POOLING AND SERVICING AGREEMENT

Pooling and Servicing Agreement

You are currently viewing:

This Pooling and Servicing Agreement involves

Terwin Mortgage Trust, | U.S. BANK NATIONAL ASSOCIATION, | SPECIALIZED LOAN SERVICING, LLC, | MERRILL LYNCH MORTGAGE INVESTORS, INC.

. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.

Title: POOLING AND SERVICING AGREEMENT
Governing Law: Delaware Date: 8/12/2005

POOLING AND SERVICING AGREEMENT, Parties: terwin mortgage trust , u.s. bank national association , specialized loan servicing llc , merrill lynch mortgage investors inc.

Exhibit 4.1

EXECUTION COPY

MERRILL LYNCH MORTGAGE INVESTORS, INC.

Depositor

TERWIN ADVISORS LLC,

Seller

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,

Servicing Administrator, Securities Administrator And Backup Servicer

SPECIALIZED LOAN SERVICING, LLC,

Servicer

and

U.S. BANK NATIONAL ASSOCIATION,

Trustee

_____________________________________

POOLING AND SERVICING AGREEMENT

Dated as of July 1, 2005

______________________________________

TERWIN MORTGAGE TRUST

ASSET-BACKED CERTIFICATES, SERIES TMTS 2005- 10HE

<PAGE>

TABLE OF CONTENTS

<TABLE>

Page

----

ARTICLE I DEFINITIONS....................................................................................1

ARTICLE II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES..................................52

SECTION 2.01. Conveyance of Mortgage Loans.....................................................52

SECTION 2.02. Acceptance by the Trustee of the Mortgage Loans..................................55

SECTION 2.03. Representations, Warranties and Covenants of the Depositor.......................57

SECTION 2.04. Representations and Warranties of the Servicing Administrator;

Representations and Warranties of the Servicer; Representations and

Warranties of the Securities Administrator; Representations and

Warranties of the Backup Servicer................................................61

SECTION 2.05. Substitutions and Repurchases of Mortgage Loans which are not "Qualified

Mortgages."......................................................................64

SECTION 2.06. Authentication and Delivery of Certificates......................................64

SECTION 2.07. REMIC Elections..................................................................64

SECTION 2.08. Covenants of the Servicing Administrator.........................................68

SECTION 2.09. Covenants of the Servicer........................................................68

SECTION 2.10. Related Agreements...............................................................68

SECTION 2.11. [Reserved].......................................................................68

SECTION 2.12. Permitted Activities of the Trust................................................68

SECTION 2.13. Qualifying Special Purpose Entity................................................68

ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS................................................69

SECTION 3.01. Servicer to Service Mortgage Loans...............................................69

SECTION 3.02. Servicing and Subservicing; Enforcement of the Obligations of the Servicer.......70

SECTION 3.03. Rights of the Depositor, the Securities Administrator, the Backup

Servicer and the Trustee in Respect of the Servicer..............................71

SECTION 3.04. The Servicing Administrator or Backup Servicer to Act as Servicer................71

SECTION 3.05. Collection of Mortgage Loan Payments; Collection Account; Servicing

Administrator Collection Account; Certificate Account............................72

SECTION 3.06. Collection of Taxes, Assessments and Similar Items; Escrow Accounts..............76

SECTION 3.07. Access to Certain Documentation and Information Regarding the Mortgage

Loans............................................................................76

SECTION 3.08. Withdrawals from a Collection Account, Servicing Administrator Collection

Account and Certificate Account..................................................77

SECTION 3.09. [RESERVED].......................................................................80

SECTION 3.10. [RESERVED].......................................................................80

SECTION 3.11. Enforcement of Due-On-Sale Clauses; Assumption Agreements........................80

SECTION 3.12. Realization Upon Defaulted Mortgage Loans; Determination of Excess

Proceeds.........................................................................81

SECTION 3.13. Trustee to Cooperate; Release of Mortgage Files..................................83

SECTION 3.14. Documents, Records and Funds in Possession of the Servicer to be Held for

the Trustee......................................................................84

SECTION 3.15. Servicing Compensation...........................................................85

SECTION 3.16. Access to Certain Documentation..................................................85

SECTION 3.17. Annual Statement as to Compliance................................................85

</TABLE>

-i-

<PAGE>

TABLE OF CONTENTS

(continued)

<TABLE>

Page

----

SECTION 3.18. Annual Independent Public Accountants' Servicing Statement; Financial

Statements.......................................................................86

SECTION 3.19. Duties and Removal of the Credit Risk Manager....................................86

SECTION 3.20. Periodic Filings.................................................................86

SECTION 3.21. Annual Certificate by Securities Administrator...................................87

SECTION 3.22. [RESERVED].......................................................................87

SECTION 3.23. Prepayment Penalty Reporting Requirements........................................87

SECTION 3.24. Servicer Reports.................................................................88

SECTION 3.25. Indemnification..................................................................88

SECTION 3.26. Non-Solicitation.................................................................89

SECTION 3.27. SLS as Servicer..................................................................90

SECTION 3.28. Quarterly Audit..................................................................90

SECTION 3.29. [RESERVED].......................................................................90

SECTION 3.30. SLS Servicing Tape; Storage and Access to Servicing Tape.........................90

ARTICLE IV ADMINISTRATION, MASTER SERVICING AND BACKUP SERVICING OF THE MORTGAGE LOANS...................91

SECTION 4.01. Servicing Administrator..........................................................91

SECTION 4.02. REMIC Related Covenants..........................................................91

SECTION 4.03. Fidelity Bond....................................................................92

SECTION 4.04. Powers to Act; Procedures........................................................92

SECTION 4.05. Due-on-Sale Clauses; Assumption Agreements.......................................93

SECTION 4.06. Documents, Records and Funds in Possession of Servicing Administrator to

be Held for Trustee..............................................................93

SECTION 4.07. Monitoring of the Servicer.......................................................93

SECTION 4.08. [RESERVED].......................................................................94

SECTION 4.09. [RESERVED].......................................................................94

SECTION 4.10. Presentment of Claims and Collection of Proceeds.................................94

SECTION 4.11. Trustee or Custodian to Retain Possession of Certain Insurance Policies

and Documents....................................................................94

SECTION 4.12. Realization Upon Defaulted Loans.................................................95

SECTION 4.13. REO Property.....................................................................95

SECTION 4.14. Annual Statement as to Compliance................................................95

SECTION 4.15. Annual Independent Public Accountants' Servicing Statement; Financial

Statements.......................................................................96

SECTION 4.16. Annual Certificate by Servicing Administrator....................................96

SECTION 4.17. Obligation of the Servicing Administrator in Respect of Prepayment

Interest Shortfalls..............................................................96

SECTION 4.18. Obligation of the Servicing Administrator in Respect of Collection Account.......97

SECTION 4.19. Backup Servicer..................................................................97

ARTICLE V DISTRIBUTIONS.................................................................................97

SECTION 5.01. Advances by the Servicing Administrator and the Servicer.........................97

SECTION 5.02. Advance Facility.................................................................98

SECTION 5.03. Reduction of Servicing Compensation in Connection with Prepayment

Interest Shortfalls.............................................................101

SECTION 5.04. Distributions on the REMIC Interests............................................101

</TABLE>

-ii-

<PAGE>

TABLE OF CONTENTS

(continued)

<TABLE>

Page

----

SECTION 5.05. Distributions...................................................................101

