POOLING AND SERVICING AGREEMENT

EXECUTION COPY

GREENWICH CAPITAL ACCEPTANCE, INC.,
Depositor

GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.,
Seller

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

AND

U.S. BANK NATIONAL ASSOCIATION,
Trustee

POOLING AND SERVICING AGREEMENT

Dated as of November 1, 2004

__________________________________

CHARLIE MAC TRUST 2004-2

Mortgage Loan Pass-Through Certificates, Series 2004-2

Table of Contents

Page

ARTICLE I DEFINITIONS; DECLARATION OF TRUST

5

SECTION 1.01. Defined Terms.

5

SECTION 1.02. Accounting.

41

ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF

CERTIFICATES

41

SECTION 2.01. Conveyance of Mortgage Loans.

41

SECTION 2.02. Acceptance by Trustee.

44

SECTION 2.03. Repurchase or Substitution of Mortgage Loans by the Company

and the Seller.

46

SECTION 2.04. Representations and Warranties of the Seller with Respect to the

Mortgage Loans.

49

SECTION 2.05. [Reserved].

50

SECTION 2.06. Representations and Warranties of the Depositor.

50

SECTION 2.07. Issuance of Certificates.

52

SECTION 2.08. Representations and Warranties of the Seller.

52

SECTION 2.09. Covenants of the Seller.

54

ARTICLE III ADMINISTRATION OF THE MORTGAGE LOANS

55

SECTION 3.01. Master Servicer to Service and Administer the Mortgage Loans.

55

SECTION 3.02. REMIC-Related Covenants.

56

SECTION 3.03. Release of Mortgage Files.

56

SECTION 3.04. REO Property.

57

SECTION 3.05. Annual Officer’s Certificate as to Compliance.

58

SECTION 3.06. Annual Independent Accountant’s Servicing Report.

59

SECTION 3.07. Reports Filed with Securities and Exchange Commission.

59

SECTION 3.08. UCC.

60

SECTION 3.09. Monitoring of the Servicer.

60

SECTION 3.10. Fidelity Bond.

62

SECTION 3.11. Power to Act; Procedures.

62

SECTION 3.12. Due-on-Sale Clauses; Assumption Agreements.

63

SECTION 3.13. Documents, Records and Funds in Possession of Master Servicer

to be Held for Trust.

63

SECTION 3.14. Presentment of Claims and Collection of Proceeds.

64

SECTION 3.15. Maintenance of the Primary Insurance Policies.

64

SECTION 3.16. Trustee to Retain Possession of Certain Insurance Policies and

Documents.

65

SECTION 3.17. Realization Upon Defaulted Mortgage Loans.

65

SECTION 3.18. Additional Compensation to the Master Servicer.

65

SECTION 3.19. Liabilities of the Master Servicer.

66

SECTION 3.20. Merger or Consolidation of the Master Servicer.

66

SECTION 3.21. Indemnification of the Trustee, the Master Servicer and the

Securities Administrator.

66

SECTION 3.22. Limitations on Liability of the Master Servicer and Others.

67

SECTION 3.23. Master Servicer Not to Resign.

68

SECTION 3.24. Successor Master Servicer.

69

SECTION 3.25. Sale and Assignment of Master Servicing.

69

ARTICLE IV ACCOUNTS

70

SECTION 4.01. Servicing Accounts

70

SECTION 4.02. Distribution Account.

71

SECTION 4.03. Permitted Withdrawals and Transfers from the Distribution Account.

73

SECTION 4.04. Standby Letter of Credit and Standby Reserve Account.

75

ARTICLE V FLOW OF FUNDS

77

SECTION 5.01. Distributions.

77

SECTION 5.02. [Reserved].

82

SECTION 5.03. Allocation of Realized Losses.

82

SECTION 5.04. Statements.

83

SECTION 5.05. Remittance Reports; Advances.

86

SECTION 5.06. Compensating Interest Payments.

87

SECTION 5.07. [Reserved].

87

SECTION 5.08. Recoveries.

87

ARTICLE VI THE CERTIFICATES

88

SECTION 6.01. The Certificates.

88

SECTION 6.02. Registration of Transfer and Exchange of Certificates.

89

SECTION 6.03. Mutilated, Destroyed, Lost or Stolen Certificates.

93

SECTION 6.04. Persons Deemed Owners.

94

SECTION 6.05. Appointment of Paying Agent.

94

ARTICLE VII DEFAULT

94

SECTION 7.01. Event of Default.

94

SECTION 7.02. Trustee to Act.

96

SECTION 7.03. Waiver of Event of Default.

97

SECTION 7.04. Notification to Certificateholders.

98

ARTICLE VIII THE TRUSTEE, THE SECURITIES ADMINISTRATOR AND THE

CUSTODIAN

98

SECTION 8.01. Duties of the Trustee, the Securities Administrator and the Custodian.

98

SECTION 8.02. Certain Matters Affecting the Trustee, the Custodian and the

Securities Administrator.

101

SECTION 8.03. Trustee, the Custodian and Securities Administrator Not Liable for

Certificates or Mortgage Loans.

103

SECTION 8.04. Trustee, Custodian, Master Servicer and Securities Administrator

May Own Certificates.

104

SECTION 8.05. Trustee’s, Custodian’s and Securities Administrator’s Fees and

Expenses.

104

SECTION 8.06. Eligibility Requirements for Trustee, the Custodian and Securities

Administrator.

105

SECTION 8.07. Resignation or Removal of Trustee, the Custodian and Securities

Administrator.

105

SECTION 8.08. Successor Trustee, Successor Custodian and Successor Securities

Administrator.

106

SECTION 8.09. Merger or Consolidation of Trustee, Custodian or Securities

Administrator.

107

SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.

107

SECTION 8.11. Limitation of Liability.

109

SECTION 8.12. Trustee May Enforce Claims Without Possession of Certificates.

109

SECTION 8.13. Suits for Enforcement.

109

SECTION 8.14. Waiver of Bond Requirement.

110

SECTION 8.15. Waiver of Inventory, Accounting and Appraisal Requirement.

110

ARTICLE IX REMIC ADMINISTRATION

110

SECTION 9.01. REMIC Administration.

110

SECTION 9.02. Prohibited Transactions and Activities.

112

ARTICLE X TERMINATION

113

SECTION 10.01. Termination.

113

SECTION 10.02. Additional Termination Requirements.

114

SECTION 10.03. Assignment of the Call Option.

115

ARTICLE XI MISCELLANEOUS PROVISIONS

115

SECTION 11.01. Amendment.

115

SECTION 11.02. Recordation of Agreement; Counterparts.

117

SECTION 11.03. Limitation on Rights of Certificateholders.

117

SECTION 11.04. Governing Law; Jurisdiction.

118

SECTION 11.05. Notices.

118

SECTION 11.06. Severability of Provisions.

119

SECTION 11.07. Article and Section References.

119

SECTION 11.08. Notice to the Rating Agency.

119

SECTION 11.09. Further Assurances.

120

SECTION 11.10. Benefits of Agreement.

120

SECTION 11.11. Acts of Certificateholders.

121

SECTION 11.12. Successors and Assigns.

121

SECTION 11.13. Reconstitution Agreement.

121

SECTION 11.14. Provision of Information.

121

EXHIBITS AND SCHEDULES :

Exhibit A

Form of Class A-1 and Class A-2 Certificate

A-1

Exhibit B

Form of Class A-3 Certificate

B-1

Exhibit C

Form of Class A-R Certificate

C-1

Exhibit D

Form of Subordinate Certificate

D-1

Exhibit E

Form of Reverse of the Certificates

E-1

Exhibit F

Request for Release

F-1

Exhibit G

Form of Initial Certification of Custodian

G-1

Exhibit H

Form of Final Certification of Custodian

H-1

Exhibit I

Form of Lost Note Affidavit

I-1

Exhibit J

Form of ERISA Representation Class A-R

J-1

Exhibit K

Form of Transferor Certificate

K-1

Exhibit L

Transfer Affidavit for Class A-R Certificate Pursuant to

Section 6.02

L-1

Exhibit M

Servicing Agreement

M-1

Exhibit N

[Reserved]

N-1

Exhibit O

Form of Call Option Assignment Agreement

O-1

Exhibit P

[Reserved]

P-1

Exhibit Q

Form of Draw Package Certificate

Q-1

Exhibit R

Form of Certification of Appointment of Agent

R-1

Schedule I

Mortgage Loan Schedule

This Pooling and Servicing Agreement is dated as of November 1, 2004 (the “ Agreement ”), among GREENWICH CAPITAL ACCEPTANCE, INC., a Delaware corporation, as depositor (the “ Depositor ”), GREENWICH CAPITAL FINANCIAL PRODUCTS, INC., a Delaware corporation, as seller (the “ Seller ”), WELLS FARGO BANK, N.A., a national banking association, as master servicer (in such capacity, the “ Master Servicer ”), as securities administrator (in such capacity, the “ Securities Administrator ”), and as custodian (in such capacity, the “ Custodian ”), and U.S. BANK NATIONAL ASSOCIATION, a national banking association, as trustee (the “ Trustee ”).

PRELIMINARY STATEMENT:

Through this Agreement, the Depositor intends to cause the issuance and sale of the Charlie Mac Trust 2004-2, Mortgage Loan Pass-Through Certificates, Series 2004-2 (the “ Certificates ”) representing in the aggregate the entire beneficial ownership of the Trust, the primary assets of which are the Mortgage Loans (as defined below).

The Depositor intends to sell 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 eight classes of certificates, designated as (i) the Class A-1 Certificates, (ii) the Class A-2 Certificates, (iii) the Class A-3 Certificates, (iv) the Class A-R Certificates, (iii) the Class B-1 Certificates, (iv) the Class B-2 Certificates, (v) the Class B-3 Certificates and (vi) the Class L Certificates.  As provided herein, the Trustee shall elect that the Trust Fund be treated for federal income tax purposes as comprising two real estate mortgage investment conduits (each, a “REMIC” or, in the alternative, the “Lower-Tier REMIC” and the “Upper-Tier REMIC”). Each Certificate, other than the Class A-R Certificate and the Class A-3 Certificate, shall represent ownership of a regular interest in the Upper-Tier REMIC, as described herein.  The Class A-3 Certificate shall represent ownership of four regular interests in the Upper-Tier REMIC, as described in footnote (2) of the Upper-Tier REMIC below.  The Class A-R Certificate represents the sole class of residual interest in each REMIC.   

The Lower-Tier REMIC shall hold as assets all property of the Trust Fund and the interests in any REMIC formed hereby.  The Upper Tier REMIC shall hold as assets the uncertificated Lower-Tier REMIC Interests, other than the Class LT-R Interest.  Each such Lower-Tier Interest is hereby designated as a REMIC regular interest.

Lower-Tier REMIC Interests

The following table specifies the Class designation, interest rate, and initial Class Principal Amount for each Class of Lower-Tier REMIC Interest:

__________________________

(1)

The interest rate with respect to any Distribution Date (and the related Accrual Period) for each of these Lower Tier Interests is a per annum rate equal to 5.000%.  

(2)

The Class LT-IO(1) Interest is entitled to receive on any Distribution Date a specified portion of the interest payable on the Non-Discount Loans for Group 1.  Specifically, for each Accrual Period, the Class LT-IO(1) Interest is entitled to interest accruals on the Non-Discount Loans for Group 1 at a per annum rate equal to the excess of the weighted average of the Net Loan Rates on the Non-Discount Loans for Group 1 over 5.00%.

(3)

The interest rate with respect to any Distribution Date (and the related Accrual Period) for each of these Lower Tier Interests is a per annum rate equal to 6.000%.  

(4)

The Class LT-IO(2) Interest is entitled to receive on any Distribution Date a specified portion of the interest payable on the Non-Discount Loans for Group 2.  Specifically, for each Accrual Period, the Class LT-IO(2) Interest is entitled to interest accruals on the Non-Discount Loans for Group 1 at a per annum rate equal to the excess of the weighted average of the Net Loan Rates on the Non-Discount Loans for Group 2 over 6.00%

(5)

The Class LT-R Interest is the sole class of residual interests in the Lower Tier REMIC.  It does not have an interest rate or a principal balance.

On each Distribution Date, Available Funds shall be distributed as principal, and Realized Losses shall be allocated, with respect to the Lower Tier REMIC Interests in the following order of priority:

(i)

First, concurrently, to the Class LT1-PO(1) Interest until its balance equals the Component Principal Balance of the PO-1 Component immediately after such Distribution Date, and to the Class LT1-PO(2) Interest until its balance equals the Component Principal Balance of the PO-2 Component immediately after such Distribution Date;  

(ii)

Second, from the remaining Available Funds for Group 1, to the Class LT-GSA(1) Interest until its principal balance equals one percent of the Group Subordinate Amount for Group 1;

(iii)

Third, from the remaining Available Funds for Group 2, to the Class LT-GSA(2) Interest until its principal balance equals one percent of the Group Subordinate Amount for Group 2;

(iv)

Fourth, to the Class LT-GSA(1) or the Class LT-GSA(2) Interest, from the remaining Available Funds, the minimum amount necessary to cause the ratio of the principal balance of such Lower Tier Interest to the principal balance of the other such Lower Tier Interest to equal the ratio of the Group Subordinate Amount related to such interest to the Group Subordinate Amount related to the other Lower Tier Interest immediately after such Distribution Date;

(v)

Fifth, from the remaining Available funds for Group 1, the Class LT-Group 1 Interest, until its balance is reduced to zero;

(vi)

Sixth, from the remaining Available funds for Group 2, the Class LT-Group 2 Interest, until its balance is reduced to zero.

(vii)

Seventh, as interest on Lower Tier Interests to the extent of any interest accrued at the interest rates described above for the related Accrual Period (or any prior Accrual Period to the extent not distributed on the related Distribution Date).  

The Certificates

The following table sets forth (or describes) the Class designation, Pass-Through Rate, and Original Class Certificate Principal Balance (or Original Class Certificate Notional Balance) for each Class of Certificates comprising interests in the Trust Fund created hereunder.  Each Class of Certificates, other than the Class A-R Certificate, is hereby designated as representing ownership of regular interests in the Upper-Tier REMIC.

____________

(1)

Calculated pursuant to the definition of “Pass-Through Rate.”

