
         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 Trust Administrator shall 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, neither the Trustee nor the Trust
         Administrator shall be bound to make any investigation into the facts
         or matters stated in any resolution, certificate, statement,
         instrument, opinion, report,

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         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 Trust Administrator, as applicable, 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 Trust
         Administrator, as applicable, not reasonably assured to the Trustee or
         the Trust Administrator, as applicable, by such Certificateholders, the
         Trustee or the Trust Administrator, as applicable, may require
         reasonable indemnity against such expense, or liability from such
         Certificateholders as a condition to taking any such action;

                  (vi) Each of the Trustee and the Trust Administrator may
         execute any of the trusts or powers hereunder or perform any duties
         hereunder either directly or by or through agents custodians, nominees
         or attorneys and shall not be responsible for any willful misconduct or
         negligence of such agents, custodians, nominees or attorneys (as long
         as such agents, custodians, nominees or attorneys are appointed with
         due and proper care);

                  (vii) Neither the Trustee nor the Trust Administrator shall be
         personally liable for any loss resulting from the investment of funds
         held in the Collection Account at the direction of the Master Servicer
         pursuant to Section 3.12; and

                  (viii) Except as otherwise expressly provided herein, none of
         the provisions of this Agreement shall require the Trustee or the Trust
         Administrator to expend or risk its own funds or otherwise to incur any
         liability, financial or otherwise, in the performance of any of its
         duties hereunder, or in the exercise of any of its rights or powers if
         it shall have reasonable grounds for believing that repayment of such
         funds or indemnity satisfactory to it against such risk or liability is
         not assured to it (not including expenses, disbursements and advances
         incurred or made by the Trustee or the Trust Administrator, as
         applicable, including the compensation and the expenses and
         disbursements of its agents and counsel, in the ordinary course of the
         Trustee's or the Trust Administrator's, as applicable, performance in
         accordance with the provisions of this Agreement.)

         (b) All rights of action under this Agreement or under any of the
Certificates, enforceable by the Trustee or the Trust Administrator, 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 or the Trust
Administrator shall be brought in its name for the benefit of all the Holders of
such Certificates, subject to the provisions of this Agreement.

         Section 8.03.     Neither Trustee nor Trust Administrator Liable for
                           Certificates or Mortgage Loans.

         The recitals contained herein and in the Certificates (other than the
signature of the Trust Administrator, on behalf of the Trustee, the
authentication of the Trust Administrator on the Certificates, the
acknowledgments of the Trust Administrator contained in Article II and the
representations and warranties of the Trustee and the Trust Administrator in
Section 8.12) shall be taken as the statements of the Depositor and neither the
Trustee nor the Trust Administrator assumes

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any responsibility for their correctness. Neither the Trustee nor the Trust
Administrator makes any representations or warranties as to the validity or
sufficiency of this Agreement (other than as specifically set forth in Section
8.12) or of the Certificates (other than the signature of the Trustee, or the
Trust Administrator on behalf of the Trustee, and authentication of the Trustee
or the Trust Administrator on the Certificates) or of any Mortgage Loan or
related document. Neither the Trustee nor the Trust Administrator shall be
accountable for the use or application by the Depositor of any of the
Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Depositor or the Master Servicer in respect
of the Mortgage Loans or deposited in or withdrawn from the Collection Account
by the Master Servicer, other than any funds held by or on behalf of the Trustee
or the Trust Administrator in accordance with Section 3.10.

         Section 8.04.     Trustee and Trust Administrator May Own Certificates.

         Each of the Trustee and the Trust Administrator 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 or Trust
Administrator, as applicable and may transact banking and/or trust business with
the Seller, the Depositor, the Master Servicer or their Affiliates.

         Section 8.05.   Trustee's and Trust Administrator's Fees and Expenses.

         (a) The Trust Administrator shall withdraw from the Distribution
Account on each Distribution Date and pay to itself one day's interest earnings
(net of losses) on amounts on deposit in the Distribution Account. In addition,
to such interest earnings, the compensation to be paid to the Trust
Administrator in respect of its obligations under this Agreement will be the
amounts paid by the Seller pursuant to a letter agreement between the Trust
Administrator and the Seller. The principal compensation to be paid to the
Trustee in respect of its obligations under this Agreement will be the amounts
paid by the Trust Administrator pursuant to a letter agreement between the
Trustee and the Trust Administrator.

         Each of the Trustee and the Trust Administrator, or any director,
officer, employee or agent of the Trustee or the Trust Administrator, as
applicable, shall be indemnified by REMIC 1 and held harmless against any loss,
liability or expense (not including expenses, disbursements and advances
incurred or made by the Trustee or the Trust Administrator, as applicable,
including the compensation and the expenses and disbursements of its agents and
counsel, in the ordinary course of the Trustee's or Trust Administrator's, as
the case may be, performance in accordance with the provisions of this
Agreement) incurred by the Trustee or the Trust Administrator, as applicable,
arising out of or in connection with the acceptance or administration of its
obligations and duties under this Agreement, other than any loss, liability or
expense (i) resulting from the Master Servicer's actions or omissions in
connection with this Agreement and the Mortgage Loans, (ii) that constitutes a
specific liability of the Trustee or the Trust Administrator, as applicable,
pursuant to Section 10.01(c) or (iii) any loss, liability or expense incurred by
reason of willful misfeasance, bad faith or negligence in the performance of
duties hereunder or by reason of reckless disregard of obligations and duties
hereunder or in the case of the Trust Administrator, as a result of a breach of
the Trust Administrator's obligations under Article X hereof. Any amounts
payable to the Trustee or the Trust Administrator, as applicable, or any
director, officer, employee or agent of the Trustee or the Trust Administrator,
in respect of the indemnification provided by this paragraph (a), or

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pursuant to any other right of reimbursement from the Trust Fund that the
Trustee or the Trust Administrator, as applicable, or any director, officer,
employee or agent of the Trustee or the Trust Administrator, may have hereunder
in its capacity as such, may be withdrawn by the Trust Administrator, from the
Distribution Account at any time. Such indemnity shall survive the termination
of this Agreement and the resignation of the Trustee or the Trust Administrator.

         As a limitation on the foregoing with respect to certain expenses of
the Trustee and the Trust Administrator, each of the Trustee and the Trust
Administrator shall receive from REMIC 1 amounts with respect to indemnification
for counsel fees and expenses (collectively, "Legal Fees") in connection with
any third-party litigation or other claims alleging violations of laws or
regulations relating to consumer lending and/or servicing of the Trust Fund
(collectively, "Third Party Claims") in an amount not greater than $25,000 per
month, and $600,000 in the aggregate (with amounts in excess of $25,000 for any
month carried-forward to subsequent months, until the $600,000 aggregate maximum
is reached). Neither the Trustee nor the Trust Administrator shall have any
obligation to incur additional expenses for which reimbursement is limited
pursuant to this paragraph in excess of the aggregate limit set forth above
unless it has received reasonable security or indemnity for such additional
expenses. The Certificateholders shall hold each of the Trustee and the Trust
Administrator harmless for any consequences to such Certificateholders resulting
from any failure of the Trustee or the Trust Administrator to incur any such
additional expenses in excess of the aforementioned aggregate limit.

         (b) The Master Servicer agrees to indemnify the Trustee and the Trust
Administrator 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 or the Trust
Administrator, as the case may be. Any payment hereunder made by the Master
Servicer to the Trustee or the Trust Administrator shall be from the Master
Servicer's own funds, without reimbursement from the Trust Fund therefor.

         (c) The Trust Administrator 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 and Trust
                           Administrator.

         Each of the Trustee and the Trust Administrator 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 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
Trust Administrator shall cease to be eligible in accordance with the provisions
of this Section, the Trustee or the Trust Administrator, as the case may be,
shall resign immediately in the manner and with the effect specified in Section
8.07.

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         Section 8.07.     Resignation or Removal of Trustee and the Trust
                           Administrator.

         Either of the Trustee or the Trust Administrator may at any time resign
and be discharged from the trust hereby created by giving written notice thereof
to the NIMs Insurer, the Depositor, the Master Servicer, the Certificateholders
and, if the Trustee is resigning, to the Trust Administrator, or, if the Trust
Administrator is resigning, to the Trustee. Upon receiving such notice of
resignation, the Depositor shall promptly appoint a successor trustee or trust
administrator by written instrument, in duplicate, which instrument shall be
delivered to the resigning Trustee or Trust Administrator and to the successor
trustee or trust administrator, as applicable. A copy of such instrument shall
be delivered to the Certificateholders, the Trustee or Trust Administrator, as
applicable, and the Master Servicer by the Depositor. If no successor trustee or
trust 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 Trust Administrator, as applicable, may petition any court of
competent jurisdiction for the appointment of a successor trustee or trust
administrator, as applicable.

         If at any time the Trustee or Trust Administrator 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 in the case of the
Trust Administrator, the Trustee), or if at any time the Trustee or the Trust
Administrator shall become incapable of acting, or shall be adjudged bankrupt or
insolvent, or a receiver of the Trustee or the Trust Administrator or of its
property shall be appointed, or any public officer shall take charge or control
of the Trustee or the Trust Administrator or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, then the Depositor (or
in the case of the Trust Administrator, the Trustee) may remove the Trustee or
the Trust Administrator, as applicable, and appoint a successor trustee or trust
administrator (which may be the same Person in the event both the Trustee and
the Trust Administrator resign or are removed) by written instrument, in
duplicate, which instrument shall be delivered to the Trustee or the Trust
Administrator, as the case may be, so removed and to the successor trustee or
trust administrator. A copy of such instrument shall be delivered to the
Certificateholders, the Trustee or the Trust Administrator, as applicable, 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 Trust Administrator and appoint
a successor trustee or trust 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 Trust Administrator, as the
case may be, 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. In addition, if the Trustee has knowledge that
the Trust Administrator has breached any of its duties under this Agreement, the
Trustee may remove the Trust Administrator in the same manner as provided in the
prior sentence.
For purposes of this Section, the Trustee shall not be deemed to have knowledge
of a breach by the Trust Administrator of any of its duties hereunder, 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 breach is received by the Trustee, and such
notice references the Certificates, the Trust Fund or this Agreement.

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         Any resignation or removal of the Trustee or the Trust Administrator
and appointment of a successor trustee or trust administrator, as the case may
be, pursuant to any of the provisions of this Section shall not become effective
until acceptance of appointment by the successor trustee or trust administrator
as provided in Section 8.08. Notwithstanding the foregoing, in the event the
Trust Administrator advises the Trustee that it is unable to continue to perform
its obligations pursuant to the terms of this Agreement prior to the appointment
of a successor, the Trustee shall be obligated to perform such obligations until
a new trust administrator is appointed and shall be entitled to receive any fees
that would have otherwise been payable to the Trust Administrator hereunder.
Such performance shall be without prejudice to any claim by a party hereto or
beneficiary hereof resulting from the Trust Administrator's breach of its
obligations hereunder.

         Section 8.08.     Successor Trustee.

         Any successor trustee or trust administrator appointed as provided in
Section 8.07 shall execute, acknowledge and deliver to the Depositor, the
Trustee or the Trust Administrator, as applicable, and to its predecessor
trustee or trust administrator an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the predecessor trustee
or trust administrator shall become effective and such successor trustee or
trust 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
trust administrator herein. The predecessor trustee or trust administrator shall
deliver to the successor trustee or trust administrator 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 or trust 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 trust
administrator all such rights, powers, duties and obligations.

         No successor trustee or trust administrator shall accept appointment as
provided in this Section unless at the time of such acceptance such successor
trustee or trust administrator shall be eligible under the provisions of Section
8.06 and the appointment of such successor trustee or trust administrator shall
not result in a downgrading of the NIM Notes or 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 or trust
administrator as provided in this Section, the Depositor shall mail notice of
the succession of such trustee or trust administrator 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 trust administrator, the successor
trustee or trust administrator shall cause such notice to be mailed at the
expense of the Depositor.

         Section 8.09.     Merger or Consolidation of Trustee or Trust
                           Administrator.

         Any corporation or association into which the Trustee or the Trust
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 Trust Administrator, as

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the case may be, shall be a party, or any corporation or association succeeding
to the business of the Trustee, shall be the successor of the Trustee or the
Trust Administrator, as the case may be, 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 1 or property securing the same may at the time be located, the Master
Servicer and the Trustee, acting jointly shall have the power and shall execute
and deliver all instruments to appoint one or more Persons approved by the
Trustee to act as co-trustee or co-trustees, jointly with the Trustee, or
separate trustee or separate trustees, of all or any part of REMIC 1, and to
vest in such Person or Persons, in such capacity, such title to REMIC 1, 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. If the Master Servicer shall not
have joined in such appointment within 15 days after the receipt by it of a
request so to do, or in case 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. If such appointment is at the request of the Master Servicer then any
expense of the Trustee shall be deemed a Servicing Advance for all purpose of
this Agreement, otherwise it will be an expense of the Trustee and will be
payable out of the Trustee's funds.

         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.

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         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 Trust Administrator 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 Trust Administrator, by entering into a
Custodial Agreement. The Trust Administrator shall initially serve as the
Custodian and this Agreement shall serve as the 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 Trust Administrator, the consent to which shall not be unreasonably
withheld. The Trust Administrator shall pay any and all fees and expenses of any
Custodian in accordance with each Custodial Agreement. Subject to Article VIII
hereof, the Trust Administrator 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 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 Trust Administrator
hereunder.

         Section 8.12.     Appointment of Office or Agency.

                  The Trust Administrator will appoint an office or agency in
the City of New York where the Certificates may be surrendered for registration
of transfer or exchange, and presented for final distribution, and where notices
and demands to or upon the Trust Administrator in respect of the Certificates
and this Agreement may be served.

         Section 8.13.     Representations and Warranties of the Trustee and the
                           Trust Administrator.

                  Each of the Trustee and the Trust Administrator hereby
represents and warrants to the Master Servicer, the Depositor and the Trustee or
the Trust Administrator, 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.

                  (ii) the execution and delivery of this Agreement, and the
         performance and compliance with the terms of this Agreement, will not
         violate the Trustee's or the Trust Administrator's charter or bylaws or
         constitute a default (or an event which, with notice or lapse of time,
         or both, would constitute a default) under, or result in the breach of,
         any

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         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 Master Servicer and the Depositor, constitutes a valid,
         legal and binding obligation of the Trustee and the Trust
         Administrator, enforceable against the Trustee and the Trust
         Administrator 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.

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                                   ARTICLE IX

                                   TERMINATION

         Section 9.01.     Termination Upon Repurchase or Liquidation of All
                           Mortgage Loans.

         (a) Subject to Section 9.02, the respective obligations and
responsibilities under this Agreement of the Depositor, the Master Servicer, the
Trust Administrator and the Trustee (other than the obligations of the Master
Servicer to the Trustee and the Trust Administrator pursuant to Section 8.05 and
of the Master Servicer to provide for and the Trust Administrator to make
payments in respect of the REMIC 1 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 in
both Loan Groups remaining in REMIC 1 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 1; 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 1 shall be at a price (the "Termination Price")
equal to the greater of (A) the aggregate Purchase Price of all the Mortgage
Loans included in REMIC 1, plus the appraised value of each REO Property, if
any, included in REMIC 1, 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
1 (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 any additional amounts necessary to pay all interest
accrued on, as well as amounts necessary to pay in full the principal balance
of, the NIM Notes and any amounts necessary to reimburse the NIMs Insurer for
all amounts paid under the NIMs Policy and any other amounts reimbursable or
otherwise payable to the NIMs Insurer, in each case, with interest thereon at
the applicable rate set forth in the Indenture and to the extent not previously
reimbursed or paid.

         (b) The Master Servicer shall have the right and, if the Master
Servicer does not 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 in both Loan Groups remaining in REMIC 1
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 1 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 equal to or 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 Holders of the Residual
Certificates agree, in connection with any termination hereunder, to assign and
transfer

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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 C Certificates.

         (c) Notice of the liquidation of the REMIC 1 Regular Interests shall be
given promptly by the Trust Administrator 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 1 Regular Interests and the
Certificates will be made upon presentation and surrender of the related
Certificates at the office of the Trust Administrator therein designated, (ii)
the amount of any such final payment, (iii) that no interest shall accrue in
respect of the REMIC 1 Regular Interests or the Certificates from and after the
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 Trust 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 1 by the Terminator, the Terminator shall
deliver to the Trust Administrator for deposit in the Distribution Account not
later than the last Business Day of the month next preceding the month of the
final distribution on the Certificates an amount in immediately available funds
equal to the above-described purchase price. The Trust Administrator shall remit
to the Master Servicer from such funds deposited in the Distribution Account (i)
any amounts which the Master Servicer would be permitted to withdraw and retain
from the Collection Account pursuant to Section 3.11 and (ii) any other amounts
otherwise payable by the Trust Administrator to the Master Servicer from amounts
on deposit in the Distribution Account pursuant to the terms of this Agreement,
in each case prior to making any final distributions pursuant to Section 9.01(d)
below. Upon certification to the Trust Administrator by a Servicing Officer of
the making of such final deposit, the Trust Administrator 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 Trust Administrator 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
Trust 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 9.01 shall not have been surrendered for cancellation
within six months after the time specified in such notice, the Trust
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 Trust Administrator shall, directly or through an agent, mail
a final notice to remaining related non-tendering Certificateholders concerning

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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
Trust Administrator 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 Trust Administrator 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 1 pursuant to Section 9.01, the
Trust Fund shall be terminated in accordance with the following additional
requirements:

                  (i) The Trust Administrator shall specify the first day in the
         90-day liquidation period in a statement attached to REMIC 1's and
         REMIC 2'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 Trust
         Administrator shall sell all of the assets of REMIC 1 to the Terminator
         for cash; and

                  (iii) At the time of the making of the final payment on the
         Certificates, the Trust 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 Terminator, the Trust Administrator shall
prepare or cause to be prepared the documentation required in connection with
the adoption of a plan of liquidation of each of REMIC 1 and REMIC 2 pursuant to
this Section 9.02.

         (c) By their acceptance of Certificates, the Holders thereof hereby
agree to authorize the Trust Administrator to specify the 90-day liquidation
period for each of REMIC 1 and REMIC 2, which authorization shall be binding
upon all successor Certificateholders.

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                                    ARTICLE X

                                REMIC PROVISIONS

         Section 10.01.             REMIC Administration.

         (a) The Trust Administrator shall elect to treat each of REMIC 1 and
REMIC 2 as a REMIC under the Code and, if necessary, under applicable state law.
Each such election will be made on Form 1066 or other appropriate federal tax or
information return (including Form 8811) or any appropriate state return for the
taxable year ending on the last day of the calendar year in which the
Certificates are issued copies of which forms and returns shall promptly be
furnished by the Trust Administrator to the NIMs Insurer. For the purposes of
the REMIC election in respect of REMIC 1, the REMIC 1 Regular Interests shall be
designated as the Regular Interests in REMIC 1 and the Class R-1 Interests shall
be designated as the Residual Interests in REMIC 1. The REMIC 2 Regular
Interests shall be designated as the Regular Interests in REMIC 2 and the Class
R-2 Interests shall be designated as the Residual Interests in REMIC 2. The
Class A Certificates, the Mezzanine Certificates, the Class C Certificates and
the Class P Certificates shall be designated as the Regular Interests in REMIC
2. Neither the Trustee nor the Trust Administrator shall permit the creation of
any "interests" in REMIC 1 or REMIC 2 (within the meaning of Section 860G of the
Code) other than the REMIC 1 Regular Interests and the interests represented by
the Certificates.

         (b) The Closing Date is hereby designated as the "Startup Day" of REMIC
1 and REMIC 2 within the meaning of Section 860G(a)(9) of the Code.