SECTION 5.06. Monthly Statements to Certificateholders........................................107

ARTICLE VI THE CERTIFICATES.............................................................................110

SECTION 6.01. The Certificates................................................................110

SECTION 6.02. Appointment of Certificate Registrar; Certificate Register; Registration

of Transfer and Exchange of Certificates........................................111

SECTION 6.03. Mutilated, Destroyed, Lost or Stolen Certificates...............................115

SECTION 6.04. Persons Deemed Owners...........................................................115

SECTION 6.05. Access to List of Certificateholders' Names and Addresses.......................116

SECTION 6.06. Book-Entry Certificates.........................................................116

SECTION 6.07. Notices to Depository...........................................................117

SECTION 6.08. Definitive Certificates.........................................................117

SECTION 6.09. Maintenance of Office or Agency.................................................117

SECTION 6.10. Authenticating Agents...........................................................118

ARTICLE VII THE DEPOSITOR, THE SERVICING ADMINISTRATOR, THE SERVICER AND THE SECURITIES

ADMINISTRATOR................................................................................119

SECTION 7.01. Respective Liabilities of the Depositor, the Servicing Administrator, the

Servicer and the Securities Administrator.......................................119

SECTION 7.02. Merger or Consolidation of the Depositor, the Servicing Administrator,

the Servicer or the Securities Administrator....................................119

SECTION 7.03. Limitation on Liability of the Depositor, Servicing Administrator, the

Servicer, the Backup Servicer, the Trustee, the Securities Administrator

and Others......................................................................119

SECTION 7.04. Limitation on Resignation of the Servicer.......................................120

SECTION 7.05. Errors and Omissions Insurance; Fidelity Bonds..................................121

SECTION 7.06. Limitation on Resignation of the Servicing Administrator and the Backup

Servicer........................................................................122

SECTION 7.07. Assignment of Backup Servicing and Master Servicing.............................122

SECTION 7.08. Limitation Upon Liability of the Credit Risk Manager............................123

ARTICLE VIII DEFAULT; TERMINATION OF SERVICER.............................................................123

SECTION 8.01. Events of Default...............................................................123

SECTION 8.02. Securities Administrator to Act; Servicing Administrator and Backup

Servicer to Act; Appointment of Successor.......................................125

SECTION 8.03. Notification to Certificateholders..............................................127

SECTION 8.04. Waiver of Servicer Events of Default............................................127

SECTION 8.05. SLS Events of Termination.......................................................127

ARTICLE IX CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR......................................128

SECTION 9.01. Duties of the Trustee...........................................................128

SECTION 9.02. Certain Matters Affecting the Trustee...........................................129

SECTION 9.03. The Trustee Not Liable for Certificates or Mortgage Loans.......................131

SECTION 9.04. The Trustee May Own Certificates................................................131

SECTION 9.05. Trustee's Fees and Expenses.....................................................131

SECTION 9.06. [RESERVED]......................................................................132

</TABLE>

-iii-

<PAGE>

TABLE OF CONTENTS

(continued)

<TABLE>

Page

----

SECTION 9.07. Eligibility Requirements for the Trustee........................................132

SECTION 9.08. Resignation and Removal of the Trustee..........................................132

SECTION 9.09. [RESERVED]......................................................................133

SECTION 9.10. Successor Trustee...............................................................133

SECTION 9.11. Merger or Consolidation of the Trustee..........................................133

SECTION 9.12. Appointment of Co-Trustee or Separate Trustee...................................133

SECTION 9.13. Tax Matters.....................................................................135

SECTION 9.14. Duties of Securities Administrator..............................................137

SECTION 9.15. Certain Matters Affecting the Securities Administrator..........................138

SECTION 9.16. Securities Administrator Not Liable for Certificates or Mortgage Loans..........139

SECTION 9.17. Securities Administrator May Own Certificates...................................140

SECTION 9.18. Fees and Expenses of the Securities Administrator...............................140

SECTION 9.19. Eligibility Requirements for the Securities Administrator.......................140

SECTION 9.20. Resignation and Removal of the Securities Administrator.........................141

SECTION 9.21. Successor Securities Administrator..............................................141

SECTION 9.22. Merger or Consolidation of Securities Administrator.............................142

ARTICLE X TERMINATION..................................................................................142

SECTION 10.01. Termination upon Liquidation or Repurchase of all Mortgage Loans................142

SECTION 10.02. Final Distribution on the Certificates..........................................143

SECTION 10.03. Additional Termination Requirements.............................................144

ARTICLE XI MISCELLANEOUS PROVISIONS.....................................................................145

SECTION 11.01. Amendment.......................................................................145

SECTION 11.02. Counterparts....................................................................146

SECTION 11.03. Governing Law...................................................................146

SECTION 11.04. Intention of Parties............................................................146

SECTION 11.05. Notices.........................................................................147

SECTION 11.06. Severability of Provisions......................................................148

SECTION 11.07. Assignment......................................................................148

SECTION 11.08. Limitation on Rights of Certificateholders......................................148

SECTION 11.09. Inspection and Audit Rights.....................................................149

SECTION 11.10. Certificates Nonassessable and Fully Paid.......................................149

</TABLE>

-iv-

<PAGE>

TABLE OF CONTENTS

Page

----

EXHIBIT A FORMS OF CERTIFICATES

EXHIBIT B MORTGAGE LOAN SCHEDULE

EXHIBIT C [RESERVED]

EXHIBIT D FORM OF CUSTODIAN CERTIFICATION

EXHIBIT E-1 FORM OF TRANSFEREE'S LETTER AND AFFIDAVIT

EXHIBIT E-2 FORM OF TRANSFEROR'S AFFIDAVIT

EXHIBIT F FORM OF TRANSFEROR CERTIFICATE

EXHIBIT G FORM OF INVESTMENT LETTER

EXHIBIT H FORM OF RULE 144A LETTER

EXHIBIT I REQUEST FOR RELEASE

EXHIBIT J [RESERVED]

EXHIBIT K FORM OF OFFICER'S CERTIFICATE OF SECURITIES

ADMINISTRATOR

EXHIBIT L FORM OF OFFICER'S CERTIFICATE OF SERVICER

EXHIBIT M [RESERVED]

EXHIBIT N [RESERVED]

EXHIBIT O FORM OF CAP CONTRACT

EXHIBIT P FORM OF CERTIFICATE OF SERVICING ADMINISTRATOR

EXHIBIT Q FORM OF CUSTODIAL AGREEMENT

EXHIBIT R FORM OF SERVICER REPORT

-v-

<PAGE>

POOLING AND SERVICING AGREEMENT, dated as of July 1, 2005, among MERRILL

LYNCH MORTGAGE INVESTORS, INC., a Delaware corporation, as depositor (the

"Depositor"), TERWIN ADVISORS LLC, a Delaware limited liability company, as

seller (the "Seller"), JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, a national

banking association organized under the laws of the United States of America, as

servicing administrator (in such capacity, the "Servicing Administrator") as

securities administrator (in such capacity, the "Securities Administrator") and

backup servicer (in such capacity, the "Backup Servicer"), SPECIALIZED LOAN

SERVICING, LLC, a Delaware limited liability company, as servicer (the

"Servicer") and U.S. BANK NATIONAL ASSOCIATION, a national banking association,

as trustee (the "Trustee").

