<PAGE>

                                                                     EXHIBIT 4.1

                     MERRILL LYNCH MORTGAGE INVESTORS, INC.
                                    Depositor

                        OPTION ONE MORTGAGE CORPORATION,
                                    Servicer

                                       and

                             WELLS FARGO BANK, N.A.,
                                     Trustee

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

                         POOLING AND SERVICING AGREEMENT
                           Dated as of October 1, 2004

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

                     MERRILL LYNCH MORTGAGE INVESTORS TRUST
            MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2004-OPT 1

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                                TABLE OF CONTENTS

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<S>                                                                                                              <C>
ARTICLE I DEFINITIONS........................................................................................      1
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES......................................     40
         SECTION 2.01.  Conveyance of Mortgage Loans.........................................................     40
         SECTION 2.02.  Acceptance by Trustee of the Mortgage Loans..........................................     43
         SECTION 2.03.  Representations, Warranties and Covenants of the Depositor...........................     44
         SECTION 2.04.  Representations and Warranties of the Servicer.......................................     47
         SECTION 2.05.  Substitutions and Repurchases of Mortgage Loans which are not "Qualified
                                    Mortgages"...............................................................     49
         SECTION 2.06.  Authentication and Delivery of Certificates..........................................     49
         SECTION 2.07.  REMIC Elections......................................................................     49
         SECTION 2.08.  Covenants of the Servicer............................................................     52
         SECTION 2.09.  [RESERVED]...........................................................................     53
         SECTION 2.10.  [RESERVED]...........................................................................     53
         SECTION 2.11.  Permitted Activities of the Trust. The Trust is created for the object and
                                    purpose of engaging in the Permitted Activities. In furtherance of
                                    the foregoing, the Trustee is hereby authorized and directed to
                                    execute and deliver on behalf of the Trust, and to perform the duties
                                    and obligations of the Trustee under the Cap Contract and any other
                                    agreement or instrument related thereto, in each case in such form as
                                    the Depositor shall direct or shall approve, the execution and
                                    delivery of any such agreement by the Depositor to be conclusive
                                    evidence of its approval thereof.........................................     53
         SECTION 2.12.  Qualifying Special Purpose Entity. For purposes of SFAS 140, the parties hereto
                                    intend that the Trust Fund shall be treated as a "qualifying special
                                    purpose entity" as such term is used in SFAS 140 and any successor
                                    rule thereto and its power and authority as stated in Section 2.11 of
                                    this Agreement shall be limited in accordance with paragraph 35
                                    thereof..................................................................     53
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS...................................................     53
         SECTION 3.01.  Servicer to Service Mortgage Loans...................................................     53
         SECTION 3.02.  Servicing and Subservicing; Enforcement of the Obligations of Servicer...............     55
         SECTION 3.03.  Rights of the Depositor and the Trustee in Respect of the Servicer...................     56
         SECTION 3.04.  Trustee to Act as Servicer...........................................................     56
         SECTION 3.05.  Collection of Mortgage Loan Payments; Collection Account; Certificate Account........     56
         SECTION 3.06.  Collection of Taxes, Assessments and Similar Items; Escrow Accounts..................     60
         SECTION 3.07.  Access to Certain Documentation and Information Regarding the Mortgage Loans.........     60
         SECTION 3.08.  Permitted Withdrawals from the Collection Account and Certificate Account............     60
         SECTION 3.09.  [RESERVED]...........................................................................     63
         SECTION 3.10.  Maintenance of Hazard Insurance......................................................     63
         SECTION 3.11.  Enforcement of Due-On-Sale Clauses; Assumption Agreements............................     63
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                                TABLE OF CONTENTS
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<S>                                                                                                              <C>
         SECTION 3.12.  Realization Upon Defaulted Mortgage Loans; Determination of Excess Proceeds..........     64
         SECTION 3.13.  Trustee to Cooperate; Release of Mortgage Files......................................     66
         SECTION 3.14.  Documents, Records and Funds in Possession of Servicer to be Held for the
                                    Trustee..................................................................     68
         SECTION 3.15.  Servicing Compensation...............................................................     68
         SECTION 3.16.  Access to Certain Documentation......................................................     68
         SECTION 3.17.  Annual Statement as to Compliance....................................................     69
         SECTION 3.18.  Annual Independent Public Accountants' Servicing Statement; Financial Statements.....     69
         SECTION 3.19.  [RESERVED]...........................................................................     69
         SECTION 3.20.  Periodic Filings.....................................................................     69
         SECTION 3.21.  Annual Certificate by Trustee........................................................     70
         SECTION 3.22.  Annual Certificate by Servicer.......................................................     70
         SECTION 3.23.  Prepayment Penalty Reporting Requirements............................................     71
         SECTION 3.24.  Statements to Trustee................................................................     72
         SECTION 3.25.  Indemnification......................................................................     72
         SECTION 3.26.  Nonsolicitation......................................................................     72
         SECTION 3.27.  MI Policies, Claims Under the MI Policies............................................     72
ARTICLE IV DISTRIBUTIONS.....................................................................................     73
         SECTION 4.01.  Advances.............................................................................     73
         SECTION 4.02.  Reduction of Servicing Compensation in Connection with Prepayment Interest
                                    Shortfalls...............................................................     74
         SECTION 4.03.  Distributions on the REMIC Interests.................................................     74
         SECTION 4.04.  Distributions........................................................................     74
         SECTION 4.05.  Monthly Statements to Certificateholders.............................................     79
ARTICLE V THE CERTIFICATES...................................................................................     82
         SECTION 5.01.  The Certificates.....................................................................     82
         SECTION 5.02.  Certificate Register; Registration of Transfer and Exchange of Certificates..........     83
         SECTION 5.03.  Mutilated, Destroyed, Lost or Stolen Certificates....................................     86
         SECTION 5.04.  Persons Deemed Owners................................................................     87
         SECTION 5.05.  Access to List of Certificateholders' Names and Addresses............................     87
         SECTION 5.06.  Book-Entry Certificates..............................................................     87
         SECTION 5.07.  Notices to Depository................................................................     88
         SECTION 5.08.  Definitive Certificates..............................................................     88
         SECTION 5.09.  Maintenance of Office or Agency......................................................     89
         SECTION 5.10.  [RESERVED]...........................................................................     89
ARTICLE VI THE DEPOSITOR AND THE SERVICER....................................................................     89
         SECTION 6.01.  Respective Liabilities of the Depositor and the Servicer.............................     89
         SECTION 6.02.  Merger or Consolidation of the Depositor or the Servicer.............................     89
         SECTION 6.03.  Limitation on Liability of the Depositor, the Servicer and Others....................     89
         SECTION 6.04.  Limitation on Resignation of Servicer................................................     90
         SECTION 6.05.  Errors and Omissions Insurance; Fidelity Bonds.......................................     90
ARTICLE VII DEFAULT; TERMINATION OF SERVICER.................................................................     91
         SECTION 7.01.  Events of Default....................................................................     91
         SECTION 7.02.  Trustee to Act; Appointment of Successor.............................................     92
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<S>                                                                                                              <C>
         SECTION 7.03.  Notification to Certificateholders...................................................     93
ARTICLE VIII CONCERNING THE TRUSTEE..........................................................................     93
         SECTION 8.01.  Duties of Trustee....................................................................     93
         SECTION 8.02.  Certain Matters Affecting the Trustee................................................     94
         SECTION 8.03.  Trustee Not Liable for Mortgage Loans................................................     96
         SECTION 8.04.  Trustee May Own Certificates.........................................................     96
         SECTION 8.05.  Trustee's Fees and Expenses..........................................................     96
         SECTION 8.06.  Indemnification of Trustee...........................................................     96
         SECTION 8.07.  Eligibility Requirements for Trustee.................................................     97
         SECTION 8.08.  Resignation and Removal of Trustee...................................................     97
         SECTION 8.09.  Successor Trustee....................................................................     98
         SECTION 8.10.  Merger or Consolidation of Trustee...................................................     98
         SECTION 8.11.  Appointment of Co-Trustee or Separate Trustee........................................     98
         SECTION 8.12.  Tax Matters..........................................................................    100
ARTICLE IX TERMINATION.......................................................................................    102
         SECTION 9.01.  Termination upon Liquidation or Repurchase of all Mortgage Loans.....................    102
         SECTION 9.02.  Final Distribution on the Certificates...............................................    102
         SECTION 9.03.  Additional Termination Requirements..................................................    103
ARTICLE X MISCELLANEOUS PROVISIONS...........................................................................    104
         SECTION 10.01. Amendment............................................................................    104
         SECTION 10.02. Counterparts.........................................................................    106
         SECTION 10.03. Governing Law........................................................................    106
         SECTION 10.04. Intention of Parties.................................................................    106
         SECTION 10.05. Notices..............................................................................    106
         SECTION 10.06. Severability of Provisions...........................................................    107
         SECTION 10.07. Assignment; Delegation of Duties.....................................................    107
         SECTION 10.08. Limitation on Rights of Certificateholders...........................................    108
         SECTION 10.09. Inspection and Audit Rights..........................................................    108
         SECTION 10.10. Certificates Nonassessable and Fully Paid............................................    109
         SECTION 10.11. [RESRERVED]..........................................................................    109
         SECTION 10.12. [RESERVED]...........................................................................    109
         SECTION 10.13. [RESERVED]...........................................................................    109
         SECTION 10.14. Assignment; Sales; Advance Facilities................................................    109
</TABLE>