         (c) The Trust Administrator shall pay out of funds on deposit in the
Distribution Account, 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 any of
REMIC 1 or REMIC 2 that involve the Internal Revenue Service or state tax
authorities) unless such expenses, professional fees or any administrative or
judicial proceedings are incurred by reason of the Trust Administrator's willful
misfeasance, bad faith or negligence. The Trust Administrator, as agent for all
of REMIC 1's and REMIC 2's tax matters person, shall (i) act on behalf of the
Trust Fund in relation to any tax matter or controversy involving any of REMIC 1
or REMIC 2 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 and will be entitled to reimbursement from the
Trust Fund for any expenses incurred by the Trust Administrator in connection
therewith unless such administrative or judicial proceeding relating to an
examination or audit by any governmental taxing authority is incurred by reason
of the Trust Administrator's willful misfeasance, bad faith or negligence. 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 Trust Administrator or an
Affiliate as its agent to perform all of the duties of the tax matters person
for the Trust Fund.

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         (d) The Trust Administrator shall prepare, and deliver to the Trustee
in a timely manner and the Trustee shall sign and file in a timely manner all of
the Tax Returns in respect of each REMIC created hereunder copies of which Tax
Returns it shall promptly furnish to the NIMs Insurer. The expenses of preparing
and filing such returns shall be borne by the Trust Administrator without any
right of reimbursement therefor. The Master Servicer shall provide on a timely
basis to the Trust Administrator 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 Trust Administrator shall perform on behalf of each of REMIC 1
and REMIC 2 all reporting and other tax compliance duties that are the
responsibility of such REMIC under the Code, the REMIC Provisions or other
compliance guidance issued by the Internal Revenue Service or any state or local
taxing authority. Among its other duties, as required by the Code, the REMIC
Provisions or other such compliance guidance, the Trust 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, (ii) to the
Certificateholders such information or reports as are required by the Code or
the REMIC Provisions including reports relating to interest, original issue
discount and market discount or premium (using the Prepayment Assumption as
required) and (iii) to the Internal Revenue Service the name, title, address and
telephone number of the person who will serve as the representative of REMIC 1
and REMIC 2. The Master Servicer shall provide on a timely basis to the Trust
Administrator 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 Trust Administrator to enable it to perform its
obligations under this subsection. In addition, the Depositor shall provide or
cause to be provided to the Trust Administrator, within ten (10) days after the
Closing Date, all information or data that the Trust 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. The Depositor shall also
provide such information or data to the NIMs Insurer.

         (f) The Trustee and the Trust Administrator 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 the Trust Administrator, to the
extent reasonably requested by the Trust Administrator to do specific actions in
order to assist in the maintenance of such status). Neither the Trust
Administrator nor the Trustee shall take any action, cause the Trust Fund to
take any action or fail to take (or fail to cause to be taken) any action that,
under the REMIC Provisions, if taken or not taken, as the case may be, could (i)
endanger the status of REMIC 1 or REMIC 2 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, the Trust
Administrator and the NIMs Insurer have received an Opinion of Counsel,
addressed to the Trustee, the Trust Administrator and the NIMs Insurer (at the
expense of the party seeking to take such action but in no event at the expense
of the Trustee or the Trust Administrator) to the effect that the contemplated
action will not, with respect to any of REMIC 1 or REMIC 2, endanger such status
or

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<PAGE>

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 or the Trust Administrator 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 Master Servicer 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. The
Trustee and the Trust Administrator shall deliver to the NIMs Insurer a copy of
any such advice or opinion. In addition, prior to taking any action with respect
to REMIC 1 or REMIC 2 or the respective assets of each, or causing REMIC 1 or
REMIC 2 to take any action, which is not contemplated under the terms of this
Agreement, the Master Servicer will consult with the Trustee and the Trust
Administrator or its designee, in writing, with respect to whether such action
could cause an Adverse REMIC Event to occur with respect to REMIC 1 or REMIC 2,
and the Master Servicer shall not take any such action or cause either REMIC 1
or REMIC 2 to take any such action as to which the Trustee or the Trust
Administrator has advised it in writing that an Adverse REMIC Event could occur;
provided that the Master Servicer may conclusively rely on such writing and
shall incur no liability for its action or failure to act in accordance with
such writing. The Trustee and the Trust Administrator 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 or the Trust Administrator, as
applicable. At all times as may be required by the Code, the Trust Administrator
or the Trustee will ensure that substantially all of the assets of both REMIC 1
will consist of "qualified mortgages" as defined in Section 860G(a)(3) of the
Code and "permitted investments" as defined in Section 860G(a)(5) of the Code.

         (g) In the event that any tax is imposed on "prohibited transactions"
of any REMIC created hereunder as defined in Section 860F(a)(2) of the Code, on
the "net income from foreclosure property" of such REMIC as defined in Section
860G(c) of the Code, on any contributions to any such REMIC after the Startup
Day therefor pursuant to Section 860G(d) of the Code, or any other tax is
imposed by the Code or any applicable provisions of state or local tax laws,
such tax shall be charged (i) to the Trust Administrator pursuant to Section
10.03 hereof, if such tax arises out of or results from a breach by the Trust
Administrator of any of its obligations under this Article X, (ii) 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,
(iii) 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 (iv) against
amounts on deposit in the Distribution Account and shall be paid by withdrawal
therefrom.

         (h) On or before April 15 of each calendar year, commencing April 15,
2001, the Trustee shall deliver to the Master Servicer, the NIMs Insurer and
each Rating Agency a Certificate from a Responsible Officer of the Trust
Administrator stating the Trust Administrator's compliance with this Article X.

         (i) The Trust Administrator shall, for federal income tax purposes,
maintain books and records with respect to each of REMIC 1 and REMIC 2 on a
calendar year and on an accrual basis.

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         (j) Following the Startup Day, neither the Trustee nor the Trust
Administrator shall accept any contributions of assets to any of REMIC 1 or
REMIC 2 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) None of the Trust Administrator, the Trustee or the Master Servicer
shall enter into any arrangement by which REMIC 1 or REMIC 2 will receive a fee
or other compensation for services nor permit any such REMIC to receive any
income from assets other than "qualified mortgages" as defined in Section
860G(a)(3) of the Code or "permitted investments" as defined in Section
860G(a)(5) of the Code.

         Section 10.02.             Prohibited Transactions and Activities.

         None of the Depositor, the Master Servicer, the Trust Administrator 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 1, (iii) the termination of
REMIC 1 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 of REMIC 1
or REMIC 2 (other than REO Property acquired in respect of a defaulted Mortgage
Loan), nor sell or dispose of any investments in the Collection Account or the
Distribution Account for gain, nor accept any contributions to any of REMIC 1 or
REMIC 2 after the Closing Date (other than a Qualified Substitute Mortgage Loan
delivered in accordance with Section 2.03), unless it and the NIMs Insurer have
received an Opinion of Counsel, addressed to the Trustee, the Trust
Administrator 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 or the Trust Administrator) that such sale,
disposition, substitution, acquisition or contribution will not (a) affect
adversely the status of any of REMIC 1 or REMIC 2 as a REMIC or (b) cause any of
REMIC 1 or REMIC 2 to be subject to a tax on "prohibited transactions" or
"contributions" pursuant to the REMIC Provisions.

         Section 10.03.             Master Servicer, Trust Administrator and
                                    Trustee Indemnification.

         (a) The Trustee agrees to indemnify the Trust Fund, the Depositor, the
Master Servicer and the Trust Administrator for any taxes and costs including,
without limitation, any reasonable attorneys fees imposed on or incurred by the
Trust Fund, the Depositor, the Master Servicer or the Trust Administrator, as a
result of a breach of the Trustee's covenants set forth in this Article X.

         (b) The Trust Administrator agrees to indemnify the Trust Fund, the
Depositor, the Master Servicer 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, the Master Servicer or the Trustee,
as a result of a breach of the Trust Administrator's covenants set forth in this
Article X.

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         (c) The Master Servicer agrees to indemnify the Trust Fund, the
Depositor, the Trust Administrator 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, the Trust Administrator or the
Trustee, as a result of a breach of the Master Servicer's covenants set forth in
Article III or this Article X.

         (d) The Depositor agrees to indemnify the Trust Fund, the Master
Servicer, the Trust Administrator and the Trustee for any taxes and costs
including, without limitation, any reasonable attorneys' fees imposed on or
incurred by the Trust Fund, the Master Servicer, the Trust Administrator or the
Trustee, as a result of a breach of the Depositor's covenants set forth in this
Article X.

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                                   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 Trust Administrator, the Trustee
and, if applicable, the Custodian, subject, in the case of any amendment or
modification which affects any right, benefit, duty or obligation of the NIMs
Insurer, to the consent of the NIMs Insurer without the consent of any of the
Certificateholders, (i) to cure any ambiguity or defect, (ii) to correct, modify
or supplement any provisions herein (including to give effect to the
expectations of Certificateholders), or in any Custodial Agreement, or (iii) to
make any other provisions with respect to matters or questions arising under
this Agreement or in any Custodial Agreement which shall not be inconsistent
with the provisions of this Agreement or such Custodial Agreement, provided that
such action shall not, as evidenced by an Opinion of Counsel delivered to the
Trustee and the Trust Administrator, adversely affect in any material respect
the interests of any Certificateholder. No amendment shall be deemed to
adversely affect in any material respect the interests of any Certificateholder
who shall have consented thereto, and no Opinion of Counsel shall be required to
address the effect of any such amendment on any such consenting
Certificateholder.

         This Agreement or any Custodial Agreement may also be amended from time
to time by the Depositor, the Master Servicer, the Trust Administrator and the
Trustee subject, in the case of any amendment or modification which affects any
right, benefit, duty or obligation of the NIMs Insurer, to the consent of the
NIMs Insurer, 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
any Custodial Agreement or of modifying in any manner the rights of the Holders
of Certificates; provided, however, that no such amendment shall (i) reduce in
any manner the amount of, or delay the timing of, payments received on Mortgage
Loans which are required to be distributed on any Certificate without the
consent of the Holder of such Certificate, (ii) adversely affect in any material
respect the interests of the Holders of any Class of Certificates in a manner,
other than as described in (i), without the consent of the Holders of
Certificates of such Class evidencing at least 66% of the Voting Rights
allocated to such Class, or (iii) modify the consents required by the
immediately preceding clauses (i) and (ii) without the consent of the Holders of
all Certificates then outstanding. Notwithstanding any other provision of this
Agreement, for purposes of the giving or withholding of consents pursuant to
this Section 11.01, Certificates registered in the name of the Depositor or the
Master Servicer or any Affiliate thereof shall be entitled to Voting Rights with
respect to matters affecting such Certificates.

         Without limiting the provisions of this Sections 11.01, the amendment
to any of the following provisions shall be deemed to affect the rights,
benefits, duties or obligations of the NIMs Insurer and therefore require the
consent of the NIMs Insurer: Sections 2.02, 2.03(a), 2.03(d), 2.03(e), 2.05,
2.11(a), 2.11(b), 3.07, 3.19, 3.20, 3.21, 3.22, 3.23, 4.03, 4.04, 4.05, 6.05,
10.01(f), 10.01(h) and 11.02, 11.05 of this Agreement.

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<PAGE>

         Notwithstanding any contrary provision of this Agreement, the Trustee
and the Trust Administrator shall be entitled to receive an Opinion of Counsel
to the effect that such amendment will not result in the imposition of any tax
on any of REMIC 1 or REMIC 2 pursuant to the REMIC Provisions or cause any of
REMIC 1 or REMIC 2 to fail to qualify as a REMIC at any time that any
Certificates are outstanding.

         Promptly after the execution of any such amendment the Trust
Administrator 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 or the Trust Administrator 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 or Trust
Administrator.

         Each of the Trustee and the Trust Administrator may, but shall not be
obligated to enter into any amendment pursuant to this Section that affects its
rights, duties and immunities under this Agreement or otherwise.

         Section 11.02.             Recordation of Agreement; Counterparts.

         To the extent permitted by applicable law, this Agreement is subject to
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Master Servicer at the expense of the Trust, but only upon direction of
Certificateholders accompanied by an Opinion of Counsel to the effect that such
recordation materially and beneficially affects the interests of the
Certificateholders.

         For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall together constitute but
one and the same instrument.

         Section 11.03.             Limitation on Rights of Certificateholders.

         The death or incapacity of any Certificateholder shall not (i) operate
to terminate this Agreement or the Trust, (ii) entitle such Certificateholder's
legal representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust, or (iii)
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.

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         Except as expressly provided for herein, no Certificateholder shall
have any right to vote or in any manner otherwise control the operation and
management of the Trust, or the obligations of the parties hereto, nor shall
anything herein set forth or contained in the terms of the Certificates be
construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability to any third person by reason of any action taken by the parties
to this Agreement pursuant to any provision hereof.

         No Certificateholder shall have any right by virtue of any provision of
this Agreement to institute any suit, action or proceeding in equity or at law
upon or under or with respect to this Agreement, unless such Holder previously
shall have given to the Trust Administrator 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 Trust Administrator to institute such action, suit or
proceeding in its own name as Trust Administrator hereunder and shall have
offered to the Trust Administrator such reasonable indemnity as it may require
against the costs, expenses and liabilities to be incurred therein or thereby,
and the Trust Administrator 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
Trust Administrator, that no one or more Holders of Certificates shall have any
right in any manner whatever by virtue of any provision of this Agreement to
affect, disturb or prejudice the rights of the Holders of any other of such
Certificates, or to obtain or seek to obtain priority over or preference to any
other such Holder, which priority or preference is not otherwise provided for
herein, or to enforce any right under this Agreement, except in the manner
herein provided and for the equal, ratable and common benefit of all
Certificateholders. For the protection and enforcement of the provisions of this
Section 11.03 each and every Certificateholder and the Trust Administrator shall
be entitled to such relief as can be given either at law or in equity.

         Section 11.04.             Governing Law; Jurisdiction.

         This Agreement shall be construed in accordance with the laws of the
State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws.

         Section 11.05.             Notices.

         All directions, demands and notices hereunder shall be in writing and
shall be deemed to have been duly given if personally delivered at or mailed by
first class mail, postage prepaid, by facsimile or by express delivery service,
to (a) in the case of the Master Servicer, Long Beach Mortgage Company, 1100
Town & Country Road, Suite 1600, Orange, California 92868, Attention:
General Counsel (telecopy number: (714) 543-6847), or such other address or
telecopy number as may hereafter be furnished to the Depositor, the Trust
Administrator and the Trustee in writing by the Master Servicer, (b) in the case
of the Trust Administrator, Bankers Trust Company of California, N.A., 1761 St.
Andrew Place, Santa Anna, California 92705-4934, Attention: Securities
Administration Services (telecopy number (714) 247-6000, or such other address
or telecopy number as may hereafter be furnished to the Depositor, the Master
Servicer and the Trustee in writing by the Trust Administrator, (c) in the case
of the Trustee, First Union National Bank, 401 South Tryon

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Street, Charlotte, North Carolina 28288, or such other address or telecopy
number as may hereafter be furnished to the Depositor, the Trust Administrator
and the Master Servicer in writing by the Trustee, (d) in the case of the
Depositor, Long Beach Securities Corp., 1100 Town & Country Road, Suite 1600,
Orange California 92868, Attention: General Counsel (telecopy number: (714) 543-
6847), or such other address or telecopy number as may be furnished to the
Master Servicer, the Trust Administrator and the Trustee in writing by the
Depositor and (e) in the case of the NIMs Insurer, Radian Insurance Inc., 1601
Market Street, Philadelphia, Pennsylvania 19103, Attention: General Counsel
(telecopy number: (215) 564-5282). Any notice required or permitted to be mailed
to a Certificateholder shall be given by first class mail, postage prepaid, at
the address of such Holder as shown in the Certificate Register. Notice of any
Master Servicer default shall be given by telecopy and by certified mail. Any
notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have duly been given when mailed, whether or not the
Certificateholder receives such notice. A copy of any notice required to be
telecopied hereunder shall also be mailed to the appropriate party in the manner
set forth above.

         Section 11.06.        Severability of Provisions.

         If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall for any reason whatsoever be held invalid, then such
covenants, agreements, 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 the Rating Agencies and the NIMs Insurer.

         The Trust Administrator 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 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,
                    the Trust Administrator 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;

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<PAGE>

                    7. The Trustee or Trust Administrator, as applicable, were
                    it to succeed as Master Servicer, is unable to make advances
                    regarding delinquent Mortgage Loans; and

                    8. The filing of any claim under the Master Servicer's
                    blanket bond and errors and omissions insurance policy
                    required by Section 3.14 or the cancellation or material
                    modification of coverage under any such instrument.

         (b) In addition, the Trust Administrator shall promptly make available
to each Rating Agency copies of each Statement to Certificateholders described
in Section 4.03 hereof and the Master Servicer shall promptly furnish to each
Rating Agency copies of the following:

                    1. each annual statement as to compliance described in
                    Section 3.20 hereof;

                    2. each annual independent public accountants' servicing
                    report described in Section 3.21 hereof; and

         Any such notice pursuant to this Section 11.08 shall be in writing and
shall be deemed to have been duly given if personally delivered or mailed by
first class mail, postage prepaid, or by express delivery service to Moody's
Investors Service, Inc., 99 Church Street, New York, NY 10048, Attention: MBS
Monitoring/Long Beach Mortgage Loan Trust 2000-4; Fitch, Inc., One State Street
Plaza, New York, New York 10004, Standard & Poor's Ratings Services, Inc., 55
Water Street, New York, New York 10004 and the NIMs Insurer at the addressed
provided in Section 11.05.

         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.             Third Party Rights.

         The NIMs Insurer shall be deemed a third-party beneficiary of this
Agreement to the extent of its rights specified herein and shall be entitled to
enforce such rights, in each case, as if it were a party hereto.

         Section 11.10.             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.
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 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

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<PAGE>

provided for in Section 2.01 hereof shall be deemed to be a grant by the
Depositor to the Trustee 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 a security interest in
the Mortgage Loans and all other property described in clause (2) of the
preceding sentence, for the purpose of securing to the Trustee the performance
by the Depositor of the obliga tions described in clause (3) of the preceding
sentence. Notwithstanding the foregoing, the parties hereto intend the
conveyance pursuant to Section 2.01 to be a true, absolute and unconditional
sale of the Mortgage Loans and assets constituting the Trust Fund by the
Depositor to the Trustee.

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<PAGE>

         IN WITNESS WHEREOF, the Depositor, the Master Servicer, the Trust
Administrator and the Trustee have caused their names to be signed hereto by
their respective officers thereunto duly authorized, all as of the day and year
first above written.

                                         LONG BEACH SECURITIES CORP.,
                                           as Depositor

                                         By: /s/ Jeffery A Sorensen
                                             ----------------------------------
                                         Name:   Jeffery A Sorensen
                                         Title:  Vice President

                                         LONG BEACH MORTGAGE COMPANY,
                                           as Master Servicer

                                         By: /s/ Jeffery A Sorensen
                                             ----------------------------------
                                         Name:   Jeffery A Sorensen
                                         Title:  Vice President

                                         BANKERS TRUST COMPANY OF
                                         CALIFORNIA,
                                         N.A.,
                                           as Trust Administrator

                                         By: /s/ Ronaldo Reyes
                                             ----------------------------------
                                         Name:   Ronaldo Reyes
                                         Title:  Associate

                                         FIRST UNION NATIONAL BANK,
                                           as Trustee

                                         By: /s/ Bryon M. Timm
                                             ----------------------------------
                                         Name:  Bryon M. Timm
                                         Title: Assistant Vice President

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<PAGE>

STATE OF       )
               ) ss.:
COUNTY OF      )

         On the ___th day of December, 2000 before me, a notary public in and
for said State, personally appeared _______________ known to me to be a
______________ of Long Beach Securities Corp., a Delaware corporation that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.

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

                                             ----------------------------------
                                                       Notary Public

<PAGE>

STATE OF        )
                ) ss.:
COUNTY OF       )

         On the ___th day of December, 2000 before me, a notary public in and
for said State, personally appeared _______________ known to me to be a
_______________ of Long Beach Mortgage Company, a corporation that executed the
within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.