The Depositor is the owner of the Trust Fund that is hereby conveyed to

the Trustee in return for the Certificates. It is intended that for federal

income tax purposes the Trust Fund will include (i) two real estate mortgage

investment conduits ("REMIC 1"and "REMIC 2") in a tiered REMIC structure, (ii)

the Initial ES Strip, (iii) amounts distributable to the Class X Certificates

pursuant to Section 5.05(i), (iv) the Cap Contract and the Cap Contract Account

and (v) the grantor trusts described in Section 2.07. REMIC 1 will consist of

all of the assets constituting the Trust Fund (other than assets described in

clauses (ii), (iii), (iv) and (v) above and other than the interests in any of

the REMICs provided for herein) and will be evidenced by the REMIC 1 Regular

Interests (which will be uncertificated and will represent the "regular

interests" in REMIC 1) and the Class LT1-R Interest as the single "residual

interest" in REMIC 1. The Trustee will hold the REMIC 1 Regular Interests. REMIC

2 will consist of the REMIC 1 Regular Interests and will be evidenced by the

REMIC 2 Regular Interests (which will be uncertificated and will represent the

"regular interests" in REMIC 2) and the REMIC 2 Residual Interest as the single

"residual interest" in REMIC 2. The Class R Certificate will represent

beneficial ownership of the Class LT1-R Interest and the REMIC 2 Residual

Interest. The "latest possible maturity date" for federal income tax purposes of

all the interests created hereby will be the Latest Possible Maturity Date.

All covenants and agreements made by the Seller in the Sale Agreement and

by the Depositor and the Trustee herein with respect to the Mortgage Loans and

the other property constituting the Trust Fund are for the benefit of the

Holders from time to time of the Certificates.

In consideration of the mutual agreements herein contained, the Depositor,

the Servicing Administrator, the Servicer, the Securities Administrator, the

Backup Servicer and the Trustee hereby agree as follows:

ARTICLE I

DEFINITIONS

Whenever used in this Agreement, the following words and phrases, unless

the context otherwise requires, shall have the following meanings:

Accepted Servicing Administration Practices: With respect to any Mortgage

Loan, as applicable, either (x) those customary mortgage master servicing

practices of prudent mortgage servicing institutions that master service

mortgage loans of the same type and quality as such Mortgage Loan in the

jurisdiction where the related Mortgaged Property is located, to the extent

applicable to the Servicing Administrator (except in its capacity as successor

to the Servicer), or (y) as provided in Section 5.01 hereof, but in no event

below the standard set forth in clause (x).

Accepted Servicing Practices: With respect to any Mortgage Loan, the

customary servicing practices, which will conform to the mortgage servicing

practices of prudent mortgage lending institutions

<PAGE>

which service for their own account mortgage loans of the same type as such

Mortgage Loan in the jurisdiction in which the related Mortgaged Property is

located.

Accrual Period: With respect to the LIBOR Certificates, the REMIC 1

Regular Interests and the REMIC 2 Regular Interests (other than the REMIC 2 B6

Interest and REMIC 2 B7 Interest) and any Distribution Date, the period

commencing on the immediately preceding Distribution Date (or, in the case of

the first Distribution Date, the Closing Date) and ending on the day immediately

preceding such Distribution Date and with respect to the Class B-6 and Class B-7

Certificates and the REMIC 2 B6 Interest and REMIC 2 B7 Interest, the calendar

month immediately preceding the month in which such Distribution Date occurs.

All calculations of interest on the LIBOR Certificates, the REMIC 1 Regular

Interests and the REMIC 2 Regular Interests (other than the REMIC 2 B6 Interest

and REMIC 2 B7 Interest) will be made on the basis of the actual number of days

elapsed in the related Accrual Period and a 360 day year and all calculations of

interest on the Class B-6 and Class B-7 Certificates and the REMIC 2 B6 Interest

and REMIC 2 B7 Interest will be made on the basis of a 360 day year consisting

of twelve 30 day months.

Administration Fee: The sum of the Aggregate Servicing Fee, the Securities

Administrator Fee and the Credit Risk Manager Fee.

Advance: The aggregate of the advances required to be made by the Servicer

with respect to any Distribution Date pursuant to Section 5.01.

Advance Facility: A financing or other facility as described in Section

5.02(a).

Advance Facility Notice: As defined in Section 5.02(b) hereof.

Advance Financing Person: As defined in Section 5.02(a) hereof.

Advance Reimbursement Amounts: As defined in Section 5.02(b) hereof.

Affiliate: With respect to any specified Person, any other Person

controlling, controlled by or under common control with such Person. For the

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 the terms "controlling" and

"controlled" have meanings correlative to the foregoing.

Aggregate Certificate Principal Balance: For any date of determination,

the sum of the Class A Certificate Principal Balance, the Class R Certificate

Principal Balance, the Class M-1 Certificate Principal Balance, the Class M-2

Certificate Principal Balance, the Class M-3 Certificate Principal Balance, the

Class M-4 Certificate Principal Balance, the Class M-5 Certificate Principal

Balance, the Class M-6 Certificate Principal Balance, the Class B-1 Certificate

Principal Balance, the Class B-2 Certificate Principal Balance, the Class B-3

Certificate Principal Balance, the Class B-4 Certificate Principal Balance, the

Class B-5 Certificate Principal Balance, the Class B-6 Certificate Principal

Balance and the Class B-7 Certificate Principal Balance, in each case as of such

date of determination.

Aggregate Servicing Fee: As to each Mortgage Loan and any Distribution

Date, an amount equal to one month's interest at the Servicing Fee Rate on the

Stated Principal Balance of such Mortgage Loan as of the immediately preceding

Distribution Date or, in the event of any payment of interest that accompanies a

Principal Prepayment in full made by the Mortgagor, interest at the Servicing

Fee Rate on the Stated Principal Balance of such Mortgage Loan as of the

immediately preceding Distribution Date

-2-

<PAGE>

for the period covered by such payment of interest (in each case payable from

interest collections on such Mortgage Loan).

Agreement: This Pooling and Servicing Agreement and any and all amendments

or supplements hereto made in accordance with the terms herein.

Amounts For Future Distribution: As to any Distribution Date, the

aggregate amount held in the related Collection Account (with respect to the

Servicer) or the Servicing Administrator Collection Account (with respect to the

Servicing Administrator) at the close of business on the immediately preceding

Determination Date on account of (i) all Scheduled Payments or portions thereof

received in respect of the Mortgage Loans due after the related Due Period and

(ii) Principal Prepayments and Liquidation Proceeds received in respect of the

Mortgage Loans after the last day of the related Prepayment Period.

Applied Realized Loss Amount: With respect to any Distribution Date, the

amount, if any, by which, the Aggregate Certificate Principal Balance after

distributions of principal on such Distribution Date exceeds the aggregate

Stated Principal Balance of the Mortgage Loans as of such Distribution Date.

Assignment of Mortgage: An assignment of the Mortgage, notice of transfer

or equivalent instrument, in recordable form, sufficient under the laws of the

jurisdiction where the related Mortgaged Property is located to reflect of

record the sale and assignment of the Mortgage Loan to the Trustee, which

assignment, notice of transfer or equivalent instrument may, if permitted by

law, be in the form of one or more blanket assignments covering Mortgages

secured by Mortgaged Properties located in the same county.

Authenticating Agent: As defined in Section 6.10 hereof.