<TABLE>
<S>              <C>
EXHIBIT A        FORMS OF OFFERED CERTIFICATES
EXHIBIT B-1      MORTGAGE LOAN SCHEDULE
EXHIBIT B-2      MORTGAGE LOAN SCHEDULE - GROUP ONE MORTGAGE LOANS
EXHIBIT B-3      MORTGAGE LOAN SCHEDULE - GROUP TWO MORTGAGE LOANS
EXHIBIT B-4      MORTGAGE LOAN SCHEDULE - MI MORTGAGE LOANS
EXHIBIT C        [RESERVED]
EXHIBIT D        FORM OF TRUSTEE CERTIFICATION
EXHIBIT E-1      FORM OF TRANSFEREE'S LETTER AND AFFIDAVIT
EXHIBIT E-2      FORM OF TRANSFEROR AFFIDAVIT
EXHIBIT F        FORM OF TRANSFEROR CERTIFICATE
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                                   (continued)

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                                                                       PAGE
<S>              <C>                                                   <C>
EXHIBIT G        FORM OF INVESTMENT LETTER
EXHIBIT H        FORM OF RULE 144A LETTER
EXHIBIT I        REQUEST FOR RELEASE
EXHIBIT J-1      MI POLICY - PMI MORTGAGE INSURANCE CO.
EXHIBIT J-2      MI POLICY - RADIAN GUARANTY INC.
EXHIBIT K        FORM OF OFFICER'S CERTIFICATE OF TRUSTEE
EXHIBIT L        FORM OF OFFICER'S CERTIFICATE OF SERVICER
EXHIBIT N        FORM OF CAP CONTRACT
EXHIBIT O        ONE MONTH LIBOR CAP TABLE
</TABLE>

                                       iv

<PAGE>

      POOLING AND SERVICING AGREEMENT, dated as of October 1, 2004, among
MERRILL LYNCH MORTGAGE INVESTORS, INC., a Delaware corporation, as depositor
(the "Depositor"), OPTION ONE MORTGAGE CORPORATION, a California corporation, as
servicer (the "Servicer") and WELLS FARGO BANK, N.A., 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. The Trust Fund for federal income
tax purposes will consist of (i) two real estate mortgage investment conduits,
(ii) the right to receive (x) proceeds from Prepayment Charges on the Mortgage
Loans, (y) amounts paid by the Servicer, the Seller or the Transferor in respect
of Prepayment Charges pursuant to this Agreement or the Transfer Agreement, as
applicable, and (z) amounts received in respect of any indemnification paid as a
result of a Prepayment Charge being unenforceable in breach of the
representations and warranties set forth in the Sale Agreement or the Transfer
Agreement, (iii) the Cap Contract and the Cap Contract Account and (iv) the
grantor trusts described in Section 2.07 hereof. The Lower Tier REMIC will
consist of all of the assets constituting the Trust Fund (other than the assets
described in clauses (ii), (iii) and (iv) above and the Lower Tier REMIC Regular
Interests) and will be evidenced by the Lower Tier REMIC Regular Interests
(which will be uncertificated and will represent the "regular interests" in the
Lower Tier REMIC) and the Class LTR Interest as the single "residual interest"
in the Lower Tier REMIC. The Trustee will hold the Lower Tier REMIC Regular
Interests. The Upper Tier REMIC will consist of the Lower Tier REMIC Regular
Interests and will be evidenced by the REMIC Regular Interests (which will
represent the "regular interests" in the Upper Tier REMIC) and the Residual
Interest as the single "residual interest" in the Upper Tier REMIC. The Class R
Certificate will represent beneficial ownership of the Class LTR Interest and
the Residual Interest. The "latest possible maturity date" for federal income
tax purposes of all interests created hereby will be the Latest Possible
Maturity Date.

      All covenants and agreements made by the Transferor in the Transfer
Agreement, 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 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 Practices: The Servicer's normal servicing practices
that it customarily employs and exercises in servicing and administering
mortgage loans for its own account giving due consideration to accepted mortgage
servicing practices of prudent mortgage lending institutions that service for
their own account mortgage loans of the same type as the Mortgages Loans in the
jurisdictions in which the related Mortgaged Properties (or Underlying Mortgaged
Properties, in the case of Co-op Loans) are located.

      Accrual Period: With respect to each Class of Certificates and the Lower
Tier REMIC Interests 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. All calculations of interest on each Class of
Certificates and the Lower Tier REMIC Interests will be made on the basis of the
actual number of days elapsed in the related Accrual Period and a 360 day year.

<PAGE>

      Adjustable Rate Mortgage Loan: A Mortgage Loan identified in the Mortgage
Loan Schedule as having a Mortgage Rate which is adjustable.

      Adjustment Date: As to each Adjustable Rate Mortgage Loan, each date on
which the related Mortgage Rate is subject to adjustment, as provided in the
related Mortgage Note.

      Advance: The aggregate of the advances required to be made by the Servicer
with respect to any Distribution Date pursuant to Section 4.01, the amount of
any such advances being equal to the sum of the aggregate amount of all payments
of principal and interest (net of the Servicing Fees) on the Mortgage Loans that
were due during the applicable Due Period and not received as of the close of
business on the related Determination Date, less the aggregate amount of any
such Delinquent payments that the Servicer has determined would constitute a
Non-Recoverable Advance were an advance to be made with respect thereto.

      Advance Facility: A financing or other facility as described in Section
10.14(a).

      Advance Facility Notice: As defined in Section 10.14(b).

      Advance Financing Person: As defined in Section 10.14(a).

      Advance Reimbursement Amounts: As defined in Section 10.14(a).

      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-1A Certificate Principal Balance, the Class A-1B
Certificate Principal Balance, the Class A-2A Certificate Principal Balance, the
Class A-2B 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 B-1
Certificate Principal Balance, the Class B-2 Certificate Principal Balance and
the Class B-3 Certificate Principal Balance, in each case as of such date of
determination.

      Agreement: This Pooling and Servicing Agreement and any and all amendments
or supplements hereto made in accordance with the terms herein.

      Applied Realized Loss Amount: With respect to any Distribution Date, the
amount, if any, by which, the sum of (i) the Aggregate Certificate Principal
Balance and (ii) the Class C 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.

      Appraised Value: With respect to any Mortgaged Property (or Underlying
Mortgaged Property in the case of a Co-op Loan) the lesser of (i) the lesser of
(a) the value thereof as determined by an appraisal made for the originator of
the Mortgage Loan at the time of origination of the Mortgage Loan by an
appraiser who met the minimum requirements of Fannie Mae and Freddie Mac and (b)
the value thereof as determined by a review appraisal conducted by the
Transferor in the event any such review appraisal determines an appraised value
more than ten percent lower than the value thereof as determined by the
appraisal referred to in clause (i)(a) above; in the case of a Mortgage Loan
with a Loan-to-Value Ratio

                                      -2-

<PAGE>

less than or equal to 80%, or more than five percent lower than the value
thereof as determined by the appraisal referred to in clause (i)(a) above; in
the case of a Mortgage Loan with a Loan-to-Value Ratio greater than 80%, as
determined by the appraisal referred to in clause (i)(a), and (ii) the purchase
price paid for the related Mortgaged Property (or Underlying Mortgaged Property
in the case of a Co-op Loan) by the Mortgagor with the proceeds of the Mortgage
Loan, provided, however, (A) in the case of a Refinanced Mortgage Loan, such
value of the Mortgaged Property (or Underlying Mortgaged Property in the case of
a Co-op Loan) is based solely upon the lesser of (1) the value determined by an
appraisal made for the originator of such Refinanced Mortgage Loan at the time
of origination of such Refinanced Mortgage Loan by an appraiser who met the
minimum requirements of Fannie Mae and Freddie Mac and (2) the value thereof as
determined by a review appraisal conducted by the Transferor in the event any
such review appraisal determines an appraised value of more than ten percent
lower than the value thereof as determined by the appraisal referred to in
clause (A)(1) above; in the case of a Mortgage Loan with a Loan-to-Value Ratio
less than or equal to 80%, or more than five percent lower than the value
thereof as determined by the appraisal referred to in clause (A)(1) above, in
the case of a Mortgage Loan with a Loan-to-Value Ratio greater than 80%, as
determined by the appraisal referred to in clause (A)(1) and (B) in the case of
a Mortgage Loan originated in connection with a "lease-option purchase", such
value of the Mortgaged Property (or Underlying Mortgaged Property in the case of
a Co-op Loan) is based on the lower of the value determined by an appraisal made
for the Transferor of such Mortgage Loan at the time of origination and the sale
price of such Mortgaged Property (or Underlying Mortgaged Property in the case
of a Co-op Loan) if the "lease option purchase price" was set less than 12
months prior to origination, and is based on the value determined by an
appraisal made for the originator of such Mortgage Loan at the time of
origination if the "lease option purchase price" was set 12 months or more prior
to origination.