(2)

The Class A-3 Certificates will be deemed for purposes of the distribution of interest and principal to consist of four components:  the IO-1 Component and the IO-2 Component, which are interest-only components that accrue interest on their related Component Notional Amounts, and the PO-1 Component and the PO-2 Component, which are principal only components.  On any Distribution Date, the Class Certificate Principal Balance of the Class A-3 Certificates will be equal to the sum of the Component Principal Balances of the PO-1 and PO-2 Components.  The Components are not severable.  For purposes of the REMIC Provisions, each component of the Class A-3 Certificates will constitute a separate “regular interest” in the Upper-Tier REMIC.

(3)

Calculated pursuant to the definition of “Subordinate Certificate Pass-Through Rate”, but adjusted, for purposes of the REMIC Provisions, to reflect the allocation, if any, of Subordinate Class Expense Share.  

ARTICLE I

DEFINITIONS; DECLARATION OF TRUST

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.  All calculations of interest described herein shall be made on the basis of an assumed 360-day year consisting of twelve 30-day months.

“ 1933 Act ”:  The Securities Act of 1933, as amended.

“ Accepted Master Servicing Practices ”:  With respect to any Mortgage Loan, those customary mortgage servicing practices of prudent mortgage servicing institutions that master service mortgage loans of the same type and quality as such Mortgage Loan in the jurisdiction where the related Mortgaged Property is located, to the extent applicable to the Trustee or the Master Servicer (except in its capacity as successor to the Servicer).

“ Account ”:  The Distribution Account or the Servicing Account, as the context requires.

“ Accrual Period ”: With respect to each Distribution Date and any Class of Certificates and any Class of Lower-Tier Interests, the calendar month immediately preceding the month in which that Distribution Date occurs.  Interest on any Class of Certificates will be calculated on the basis of a 360-day year composed of twelve 30-day months.

“ Accrued Interest Amount ”:  For any Distribution Date and for any Undercollateralized Group, an amount equal to one month’s interest on the applicable Principal Deficiency Amount at the Net WAC of the applicable Loan Group, plus any interest accrued on such Undercollateralized Group remaining unpaid from prior Distribution Dates.

“ Advance ”:  With respect to any Distribution Date and any Mortgage Loan or REO Property, any advance made by the Servicer under the Servicing Agreement or the Master Servicer pursuant to Section 5.05.

“ Adverse REMIC Event ”:  Either (i) loss of status as a REMIC, within the meaning of Section 860D of the Code, for any group of assets identified as a REMIC in the Preliminary Statement to this Agreement, or (ii) imposition of any tax, including the tax imposed under Section 860F(a)(1) on prohibited transactions, and the tax imposed under Section 860G(d) on certain contributions to a REMIC, on any REMIC created hereunder to the extent such tax would be payable from assets held as part of the Trust Fund.

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

“ Aggregate Subordinate Percentage ”:  As to any Distribution Date, the percentage equivalent of a fraction the numerator of which is the aggregate of the Class Certificate Principal Balances of the Classes of Subordinate Certificates and the denominator of which is the Pool Balance for such Distribution Date (net of the PO Percentage of the Stated Principal Balance of each Discount Mortgage Loan).

“ Aggregate Subordinate Principal Distribution Amount ”:  For any Distribution Date, the sum of the Subordinate Principal Distribution Amounts for each Loan Group.

“ Agreement ”:  This Pooling and Servicing Agreement, dated as of November 1, 2004, as amended, supplemented and otherwise modified from time to time.

“ Amount Available for Group 1 Principal ”:  As to any Distribution Date, Available Funds for Loan Group 1 for such Distribution Date reduced by the aggregate amount distributable on such Distribution Date in respect of interest on the Class A-1 and Class A-R Certificates and the IO-1 Component pursuant to Section 5.01(a)(i)(B).

“ Amount Available for Group 2 Principal ”:  As to any Distribution Date, Available Funds for Loan Group 2 for such Distribution Date reduced by the aggregate amount distributable on such Distribution Date in respect of interest on the Class A-2 Certificates and the IO-2 Component pursuant to Section 5.01(b)(i)(B).

“ Amount Available for PO Recoveries ”: With respect to any Loan Group and any Distribution Date, the aggregate of the PO Percentage of Recoveries on each Discount Mortgage Loan in such Loan Group for such Distribution Date.

“ Applicable Credit Support Percentage ”:  As defined in Section 5.01(e).

“ Apportioned Principal Balance ”: As to any Class of Subordinate Certificates, a Loan Group and any Distribution Date, the Class Certificate Principal Balance of such Class immediately prior to such Distribution Date multiplied by a fraction, the numerator of which is the Subordinate Component for the related Loan Group for such date and the denominator of which is the sum of the Subordinate Components (in the aggregate).

“ Assignment ”:  As to any Mortgage, an assignment of mortgage, notice of transfer or equivalent instrument, in recordable form, which is sufficient, under the laws of the jurisdiction in which the related Mortgaged Property is located, to reflect or record the sale of such Mortgage.

“ Available Funds ”:  As to any Distribution Date and any Loan Group, an amount equal to (i) the sum of (a) the aggregate of the Monthly Payments received on or prior to the related Determination Date (excluding Monthly Payments due in future Due Periods but received by the related Determination Date) in respect of the Mortgage Loans in that Loan Group, (b) Net Liquidation Proceeds, Insurance Proceeds, Principal Prepayments, Recoveries and other unscheduled recoveries of principal and interest in respect of the Mortgage Loans in that Loan Group received during the related Prepayment Period, (c) the aggregate of any amounts received in respect of REO Properties for such Distribution Date in respect of the Mortgage Loans in that Loan Group, (d) the aggregate of any amounts of Interest Shortfalls (excluding for such purpose all shortfalls as a result of Relief Act Reductions) paid by the Servicer pursuant to the Servicing Agreement and Compensating Interest Payments deposited in the Distribution Account for that Distribution Date in respect of the Mortgage Loans in that Loan Group, (e) the aggregate of the Purchase Prices and Substitution Adjustments deposited in the Distribution Account during the related Prepayment Period in respect of the Mortgage Loans in that Loan Group, (f) the aggregate of any advances in respect of delinquent Monthly Payments made by the Servicer and Advances made by the Master Servicer for that Distribution Date in respect of the Mortgage Loans in that Loan Group, (g) the aggregate of any Advances made by the Trustee for that Distribution Date pursuant to Section 7.02 hereof in respect of the Mortgage Loans in that Loan Group and (h) the Termination Price allocated to that Loan Group on the Distribution Date on which the Trust is terminated; minus (ii) the sum of (w) the Servicing Fees for that Distribution Date in respect of the Mortgage Loans in that Loan Group, (x) amounts in reimbursement for Advances previously made in respect of the Mortgage Loans in that Loan Group and other amounts as to which the Company, the Servicer, the Trustee, the Master Servicer, the Securities Administrator and the Custodian are entitled to be reimbursed pursuant to Section 4.03, (y) the amount payable to the Trustee, the Master Servicer or the Securities Administrator pursuant to Sections 3.21(b), 3.22(c), 3.18 and 8.05 in respect of the Mortgage Loans in that Loan Group and (z) amounts deposited in the Distribution Account in error in respect of the Mortgage Loans in that Loan Group.

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

“ Book-Entry Certificates ”:  Any of the Certificates that shall be registered in the name of the Depository or its nominee, the ownership of which is reflected on the books of the 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 6.02 hereof).  On the Closing Date, all Classes of the Certificates other than the Physical Certificates shall be Book-Entry Certificates.

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

“ Call Option ”:  The right to terminate this Agreement and the Trust pursuant to the second paragraph of Section 10.01(a) hereof.

“ Call Option Assignment Agreement ”:  Any Call Option Assignment Agreement substantially in the form set forth in Exhibit O hereto.

“ Call Option Date ”:  As defined in Section 10.01(a) hereof.

“ Call Option Holder ”:  Initially, the Master Servicer and any successor Call Option Holder which has been assigned the Call Option pursuant to a Call Option Assignment Agreement and Section 10.03 hereof.

“ Certificate ”:  Any Regular Certificate or Residual Certificate.

“ Certificate Notional Balance ”:  With respect to each Certificate of Class A-3 and any date of determination, the product of (i) the Class Certificate Notional Balance of such Class and (ii) the applicable Percentage Interest of such Certificate.

“ Certificate Owner ”:  With respect to each Book-Entry Certificate, any beneficial owner thereof and with respect to each Physical Certificate, the Certificateholder thereof.

“ Certificate Principal Balance ”:  With respect to each Certificate of a given Class (other than the Class A-3 Certificates) and any date of determination, the product of (i) the Class Certificate Principal Balance of such Class and (ii) the applicable Percentage Interest of such Certificate.

“ Certificate Register ” and “ Certificate Registrar ”:  The register maintained and registrar appointed pursuant to Section 6.02 hereof.  Wells Fargo Bank, N.A. will act as Certificate Registrar on behalf of the Trustee, for so long as it is the Securities Administrator under this Agreement.

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

“Charged-off Amount”:  With respect to any Charged-off Mortgage Loan, an amount equal to the Principal Balance of such Mortgage Loan remaining unpaid on the date such Mortgage Loan became a Charged-off Mortgage Loan.

“Charged-off Interest Amount”:  With respect to any Distribution Date and each Charged-off Mortgage Loan that became a Charged-off Mortgage Loan in the month prior to such Distribution Date, interest on such Mortgage Loan, at the related Net Loan Rate, for the full month in which such Mortgage Loan became a Charged-off Mortgage Loan.

“ Charged-off Mortgage Loan ”:  As to any Distribution Date prior to the Letter of Credit Termination Date, any Mortgage Loan in respect of which the Servicer has determined, in accordance with the servicing procedures specified herein, during the first five business days in the month in which such Distribution Date occurs, that any further Advances with respect to such Mortgage Loan would be nonrecoverable, as evidenced by the delivery by the Servicer of a certificate of a Servicing Officer to that effect prior to the 5th Business Day of a month pursuant to Section 5.03 of the Servicing Agreement.  

“Charged-off Recovery”:  With respect to any Distribution Date and a Mortgage Loan that became a Charged-off Mortgage Loan in a month preceding the month prior to that Distribution Date and with respect to which the related Charged-off Amount was allocated to one or more Classes of Certificates, an amount received in respect of such Charged-off Mortgage Loan during the prior calendar month, net of any reimbursable expenses.

“ Class ”:  Collectively, Certificates that 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-1 Certificate ”:  Any of the Class A-1 Certificates as designated on the face thereof, executed by the Trustee and authenticated and delivered by the Certificate Registrar, substantially in the form annexed hereto as Exhibit A, evidencing the ownership of a “regular interest” in the Upper Tier REMIC created hereunder and representing the right to distributions as set forth herein and therein.

“ Class A-2 Certificate ”:  Any of the Class A-2 Certificates as designated on the face thereof, executed by the Trustee and authenticated and delivered by the Certificate Registrar, substantially in the form annexed hereto as Exhibit A, evidencing the ownership of a “regular interest” in the Upper Tier REMIC created hereunder and representing the right to distributions as set forth herein and therein.

“ Class A-3 Certificate ”:  Any of the Class A-3 Certificates as designated on the face thereof, executed by the Trustee and authenticated and delivered by the Certificate Registrar, substantially in the form annexed hereto as Exhibit B, evidencing the ownership of a “regular interest” in the Upper Tier REMIC created hereunder and representing the right to distributions as set forth herein and therein.

“ Class A-R Certificate ”:  The Class A-R Certificate as designated on the face thereof executed by the Trustee, and authenticated and delivered by the Certificate Registrar, substantially in the form annexed hereto as Exhibit C, evidencing the ownership of the sole class of “residual interest” in each REMIC created hereunder and representing the right to distributions as set forth herein and therein.

“ Class B-1 Certificate ”:  Any of the Class B-1 Certificates as designated on the face thereof, executed by the Trustee and authenticated and delivered by the Certificate Registrar, substantially in the form annexed hereto as Exhibit D, evidencing the ownership of a “regular interest” in the Upper Tier REMIC created hereunder and representing the right to distributions as set forth herein and therein.

“ Class B-2 Certificate ”:  Any of the Class B-2 Certificates as designated on the face thereof, executed by the Trustee and authenticated and delivered by the Certificate Registrar, substantially in the form annexed hereto as Exhibit D, evidencing the ownership of a “regular interest” in the Upper Tier REMIC created hereunder and representing the right to distributions as set forth herein and therein.

“ Class B-3 Certificate ”:  Any of the Class B-3 Certificates as designated on the face thereof, executed by the Trustee and authenticated and delivered by the Certificate Registrar, substantially in the form annexed hereto as Exhibit D, evidencing the ownership of a “regular interest” in the Upper Tier REMIC created hereunder and representing the right to distributions as set forth herein and therein.

“ Class Certificate Notional Balance ”:  With respect to the Class A-3 Certificates and any Distribution Date, the sum of the IO-1 Component Notional Balance and the IO-2 Component Notional Balance for such Distribution Date.

“ Class Certificate Principal Balance ”:  As to any Distribution Date, with respect to any Class of Certificates (other than the Class A-3 Certificates), the Original Class Certificate Principal Balance as (a) reduced by the sum of (x) all amounts actually distributed in respect of principal of that Class on all prior Distribution Dates, (y) the sum of (i) all Realized Losses, if any, actually allocated to that Class on all prior Distribution Dates and (ii) all Charged-off Amounts, if any, actually allocated to that Class on all prior Distribution Dates and (z) in the case of the Subordinate Certificates, any applicable Writedown Amount and (b) increased pursuant to Section 5.08.  With respect to the Class A-3 Certificates, the sum of the Component Principal Balances of the PO Components.

“ Class L Certificate ”:  Any of the Class L Certificates as designated on the face thereof, executed by the Trustee and authenticated and delivered by the Certificate Registrar, substantially in the form annexed hereto as Exhibit D, evidencing the ownership of a “regular interest” in the Upper Tier REMIC created hereunder and representing the right to distributions as set forth herein and therein.

“ Class LT-R Interest ”:  As described in the Preliminary Statement.

“ Class Subordination Percentage ”:  With respect to each Class of Subordinate Certificates and any Distribution Date, the percentage equivalent of a fraction the numerator of which is the Class Certificate Principal Balance of such Class immediately before such Distribution Date and the denominator of which is the aggregate of the Class Certificate Principal Balances of all Classes of Certificates immediately before such Distribution Date.

“ Close of Business ”:  As used herein, with respect to any Business Day and location, 5:00 p.m. at such location.

“ Closing Date ”:  November 30, 2004.

“ Code ”:  The Internal Revenue Code of 1986, as amended.

“ Commission ”:  U.S. Securities and Exchange Commission.