Available Funds Cap: As of any Distribution Date, for the Class A, Class

M, Class B-1, Class B-2, Class B-3, Class B-4 and Class B-5 Certificates, a per

annum rate equal to the product of (A) 12 times the quotient obtained by

dividing (x) the excess of (a) the total scheduled interest on the Mortgage

Loans for the related Due Period over (b) the Administration Fee for such

Distribution Date by (y) the Aggregate Certificate Principal Balance immediately

prior to such Distribution Date and (B) a fraction, the numerator of which is 30

and the denominator of which is the actual number of days in the related Accrual

Period; and as of any Distribution Date, for the Class B-6 and Class B-7

Certificates, a per annum rate equal to 12 times the quotient obtained by

dividing (x) the excess of (a) the total scheduled interest on the Mortgage

Loans for the related Due Period over (b) the Administration Fee for such

Distribution Date by (y) the Aggregate Certificate Principal Balance immediately

prior to such Distribution Date.

Backup Servicer: JPMorgan, or its permitted successor in interest or

assignee or any successor Backup Servicer appointed pursuant to the provisions

hereof.

Balloon Loan: A Mortgage Loan having an original term to stated maturity

of generally up 15 years which provides for level monthly payments of principal

and interest generally based on a 30 year amortization schedule, with a balloon

payment of the remaining outstanding principal balance due on such Mortgage Loan

at its stated maturity.

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

-3-

<PAGE>

Section 6.06). As of the Closing Date, each of the Class A, Class M and Class B

Certificates constitutes a Class of Book-Entry Certificates.

Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a day

on which banking institutions in the City of New York, New York, or the city in

which the Corporate Trust Office of the Trustee or the Securities Administrator

is located, or financial and savings and loan institutions in the States of

California, Texas or Colorado are authorized or obligated by law or executive

order to be closed.

Cap Contract: The confirmation and agreement and any related confirmation

thereto, between the Cap Contract Counterparty and the Trustee (in the form of

Exhibit O hereto).

Cap Contract Account: The separate Eligible Account created and maintained

by the Securities Administrator, on behalf of the Trustee, pursuant to Section

5.05(l) in the name of the Trustee for the benefit of the Trust Fund and

designated "JPMorgan Chase Bank, N.A., as securities administrator for U.S. Bank

National Association, as Trustee, in trust for registered holders of Terwin

Mortgage Trust 2005-10HE, Asset-Backed Certificates, Series TMTS 2005-10HE."

Funds in the Cap Contract Account shall be held in trust for the Trust Fund for

the uses and purposes set forth in this Agreement.

Cap Contract Counterparty: The Royal Bank of Scotland plc.

Cap Contract Notional Balance: With respect to any Distribution Date, the

Cap Contract Notional Balance set forth below for such Distribution Date:

One-Month LIBOR Cap Table

Beginning Ending Notional Lower Upper

Accrual Accrual Balance($) Collar(%) Collar(%)

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

7/28/2005 8/25/2005 272,992,000 6.989 9.740

8/25/2005 9/25/2005 269,764,770 6.290 9.740

9/25/2005 10/25/2005 265,997,171 6.512 9.740

10/25/2005 11/25/2005 261,702,809 6.296 9.740

11/25/2005 12/25/2005 256,891,854 6.519 9.740

12/25/2005 1/25/2006 251,577,904 6.304 9.740

1/25/2006 2/25/2006 245,777,999 6.308 9.740

2/25/2006 3/25/2006 239,512,616 7.015 9.740

3/25/2006 4/25/2006 232,807,325 6.314 9.740

4/25/2006 5/25/2006 226,115,986 6.536 9.740

5/25/2006 6/25/2006 219,573,364 6.320 9.740

6/25/2006 7/25/2006 213,215,908 6.542 9.740

7/25/2006 8/25/2006 207,040,379 6.326 9.740

8/25/2006 9/25/2006 201,041,553 6.330 9.740

9/25/2006 10/25/2006 195,214,364 6.553 9.740

10/25/2006 11/25/2006 189,553,881 6.337 9.740

11/25/2006 12/25/2006 184,055,318 6.561 9.740

12/25/2006 1/25/2007 178,714,031 6.344 9.740

1/25/2007 2/25/2007 173,517,290 6.348 9.740

2/25/2007 3/25/2007 166,008,967 7.069 9.740

3/25/2007 4/25/2007 158,022,871 7.315 9.740

4/25/2007 5/25/2007 150,227,747 7.998 9.740

5/25/2007 6/25/2007 142,835,437 7.793 9.740

-4-

<PAGE>

Beginning Ending Notional Lower Upper

Accrual Accrual Balance($) Collar(%) Collar(%)

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

6/25/2007 7/25/2007 135,835,107 8.062 9.740

7/25/2007 8/25/2007 130,628,323 7.793 9.740

8/25/2007 9/25/2007 126,121,081 7.800 9.740

9/25/2007 10/25/2007 121,913,798 8.505 9.740

10/25/2007 11/25/2007 117,860,281 8.386 9.740

11/25/2007 12/25/2007 113,942,785 8.697 9.740

12/25/2007 1/25/2008 110,155,040 8.411 9.740

1/25/2008 2/25/2008 106,492,667 8.413 9.740

2/25/2008 3/25/2008 102,951,428 9.016 9.740

3/25/2008 4/25/2008 99,527,266 8.936 9.740

4/25/2008 5/25/2008 96,220,734 9.537 9.740

5/25/2008 6/25/2008 93,025,757 9.302 9.740

6/25/2008 7/25/2008 89,936,056 9.630 9.740

7/25/2008 8/25/2008 86,947,984 9.312 9.740

8/25/2008 9/25/2008 85,178,433 9.190 9.740

9/25/2008 10/25/2008 0 0.000 0.000

Cap Contract Termination Date: The Distribution Date in September 2008.

Certificate: Any one of the certificates of any Class executed by the

Securities Administrator and authenticated by the Authenticating Agent in

substantially the forms attached hereto as Exhibits A.

Certificate Account: The separate Eligible Account created and maintained

by the Securities Administrator pursuant to Section 3.05(f) in the name of the

Trustee for the benefit of the Certificateholders and designated "JPMorgan Chase

Bank, N.A., as securities administrator for U.S. Bank National Association, as

trustee, in trust for registered holders of Terwin Mortgage Trust, Asset-Backed

Certificates, Series TMTS 2005-10HE." Funds in the Certificate Account shall be

held in trust for the Certificateholders for the uses and purposes set forth in

this Agreement.

Certificate Owner: With respect to a Book-Entry Certificate, the Person

that is the beneficial owner of such Book-Entry Certificate.

Certificate Principal Balance: As to any Certificate (other than a Class X

or Class ES Certificate) and as of any Distribution Date, the Initial

Certificate Principal Balance of such Certificate less the sum of (1) all

amounts distributed with respect to such Certificate in reduction of the

Certificate Principal Balance thereof on previous Distribution Dates pursuant to

Section 5.05, and (2) any Applied Realized Loss Amounts allocated to such

Certificate on previous Distribution Dates pursuant to Section 5.05(j).

Notwithstanding the foregoing on any Distribution Date relating to a Due Period

in which a Subsequent Recovery has been received by the Servicer, the

Certificate Principal Balance of any Class of Certificates then outstanding for

which any Applied Realized Loss Amount has been allocated will be increased, in

order of seniority, by an amount equal to the lesser of (i) the Unpaid Realized

Loss Amount for such Class of Certificates and (ii) the total of any Subsequent

Recovery in respect of principal distributed on such date to the

Certificateholders (reduced by the amount of the increase in the Certificate

Principal Balance of any more senior Class of Certificates pursuant to this

sentence on such Distribution Date).