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

                                             ----------------------------------
                                                       Notary Public

<PAGE>

STATE OF          )
                  ) ss.:
COUNTY OF         )

         On the ___th day of December, 2000 before me, a notary public in and
for said State, personally appeared _______________, known to me to be a
____________________ of Bankers Trust Company of California, N.A., a national
banking association that executed the within instrument, and also known to me to
be the person who executed it on behalf of said association, and acknowledged to
me that such 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

<PAGE>

STATE OF         )
                 ) ss.:
COUNTY OF        )

         On the ___th day of December, 2000 before me, a notary public in and
for said State, personally appeared _______________, known to me to be a
____________________ of First Union National Bank, a national banking
association that executed the within instrument, and also known to me to be the
person who executed it on behalf of said association, and acknowledged to me
that such 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

<PAGE>

                            CLASS A[__] CERTIFICATES

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

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, AS AMENDED (THE "CODE").

Certificate No.                        :      1

Cut-off Date                           :      With respect to any Mortgage Loan,
                                              the later of (i) the date of
                                              origination of such Mortgage Loan
                                              or (ii) December 1, 2000

First Distribution Date                :      January 22, 2001

Initial Certificate Principal
Balance of this Certificate
("Denomination")                       :      $[__]

Original Class Certificate
Principal Balance of this Class        :      $[__]

Percentage Interest                    :      100.00%

Pass-Through Rate                      :      [__]

CUSIP                                  :      [__]

Class                                  :      A[__]

Assumed Maturity Date                  :      December 2030

                                      A-1-1

<PAGE>

                      Long Beach Mortgage Loan Trust 2000-1
                           Asset-Backed Certificates,
                                  Series 2000-1
                                   Class A[__]

         evidencing the Percentage Interest in the distributions allocable to
         the Certificates of the above-referenced Class with respect to the
         Trust consisting of first lien, adjustable rate mortgage loans (the
         "Mortgage Loans")

                    LONG BEACH SECURITIES CORP., as Depositor

         Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
A[__] Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class A[__]
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer, the Trustee or the Trust
Administrator referred to below or any of their respective affiliates.

         This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class A[__] Certificate (obtained by
dividing the Denomination of this Class A[__] Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Long Beach
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of December 1, 2000 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer"), First Union National Bank, a national banking association, as
Trustee (the "Trustee") and Bankers Trust Company of California, N.A. (the
"Trust Administrator"). To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Agreement. This Class A[__]
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Class A[__]
Certificate by virtue of the acceptance hereof assents and by which such Holder
is bound.

         Reference is hereby made to the further provisions of this Class A[__]
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

         This Class A[__] Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trust Administrator.

                                      A-1-2

<PAGE>

         IN WITNESS WHEREOF, the Trust Administrator on behalf of the Trust has
caused this Certificate to be duly executed.

Dated: December __, 2000

                                   LONG BEACH MORTGAGE LOAN TRUST 2000-1

                                   By:      BANKERS TRUST COMPANY OF
                                            CALIFORNIA, N.A.
                                            not in its individual capacity, but
                                            solely as Trust Administrator

                                   By__________________________________________

This is one of the Class A[__] Certificates
referenced in the within-mentioned Agreement

By_________________________________________________
         Authorized Signatory of
         Bankers Trust Company of California, N.A.,
         as Trust Administrator

                                      A-1-3

<PAGE>

                      [Reverse of Class A[__] Certificate]

                      LONG BEACH MORTGAGE LOAN TRUST 2000-1
                           Asset-Backed Certificates,
                                  Series 2000-1

         This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2000-1, Asset-Backed Certificates,
Series 2000-1 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trust Administrator is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.

         This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trust Administrator.

         Pursuant to the terms of the Agreement, a distribution will be made on
the 21st day of each month or, if such 21st day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.

         Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trust Administrator specified in the notice to
Certificateholders of such final distribution.

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trust Administrator and the rights of the Certificateholders under the Agreement
at any time by the Depositor, the Master Servicer, the Trustee and the Trust
Administrator and of Holders of the requisite percentage of the Percentage
Interests of each Class of Certificates affected by such amendment, as specified
in the Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.

                                      A-1-4

<PAGE>

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trust Administrator upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trust
Administrator accompanied by a written instrument of transfer in form
satisfactory to the Trust Administrator and the Certificate Registrar duly
executed by the holder hereof or such holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage Interest
in the Trust will be issued to the designated transferee or transferees.

         The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange, but the Trust Administrator may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.

         The Depositor, the Master Servicer, the Trustee and the Trust
Administrator and any agent of the Depositor or the Trust Administrator may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Depositor, the Trust Administrator nor
any such agent shall be affected by any notice to the contrary.

         On any Distribution Date following the date at which the remaining
Principal Balance of the Mortgage Loans is less than 10% of the sum of the
Principal Balance of the Mortgage Loans as of the Cut-off Date, the Master
Servicer may purchase, in whole, from the Trust the Mortgage Loans at a purchase
price determined as provided in the Agreement. In the event that no such
optional termination occurs, the obligations and responsibilities created by the
Agreement will terminate upon notice to the Trust Administrator upon the
earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan in the Trust, (iii) the
Distribution Date in December 2030.

         Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.

                                      A-1-5

<PAGE>

                                   ASSIGNMENT
                                   ----------

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

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

         I (We) further direct the Trust Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:

Dated:_________________

                                   _____________________________________
                                   Signature by or on behalf of assignor

                                      A-1-6

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of ____________________________________________________________,
account number _____________________, or, if mailed by check, to _______________
________________________________________________________________________________
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.

         This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.

                                      A-1-7

<PAGE>

                             CLASS M-1 CERTIFICATES

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUST
ADMINISTRATOR OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES TO THE EXTENT
DESCRIBED IN 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"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.

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, AS AMENDED (THE "CODE").

                                      A-2-1

<PAGE>

Certificate No.                        :      1

Cut-off Date                           :      With respect to any Mortgage Loan,
                                              the later of (i) the date of
                                              origination of such Mortgage Loan
                                              or (ii) December 1, 2000

First Distribution Date                :      January 22, 2000

Initial Certificate Principal
Balance of this Certificate
("Denomination")                       :      $[__]

Original Class Certificate
Principal Balance of this Class        :      $[__]

Percentage Interest                    :      100.00%

Pass-Through Rate                      :      Variable

CUSIP                                  :      [__]

Class                                  :      M-1

Assumed Maturity Date                  :      December 2030

                                      A-2-2

<PAGE>

                      Long Beach Mortgage Loan Trust 2000-1
                           Asset-Backed Certificates,
                                  Series 2000-1
                                    Class M-1

         evidencing the Percentage Interest in the distributions allocable to
         the Certificates of the above-referenced Class with respect to the
         Trust consisting of first lien, adjustable rate mortgage loans (the
         "Mortgage Loans")

                    LONG BEACH SECURITIES CORP., as Depositor

         Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
M-1 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-1
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer, the Trustee or the Trust
Administrator referred to below or any of their respective affiliates.

         This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class M-1 Certificate (obtained by
dividing the Denomination of this Class M-1 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Long Beach
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of December 1, 2000 (the "Agreement") among the
Depositor, Long Beach Mortgage Corporation, as master servicer (the "Master
Servicer"), First Union National Bank, a national banking association, as
Trustee (the "Trustee") and Bankers Trust Company of California, N.A. (the
"Trust Administrator"). To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Agreement. This Class M-1
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Class M-1
Certificate by virtue of the acceptance hereof assents and by which such Holder
is bound.

         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(d) of the Agreement.

         Reference is hereby made to the further provisions of this Class M-1
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

         This Class M-1 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trust Administrator.

                                      A-2-3

<PAGE>

         IN WITNESS WHEREOF, the Trust Administrator on behalf of the Trust has
caused this Certificate to be duly executed.

Dated: December __, 2000

                                   LONG BEACH MORTGAGE LOAN TRUST 2000-1

                                   By:      BANKERS TRUST COMPANY OF
                                            CALIFORNIA, N.A.
                                            not in its individual capacity, but
                                            solely as Trust Administrator

                                   By__________________________________________

This is one of the Class M-1 Certificates
referenced in the within-mentioned Agreement

By_________________________________________________
         Authorized Signatory of
         Bankers Trust Company of California, N.A.,
         as Trust Administrator

                                      A-2-4

<PAGE>

                       [Reverse of Class M-1 Certificate]

                      LONG BEACH MORTGAGE LOAN TRUST 2000-1
                           Asset-Backed Certificates,
                                  Series 2000-1

         This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2000-1, Asset-Backed Certificates,
Series 2000-1 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trust Administrator is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.

         This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trust Administrator.

         Pursuant to the terms of the Agreement, a distribution will be made on
the 21st day of each month or, if such 21st day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.

         Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trust Administrator specified in the notice to
Certificateholders of such final distribution.

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trust Administrator and the rights of the Certificateholders under the Agreement
at any time by the Depositor, the Master Servicer, the Trustee and the Trust
Administrator and of Holders of the requisite percentage of the Percentage
Interests of each Class of Certificates affected by such amendment, as specified
in the Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.

                                      A-2-5

<PAGE>

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trust Administrator upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trust
Administrator accompanied by a written instrument of transfer in form
satisfactory to the Trust Administrator and the Certificate Registrar duly
executed by the holder hereof or such holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage Interest
in the Trust will be issued to the designated transferee or transferees.

         The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange, but the Trust Administrator may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.

         The Depositor, the Master Servicer, the Trustee and the Trust
Administrator and any agent of the Depositor or the Trust Administrator may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Depositor, the Trust Administrator nor
any such agent shall be affected by any notice to the contrary.

         On any Distribution Date following the date at which the remaining
Principal Balance of the Mortgage Loans is less than 10% of the sum of the
Principal Balance of the Mortgage Loans as of the Cut-off Date, the Master
Servicer may purchase, in whole, from the Trust the Mortgage Loans at a purchase
price determined as provided in the Agreement. In the event that no such
optional termination occurs, the obligations and responsibilities created by the
Agreement will terminate upon notice to the Trust Administrator upon the
earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan in the Trust, (iii) the
Distribution Date in December 2030.

         Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.

                                      A-2-6

<PAGE>

                                   ASSIGNMENT
                                   ----------

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

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

         I (We) further direct the Trust Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:

Dated:_________________

                                   _____________________________________
                                   Signature by or on behalf of assignor

                                      A-2-7

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of ____________________________________________________________,
account number _____________________, or, if mailed by check, to _______________
________________________________________________________________________________
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.

         This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.

                                      A-2-8

<PAGE>

                             CLASS M-2 CERTIFICATES

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUST
ADMINISTRATOR OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THIS CERTIFICATE IS 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.

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"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.

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, AS AMENDED (THE "CODE").

                                      A-3-1

<PAGE>

Certificate No.                        :      1

Cut-off Date                           :      With respect to any Mortgage Loan,
                                              the later of (i) the date of
                                              origination of such Mortgage Loan
                                              or (ii) December 1, 2000

First Distribution Date                :      January 22, 2001

Initial Certificate Principal
Balance of this Certificate
("Denomination")                       :      $[__]

Original Class Certificate
Principal Balance of this Class        :      $[__]

Percentage Interest                    :      100.00%

Pass-Through Rate                      :      Variable

CUSIP                                  :      [__]

Class                                  :      M-2

Assumed Maturity Date                  :      December 2030

                                      A-3-2

<PAGE>

                      Long Beach Mortgage Loan Trust 2000-1
                           Asset-Backed Certificates,
                                  Series 2000-1
                                    Class M-2

         evidencing the Percentage Interest in the distributions allocable to
         the Certificates of the above-referenced Class with respect to the
         Trust consisting of first lien, adjustable rate mortgage loans (the
         "Mortgage Loans")

                    LONG BEACH SECURITIES CORP., as Depositor

         Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
M-2 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-2
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer, the Trustee or the Trust
Administrator referred to below or any of their respective affiliates.

         This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class M-2 Certificate (obtained by
dividing the Denomination of this Class M-2 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Long Beach
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of December 1, 2000 (the "Agreement") among the
Depositor, Long Beach Mortgage Corporation, as master servicer (the "Master
Servicer"), First Union National Bank, a national banking association, as
Trustee (the "Trustee") and Bankers Trust Company of California, N.A. (the
"Trust Administrator"). To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Agreement. This Class M-2
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Class M-2
Certificate by virtue of the acceptance hereof assents and by which such Holder
is bound.

         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(d) of the Agreement.

         Reference is hereby made to the further provisions of this Class M-2
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

         This Class M-2 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trust Administrator.

                                      A-3-3

<PAGE>

         IN WITNESS WHEREOF, the Trust Administrator on behalf of the Trust has
caused this Certificate to be duly executed.

Dated: December __, 2000

                                   LONG BEACH MORTGAGE LOAN TRUST 2000-1

                                   By:      BANKERS TRUST COMPANY OF
                                            CALIFORNIA, N.A.
                                            not in its individual capacity, but
                                            solely as Trust Administrator

                                   By__________________________________________

This is one of the Class M-2 Certificates
referenced in the within-mentioned Agreement

By_________________________________________________
         Authorized Signatory of
         Bankers Trust Company of California, N.A.,
         as Trust Administrator

                                      A-3-4

<PAGE>

                       [Reverse of Class M-2 Certificate]

                      LONG BEACH MORTGAGE LOAN TRUST 2000-1
                           Asset-Backed Certificates,
                                  Series 2000-1

         This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2000-1, Asset-Backed Certificates,
Series 2000-1 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trust Administrator is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.

         This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trust Administrator.

         Pursuant to the terms of the Agreement, a distribution will be made on
the 21st day of each month or, if such 21st day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.

         Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trust Administrator specified in the notice to
Certificateholders of such final distribution.

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trust Administrator and the rights of the Certificateholders under the Agreement
at any time by the Depositor, the Master Servicer, the Trustee and the Trust
Administrator and of Holders of the requisite percentage of the Percentage
Interests of each Class of Certificates affected by such amendment, as specified
in the Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.

                                      A-3-5

<PAGE>

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trust Administrator upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trust
Administrator accompanied by a written instrument of transfer in form
satisfactory to the Trust Administrator and the Certificate Registrar duly
executed by the holder hereof or such holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage Interest
in the Trust will be issued to the designated transferee or transferees.

         The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange, but the Trust Administrator may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.

         The Depositor, the Master Servicer, the Trustee and the Trust
Administrator and any agent of the Depositor or the Trust Administrator may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Depositor, the Trust Administrator nor
any such agent shall be affected by any notice to the contrary.

         On any Distribution Date following the date at which the remaining
Principal Balance of the Mortgage Loans is less than 10% of the sum of the
Principal Balance of the Mortgage Loans as of the Cut-off Date, the Master
Servicer may purchase, in whole, from the Trust the Mortgage Loans at a purchase
price determined as provided in the Agreement. In the event that no such
optional termination occurs, the obligations and responsibilities created by the
Agreement will terminate upon notice to the Trustee upon the earliest of (i) the
Distribution Date on which the Certificate Principal Balances of the Regular
Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in December 2030.

         Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.

                                      A-3-6

<PAGE>

                                   ASSIGNMENT
                                   ----------

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

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

         I (We) further direct the Trust Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:

Dated:_________________

                                   _____________________________________
                                   Signature by or on behalf of assignor

                                      A-3-7

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of ____________________________________________________________,
account number _____________________, or, if mailed by check, to _______________
________________________________________________________________________________
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.

         This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.

                                      A-3-8

<PAGE>

                             CLASS M-3 CERTIFICATES

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUST
ADMINISTRATOR OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THIS CERTIFICATE IS 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.

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"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.

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, AS AMENDED (THE "CODE").

                                      A-4-1

<PAGE>

Certificate No.                        :      1

Cut-off Date                           :      With respect to any Mortgage Loan,
                                              the later of (i) the date of
                                              origination of such Mortgage Loan
                                              or (ii) December 1, 2000

First Distribution Date                :      January 22, 2001

Initial Certificate Principal
Balance of this Certificate
("Denomination")                       :      $[__]

Original Class Certificate
Principal Balance of this Class        :      $[__]

Percentage Interest                    :      100.00%

Pass-Through Rate                      :      Variable

CUSIP                                  :      [__]

Class                                  :      M-3

Assumed Maturity Date                  :      December 2030

                                      A-4-2

<PAGE>

                      Long Beach Mortgage Loan Trust 2000-1
                           Asset-Backed Certificates,
                                  Series 2000-1
                                    Class M-3

         evidencing the Percentage Interest in the distributions allocable to
         the Certificates of the above-referenced Class with respect to the
         Trust consisting of first lien, adjustable rate mortgage loans (the
         "Mortgage Loans")

                    LONG BEACH SECURITIES CORP., as Depositor

         Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
M-3 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-3
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer, the Trustee or the Trust
Administrator referred to below or any of their respective affiliates.

         This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class M-3 Certificate (obtained by
dividing the Denomination of this Class M-3 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Long Beach
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of December 1, 2000 (the "Agreement") among the
Depositor, Long Beach Mortgage Corporation, as master servicer (the "Master
Servicer"), First Union National Bank, a national banking association, as
Trustee (the "Trustee") and Bankers Trust Company of California, N.A. (the
"Trust Administrator"). To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Agreement. This Class M-3
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Class M-3
Certificate by virtue of the acceptance hereof assents and by which such Holder
is bound.

         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(d) of the Agreement.

         Reference is hereby made to the further provisions of this Class M-3
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

         This Class M-3 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trust Administrator.

                                      A-4-3

<PAGE>

         IN WITNESS WHEREOF, the Trust Administrator on behalf of the Trust has
caused this Certificate to be duly executed.

Dated: December __, 2000

                                   LONG BEACH MORTGAGE LOAN TRUST 2000-1

                                   By:      BANKERS TRUST COMPANY OF
                                            CALIFORNIA, N.A.
                                            not in its individual capacity, but
                                            solely as Trust Administrator

                                   By__________________________________________

This is one of the Class M-3 Certificates
referenced in the within-mentioned Agreement

By___________________________________________
         Authorized Signatory of
         Bankers Trust Company of California,
         N.A., as Trust Administrator

                                      A-4-4

<PAGE>

                       [Reverse of Class M-3 Certificate]

                      LONG BEACH MORTGAGE LOAN TRUST 2000-1
                           Asset-Backed Certificates,
                                  Series 2000-1

         This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2000-1, Asset-Backed Certificates,
Series 2000-1 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trust Administrator is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.

         This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trust Administrator.

         Pursuant to the terms of the Agreement, a distribution will be made on
the 21st day of each month or, if such 21st day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.

         Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trust Administrator specified in the notice to
Certificateholders of such final distribution.

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trust Administrator and the rights of the Certificateholders under the Agreement
at any time by the Depositor, the Master Servicer, the Trustee and the Trust
Administrator and of Holders of the requisite percentage of the Percentage
Interests of each Class of Certificates affected by such amendment, as specified
in the Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.

                                      A-4-5

<PAGE>

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trust Administrator upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trust
Administrator accompanied by a written instrument of transfer in form
satisfactory to the Trust Administrator and the Certificate Registrar duly
executed by the holder hereof or such holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage Interest
in the Trust will be issued to the designated transferee or transferees.

         The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange, but the Trust Administrator may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.

         The Depositor, the Master Servicer, the Trustee and the Trust
Administrator and any agent of the Depositor or the Trust Administrator may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Depositor, the Trust Administrator nor
any such agent shall be affected by any notice to the contrary.

         On any Distribution Date following the date at which the remaining
Principal Balance of the Mortgage Loans is less than 10% of the sum of the
Principal Balance of the Mortgage Loans as of the Cut-off Date, the Master
Servicer may purchase, in whole, from the Trust the Mortgage Loans at a purchase
price determined as provided in the Agreement. In the event that no such
optional termination occurs, the obligations and responsibilities created by the
Agreement will terminate upon notice to the Trust Administrator upon the
earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan in the Trust, (iii) the
Distribution Date in December 2030.

         Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.

                                      A-4-6

<PAGE>

                                   ASSIGNMENT
                                   ----------

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

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

         I (We) further direct the Trust Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:

Dated:_________________

                                   _____________________________________
                                   Signature by or on behalf of assignor

                                      A-4-7

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of ____________________________________________________________,
account number _____________________, or, if mailed by check, to _______________
________________________________________________________________________________
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.

         This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.

                                      A-4-8

<PAGE>

                              CLASS C CERTIFICATES

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").

THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.

THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE CLASS M-1
CERTIFICATES, THE CLASS M-2 CERTIFICATES AND THE CLASS M-3 CERTIFICATES TO THE
EXTENT DESCRIBED IN 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"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.

                                      A-5-1

<PAGE>

Certificate No.                        :      1

Cut-off Date                           :      With respect to any Mortgage Loan,
                                              the later of (i) the date of
                                              origination of such Mortgage Loan
                                              or (ii) December 1, 2000

First Distribution Date                :      January 22, 2001

Initial Certificate Principal
Balance of this Certificate
("Denomination")                       :      $[__]

Original Class Certificate
Principal Balance of this Class        :      $[__]

Initial Notional Amount of this
Certificate ("Denomination")
                                       :      $[--]

Original Notional Amount of
this Class                             :      $[__]

Percentage Interest                    :      100.00%

Class                                  :      C

                                      A-5-2

<PAGE>

                      Long Beach Mortgage Loan Trust 2000-1
                           Asset-Backed Certificates,
                                  Series 2000-1
                                     Class C

         evidencing the Percentage Interest in the distributions allocable to
         the Certificates of the above-referenced Class with respect to the
         Trust consisting of first lien, adjustable rate mortgage loans (the
         "Mortgage Loans")

                    LONG BEACH SECURITIES CORP., as Depositor

         Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class C
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class C
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer, the Trustee or the Trust
Administrator referred to below or any of their respective affiliates.

         This certifies that Long Beach Mortgage Securities Corp. is the
registered owner of the Percentage Interest evidenced by this Class C
Certificate (obtained by dividing the Denomination of this Class C Certificate
by the Original Class Certificate Principal Balance) in certain distributions
with respect to a Trust consisting primarily of the Mortgage Loans deposited by
Long Beach Securities Corp. (the "Depositor"). The Trust was created pursuant to
a Pooling and Servicing Agreement dated as of December 1, 2000 (the "Agreement")
among the Depositor, Long Beach Mortgage Corporation, as master servicer (the
"Master Servicer"), First Union National Bank, a national banking association,
as Trustee (the "Trustee") and Bankers Trust Company of California, N.A. (the
"Trust Administrator"). To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Agreement. This Class C
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Class C
Certificate by virtue of the acceptance hereof assents and by which such Holder
is bound.

         No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trust Administrator and the Depositor in writing the facts
surrounding the transfer. In the event that such a transfer is not to be made
pursuant to Rule 144A of the Act, there shall be delivered to the Trust
Administrator and the Depositor of an Opinion of Counsel that such transfer may
be made pursuant to an exemption from the Act, which Opinion of Counsel shall
not be obtained at the expense of the Trustee, the Trust Administrator, the
Master Servicer or the Depositor; or there shall be delivered to the Trust
Administrator and the Depositor a transferor certificate by the transferor and
an investment letter shall be executed by the transferee. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trust Administrator and the Depositor against any liability that may result if
the transfer is not so exempt or is not made in accordance with such federal and
state laws.

                                      A-5-3

<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(d) of the Agreement.

         Reference is hereby made to the further provisions of this Class C
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

         This Class C Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trust Administrator.

                                      A-5-4

<PAGE>

         IN WITNESS WHEREOF, the Trust Administrator on behalf of the Trust has
caused this Certificate to be duly executed.

Dated: December __, 2000

                         LONG BEACH MORTGAGE LOAN TRUST 2000-1

                         By:      BANKERS TRUST COMPANY OF
                                  CALIFORNIA, N.A.,
                                  not in its individual capacity, but solely as
                                  Trust Administrator

                         By____________________________________________________

This is one of the Class C Certificates
referenced in the within-mentioned Agreement

By___________________________________________
         Authorized Signatory of
         Bankers Trust Company of California,
         as Trust Administrator

                                      A-5-5

<PAGE>

                        [Reverse of Class C Certificate]

                      Long Beach Mortgage Loan Trust 2000-1
                           Asset-Backed Certificates,
                                  Series 2000-1

         This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2000-1, Asset-Backed Certificates,
Series 2000-1 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trust Administrator is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.

         This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trust Administrator.

         Pursuant to the terms of the Agreement, a distribution will be made on
the 21st day of each month or, if such 21st day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.

         Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trust Administrator specified in the notice to
Certificateholders of such final distribution.

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trust Administrator and the rights of the Certificateholders under the Agreement
at any time by the Depositor, the Master Servicer, the Trustee and the Trust
Administrator and of Holders of the requisite percentage of the Percentage
Interests of each Class of Certificates affected by such amendment, as specified
in the Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.

                                      A-5-6

<PAGE>

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trust Administrator upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trust
Administrator accompanied by a written instrument of transfer in form
satisfactory to the Trust Administrator and the Certificate Registrar duly
executed by the holder hereof or such holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage Interest
in the Trust will be issued to the designated transferee or transferees.

         The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange, but the Trust Administrator may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.

         The Depositor, the Master Servicer, the Trustee and the Trust
Administrator and any agent of the Depositor or the Trust Administrator may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Depositor, the Trust Administrator nor
any such agent shall be affected by any notice to the contrary.

         On any Distribution Date following the date at which the remaining
Principal Balance of the Mortgage Loans is less than 10% of the sum of the
aggregate Principal Balance of the Mortgage Loans as of the Cut-off Date, the
Master Servicer may purchase, in whole, from the Trust the Mortgage Loans at a
purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trust Administrator upon the
earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan in the Trust, (iii) the
Distribution Date in December 2030.

         Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.

                                      A-5-7

<PAGE>

                                   ASSIGNMENT
                                   ----------

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

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

         I (We) further direct the Trust Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:

Dated:_________________

                                   _____________________________________
                                   Signature by or on behalf of assignor

                                      A-5-8

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of ____________________________________________________________,
account number _____________________, or, if mailed by check, to _______________
________________________________________________________________________________
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.

         This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.

                                      A-5-9

<PAGE>

                               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, AS AMENDED (THE "CODE").

THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE 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"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.

                                      A-7-1

<PAGE>

Certificate No.                        :      1

Cut-off Date                           :      With respect to any Mortgage Loan,
                                              the later of (i) the date of
                                              origination of such Mortgage Loan
                                              or (ii) December 1, 2000

First Distribution Date                :      January 22, 2001

Initial Certificate Principal
Balance of this Certificate
("Denomination")                       :      $100.00

Original Class Certificate
Principal Balance of this Class        :      $100.00

Percentage Interest                    :      100.00%

Class                                  :      P

                                      A-7-2

<PAGE>

                      Long Beach Mortgage Loan Trust 2000-1
                           Asset-Backed Certificates,
                                  Series 2000-1
                                     Class P

         evidencing the Percentage Interest in the distributions allocable to
         the Certificates of the above-referenced Class with respect to the
         Trust consisting of first lien, adjustable rate mortgage loans (the
         "Mortgage Loans")

                    LONG BEACH SECURITIES CORP., as Depositor

         Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class P
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class P
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer, the Trustee or the Trust
Administrator referred to below or any of their respective affiliates.

         This certifies that Long Beach Mortgage Securities Corp. is the
registered owner of the Percentage Interest evidenced by this Class P
Certificate (obtained by dividing the Denomination of this Class P Certificate
by the Original Class Certificate Principal Balance) in certain distributions
with respect to a Trust consisting primarily of the Mortgage Loans deposited by
Long Beach Securities Corp. (the "Depositor"). The Trust was created pursuant to
a Pooling and Servicing Agreement dated as of December 1, 2000 (the "Agreement")
among the Depositor, Long Beach Mortgage Corporation, as master servicer (the
"Master Servicer"), First Union National Bank, a national banking association,
as Trustee (the "Trustee") and Bankers Trust Company of California, N.A. (the
"Trust Administrator"). To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Agreement. This Class P
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Class P
Certificate by virtue of the acceptance hereof assents and by which such Holder
is bound.

         This Certificate does not have a pass-through rate and will be entitled
to distributions only to the extent set forth in the Agreement.

         No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trust Administrator and the Depositor in writing the facts
surrounding the transfer. In the event that such a transfer is not to be made
pursuant to Rule 144A of the Act, there shall be delivered to the Trust
Administrator and the Depositor of an Opinion of Counsel that such transfer may
be made pursuant to an exemption from the Act, which Opinion of Counsel shall
not be obtained at the expense of the Trustee, the Trust Administrator, the
Master Servicer or the Depositor; or there shall be delivered to the Trust
Administrator and the Depositor a transferor certificate by the transferor and
an investment letter shall be executed by the transferee. The Holder hereof
desiring to effect such transfer shall, and does

                                      A-7-3

<PAGE>

hereby agree to, indemnify the Trust Administrator and the Depositor against any
liability that may result if the transfer is not so exempt or is not made in
accordance with such federal and state laws.

         No transfer of 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(d) of the Agreement.

         Reference is hereby made to the further provisions of this Class P
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

         This Class P Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trust Administrator.

                                      A-7-4

<PAGE>

         IN WITNESS WHEREOF, the Trust Administrator on behalf of the Trust has
caused this Certificate to be duly executed.

Dated: December __, 2000

                         LONG BEACH MORTGAGE LOAN TRUST 2000-1

                         By:      BANKERS TRUST COMPANY OF
                                  CALIFORNIA, N.A.,
                                  not in its individual capacity, but solely as
                                  Trust Administrator

                         By____________________________________________________

This is one of the Class P Certificates
referenced in the within-mentioned Agreement

By_________________________________________________
         Authorized Signatory of
         Bankers Trust Company of California, N.A.,
         as Trust Administrator

                                      A-7-5

<PAGE>

                        [Reverse of Class P Certificate]

                      Long Beach Mortgage Loan Trust 2000-1
                           Asset-Backed Certificates,
                                  Series 2000-1

         This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2000-1, Asset-Backed Certificates,
Series 2000-1 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trust Administrator is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.

         This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trust Administrator.

         Pursuant to the terms of the Agreement, a distribution will be made on
the 21st day of each month or, if such 21st day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.

         Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trust Administrator specified in the notice to
Certificateholders of such final distribution.

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trust Administrator and the rights of the Certificateholders under the Agreement
at any time by the Depositor, the Master Servicer, the Trustee and the Trust
Administrator and of Holders of the requisite percentage of the Percentage
Interests of each Class of Certificates affected by such amendment, as specified
in the Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.

                                      A-7-6

<PAGE>

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trust Administrator upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trust
Administrator accompanied by a written instrument of transfer in form
satisfactory to the Trust Administrator and the Certificate Registrar duly
executed by the holder hereof or such holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage Interest
in the Trust will be issued to the designated transferee or transferees.

         The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange, but the Trust Administrator may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.

         The Depositor, the Master Servicer, the Trustee and the Trust
Administrator and any agent of the Depositor or the Trust Administrator may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Depositor, the Trust Administrator nor
any such agent shall be affected by any notice to the contrary.

         On any Distribution Date following the date at which the remaining
Principal Balance of the Mortgage Loans is less than 10% of the sum of the
Principal Balance of the Mortgage Loans as of the Cut-off Date, the Master
Servicer may purchase, in whole, from the Trust the Mortgage Loans at a purchase
price determined as provided in the Agreement. In the event that no such
optional termination occurs, the obligations and responsibilities created by the
Agreement will terminate upon notice to the Trust Administrator upon the
earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan in the Trust, (iii) the
Distribution Date in December 2030.

         Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.

                                      A-7-7

<PAGE>

                                   ASSIGNMENT
                                   ----------

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

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

         I (We) further direct the Trust Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:

Dated:_________________

                                   _____________________________________
                                   Signature by or on behalf of assignor

                                      A-7-8

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of ____________________________________________________________,
account number _____________________, or, if mailed by check, to _______________
________________________________________________________________________________
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.

         This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.

                                      A-7-9

<PAGE>

                              CLASS R CERTIFICATES

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").

THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.

THIS CLASS R CERTIFICATE HAS NO PRINCIPAL BALANCE, DOES NOT BEAR INTEREST AND
WILL NOT RECEIVE ANY DISTRIBUTIONS EXCEPT AS PROVIDED HEREIN.

NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.

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"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.

Certificate No.                         :    1

Cut-off                                      Date : With respect to any Mortgage
                                             Loan, the later of (i) the date of
                                             origination of such Mortgage Loan
                                             or (ii) December 1, 2000

First Distribution Date                 :    January 22, 2001

Percentage Interest                     :    100.00%

Class                                        R

                                      A-8-1

<PAGE>

                      Long Beach MORTGAGE LOAN TRUST 2000-1
                           Asset-Backed Certificates,
                                  Series 2000-1
                                     Class R

         evidencing the Percentage Interest in the distributions allocable to
         the Certificates of the above-referenced Class with respect to the
         Trust consisting primarily of a pool of first lien, adjustable rate
         mortgage loans (the "Mortgage Loans")

                    LONG BEACH SECURITIES CORP., as Depositor

         This Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by the Depositor, the Master Servicer, the Trustee or the
Trust Administrator referred to below or any of their respective affiliates.

         This certifies that Long Beach Mortgage Securities Corp. is the
registered owner of the Percentage Interest evidenced by this Certificate
specified above in the interest represented by all Certificates of the Class to
which this Certificate belongs in a Trust consisting primarily of the Mortgage
Loans deposited by Long Beach Securities Corp. (the "Depositor"). The Trust was
created pursuant to a Pooling and Servicing Agreement dated as of December 1,
2000 (the "Agreement") among the Depositor, Long Beach Mortgage Corporation, as
master servicer (the "Master Servicer"), First Union National Bank, a national
banking association, as Trustee (the "Trustee") and Bankers Trust Company of
California, N.A. (the "Trust Administrator"). 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.

         This Certificate does not have a principal balance or pass-through rate
and will be entitled to distributions only to the extent set forth in the
Agreement. In addition, any distribution of the proceeds of any remaining assets
of the Trust will be made only upon presentment and surrender of this
Certificate at the Corporate Trust Office or the office or agency maintained by
the Trust Administrator in Charlotte, North Carolina.

         No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trust Administrator and the Depositor in writing the facts
surrounding the transfer. In the event that such a transfer is not to be made
pursuant to Rule 144A of the Act, there shall be delivered to the Trust
Administrator and the Depositor of an Opinion of Counsel that such transfer may
be made pursuant to an exemption from the Act, which Opinion of Counsel shall
not be obtained at the expense of the Trustee, the Trust Administrator, the
Master Servicer or the Depositor; or there shall be delivered to the Trust
Administrator and the Depositor a transferor certificate by the transferor and
an investment letter shall be executed by the transferee. The Holder hereof
desiring to effect such transfer shall, and does

                                      A-8-2

<PAGE>

hereby agree to, indemnify the Trust Administrator and the Depositor against any
liability that may result if the transfer is not so exempt or is not made in
accordance with such federal and state laws.

         No transfer of 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(d) of the Agreement.

         Each Holder of this Certificate will be deemed to have agreed to be
bound by the restrictions of the Agreement, including but not limited to the
restrictions that (i) each person holding or acquiring any Ownership Interest in
this Certificate must be a Permitted Transferee, (ii) no Ownership Interest in
this Certificate may be transferred without delivery to the Trust Administrator
of (a) a transfer affidavit of the proposed transferee and (b) a transfer
certificate of the transferor, each of such documents to be in the form
described in the Agreement, (iii) each person holding or acquiring any Ownership
Interest in this Certificate must agree to require a transfer affidavit and to
deliver a transfer certificate to the Trust Administrator as required pursuant
to the Agreement, (iv) each person holding or acquiring an Ownership Interest in
this Certificate must agree not to transfer an Ownership Interest in this
Certificate if it has actual knowledge that the proposed transferee is not a
Permitted Transferee and (v) any attempted or purported transfer of any
Ownership Interest in this Certificate in violation of such restrictions will be
absolutely null and void and will vest no rights in the purported transferee.
Pursuant to the Agreement, The Trust Administrator will provide the Internal
Revenue Service and any pertinent persons with the information needed to compute
the tax imposed under the applicable tax laws on transfers of residual interests
to disqualified organizations, if any person other than a Permitted Transferee
acquires an Ownership Interest on a Class R Certificate in violation of the
restrictions mentioned above.

         Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

         This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized officer of the Trust Administrator.

                                      A-8-3

<PAGE>

         IN WITNESS WHEREOF, the Trust Administrator on behalf of the Trust has
caused this Certificate to be duly executed.

Dated: December __, 2000

                         LONG BEACH MORTGAGE LOAN TRUST 2000-1

                         By:      BANKERS TRUST COMPANY OF
                                  CALIFORNIA, N.A.
                                  not in its individual capacity, but solely as
                                  Trust Administrator

                         By____________________________________________________

This is one of the Class R Certificates
referenced in the within-mentioned Agreement

By_________________________________________________
         Authorized Signatory of
         Bankers Trust Company of California, N.A.,
         as Trust Administrator

                                      A-8-4

<PAGE>

                        [Reverse of Class R Certificate]

                      Long Beach Mortgage Loan Trust 2000-1
                           Asset-Backed Certificates,
                                  Series 2000-1

         This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2000-1, Asset-Backed Certificates,
Series 2000-1 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trust Administrator is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.

         This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trust Administrator.

         Pursuant to the terms of the Agreement, a distribution will be made on
the 21st day of each month or, if such 21st day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.

         Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trust Administrator specified in the notice to
Certificateholders of such final distribution.

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trust Administrator and the rights of the Certificateholders under the Agreement
at any time by the Depositor, the Master Servicer, the Trustee and the Trust
Administrator and of Holders of the requisite percentage of the Percentage
Interests of each Class of Certificates affected by such amendment, as specified
in the Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.

                                      A-8-5

<PAGE>

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trust Administrator upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trust
Administrator accompanied by a written instrument of transfer in form
satisfactory to the Trust Administrator and the Certificate Registrar duly
executed by the holder hereof or such holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage Interest
in the Trust will be issued to the designated transferee or transferees.

         The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange, but the Trust Administrator may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.

         The Depositor, the Master Servicer, the Trustee and the Trust
Administrator and any agent of the Depositor or the Trust Administrator may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Depositor, the Trust Administrator nor
any such agent shall be affected by any notice to the contrary.

         On any Distribution Date following the date at which the remaining
Principal Balance of the Mortgage Loans is less than 10% of the sum of the
Principal Balance of the Mortgage Loans as of the Cut-off Date, the Master
Servicer may purchase, in whole, from the Trust the Mortgage Loans at a purchase
price determined as provided in the Agreement. In the event that no such
optional termination occurs, the obligations and responsibilities created by the
Agreement will terminate upon notice to the Trust Administrator upon the
earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan in the Trust, (iii) the
Distribution Date in December 2030.

         Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.

                                      A-8-6

<PAGE>

                                   ASSIGNMENT
                                   ----------

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

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

         I (We) further direct the Trust Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:

Dated:_________________

                                   _____________________________________
                                   Signature by or on behalf of assignor

                                      A-8-7

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of ____________________________________________________________,
account number _____________________, or, if mailed by check, to _______________
________________________________________________________________________________
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.

         This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.

                                      A-8-8

<PAGE>

                                    EXHIBIT B
                                   [RESERVED]

                                       B-1

<PAGE>

                                    EXHIBIT C

                    FORM OF MORTGAGE LOAN PURCHASE AGREEMENT

                                       C-1

<PAGE>

                        MORTGAGE LOAN PURCHASE AGREEMENT

                  This is a Mortgage Loan Purchase Agreement (the "Agreement"),
dated December 12, 2000, between Long Beach Securities Corp., a Delaware
corporation (the "Purchaser") and Long Beach Mortgage Company, a Delaware
corporation (the "Seller").