“ Company ”:  U.S. Central Credit Union, or any successor thereto, including any successor to the Company under the Servicing Agreement appointed pursuant to the provisions of Section 3.09 hereof.

“ Compensating Interest Payment ”:  With respect to any Distribution Date, an amount equal to the amount, if any, by which (x) the aggregate amount of any Interest Shortfalls (excluding for such purpose all shortfalls as a result of Relief Act Reductions) that the Company is required to cause to be paid by the Servicer pursuant to the Servicing Agreement with respect to such Distribution Date, exceeds (y) the aggregate amount actually paid by the Servicer in respect of such shortfalls; provided, that such amount, to the extent payable by the Master Servicer, shall not exceed the aggregate Master Servicing Compensation that would be payable to the Master Servicer in respect of such Distribution Date without giving effect to any Compensating Interest Payment.

“ Component ”:  Any of the IO-1 Component, the IO-2 Component, the PO-1 Component and the PO-2 Component, as applicable.

“Component Principal Balance”:  As to any Distribution Date, with respect to either PO Component, the Original Component Principal Balance as (a) reduced by the sum of (x) all amounts actually distributed in respect of principal of that Component on all prior Distribution Dates, (y) the sum of (i) all Realized Losses, if any, actually allocated to that Component on all prior Distribution Dates and (ii) all Charged-off Amounts, if any, actually allocated to that Component on all prior Distribution Dates and (b) increased pursuant to Section 5.08.  

“ Corporate Trust Office ”:  With respect to the Trustee, the principal corporate trust office at which at any particular time its corporate trust business in connection with this Agreement shall be administered, which office at the date of the execution of this instrument is located at One Federal Street, Boston, Massachusetts 02110, Attention: Charlie Mac Trust 2004-2 or at such other address as the Trustee may designate from time to time by notice to the Certificateholders, the Depositor, the Master Servicer, the Securities Administrator and the Seller.  With respect to the Certificate Registrar and presentment of Certificates for registration of transfer, exchange or final payment, Wells Fargo Bank, N.A., 6th Street and Marquette Avenue, Minneapolis, Minnesota 55479, Attention: Corporate Trust, Charlie Mac Trust 2004-2.  

“ Corresponding Class ”:  With respect to each class of Lower-Tier Interests, the Class or Classes of Certificates so designated in the Preliminary Statement.  

“ Custodian ”:  Wells Fargo Bank, N.A., or its successor in interest, or any successor securities administrator appointed as herein provided.

“ Cut-Off Date ”:  With respect to any Mortgage Loan other than a Qualified Substitute Mortgage Loan, the Close of Business in New York City on November 1, 2004.  With respect to any Qualified Substitute Mortgage Loan, the date designated as such on the Mortgage Loan Schedule (as amended).

“ Cut-Off Date Aggregate Principal Balance ”: The aggregate of the Cut-Off Date Principal Balances of the Mortgage Loans in each Loan Group.

“ Cut-Off Date Principal Balance ”:  With respect to any Mortgage Loan, the principal balance thereof remaining to be paid, after application of all scheduled principal payments due on or before the Cut-Off Date whether or not received as of the Cut-Off Date (or as of the applicable date of substitution with respect to a Qualified Substitute Mortgage Loan).

“ Definitive Certificates ”:  Any Certificate evidenced by a Physical Certificate and any Certificate issued in lieu of a Book-Entry Certificate pursuant to Section 6.02(c) or (d) hereof.

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

“ Delinquent ”:  Any Mortgage Loan with respect to which the Monthly Payment due on a Due Date is not made.

“ Depositor ”:  Greenwich Capital Acceptance, Inc., a Delaware corporation, or any successor in interest.

“ Depository ”:  The initial Depository shall be The Depository Trust Company, whose nominee is Cede & Co., or any other organization registered as a “clearing agency” pursuant to Section 17A of the 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 ”:  For any Distribution Date and each Mortgage Loan, the date each month, as set forth in the Servicing Agreement, on which the Servicer determines the amount of all funds required to be remitted to the Master Servicer on the Servicer Remittance Date with respect to the Mortgage Loans.  

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

“ Discount Mortgage Loan ”:  Any Mortgage Loan with a Net Loan Rate that is less than the related Required Coupon as of the Cut-off Date.  

“ Disqualified Organization ”:  A “disqualified organization” defined in Section 860E(e)(5) of the Code, or any other Person so designated by the Trustee based upon an Opinion of Counsel provided to the Trustee by nationally recognized counsel acceptable to the Trustee that the holding of an ownership interest in the Residual 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 Residual Certificate to such Person.

“ Distribution Account ”:  The trust account or accounts created and maintained by the Master Servicer, on behalf of the Trustee pursuant to Section 4.02 hereof in the name of the Trustee for the benefit of the Securities Administrator, as Paying Agent for the Trustee and the Certificateholders and designated “Distribution Account, U.S. Bank National Association, as Trustee, in trust for the registered Certificateholders of Charlie Mac Trust 2004-2, Mortgage Loan Pass-Through Certificates, Series 2004-2” and which must be an Eligible Account.

“ Distribution Account Income ”:  As to any Distribution Date, any interest or other investment income earned on funds deposited in the Distribution Account during the month of such Distribution Date.

“ Distribution Date ”:  The 25th day of the month, or, if such day is not a Business Day, the next Business Day commencing in December 2004.

“ Distribution Date Statement ”:  As defined in Section 5.04(a) hereof.

“ Draw Event ”:  As defined in Section 4.04 hereof.

“ Draw Package ”:  The documentary demand for payment, dated and signed by the Securities Administrator, on behalf of the Trustee, stating on its face “Drawn under U.S. Central Credit Union Irrevocable Standby Letter of Credit No. CM2004-002” accompanied by a copy of the Standby Letter of Credit and a fully executed and completed Draw Package Certificate.

“ Draw Package Certificate ”:  The certificate in the form attached hereto as Exhibit Q which shall be executed and delivered by the Securities Administrator, on behalf of the Trustee, pursuant to Section 4.04 herein, with any attachments and schedules referenced in such certificate.

“ Due Date ”:  With respect to each Mortgage Loan and any Distribution Date, the first day of the calendar month in which that Distribution Date occurs on which the Monthly Payment for such Mortgage Loan was due, 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 that Distribution Date occurs and ending on the first day of the month in which that 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 in the highest short term rating category of the Rating Agency 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 it), the uninsured deposits in which account are otherwise secured such that, as evidenced by an Opinion of Counsel delivered to the Trustee and to the Rating Agency, the Certificateholders will have a claim with respect to the funds in the account or a perfected first priority security interest against the collateral (which shall be limited to Permitted Investments) securing those 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,

(iv)

an account otherwise acceptable to the Rating Agency without reduction or withdrawal of its then current ratings of the Certificates as evidenced by a letter from the Rating Agency to the Trustee.  Eligible Accounts may bear interest, and any account with the depository institution acting as Trustee hereunder may be an Eligible Account so long as it otherwise satisfies the requirements of this definition.

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

“ ERISA-Restricted Certificates ”:  The Class A-R Certificates and any Certificate that does not satisfy the applicable rating requirement under the Underwriter’s Exemption.

“ ERISA-Qualifying Underwriting ”:  A best efforts or firm commitment underwriting or private placement that meets the requirements of an Underwriter’s Exemption.

“ Event of Default ”:  Any one of the events (howsoever described) set forth in Section 7.01 hereof as an event or events upon the occurrence and continuation of which the Master Servicer may be terminated.  

“ Fannie Mae ”:  The Federal National Mortgage Association or any successor thereto.

“ FDIC ”:  The Federal Deposit Insurance Corporation or any successor thereto.

“ Final Certification ”:  The certification required to be delivered by the Custodian not later than 90 days after the Closing Date to the Depositor and the Trustee in the form annexed hereto as Exhibit H pursuant to Section 2.02 of this Agreement.

“ 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 pursuant to or as contemplated by Sections 2.03 and 10.01), a determination made by the Servicer, and reported to the Master Servicer, that all Insurance Proceeds, Liquidation Proceeds and other payments or recoveries which the Servicer expects to be finally recoverable in respect thereof have been so recovered.  

“ Freddie Mac ”:  The Federal Home Loan Mortgage Corporation or any successor thereto.

“ GCFP ”:  Greenwich Capital Financial Products, Inc., and its successors and assigns.

“ Group 1 Mortgage Loan ”:  A Mortgage Loan that is identified as such on the Mortgage Loan Schedule.

“ Group 2 Mortgage Loan ”:  A Mortgage Loan that is identified as such on the Mortgage Loan Schedule.

“Group Subordinate Amount” :  For any Distribution Date and either of Loan Group 1 or Loan Group 2, the excess of (i) the aggregate Stated Principal Balances of the Mortgage Loans in such Loan Group (less the PO Percentage of any Discount Mortgage Loans in that Loan Group) as of the first day of the related Due Period over (ii) the aggregate Certificate Principal Balances of the Class A-1 and Class A-R Certificates, in the case of Loan Group 1, and the Class A-2 Certificates, in the case of Loan Group 2, in each case immediately prior to that Distribution Date.

“ Indemnified Persons ”:  The Trustee, the Master Servicer, the Depositor, the Custodian and the Securities Administrator and their respective officers, directors, agents and employees and, with respect to the Trustee, any separate co-trustee and its officers, directors, agents and employees.

“ Independent ”:  When used with respect to any specified Person, any such Person who (a) is in fact independent of the Depositor and its Affiliates, (b) does not have any direct financial interest in or any material indirect financial interest in the Depositor or any Affiliate thereof, and (c) is not connected with the Depositor or any Affiliate thereof as an officer, employee, promoter, underwriter, trustee, partner, director or Person performing similar functions; provided, however , that a Person shall not fail to be Independent of the Depositor or 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 any Affiliate thereof.

“Independent Contractor”:  Either (i) any Person (other than the Master Servicer) that would be an “independent contractor” with respect to any REMIC formed hereby 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 no REMIC formed hereby receives or derives any income from such Person and provided that the relationship between such Person and the applicable REMIC is at arm’s length, all within the meaning of Treasury Regulation Section 1.856-4(b)(5), or (ii) any other Person (including the Master Servicer) if the Trustee has received an Opinion of Counsel to the effect that the taking of any action in respect of any REO Property by such Person, subject to any conditions therein specified, that is otherwise herein contemplated to be taken by an Independent Contractor will not cause such REO Property to cease to qualify as “foreclosure property” within the meaning of Section 860G(a)(8) of the Code (determined without regard to the exception applicable for purposes of Section 860D(a) of the Code), or cause any income realized in respect of such REO Property to fail to qualify as Rents from Real Property.

“ Initial Certificate Principal Balance ”:  With respect to any Certificate (other than the Class A-3 Certificates), the amount designated “Initial Certificate Principal Balance” on the face thereof.

“ Initial Certificate Notional Balance ”:  With respect to the Class A-3 Certificates, the amount designated “Initial Certificate Notional Balance” on the face thereof.

“ Initial Certification ”:  The certification required to be executed by the Custodian and delivered on the Closing Date to the Depositor and the Trustee in the form annexed hereto as Exhibit G pursuant to Section 2.02 of this Agreement.

“ Initial Stated Expiration Date ”:  With respect to the Standby Letter of Credit, November 30, 2007.

“ Insurance Proceeds ”:  With respect to any Mortgage Loan, proceeds of any title policy, hazard policy or other insurance policy covering a Mortgage Loan, to the extent such proceeds are not to be applied to the restoration of the related Mortgaged Property or released to the related Mortgagor in accordance with the Servicing Agreement.

“ Interest Distributable Amount ”:  With respect to any Distribution Date and each Class of Certificates (or with respect to the Class A-3 Certificates, the IO-1 Component and the IO-2 Component), the sum of (i) the Monthly Interest Distributable Amount for that Class and (ii) the Unpaid Interest Shortfall Amount for that Class or IO Component.

“ Interest Shortfall ”:  With respect to any Distribution Date and each Mortgage Loan that during the related Prepayment Period was the subject of a Principal Prepayment or a reduction of its Monthly Payment under the Relief Act, an amount determined as follows:

(a)

Principal Prepayments in part received during the relevant Prepayment Period :  the difference between (i) one month’s interest at the applicable Net Loan Rate on the amount of such prepayment and (ii) the amount of interest for the calendar month of such prepayment (adjusted to the applicable Net Loan Rate) actually received with respect to such prepayment at the time of such prepayment; and

(b)

Principal Prepayments in full received during the relevant Prepayment Period :  the difference between (i) one month’s interest at the applicable Net Loan Rate on the Stated Principal Balance of such Mortgage Loan immediately prior to such prepayment and (ii) the amount of interest for the calendar month of such prepayment (adjusted to the applicable Net Loan Rate) actually received with respect to such prepayment at the time of such prepayment; and

(c)

the amount of any Relief Act Reductions for such Distribution Date.

“ IO-1 Component ”:  The IO Component of the Class A-3 Certificates that relates to the Group 1 Mortgage Loans.

“ IO-1 Component Notional Balance ”:  With respect to the IO-1 Component and any Distribution Date, the aggregate Stated Principal Balance of the Group 1 Mortgage Loans.  As of the Cut-off Date, the IO-1 Component Notional Balance shall equal $106,840,221.

“ IO-2 Component ”:  The IO Component of the Class A-3 Certificates that relates to the Group 2 Mortgage Loans.

“ IO-2 Component Notional Balance ”:  With respect to the IO-2 Component and any Distribution Date, the aggregate Stated Principal Balance of the Group 2 Mortgage Loans.  As of the Cut-off Date, the IO-1 Component Notional Balance shall equal $47,098,614.

“ IO Component ”:  Either of the IO-1 Component or the IO-2 Component, as applicable.

“ Latest Possible Maturity Date ”:  As determined as of the Cut-Off Date, the Distribution Date following the fifth anniversary of the scheduled maturity date of the Mortgage Loan having the latest scheduled maturity date as of the Cut-Off Date.

“Letter of Credit Termination Date”:  The later of (i) the date on which the Standby Letter of Credit is terminated and (ii) the balance of the Standby Reserve Account is reduced to zero.

“ Liquidated Mortgage Loan ”:  As to any Distribution Date, any Mortgage Loan in respect of which the Servicer has determined, in accordance with the servicing procedures specified herein, as of the end of the related Prepayment Period, that all Liquidation Proceeds that it expects to recover with respect to the liquidation of such 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 hereunder.  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 10.01 hereof or the applicable provisions of the Servicing Agreement.