Certificate Register: The register maintained pursuant to Section 6.02

hereof.

-5-

<PAGE>

Certificate Registrar: The Certificate Registrar appointed pursuant to

Section 6.02 hereof.

Certificateholder or Holder: The Person in whose name a Certificate is

registered in the Certificate Register (initially, Cede & Co., as nominee for

the Depository, in the case of the Book-Entry Certificates) in the case of any

Class of Certificates except that solely for the purpose of giving any consent

pursuant to this Agreement, any Certificate registered in the name of the

Depositor or any Affiliate of the Depositor shall be deemed not to be

Outstanding and the Percentage Interest evidenced thereby shall not be taken

into account in determining whether the requisite amount of Percentage Interests

necessary to effect such consent has been obtained; provided, however, that if

any such Person (including the Depositor) owns 100% of the Percentage Interests

evidenced by a Class of Certificates, such Certificates shall be deemed to be

Outstanding for purposes of any provision hereof that requires the consent of

the Holders of Certificates of a particular Class as a condition to the taking

of any action hereunder. The Securities Administrator, the Trustee and the

Certificate Registrar are entitled to rely conclusively on a certification of

the Depositor or any Affiliate of the Depositor in determining which

Certificates are registered in the name of an Affiliate of the Depositor.

Class: All Certificates bearing the same Class designation as set forth in

Section 6.01 hereof.

Class A Certificate Principal Balance: For any date of determination, the

sum of the Class A-1A Certificate Principal Balance, the Class A-1B Certificate

Principal Balance and the Class A-1C Certificate Principal Balance.

Class A Certificates: Any of the Class A-1A Certificates, the Class A-1B

Certificates and the Class A-1C Certificates.

Class A Principal Distribution Amount: With respect to any Distribution

Date (1) prior to the Stepdown Date or any Distribution Date on which a Trigger

Event exists, 100% of the Principal Distribution Amount for such Distribution

Date and (2) on or after the Stepdown Date where a Trigger Event does not exist,

the excess of (A) the Class A Certificate Principal Balance and the Class R

Certificate Principal Balance immediately prior to such Distribution Date over

(B) the lesser of (i) 52.30% of the Stated Principal Balance of the Mortgage

Loans as of the end of the immediately preceding Due Period and (ii) the excess

of the Stated Principal Balance of the Mortgage Loans as of the end of the

immediately preceding Due Period over the Minimum Required Overcollateralization

Amount; provided, however, that in no event will the Class A Principal

Distribution Amount with respect to any Distribution Date exceed the aggregate

Certificate Principal Balance of the Class A and Class R Certificates.

Class A-1A Certificate Principal Balance: As of any date of determination,

the aggregate Certificate Principal Balance of the Class A-1A Certificates.

Class A-1A Certificates: Any Certificate designated as a "Class A-1A

Certificate" on the face thereof, in the form of Exhibit A hereto, representing

the right to distributions as set forth herein.

Class A-1A Current Interest: As of any Distribution Date, the interest

accrued during the related Accrual Period at the Class A-1A Pass-Through Rate on

the Class A-1A Certificate Principal Balance as of the first day of such Accrual

Period (after giving effect to all distributions of principal made or deemed to

be made as of such first day) plus the Current Interest and Interest Carry

Forward Amount portions of any previous distributions on such Class that are

recovered as a voidable preference by a trustee in bankruptcy, less any

Non-Supported Interest Shortfall allocated on such Distribution Date to the

Class A-1A Certificates.

-6-

<PAGE>

Class A-1A Interest Carry Forward Amount: As of any Distribution Date, the

sum of (1) the excess of (A) the Class A-1A Current Interest with respect to

prior Distribution Dates (excluding any Floating Rate Certificate Carryover for

the Class A-1A Certificates) over (B) the amount actually distributed to the

Class A-1A Certificates with respect to Class A-1A Current Interest and Class A

-1A Current Interest Carry Forward Amounts on such prior Distribution Dates and

(2) interest on such excess (to the extent permitted by applicable law) at the

Class A-1A Pass-Through Rate for the related Accrual Period.

Class A-1A Margin: As of any Distribution Date up to and including the

Optional Termination Date for the Class A-1A Certificates, 0.140% per annum and,

as of any Distribution Date after the Optional Termination Date, 0.280% per

annum.

Class A-1A Pass-Through Rate: For the first Distribution Date, 3.62125%

per annum. As of any Distribution Date thereafter, the least of (1) One-Month

LIBOR plus the Class A-1A Margin, (2) the Maximum Rate Cap and (3) the Available

Funds Cap for such Distribution Date.

Class A-1B Certificate Principal Balance: As of any date of determination,

the aggregate Certificate Principal Balance of the Class A-1B Certificates.

Class A-1B Certificates: Any Certificate designated as a "Class A-1B

Certificate" on the face thereof, in the form of Exhibit A hereto, representing

the right to distributions as set forth herein.

Class A-1B Current Interest: As of any Distribution Date, the interest

accrued during the related Accrual Period at the Class A-1B Pass-Through Rate on

the Class A-1B Certificate Principal Balance as of the first day of such Accrual

Period (after giving effect to all distributions of principal made or deemed to

be made as of such first day) plus the Current Interest and Interest Carry

Forward Amount portions of any previous distributions on such Class that are

recovered as a voidable preference by a trustee in bankruptcy, less any

Non-Supported Interest Shortfall allocated on such Distribution Date to the

Class A-1B Certificates.

Class A-1B Interest Carry Forward Amount: As of any Distribution Date, the

sum of (1) the excess of (A) the Class A-1B Current Interest with respect to

prior Distribution Dates (excluding any Floating Rate Certificate Carryover for

the Class A-1B Certificates) over (B) the amount actually distributed to the

Class A-1B Certificates with respect to Class A-1A Current Interest and Class

A-1B Current Interest Carry Forward Amounts on such prior Distribution Dates and

(2) interest on such excess (to the extent permitted by applicable law) at the

Class A-1B Pass-Through Rate for the related Accrual Period.

Class A-1B Margin: As of any Distribution Date up to and including the

Optional Termination Date for the Class A-1B Certificates, 0.290% per annum and,

as of any Distribution Date after the Optional Termination Date, 0.580% per

annum.

Class A-1B Pass-Through Rate: For the first Distribution Date, 3.77125%

per annum. As of any Distribution Date thereafter, the least of (1) One-Month

LIBOR plus the Class A-1B Margin, (2) the Maximum Rate Cap and (3) the Available

Funds Cap for such Distribution Date.

Class A-1C Certificate Principal Balance: As of any date of determination,

the aggregate Certificate Principal Balance of the Class A-1C Certificates.

Class A-1C Certificates: Any Certificate designated as a "Class A-1C

Certificate" on the face thereof, in the form of Exhibit A hereto, representing

the right to distributions as set forth herein.

-7-

<PAGE>

Class A-1C Current Interest: As of any Distribution Date, the interest

accrued during the related Accrual Period at the Class A-1C Pass-Through Rate on

the Class A-1C Certificate Principal Balance as of the first day of such Accrual

Period (after giving effect to all distributions of principal made or deemed to

be made as of such first day) plus the Current Interest and Interest Carry

Forward Amount portions of any previous distributions on such Class that are

recovered as a voidable preference by a trustee in bankruptcy, less any

Non-Supported Interest Shortfall allocated on such Distribution Date to the

Class A-1C Certificates.