      Assignment of Mortgage: An assignment of the Mortgage, notice of transfer
(or UCC-3 assignment (or equivalent instrument) with respect to each Co-op Loan)
or equivalent instrument, in recordable form (except in the case of a Co-op
Loan) (except for the name of the assignee if such Mortgage Loan is endorsed in
blank), sufficient under the laws of the jurisdiction where the related
Mortgaged Property (or Underlying Mortgaged Property, in the case of a Co-op
Loan) 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.

      Auction: The one-time auction conducted by the Trustee, as described in
Section 9.01(b) hereof.

      Auction Date: The date on which the Auction occurs.

      Available Funds Cap: With respect to any Distribution Date, a per annum
rate equal to 12 times the quotient of (x) the total scheduled interest on the
Mortgage Loans based on the Net Mortgage Rates in effect on the related Due Date
divided by (y) the Aggregate Certificate Principal Balance for such Distribution
Date multiplied by 30 and divided by the actual number of days in the related
Accrual Period.

      Balloon Loan: A Mortgage Loan having an original term to stated maturity
of approximately 15 years which provides for level monthly payments of principal
and interest 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

                                      -3-

<PAGE>

indirectly, as an indirect participant in accordance with the rules of the
Depository and as described in Section 5.06). As of the Closing Date, each of
the Class A-1A, Class A-1B, Class A-2A, Class A-2B, Class M-1, Class M-2, Class
M-3, Class B-1, Class B-2 and Class B-3 Certificates constitutes a Class of
Book-Entry Certificates.

      Business Day: Any day other than (1) a Saturday or a Sunday, or (2) a day
on which banking institutions in the State of California, State of Florida,
State of Maryland, State of Minnesota, Commonwealth of Pennsylvania or the City
of New York, New York are authorized or obligated by law or executive order to
be closed.

      Cap Contract: The amended confirmation and agreement and any related
confirmation thereto, between the Trustee and Swiss Re Financial Products
Corporation (in the form of Exhibit N hereto).

      Cap Contract Account: The separate Eligible Account created and maintained
by the Trustee pursuant to Section 4.04(k) in the name of the Trustee for the
benefit of the Trust Fund and designated "Wells Fargo Bank, N.A., as Trustee, in
trust for registered holders of Merrill Lynch Mortgage Investors Trust, Mortgage
Loan Asset-Backed Certificates, Series 2004-OPT1." 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 Notional Balance: With respect to any Distribution Date, the
Cap Contract Notional Balance set forth for such Distribution Date in the
One-Month LIBOR Cap Table attached hereto as Exhibit O.

      Cap Contract Termination Date: The Distribution Date in May 2011.

      Certificate: Any one of the certificates of any Class executed by the
Trustee and authenticated by the Trustee in substantially the forms attached
hereto as Exhibits A.

      Certificate Account: The separate Eligible Account created and maintained
by the Trustee pursuant to Section 3.05(f) in the name of the Trustee for the
benefit of the Certificateholders and designated "Wells Fargo Bank, N.A., as
Trustee, in trust for registered holders of Merrill Lynch Mortgage Investors
Trust, Mortgage Loan Asset-Backed Certificates, Series 2004-OPT1." 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 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 4.04, and (2) any Applied Realized Loss Amounts
allocated to such Certificate on previous Distribution Dates pursuant to Section
4.04(i). On each Distribution Date, after all distributions of principal on such
Distribution Date, a portion of the Class C Interest Carry Forward Amount in an
amount equal to the excess of the Overcollateralization Amount on such
Distribution Date over the Overcollateralization Amount as of the preceding
Distribution Date (or, in the case of the first Distribution Date, the initial
Overcollateralization Amount (based on the Stated Principal Balance of the
Mortgage Loans as of the Cut-Off Date)) will be added to the aggregate
Certificate Principal Balance of the Class C Certificates (on a pro rata basis).
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

                                      -4-

<PAGE>

the lesser of (i) the Unpaid Realized Loss Amount for such Class of Certificates
and (ii) the total of any Subsequent Recovery 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 5.02
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 any Class of Regular Certificates or the Class R
Certificate, 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 Trustee is 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 5.01 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, the Class A-2A Certificate Principal Balance, the Class A-2B
Certificate Principal Balance and the Class R Certificate Principal Balance.

      Class A Certificates: Any of the Class A-1A Certificates, Class A-1B
Certificates, Class A-2A Certificates, Class A-2B Certificates and Class R
Certificate.

      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 immediately prior to
such Distribution Date over (B) the lesser of (i) 81.50% 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 Certificates.

      Class A-1A Certificate: 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 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class A-1A Certificates.

      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 such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class A-1A Interest Carry Forward Amount that is recovered as a
voidable

                                      -5-

<PAGE>

preference by a trustee in bankruptcy, less any Non-Supported Interest Shortfall
allocated on such Distribution Date to the Class A-1A Certificates. For purposes
of calculating interest, principal distributions on a Distribution Date will be
deemed to have been made on the first day of the Accrual Period in which such
Distribution Date occurs.

      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 over (B) the amount actually distributed to the Class
A-1A Certificates with respect to interest 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 Certificates, 0.260% per annum and, as of any
Distribution Date after the Optional Termination Date, 0.520% per annum.

      Class A-1A Pass-Through Rate: For the first Distribution Date, 2.150% 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: 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 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class A-1B Certificates.

      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 such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class A-1B Interest Carry Forward Amount that is 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.
For purposes of calculating interest, principal distributions on a Distribution
Date will be deemed to have been made on the first day of the Accrual Period in
which such Distribution Date occurs.

      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 over (B) the amount actually distributed to the Class
A-1B Certificates with respect to interest 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 Certificates, 0.430% per annum and, as of any
Distribution Date after the Optional Termination Date, 0.860% per annum.

      Class A-1B Pass-Through Rate: For the first Distribution Date, 2.320% 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-2A Certificate: Any Certificate designated as a "Class A-2A
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.

                                      -6-

<PAGE>

      Class A-2A Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class A-2A Certificates.

      Class A-2A Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class A-2A Pass-Through Rate on
the Class A-2A Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class A-2A Interest Carry Forward Amount that is 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-2A Certificates.
For purposes of calculating interest, principal distributions on a Distribution
Date will be deemed to have been made on the first day of the Accrual Period in
which such Distribution Date occurs.

      Class A-2A Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class A-2A Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
A-2A Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class A-2A Pass-Through Rate for the related Accrual Period.

      Class A-2A Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.360% per annum and, as of any
Distribution Date after the Optional Termination Date, 0.720% per annum.

      Class A-2A Pass-Through Rate: For the first Distribution Date, 2.250% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class A-2A Margin, (2) the Maximum Rate Cap and (3) the Available Funds
Cap for such Distribution Date.

      Class A-2B Certificate: Any Certificate designated as a "Class A-2B
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.

      Class A-2B Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class A-2B Certificates.

      Class A-2B Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class A-2B Pass-Through Rate on
the Class A-2B Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class A-2B Interest Carry Forward Amount that is 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-2B Certificates.
For purposes of calculating interest, principal distributions on a Distribution
Date will be deemed to have been made on the first day of the Accrual Period in
which such Distribution Date occurs.

      Class A-2B Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class A-2B Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
A-2B Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class A-2B Pass-Through Rate for the related Accrual Period.

      Class A-2B Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.450% per annum and, as of any
Distribution Date after the Optional Termination Date, 0.900% per annum.

                                      -7-

<PAGE>

      Class A-2B Pass-Through Rate: For the first Distribution Date, 2.340% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class A-2B Margin, (2) the Maximum Rate Cap and (3) the Available Funds
Cap for such Distribution Date.

      Class B Certificates: Any of the Class B-1, the Class B-2 or the Class B-3
Certificate.

      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 such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class B-1 Interest Carry Forward Amount that is 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. For
purposes of calculating interest, principal distributions on a Distribution Date
will be deemed to have been made on the first day of the Accrual Period in which
such Distribution Date occurs.

      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 over (B) the amount actually distributed to the Class
B-1 Certificates with respect to interest 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.

      Class B-1 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 2.100% per annum and, as of any
Distribution Date after the Optional Termination Date, 3.150% per annum.