“ Liquidation Expenses ”:  With respect to a Mortgage Loan in liquidation, unreimbursed expenses paid or incurred by or for the account of the Master Servicer or the Servicer, such expenses including (a) property protection expenses, (b) property sales expenses, (c) foreclosure and sale costs, including court costs and reasonable attorneys’ fees, and (d) similar expenses reasonably paid or incurred in connection with liquidation.

“ Liquidation Proceeds ”:  With respect to any Mortgage Loan, the amount (other than amounts received in respect of the rental of any REO Property prior to REO Disposition) received by the Servicer as proceeds from the liquidation of such Mortgage Loan, as determined in accordance with the applicable provisions of the Servicing Agreement, other than Recoveries; provided that with respect to any Mortgage Loan or REO Property repurchased, substituted or sold pursuant to or as contemplated hereunder, or pursuant to the applicable provisions of the Servicing Agreement, “Liquidation Proceeds” shall also include amounts realized in connection with such repurchase, substitution or sale.

“ Loan Group ”:  Either of Loan Group 1 or Loan Group 2, as the context requires.

“ Loan Group Balance ”:  As to each Loan Group, the aggregate of the Stated Principal Balances of the Mortgage Loans in such Loan Group that were Outstanding Mortgage Loans at the time of determination.

“ Loan Group 1 ”:  At any time, the Group 1 Mortgage Loans in the aggregate and any REO Properties acquired in respect thereof.

“ Loan Group 2 ”:  At any time, the Group 2 Mortgage Loans in the aggregate and any REO Properties acquired in respect thereof.

“ Loan Rate ”:  With respect to each Mortgage Loan, the annual rate at which interest accrues on such Mortgage Loan from time to time in accordance with the provisions of the related Mortgage Note.

“ Loan-to-Value Ratio ”:  With respect to each Mortgage Loan and any date of determination, a fraction, expressed as a percentage, the numerator of which is the Principal Balance of the Mortgage Loan at such date of determination and the denominator of which is the Value of the related Mortgaged Property.

“ 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 Company certifying that the original Mortgage Note has been lost, misplaced or destroyed (together with a copy of the related Mortgage Note and indemnifying the Trust against any loss, cost or liability resulting from the failure to deliver the original Mortgage Note) in the form of Exhibit I hereto.

“ Lower Tier Interest ”:  Any one of the interests in the Lower-Tier REMIC, as described in the Preliminary Statement.

“ Lower Tier REMIC ”: As described in the Preliminary Statement.

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

“ Master Servicer ”:  Wells Fargo Bank, N.A., or any successor Master Servicer appointed as herein provided.

“Master Servicing Compensation” :  As to any Distribution Date, the compensation payable to the Master Servicer pursuant to Section 3.18 and Article IV.

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

“ MERS Mortgage Loan ”:  Any Mortgage Loan registered with MERS on the MERS System.

“ MERS® System ”:  The system of recording transfers of mortgages electronically maintained by MERS.

“ MIN ”:  The Mortgage Identification Number for any MERS Mortgage Loan.

“ MOM Loan ”:  Any Mortgage Loan as to which MERS is acting as mortgagee, solely as nominee for the originator of such Mortgage Loan and its successors and assigns.

“ Monthly Interest Distributable Amount ”:  With respect to each Class of Certificates or, with respect to the Class A-3 Certificates, the IO-1 Component and IO-2 Component and any Distribution Date, the amount of interest accrued during the related Accrual Period at the related Pass-Through Rate on the Class Certificate Principal Balance or Class Certificate Notional Balance of that Class or IO Component immediately prior to that Distribution Date; provided, however , that for purposes of compliance with the REMIC Provisions, (A) the Monthly Interest Distributable Amount for each Class of Subordinate Certificates shall be calculated by reducing the related Pass-Through Rate by a per annum rate equal to (i) 12 times the Subordinate Class Expense Share for such Class divided by (ii) the Class Certificate Principal Balance of such Class as of the beginning of the related Accrual Period and (B) such Class shall be deemed to bear interest at such Pass-Through Rate as so reduced for federal income tax purposes.

“ Monthly Payment ”:  With respect to any Mortgage Loan, the scheduled monthly payment of principal and interest on such Mortgage Loan that is payable by the related Mortgagor from time to time under the related Mortgage Note, determined, for the purposes of this Agreement: (a) after giving effect to 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 Servicer pursuant to the applicable provisions of the Servicing Agreement; and (c) on the assumption that all other amounts, if any, due under such Mortgage Loan are paid when due.

“ Moody’s ”:  Moody’s Investors Service, Inc. and its successors.

“ 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 ”:  With respect to each Mortgage Loan, the mortgage documents listed in Section 2.01 hereof pertaining to a particular Mortgage Loan and any additional documents delivered to the Custodian to be added to the Mortgage File pursuant to this Agreement.

“ Mortgage Loan ”:  Each mortgage loan transferred and assigned to the Trustee pursuant to Section 2.01 or Section 2.03(b) hereof 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 Mortgage Loan Purchase Agreement between the Seller and the Depositor, dated as of November 1, 2004, regarding the transfer of the Mortgage Loans by the Seller (including the Seller’s rights and interests in the Servicing Agreement) to or at the direction of the Depositor.

“ Mortgage Loan Schedule ”:  As of any date, the list of Mortgage Loans included in the Trust Fund on such date, attached hereto as Schedule I.  The Mortgage Loan Schedule shall be prepared by the Seller and shall set forth the following information with respect to each Mortgage Loan:

(i)

the Mortgage Loan identifying number;

(ii)

the Mortgagor’s name;

(iii)

the street address of the Mortgaged Property including the state and five-digit ZIP code;

(iv)

a code indicating whether the Mortgaged Property was represented by the borrower, at the time of origination, as being owner-occupied;

(v)

a code indicating whether the Residential Dwelling constituting the Mortgaged Property is (a) a detached single family dwelling, (b) a dwelling in a planned unit development, (c) a condominium unit, (d) a two- to four-unit residential property, (e) a townhouse or (f) other type of Residential Dwelling;

(vi)

if the related Mortgage Note permits the borrower to make Monthly Payments of interest only for a specified period of time, (a) the original number of such specified Monthly Payments and (b) the remaining number of such Monthly Payments as of the Cut-Off Date;

(vii)

the original months to maturity;

(viii)

the stated remaining months to maturity from the Cut-Off Date based on the original amortization schedule;

(ix)

the Loan-to-Value Ratio at origination;

(x)

the Loan Rate in effect immediately following the Cut-Off Date;

(xi)

the date on which the first Monthly Payment is or was due on the Mortgage Loan;

(xii)

the stated maturity date;

(xiii)

the Servicing Fee Rate, if any;

(xiv)

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

(xv)

the original principal balance of the Mortgage Loan;

(xvi)

the Stated Principal Balance of the Mortgage Loan on the Cut-Off Date and  a code indicating the purpose of the Mortgage Loan (i.e., purchase financing, rate/term refinancing, cash-out refinancing);

(xvii)

the Value of the Mortgaged Property;

(xviii)

the sale price of the Mortgaged Property, if applicable;

(xix)

the product code;

(xx)

the respective Loan Group; and

(xxi)

the Loan Rate in effect at origination.

Information set forth in clauses (ii) and (iii) above regarding each Mortgagor and the related Mortgaged Property shall be confidential and the Trustee (or the Master Servicer) shall not disclose such information; provided that, notwithstanding anything herein to the contrary, the foregoing shall not be construed to prohibit (i) disclosure of any and all information that is or becomes publicly known, or information obtained by Trustee from sources other than the other parties hereto, (ii) disclosure of any and all information (A) if required to do so by any applicable, law, rule or regulation, (B) to any government agency or regulatory body having or claiming authority to regulate or oversee any respects of Trustee’s business or that of its affiliates, (C) pursuant to any subpoena, civil investigative demand or similar demand or request of any court, regulatory authority, arbitrator or arbitration to which Trustee or any affiliate or an officer, director, employer or shareholder thereof is a party or (D) to any affiliate, independent or internal auditor, agent, employee or attorney of Trustee having a need to know the same, provided that Trustee advises such recipient of the confidential nature of the information being disclosed, or (iii) any other disclosure authorized by the Depositor or Master Servicer.

The Mortgage Loan Schedule, as in effect from time to time, shall also set forth the following information with respect to the Mortgage Loans in the aggregate and by Loan Group as of the Cut-Off Date: (1) the number of Mortgage Loans; (2) the current Principal Balance of the Mortgage Loans; (3) the weighted average Loan Rate of the Mortgage Loans; and (4) the weighted average remaining months to 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.

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

“ Mortgaged Property ”:  The fee simple or leasehold interest in real property, together with improvements thereto including any exterior improvements to be completed within 120 days of disbursement of the related Mortgage Loan proceeds.

“ Mortgagor ”:  The obligor on a Mortgage Note.

“ Net Interest Shortfall ”:  With respect to any Distribution Date, the excess of Interest Shortfalls, if any, for such Distribution Date over the sum of (i) Interest Shortfalls paid by the Servicer under the Servicing Agreement with respect to such Distribution Date and (ii) Compensating Interest Payments made with respect to such Distribution Date.

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

“ Net Loan 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 Loan Rate for such Mortgage Loan minus the related Servicing Fee Rate.  For purposes of determining whether any Qualified Substitute Mortgage Loan is a Discount Mortgage Loan or a Non-Discount Mortgage Loan and for purposes of calculating the applicable PO Percentage and applicable Non-PO Percentage, each Qualified Substitute Mortgage Loan shall be deemed to have a Net Loan Rate equal to the Net Loan Rate of the Deleted Mortgage Loan for which it is substituted.

“ Net Realized Losses ”:  For any Class of Certificates, other than the Class L Certificates, and any Distribution Date, the excess of (i) the sum of (A) the amount of Realized Losses previously allocated to that Class and (B) the amount of Charged-off Amounts previously allocated to that Class over (ii) the amount of any increases to the Class Certificate Principal Balance of that Class pursuant to Section 5.08 due to Recoveries.

For the Class L Certificates and any Distribution Date, the excess of (i) the sum of (A) the amount of Realized Losses previously allocated to that Class and (B) the amount of Charged-off Amounts previously allocated to that Class over (ii) the sum of (A) the amount of any increases to the Class Certificate Principal Balance of that Class pursuant to Section 5.08 due to Recoveries and (B) the aggregate amount of any distributions to such Class pursuant to Section 5.03(d).

“ Net WAC ”:  With respect to any Distribution Date and any Loan Group, the weighted average of the Net Loan Rates of the Mortgage Loans in that Loan Group as of the first day of the related Due Period (or, in the case of the first Distribution Date, as of the Cut-Off Date), weighted on the basis of the related Stated Principal Balances at the beginning of the related Due Period.

“ Non-PO Loan Group Balance ”:  As to each Loan Group, the aggregate of the Stated Principal Balances of the Mortgage Loans in such Loan Group (other than any Discount Mortgage Loans in that Loan Group) that were Outstanding Mortgage Loans at the time of determination.

“ Nonrecoverable ”:  A determination by the Master Servicer or the Servicer in respect of a delinquent Mortgage Loan that if it were to make an Advance or an advance of a delinquent Monthly Payment, respectively, in respect thereof, such amount would not be recoverable from any collections or other recoveries (including Liquidation Proceeds) on such Mortgage Loan.

“ Non-Discount Mortgage Loan ”:  Any Mortgage Loan with a Net Loan Rate that is greater than or equal to the related Required Coupon as of the Cut-off Date.  

“ Non-PO Percentage ”:  As to any Mortgage Loan (a) that is a Discount Mortgage Loan, a fraction (expressed as a percentage) the numerator of which is the Net Loan Rate of such Discount Mortgage Loan and the denominator of which is the related Required Coupon and (b) that is a Non-Discount Mortgage Loan, 100%.

“ Non-PO Recoveries ”:  With respect to any Loan Group and any Distribution Date, an amount that is equal to the excess, if any, of  (A) the amount of Recoveries (other than Charged-off Recoveries) on the Mortgage Loans of such Loan Group for such Distribution Date, over (B) the amount of PO Recoveries for such Loan Group for such Distribution Date.

“ 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), or by the Treasurer, the Secretary, or one of the assistant treasurers or assistant secretaries of the Seller, the Master Servicer or the Depositor, as applicable.

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

“ Original Applicable Credit Support Percentage ”:  With respect to each Class of Subordinate Certificates, the corresponding percentage set forth below opposite its Class designation:

“ Original Class Certificate Principal Balance ”:  With respect to each Class of Certificates, the corresponding aggregate amount set forth opposite the Class designation of such Class in the Preliminary Statement.

“ Original Class Certificate Notional Balance ”:  With respect to the Class A-3 Certificates, the corresponding aggregate notional amount set forth opposite the Class designation of such Class in the Preliminary Statement.

“ Original Component Principal Balance ”:  With respect to the PO-1 Component, $1,318,563 and with respect to the PO-2 Component, $1,500,628.

“ Original Subordinated Principal Balance ”:  The aggregate of the Original Class Certificate Principal Balances of the Classes of Subordinate Certificates.

“ Originator ”:  Navy Federal Credit Union.

“ OTS ”:  The Office of Thrift Supervision.

“ Outstanding Mortgage Loan ”:  As of any Due Date, a Mortgage Loan with a Stated Principal Balance greater than zero, that was not the subject of a prepayment in full prior to such Due Date and that did not become a Liquidated Mortgage Loan prior to such Due Date.

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

“ Pass-Through Rate ”:  With respect to each Class of Certificates (or with respect to the Class A-3 Certificates, the IO-1 Component and IO-2 Component) and any Distribution Date, the rate set forth below:

(i)

The Pass-Through Rate for the Class A-1 Certificates shall equal 5.000% per annum;

(ii)

The Pass-Through Rate for the Class A-2 Certificates shall equal 6.000% per annum;

(iii)

The Pass-Through Rate for the IO-1 Component shall equal the weighted average of the Stripped Interest Rates for the Group 1 Mortgage Loans;

(iv)

The Pass-Through Rate for the IO-2 Component shall equal the weighted average of the Stripped Interest Rates for the Group 2 Mortgage Loans;

(v)

The Pass-Through Rate for the Class B-1, Class B-2, Class B-3 and Class L Certificates shall equal the Subordinate Certificate Pass-Through Rate.

“ Paying Agent ”:  Any paying agent appointed pursuant to Section 6.05 hereof.  The initial Paying Agent shall be Wells Fargo Bank, N.A., for so long as it is acting as Securities Administrator under this Agreement.