Class A-1C Interest Carry Forward Amount: As of any Distribution Date, the

sum of (1) the excess of (A) the Class A-1C Current Interest with respect to

prior Distribution Dates (excluding any Floating Rate Certificate Carryover for

the Class A-1C Certificates) over (B) the amount actually distributed to the

Class A-1C Certificates with respect to Class A-1C Current Interest and Class A

-1C Current Interest Carry Forward Amounts on such prior Distribution Dates and

(2) interest on such excess (to the extent permitted by applicable law) at the

Class A-1C Pass-Through Rate for the related Accrual Period.

Class A-1C Margin: As of any Distribution Date up to and including the

Optional Termination Date for the Class A-1C Certificates, 0.370% per annum and,

as of any Distribution Date after the Optional Termination Date, 0.740% per

annum.

Class A-1C Pass-Through Rate: For the first Distribution Date, 3.85125%

per annum. As of any Distribution Date thereafter, the least of (1) One-Month

LIBOR plus the Class A-1C Margin, (2) the Maximum Rate Cap and (3) the Available

Funds Cap for such Distribution Date.

Class B Certificates: The Class B-1 Certificates, Class B-2 Certificates,

Class B-3 Certificates, Class B-4 Certificates, Class B-5 Certificates, Class

B-6 Certificates and Class B-7 Certificates.

Class B-1 Applied Realized Loss Amount: As of any Distribution Date, the

sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans

which have been applied to the reduction of the Certificate Principal Balance of

the Class B-1 Certificates.

Class B-1 Certificate: Any Certificate designated as a "Class B-1

Certificate" on the face thereof, in the form of Exhibit A hereto, representing

the right to distributions as set forth herein.

Class B-1 Certificate Principal Balance: As of any date of determination,

the aggregate Certificate Principal Balance of the Class B-1 Certificates.

Class B-1 Current Interest: As of any Distribution Date, the interest

accrued during the related Accrual Period at the Class B-1 Pass-Through Rate on

the Class B-1 Certificate Principal Balance as of the first day of such Accrual

Period (after giving effect to all distributions of principal made or deemed to

be made as of such first day) plus the Current Interest and Interest Carry

Forward Amount portions of any previous distributions on such Class that are

recovered as a voidable preference by a trustee in bankruptcy, less any

Non-Supported Interest Shortfall allocated on such Distribution Date to the

Class B-1 Certificates.

Class B-1 Interest Carry Forward Amount: As of any Distribution Date, the

sum of (1) the excess of (A) the Class B-1 Current Interest with respect to

prior Distribution Dates (excluding any Floating Rate Certificate Carryover for

the Class B-1 Certificates) over (B) the amount actually distributed to the

Class B-1 Certificates with respect to Class B-1 Current Interest and Class B-1

Current Interest Carry Forward Amounts on such prior Distribution Dates and (2)

interest on such excess (to the extent permitted by applicable law) at the Class

B-1 Pass-Through Rate for the related Accrual Period.

-8-

<PAGE>

Class B-1 Margin: As of any Distribution Date up to and including the

Optional Termination Date for the Class B-1 Certificates, 1.300% per annum and,

as of any Distribution Date after the Optional Termination Date, 1.950% per

annum.

Class B-1 Pass-Through Rate: For the first Distribution Date, 4.78125% per

annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR

plus the Class B-1 Margin, (2) the Maximum Rate Cap and (3) the Available Funds

Cap for such Distribution Date.

Class B-1 Principal Distribution Amount: With respect to any Distribution

Date on or after the Stepdown Date, 100% of the Principal Distribution Amount

for such Distribution Date if the Class A Certificate Principal Balance, the

Class R Certificate Principal Balance and the Class M Certificate Principal

Balance have been reduced to zero and a Trigger Event exists, or as long as a

Trigger Event does not exist, the excess of (1) the sum of (A) the Class A

Certificate Principal Balance and Class R Certificate Principal Balance (after

taking into account distributions of the Class A Principal Distribution Amount

on such Distribution Date), (B) the Class M Certificate Principal Balance (after

taking into account distributions of the Class M Principal Distribution Amount

on such Distribution Date) and (C) the Class B-1 Certificate Principal Balance

immediately prior to such Distribution Date over (2) the lesser of (A) 83.30% of

the Stated Principal Balance of the Mortgage Loans as of the end of the

immediately preceding Due Period and (B) the excess of the Stated Principal

Balance of the Mortgage Loans as of the end of the immediately preceding Due

Period over the Minimum Required Overcollateralization Amount. Notwithstanding

the foregoing, (I) on any Distribution Date prior to the Stepdown Date on which

the Certificate Principal Balance of each Class of Class A, Class R and Class M

Certificates has been reduced to zero, the Class B-1 Principal Distribution

Amount will equal the lesser of (x) the outstanding Class B-1 Certificate

Principal Balance and (y) 100% of the Principal Distribution Amount remaining

after any distributions on such Class A, Class R and Class M Certificates and

(II) in no event will the Class B-1 Principal Distribution Amount with respect

to any Distribution Date exceed the Class B-1 Certificate Principal Balance.

Class B-1 Unpaid Realized Loss Amount: As of any Distribution Date, the

excess of (1) the Class B-1 Applied Realized Loss Amount over (2) the sum of (x)

all distributions in reduction of the Class B-1 Unpaid Realized Loss Amounts on

all previous Distribution Dates and (y) all increases in the Certificate

Principal Balance of such Class B-1 Certificates pursuant to the definition of

"Certificate Principal Balance."

Class B-2 Applied Realized Loss Amount: As of any Distribution Date, the

sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans

which have been applied to the reduction of the Certificate Principal Balance of

the Class B-2 Certificates.

Class B-2 Certificate: Any Certificate designated as a "Class B-2

Certificate" on the face thereof, in the form of Exhibit A hereto, representing

the right to distributions as set forth herein.

Class B-2 Certificate Principal Balance: As of any date of determination,

the aggregate Certificate Principal Balance of the Class B-2 Certificates.

Class B-2 Current Interest: As of any Distribution Date, the interest

accrued during the related Accrual Period at the Class B-2 Pass-Through Rate on

the Class B-2 Certificate Principal Balance as of the first day of such Accrual

Period (after giving effect to all distributions of principal made or deemed to

be made as of such first day) plus the Current Interest and Interest Carry

Forward Amount portions of any previous distributions on such Class that are

recovered as a voidable preference by a trustee in bankruptcy, less any

Non-Supported Interest Shortfall allocated on such Distribution Date to the

Class B-2 Certificates.

-9-

<PAGE>

Class B-2 Interest Carry Forward Amount: As of any Distribution Date, the

sum of (1) the excess of (A) the Class B-2 Current Interest with respect to

prior Distribution Dates (excluding any Floating Rate Certificate Carryover for

the Class B-2 Certificates) over (B) the amount actually distributed to the

Class B-2 Certificates with respect to Class B-2 Current Interest and Class B-2

Current Interest Carry Forward Amounts on such prior Distribution Dates and (2)

interest on such excess (to the extent permitted by applicable law) at the Class

B-2 Pass-Through Rate for the related Accrual Period.