                              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 intends to deposit the Mortgage Loans into a
mortgage pool constituting the trust fund. The trust fund will be evidenced by
fixed rate and floating rate asset backed certificates designated as Long Beach
Mortgage Loan Trust, Series 2000-1 (the "Certificates"). The Certificates will
consist of eleven classes of certificates. The Certificates will be issued
pursuant to a Pooling and Servicing Agreement, dated as of December 1, 2000 (the
"Pooling and Servicing Agreement"), among the Purchaser as depositor, First
Union National Bank as trustee, Bankers Trust Company of California, N.A. as
trust administrator and the Seller as master servicer (in such capacity, the
"Master Servicer"). 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 agrees to sell,
and the Purchaser agrees to purchase, on or before December 15, 2000 (the
"Closing Date"), certain fixed-rate and adjustable-rate conventional residential
mortgage loans (the "Mortgage Loans"), having an aggregate principal balance as
of the close of business on December 1, 2000 (the "Cut-off Date") of
approximately $1,000,000,594.71, after giving effect to all payments due on the
Mortgage Loans on or before the Cut-off Date, whether or not received.

                  SECTION 2. MORTGAGE LOAN 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 on the Closing Date and
the Seller will prepare or cause to be prepared on or prior to the Closing Date
a final schedule (the "Closing Schedule") that together shall describe such
Mortgage Loans and set forth all of the Mortgage Loans to be purchased under
this Agreement. The Closing Schedule will conform to the requirements set forth
in this Agreement and to the definition of "Mortgage Loan Schedule" under the
Pooling and Servicing Agreement. The Closing Schedule shall be used as the
Mortgage Loan Schedule under the Pooling and Servicing Agreement.

                  SECTION 3. CONSIDERATION.

                  In consideration for the Mortgage Loans to be purchased
hereunder, the Purchaser shall on the Closing Date, as described in Section 8,
(i) pay to or upon the order of the Seller in immediately available funds an
amount (the "Purchase Price") equal to the net sale proceeds of the Class A
Certificates and the Mezzanine Certificates and (ii) will have delivered to Long
Beach Asset

                                                         1

<PAGE>

Holdings Corp. upon the order of the Seller the Class C Certificates, the Class
P Certificates and the Class R Certificates (the "Long Beach Certificates").

                  The Purchaser or any assignee, transferee or designee of the
Purchaser shall be entitled to all scheduled payments of principal due after the
Cut-off Date, all other payments of principal due and collected after the
Cut-off Date, and all payments of interest on the Mortgage Loans allocable to
the period after the Cut-off Date. 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.

                  Pursuant to the Pooling and Servicing Agreement, the Purchaser
will 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 Purchaser in and to the Mortgage Loans (other than Sections 17
and 18 hereof), together with its rights under this Agreement.

                  SECTION 4. TRANSFER OF THE MORTGAGE LOANS.

                  (a) POSSESSION OF MORTGAGE FILES. The Seller does hereby sell,
transfer, assign, set over and convey to the Purchaser, without recourse but
subject to the terms of this Agreement, all of its right, title and interest in,
to and under the Mortgage Loans. 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 and immediately transferred to the Trustee. Upon the sale 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 or
         in the following form: "Pay to the order of First Union National Bank
         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 a copy of such original Mortgage Note with an accompanying
         Lost Note Affidavit executed by the Seller;

                           (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 executed in blank;

                                        2

<PAGE>

                           (iv) the original recorded Assignment or Assignments
         showing a complete chain of assignment from the originator to the
         Person assigning the Mortgage to the Trustee or in blank;

                           (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,
         together with all endorsements or riders 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 the title issued by the title insurance or escrow
         company.

                  The Seller shall promptly (and in no event later than thirty
(30) Business Days, subject to extension upon a mutual agreement between the
Seller and the Purchaser), following the later of the Closing Date and the date
of receipt by the Seller of recording information for a Mortgage submit or cause
to be submitted for recording, at no expense to the Purchaser, 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 clause (iii) above in the following form: "First Union National Bank, 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 shall not be required to be completed and
submitted for recording with respect to any Mortgage Loan if the Trustee, the
Trust Administrator, the NIMs Insurer and each Rating Agency has received an
opinion of counsel, reasonably satisfactory to the Trustee, the Trust
Administrator, the NIMs Insurer and each Rating Agency, to the effect that the
recordation of such Assignments in any specific jurisdiction is not necessary to
protect the Trust's interest in the related Mortgage Note; provided further,
however, notwithstanding the delivery of any opinion of counsel, each Assignment
shall be submitted for recording by the Seller, in the manner described above,
at no expense to the Trust Fund, the Trustee or the Trust Administrator, upon
the earliest to occur of: (i) reasonable direction by Holders of Certificates
entitled to at least 25% of the Voting Rights, (ii) the occurrence of a Master
Servicer Event of Default, (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 of the Pooling and Servicing Agreement and (v) if
the Seller is not the Master Servicer and with respect to any one Assignment,
the occurrence of a bankruptcy, insolvency or foreclosure relating to the
Mortgagor under the related Mortgage.

                  If any document referred to in Section 4(b)(ii), Section
4(b)(iii) or Section 4(b)(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 the original of such document, the obligations of the Seller to deliver
such documents shall be deemed to be satisfied upon (1) delivery to the
Purchaser 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

                                        3

<PAGE>

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
Purchaser upon receipt thereof, and in any event no later than one year after
the Closing Date, 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 4(b)(vi) above, the Seller shall deliver or cause to be
delivered to the Purchaser or any assignee, transferee or designee of the
Purchaser promptly after receipt thereof, and in any event within 120 days after
the Closing Date, the original lender's title insurance policy. The Seller shall
deliver or cause to be delivered to the Purchaser or any assignee, transferee or
designee of the Purchaser 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.

                  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, on and
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) TRANSFER OF INTEREST IN AGREEMENTS. The Purchaser has the
right to assign its interest under this Agreement (other than Sections 17 and 18
hereof), 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 Trustee shall succeed to the rights and obligations hereunder of
the Purchaser. Any expense reasonably incurred by or on behalf of the Purchaser,
the Trust Administrator or the Trustee in connection with enforcing any
obligations of the Seller under this Agreement will be promptly reimbursed by
the Seller.

                  (e) 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. Such examination may be made by the Purchaser, the
Trust Administrator or the Trustee, and their respective designees, upon
reasonable notice to the Seller during normal business hours at any time before
or 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,

                                        4

<PAGE>

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, as
of the date hereof and as of the Closing Date, and covenants, that:

                           (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 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, instrument or indenture 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 or any of its property, will result in the creation or
         imposition of any lien, charge or encumbrance which would have a
         material adverse effect upon the Mortgage Loans or any documents or
         instruments evidencing or securing the Mortgage Loans; 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

                                        5

<PAGE>

         having jurisdiction over it, which materially and adversely affects or,
         to the Seller's knowledge, would in the future result in the creation
         or imposition of any lien, charge or encumbrance which would have a
         material adverse effect upon the Mortgage Loans or any documents or
         instruments evidencing or securing the Mortgage Loans or materially and
         adversely affect (x) the ability of the Seller to perform its
         obligations under this Agreement or the Pooling and Servicing 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 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;

                           (vi) No litigation or proceeding is pending or, to
         the best knowledge of the Seller, threatened, against the Seller that
         would materially and adversely affect the execution, delivery or
         enforceability of this Agreement or the Pooling and Servicing Agreement
         or the issuance of the Certificates 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 and the terms of the
         Pooling and Servicing Agreement or, that would result in a material
         adverse change in the financial or operating conditions of the Seller;

                           (vii) No certificate of an officer, statement or
         other information furnished in writing or report delivered by the
         Seller to the Purchaser, any affiliate of the Purchaser, the Trust
         Administrator or the Trustee for use in connection with the purchase of
         the Mortgage Loans and the transactions contemplated hereunder and
         under the Pooling and Servicing Agreement will contain any untrue
         statement of a material fact, or omit a material fact necessary to make
         the information, certificate, statement or report not misleading in any
         material respect;

                           (viii) The Seller has not dealt with any broker,
         investment banker, agent or other person, except for the Purchaser or
         any of its affiliates, that may be entitled to any commission or
         compensation in connection with the sale of the Mortgage Loans;

                           (ix) Each Mortgage Note, each Mortgage, each
         Assignment and any other document required to be delivered by or on
         behalf of the Seller under this Agreement or the Pooling and Servicing
         Agreement to the Purchaser or any assignee, transferee or designee of
         the Purchaser for each Mortgage Loan has been or will be, in accordance
         with Section 4(b) hereof, delivered to the Purchaser or any such
         assignee, transferee or designee. With respect to each Mortgage Loan,
         the Seller is in possession of a complete Mortgage File in compliance
         with the Pooling and Servicing Agreement, except for such documents
         that have

                                        6

<PAGE>

         been delivered (1) to the Purchaser or any assignee, transferee or
         designee of the Purchaser or (2) for recording to the appropriate
         public recording office and have not yet been returned;

                           (x) The transfer, assignment and conveyance of the
         Mortgage Notes and the Mortgages by the Seller pursuant to this
         Agreement are not subject to the bulk transfer or any similar statutory
         provisions in effect in any relevant jurisdiction, except any as may
         have been complied with;

                           (xi) The Seller (A) is a solvent entity and is paying
         its debts as they become due, (B) after giving effect to the transfer
         of the Mortgage Loans, will be a solvent entity and will have
         sufficient resources to pay its debts as they become due and (C) did
         not sell the Mortgage Loans to the Purchaser with the intent to hinder,
         delay or defraud any of its creditors;

                           (xii) The form of endorsement of each Mortgage Note
         satisfied the requirement, if any, of endorsement in order to transfer
         all right, title and interest of the party so endorsing, as noteholder
         or assignee thereof, in and to that Mortgage Note; and each Assignment
         to be delivered hereunder is in recordable form and is sufficient to
         effect the assignment of and to transfer to the assignee thereunder the
         benefits of the assignor, as mortgagee or assignee thereof, under each
         Mortgage to which that Assignment relates;

                           (xiii) The transfer of the Mortgage Loans to the
         Purchaser at the Closing Date will be treated by the Seller for
         financial accounting and reporting purposes as a sale of assets; and

                           (xiv) Immediately prior to the sale of the Mortgage
         Loans to the Purchaser as herein contemplated, the Seller had good
         title to, and was the sole owner of, the Mortgage Loans, and such sale
         validly transfers the Mortgage Loans to the Purchaser free and clear of
         any pledge, lien, encumbrance or security interest.

                  SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE SELLER
                             RELATING TO THE INDIVIDUAL MORTGAGE LOANS.

                  The Seller hereby represents and warrants to the Purchaser,
that as of the Closing Date:

                           (i) The information set forth on the Mortgage Loan
Schedule with respect to each Mortgage Loan is complete, true and correct in all
material respects;

                           (ii) The Mortgage Loan is in compliance with the
characteristics of the Mortgage Loans as set forth on Exhibit 1;

                           (iii) As of November 30, 2000, the Monthly Payment
due under each Mortgage Loan is not 30 or more days delinquent in payment and
none of the Mortgage Loans will have been contractually delinquent for more than
30 days more than once during the preceding

                                        7

<PAGE>

twelve months and, except as provided above, no Mortgage Loan will ever have
experienced a delinquency of 60 or more days since the origination thereof;

                           (iv) Each Mortgage is a valid and enforceable first
lien on the Mortgaged Property, including all improvements thereon, subject only
to (a) the lien of non-delinquent 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 which do not materially interfere
with the benefits of the security intended to be provided by such Mortgage 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;

                           (v) Immediately prior to the assignment 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;

                           (vi) To the best of the Seller's knowledge, there is
no delinquent tax or assessment lien against any Mortgaged Property;

                           (vii) 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 Note or the Mortgage
unenforceable, in whole or in part, or subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto;

                           (viii) To the best of the Seller's knowledge, there
are no mechanics' liens or claims for work, labor or material 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 (xii) below;

                           (ix) To the best of the Seller's knowledge, each
Mortgaged Property is free of material damage and is at least in average repair;

                           (x) Each Mortgage Loan at origination complied in all
material respects with applicable local, state and federal laws, including,
without limitation, usury, equal credit opportunity, real estate settlement
procedures, truth-in-lending and disclosure laws, and consummation of the
transactions contemplated hereby will not involve the violation of any such
laws;

                           (xi) 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

                                        8

<PAGE>

written instrument which has been recorded, if necessary, to protect the
interests of the Seller and the Purchaser and which has been delivered to the
Trust Administrator or the Custodian as part of the Mortgage File, and the terms
of which are reflected in the Mortgage Loan Schedule); 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;

                           (xii) A lender's policy of title insurance together
with a condominium endorsement and extended coverage endorsement, if applicable,
and, with respect to each Group II Mortgage Loan, an adjustable rate mortgage
endorsement in an amount at least equal to the balance of the Mortgage Loan as
of the Cut-off Date, 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 and Trustee 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
acceptable to Fannie Mae or Freddie Mac 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; to the best of the Seller's knowledge, no claims have been made
under such mortgage 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 mortgage title insurance policy;

                           (xiii) Each Mortgage Loan was originated by the
Seller (or, if generated on behalf of the Seller by a Person other than the
Seller, is subject to the same 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, or
by a mortgagee approved by the Secretary of Housing and Urban Development
pursuant to Sections 203 and 211 of the National Housing Act;

                           (xiv) With respect to each Group II 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. Except for Balloon
Mortgage Loans, 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. All rate adjustments have
been performed in accordance with the terms of the related Mortgage Note or
subsequent modifications, if any;

                           (xv) To the best of the Seller's knowledge, all of
the improvements which were included for the purpose of determining the Value of
the Mortgaged Property lie wholly within the boundaries and building restriction
lines of such property, and no improvements on adjoining properties encroach
upon the Mortgaged Property;

                                        9

<PAGE>

                           (xvi) All inspections, licenses and certificates
required to be made or issued with respect to all occupied portions of the
Mortgaged Property and, with respect to the use and occupancy of the same,
including but not limited to certificates of occupancy, have been made or
obtained from the appropriate authorities and to the best of the Seller's
knowledge, the Mortgaged Property is lawfully occupied under applicable law;

                           (xvii) 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;

                           (xviii) 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. To
the best of the Seller's knowledge, 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;

                           (xix) 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.
All costs, fees and expenses incurred in making, closing or recording the
Mortgage Loans were paid;

                           (xx) 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
interfere with the right to sell the Mortgaged Property at a trustee's sale or
the right to foreclose the Mortgage;

                           (xxi) 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;

                           (xxii) There exist no deficiencies with respect to
escrow deposits and payments, if such are required, for which customary
arrangements for repayment thereof have not been made, and no escrow deposits or
payments of other charges or payments due the Seller have been capitalized under
the Mortgage or the related Mortgage Note;

                           (xxiii) The origination, underwriting and collection
practices used by the Seller with respect to each Mortgage Loan have been in all
respects legal, proper, prudent and customary in the mortgage servicing
business. Each Mortgage Loan is currently being serviced by the Seller and has
been serviced by the Seller since the date of origination of each Mortgage Loan;

                                       10

<PAGE>

                           (xxiv) There is no pledged account or other security
other than real estate securing the Mortgagor's obligations;

                           (xxv) No Mortgage Loan has a shared appreciation
feature, or other contingent interest feature;

                           (xxvi) Approximately 71.85% of the Mortgage Loans in
Loan Group I and approximately 71.89% of the Mortgage Loans in Loan Group II, by
Cut-off Date Aggregate Principal Balance, provide for primary mortgage
insurance;

                           (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 coverage of such
other hazards as are customarily covered by hazard insurance policies with
extended coverage 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 this clause (xxvii) and 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;

                           (xxviii) If the Mortgaged Property is in an area
identified in the Federal Register by the Federal Emergency Management Agency as
subject to 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, to the best of the Seller's
knowledge, does not include cooperatives and does not constitute property other
than real property under state law;

                           (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 addition to those made by the Mortgagor;

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                           (xxxii) Any future advances made prior to the Cut-off
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 related 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 as described in the
Prospectus Supplement as applicable to its credit grade;

                           (xxxiv) The Mortgage File contains an appraisal which
was performed by an appraiser who satisfied, and which was conducted in
accordance with, all of the applicable requirements of the Financial
Institutions Reform, Recovery and Enforcement Act of 1989, as amended;

                           (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) Except with respect to approximately ____% of
the Mortgage Loans in Loan Group I, by Cut-off Date Aggregate Principal Balance,
no loan junior in lien priority to such Mortgage Loan and secured by the related
Mortgaged Property was originated by the Seller at the time of origination of
such Mortgage Loan;

                           (xxxvii) 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;

                           (xxxviii) To the best of the Seller's knowledge no
error, omission, misrepresentation, negligence, fraud or similar occurrence with
respect to a Mortgage Loan has taken place on the part of any person, including,
without limitation, the Mortgagor, any appraiser, any builder or developer, or
any other party involved in the origination of the Mortgage Loan or in the
application of any insurance in relation to such Mortgage Loan;

                           (xxxix) Each Mortgage Loan constitutes a "qualified
mortgage" within the meaning of Section 860(G)(a)(3) of the Code;

                           (xl) The information set forth in the Prepayment
Charge Schedule is complete, true and correct in all material respects at the
date or dates respecting with such information is furnished and each Prepayment
Charge is permissible and enforceable in accordance with its terms upon the
Mortgagor's full and voluntary Principal Prepayment (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; (2) the collectability thereof may be limited due to acceleration in
connection with a foreclosure or other involuntary prepayment; or (3) subsequent
changes in applicable law may limit or prohibit enforceability thereof) under
applicable law;

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<PAGE>

                           (xli) The Loan-to-Value Ratio for each Mortgage Loan
was no greater than 99.49% at the time of origination;

                           (xlii) The first date on which each Mortgagor must
make a payment on the related Mortgage Note is no later than 60 days from the
date of this Agreement;

                           (xliii) With respect to any Mortgage Loan, the
related Mortgagor shall not fail to make the first Monthly Payment due under
such Mortgage Loan by the second succeeding Due Date after the Due Date on which
such Monthly Payment was due (a "First Payment Default");

                           (xliv) [Reserved];

                           (xlv) The Seller has not advanced funds, or induced,
solicited or knowingly received any advance of funds by a party other than the
Mortgagor, directly or indirectly, for the payment of any amount required under
the Mortgage Loans;

                           (xlvi) There is no proceeding pending, or to best of
the Seller's knowledge threatened, for the total or partial condemnation of the
Mortgaged Property or the taking by eminent domain of any Mortgaged Property;

                           (xlvii) None of the Mortgage Loans are classified as
"high cost" loans under Section 32 of the Home Ownership and Equity Protection
Act of 1994;

                           (xlviii) The Seller did not select the Mortgage Loans
with the intent to adversely affect the interests of the Purchaser; and

                           (xlviv) The Seller has not received any notice that
any Mortgagor has field for any bankruptcy or similar legal protection.

                  SECTION 7. REPURCHASE OBLIGATION FOR DEFECTIVE DOCUMENTATION
                             AND FOR BREACH OF REPRESENTATION AND WARRANTY.

                  (a) The representations and warranties contained in Section 5
(ix), (xii) and (xiv) and 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 Seller or 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 and the Trust
Administrator for the benefit of holders of asset-backed certificates evidencing
an interest in all or a portion of the Mortgage Loans. With respect to the
representations and warranties contained herein which are made to the knowledge
or the best of knowledge of the Seller, or as to which the Seller has no
knowledge, if it is discovered that the substance of any such representation and
warranty was inaccurate as of the date such representation and warranty was made
or deemed to be made, and such inaccuracy materially and adversely affects the
value of the related Mortgage Loan or the interest therein of the Purchaser or
the Purchaser's assignee, transferee or designee, then notwithstanding the lack
of knowledge by the Seller with respect to the substance of such representation
and warranty being inaccurate at the time

                                       13

<PAGE>

the representation and warranty was made, the Seller shall take such action
described in the following paragraph in respect of such Mortgage Loan.