“ Percentage Interest ”:  With respect to any Certificate other than a Class A-R Certificate, a fraction, expressed as a percentage, the numerator of which is the Initial Certificate Principal Balance or Initial Certificate Notional Balance, as applicable, represented by such Certificate and the denominator of which is the Original Class Certificate Principal Balance or Original Class Certificate Notional Balance, as applicable, of the related Class.  With respect to the Class A-R Certificate, 100%.

“ 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 Trustee, the Securities Administrator or any of their respective Affiliates or for which an Affiliate of the Trustee serves as an advisor:

(i)

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

(ii)

(A) demand and time deposits in, certificates of deposit of, bankers’ acceptances issued by or federal funds sold by any depository institution or trust company (including the Trustee, the Master Servicer or 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 state authorities, so long as, at the time of such investment or contractual commitment providing for such investment, such depository institution or trust company or its ultimate parent has a short-term uninsured debt rating in one of the two highest available rating categories of the Rating Agency and (B) any other demand or time deposit or deposit which is fully insured by the FDIC and are rated Prime+1 by Moody’s;

(iii)

repurchase obligations with respect to any security described in clause (i) above and entered into with a depository institution or trust company (acting as principal) rated A and A2, or higher, by S&P and Moody’s, respectively;

(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, the District of Columbia or any State thereof and that are rated by the Rating Agency in its highest long-term unsecured rating categories at the time of such investment or contractual commitment providing for such investment;

(v)

commercial paper (including both non-interest-bearing discount obligations and interest-bearing obligations) that is rated by the Rating Agency in its highest short-term unsecured debt rating available at the time of such investment;

(vi)

units of money market funds (which may be 12b-1 funds, as contemplated by the Commission under the Investment Company Act of 1940) registered under the Investment Company Act of 1940 including funds managed or advised by the Trustee, the Master Servicer or an Affiliate thereof having the highest applicable rating from the Rating Agency; and

(vii)

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

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

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

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

“ Physical Certificates ”:  The Class A-R Certificates.

“ Pool Balance ”:  As to any Distribution Date, the aggregate of the Stated Principal Balances, as of the Close of Business on the first day of the month preceding the month in which such Distribution Date occurs, of the Mortgage Loans that were Outstanding Mortgage Loans on that day.

“ PO-1 Component ”:  The PO Component of the Class A-3 Certificates that relates to the Group 1 Mortgage Loans.

“ PO-2 Component ”:  The PO Component of the Class A-3 Certificates that relates to the Group 2 Mortgage Loans.

“ PO Component ”:  Either of the PO-1 Component or the PO-2 Component, as applicable.

“ PO Deferred Amount ”:  As to any Distribution Date and Loan Group on or prior to the Senior Credit Support Depletion Date, the sum of (i) the sum for all of the Discount Mortgage Loans of such Loan Group of the applicable PO Percentage for each such Mortgage Loan of the principal portion of each Realized Loss and Charged-off Amount on such Discount Mortgage Loan, to be allocated to the related Class of Class PO Certificates on such Distribution Date and (ii) all amounts previously allocated to such Class of Class PO Certificates in respect of such losses and not distributed to such Class of Class PO Certificates on prior Distribution Dates.  After the Senior Credit Support Depletion Date, the PO Deferred Amount for each Loan Group shall be zero.

“ PO Percentage ”:  As to any Discount Mortgage Loan, 100% minus the Non-PO Percentage for such Discount Mortgage Loan.  As to any Non-Discount Mortgage Loan, 0%.

“ PO Principal Distribution Amount ”:  With respect to each Loan Group and any Distribution Date, the sum of (a) the applicable PO Percentage of each scheduled payment of principal collected or advanced on the related Mortgage Loans by the Servicer or the Master Servicer in respect of the related Due Period, (b) the applicable PO Percentage of that portion of the Purchase Price, representing principal of any repurchased Mortgage Loan in that Loan Group, deposited to the Distribution Account during the related Prepayment Period, (c) the applicable PO Percentage of the principal portion of any related Substitution Adjustments deposited in the Distribution Account during the related Prepayment Period, (d) the applicable PO Percentage of the principal portion of all Insurance Proceeds received during the related Prepayment Period with respect to Mortgage Loans in that Loan Group that are not yet Liquidated Mortgage Loans, (e) the applicable PO Percentage of the principal portion of all Net Liquidation Proceeds received during the related Prepayment Period with respect to Liquidated Mortgage Loans in that Loan Group, (f) the applicable PO Percentage of all Principal Prepayments in part or in full on Mortgage Loans in that Loan Group applied by the Servicer or the Master Servicer during the related Prepayment Period, (g) the applicable PO Percentage of all Recoveries related to that Loan Group received during the calendar month preceding the month of that Distribution Date and (h) on the Distribution Date on which the Trust is to be terminated pursuant to Section 10.01 hereof, the applicable PO Percentage of that portion of the Termination Price in respect of principal for that Loan Group.

“ PO Recoveries ”:  With respect to any Loan Group and any Distribution Date, an amount equal to the lesser of (a) the Amount Available for PO Recoveries for such Loan Group and (b) the PO Deferred Amount for such Loan Group.

“ PO Recovery Excess ”: With respect to any Loan Group and any Distribution Date, the excess, if any of (a) the Amount Available for PO Recoveries for such Loan Group over (b) the PO Deferred Amount for such Loan Group.

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

“ Primary Insurance Policy ”:  Mortgage guaranty insurance, if any, on an individual Mortgage Loan, as evidenced by a policy or certificate.

“ 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 Principal Balance of such Mortgage Loan after the Cut-Off Date.  For purposes of this definition, a Liquidated Mortgage Loan shall be deemed to have a Principal Balance equal to the Principal Balance of the related Mortgage Loan as of the final recovery of related Liquidation Proceeds and a Principal Balance of zero thereafter.  As to any REO Property and any day, the Principal Balance of the related Mortgage Loan immediately prior to such Mortgage Loan becoming REO Property.

“ Principal Deficiency Amount ”:  For any Distribution Date and for any Undercollateralized Group, the excess, if any, of the aggregate Class Certificate Principal Balance of the Senior Certificates (other than the related PO Component) related to such Undercollateralized Group immediately prior to such Distribution Date over the sum of the Principal Balances of the Mortgage Loans in the related Loan Group (less the PO Percentage of each Discount Mortgage Loan in that Loan Group) immediately prior to such Distribution Date.

“ Principal Distribution Amount ”:  With respect to each Loan Group and any Distribution Date, the sum of (a) the applicable Non-PO Percentage of each scheduled payment of principal collected or advanced on the related Mortgage Loans by the Servicer or the Master Servicer in respect of the related Due Period, (b) the applicable Non-PO Percentage of that portion of the Purchase Price, representing principal of any repurchased Mortgage Loan in that Loan Group, deposited to the Distribution Account during the related Prepayment Period, (c) the applicable Non-PO Percentage of the principal portion of any related Substitution Adjustments deposited in the Distribution Account during the related Prepayment Period, (d) the applicable Non-PO Percentage of the principal portion of all Insurance Proceeds received during the related Prepayment Period with respect to Mortgage Loans in that Loan Group that are not yet Liquidated Mortgage Loans, (e) the applicable Non-PO Percentage of the principal portion of all Net Liquidation Proceeds received during the related Prepayment Period with respect to Liquidated Mortgage Loans in that Loan Group, (f) the applicable Non-PO Percentage of all Principal Prepayments in part or in full on Mortgage Loans in that Loan Group applied by the Servicer or the Master Servicer during the related Prepayment Period, (g) the applicable Non-PO Percentage of all Recoveries related to that Loan Group received during the calendar month preceding the month of that Distribution Date and (h) on the Distribution Date on which the Trust is to be terminated pursuant to Section 10.01 hereof, the applicable Non-PO Percentage of that portion of the Termination Price in respect of principal for that Loan Group.

“ Principal Prepayment ”:  Any payment of principal made by the Mortgagor on a Mortgage Loan that is received in advance of its scheduled Due Date and that 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.

“ Pro Rata Share ”:  As to any Distribution Date and any Class of Subordinate Certificates, the portion of the Aggregate Subordinate Principal Distribution Amount allocable to such Class, equal to the product of the (a) Aggregate Subordinate Principal Distribution Amount on such date and (b) a fraction, the numerator of which is the related Class Certificate Principal Balance of that Class and the denominator of which is the aggregate of the Class Certificate Principal Balances of all the Classes of Subordinate Certificates.

“ Prospectus ”:  The Prospectus Supplement, together with the accompanying prospectus dated April 23, 2004, relating to the Senior Certificates and the Subordinate Certificates.

“ Prospectus Supplement ”:  That certain Prospectus Supplement dated November 19, 2004 relating to the initial sale of the Senior Certificates and the Subordinate Certificates.

“ Purchase Price ”:  With respect to any Mortgage Loan or REO Property to be purchased by the Seller pursuant to or as contemplated by Section 2.03 or Section 10.01 hereof, and as confirmed by an Officers’ Certificate from the Seller to the Trustee, an amount equal to the sum of (i) 100% of the Principal Balance thereof as of the date of purchase (or such other price as provided in Section 10.01), plus (ii) in the case of (x) a Mortgage Loan, accrued interest on such Principal Balance at the applicable Loan Rate (or if the servicer is repurchasing such Mortgage Loan, the Loan Rate minus the Servicing Fee Rate) from the Due Date as to which interest was last covered by a payment by the Mortgagor 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 Principal Balance at the applicable Loan Rate (or if the servicer is repurchasing such Mortgage Loan, the Loan Rate minus the Servicing Fee Rate) from the Due Date as to which interest was last covered by a payment by the Mortgagor 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 and Liquidation Proceeds that as of the date of purchase had been distributed as or to cover REO Imputed Interest, plus (iii) any unreimbursed Servicing Advances and any unpaid Servicing Fees allocable to such Mortgage Loan or REO Property, plus (iv) in the case of a Mortgage Loan required to be purchased pursuant to Section 2.03 hereof, expenses reasonably incurred or to be incurred by the Trustee in respect of the breach or defect giving rise to the purchase obligation and plus (v) any costs and damages incurred by the Trust in connection with any violation by such Mortgage Loan of any predatory- or abusive-lending laws.

“ Qualified Insurer ”:  A mortgage guaranty insurance company duly qualified as such under the laws of the state of its principal place of business and each state having jurisdiction over such insurer in connection with the insurance policy issued by such insurer, duly authorized and licensed in such states to transact a mortgage guaranty insurance business in such states and to write the insurance provided by the insurance policy issued by it, approved as a Fannie Mae-approved mortgage insurer and having a claims paying ability rating of at least “AA” or equivalent rating by a nationally recognized statistical rating organization.  Any replacement insurer with respect to a Mortgage Loan must have at least as high a claims paying ability rating as the insurer it replaces had on the Closing Date.

“ Qualified Substitute Mortgage Loan ”:  A mortgage loan substituted for a Deleted Mortgage Loan pursuant to the terms of this Agreement which must, on the date of such substitution, (i) have an outstanding principal balance, after application of all scheduled payments of principal and interest due during or prior to the month of substitution, not in excess of, and not more than 5% less than, the Principal Balance of the Deleted Mortgage Loan as of the Due Date in the calendar month during which the substitution occurs, (ii) have a remaining term to maturity not greater than (and not more than one year less than) that of the Deleted Mortgage Loan, (iii) be current as of the date of substitution, (iv) 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, (v) have been underwritten or re-underwritten in accordance with the same or substantially similar underwriting criteria and guidelines as the Deleted Mortgage Loan, (vi) is of the same or better credit quality as the Deleted Mortgage Loan, (vii) conform to each representation and warranty set forth in Section 2.04 hereof applicable to the Deleted Mortgage Loan and (viii) have a Loan Rate not less than the Loan Rate of 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 terms described in clause (ii) hereof shall be determined on the basis of weighted average remaining term to maturity and the Loan-to-Value Ratio described in clause (iii) 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 (vii) hereof must be satisfied as to each Qualified Substitute Mortgage Loan or in the aggregate, as the case may be.  Any Mortgage Loan substituted for a Discount Mortgage Loan shall for all purposes of this Agreement be treated as having the same interest rate as the Mortgage Loan it replaced, except that any excess interest shall be paid to the IO-1 Component.

“ Rating Agency ”:  S&P and Moody’s.  If any rating agency or its successor shall no longer be in existence, “Rating Agency” shall include such nationally recognized statistical rating agency, or other comparable Person, as shall have been designated by the Depositor, notice of which designation shall be given to the Trustee and the 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 Liquidated Mortgage Loan; provided , that with respect to the Class L Certificates and any Distribution Date, “Realized Loss” shall also mean the amount by which such Class of Certificates is reduced on such Distribution Date pursuant to Section 5.03(d).

“ Reconstitution Agreement ”:  The assignment, assumption and recognition agreement dated as of November 1, 2004 among the Seller, the Trustee, the Depositor and the Company and acknowledged by the Master Servicer.

“ Reconstitution Date ”:  November 1, 2004.

“ Record Date ”:  With respect to each Distribution Date and all Classes of Certificates, the last Business Day of the calendar month preceding the month in which such Distribution Date occurs.  

“ Recovery ”:  With respect to any Distribution Date and a Mortgage Loan that became a Liquidated Mortgage Loan in a month preceding the month prior to that Distribution Date and with respect to which the related Realized Loss was allocated to one or more Classes of Certificates, an amount received in respect of such Liquidated Mortgage Loan during the prior calendar month, net of any reimbursable expenses.

“ Refinancing Mortgage Loan ”:  Any Mortgage Loan originated in connection with the refinancing of an existing mortgage loan.

“ Regular Certificate ”:  Any Class A-1, Class A-2, Class A-3, Class B-1, Class B-2, Class B-3 or Class L Certificate.

“ Relief Act ”:  The Servicemembers Civil Relief Act, or any similar state law.

“ Relief Act Reductions ”:  With respect to any Distribution Date and any Mortgage Loan as 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, if any, by which (i) interest collectible on that Mortgage Loan during such Due Period is less than (ii) one month’s interest on the Stated Principal Balance of such Mortgage Loan at the Loan 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 Opinion ”:  An Independent Opinion of Counsel, to the effect that the proposed action described therein would not, under the REMIC Provisions, (i) cause any REMIC created hereunder to fail to qualify as a REMIC while any regular interest in such REMIC is outstanding, (ii) result in a tax on prohibited transactions with respect to any REMIC created hereunder or (iii) constitute a taxable contribution to any REMIC created hereunder after the Startup Day.