      Class B-1 Pass-Through Rate: For the first Distribution Date, 3.990% 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 M-1 Certificate Principal Balance, the Class M-2 Certificate Principal
Balance and the Class M-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
(after taking into account distributions of the Class A Principal Distribution
Amount on such Distribution Date), (B) the Class M-1 Certificate Principal
Balance (after taking into account distributions of the Class M-1 Principal
Distribution Amount on such Distribution Date), (C) the Class M-2 Certificate
Principal Balance (after taking into account distributions of the Class M-2
Principal Distribution Amount on such Distribution Date), (D) the Class M-3
Certificate Principal Balance (after taking into account distributions of the
Class M-3 Principal Distribution Amount on such Distribution Date) and (E) the
Class B-1 Certificate Principal Balance immediately prior to such

                                      -8-

<PAGE>

Distribution Date over (2) the lesser of (A) 96.50% 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 and Class M Certificates has been reduced to
zero, the Class B-1 Principal Distribution Amount will equal the lesser of (x)
the outstanding Certificate Principal Balance of the Class B-1 Certificates and
(y) 100% of the Principal Distribution Amount remaining after any distributions
on such Class of the Class A 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 last sentence
of 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 such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class B-2 Interest Carry Forward Amount that is 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. For
purposes of calculating interest, principal distributions on a Distribution Date
will be deemed to have been made on the first day of the Accrual Period in which
such Distribution Date occurs.

      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 over (B) the amount actually distributed to the Class
B-2 Certificates with respect to interest 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 Certificates, 3.000% per annum and, as of any
Distribution Date after the Optional Termination Date, 4.500% per annum.

      Class B-2 Pass-Through Rate: For the first Distribution Date, 4.890% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class B-2 Margin, (2) the Maximum Rate Cap and (3) the Available Funds
Cap for such Distribution Date.

                                      -9-

<PAGE>

      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 M-1 Certificate Principal Balance, the Class M-2 Certificate Principal
Balance, the Class M-3 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 (after taking into account
distributions of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class M-1 Certificate Principal Balance (after taking into
account distributions of the Class M-1 Principal Distribution Amount on such
Distribution Date), (C) the Class M-2 Certificate Principal Balance (after
taking into account distributions of the Class M-2 Principal Distribution Amount
on such Distribution Date), (D) the Class M-3 Certificate Principal Balance
(after taking into account distributions of the Class M-3 Principal Distribution
Amount on such Distribution Date), (E) 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 (F) the Class B-2 Certificate
Principal Balance immediately prior to such Distribution Date over (2) the
lesser of (A) 97.50% 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 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
Certificate Principal Balance of the Class B-2 Certificates and (y) 100% of the
Principal Distribution Amount remaining after any distributions on such Class of
the Class A, 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 last sentence
of 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.

      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 such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class B-3 Interest Carry Forward Amount that is 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. For
purposes of calculating interest, principal distributions on a Distribution Date
will be deemed to have been made on the first day of the Accrual Period in which
such Distribution Date occurs.

                                      -10-

<PAGE>

      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 over (B) the amount actually distributed to the Class
B-3 Certificates with respect to interest 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 Certificates, 3.750% per annum and, as of any
Distribution Date after the Optional Termination Date, 5.625% per annum.

      Class B-3 Pass-Through Rate: For the first Distribution Date, 5.640% 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 M-1 Certificate Principal Balance, the Class M-2 Certificate Principal
Balance, the Class M-3 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 (after taking into account distributions of the Class A Principal
Distribution Amount on such Distribution Date), (B) the Class M-1 Certificate
Principal Balance (after taking into account distributions of the Class M-1
Principal Distribution Amount on such Distribution Date), (C) the Class M-2
Certificate Principal Balance (after taking into account distributions of the
Class M-2 Principal Distribution Amount on such Distribution Date), (D) the
Class M-3 Certificate Principal Balance (after taking into account distributions
of the Class M-3 Principal Distribution Amount on such Distribution Date), (E)
the Class B-1 Certificate Principal Balance (after taking into account
distributions of the Class B-1 Principal Distribution Amount on such
Distribution Date), (F) the Class B-2 Certificate Principal Balance (after
taking into account the distributions of the Class B-2 Principal Distribution
Amount on such Distribution Date) and (G) the Class B-3 Certificate Principal
Balance immediately prior to such Distribution Date over (2) the lesser of (A)
98.50% of the Stated Principal Balances of the Mortgage Loans as of the end of
the immediately preceding Due Period and (B) the excess of the Stated Principal
Balances 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 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 Certificate
Principal Balance of the Class B-3 Certificates and (y) 100% of the Principal
Distribution Amount remaining after any distributions on such Class of the Class
A, 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.

      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 last sentence
of the definition of "Certificate Principal Balance."

      Class C 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 C Certificates.

                                      -11-

<PAGE>

      Class C Certificate: Any Certificate designated as a "Class C Certificate"
on the face thereof, in the form of Exhibit A hereto, representing the right to
distributions as set forth herein.

      Class C Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class C Certificates.

      Class C Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class C Distributable Interest
Rate on a notional amount equal to the aggregate principal balance of the Lower
Tier REMIC Regular Interests immediately prior to such Distribution Date, plus
the interest portion of any previous distributions on such Class that is
recovered as a voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest Shortfall allocated on such Distribution Date to the
Class C Certificates.

      Class C Distributable Interest Rate: The excess, if any, of (a) the
weighted average of the interest rates on the Lower Tier REMIC Regular Interests
over (b) two times the weighted average of the interest rates on the Lower Tier
REMIC Regular Interests (treating for purposes of this clause (b) the interest
rate on each of the Lower Tier REMIC Marker Classes as being capped at the
interest rate of its Related Certificates and treating the Class LTX Interest as
being capped at zero). The averages described in the preceding sentence shall be
weighted on the basis of the respective principal balances of the Lower Tier
REMIC Regular Interests immediately prior to any date of determination.

      Class C Interest Carry Forward Amount: As of any Distribution Date, the
excess of (A) the Class C Current Interest with respect to prior Distribution
Dates over (B) the amount actually distributed to the Class C Certificates with
respect to interest on such prior Distribution Dates or added to the aggregate
Certificate Principal Balance of the Class C Certificates.

      Class C Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class C Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class C Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class C Certificates pursuant to the last sentence of
the definition of "Certificate Principal Balance."

      Class LTA-1A Interest: An uncertificated regular interest in the Lower
Tier REMIC with an initial principal balance equal to 1/2 of the initial
principal balance of its Related Certificates and an interest rate equal to the
Net Rate.

      Class LTA-1B Interest: An uncertificated regular interest in the Lower
Tier REMIC with an initial principal balance equal to 1/2 of the initial
principal balance of its Related Certificate and an interest rate equal to the
Net Rate.

      Class LTA-2A Interest: An uncertificated regular interest in the Lower
Tier REMIC with an initial principal balance equal to 1/2 of the initial
principal balance of its Related Certificate and an interest rate equal to the
Net Rate.

      Class LTA-2B Interest: An uncertificated regular interest in the Lower
Tier REMIC with an initial principal balance equal to 1/2 of the initial
principal balance of its Related Certificate and an interest rate equal to the
Net Rate.

      Class LTB-1 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/2 of the initial principal
balance of its Related Certificate and an interest rate equal to the Net Rate.

                                      -12-

<PAGE>

      Class LTB-2 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/2 of the initial principal
balance of its Related Certificate and an interest rate equal to the Net Rate.

      Class LTB-3 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/2 of the initial principal
balance of its Related Certificate and an interest rate equal to the Net Rate.

      Class LTM-1 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/2 of the initial principal
balance of its Related Certificate and an interest rate equal to the Net Rate.

      Class LTM-2 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/2 of the initial principal
balance of its Related Certificate and an interest rate equal to the Net Rate.

      Class LTM-3 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/2 of the initial principal
balance of its Related Certificate and an interest rate equal to the Net Rate.

      Class LTR Interest: The sole class of "residual interest" in the Lower
Tier REMIC.

      Class LTX Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to the excess of (i) the aggregate
Cut-off Date Principal Balance of the Mortgage Loans over (ii) the aggregate
initial principal balance of the Lower Tier REMIC Marker Classes and an interest
rate equal to the Net Rate.

      Class M Certificates: Any of the Class M-1, Class M-2 and Class M-3
Certificates.

      Class M-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 M-1 Certificates.

      Class M-1 Certificate: Any Certificate designated as a "Class M-1
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.

      Class M-1 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-1 Certificates.

      Class M-1 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-1 Pass-Through Rate on
the Class M-1 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or Class M-1 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class M-1 Certificates. For
purposes of calculating interest, principal distributions on a Distribution Date
will be deemed to have been made on the first day of the Accrual Period in which
such Distribution Date occurs.

      Class M-1 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-1 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-1 Certificates with respect to interest on such prior Distribution Dates

                                      -13-

<PAGE>

and (2) interest on such excess (to the extent permitted by applicable law) at
the Class M-1 Pass-Through Rate for the related Accrual Period.

      Class M-1 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.750% per annum and, as of any
Distribution Date after the Optional Termination Date, 1.125% per annum.

      Class M-1 Pass-Through Rate: For the first Distribution Date, 2.640% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class M-1 Margin, (2) the Maximum Rate Cap and (3) the Available Funds
Cap for such Distribution Date.