                  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 Trust Administrator's initial certification), 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 of the Purchaser or the Purchaser's assignee, transferee or
designee, the party discovering the breach shall give prompt written notice to
the others. Within ninety (90) days of its discovery or its receipt of notice of
any such missing documentation which was not transferred to the Purchaser as
described above or materially defective documentation or any such breach of a
representation and warranty, the 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; provided, however,
that in the case of a breach of the representation and warranty concerning the
Mortgage Loan Schedule contained in Section 6(i), if such breach relates to any
field on the Mortgage Loan Schedule which identifies any Prepayment Charge, then
in lieu of purchasing such Mortgage Loan from the Trust Fund at the Purchase
Price, the Seller shall pay the amount of the incorrectly identified Prepayment
Charge (net of any amount previously collected by or paid to the Trust Fund in
respect of such Prepayment Charge), and the Seller shall have no obligation to
repurchase or substitute for such Mortgage Loan. 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
and any remedy by the Seller for a breach of a representation or warranty that
materially and adversely affects the value of any Prepayment Charge shall be
made in a manner consistent with Section 2.03(c) of the Pooling and Servicing
Agreement.

                  (b) It is understood and agreed that the obligations of the
Seller set forth in this Section 7 to cure, repurchase or substitute for a
defective Mortgage Loan constitute the sole remedies of the Purchaser against
the Seller respecting a missing or defective document or a breach of the
representations and warranties contained in Section 5 or Section 6.

                  SECTION 8. CLOSING; PAYMENT FOR THE MORTGAGE LOANS. The
closing of the purchase and sale of the Mortgage Loans shall be held at the New
York City office of Thacher Proffitt & Wood at 10:00 am New York City time on
the Closing Date.

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<PAGE>

                  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 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 in immediately available funds and delivery of the
Long Beach Certificates to Long Beach Asset Holdings Corp.

                  SECTION 9. CLOSING DOCUMENTS. Without limiting the generality
of Section 8 hereof, the closing shall be subject to delivery of each of the
following documents:

                  (a) An Officers' Certificate of the Seller, dated the Closing
Date, upon which the Purchaser and Deutsche Bank Securities Inc. as
representative of the several underwriters (the "Representative") and Radian
Insurance Inc. (the "NIMs Insurer") 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 the State of Delaware;

                  (b) An Officers' Certificate of the Seller, dated the Closing
Date, upon which the Purchaser and the Representative and the NIMs Insurer 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 (which may be in-house
counsel of the Seller), dated the Closing Date and addressed to the Purchaser,
the Representative and the NIMs Insurer;

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<PAGE>

                  (d) Such opinions of counsel as the Rating Agencies, the
Representative, the Trust Administrator, the Trustee or the NIMs Insurer 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;

                  (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
Purchaser's Prospectus Supplement, dated December 12, 2000, under the captions
"Summary of Terms--Mortgage Loans," "Risk Factors," "The Mortgage Pool," and
"Long Beach Mortgage Company," agrees with the records of the Seller;

                  (f) The Seller shall deliver to the Purchaser for inclusion in
the Prospectus Supplement under the caption "Long Beach Mortgage Company" or for
inclusion in other offering materials, such publicly available information
regarding the Seller, 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 a computer tape with respect to
the pool information, as the Representative may request;

                  (g) Letters from at least two nationally recognized
statistical rating agencies rating the Offered Certificates; and

                  (h) Such further information, certificates, opinions and
documents as the Purchaser or the Representative 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,
recording fees, fees for title policy endorsements and continuations and the
fees for recording Assignments, the fees and expenses of the Seller's in-house
accountants and in-house attorneys, the costs and expenses incurred in
connection with determining the Seller's loan loss, foreclosure and delinquency
experience, the costs and expenses incurred in connection with obtaining the
documents referred to in Sections 9(d) and 9(e), the cost of an opinion of
counsel regarding the true sale of the mortgage loans, the costs and expenses of
printing (or otherwise reproducing) and delivering this Agreement, the Pooling
and Servicing Agreement, the Certificates, the prospectus, prospectus
supplement, any blue sky filings and private placement memorandum relating to
the Certificates and other related documents, the initial fees, costs and
expenses of the Trustee and the Trust Administrator, the fees and expenses of
the Purchaser'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 any opinions of outside special counsel that may be required for the
Seller, the cost of obtaining the documents referred to in Section 9(e) hereof
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.

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<PAGE>

                  SECTION 11. SERVICING. The Seller has represented to the
Purchaser that the Mortgage Loans are being serviced in accordance with the
terms of the Pooling and Servicing Agreement, and it is understood and agreed by
and between the Seller and the Purchaser that any interim servicing arrangements
with the Seller will be superseded by the servicing arrangements set forth in
the Pooling and Servicing Agreement.

                  SECTION 12. MANDATORY DELIVERY; GRANT OF SECURITY INTEREST.
The sale and delivery on the Closing Date of the Mortgage Loans described on the
Mortgage Loan Schedule in accordance with the terms and conditions of this
Agreement is mandatory. It is specifically understood and agreed that each
Mortgage Loan is unique and identifiable on the date hereof and that an award of
money damages would be insufficient to compensate the Purchaser for the losses
and damages incurred by the Purchaser in the event of the 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 (i) the Purchaser's right, prior
to the Closing Date, to reject any Mortgage Loan to the extent permitted by this
Agreement and (ii) the Purchaser's 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
automatically 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 re-delivery of the Mortgage Loans, if delivery to
the Purchaser has occurred and the security interest created by this Section 12
shall be deemed to have been released.

                  SECTION 13. 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
1650, Orange, California 92868, Attention: __________, 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 1650, Orange,
California 92868, Attention: General Counsel, or to such other address as the
Seller may designate in writing to the Purchaser.

                  SECTION 14. 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

                                       17

<PAGE>

provisions hereof. Any part, provision, representation or warranty of this
Agreement which is prohibited or unenforceable or is held to be void or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof.

                  SECTION 15. AGREEMENT OF PARTIES. The Seller and the Purchaser
each agree to execute and deliver such instruments (including UCC financing
statements and continuation statements) 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 16. 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 and its successors and assigns, 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 17. INDEMNIFICATION. (a) The Seller will indemnify and
hold harmless each of (i) the Purchaser and (ii) each person, if any, who
controls the Purchaser within the meaning of Section 15 of the Securities Act of
1933, as amended (the "1933 Act") or the Securities Exchange Act of 1934, as
amended (the "1934 Act") ((i) and (ii) together, the "Indemnified Party")
against any and all losses, claims, expenses, damages or liabilities, to which
the Indemnified Party may become subject, under the 1933 Act or otherwise, and
will reimburse each Indemnified Party for any legal or other expenses incurred
by the Indemnified Party in connection with investigating or defending any such
loss, claim, expenses, damage, liability or action insofar as such losses,
claims, expenses, damages or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Prospectus Supplement dated December 12, 2000
(the "Prospectus Supplement"), as amended or supplemented, relating to the
public offering of the Class A Certificates and the Mezzanine Certificates,
representing interests in the Mortgage Loans, or in any other offering document
(the "Private Placement Memorandum") relating to the offering by the Purchaser
or an affiliate thereof, of the Class C, Class P and Class R Certificates, or
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances in which they were made, not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with (i) information furnished in writing to the Purchaser or any of
its affiliates by the Seller specifically for use therein, which shall include,
with respect to the Prospectus Supplement, the information set forth under the
captions "Summary of Terms--Mortgage Loans," "Risk Factors" (but only to the
extent that the information under "Risk Factors" has been furnished

                                       18

<PAGE>

by the Seller), "The Mortgage Pool" and "Long Beach Mortgage Company" and, with
respect to any Private Placement Memorandum, any information of a comparable
nature, (ii) the data files containing information with respect to the Mortgage
Loans as transmitted by modem to the Purchaser by the Seller or any of its
affiliates (as such transmitted information may have been amended in writing by
the Seller or any of its affiliates and received by the Purchaser subsequent to
transmission) specifically for use therein, which shall include, with respect to
the Prospectus Supplement, the information set forth under the captions "Summary
of Terms--Mortgage Loans," "Risk Factors" (but only to the extent that the
information under "Risk Factors" has been furnished by the Seller) and "The
Mortgage Pool" and, with respect to any Private Placement Memorandum, any
information of a comparable nature or (iii) any representation, warranty or
covenant made by the Seller or any affiliate of the Seller in this Agreement and
the Pooling and Servicing Agreement, on which the Indemnified Party has relied
((i) through (iii) collectively "Seller Information"), provided however, that to
the extent that any such losses, claims, expenses, damages or liabilities to
which the Indemnified Party may become subject arise out of or are based upon
both (1) statements, omissions, representations, warranties or covenants of the
Seller described above and (2) any other factual basis, the Seller shall
indemnify and hold harmless the Indemnified Party only to the extent that the
losses, claims expenses, damages or liabilities of the person or persons
asserting the claim are determined to arise from or be based only upon matters
set forth in clause (1) above. The Seller's liability under this Section 17
shall be in addition to any other liability the Seller may otherwise have.

                  (b) The Purchaser agrees to indemnify and hold harmless the
Seller, its officers and its directors, and each person who controls the Seller
within the meaning of either the 1933 Act against any and all losses, claims,
damages or liabilities, joint or several, to which they may become subject under
the 1933 Act, or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Prospectus Supplement, the Prospectus or Private Placement Memorandum, or in any
revision or amendment thereof or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances in which they were made, not misleading, except
insofar as such losses, claims, damages or liabilities are caused by any untrue
statement or omission or alleged untrue statement or omission made therein in
reliance upon and in conformity with the Seller's Information and will reimburse
the Seller and any controlling person for any legal or other expenses reasonably
incurred by such Seller and any controlling person in connection with
investigating or defending any such loss, claim, damage, liability or action.
The Purchaser's liability under this Section 17 shall be in addition to any
other liability the Purchaser may otherwise have.

                  (c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either Section 17(a) or 17(b) above, such
person (the "indemnified party") shall promptly notify the person against whom
such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the reasonable fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the right
to retain its own counsel, but the reasonable fees and expenses of such

                                       19

<PAGE>

counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel, (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them or
(iii) the indemnifying party has failed to assume the defense of such action and
employ counsel reasonably satisfactory to the indemnified party. It is
understood that the indemnifying party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
reasonable fees and expenses of more than one separate firm for all such
indemnified parties. Such firm shall be designated in writing by the Purchaser,
in the case of parties indemnified pursuant to clause 17(a) and by the Seller,
in the case of parties indemnified pursuant to clause 17(b). The indemnifying
party may, at its option, at any time upon written notice to the indemnified
party, assume the defense of any proceeding and may designate counsel
satisfactory to the indemnified party in connection therewith provided that the
counsel so designated would have no actual or potential conflict of interest in
connection with such representation. Unless it shall assume the defense of any
proceeding, the indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. If the indemnifying party
assumes the defense of any proceeding, it shall be entitled to settle such
proceeding with the prior written consent of the indemnified party or, if (i)
such settlement does not include a statement as to, or on admission of fault,
culpability or failure to act by or on behalf of the indemnified party and (ii)
such settlement provides for an unconditional release of the indemnified party
in connection with all matters relating to the proceeding which have been
asserted against the indemnified party in such proceeding by the other parties
to such settlement, without the prior written consent of the indemnified party.

                  (d) If the indemnification provided for in this Section 17 is
unavailable to an indemnified party under Section 17(a) or 17(b) hereof or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then the indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities, in
such proportion as is appropriate to reflect the relative fault of the
indemnified and indemnifying parties in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative fault of the
indemnified and indemnifying parties shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by such parties and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.

                  (e) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in paragraph (a) of this
Section 17 is due in accordance with its terms but is for any reason held by a
court to be unavailable from the Seller on grounds of policy or otherwise, the
Seller on the one hand and the Purchaser on the other hand shall contribute to
the aggregate losses, claims, damages and liabilities (including legal and other
expenses reasonably incurred in connection with investigating or defending same)
(collectively, "Losses") to which the Seller on the one hand and the Purchaser
on the other hand may be subject in such proportion as is

                                       20

<PAGE>

appropriate to reflect the relative benefits received by the Seller on the one
hand and the Purchaser on the other hand from the sale of the Mortgage Loans;
provided, however, that in no case shall the Purchaser be responsible for any
amount in excess of 0.225% of the aggregate initial principal balance of the
Mortgage Loans. If the allocation provided by the immediately preceding sentence
is unavailable for any reason, the Seller on the one hand and the Purchaser on
the other hand shall contribute in such proportion as is appropriate to reflect
not only such relative benefits but also the relative fault of the Seller on the
one hand and the Purchaser on the other hand in connection with the statements
or omissions that resulted in such Losses as well as any other relevant
equitable considerations. Benefits received by the Seller shall be deemed to be
equal to the total net proceeds from the sale (before deducting expenses) plus
the value of all Certificates retained by the Seller or one of its affiliates
and benefits received by the Purchaser shall be deemed to be equal to 0.225% of
the aggregate initial principal balance of the Mortgage Loans. Relative fault
shall be determined by reference to whether any alleged untrue statement or
omission relates to the information provided by the Seller on the one hand or
the Purchaser on the other hand. The Seller and the Purchaser agree that it
would not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation that does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this subsection (e) the Representative shall not be required to contribute any
amount in excess of the amount by which the total price at which the related
Offered Certificates underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such
Representative has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 17,
each person, if any, who controls the Purchaser within the meaning of the
Securities Act or the 1934 Act and each director, officer, employee and agent of
the Purchaser shall have the same rights to contribution as the Purchaser, and
each person, if any, who controls the Seller within the meaning of either the
Securities Act or the 1934 Act and each director of the Seller shall have the
same rights to contribution as the Seller, subject in each case to the
applicable terms and conditions of this paragraph 17(e).

                  (f) The indemnity and contribution agreements contained in
this Section 17 shall remain operative and in full force and effect regardless
of (i) any termination of this Agreement, (ii) any investigation made by the
Purchaser or any person controlling the Purchaser or by or on behalf of the
Seller and their respective directors or officers or any person controlling the
Seller, and (iii) acceptance of and payment for any of the Certificates.

                  SECTION 18. [RESERVED].

                  SECTION 19. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS,
DUTIES, OBLIGATIONS AND RESPONSIBILITIES OF THE PARTIES HERETO SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS (INCLUDING THE CHOICE OF LAW
PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK. THE PARTIES HERETO INTEND
THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW
SHALL APPLY TO THIS AGREEMENT.

                                       21

<PAGE>

                  SECTION 20. 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.

                  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 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 by the
secured party" for purposes of perfecting the security interest pursuant to
Section 9-305 of 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.

                  SECTION 21. THIRD PARTY BENEFICIARY. Each of the Trustee, the
Trust Administrator and the NIMs Insurer, shall be a third party beneficiary
hereof (except with respect to Section 17) and shall be entitled to enforce the
provisions hereof as if a party hereto, except the provisions of Section 17
hereof. This provision shall not limit waiver, enforcement and consent powers
that Radian Insurance Inc. has except as specifically agreed in a separate
letter agreement between such

                                       22

<PAGE>

parties or as otherwise agreed between Radian Insurance Inc. and the parties may
perform in accordance with such powers. The Representative, on behalf of the
underwriters, shall be a third party beneficiary hereof solely with respect to
Section 17 and shall be entitled to enforce the provisions of Section 17 as if
it were a party hereto.

                                       23

<PAGE>

                  IN WITNESS WHEREOF, the Purchaser and the Seller have caused
their names to be signed by their respective officers thereunto duly authorized
as of the date first above written.

                                     LONG BEACH SECURITIES CORP.

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

                                     LONG BEACH MORTGAGE COMPANY

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

                                       24

<PAGE>

                                    EXHIBIT 1

         Pool Characteristics of the Mortgage Loans as delivered on the Closing
Date:

         All percentages set forth herein are based upon Cut-off Date Aggregate
Principal Balance.

         (1) No Mortgage Loans in Loan Group I or Loan Group II had a
Loan-to-Value Ratio at origination in excess of approximately 90.60% and 99.49%,
respectively;

         (2) No more than approximately _____% and _____% of the Mortgage Loans
in Loan Group I and Loan Group II, respectively, are related to Mortgaged
Properties located in any one zip code area;

         (3) Each Mortgaged Property in Loan Group I and Loan Group II,
respectively, is located in one of the states listed in the chart entitled
"Geographic Distribution of the Mortgaged Properties relating to the Group I
Mortgage Loans" and "Geographic Distribution of the Mortgaged Properties
relating to the Group II Mortgage Loans," respectively, in the Prospectus
Supplement;

         (4) No more than approximately 2.98% and 5.37% of the Mortgage Loans in
Loan Group I and Loan Group II, respectively, are secured by condominium units
and all condominium Mortgage Loans have been originated on a form acceptable to
Fannie Mae or Freddie Mac with such riders as have been acceptable to Fannie Mae
or Freddie Mac, as the case may be;

         (5) No more than approximately 7.13% and 4.38% of the Mortgage Loans in
Loan Group I and Loan Group II, respectively, are secured by two- to four-family
dwellings. No more than approximately 0.05% and 0.25% of the Mortgage Loans in
Loan Group I and Loan Group II, respectively, are secured by Town Houses. No
more than approximately 6.30% and 7.00% of the Mortgage Loans in Loan Group I
and Loan Group II, respectively, are secured by Manufactured Housing. No more
than approximately 6.01% and 10.70% of the Mortgage Loans in Loan Group I and
Loan Group II, respectively, are secured by dwelling units in PUDs;

         (6) No Mortgage Loan in Loan Group I or Loan Group II had a principal
balance in excess of approximately $569,746 and $749,334, respectively, at
origination;

         (7) Each Mortgage Loan in Loan Group I and Loan Group II has a first
Due Date on or after August 1999 and December 1998, respectively, and each Group
II Mortgage Loan has a next Adjustment Date no later than January 2006;

         (8) On the basis of representations made by the Mortgagors in their
loan applications, no more than approximately 5.56% and 4.35% of the Mortgage
Loans in Loan Group I and Loan Group II, respectively, are secured by investor
properties and at least approximately 93.68% and 95.15% of the Mortgage Loans in
Loan Group I and Loan Group II, respectively, are owner-occupied Mortgaged
Properties;

         (9) The Mortgage Rates borne by the Mortgage Loans in Loan Group I and
Loan Group II as of the Cut-off Date ranged from approximately 8.200% and 7.500%
per annum respectively,

                                       1-1

<PAGE>

to approximately 14.975% and 15.100% per annum respectively, and the weighted
average Mortgage Rate as of the Cut-off Date was approximately 10.962% and
10.762% per annum respectively;

         (10) Approximately 14.40% and 15.34% of the Mortgage Loans in Loan
Group I and Loan Group II, respectively, were rate/term refinancings,
approximately 53.72% and 35.39% of the Mortgage Loans in Loan Group I and Loan
Group II, respectively, were cash out refinancings and approximately 31.88% and
49.27% of the Mortgage Loans in Loan Group I and Loan Group II, respectively,
were made to purchase the related Mortgaged Properties;

         (11) As of the Cut-off Date, the Gross Margins for the Group II
Mortgage Loans range from approximately 4.750% to 8.700% and the weighted
average Gross Margin for the Group II Mortgage Loans as of the Cut-off Date was
approximately 6.132%;

         (12) No less than approximately 77.54% and 80.09% of the Mortgage Loans
in Loan Group I and Loan Group II, respectively, were originated by the Seller
under the Seller's "Full Documentation" mortgage loan program, no more than
approximately 6.60% and 4.09% of the Mortgage Loans in Loan Group I and Loan
Group II, respectively, were originated by the Seller under the Seller's
"Limited Documentation" mortgage loan program and no more than approximately
15.86% and 15.82% of the Mortgage Loans in Loan Group I and Loan Group II,
respectively, were originated by the Seller under the Seller's "Stated Income
Documentation" mortgage loan program; and

         (13) With respect to the Seller's underwriting risk categories,
approximately 54.68%, 20.26%, 15.29%, 8.40% and 1.36% of the Mortgage Loans in
Loan Group I constitute "A-" Risk Mortgage Loans, "B" Risk Mortgage Loans, "B-"
Risk Mortgage Loans, "C" Risk Mortgage Loans and "D" Risk Mortgage Loans,
respectively, and approximately 55.72%, 17.28%, 15.76%, 8.89 and 2.07% of
Mortgage Loans in Loan Group II constitute "A-" Risk Mortgage Loans, "B" Risk
Mortgage Loans, "B-" Risk Mortgage Loans, "C" Risk Mortgage Loans and "D" Risk
Mortgage Loans, respectively.