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

“ Remittance Report ”:  The Master Servicer’s Remittance Report to the Securities Administrator providing information with respect to each Mortgage Loan which is provided no later than the 18th calendar day of each month, or if such day is not a Business Day, the immediately preceding Business Day, and which shall contain such information as may be agreed upon by the Master Servicer and the Securities Administrator and which shall be sufficient to enable the Securities Administrator to prepare the related Distribution Date Statement.

“ 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 Servicer in respect of an REO Property pursuant to the Servicing Agreement.

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

“ REO Imputed Interest ”:  As to any REO Property, for any calendar month during which such REO Property was at any time part of the Trust Fund, one month’s interest at the applicable Net Loan Rate on the Principal Balance of such REO Property (or, in the case of the first such calendar month, of the related Mortgage Loan if appropriate) as of the Close of Business on the Due Date in such calendar month.

“ REO Principal Amortization ”:  With respect to any REO Property, for any calendar month, the excess, if any, of (a) the aggregate of all amounts received in respect of such REO Property during such calendar month, whether in the form of rental income, sale proceeds (including, without limitation, that portion of the Termination Price paid in connection with a purchase of all of the Mortgage Loans and REO Properties pursuant to Section 10.01 hereof that is allocable to such REO Property) or otherwise, net of any portion of such amounts (i) payable pursuant to the applicable provisions of the Servicing Agreement in respect of the proper operation, management and maintenance of such REO Property or (ii) payable or reimbursable to the Company or the Servicer pursuant to the applicable provisions of the Servicing Agreement 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 Servicer on behalf of the Trust Fund through foreclosure or deed-in-lieu of foreclosure in accordance with the applicable provisions of the Servicing Agreement.

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

“ Required Payment ”:  For any Distribution Date, an amount equal to (x) the lesser of (i) the sum of (A) the sum of all Realized Losses allocated to the Class L Certificates on such Distribution Date and (B) the sum of (1) all Charged-off Amounts allocated to the Class L Certificates on such Distribution Date plus (2) the Charged-off Interest Amount with respect to each related Charged-off Mortgage Loan, and (ii) the Stated Amount of the Standby Letter of Credit for such Distribution Date or (y) if the Standby Letter of Credit Provider has given notice that it will not renew the Standby Letter of Credit, the Stated Amount.

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

“ Residual Certificate ”:  The Class A-R Certificate.

“ Responsible Officer ”:  When used with respect to the Trustee, any director, the President, any vice president or any assistant vice president in it Corporate Trust Services department, or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and, with respect to a particular matter, to whom such matter is referred because of such officer’s knowledge of and familiarity with the particular subject.

“ Restricted Classes ”:  As defined in Section 5.01(d).

“ Restricted Global Security ”:  As defined in Section 6.01.

“ S&P ”:  Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and any successor thereto.  

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

“ Securities Administrator ”:  Wells Fargo Bank, N.A., or its successor in interest, or any successor securities administrator appointed as herein provided.

“ Seller ”:  GCFP, in its capacity as seller under this Agreement.

“ Senior Certificate ”:  Any one of the Class A-1, Class A-2, Class A-3 or Class A-R Certificates.

“ Senior Certificate Group ”:  Any of (a) the Class A-1 and Class A-R Certificates with respect to Loan Group 1 and (b) the Class A-2 Certificates with respect to Loan Group 2.

“ Senior Certificateholder ”:  Any Holder of a Senior Certificate.

“ Senior Credit Support Depletion Date ”:  The date on which the Class Certificate Principal Balance of each Class of Subordinate Certificates has been reduced to zero.

“ Senior Percentage ”:  With respect to each Loan Group and any Distribution Date, the percentage equivalent of a fraction the numerator of which is the aggregate of the Class Certificate Principal Balances of the Classes of Senior Certificates relating to that Loan Group (other than the related PO Component) immediately prior to such Distribution Date and the denominator of which is the Non-PO Loan Group Balance in the related Loan Group for such Distribution Date; provided, however , that on any Distribution Date after a Senior Termination Date has occurred with respect to the Senior Certificates related to a Loan Group, the Senior Percentage for the related Loan Group will be equal to 0%.

“ Senior Prepayment Percentage ”:  With respect to each Loan Group and any Distribution Date before the Distribution Date in December 2009, 100%.  Except as provided herein, the Senior Prepayment Percentage for each Loan Group and any Distribution Date occurring on or after the tenth anniversary of the first Distribution Date will be as follows:  (i) from December 2009 through November 2010, the related Senior Percentage plus 70% of the related Subordinate Percentage for that Distribution Date; (ii) from December 2010 through November 2011, the related Senior Percentage plus 60% of the related Subordinate Percentage for that Distribution Date; (iii) from December 2011 through November 2012, the related Senior Percentage plus 40% of the related Subordinate Percentage for that Distribution Date; (iv) from December 2012 through November 2013, the related Senior Percentage plus 20% of the related Subordinate Percentage for that Distribution Date; and (v) from and after December 2013, the related Senior Percentage for that Distribution Date; provided, however, that there shall be no reduction in the Senior Prepayment Percentage unless the Step Down Conditions are satisfied; and provided, further , that if on any Distribution Date occurring on or after the Distribution Date in December 2009, the Senior Percentage for either Loan Group exceeds the initial Senior Percentage for such Loan Group, the related Senior Prepayment Percentage for that Distribution Date will again equal 100%.

“ Senior Principal Distribution Amount ”:  With respect to each Loan Group and any Distribution Date, the sum of:

(1)

the related Senior Percentage of all amounts described in clauses (a) through (d) of the definition of “Principal Distribution Amount” for that Loan Group and that Distribution Date;

(2)

with respect to each Mortgage Loan in that Loan Group which became a Liquidated Mortgage Loan during the related Prepayment Period, the lesser of

(x)

the applicable Non-PO Percentage of the related Senior Percentage of the Stated Principal Balance of that Mortgage Loan; and

(y)

the applicable Non-PO Percentage of the related Senior Prepayment Percentage of the amount of the Net Liquidation Proceeds allocable to principal received with respect to that Mortgage Loan; and

(3)

the related Senior Prepayment Percentage of the amounts described in clauses (f) and (g) of the definition of “Principal Distribution Amount” for that Loan Group.

“ Senior Termination Date ”:  For each Senior Certificate Group, the Distribution Date on which the aggregate Certificate Principal Balance of the related Senior Certificates (other than the related PO Component) is reduced to zero.

“ Servicer ”:  Navy Federal Credit Union, as primary servicer of the Mortgage Loans and any successors thereto, or any other primary servicer appointed pursuant to the provisions of Section 3.09 hereof.

“ Servicer Remittance Date ”:  The “Remittance Date” defined in the Servicing Agreement.

“ Servicing Account ”:  Any account established and maintained by the Servicer with respect to the related Mortgage Loans and any REO Property, pursuant to the terms of the Servicing Agreement.

“ Servicing Advances ”:  As defined in the Servicing Agreement.

“ Servicing Agreement”:  The Purchase, Warranties and Servicing Agreement, dated as of August 1, 2004, between the Seller and the Company, as modified by the Reconstitution Agreement, or any other agreement providing for the servicing of the Mortgage Loans entered into pursuant to the provisions of Section 3.09 hereof.

“ Servicer Certification ”:  A written certification delivered to the Trustee, the Master Servicer and the Depositor pursuant to Section 6.07 of the Servicing Agreement covering servicing of the Mortgage Loans by the Servicer and signed by an officer of the Servicer.

“ Servicing Fee ”:  With respect to the Company and each Mortgage Loan and for any calendar month, the fee payable to the Company determined pursuant to the Servicing Agreement.  

“ Servicing Fee Rate ”:  With respect to each Mortgage Loan, the per annum servicing fee rate set forth on the Mortgage Loan Schedule.

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

“ Standby Letter of Credit ”:  The letter of credit provided by the Company, dated November 30, 2004, for the benefit of the Class L Certificateholders.

“ Standby Letter of Credit Provider ”:  The Company.

“ Standby Reserve Account ”:  The separate trust account or accounts created and maintained by the Securities Administrator, on behalf of the Trustee pursuant to Section 4.04 hereof in the name of the Trustee for the benefit of the Securities Administrator, as Paying Agent for the Trustee and the Class L Certificateholders and designated “Standby Reserve Account, U.S. Bank National Association, as Trustee, in trust for the registered holders of Class L Certificates of Charlie Mac Trust 2004-2, Mortgage Loan Pass-Through Certificates, Series 2004-2” and which must be an Eligible Account.

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

“ Stated Amount ”:  With respect to any Distribution Date, the aggregate of the Class Certificate Principal Balances of the Class L Certificates on such Distribution Date, immediately prior to any distributions of principal or allocation of Realized Losses and Charged-off Amounts on such Distribution Date.

“ Stated Principal Balance ”:  With respect to any Mortgage Loan (other than a Charged-off Mortgage Loan): (a) as of the Distribution Date in December 2004, the Cut-Off Date Principal Balance of such Mortgage Loan,  (b) thereafter as of any date of determination up to and including the Distribution Date on which the proceeds, if any, of a Liquidation Event with respect to such Mortgage Loan would be distributed, the outstanding principal balance of such Mortgage Loan as of the Cut-Off Date, as shown in the Mortgage Loan Schedule, minus , in the case of each Mortgage Loan, the sum of (i) the principal portion of each Monthly Payment due on a Due Date subsequent to the Cut-Off Date, whether or not received, (ii) all Principal Prepayments received after the Cut-Off Date, to the extent distributed pursuant to Section 5.01 before such date of determination and (iii) all Liquidation Proceeds and Insurance Proceeds applied by the Servicer as recoveries of principal in accordance with the applicable provisions of the Servicing Agreement, to the extent distributed pursuant to Section 5.01 before such date of determination; and (c) as of any date of determination 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 Charged-off Mortgage Loan, as of any date following the date on which such Mortgage Loan became a Charged-off Mortgage Loan, zero.  

With respect to any REO Property: (x) as of any date of determination up to and 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, 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 5.01 before such date of determination; and (y) as of any date of determination 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.

“ Step Down Conditions ”: As of the first Distribution Date as to which any decrease in any Senior Prepayment Percentage applies, (i) the outstanding Principal Balance of all Mortgage Loans 60 days or more Delinquent (including Mortgage Loans in REO and foreclosure) (averaged over the preceding six month period), as a percentage of the aggregate of the Class Certificate Principal Balances of the Classes of Subordinate Certificates on such Distribution Date, does not equal or exceed 50% and (ii) cumulative Realized Losses and Charged-off Amounts with respect to all of the Mortgage Loans do not exceed:

·

for any Distribution Date on or after the tenth anniversary of the first Distribution Date, 30% of the aggregate Certificate Principal Balance of the Subordinate Certificates as of the Closing Date,

·

for any Distribution Date on or after the eleventh anniversary of the first Distribution Date, 35% of the aggregate Certificate Principal Balance of the Subordinate Certificates as of the Closing Date,

·

for any Distribution Date on or after the twelfth anniversary of the first Distribution Date, 40% of the aggregate Certificate Principal Balance of the Subordinate Certificates as of the Closing Date,

·

for any Distribution Date on or after the thirteenth anniversary of the first Distribution Date, 45% of the aggregate Certificate Principal Balance of the Subordinate Certificates as of the Closing Date, and

·

for any Distribution Date on or after the fourteenth anniversary of the first Distribution Date, 50% of the aggregate Certificate Principal Balance of the Subordinate Certificates as of the Closing Date.

“ Stripped Interest Rate ”:  With respect to each Mortgage Loan, the excess, if any, of the Net Loan Rate for such Mortgage Loan over the Required Coupon for such Mortgage Loan.

“ Subordinate Certificate ”:  Any one of the Class B-1, Class B-2, Class B-3 or Class L Certificates.

“ Subordinate Certificate Pass-Through Rate ”:  With respect to each Class of Subordinate Certificates and any Distribution Date, the rate per annum equal to the weighted average of the Required Coupon for Loan Group 1 and Loan Group 2 (weighted on the basis of the respective Subordinate Components).

“ Subordinate Class Expense Share ”:  For each Class of Subordinate Certificates and each Accrual Period, the Subordinate Class Expense Share shall be allocated in reverse order of their respective alphanumerical Class designations (beginning with the Class of Subordinate Certificates with the highest alphanumerical designation), and will be an amount equal to (i) the sum of, without duplication, (a) the amounts paid to the Trustee from the Trust Fund during such Accrual Period pursuant to Section 8.05 hereof to the extent such amounts were paid for ordinary or routine expenses and were not taken into account in computing the Net Loan Rate of any Mortgage Loan and (b) amounts described in clause (y) of the definition of Available Funds herein to the extent such amounts were paid for ordinary or routine expenses and were not taken into account in computing the Net Loan Rate of any Mortgage Loan minus (ii) amounts taken into account under clause (i) of this definition in determining the Subordinate Class Expense Share of any Class of Subordinate Certificates having a higher alphanumeric designation.  In no event, however, shall the Subordinate Class Expense Share for any Class of Subordinate Certificates and any Accrual Period exceed the product of (i) (a) the Pass-Through Rate for such Class divided by (b) 12 and (ii) the Class Certificate Principal Amount of such Class of Subordinate Certificates as of the beginning of the related Accrual Period.

“ Subordinate Component ”:  With respect to each Loan Group and any Distribution Date, the excess of the related Non-PO Loan Group Balance for such Distribution Date over the aggregate Class Certificate Principal Balance of the related Senior Certificate Group (other than the related PO Component) immediately preceding such Distribution Date.  The designation “1” and “2” appearing after the corresponding Loan Group designation is used to indicate a Subordinate Component allocable to Loan Group 1 and Loan Group 2, respectively.

“ Subordinate Percentage ”:  With respect to each Loan Group and any Distribution Date, the difference between 100% and the related Senior Percentage for such Loan Group and Distribution Date.

“ Subordinate Prepayment Percentage ”:  With respect to each Loan Group and any Distribution Date, the difference between 100% and the related Senior Prepayment Percentage for such Loan Group for such Distribution Date.

“ Subordinate Principal Distribution Amount ”:  With respect each Loan Group and any Distribution Date, an amount equal to the sum of:

(1)

 the related Subordinate Percentage of all amounts described in clauses (a) through (d) of the definition of “Principal Distribution Amount” for that Distribution Date for that Loan Group;

(2)

with respect to each Mortgage Loan in that Loan Group that became a Liquidated Mortgage Loan during the related Prepayment Period, the applicable Non-PO Percentage of the amount of the Net Liquidation Proceeds allocated to principal received with respect thereto remaining after application thereof pursuant to clause (2) of the definition of “Senior Principal Distribution Amount” for that Distribution Date, up to the applicable Non-PO Percentage of the related Subordinate Percentage of the Stated Principal Balance of such Mortgage Loan; and

(3)

the related Subordinated Prepayment Percentage of all amounts described in clause (f) of the definition of “Principal Distribution Amount” for such Distribution Date for that Loan Group.