      Class M-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 has 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 (after taking into account distributions of the Class A Principal
Distribution Amount on such Distribution Date) and (B) the Class M-1 Certificate
Principal Balance immediately prior to such Distribution Date over (2) the
lesser of (A) 90.00% of the Stated Principal Balances of the Mortgage Loans as
of the end of the immediately preceding Due Period and (B) the excess of the
Stated Principal Balances for 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 Certificates has been reduced to zero, the Class M-1 Principal Distribution
Amount will equal the lesser of (x) the outstanding Certificate Principal
Balance of the Class M-1 Certificates and (y) 100% of the Principal Distribution
Amount remaining after any distributions on such Class A Certificates and (II)
in no event will the Class M-1 Principal Distribution Amount with respect to any
Distribution Date exceed the Class M-1 Certificate Principal Balance.

      Class M-1 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-1 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class M-1 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-1 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."

      Class M-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 M-2 Certificates.

      Class M-2 Certificate: Any Certificate designated as a "Class M-2
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.

      Class M-2 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-2 Certificates.

      Class M-2 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-2 Pass-Through Rate on
the Class M-2 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or Class M-2 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class M-2 Certificates. For
purposes of calculating interest, principal distributions on a Distribution Date

                                      -14-

<PAGE>

will be deemed to have been made on the first day of the Accrual Period in which
such Distribution Date occurs.

      Class M-2 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-2 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-2 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class M-2 Pass-Through Rate for the related Accrual Period.

      Class M-2 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 1.350% per annum and, as of any
Distribution Date after the Optional Termination Date, 2.025% per annum.

      Class M-2 Pass-Through Rate: For the first Distribution Date, 3.240% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class M-2 Margin, (2) the Maximum Rate Cap and (3) the Available Funds
Cap for such Distribution Date.

      Class M-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 and the
Class M-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 (after taking into
account distributions of the Class A Principal Distribution Amount on such
Distribution Date), (B) the Class M-1 Certificate Principal Balance (after
taking into account distributions of the Class M-1 Principal Distribution Amount
on such Distribution Date) and (C) the Class M-2 Certificate Principal Balance
immediately prior to such Distribution Date over (2) the lesser of (A) 94.50% of
the Stated Principal Balances of the Mortgage Loans as of the end of the
immediately preceding Due Period and (B) the excess of the Stated Principal
Balances 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 Certificates and the
Class M-1 Certificates has been reduced to zero, the Class M-2 Principal
Distribution Amount will equal the lesser of (x) the outstanding Certificate
Principal Balance of the Class M-2 Certificates and (y) 100% of the Principal
Distribution Amount remaining after any distributions on such Class of the Class
A and Class M-1 Certificates and (II) in no event will the Class M-2 Principal
Distribution Amount with respect to any Distribution Date exceed the Class M-2
Certificate Principal Balance.

      Class M-2 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-2 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class M-2 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-2 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."

      Class M-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 M-3 Certificates.

      Class M-3 Certificate: Any Certificate designated as a "Class M-3
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.

      Class M-3 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-3 Certificates.

                                      -15-

<PAGE>

      Class M-3 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-3 Pass-Through Rate on
the Class M-3 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or Class M-3 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class M-3 Certificates. For
purposes of calculating interest, principal distributions on a Distribution Date
will be deemed to have been made on the first day of the Accrual Period in which
such Distribution Date occurs.

      Class M-3 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-3 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-3 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class M-3 Pass-Through Rate for the related Accrual Period.

      Class M-3 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 1.650% per annum and, as of any
Distribution Date after the Optional Termination Date, 2.475% per annum.

      Class M-3 Pass-Through Rate: For the first Distribution Date, 3.540% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class M-3 Margin, (2) the Maximum Rate Cap and (3) the Available Funds
Cap for such Distribution Date.

      Class M-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, Class
M-1 Certificate Principal Balance and Class M-2 Certificate Principal Balance
has 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 (after taking into account distributions of the Class A
Principal Distribution Amount on such Distribution Date), (B) the Class M-1
Certificate Principal Balance (after taking into account distributions of the
Class M-1 Principal Distribution Amount on such Distribution Date), (C) the
Class M-2 Certificate Principal Balance (after taking into account distributions
of the Class M-2 Principal Distribution Amount on such Distribution Date) and
(D) the Class M-3 Certificate Principal Balance immediately prior to such
Distribution Date over (2) the lesser of (A) 95.50% of the Stated Principal
Balances of the Mortgage Loans as of the end of the immediately preceding Due
Period and (B) the excess of the Stated Principal Balances for 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 Certificates, the Class M-1 Certificates and
the Class M-2 Certificates has been reduced to zero, the Class M-3 Principal
Distribution Amount will equal the lesser of (x) the outstanding Certificate
Principal Balance of the Class M-3 Certificates and (y) 100% of the Principal
Distribution Amount remaining after any distributions on such Class of the Class
A, Class M-1 and Class M-2 Certificates and (II) in no event will the Class M-3
Principal Distribution Amount with respect to any Distribution Date exceed the
Class M-3 Certificate Principal Balance.

      Class M-3 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-3 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class M-3 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-3 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."

                                      -16-

<PAGE>

      Class P Certificate: Any Certificate designated as a Class P Certificate
on the face thereof, executed by the Trustee and authenticated by the Trustee in
substantially the form set forth in Exhibit A, representing the right to
distributions as set forth herein.

      Class R Certificate: The Class R Certificate executed by the Trustee and
authenticated by the Trustee in substantially the form set forth in Exhibit A.

      Class R Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class R Certificate.

      Class R Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class R Pass-Through Rate on
the Class R Certificate Principal Balance as of such Distribution Date plus the
portion of any previous distributions on such Class in respect of Current
Interest or a Class R Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class R Certificate. For
purposes of calculating interest, principal distributions on a Distribution Date
will be deemed to have been made on the first day of the Accrual Period in which
such Distribution Date occurs.

      Class R Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class R Current Interest with respect to prior
Distribution Dates over (B) the amount actually distributed to the Class R
Certificate with respect to interest on such prior Distribution Dates and (2)
interest on such excess (to the extent permitted by applicable law) at the Class
R Pass-Through Rate for the related Accrual Period.

      Class R Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.260% per annum and, as of any
Distribution Date after the Optional Termination Date, 0.520% per annum.

      Class R Pass-Through Rate: For the first Distribution Date, 2.150% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class R Margin, (2) the Maximum Rate Cap and (3) the Available Funds
Cap for such Distribution Date.

      Closing Date: October 12, 2004.

      Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.

      Collection Account: The separate Eligible Account created and initially
maintained by the Servicer pursuant to Section 3.05(d) in the name of the
Trustee for the benefit of the Certificateholders and designated "Option One
Mortgage Corporation, as Servicer for Wells Fargo Bank, N.A., as Trustee, in
trust for registered holders of Merrill Lynch Mortgage Investors Trust, Mortgage
Loan Asset-Backed Certificates, Series 2004-OPT1". Funds in the Collection
Account shall be held in trust for the Certificateholders for the uses and
purposes set forth in this Agreement.

      Combined Loan-to-Value Ratio: For any Mortgage Loan in a second lien
position, the fraction, expressed as a percentage, the numerator of which is the
sum of (1) the original principal balance of the related Mortgage Loan and (2)
any outstanding principal balances of Mortgage Loans the liens on which are
senior to the lien on such Mortgage Loan (such sum calculated at the date of
origination of such related Mortgage Loan) and the denominator of which is the
Appraised Value of the related Mortgaged Property (or applicable dwelling unit,
in the case of a Co-op Loan).

                                      -17-

<PAGE>

      Compensating Interest: With respect to any Mortgage Loan and any
Distribution Date, an amount equal to the portion of any Prepayment Interest
Shortfalls required to be deposited in the Collection Account by the Servicer
pursuant to Section 4.02 hereof.

      Condemnation Proceeds: All awards or settlements in respect of a Mortgaged
Property (or Underlying Mortgaged Property, in the case of a Co-op Loan),
whether permanent or temporary, partial or entire, by exercise of the power of
eminent domain or condemnation, to the extent not required to be released either
to a Mortgagor in accordance with the terms of the related mortgage loan
documents or to the holder of a senior lien on the Mortgaged Property (or
Underlying Mortgaged Property, in the case of a Co-op Loan).

      Co-op Lease: With respect to a Co-op Loan, the lease with respect to a
dwelling unit occupied by the Mortgagor and relating to the stock allocated to
the related dwelling unit.

      Co-op Loan: A Mortgage Loan secured by the pledge of stock allocated to a
dwelling unit in a residential cooperative housing corporation and a collateral
assignment of the related Co-op Lease.

      Current Interest: Any of the Class A-1A Current Interest, the Class A-1B
Current Interest, the Class A-2A Current Interest, the Class A-2B Current
Interest, the Class R Current Interest, the Class M-1 Current Interest, the
Class M-2 Current Interest, the Class M-3 Current Interest, the Class B-1
Current Interest, the Class B-2 Current Interest and Class B-3 Current Interest.

      Cut-off Date: October 1, 2004.