                                       1-2

<PAGE>

                                    EXHIBIT D

                             MORTGAGE LOAN SCHEDULE

                                 FILED BY PAPER

                                       D-1

<PAGE>

                                   EXHIBIT E-1

                               REQUEST FOR RELEASE
                             (for Trustee/Custodian)

Loan Information
----------------

         Name of Mortgagor:______________________________

         Master Servicer
         Loan No.:         ______________________________

Trustee/Custodian
-----------------

         Name:             ______________________________

         Address:

         Trustee/Custodian
         Mortgage File No.:_______________________________

Depositor
---------

         Name:             LONG BEACH SECURITIES CORP.

         Address:          _______________________________

         Certificates:     Long Beach Mortgage Certificates, Series 2000-1.

                                       E-1

<PAGE>

                  The undersigned Master Servicer hereby acknowledges that it
has received from _______________________, as Trustee for the Holders of Long
Beach Mortgage Asset-Backed Certificates, Series 2000-1, the documents referred
to below (the "Documents"). All capitalized terms not otherwise defined in this
Request for Release shall have the meanings given them in the Pooling and
Servicing Agreement, dated as of December 1, 2000, among the Trustee, the Trust
Administrator, the Depositor and the Master Servicer (the "Pooling and Servicing
Agreement").

(a) Promissory Note dated _______________, 20__, in the original principal sum
of $__________, made by ___________________, payable to, or endorsed to the
order of, the Trust Administrator.

(b) Mortgage recorded on _____________________ as instrument no.
________________ in the County Recorder's Office of the County of
_________________, State of ____________ in book/reel/docket _________________
of official records at page/image _____________.

(c) Deed of Trust recorded on ___________________ as instrument no.
________________ in the County Recorder's Office of the County of
_________________, State of ____________________ in book/reel/docket
_________________ of official records at page/image --------------.

(d) Assignment of Mortgage or Deed of Trust to the Trust Administrator, recorded
on ___________________ as instrument no. _________ in the County Recorder's
Office of the County of _______________, State of _______________________ in
book/reel/docket ____________ of official records at page/image ____________.

(e) Other documents, including any amendments, assignments or other assumptions
of the Mortgage Note or Mortgage.

(f) _____________________________________________

(g) _____________________________________________

(h) _____________________________________________

(i) _____________________________________________

                  The undersigned Master Servicer hereby acknowledges and agrees
as follows:

         (1) The Master Servicer shall hold and retain possession of the
Documents in trust for the benefit of the Trust Administrator, solely for the
purposes provided in the Agreement.

         (2) The Master Servicer shall not cause or permit the Documents to
become subject to, or encumbered by, any claim, liens, security interest,
charges, writs of attachment or other impositions nor shall the Master Servicer
assert or seek to assert any claims or rights of setoff to or against the
Documents or any proceeds thereof.

                                       E-2

<PAGE>

         (3) The Master Servicer shall return each and every Document previously
requested from the Mortgage File to the Trust Administrator when the need
therefor no longer exists, unless the Home Equity Loan relating to the Documents
has been liquidated and the proceeds thereof have been remitted to the
Collection Account and except as expressly provided in the Agreement.

         (4) The Documents and any proceeds thereof, including any proceeds of
proceeds, coming into the possession or control of the Master Servicer shall at
all times be ear-marked for the account of the Trust Administrator, and the
Master Servicer shall keep the Documents and any proceeds separate and distinct
from all other property in the Master Servicer's possession, custody or control.

Dated:

                                                     LONG BEACH MORTGAGE COMPANY

                                                     By:________________________
                                                     Name:
                                                     Title:

                                       E-3

<PAGE>

                                   EXHIBIT E-2

                               REQUEST FOR RELEASE
                          [Mortgage Loans Paid in Full]

                     OFFICERS' CERTIFICATE AND TRUST RECEIPT
                     MORTGAGE LOAN PASS-THROUGH CERTIFICATES
                                  SERIES 2000-1

____________________________________________________ HEREBY CERTIFIES THAT
HE/SHE IS AN OFFICER OF THE MASTER SERVICER, HOLDING THE OFFICE SET FORTH
BENEATH HIS/HER SIGNATURE, AND HEREBY FURTHER CERTIFIES AS FOLLOWS:

WITH RESPECT TO THE HOME EQUITY LOANS, AS THE TERM IS DEFINED IN THE POOLING AND
SERVICING AGREEMENT DESCRIBED IN THE ATTACHED SCHEDULE:

ALL PAYMENTS OF PRINCIPAL, PREMIUM (IF ANY), AND INTEREST HAVE BEEN MADE.

LOAN NUMBER:_____________________      BORROWER'S NAME:___________________

COUNTY:__________________________

WE HEREBY CERTIFY THAT ALL AMOUNTS RECEIVED IN CONNECTION WITH SUCH PAYMENTS,
WHICH ARE REQUIRED TO BE DEPOSITED IN THE COLLEC-TION ACCOUNT PURSUANT TO
SECTION [3.10] OF THE POOLING AND SERVIC-ING AGREEMENT, HAVE BEEN OR WILL BE
CREDITED.

                                               DATED:____________________
_______________________________
/  /   VICE PRESIDENT

/  /   ASSISTANT VICE PRESIDENT

                                      E-4

<PAGE>

                                   EXHIBIT F-1

               FORM OF TRUST ADMINISTRATOR'S INITIAL CERTIFICATION

                                           [Date]

Long Beach Securities Corp.                Long Beach Mortgage Company
1100 Town & Country Road                   1100 Town & Country Road
Orange, California 92868                   Orange, California 92868

Radian Insurance Inc.                      First Union National Bank
1601 Market Street                         Structured Finance Trust Services
Philadelphia, Pennsylvania 19103           401 South Tryon Street, NC1179,
                                             12th Floor
                                           Charlotte, North Carolina 28288-1179

    Re: Pooling and Servicing Agreement, dated as of December 1, 2000
        among Long Beach Securities Corp., Long Beach Mortgage Company,
        First Union National Bank and Bankers Trust Company of California, N.A.,
        Mortgage Loan Asset-Backed Certificates Series 2000-1
        ------------------------------------------------------------------------

Ladies and Gentlemen:

         Pursuant to Section 2.02 of the Pooling and Servicing Agreement the
undersigned as Trust Administrator hereby acknowledges receipt of each Mortgage
File and certifies 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 hereto as not being
covered by this certification), (i) all documents constituting part of such
Mortgage File (other than such documents described in Section 2.01(e) of the
Pooling Agreement) required to be delivered to it pursuant to the Pooling and
Servicing Agreement are in its possession, (ii) such documents have been
reviewed by it and are not mutilated, torn or defaced unless initialed by the
related borrower and relate to such Mortgage Loan and (iii) based on its
examination and only as to the foregoing, the information set forth in the
Mortgage Loan Schedule that corresponds to items (i), (ii), (ix), (xii), (xiv)
(to the extent of the Periodic Rate Cap and the maximum first Adjustment Date
Mortgage Rate adjustment) and (xvi) of the definition of "Mortgage Loan
Schedule" of the Pooling Agreement accurately reflects information set forth in
the Mortgage File.

         The Trust Administrator 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 Trust
Administrator makes no representations as to: (i) the validity, legality,
sufficiency, enforceability due authorization, recordability or genuineness of
any of the documents contained in the Mortgage File of any of the Mortgage Loans
identified on the Mortgage Loan Schedule, or (ii) the collectability,
insurability, effectiveness or suitability of any such Mortage Loan.

                                       F-1

<PAGE>

                                            BANKERS TRUST COMPANY OF
                                            CALIFORNIA, N.A.

                                            By:_____________________________
                                            Name:
                                            Title:

                                       F-2

<PAGE>

                                   EXHIBIT F-2

                       FORM OF TRUSTEE FINAL CERTIFICATION

                                            [Date]

Long Beach Securities Corp.                 Long Beach Mortgage Company
1100 Town & Country Road                    1100 Town & Country Road
Orange, California 92868                    Orange, California 92868

Radian Insurance Inc.                       First Union National Bank
1601 Market Street                          Structured Finance Trust Services
Philadelphia, Pennsylvania 19103            401 South Tryon Street, NC1179,
                                              12th Floor
                                            Charlotte, North Carolina 28288-1179

    Re: Pooling and Servicing Agreement, dated as of December 1, 2000 among
        Long Beach Securities Corp., Long Beach Mortgage Company, First
        Union National Bank and Bankers Trust Company of California, N.A.,
        Mortgage Loan Asset-Backed Certificates Series 2000-1
        -------------------------------------------------------------------

Ladies and Gentlemen:

         In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trust Administrator, 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:

                  (a) the original Mortgage Note, endorsed in blank or in the
         following form: "Pay to the order of First Union National Bank, 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 a copy of such original Mortgage Note with an accompanying
         Lost Note Affidavit executed by the Seller;

                  (b) 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;

                  (c) an original Assignment in blank;

                  (d) the original recorded Assignment or Assignments showing a
         complete chain of assignment from the originator to the Person
         assigning the Mortgage to the Trustee or in blank;

                                       F-3

<PAGE>

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

                  (f) the original lender's title insurance policy, together
         with all endorsements or riders issued with or subsequent to the
         issuance of such policy, insuring the priority of the Mortgage as a
         first lien on the Mortgaged Property represented therein as a fee
         interest vested in the Mortgagor, or in the event such original title
         policy is unavailable, a written commitment or uniform binder or
         preliminary report of title issued by the title insurance or escrow
         company.

         The Trust Administrator 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 Trust
Administrator makes no representations as to: (i) the validity, legality,
sufficiency, enforceability or genuineness of any of the documents contained in
the Mortgage File of any of the Mortgage Loans identified on the Mortgage Loan
Schedule, or (ii) the collectability, insurability, effectiveness or suitability
of any such Mortgage Loan.

         Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.

                                                 BANKERS TRUST COMPANY OF
                                                 CALIFORNIA, N.A.

                                                 By:_____________________
                                                 Name:
                                                 Title:

                                       F-4

<PAGE>

                                    EXHIBIT G

                                   [Reserved]

                                       G-1

<PAGE>

                                    EXHIBIT H

                           FORM OF LOST NOTE AFFIDAVIT
                           ---------------------------

         Personally appeared before me the undersigned authority to administer
oaths, _____________________ who first being duly sworn deposes and says:
Deponent is _____________________ of __________________, successor by merger to
_________________________________ ("Seller") and who has personal knowledge of
the facts set out in this affidavit.

On _________________________________, _________________________________ did
execute and deliver a promissory note in the principal amount of
$___________________.

         That said note has been misplaced or lost through causes unknown and is
presently lost and unavailable after diligent search has been made. Seller's
records show that an amount of principal and interest on said note is still
presently outstanding, due, and unpaid, and Seller is still owner and holder in
due course of said lost note.

         Seller executes this Affidavit for the purpose of inducing Bankers
Trust Company of California, N.A., as trust administrator on behalf of Long
Beach Mortgage Loan Trust 2000-1, Asset-Backed Certificates Series 2000-1, to
accept the transfer of the above described loan from Seller.

         Seller agrees to indemnify Bankers Trust Company of California, N.A.,
Long Beach Securities Corp. and Long Beach Mortgage Corporation harmless for any
losses incurred by such parties resulting from the above described promissory
note has been lost or misplaced.

By:_________________________
   _________________________

STATE OF                        )
                                )        SS:
COUNTY OF                       )

         On this ______ day of ______________, 20_, before me, a Notary Public,
in and for said County and State, appeared , who acknowledged the extension of
the foregoing and who, having been duly sworn, states that any representations
therein contained are true.

         Witness my hand and Notarial Seal this _________ day of 20__.

______________________________
______________________________
My commission expires ______________________.

                                       H-1

<PAGE>

                                    EXHIBIT I
                          FORM OF ERISA REPRESENTATION

Long Beach Securities Corp.
1100 Town & Country Road
Orange, California 92868

First Union National Bank
401 South Tryon Street
Charlotte, North Carolina 28288

Bankers Trust Company of California, N.A.
1761 East St. Andrew Place
Santa Ana, California 92705

                  Re:      Long Beach Mortgage Loan Trust 2000-1,
                           Asset-Backed Certificates, Series 2000-1
                           ----------------------------------------

Ladies and Gentlemen:

         ___________________ (the "Transferee") intends to acquire from
__________________ (the "Transferor") $____________ Initial Certificate
Principal Balance of Long Beach Mortgage Loan Trust 2000-1, Asset-Backed
Certificates, Series 2000-1, [Class C, Class P, Class R] (the "Certificates"),
issued pursuant to a Pooling and Servicing Agreement dated as of December 1,
2000 (the "Agreement") among the Depositor, Long Beach Mortgage Corporation, as
master servicer (the "Master Servicer"), First Union National Bank, a national
banking association, as Trustee (the "Trustee") and Bankers Trust Company of
California, N.A. (the "Trust Administrator"). 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, the Trust
Administrator and the Master Servicer that the following statements in either
(1) or (2) are accurate:

         _____ (1) The Certificates (i) are not being acquired by, and will not
         be transferred to, any employee benefit plan within the meaning of
         section 3(3) of the Employee Retirement Income Security Act of 1974, as
         amended ("ERISA"), or other retirement arrangement, including
         individual retirement accounts and annuities, Keogh plans and bank
         collective investment funds and insurance company general or separate
         accounts in which such plans, accounts or arrangements are invested,
         that is subject to Section 406 of ERISA or Section 4975 of the Internal
         Revenue Code of 1986 (the "Code") (any of the foregoing, a "Plan"),
         (ii) are not being acquired with "plan assets" of a Plan within the
         meaning of the Department of Labor ("DOL") regulation, 29 C.F.R. ss.
         2510.3-101, and (iii) will not be transferred to any entity that is
         deemed to be investing in plan assets within the meaning of the DOL
         regulation at 29 C.F.R. ss. 2510.3-101; or

         _____ (2) The Transferee will provide an Opinion of Counsel to the
         Depositor, the Trust Administrator, the Trustee and the Master Servicer
         which establishes to the

                                       I-1

<PAGE>

         satisfaction of the Depositor, the Trust Administrator, the Trustee and
         the Master Servicer that the purchase of such Certificates is
         permissible under applicable law, will not constitute or result in any
         prohibited transaction under ERISA or Section 4975 of the Code and will
         not subject the Depositor, the Master Servicer, the Trust
         Administrator, 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.

                  IN WITNESS WHEREOF, the Transferee executed this certificate.

                                        ________________________________
                                        [Transferee]

                                        By:_____________________________
                                        Name:
                                        Title:

                                       I-2

<PAGE>

                                    EXHIBIT J

                    FORM OF INVESTMENT LETTER [NON-RULE 144A]

                                     [DATE]

Long Beach Securities Corp.
1100 Town & Country Road
Orange, California 92868

First Union National Bank
401 South Tryon Street
Charlotte, North Carolina 28288

Bankers Trust Company of California, N.A.
1761 East St. Andrew Place
Santa Ana, California 92705

                           Re:      Long Beach Mortgage Loan Trust 2000-1,
                                    Asset-Backed Certificates Series 2000-1
                                    ---------------------------------------

Ladies and Gentlemen:

                  In connection with our acquisition of the above-captioned
Certificates, we certify that (a) we understand that the Certificates are not
being registered under the Securities Act of 1933, as amended (the "Act"), or
any state securities laws and are being transferred to us in a transaction that
is exempt from the registration requirements of the Act and any such laws, (b)
we are an "accredited investor," as defined in Regulation D under the Act, and
have such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the Certificates,
(c) we have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) we are not an employee benefit plan that is
subject to the Employee Retirement Income Security Act of 1974, as amended, or a
plan that is subject to Section 4975 of the Internal Revenue Code of 1986, as
amended, nor are we acting on behalf of any such plan, (e) we are acquiring the
Certificates for investment for our own account and not with a view to any
distribution of such Certificates (but without prejudice to our right at all
times to sell or otherwise dispose of the Certificates in accordance with clause
(g) below), (f) we have not offered or sold any Certificates to, or solicited
offers to buy any Certificates from, any person, or otherwise approached or
negotiated with any person with respect thereto, or taken any other action which
would result in a violation of Section 5 of the Act, and (g) we will not sell,
transfer or otherwise dispose of any Certificates unless (1) such sale, transfer
or other disposition is made pursuant to an effective registration statement
under the Act or is exempt from such registration requirements, and if
requested, we will at our expense provide an opinion of counsel satisfactory to
the addressees of this Certificate that such sale, transfer or other disposition
may be made pursuant to an exemption from the Act, (2) the purchaser or
transferee of such Certificate has

                                       J-1

<PAGE>

executed and delivered to you a certificate to substantially the same effect as
this certificate, and (3) the purchaser or transferee has otherwise complied
with any conditions for transfer set forth in the Pooling and Servicing
Agreement.

                                        Very truly yours,

                                        [NAME OF TRANSFEREE]

                                        By:________________________________
                                                Authorized Officer

                                       J-2

<PAGE>

                       FORM OF RULE 144A INVESTMENT LETTER

                                     [DATE]

Long Beach Securities Corp.
1100 Town & Country Road
Orange, California 92868

First Union National Bank
401 South Tryon Street
Charlotte, North Carolina 28288

Bankers Trust Company of California, N.A.
1761 East St. Andrew Place
Santa Ana, California 92705

                           Re:      Long Beach Mortgage Loan Trust 2000-1,
                                    Asset-Backed Certificates Series 2000-1
                                    ---------------------------------------

Ladies and Gentlemen:

         In connection with our acquisition of the above Certificates we certify
that (a) we understand that the Certificates are not being registered under the
Securities Act of 1933, as amended (the "Act"), or any state securities laws and
are being transferred to us in a transaction that is exempt from the
registration requirements of the Act and any such laws, (b) we have had the
opportunity to ask questions of and receive answers from the Depositor
concerning the purchase of the Certificates and all matters relating thereto or
any additional information deemed necessary to our decision to purchase the
Certificates, (c) we are not an employee benefit plan that is subject to the
Employee Retirement Income Security Act of 1974, as amended, or a plan that is
subject to Section 4975 of the Internal Revenue Code of 1986, as amended, nor
are we acting on behalf of any such plan, (d) we have not, nor has anyone acting
on our behalf offered, transferred, pledged, sold or otherwise disposed of the
Certificates, any interest in the Certificates or any other similar security to,
or solicited any offer to buy or accept a transfer, pledge or other disposition
of the Certificates, any interest in the Certificates or any other similar
security from, or otherwise approached or negotiated with respect to the
Certificates, any interest in the Certificates or any other similar security
with, any person in any manner, or made any general solicitation by means of
general advertising or in any other manner, or taken any other action, that
would constitute a distribution of the Certificates under the Securities Act or
that would render the disposition of the Certificates a violation of Section 5
of the Securities Act or require registration pursuant thereto, nor will act,
nor has authorized or will authorize any person to act, in such manner with
respect to the Certificates, (e) we are a "qualified institutional buyer" as
that term is defined in Rule 144A under the Securities Act and have completed
either of the forms of certification to that effect attached hereto as Annex 1
or Annex 2. We are aware that the sale to us is being made in reliance on Rule
144A. We are acquiring the Certificates for our own account or for resale
pursuant to Rule 144A and further, understand that such Certificates may be
resold, pledged or transferred only (i) to a person reasonably believed to be a
qualified institutional buyer that purchases for its own account or for the
account of a qualified institutional buyer to

                                       J-3

<PAGE>

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 Securities Act.