“ Substitution Adjustment ”:  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 on behalf of every REMIC created hereunder under the REMIC Provisions, together with any and all other information reports or returns that may be required to be furnished to the Certificateholders or filed with the Internal Revenue Service or any other governmental taxing authority under any applicable provisions of federal, state or local tax laws.

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

“ Transfer ”:  Any direct or indirect transfer or sale of any Ownership Interest in a Residual Certificate.

“ Transfer Affidavit ”:  As defined in Section 6.02(e)(ii) hereof.

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

“ Trust ”:  Charlie Mac Trust 2004-2, the trust created hereunder.

“ Trust Fund ”:  The segregated pool of assets subject hereto, constituting the primary trust created hereby and to be administered hereunder, with respect to which a REMIC election is to be made, such Trust Fund 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 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); (v) the Distribution Account (subject to the last sentence of this definition), any REO Account and the Standby Reserve Account and such assets that are deposited therein from time to time and any investments thereof, together with any and all income, proceeds and payments with respect thereto; (vi) all right, title and interest of the Seller in and to the Servicing Agreement, including the Servicing Account and (vii) the Standby Letter of Credit.  Notwithstanding the foregoing, however, the Trust Fund specifically excludes (1) all payments and other collections of interest and principal due on the Mortgage Loans on or before the Cut-Off Date and principal received before the Cut-Off Date (except any principal collected as part of a payment due after the Cut-Off Date) and (2) all income and gain realized from Permitted Investments of funds on deposit in the Distribution Account.

“ Trustee ”:  U.S. Bank National Association, a national banking association, its successors and assigns, or any successor trustee appointed as provided herein.

“ Trustee Fee ”:  The annual fee paid to the Trustee for its services rendered under this Agreement on the anniversary of the Closing Date.  

“ Undercollateralized Group ”:  With respect to any Distribution Date and Loan Group, as to which the aggregate Class Certificate Principal Balance of the related classes of Senior Certificates (other than the related PO Component), after giving effect to distributions pursuant to Section 5.01(a) on such date, is greater than the Non-PO Loan Group Balance of that Loan Group for such Distribution Date.

“ Underwriter’s Exemption ”: Prohibited Transaction Exemption 90-59 (Exemption Application No. D-8374), as amended by Prohibited Transaction Exemption 97-34 (Exemption Application Nos. D-10245 and D-10246), as amended by Prohibited Transaction Exemption 2000-58 (Exemption Application No. D-10829) and as amended by Prohibited Transaction Exemption 2002-41 (Exemption Application No. D-11077) (or any successor thereto), or any substantially similar administrative exemption granted by the U.S. Department of Labor.

“ 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 on such Mortgaged Property.

“ United States Person ” or “ U.S. Person ”:  A “United States person” within the meaning set forth in Section 7701(a)(30) of the Code or successor provisions.

“ Unpaid Interest Shortfall Amount ”:  With respect to each Class of Certificates (and with respect to the Class A-3 Certificates, the IO-1 Component and IO-2 Component) and (i) the first Distribution Date, zero, and (ii) any Distribution Date after the first Distribution Date, the amount, if any, by which (1)(a) the Monthly Interest Distributable Amount for that Class or IO Component for the immediately preceding Distribution Date exceeds (b) the aggregate amount distributed on that Class or IO Component in respect of such Monthly Interest Distributable Amount on the preceding Distribution Date plus (2) any such shortfalls remaining unpaid from prior Distribution Dates.

“ Upper Tier REMIC ”:  As described in the Preliminary Statement.

“ Value ”:  With respect to any Mortgage Loan and the related Mortgaged Property, the lesser of:

(i)

the value of such Mortgaged Property as determined by an appraisal made for the originator of the Mortgage Loan at the time of origination of the Mortgage Loan by an appraiser who met the minimum requirements of Fannie Mae and Freddie Mac; and

(ii)

the purchase price paid for the related Mortgaged Property by the Mortgagor with the proceeds of the Mortgage Loan;

provided , however , that in the case of a Refinancing Mortgage Loan, such value of the Mortgaged Property is based solely upon the value determined by an appraisal made for the originator of such Refinancing Mortgage Loan at the time of origination by an appraiser who met the minimum requirements of Fannie Mae and Freddie Mac.

“ Voting Rights ”:  The portion of the voting rights of all of the Certificates that is allocated to any Certificate.  98% of the voting rights shall be allocated among the Classes of Regular Certificates (other than the Class A-3 and Class A-R Certificates), pro rata , based on a fraction, expressed as a percentage, the numerator of which is the Class Certificate Principal Balance of such Class and the denominator of which is the aggregate of the Class Certificate Principal Balances then outstanding, 1% of the voting rights shall be allocated to the Class A-3 Certificates and 1% of the voting rights shall be allocated to the Class A-R Certificate; provided, however , that when none of the Regular Certificates is outstanding, 100% of the voting rights shall be allocated to the Holder of the Class A-R Certificate.  The voting rights allocated to a Class of Certificates shall be allocated among all Holders of such Class, pro rata , based on a fraction the numerator of which is the Certificate Principal Balance or Certificate Notional Amount, as applicable, of each Certificate of such Class and the denominator of which is the Class Certificate Principal Balance or Class Certificate Notional Amount, as applicable, of such Class; provided, however , that any Certificate registered in the name of the Master Servicer, the Securities Administrator or the Trustee or any of their respective affiliates shall not be included in the calculation of Voting Rights.

“ Writedown Amount ”:  The reduction described in Section 5.03(d).

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.

ARTICLE II

CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES

SECTION 2.01.   Conveyance of Mortgage Loans .

(a)

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 (i) each Mortgage Loan identified on the Mortgage Loan Schedule, including the related Cut-Off Date Principal Balance, all interest due thereon after the Cut-Off Date and all collections in respect of interest and principal due after the Cut-Off Date; (ii) all the Depositor’s right, title and interest in and to the Distribution Account and the Standby Reserve Account and all amounts from time to time credited to and the proceeds of the Distribution Account and the Standby Reserve Account; (iii) any real property that secured each such Mortgage Loan and that has been acquired by foreclosure or deed in lieu of foreclosure; (iv) the Depositor’s interest in any insurance policies in respect of the Mortgage Loans; (v) all proceeds of any of the foregoing; and (vi) all other assets included or to be included in the Trust Fund.  Such assignment includes all interest and principal due to the Depositor or the Master Servicer after the Cut-Off Date with respect to the Mortgage Loans.  In addition, on or prior to the Closing Date, the Depositor shall cause the Standby Letter of Credit Provider to issue the Standby Letter of Credit to the Trustee.  The Depositor hereby directs the Trustee to execute, not in its individual capacity, but solely as Trustee on behalf of the Trust, and deliver the Standby Letter of Credit.

(b)

Concurrently with the execution and delivery of this Agreement, the Depositor does hereby assign to the Trustee all of its rights and interest under the Mortgage Loan Purchase Agreement, including all rights of the Seller under the Servicing Agreement to the extent assigned in the Mortgage Loan Purchase Agreement.  The Trustee hereby accepts such assignment, and shall be entitled to exercise all rights of the Depositor under the Mortgage Loan Purchase Agreement and all rights of the Seller under the Servicing Agreement as if, for such purpose, it were the Depositor or the Seller, as applicable, including the Seller’s right to enforce remedies for breaches of representations and warranties and delivery of defective Mortgage Loan documents.  The foregoing sale, transfer, assignment, set-over, deposit and conveyance does not and is not intended to result in creation or assumption by the Trustee of any obligation of the Depositor, the Seller or any other Person in connection with the Mortgage Loans or any other agreement or instrument relating thereto except as specifically set forth herein.

(c)

In connection with such transfer, conveyance and assignment of the Mortgage Loans, the Seller does hereby deliver to, and deposit with, or cause to be delivered to and deposited with, the Custodian acting on the Trustee’s behalf, the following documents or instruments with respect to each Mortgage Loan so transferred and assigned:

(i)

the original Mortgage Note endorsed by manual or facsimile signature in blank in the following form:  “Pay to the order of ___________ without recourse,” with all intervening endorsements showing a complete chain of endorsement from the originator to the Person endorsing the Mortgage Note (each such endorsement being sufficient to transfer all right, title and interest of the party so endorsing, as noteholder or assignee thereof, in and to that Mortgage Note); or, with respect to any Lost Mortgage Note, a lost note affidavit from the related originator or the Seller stating that the original Mortgage Note was lost or destroyed, together with a copy of such Mortgage Note;

(ii)

except as provided below, the original recorded Mortgage or a copy of such Mortgage certified by the related originator as being a true and complete copy of the Mortgage;

(iii)

a duly executed assignment of the Mortgage (which may be included in a blanket assignment or assignments), endorsed in the following form:  “U.S. Bank National Association, in trust for the Charlie Mac Trust 2004-2 for the benefit of the Holders of the Mortgage Loan Pass-Through Certificates, Series 2004-2” together with, except as provided below, all interim recorded assignments of such mortgage (each such assignment, when duly and validly completed, to be in recordable form and sufficient to effect the assignment of and transfer to the assignee thereof, under the Mortgage to which the assignment relates); provided that, if the related Mortgage has not been returned from the applicable public recording office, such assignment of the Mortgage may exclude the information to be provided by the recording office;

(iv)

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

(v)

except as provided below, the original or duplicate original lender’s title policy and all riders thereto.

(d)

Assignments of each Mortgage with respect to each Mortgage Loan that is not a MERS Mortgage Loan shall be recorded; provided, however, that such assignments need not be recorded if, in the Opinion of Counsel (which must be from Independent Counsel and not at the expense of the Trust or the Trustee) acceptable to the Trustee, the Rating Agency and the Master Servicer, recording in such states is not required to protect the Trustee’s interest in the related Mortgage Loans; provided, further, notwithstanding the delivery of any Opinion of Counsel, each assignment of Mortgage shall be submitted for recording by the Seller (or the Seller will cause the Servicer to submit each such assignment for recording), at the cost and expense of the Seller, in the manner described above, at no expense to the Trust or Trustee, upon the earliest to occur of (1) reasonable direction by the Majority Certificateholders, (2) the occurrence of a bankruptcy or insolvency relating to the Seller or the Depositor, or (3) with respect to any one Assignment of Mortgage, the occurrence of a bankruptcy, insolvency or foreclosure relating to the Mortgagor under the related Mortgage.  Subject to the preceding sentence, as soon as practicable after the Closing Date (but in no event more than three months thereafter except to the extent delays are caused by the applicable recording office), and to the extent recordation is required under the laws of the applicable jurisdiction to protect the Trustee’s and the Certificateholders’ interest in the related Mortgage Loan, the Seller shall properly record (or the Seller will cause the Servicer to properly record), at the expense of the Seller (with the cooperation of the Depositor, the Master Servicer and the Trustee), in each public recording office where the related Mortgages are recorded, each assignment with respect to a Mortgage Loan that is not a MERS Mortgage Loan.

If in connection with any Mortgage Loan the Seller cannot deliver (a) the original recorded Mortgage, (b) all interim recorded assignments or (c) the lender’s title policy (together with all riders thereto) satisfying the requirements of clause (ii), (iii) or (v) above, respectively, concurrently with the execution and delivery hereof because such document or documents have not been returned from the applicable public recording office in the case of clause (ii) or (iii) above, or because the title policy has not been delivered to either the Custodian or the Seller by the applicable title insurer in the case of clause (v) above, the Seller shall promptly deliver to the Custodian, in the case of clause (ii) or (iii) above, such original Mortgage or such interim assignment, as the case may be, with evidence of recording indicated thereon upon receipt thereof from the public recording office, or a copy thereof, certified, if appropriate, by the relevant recording office, but in no event shall any such delivery of the original Mortgage and each such interim assignment or a copy thereof, certified, if appropriate, by the relevant recording office, be made later than one year following the Closing Date, or, in the case of clause (v) above, no later than 120 days following the Closing Date; provided, however, in the event the Seller is unable to deliver by such date each Mortgage and each such interim assignment by reason of the fact that any such documents have not been returned by the appropriate recording office, or, in the case of each such interim assignment, because the related Mortgage has not been returned by the appropriate recording office, the Seller shall deliver such documents to the Custodian as promptly as possible upon receipt thereof and, in any event, within 720 days following the Closing Date.  The Seller shall forward or cause to be forwarded to the Custodian (a) from time to time additional original documents evidencing an assumption or modification of a Mortgage Loan and (b) any other documents required to be delivered by the Seller to the Custodian.  In the event that the original Mortgage is not delivered and in connection with the payment in full of the related Mortgage Loan and the public recording office requires the presentation of a “lost instruments affidavit and indemnity” or any equivalent document, because only a copy of the Mortgage can be delivered with the instrument of satisfaction or reconveyance, the Seller shall execute and deliver or cause to be executed and delivered such a document to the public recording office.  In the case where a public recording office retains the original recorded Mortgage or in the case where a Mortgage is lost after recordation in a public recording office, the Seller shall deliver to the Custodian a copy of such Mortgage certified by such public recording office to be a true and complete copy of the original recorded Mortgage.

(e)

The Seller shall deliver or cause to be delivered to the Custodian, acting on behalf of the Trustee, promptly upon receipt thereof, any other documents constituting a part of a Mortgage File received with respect to any Mortgage Loan sold to the Depositor by the Seller, including, but not limited to, any original documents evidencing an assumption or modification of any Mortgage Loan.

(f)

For Mortgage Loans (if any) that have been prepaid in full after the Cut-off Date and prior to the Closing Date, the Seller, in lieu of delivering the above documents, herewith delivers to the Custodian on behalf of the Trustee, an Officer’s Certificate which shall include a statement to the effect that all amounts received in connection with such prepayment that are required to be deposited in the Distribution Account have been so deposited.  All original documents that are not delivered to the Custodian on behalf of the Trust shall be held by the Servicer in trust for the Trustee, for the benefit of the Trust and the Certificateholders.

(g)

The Depositor herewith delivers to the Trustee an executed copy of the Mortgage Loan Purchase Agreement.

SECTION 2.02.   Acceptance by Trustee .