Class B-2 Margin: As of any Distribution Date, up to and including the

Optional Termination Date for the Class B-2 Certificates, 1.370% per annum and,

as of any Distribution Date after the Optional Termination Date, 2.055% per

annum.

Class B-2 Pass-Through Rate: For the first Distribution Date, 4.85125% per

annum. As of any Distribution Date thereafter, the least of (i) One-Month LIBOR

plus the Class B-2 Margin, (2) the Maximum Rate Cap and (3) the Available Funds

Cap for such Distribution Date.

Class B-2 Principal Distribution Amount: With respect to any Distribution

Date on or after the Stepdown Date, 100% of the Principal Distribution Amount

for such Distribution Date if the Class A Certificate Principal Balance, the

Class R Certificate Principal Balance, the Class M Certificate Principal Balance

and the Class B-1 Certificate Principal Balance have been reduced to zero and a

Trigger Event exists, or as long as a Trigger Event does not exist, the excess

of (1) the sum of (A) the Class A Certificate Principal Balance and Class R

Certificate Principal Balance (after taking into account distributions of the

Class A Principal Distribution Amount on such Distribution Date), (B) the Class

M Certificate Principal Balance (after taking into account distributions of the

Class M Principal Distribution Amount on such Distribution Date), (C) the Class

B-1 Certificate Principal Balance (after taking into account distributions of

the Class B-1 Principal Distribution Amount on such Distribution Date) and (D)

the Class B-2 Certificate Principal Balance immediately prior to such

Distribution Date over (2) the lesser of (A) 85.70% of the Stated Principal

Balance of the Mortgage Loans as of the end of the immediately preceding Due

Period and (B) the excess of the Stated Principal Balance of the Mortgage Loans

as of the end of the immediately preceding Due Period over Minimum Required

Overcollateralization Amount. Notwithstanding the foregoing, (I) on any

Distribution Date prior to the Stepdown Date on which the Certificate Principal

Balance of each Class of Class A, Class R, Class M and Class B-1 Certificates

has been reduced to zero, the Class B-2 Principal Distribution Amount will equal

the lesser of (x) the outstanding Class B-2 Certificate Principal Balance and

(y) 100% of the Principal Distribution Amount remaining after any distributions

on such Class A, Class R, Class M and Class B-1 Certificates and (II) in no

event will the Class B-2 Principal Distribution Amount with respect to any

Distribution Date exceed the Class B-2 Certificate Principal Balance.

Class B-2 Unpaid Realized Loss Amount: As of any Distribution Date, the

excess of (1) the Class B-2 Applied Realized Loss Amount over (2) the sum of (x)

all distributions in reduction of the Class B-2 Unpaid Realized Loss Amounts on

all previous Distribution Dates and (y) all increases in the Certificate

Principal Balance of such Class B-2 Certificates pursuant to the definition of

"Certificate Principal Balance."

Class B-3 Applied Realized Loss Amount: As of any Distribution Date, the

sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans

which have been applied to the reduction of the Certificate Principal Balance of

the Class B-3 Certificates.

Class B-3 Certificate: Any Certificate designated as a "Class B-3

Certificate" on the face thereof, in the form of Exhibit A hereto, representing

the right to distributions as set forth herein.

-10-

<PAGE>

Class B-3 Certificate Principal Balance: As of any date of determination,

the aggregate Certificate Principal Balance of the Class B-3 Certificates.

Class B-3 Current Interest: As of any Distribution Date, the interest

accrued during the related Accrual Period at the Class B-3 Pass-Through Rate on

the Class B-3 Certificate Principal Balance as of the first day of such Accrual

Period (after giving effect to all distributions of principal made or deemed to

be made as of such first day) plus the Current Interest and Interest Carry

Forward Amount portions of any previous distributions on such Class that are

recovered as a voidable preference by a trustee in bankruptcy, less any

Non-Supported Interest Shortfall allocated on such Distribution Date to the

Class B-3 Certificates.

Class B-3 Interest Carry Forward Amount: As of any Distribution Date, the

sum of (1) the excess of (A) the Class B-3 Current Interest with respect to

prior Distribution Dates (excluding any Floating Rate Certificate Carryover for

the Class B-3 Certificates) over (B) the amount actually distributed to the

Class B-3 Certificates with respect to Class B-3 Current Interest and Class B-3

Current Interest Carry Forward Amounts on such prior Distribution Dates and (2)

interest on such excess (to the extent permitted by applicable law) at the Class

B-3 Pass-Through Rate for the related Accrual Period.

Class B-3 Margin: As of any Distribution Date up to and including the

Optional Termination Date for the Class B-3 Certificates, 1.800% per annum and,

as of any Distribution Date after the Optional Termination Date, 2.700% per

annum.

Class B-3 Pass-Through Rate: For the first Distribution Date 5.28125% per

annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR

plus the Class B-3 Margin, (2) the Maximum Rate Cap and (3) the Available Funds

Cap for such Distribution Date.

Class B-3 Principal Distribution Amount: With respect to any Distribution

Date on or after the Stepdown Date, 100% of the Principal Distribution Amount

for such Distribution Date if the Class A Certificate Principal Balance, the

Class R Certificate Principal Balance, the Class M Certificate Principal

Balance, the Class B-1 Certificate Principal Balance and the Class B-2

Certificate Principal Balance have been reduced to zero and a Trigger Event

exists, or as long as a Trigger Event does not exist, the excess of (1) the sum

of (A) the Class A Certificate Principal Balance and Class R Certificate

Principal Balance (after taking into account distributions of the Class A

Principal Distribution Amount on such Distribution Date), (B) the Class M

Certificate Principal Balance (after taking into account distributions of the

Class M Principal Distribution Amount on such Distribution Date), (C) the Class

B-1 Certificate Principal Balance (after taking into account distributions of

the Class B-1 Principal Distribution Amount on such Distribution Date), (D) the

Class B-2 Certificate Principal Balance immediately prior to such Distribution

Date (after taking into account distribution of the Class B-2 Principal

Distribution Amount on such Distribution Date) and (E) the Class B-3 Certificate

Principal Balance over (2) the lesser of (A) 87.90% of the Stated Principal

Balance of the Mortgage Loans as of the end of the immediately preceding Due

Period and (B) the excess of the Stated Principal Balance of the Mortgage Loans

as of the end of the immediately preceding Due Period over Minimum Required

Overcollateralization Amount. Notwithstanding the foregoing, (I) on any

Distribution Date prior to the Stepdown Date on which the Certificate Principal

Balance of each Class of Class A, Class R, Class M, Class B-1 and Class B-2

Certificates has been reduced to zero, the Class B-3 Principal Distribution

Amount will equal the lesser of (x) the outstanding Class B-3 Certificate

Principal Balance and (y) 100% of the Principal Distribution Amount remaining

after any distributions on such Class A, Class R, Class M, Class B-1 and Class

B-2 Certificates and (II) in no event will the Class B-3 Principal Distribution

Amount with respect to any Distribution Date exceed the Class B-3 Certificate

Principal Balance.

-11-

<PAGE>

Class B-3 Unpaid Realized Loss Amount: As of any Distribution Date, the

excess of (1) the Class B-3 Applied Realized Loss Amount over (2) the sum of (x)

all distributions in reduction of the Class B-3 Unpaid Realized Loss Amounts on

all previous Distribution Dates and (y) all increases in the Certificate

Principal Balance of such Class B-3 Certificates pursuant to the definition of

"Certificate Principal Balance."