                                        Very truly yours,

                                        [NAME OF TRANSFEREE]

                                        By:______________________________
                                                 Authorized Officer

                                       J-4

<PAGE>

                                                            ANNEX 1 TO EXHIBIT J
                                                            --------------------

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
            --------------------------------------------------------

          [For Transferees Other Than Registered Investment Companies]

                  The undersigned (the "Buyer") hereby certifies as follows to
the parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:

                  1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.

                  2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned
and/or invested on a discretionary basis $ 1 in securities (except for the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A and (ii)
the Buyer satisfies the criteria in the category marked below.

                  ________ CORPORATION, ETC. The Buyer is a corporation (other
                  than a bank, savings and loan association or similar
                  institution), Massachusetts or similar business trust,
                  partnership, or charitable organization described in Section
                  501(c)(3) of the Internal Revenue Code of 1986, as amended.

                  _________ BANK. The Buyer (a) is a national bank or banking
                  institution organized under the laws of any State, territory
                  or the District of Columbia, the business of which is
                  substantially confined to banking and is supervised by the
                  State or territorial banking commission or similar official or
                  is a foreign bank or equivalent institution, and (b) has an
                  audited net worth of at least $25,000,000 as demonstrated in
                  its latest annual financial statements, a copy of which is
                  attached hereto.

                  ________ SAVINGS AND LOAN. The Buyer (a) is a savings and loan
                  association, building and loan association, cooperative bank,
                  homestead association or similar institution, which is
                  supervised and examined by a State or Federal authority having
                  supervision over any such institutions or is a foreign savings
                  and loan association or equivalent institution and (b) has an
                  audited net worth of at least $25,000,000 as demonstrated in
                  its latest annual financial statements, a copy of which is
                  attached hereto.

                  _________ BROKER-DEALER. The Buyer is a dealer registered
                  pursuant to Section 15 of the Securities Exchange Act of 1934.

--------------------
1        Buyer must own and/or invest on a discretionary basis at least
         $100,000,000 in securities unless Buyer is a dealer, and, in that case,
         Buyer must own and/or invest on a discretionary basis at least
         $10,000,000 in securities.

                                       J-5

<PAGE>

                  ____________ INSURANCE COMPANY. The Buyer is an insurance
                  company whose primary and predominant business activity is the
                  writing of insurance or the reinsuring of risks underwritten
                  by insurance companies and which is subject to supervision by
                  the insurance commissioner or a similar official or agency of
                  a State, territory or the District of Columbia.

                  ____________ STATE OR LOCAL PLAN. The Buyer is a plan
                  established and maintained by a State, its political
                  subdivisions, or any agency or instrumentality of the State or
                  its political subdivisions, for the benefit of its employees.

                  ____________ ERISA PLAN. The Buyer is an employee benefit plan
                  within the meaning of Title I of the Employee Retirement
                  Income Security Act of 1974.

                  ____________ INVESTMENT ADVISOR. The Buyer is an investment
                  advisor registered under the Investment Advisors Act of 1940.

                  ____________ SMALL BUSINESS INVESTMENT Company. Buyer is a
                  small business investment company licensed by the U.S. Small
                  Business Administration under Section 301(c) or (d) of the
                  Small Business Investment Act of 1958.

                  ____________ BUSINESS DEVELOPMENT COMPANY. Buyer is a business
                  development company as defined in Section 202(a)(22) of the
                  Investment Advisors Act of 1940.

                  3. The term "SECURITIES" as used herein DOES NOT INCLUDE (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer is
a dealer, (iii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iv) bank deposit notes and certificates of deposit (v)
loan participations, (vi) repurchase agreements, (vii) securities owned but
subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.

                  4. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the Buyer, the
Buyer used the cost of such securities to the Buyer and did not include any of
the securities referred to in the preceding paragraph, except (i) where the
Buyer reports its securities holdings in its financial statements on the basis
of their market value, and (ii) no current information with respect to the cost
of those securities has been published. If clause (ii) in the preceding sentence
applies, the securities may be valued at market. Further, in determining such
aggregate amount, the Buyer may have included securities owned by subsidiaries
of the Buyer, but only if such subsidiaries are consolidated with the Buyer in
its financial statements prepared in accordance with generally accepted
accounting principles and if the investments of such subsidiaries are managed
under the Buyer's direction. However, such securities were not included if the
Buyer is a majority-owned, consolidated subsidiary of another enterprise and the
Buyer is not itself a reporting company under the Securities Exchange Act of
1934, as amended.

                  5. The Buyer acknowledges that it is familiar with Rule 144A
and understands that the seller to it and other parties related to the
Certificates are relying and will

                                       J-6

<PAGE>

continue to rely on the statements made herein because one or more sales to the
Buyer may be in reliance on Rule 144A.

                  6. Until the date of purchase of the Rule 144A Securities, the
Buyer will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.

                                        ____________________________________
                                                Print Name of Buyer

                                        By:_________________________________
                                        Name:
                                        Title:

                                        Date:_______________________________

                                       J-7

<PAGE>

                                                            ANNEX 2 TO EXHIBIT J
                                                            --------------------

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
            --------------------------------------------------------

           [For Transferees That are Registered Investment Companies]

                  The undersigned (the "Buyer") hereby certifies as follows to
the parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:

                  1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.

                  2. In connection with purchases by Buyer, the Buyer is a
"qualified institutional buyer" as defined in SEC Rule 144A because (i) the
Buyer is an investment company registered under the Investment Company Act of
1940, as amended and (ii) as marked below, the Buyer alone, or the Buyer's
Family of Investment Companies, owned at least $100,000,000 in securities (other
than the excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year. For purposes of determining the amount of securities
owned by the Buyer or the Buyer's Family of Investment Companies, the cost of
such securities was used, except (i) where the Buyer or the Buyers Family of
Investment Companies reports its securities holdings in its financial statements
on the basis of their market value, and (ii) no current information with respect
to the cost of those securities has been published. If clause (ii) in the
preceding sentence applies, the securities may be valued at market.

                  ___________ The Buyer owned $_________ in securities (other
                  than the excluded securities referred to below) as of the end
                  of the Buyer's most recent fiscal year (such amount being
                  calculated in accordance with Rule 144A).

                  ___________ The Buyer is part of a Family of Investment
                  Companies which owned in the aggregate $___________ in
                  securities (other than the excluded securities referred to
                  below) as of the end of the Buyer's most recent fiscal year
                  (such amount being calculated in accordance with Rule 144A).

                  3. The term "FAMILY OF INVESTMENT COMPANIES" as used herein
means two or more registered investment companies (or series thereof) that have
the same investment adviser or investment advisers that are affiliated (by
virtue of being majority owned subsidiaries of the same parent or because one
investment adviser is a majority owned subsidiary of the other).

                  4. The term "SECURITIES" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) securities issued or guaranteed by
the U.S. or any instrumentality thereof, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase agreements,

                                       J-8

<PAGE>

(vi) securities owned but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.

                  5. The Buyer is familiar with Rule 144A and understands that
the parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.

                  6. Until the date of purchase of the Certificates, the
undersigned will notify the parties listed in the Rule 144A Transferee
Certificate to which this certification relates of any changes in the
information and conclusions herein. Until such notice is given, the Buyer's
purchase of the Certificates will constitute a reaffirmation of this
certification by the undersigned as of the date of such purchase.

                                        ________________________________________
                                        Print Name of Buyer or Adviser

                                        By:_____________________________________
                                        Name:
                                        Tide:

                                        IF AN ADVISER:

                                        ________________________________________
                                                 Print Name of Buyer

                                        Date:___________________________________

                                       J-9

<PAGE>

                                    EXHIBIT K

                     AFFIDAVIT OF TRANSFER OF R CERTIFICATES
                           PURSUANT TO SECTION 5.02(d)

                     LONG BEACH MORTGAGE LOAN TRUST 2000-1,
                    ASSET-BACKED CERTIFICATES, SERIES 2000-1

STATE OF      )
              ) ss.:
COUNTY OF     )

         The undersigned, being first duly sworn, deposes and says as follows:

         1. The undersigned is an officer of , the proposed Transferee of an
Ownership Interest in Class R Certificates (the "Certificate") issued pursuant
to the Pooling and Servicing Agreement, (the "Agreement"), relating to the
above-referenced Certificates, among Long Beach Securities Corp., as Depositor,
Long Beach Mortgage Corporation, as Master Servicer (the "Master Servicer"),
First Union National Bank, as Trustee (the "Trustee") and Bankers Trust Company
of California, N.A. (the "Trust Administrator"). Capitalized terms used, but not
defined herein shall have the meanings ascribed to such terms in the Agreement.
The Transferee has authorized the undersigned to make this affidavit on behalf
of the Transferee.

         2. The Transferee is, as of the date hereof and will be, as of the date
of the Transfer, a Permitted Transferee. The Transferee is acquiring its
Ownership Interest in the Certificate either (i) for its own account or (ii) as
nominee, trustee or agent for another Person and has attached hereto an
affidavit from such Person in substantially the same form as this affidavit. The
Transferee has no knowledge that any such affidavit is false.

         3. The Transferee has been advised of, and understands that (i) a tax
will be imposed on Transfers of the Certificate to Persons that are not
Permitted Transferees; (ii) such tax will be imposed on the transferor, or, if
such Transfer is through an agent (which includes a broker, nominee or
middleman) to a Person that is not a Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability for
the tax if the subsequent Transferee furnished to such Person an affidavit that
such subsequent Transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.

         4. The Transferee has been advised of, and understands that a tax will
be imposed on a "pass-through entity" holding the Certificate if at any time
during the taxable year of the pass- through entity a Person that is not a
Permitted Transferee is the record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the pass-through
entity does not have actual knowledge that such affidavit is false. (For this
purpose, a "pass-through entity" includes a regulated investment company, a real
estate investment trust or common trust fund, a partnership,

                                       K-1

<PAGE>

trust or estate, and certain cooperatives and, except as may be provided in
Treasury Regulations, persons holding interests in pass-through entities as a
nominee for another Person.)

         5. The Transferee has reviewed the provisions of Section 5.02(d) of the
Agreement and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificate including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The Transferee expressly agrees to be bound by and
to abide by the provisions of Section 5.02(d) of the Agreement and the
restrictions noted on the face of the Certificate. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the Transfer to the Transferee contemplated hereby null and void.

         6. The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to Transfer its Ownership Interest in the
Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as Exhibit K to the Agreement (a "Transferor Certificate") to the
effect that such Transferee has no actual knowledge that the Person to which the
Transfer is to be made is not a Permitted Transferee.

         7. The Transferee does not have the intention to impede the assessment
or collection of any tax legally required to be paid with respect to the
Certificate.

         8. The Transferee's taxpayer identification number is _____________.

         9. The Transferee is a United States Person as defined in the
Agreement.

         10. The Transferee is aware that the Certificate may be a "noneconomic
residual interest" within the meaning of proposed Treasury regulations
promulgated pursuant to the Code and that the transferor of a noneconomic
residual interest will remain liable for any taxes due with respect to the
income on such residual interest, unless no significant purpose of the transfer
was to impede the assessment or collection of tax.

         11. The Transferee is not an employee benefit plan that is subject to
ERISA or a plan that is subject to Section 4975 of the Code, nor is it acting on
behalf of such a plan.

                                       K-2

<PAGE>

         IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
duly authorized officer and its corporate seal to be hereunto affixed, duly
attested, this ___ day of __________, ___.

                                        [NAME OF TRANSFEREE]

                                        By:______________________________
                                        Name:
                                        Title:

[Corporate Seal]

ATTEST:

_________________________
[Assistant] Secretary

         Personally appeared before me the above-named , known or proved to me
to be the same person who executed the foregoing instrument and to be the of the
Transferee, and acknowledged that he executed the same as his free act and deed
and the free act and deed of the Transferee.

         Subscribed and sworn before me this __ day of _______, ___.

                              ______________________________
                                         NOTARY PUBLIC

                              My Commission expires the ____ day of ____, ___.

                                       K-3

<PAGE>

                                    EXHIBIT L

                         FORM OF TRANSFEROR CERTIFICATE

                                     [DATE]

Long Beach Securities Corp.
1100 Town & Country Road
Orange, California 92868

                           Re:      Long Beach Mortgage Loan Trust 2000-1,
                                    Asset-Backed Certificates Series 2000-1
                                    ---------------------------------------

Ladies and Gentlemen:

         In connection with our disposition of the above Certificates we certify
that (a) we understand that the Certificates have not been registered under the
Securities Act of 1933, as amended (the "Act"), and are being disposed by us in
a transaction that is exempt from the registration requirements of the Act, (b)
we have not offered or sold any Certificates to, or solicited offers to buy any
Certificates from, any person, or otherwise approached or negotiated with any
person with respect thereto, in a manner that would be deemed, or taken any
other action which would result in, a violation of Section 5 of the Act, (c) to
the extent we are disposing of a Class [ ] Certificate, we have no knowledge the
Transferee is not a Permitted Transferee and (d) no purpose of the proposed
disposition of a Class [ ] Certificate is to impede the assessment or collection
of tax.

                                        Very truly yours,

                                        TRANSFEROR

                                        By:__________________________
                                        Name:
                                        Title:

                                       L-1

<PAGE>

                                   SCHEDULE I

                           PREPAYMENT PREMIUM SCHEDULE

                             AVAILABLE UPON REQUEST

                                       M-1<PAGE>

                                                                   EXHIBIT 10.21

                                PROMISSORY NOTE

$586,196                                                          August 2, 2000

     FOR VALUE RECEIVED, Frederick R. Hipp ("Maker"), does hereby promise to pay
to California Pizza Kitchen, Inc., a California corporation ("Holder"), at 6053
West Century Boulevard, Suite 1100, Los Angeles, California 90045-6430, or at
such other place or places as Holder may designate, the principal sum of Five
Hundred Eighty Six Thousand One Hundred Ninety Six Dollars ($586,196), together
with interest at the rate of eight and one-half percent (8.5%) per annum on the
unpaid principal amount from time to time outstanding hereunder, with interest
and principal payable as provided as below.

     This Promissory Note (this "Note") is made and given in connection with a
loan to Maker by Holder made in connection with the tax liability incurred by
Maker upon the exercise of options to purchase shares in the Holder (the "Option
Shares").  The amounts due under this Note are subject to offset against amounts
due to Maker by Holder under certain conditions.

     Interest shall be calculated based on a 360-day year and shall accrue on a
monthly basis to be paid at the same time as the principal.  The principal and
interest of this Note is due and payable on the earlier of (i) three days after
the date Maker sells any of his Option Shares, (ii) 30 days after the date
Maker's employment with Holder is terminated for "Cause" or after the date Maker
voluntarily terminates his employment, (iii) one year after the date Maker's
employment terminates due to death or "Disability," and (iv) August 2, 2002.
For purposes of this paragraph, the terms "Cause" and "Disability" shall have
the meanings set forth in that certain Severance Agreement by and between Holder
and Maker dated as of March 31, 1998.

     In addition, as partial payment to be applied against amounts owed
hereunder, Holder shall withhold and apply fifty percent (50%) of any amounts
which would otherwise be payable to Maker as bonus compensation (calculated on
an after-tax basis) until this Note is repaid in full.  Notwithstanding the
foregoing, Maker, at his sole option, may prepay this Note at any time or from
time to time, in whole or in part.

     All payments received on account of this Note shall be applied first to
interest, then to charges and fees payable hereunder and then to the unpaid
principal balance hereof.

     Maker hereby waives all notices, demands and presentments for payment, all
notices of default, nonpayment, intention to accelerate maturity, acceleration
of maturity, protest and dishonor, and diligence in taking any action to collect
amounts hereunder.
<PAGE>

     As security for the prompt performance, observance and payment in full of
the amounts due to Holder hereunder as principal and interest, together with all
expenses of obtaining or endeavoring to obtain payment thereof, or enforcing
this Note, including court costs and reasonable attorneys' fees, Maker hereby
grants to Holder a continuing security interest, a lien upon, and a right of
setoff against, and Maker hereby assigns, transfers, pledges and sets over to
Holder, all of the Maker's rights, title and interest in, to and under the
Options Shares and all accessions and additions to, and any replacements of and
substitutions for, any of such Option Shares, and all proceeds from a sale or
other disposition of any of the foregoing (collectively, the "Collateral").
Maker hereby delivers the certificates representing the Option Shares to Holder
in order to perfect Holder's security interest therein.

     Maker shall not pledge, mortgage, encumber or otherwise permit the
Collateral to be subject to any lien, security interest or charge, other than
the security interest provided for herein, including security interests junior
in right to the interest of Holder, without the prior written consent of Holder.

     If this Note or any part of the indebtedness represented hereby shall not
be paid when due, by offset or otherwise, Holder shall have the full power to
sell, transfer or otherwise deal with the Collateral or the proceeds thereof.

     If this Note or any part of the indebtedness represented hereby shall not
be paid when due, by offset or otherwise, then Holder may place this Note or any
part of the indebtedness represented hereby in the hands of a third party for
collection.  Maker agrees to pay, in addition to all other amounts due
hereunder, all costs and expenses incurred in connection with the collection or
enforcement of this Note, including without limitation court costs, attorneys'
fees (whether or not suit be brought), and attorneys' fees for bankruptcy
proceedings, appeals and anticipated post-judgment collection services and
Holder may take judgment for all such amounts in addition to all other sums due
hereunder.

     The acceptance by Holder of any payment that is less than the total of all
amounts due and payable at the time of such payment shall not constitute a
waiver of Holder's rights or remedies at that time or at any subsequent time,
without the express written consent of Holder.  This Note may be waived,
changed, modified or discharged only by an agreement in writing signed by the
party against whom enforcement of any waiver, change, modification or discharge
is sought.  A waiver by Holder or a failure to enforce any covenant or condition
of this Note shall not operate as a waiver of any such covenant or condition or
affect the right of Holder to exercise any right or remedy not expressly waived
in writing.

     The rights and obligations of Maker and all provisions hereof shall be
governed by and construed in accordance with the laws of the State of
California, notwithstanding any choice of law statute, principles or regulations
to the contrary.

     If any provision of this Note, or the application thereof to any
circumstance, is found to be unenforceable, invalid or illegal, such provision
shall be deemed deleted from this Note or not applicable to such circumstance,
as the case may be, and the remainder of this Note shall not be affected or
impaired thereby.

                                       2
<PAGE>

     All notices, requests, demands and other communications under this Note
shall be in writing and shall he deemed to have been delivered and received (i)
five business days after having been deposited in the United States mail and
enclosed in a certified or registered post-paid envelope; (ii) one business day
after having been sent by overnight courier; and (iii) on the same day when
personally delivered or sent by facsimile communications equipment of the
sending party on a business day, or otherwise on the next succeeding business
day thereafter; in each case addressed to the respective party at California
Pizza Kitchen, Inc., 6053 West Century Boulevard, Suite 1100, Los Angeles, CA
90045, or at such other address of the Holder that then represents the address
of the Holder's corporate headquarters or to such changed addresses as the
parties may have filed in accordance therewith.

     IN WITNESS WHEREOF, Maker has executed this Note as of the date first set
forth above.

                                            /s/  Frederick R. Hipp
                                           -------------------------------------
                                           Frederick R. Hipp

                                       3

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