      Cut-off Date Principal Balance: As to any Mortgage Loan, the unpaid
principal balance thereof as of the close of business on the calendar day
immediately preceding the Cut-off Date after application of all payments of
principal due on or prior to the Cut-off Date, whether or not received, and all
Principal Prepayments received prior to the Cut-off Date, but without giving
effect to any installments of principal received in respect of Due Dates on and
after the Cut-off Date.

      Definitive Certificates: As defined in Section 5.06.

      Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced by a
Replacement Mortgage Loan.

      Delinquent: A Mortgage Loan is "delinquent" if any payment due thereon is
not made pursuant to the terms of such Mortgage Loan by the close of business on
the day such payment is scheduled to be due. A Mortgage Loan is "30 days
delinquent" if such payment has not been received by the close of business on
the corresponding day of the month immediately succeeding the month in which
such payment was due, or, if there is no such corresponding day (e.g., as when a
30-day month follows a 31-day month in which a payment was due on the 31st day
of such month), then on the last day of such immediately succeeding month.
Similarly for "60 days delinquent," "90 days delinquent" and so on.

      Denomination: With respect to each Certificate, the amount set forth on
the face thereof as the "Initial Principal Balance of this Certificate."

      Depositor: Merrill Lynch Mortgage Investors, Inc., a Delaware corporation,
or its successor in interest.

      Depository: The initial Depository shall be The Depository Trust Company
("DTC"), the nominee of which 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

                                      -18-

<PAGE>

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 Agreement: With respect to Classes of Book-Entry Certificates,
the agreement between the Trustee and the initial Depository.

      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.

      Designated Transaction: A transaction in which the assets underlying the
Certificates consist of single-family residential, multi-family residential,
home equity, manufactured housing and/or commercial mortgage obligations that
are secured by single-family residential, multi-family residential, commercial
real property or leasehold interests therein.

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

      Disqualified Organization: (1) the United States, any state or political
subdivision thereof, any foreign government, any international organization, or
any agency or instrumentality of any of the foregoing, (2) any organization
(other than a cooperative described in Section 521 of the Code) which is exempt
from tax under Chapter 1 of Subtitle A of the Code unless such organization is
subject to the tax imposed by Section 511 of the Code and (3) any organization
described in Section 1381(a)(2)(C) of the Code.

      Distribution Date: The 25th day of each calendar month, or if such 25th
day is not a Business Day, the next succeeding Business Day, commencing in
November 2004.

      Due Date: With respect to any Distribution Date and any Mortgage Loan, the
day during the related Due Period on which a Scheduled Payment is due.

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

      Eligible Account: An account that is (i) maintained with a depository
institution the long-term unsecured debt obligations of which are rated by each
Rating Agency in one of its two highest rating categories, or (ii) maintained
with the corporate trust department of a bank which (A) has a rating of at least
Baa3 or P-3 by Moody's and (B) is either the Depositor or the corporate trust
department of a national bank or banking corporation which has a rating of at
least A-1 by S&P or F1 by Fitch, or (iii) an account or accounts the deposits in
which are fully insured by the FDIC, or (iv) an account or accounts, acceptable
to each Rating Agency without reduction or withdrawal of the rating of any Class
of Certificates, as evidenced in writing, by a depository institution in which
such accounts are insured by the FDIC (to the limit established by the FDIC),
the uninsured deposits in which accounts are otherwise secured such that, as
evidenced by an Opinion of Counsel delivered to and acceptable to the Trustee
and each Rating Agency, the Certificateholders have a claim with respect to the
funds in such account and a perfected first security interest against any
collateral (which shall be limited to Permitted Investments) securing such funds
that is superior to claims of any other depositors or creditors of the
depository institution with which such account is maintained, or (v) maintained
at an eligible institution whose commercial paper, short-term debt or other
short-term deposits are rated at least A-1+ by S&P and F-1+ by Fitch, or (vi)
maintained with a federal or state chartered depository institution the deposits
in which

                                      -19-

<PAGE>

are insured by the FDIC to the applicable limits and the short-term unsecured
debt obligations of which (or, in the case of a depository institution that is a
subsidiary of a holding company, the short-term unsecured debt obligations of
such holding company) are rated A-1 by S&P or Prime-1 by Moody's at the time any
deposits are held on deposit therein, or (vii) a segregated trust account or
accounts maintained with a federal or state chartered depository institution or
trust company acting in its fiduciary capacity, that is acceptable to the Rating
Agencies, or (viii) otherwise acceptable to each Rating Agency, as evidenced by
a letter from each Rating Agency to the Trustee.

      ERISA: The Employee Retirement Income Security Act of 1974, including any
successor or amendatory provisions.

      ERISA Restricted Certificate: The Class C Certificates, the Class P
Certificates and the Class R Certificate and any other Certificate, unless such
other Certificate shall have received a rating from a Rating Agency at the time
of a transfer of such other Certificate that is in one of the three (or in the
case of Designated Transactions, four) highest generic rating categories.

      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: As defined in Section 7.01 hereof.

      Excess Interest: On any Distribution Date, for each Class of the Class A,
Class B and Class M Certificates, the excess, if any, of (1) the amount of
interest such Class of Certificates is entitled to receive on such Distribution
Date at its Pass-Through Rate over (2) the amount of interest such Class of
Certificates would have been entitled to receive on such Distribution Date had
the Pass-Through Rate for such Class been the REMIC Pass-Through Rate.

      Excess Proceeds: With respect to any Liquidated Loan, any Liquidation
Proceeds that are in excess of the sum of (1) the unpaid principal balance of
such Liquidated Loan as of the date of such liquidation plus (2) interest at the
Mortgage Rate from the Due Date as to which interest was last paid or advanced
to Certificateholders (and not reimbursed to the Servicer) up to the Due Date in
the month in which such Liquidation Proceeds are required to be distributed on
the unpaid principal balance of such Liquidated Loan outstanding during each Due
Period as to which such interest was not paid or advanced.

      Exchange Act: The Securities Exchange Act of 1934, as amended.

      Extra Principal Distribution Amount: With respect to any Distribution
Date, (1) prior to the Stepdown Date, the excess of (A) the sum of (i) the
Aggregate Certificate Principal Balance immediately preceding such Distribution
Date reduced by the Principal Funds with respect to such Distribution Date and
(ii) $5,466,958 over (B) the Pool Stated Principal Balance of the Mortgage Loans
as of such Distribution Date and (2) on and after the Stepdown Date, (A) the sum
of (i) the Aggregate Certificate Principal Balance immediately preceding such
Distribution Date, reduced by the Principal Funds with respect to such
Distribution Date and (ii) the greater of (a) 1.50% of the Pool Stated Principal
Balance of the Mortgage Loans and (b) the Minimum Required Overcollateralization
Amount less (B) the Pool Stated Principal Balance of the Mortgage Loans as of
such Distribution Date; provided, however, that if on any Distribution Date a
Trigger Event is in effect, the Extra Principal Distribution Amount will not be
reduced to the applicable percentage of the then-current Pool Stated Principal
Balance of the Mortgage Loans as of the Due Date immediately prior to the
Trigger Event until the next Distribution Date on which the Trigger Event is not
in effect.

                                      -20-

<PAGE>

      Fannie Mae: A federally chartered and privately owned corporation
organized and existing under the Federal National Mortgage Association Charter
Act, or any successor thereto.

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

      Fitch: Fitch, Inc., or its successor in interest.

      Fixed Rate Mortgage Loan: A Mortgage Loan identified in the Mortgage Loan
Schedule as having a Mortgage Rate which is fixed.

      Floating Rate Certificate Carryover: With respect to a Distribution Date,
in the event that the Pass-Through Rate for a Class of the Class A, Class M or
Class B Certificates is based upon the Available Funds Cap, the excess of (x)
the amount of interest that such Class would have been entitled to receive on
such Distribution Date had the Pass-Through Rate for that Class not been
calculated based on the Available Funds Cap, up to but not exceeding the Maximum
Rate Cap over (y) the amount of interest payable on such Class on such
Distribution Date based on the Available Funds Cap up to but not exceeding the
Maximum Rate Cap, together with (i) the unpaid portion of any such excess from
prior Distribution Dates (and interest accrued thereon at the then applicable
Pass-Through Rate for such Class, without giving effect to the Available Funds
Cap) and (ii) any amount previously distributed with respect to Floating Rate
Certificate Carryover for such Class that is recovered as a voidable preference
by a trustee in bankruptcy.

      Freddie Mac: A corporate instrumentality of the United States created and
existing under Title III of the Emergency Home Finance Act of 1970, as amended,
or any successor thereto.

      Grantor Trusts: The grantor trusts described in Section 2.07 hereof.

      Gross Margin: The percentage set forth in the related Mortgage Note for
each of the Adjustable Rate Mortgage Loans which is to be added to the
applicable index for use in determining the Mortgage Rate on each Adjustment
Date, and which is set forth in the Mortgage Loan Schedule for each Adjustable
Rate Mortgage Loan.

      Group One Mortgage Loan: Any Mortgage Loan identified in the Group One
Mortgage Loan Schedule attached hereto as Exhibit B-2.