Class B-4 Applied Realized Loss Amount: As of any Distribution Date, the

sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans

which have been applied to the reduction of the Certificate Principal Balance of

the Class B-4 Certificates.

Class B-4 Certificate: Any Certificate designated as a "Class B-4

Certificate" on the face thereof, in the form of Exhibit A hereto, representing

the right to distributions as set forth herein.

Class B-4 Certificate Principal Balance: As of any date of determination,

the aggregate Certificate Principal Balance of the Class B-4 Certificates.

Class B-4 Current Interest: As of any Distribution Date, the interest

accrued during the related Accrual Period at the Class B-4 Pass-Through Rate on

the Class B-4 Certificate Principal Balance as of the first day of such Accrual

Period (after giving effect to all distributions of principal made or deemed to

be made as of such first day) plus the Current Interest and Interest Carry

Forward Amount portions of any previous distributions on such Class that are

recovered as a voidable preference by a trustee in bankruptcy, less any

Non-Supported Interest Shortfall allocated on such Distribution Date to the

Class B-4 Certificates.

Class B-4 Interest Carry Forward Amount: As of any Distribution Date, the

sum of (1) the excess of (A) the Class B-4 Current Interest with respect to

prior Distribution Dates (excluding any Floating Rate Certificate Carryover for

the Class B-4 Certificates) over (B) the amount actually distributed to the

Class B-4 Certificates with respect to Class B-4 Current Interest and Class B-4

Current Interest Carry Forward Amounts on such prior Distribution Dates and (2)

interest on such excess (to the extent permitted by applicable law) at the Class

B-4 Pass-Through Rate for the related Accrual Period.

Class B-4 Margin: As of any Distribution Date up to and including the

Optional Termination Date for the Class B-4 Certificates, 3.500% per annum and,

as of any Distribution Date after the Optional Termination Date, 5.250% per

annum.

Class B-4 Pass-Through Rate: For the first Distribution Date, 6.98125% per

annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR

plus the Class B-4 Margin, (2) the Maximum Rate Cap and (3) the Available Funds

Cap for such Distribution Date.

Class B-4 Principal Distribution Amount: With respect to any Distribution

Date on or after the Stepdown Date, 100% of the Principal Distribution Amount

for such Distribution Date if the Class A Certificate Principal Balance, the

Class R Certificate Principal Balance, the Class M Certificate Principal

Balance, the Class B-1 Certificate Principal Balance, the Class B-2 Certificate

Principal Balance and the Class B-3 Certificate Principal Balance have been

reduced to zero and a Trigger Event exists, or as long as a Trigger Event does

not exist, the excess of (1) the sum of (A) the Class A Certificate Principal

Balance and Class R Certificate Principal Balance (after taking into account

distributions of the Class A Principal Distribution Amount on such Distribution

Date), (B) the Class M Certificate Principal Balance (after taking into account

distributions of the Class M Principal Distribution Amount on such Distribution

Date), (C) the Class B-1 Certificate Principal Balance (after taking into

account distributions of the Class B-1 Principal Distribution Amount on such

Distribution Date), (D) the Class B-2 Certificate Principal Balance immediately

prior to such Distribution Date (after taking into account distribution of the

Class B-2

-12-

<PAGE>

Principal Distribution Amount on such Distribution Date), (E) the Class B-3

Certificate Principal Balance (after taking into account distributions of the

Class B-3 Principal Distribution Amount on such Distribution Date) and (F) the

Class B-4 Certificate Principal Balance over (2) the lesser of (A) 89.40% of the

Stated Principal Balance of the Mortgage Loans as of the end of the immediately

preceding Due Period and (B) the excess of the Stated Principal Balance of the

Mortgage Loans as of the end of the immediately preceding Due Period over

Minimum Required Overcollateralization Amount. Notwithstanding the foregoing,

(I) on any Distribution Date prior to the Stepdown Date on which the Certificate

Principal Balance of each Class of Class A, Class R, Class M, Class B-1, Class

B-2 and Class B-3 Certificates has been reduced to zero, the Class B-4 Principal

Distribution Amount will equal the lesser of (x) the outstanding Class B-4

Certificate Principal Balance and (y) 100% of the Principal Distribution Amount

remaining after any distributions on such Class A, Class R, Class M, Class B-1,

Class B-2 and Class B-3 Certificates and (II) in no event will the Class B-4

Principal Distribution Amount with respect to any Distribution Date exceed the

Class B-4 Certificate Principal Balance.

Class B-4 Unpaid Realized Loss Amount: As of any Distribution Date, the

excess of (1) the Class B-4 Applied Realized Loss Amount over (2) the sum of (x)

all distributions in reduction of the Class B-4 Unpaid Realized Loss Amounts on

all previous Distribution Dates and (y) all increases in the Certificate

Principal Balance of such Class B-4 Certificates pursuant to the definition of

"Certificate Principal Balance."

Class B-5 Applied Realized Loss Amount: As of any Distribution Date, the

sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans

which have been applied to the reduction of the Certificate Principal Balance of

the Class B-5 Certificates.

Class B-5 Certificate: Any Certificate designated as a "Class B-5

Certificate" on the face thereof, in the form of Exhibit A hereto, representing

the right to distributions as set forth herein.

Class B-5 Certificate Principal Balance: As of any date of determination,

the aggregate Certificate Principal Balance of the Class B-5 Certificates.

Class B-5 Current Interest: As of any Distribution Date, the interest

accrued during the related Accrual Period at the Class B-5 Pass-Through Rate on

the Class B-5 Certificate Principal Balance as of the first day of such Accrual

Period (after giving effect to all distributions of principal made or deemed to

be made as of such first day) plus the Current Interest and Interest Carry

Forward Amount portions of any previous distributions on such Class that are

recovered as a voidable preference by a trustee in bankruptcy, less any

Non-Supported Interest Shortfall allocated on such Distribution Date to the

Class B-5 Certificates.

Class B-5 Interest Carry Forward Amount: As of any Distribution Date, the

sum of (1) the excess of (A) the Class B-5 Current Interest with respect to

prior Distribution Dates (excluding any Floating Rate Certificate Carryover for

the Class B-5 Certificates) over (B) the amount actually distributed to the

Class B-5 Certificates with respect to Class B-5 Current Interest and Class B-5

Current Interest Carry Forward Amounts on such prior Distribution Dates and (2)

interest on such excess (to the extent permitted by applicable law) at the Class

B-5 Pass-Through Rate for the related Accrual Period.

Class B-5 Margin: As of any Distribution Date up to and including the

Optional Termination Date for the Class B-5 Certificates, 3.500% per annum and,

as of any Distribution Date after the Optional Termination Date, 5.250% per

annum.

-13-

<PAGE>

Class B-5 Pass-Through Rate: For the first Distribution Date, 6.98125% per

annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR

plus the Class B-5 Margin, (2) the Maximum Rate Cap and (3) the Available Funds

Cap for such Distribution Date.

Class B-5 Principal Distribution Amount: With respect to any Distribution

Date on or after the Stepdown Date, 100% of the Principal Distribution Amount

for such Distribution Date if the Class A Certificate Principal Balance, the

Class R Certificate Principal Balance, the Class M Certificate Principal

Balance, the Class B-1 Certificate Principal Balance, the Class B-2 Certificate

Balance, the Class B-3 Certificate Principal Balance and the Class B-4