The Custodian, on behalf of the Trustee, by execution and delivery hereof, acknowledges receipt of the documents identified in the Initial Certification issued by it in the form annexed hereto as Exhibit G and declares that it holds and will hold such documents and the other documents delivered to it constituting the Mortgage Files, and the Trustee declares that it holds or will hold such other assets as are included in the Trust Fund, in trust for the exclusive use and benefit of all present and future Certificateholders.  The Custodian acknowledges that it will maintain possession in the State of California or Utah of the Mortgage Notes held by it, unless otherwise permitted by the Rating Agencies and the Trustee.  

The Custodian agrees to execute and deliver on the Closing Date to the Depositor and the Trustee an Initial Certification in the form annexed hereto as Exhibit G.  Based on its review and examination, and only as to the documents identified in such Initial Certification, the Custodian acknowledges, subject to any applicable exceptions noted on Exhibit G, that such documents appear regular on their face and relate to such Mortgage Loan.  The Custodian shall not be under any duty or obligation to (i) inspect, review or examine said documents, instruments, certificates or other papers to determine that the same are genuine, enforceable or appropriate for the represented purpose or that they have actually been recorded in the real estate records or that they are other than what they purport to be on their face or (ii) determine whether the Mortgage File includes any of the documents specified in Section 2.01(c)(iv) unless the Mortgage Loan Schedule indicates that such documents should be included.

Not later than 90 days after the Closing Date, the Custodian shall deliver to the Depositor and the Trustee a Final Certification in the form annexed hereto as Exhibit H, with any applicable exceptions noted thereon.  The Custodian shall make available, upon request of any Certificateholder, a copy of any exceptions noted on the Initial Certification or the Final Certification.  The Custodian shall make available, upon request of the Trustee, the identity of the originator for any Mortgage Loan with a material exception.

If, in the course of such review, the Custodian finds any document constituting a part of a Mortgage File which does not meet the requirements of Section 2.01, the Custodian shall list such as an exception in the Final Certification; provided, however, that the Custodian shall not make any determination as to whether (i) any endorsement is sufficient to transfer all right, title and interest of the party so endorsing, as noteholder or assignee thereof, in and to that Mortgage Note, (ii) any assignment is in recordable form or is sufficient to effect the assignment of and transfer to the assignee thereof under the mortgage to which the assignment relates or (iii) determine whether the Mortgage File includes any of the documents specified in Section 2.01(c)(iv) unless the Mortgage Loan Schedule indicates that such documents should be included.  

Upon receiving the Final Certification from the Custodian, the Trustee shall notify the Seller of any document defects listed as exceptions in each such Final Certification.  

Upon the discovery by the Seller or the Depositor (or upon receipt by the Trustee of written notification of such breach) of a breach of any of the representations and warranties made by the Seller in the Mortgage Loan Purchase Agreement in respect of any Mortgage Loan that materially adversely affects such Mortgage Loan or the interests of the related Certificateholders in such Mortgage Loan, the party discovering such breach shall give prompt written notice to the other parties to this Agreement.

The Depositor and the Trustee intend that the assignment and transfer herein contemplated constitute a sale of the Mortgage Loans, the related Mortgage Notes and the related documents, conveying good title thereto free and clear of any liens and encumbrances, from the Depositor to the Trustee and that such property not be part of the Depositor’s estate or property of the Depositor in the event of any insolvency by the Depositor.  In the event that such conveyance is deemed to be, or to be made as security for, a loan, the parties intend that the Depositor shall be deemed to have granted and does hereby grant to the Trustee a first priority perfected security interest in all of the Depositor’s right, title and interest in and to the Mortgage Loans, the related Mortgage Notes and the related documents, and that this Agreement shall constitute a security agreement under applicable law.

SECTION 2.03.   Repurchase or Substitution of Mortgage Loans by the Company and the Seller .

(a)

Upon its discovery or receipt of written notice of any materially defective document in, or that a document is missing from, a Mortgage File or of the breach by the Company of any representation, warranty or covenant under the Servicing Agreement in respect of any Mortgage Loan which materially adversely affects the value of that Mortgage Loan or the interest therein of the Certificateholders, the Trustee shall promptly notify the Company of such defect, missing document or breach and request that the Company deliver such missing document or cure such defect or breach within 90 days from the date that the Seller was notified of such missing document, defect or breach, and if the Company does not deliver such missing document or cure such defect or breach in all material respects during such period, the Trustee shall enforce the Company’s obligation under the Servicing Agreement and cause the Company to repurchase that Mortgage Loan from the Trust Fund at the Repurchase Price (as defined in the Servicing Agreement) on or prior to the Determination Date following the expiration of such 90 day period.  It is understood and agreed that the obligation of the Company (i) 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, and (ii) indemnify the Seller under the Servicing Agreement, shall constitute the only remedies against the Company respecting such omission, defect or breach available to the Trustee on behalf of the Certificateholders.

(b)

Upon discovery or receipt of written notice of the breach by the Seller of any representation, warranty or covenant under the Mortgage Loan Purchase Agreement or in Section 2.04 or Section 2.08 hereof in respect of any Mortgage Loan which materially adversely affects the value of that Mortgage Loan or the interest therein of the Certificateholders, the Trustee (or the Custodian, on behalf of the Trustee) shall promptly notify the Seller of such breach and request that the Seller cure such breach within 90 days from the date that the Seller was notified of such breach, and if the Seller does not cure such breach in all material respects during such period, the Trustee shall enforce the Seller’s obligation under the Mortgage Loan Purchase Agreement and cause the Seller to repurchase that Mortgage Loan from the Trust Fund at the Purchase Price on or prior to the Determination Date following the expiration of such 90 day period (subject to Section 2.03(e) below); provided, however, that, in connection with any such breach that could not reasonably have been cured within such 90 day period, if the Seller shall have commenced to cure such breach within such 90 day period, the Seller shall be permitted to proceed thereafter diligently and expeditiously to cure the same within the additional period provided under the Mortgage Loan Purchase Agreement.  In lieu of repurchasing any such Mortgage Loan as provided above, the Seller may cause such Mortgage Loan to be removed from the Trust Fund (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(g) below.  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 breach has occurred and is continuing shall constitute the sole remedy against the Seller respecting such omission, defect or breach available to the Trustee on behalf of the Certificateholders.  

(c)

The Purchase Price or Repurchase Price (as defined in the Servicing Agreement) for a Mortgage Loan repurchased hereunder or such other amount due shall be deposited in the Distribution Account on or prior to the next Determination Date after the Company’s or Seller’s obligation to repurchase such Mortgage Loan arises.  Upon receipt of the related deposit in the Distribution Account, the Trustee shall cause the Custodian to release to the Company or Seller, as applicable, the related Mortgage File and shall execute and deliver such instruments of transfer or assignment, in each case without recourse, representation or warranty, as the Company or Seller, as applicable, shall furnish to it and as shall be necessary to vest in the Company or Seller, as applicable, any Mortgage Loan released pursuant hereto and the Trustee and the Custodian shall have no further responsibility with regard to such Mortgage File (it being understood that the Trustee and Custodian shall have no responsibility for determining the sufficiency of such assignment for its intended purpose).  

Notwithstanding anything to the contrary set forth above, with respect to any breach by the Seller of a representation or warranty made by the Seller herein or in the Mortgage Loan Purchase Agreement that materially and adversely affects the value of a Mortgage Loan or the Mortgage Loans or the interest therein of the Certificateholders, if the Seller would not be in breach of such representation or warranty but for a breach by the Company of a representation and warranty made by the Company in the Servicing Agreement, then the Company, in the manner and to the extent set forth therein, and not the Seller, hereunder shall be required to remedy such breach.

(d)

The Trustee shall enforce the obligations of the Seller under the Mortgage Loan Purchase Agreement including, without limitation, any obligation of the Seller to purchase a Mortgage Loan on account of a breach of a representation, warranty or covenant as described in this Section 2.03(b) and its obligation to indemnify the Trust Fund with respect to any such breach.

(e)

If pursuant to the provisions of Section 2.03(b), the Seller repurchases or otherwise removes from the Trust Fund a Mortgage Loan that is a MERS Mortgage Loan, the Seller shall take (or shall cause the Servicer to take), at the expense of the Seller (with the cooperation of the Depositor, the Master Servicer and the Trustee), such actions as are necessary either (i) cause MERS to execute and deliver an Assignment of Mortgage in recordable form to transfer the Mortgage from MERS to the Seller and shall cause such Mortgage to be removed from registration on the MERS® System in accordance with MERS’ rules and regulations or (ii) cause MERS to designate on the MERS® System the Seller or its designee as the beneficial holder of such Mortgage Loan.

(f)

[Reserved].

(g)

Any substitution of Qualified Substitute Mortgage Loans for Deleted Mortgage Loans made pursuant to Section 2.03(b) above must be effected prior to the last Business Day that is within two years after the Closing Date.  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 Custodian, on behalf of the Trustee, for such Qualified Substitute Mortgage Loan or Loans, the Mortgage Note, the Mortgage, the Assignment to the Trustee, and such other documents and agreements, with all necessary endorsements thereon, as are required under the Custodial Agreement, together with an Officers’ Certificate stating that each such Qualified Substitute Mortgage Loan satisfies the definition thereof and specifying the Substitution Adjustment (as described below), if any, in connection with such substitution; provided, however, that, in the case of any Qualified Substitute Mortgage Loan that is a MERS Mortgage Loan, the Seller shall provide such documents and take such other action with respect to such Qualified Substitute Mortgage Loans as are required pursuant to the Custodial Agreement.  The Custodian, on behalf of the Trustee, shall acknowledge receipt for such Qualified Substitute Mortgage Loan or Loans and shall, within five Business Days thereafter, review such documents as specified in the Custodial Agreement and deliver to the Servicer, with respect to such Qualified Substitute Mortgage Loan or Loans, a certification substantially in the form attached to the Custodial Agreement as Exhibit C-1, with any exceptions noted thereon.  Pursuant to the Custodial Agreement, within 180 days of the date of substitution, the Custodian, on behalf of the Trustee, shall deliver to the Seller a certification substantially in the form of Exhibit C-2 thereto with respect to such Qualified Substitute Mortgage Loan or Loans, with any exceptions noted thereon.  Monthly Payments due with respect to Qualified Substitute Mortgage Loans in the month of substitution are not part of the Trust Fund and will be retained by the Seller.  For the month of substitution, distributions to Certificateholders will reflect the collections and recoveries in respect of such Deleted Mortgage Loan in the Due Period preceding the month of substitution and the Depositor or the Seller, as the case may be, shall thereafter be entitled to retain all amounts subsequently received in respect of such Deleted Mortgage Loan.  The Seller shall give or cause to be given written notice to the Certificateholders that such substitution has taken place, shall amend the  Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage Loan from the terms of this Agreement and the substitution of the Qualified Substitute Mortgage Loan or Loans and shall deliver a copy of such amended Mortgage Loan Schedule to the Trustee and the Custodian.  Upon such substitution, such Qualified Substitute Mortgage Loan or Loans shall constitute part of the Trust Fund and shall be subject in all respects to the terms of this Agreement and, in the case of a substitution effected by the Seller, the Mortgage Loan Purchase Agreement, including, in the case of a substitution effected by the Seller all representations and warranties thereof included in the Mortgage Loan Purchase Agreement and all representations and warranties thereof set forth in Section 2.04 hereof, in each case 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 Seller shall determine, and provide written certification to the Trustee and the Seller as to the amount (each, a “ Substitution Adjustment ”), if any, by which the aggregate Purchase Price of all such Deleted Mortgage Loans exceeds the aggregate, as to each such Qualified Substitute Mortgage Loan, of the principal balance thereof as of the date of substitution, together with one month’s interest on such principal balance at the applicable Net Loan Rate.  On or prior to the next Determination Date after the Seller’s obligation to repurchase the related Deleted Mortgage Loan arises, the Seller will deliver or cause to be delivered to the Master Servicer for deposit in the Distribution Account an amount equal to the related Substitution Adjustment, if any, and the Custodian, upon receipt of the related Qualified Substitute Mortgage Loan or Loans, shall release to the Seller the related Mortgage File or Files and shall execute and deliver such instruments of transfer or assignment, in each case without recourse, as the Seller shall deliver to it and as shall be necessary to vest therein any Deleted Mortgage Loan released pursuant hereto.

In addition, the Seller shall obtain at its own expense and deliver to the Trustee and the Securities Administrator an Opinion of Counsel to the effect that such substitution (either specifically or as a class of transactions) will not cause an Adverse REMIC Event.  If such Opinion of Counsel cannot be delivered, then such substitution may only be effected at such time as the required Opinion of Counsel can be given.

SECTION 2.04.   Representations and Warranties of the Seller with Respect to the Mortgage Loans .

The Seller hereby makes the following representations and warranties to the Trustee on behalf of the Certificateholders as of the Closing Date with respect to the Mortgage Loans:

(i)

Each Mortgage Loan at the time it was made complied in all material respects with applicable local, state, and federal laws, including, but not limited to, all applicable predatory and abusive lending laws.

(ii)

No Mortgage Loan is a “High Cost Loan” or “Covered Loan,” as applicable, as such terms are defined in Standard & Poor’s LEVELS® Glossary, Appendix E, in effect as of the Closing Date and no Mortgage Loan originated on or after October 1, 2002 through March 6, 2003 is governed by the Georgia Fair Lending Act; and

(iii)

With respect to each representation and warranty with respect to any Mortgage Loan made by the Company in the Servicing Agreement that is made as of the Closing Date (as defined in the Servicing Agreement), to the Seller’s knowledge, no event has occurred since the related Closing Date (as defined in the Servicing Agreement) that would render such representations and warranties to be untrue in any material respect.

With respect to the representations and warranties incorporated in this Section 2.04 that are made to the best of the Seller’s knowledge or as to which the Seller has no knowledge, if it is discovered by the Depositor, the Seller, the Master Servicer, the Securities Administrator or the Trustee that the substance of such representation and warranty is inaccurate and such inaccuracy materially and adversely affects the value of the related Mortgage Loan or the interest therein of the Certificateholders then, notwithstanding the Seller’s lack of knowledge with respect to the substance of such representation and warranty being inaccurate at the time the representation or warranty was made, such inaccuracy shall be deemed a breach of the applicable representation or warranty.

It is understood and agreed that the representations and warranties in this Section 2.04 shall survive the conveyance and assignment of the Mortgage Files to the Trustee and the delivery of the Mortgage Files to the Custodian for the benefit of the Trustee and the Certificateholders and shall inure to the benefit of the Certificateholders notwithstanding any restrictive or qualified endorsement or assignment. &n