      Group One Principal Distribution Amount: As of any Distribution Date, the
amount equal to the lesser of (1) the sum of the Certificate Principal Balance
of the Class A-1A, Class A-1B and Class R Certificates and (2) the product of
(x) the Group One Principal Distribution Percentage and (y) the Class A
Principal Distribution Amount; provided, however, that (A) with respect to the
Distribution Date on which the Certificate Principal Balance of each of the
Class A-2A and Class A-2B Certificates is initially reduced to zero (so long as
any of the Class R, Class A-1A or Class A-1B Certificates is outstanding), the
portion of the Group Two Principal Distribution Percentage of the Class A
Principal Distribution Amount in excess of the amount necessary to reduce the
Certificate Principal Balance of each of the Class A-2A and Class A-2B
Certificates to zero will be added to the Group One Principal Distribution
Amount and (B) with respect to any Distribution Date thereafter, the Group One
Principal Distribution Amount will equal the Class A Principal Distribution
Amount.

      Group One Principal Distribution Percentage: With respect to any
Distribution Date, a fraction expressed as a percentage, the numerator of which
is the amount of Principal Funds with respect to such Distribution Date received
with respect to Group One Mortgage Loans, and the denominator of which is the
amount of all Principal Funds with respect to such Distribution Date received on
all the Mortgage Loans.

                                      -21-

<PAGE>

      Group Two Mortgage Loan: Any Mortgage Loan identified in the Group Two
Mortgage Loan Schedule attached hereto as Exhibit B-3.

      Group Two Principal Distribution Amount: As of any Distribution Date, the
amount equal to the lesser of (1) the sum of the Certificate Principal Balance
of the Class A-2A and Class A-2B Certificates and (2) the product of (x) the
Group Two Principal Distribution Percentage and (y) the Class A Principal
Distribution Amount; provided, however, that (A) with respect to the
Distribution Date on which the Certificate Principal Balance of each of the
Class R, Class A-1A and Class A-1B Certificates is initially reduced to zero (so
long as either the Class A-2A or Class A-2B Certificates is outstanding) the
portion of the Group One Principal Distribution Percentage of the Class A
Principal Distribution Amount in excess of the amount necessary to reduce the
Certificate Principal Balance of each of the Class A-1A and Class A-1B
Certificates to zero will be added to the Group Two Principal Distribution
Amount and (B) with respect to any Distribution Date thereafter, the Group Two
Principal Distribution Amount will equal the Class A Principal Distribution
Amount.

      Group Two Principal Distribution Percentage: With respect to any
Distribution Date, a fraction expressed as a percentage, the numerator of which
is the amount of Principal Funds with respect to such Distribution Date received
with respect to Group Two Mortgage Loans, and the denominator of which is the
amount of all Principal Funds with respect to such Distribution Date received on
all the Mortgage Loans.

      Indenture: An indenture relating to the issuance of NIM Notes.

      Initial Adjustment Date: As to any Adjustable Rate Mortgage Loan, the
first Adjustment Date following the origination of such Mortgage Loan.

      Initial Certificate Principal Balance: With respect to any Certificate,
the Certificate Principal Balance of such Certificate or any predecessor
Certificate on the Closing Date as set forth in Section 5.01 hereof.

      Initial Mortgage Rate: As to each Mortgage Loan, the Mortgage Rate in
effect prior to the Initial Adjustment Date.

      Initial Optional Termination Date: The first Distribution Date on which
the aggregate Stated Principal Balance of the Mortgage Loans is equal to or less
than 10% of the aggregate Stated Principal Balance of the Mortgage Loans as of
the Cut-off Date.

      Insurance Policy: With respect to any Mortgage Loan or the related
Mortgaged Property (or the related Underlying Mortgaged Property, in the case of
a Co-op Loan) included in the Trust Fund, any insurance policy, including all
riders and endorsements thereto in effect with respect to such Mortgage Loan or
Mortgaged Property (or related Underlying Mortgage Property, in the case of a
Co-op Loan), including any replacement policy or policies for any insurance
policies, including, without limitation, the MI Policies.

      Insurance Proceeds: Proceeds paid in respect of a Mortgage Loan or the
related Mortgaged Property (or the related Underlying Mortgaged Property, in the
case of a Co-op Loan) pursuant to any Insurance Policy or any other insurance
policy covering such Mortgage Loan or Mortgaged Property (or Underlying
Mortgaged Property, in the case of a Co-op Loan), to the extent such proceeds
are payable to the mortgagee under the Mortgage, the Servicer or the trustee
under the deed of trust and are not applied to the restoration of the related
Mortgaged Property (or the related Underlying Mortgaged Property, in the case of
a Co-op Loan) or released either to the Mortgagor or to the holder of a senior
lien on the related

                                      -22-

<PAGE>

Mortgaged Property (or the related Underlying Mortgaged Property in the case of
a Co-op Loan) in accordance with the procedures that the Servicer would follow
in servicing mortgage loans held for its own account, in each case other than
any amount included in such Insurance Proceeds in respect of Insured Expenses.

      Insured Expenses: Expenses covered by an Insurance Policy or any other
insurance policy with respect to a Mortgage Loan or the related Mortgaged
Property (or the related Underlying Mortgaged Property, in the case of a Co-op
Loan).

      Interest Carry Forward Amount: Any of the Class A-1A Interest Carry
Forward Amount, the Class A-1B Interest Carry Forward Amount, the Class A-2A
Interest Carry Forward Amount, the Class A-2B Interest Carry Forward Amount, the
Class R Interest Carry Forward Amount, the Class M-1 Interest Carry Forward
Amount, the Class M-2 Interest Carry Forward Amount, the Class M-3 Interest
Carry Forward Amount, the Class B-1 Interest Carry Forward Amount, the Class B-2
Interest Carry Forward Amount or the Class B-3 Interest Carry Forward Amount, as
the case may be.

      Interest Determination Date: With respect to the Certificates, (i) for any
Accrual Period other than the first Accrual Period, the second LIBOR Business
Day preceding the commencement of such Accrual Period and (ii) for the first
Accrual Period, October 18, 2004.

      Interest Funds: With respect to any Distribution Date, the sum, without
duplication, of (1) all scheduled interest due during the related Due Period and
received before the related Servicer Remittance Date or advanced on or before
the related Servicer Remittance Date less the applicable Servicing Fees, (2) all
Advances relating to interest with respect to the Mortgage Loans, (3) all
Compensating Interest with respect to the Mortgage Loans and such Distribution
Date, (4) Liquidation Proceeds with respect to the Mortgage Loans (to the extent
that such Liquidation Proceeds relate to interest) collected during the related
Prepayment Period, (5) all proceeds of any purchase pursuant to Section 2.02 or
2.03 during the related Prepayment Period or pursuant to Section 9.01 not later
than two Business Days prior to such Distribution Date (to the extent that such
proceeds relate to interest) less the applicable Servicing Fees and (6) all
Prepayment Charges received with respect to the Mortgage Loans during the
related Prepayment Period, less (A) all Non-Recoverable Advances relating to
interest and (B) other amounts reimbursable to the Servicer and the Trustee
pursuant to this Agreement.

      Latest Possible Maturity Date: The latest maturity date for any Mortgage
Loan in the Trust Fund plus one year.

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

      Liquidated Loan: With respect to any Distribution Date, a defaulted
Mortgage Loan that either (a) pursuant to Section 3.12 has been realized upon or
liquidated through deed-in-lieu of foreclosure, foreclosure sale, trustee's sale
or other realization as provided by applicable law governing the real property
subject to the related Mortgage and any security agreements and as to which the
Servicer has certified (in accordance with Section 3.12) in the related
Prepayment Period that it has received all amounts it expects to receive in
connection with such liquidation or (b) as to which is not a first lien Mortgage
Loan and is delinquent 120 days or longer, the Servicer has certified in a
certificate of an officer of the Servicer delivered to the Depositor and the
Trustee that it does not believe that there is a reasonable likelihood that any
further net proceeds will be received or recovered with respect to such Mortgage
Loan.

                                      -23-

<PAGE>

      Liquidation Proceeds: Amounts, including Condemnation Proceeds and
Insurance Proceeds, received in connection with the partial or complete
liquidation of a Mortgage Loan, whether through trustee's sale, foreclosure
sale, sale by the Servicer pursuant to this Agreement or otherwise, and, if
applicable, any REO Disposition Proceeds received by the Servicer in connection
with the final sale of a related REO Property, less the sum of any related
unreimbursed or unpaid Advances, Servicing Fees, Servicing Advances and any
other expenses related to such Mortgage Loan.

      Loan-to-Value Ratio: With respect to any Mortgage Loan, the fraction,
expressed as a percentage, the numerator of which is the original principal
balance of the related Mortgage Loan and the denominator of which is the
Appraised Value of the related Mortgaged Property (or applicable dwelling unit,
in the case of a Co-op Loan).

      Losses: Any losses, claims, damages, liabilities or expenses collectively.

      Lower Tier REMIC: As described in the Preliminary Statement and Section
2.07.

      Lower Tier REMIC Interests: Each of the Class LTA-1A Interest, the Class
LTA-1B Interest, the Class LTA-2A Interest, the Class LTA-2B Interest, the Class
LTM-1 Interest, the Class LTM-2 Interest, the Class LTM-3 Interest, the Class
LTB-1 Interest, the Class LTB-2 Interest, the Class LTB-3 Interest, the Class
LTX Interest and the Class LTR Interest.

      Lower Tier REMIC Marker Classes: Each of the classes of Lower Tier REMIC
Regular Interests other than the Class LTX Interest.

      Lower Tier REMIC Regular Interests: Each of the Lower Tier REMIC Interests
other than the Class LTR Interest.

      Maximum Mortgage Rate: With respect to each Adjustable Rate Mortgage Loan,
the maximum rate of interest set forth as such in the related Mortgage Note and
with respect to each Fixed Rate Mortgage Loan, the rate of interest set forth in
the related Mortgage Note.

      Maximum Rate Cap: With respect to any Distribution Date, 12 times the
quotient of (x) the aggregate scheduled interest that would have been due on the
Mortgage Loans during the related Due Period had the Adjustable Rate Mortgage
Loans provided for interest at their maximum lifetime Net Mortgage Rates and the
Fixed Rate Mortgage Loans provided for interest at their Net Mortgage Rates,
divided by (y) the aggregate Stated Principal Balance of the Mortgage Loans as
of the preceding Distribution Date multiplied by 30 and divided by the actual
number of days in the related Accrual Period.

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

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

      MERS System: The system of recording transfers of mortgage electronically
maintained by MERS.

      MI Insurer Fee: The amount payable to the related MI Insurer on each
Distribution Date, which amount shall equal one-twelfth of the product of (i)
the related MI Insurer Fee Rate and (ii) the Stated Principal Balance of the
applicable MI Mortgage Loan (or the related REO Property) as of the first day of
the related Due Period.

                                      -24-

<PAGE>

      MI Insurer Fee Rate: With respect to each MI Mortgage Loan, the rate
specified for such Mortgage Loan on the schedule attached to the related MI
Policy , plus a rate computed so that the related MI Insurer Fee would make the
related MI Insurer whole for any taxes imposed on such MI Insurer by the States
of Kentucky or West Virginia with respect to MI Mortgage Loans located in such
States.

      MI Insurers: PMI and Radian.

      MI Mortgage Loans: The list of Mortgage Loans insured by the MI Insurers
attached hereto as Exhibit B-4.

      MI Policies: (A) The PMI Bulk Primary MI Policy # 22510-1 and all
endorsements thereto, dated October 19, 2004, with respect to the MI Mortgage
Loans insured by PMI, which is attached hereto as Exhibit J-1 and (B) the Radian
primary private mortgage Insurance Policy No. 54766 and the related Mortgage
Guaranty Commitment Certificate reference ID# 04-998065 and all endorsements
thereto, dated October 19 2004, with respect to the MI Mortgage Loans insured by
Radian, which is attached hereto as Exhibit J-2.

      MIN: The loan number for any MERS Loan.

      Minimum Mortgage Rate: With respect to each Adjustable Rate Mortgage Loan,
the minimum rate of interest set forth as such in the related Mortgage Note.

      Minimum Required Overcollateralization Amount: An amount equal to the
product of (x) 0.50% and (y) the Stated Principal Balance of the Mortgage Loans
as of the Cut-off Date.

      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 Statement: The statement delivered to the Certificateholders
pursuant to Section 4.05.

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

      Mortgage: With respect to a Mortgage Loan that is not a Co-op Loan, the
mortgage, deed of trust or other instrument with all riders attached thereto
creating a first or second lien or a first or second priority ownership interest
in an estate in fee simple or a leasehold estate in real property securing a
Mortgage Note. With respect to a Co-op Loan, the security agreement with all
riders attached thereto creating a security interest in the stock allocated to a
dwelling unit in a residential cooperative housing corporation and pledged to
secure such Co-op Loan and the related Co-op Lease.

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

      Mortgage Loans: Such of the mortgage loans transferred and assigned to the
Trustee pursuant to the provisions hereof as from time to time are held as a
part of the Trust Fund (including related REO Properties), the mortgage loans so
held being identified in the Mortgage Loan Schedule, notwithstanding foreclosure
or other acquisition of title of the related Mortgaged Property. Any mortgage
loan that was intended by the parties hereto to be transferred to the Trust Fund
as indicated by such Mortgage Loan Schedule which is in fact not so transferred
for any reason shall continue to be a Mortgage Loan hereunder until the Purchase
Price with respect thereto has been paid to the Trust Fund.

                                      -25-

<PAGE>

      Mortgage Loan Schedule: The lists of Mortgage Loans (as from time to time
amended by the Trustee to reflect the deletion of Deleted Mortgage Loans and the
addition of Replacement Mortgage Loans pursuant to the provisions of this
Agreement) provided by the Depositor and transferred to the Trustee as part of
the Trust Fund and from time to time subject to this Agreement, attached hereto
as Exhibits B-1, B-2, B-3 and B-4, setting forth the following information with
respect to each Mortgage Loan:

      (i)     the loan number;

      (ii)    the borrower name and address;

      (iii)   the unpaid principal balance of the Mortgage Loans;

      (iv)    the Initial Mortgage Rate;

      (v)     (a) the original maturity date and (b) the months remaining before
              maturity date;

      (vi)    the original principal balance;

      (vii)   the Cut-off Date Principal Balance;

      (viii)  the first payment due date of the Mortgage Loan;

      (ix)    the Loan-to-Value Ratio at origination with respect to a first
              lien Mortgage Loan, or the Combined Loan-to-Value Ratio with
              respect to a second lien Mortgage Loan;

      (x)     a code indicating whether the residential dwelling at the time of
              origination was represented to be owner-occupied;

      (ix)    a code indicating the property type;

      (xii)   with respect to each Adjustable Rate Mortgage Loan;

              (a)   the frequency of each Adjustment Date;

              (b)   the next Adjustment Date;

              (c)   the Maximum Mortgage Rate;

              (d)   the Minimum Mortgage Rate;

              (e)   the Mortgage Rate as of the Cut-off Date;

              (f)   the related Periodic Rate Cap;

              (g)   the Gross Margin; and

              (h)   the lifetime rate cap;

      (xiii)  location of the related Mortgaged Property (or Underlying
              Mortgaged Property, in the case of a Co-op Loan);

                                      -26-

<PAGE>

      (xiv)   a code indicating whether a Prepayment Charge is applicable and,
              if so, the term of such Prepayment Charge;

      (xv)    the Credit Score and date obtained;

      (xvi)   a code indicating whether such loan is a MI Mortgage Loan;

      (xvii)  each MI Insurer Fee Rate; and

      (xviii) the coverage percentage under the applicable MI Policy.

      Mortgage Note: The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan
and all amendments, modifications and attachments with all riders attached
thereto.

      Mortgage Pool: The aggregate of the Mortgage Loans identified in the
Mortgage Loan Schedule set out on Exhibit B-1.

      Mortgage Rate: The annual rate of interest borne by a Mortgage Note from
time to time. With respect to any Mortgage Loan that becomes an REO Property,
the annual rate determined in accordance with the immediate preceding sentence
as of the date such Mortgage Loan became an REO Property.

      Mortgaged Property: The underlying property securing a Mortgage Loan.

      Mortgagor: The obligor on a Mortgage Note.

      Net Mortgage Rate: As to each Mortgage Loan, and at any time, the per
annum rate equal to the then current Mortgage Rate less the sum of (1) the
Servicing Fee Rate and (2) the MI Insurer Fee Rate, if applicable.

      Net Rate: With respect to any Distribution Date, the product of (x) the
weighted average Net Mortgage Rate for the Mortgage Loans calculated based on
the respective Net Mortgage Rates and the Stated Principal Balances of such
Mortgage Loans as of the preceding Distribution Date (or, in the case of the
first Distribution Date, as of the Cut-off Date) and (y) a fraction, the
numerator of which is 30 and the denominator of which is the actual number of
days in the related Accrual Period.

      Net WAC: With respect to any Distribution Date, a per annum rate equal to
12 times the quotient obtained by dividing (x) the total scheduled interest
based on the Net Mortgage Rates in effect on the related Due Date, by (y) the
aggregate Stated Principal Balance of the Mortgage Loans as of the preceding
Distribution Date.

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

      Non-Recoverable Advance: Any portion of an Advance previously made or
proposed to be made by the Servicer that, in the good faith judgment of the
Servicer, will not or, in the case of a current delinquency, would not, be
ultimately recoverable by the Servicer from the related Mortgagor or related
Liquidation Proceeds or otherwise with respect to the related Mortgage Loan.

      Non-Recoverable Servicing Advance: Any portion of a Servicing Advance
previously made or proposed to be made by the Servicer that, in the good faith
judgment of the Servicer, will not or, in the case of a current Servicing
Advance, would not, be ultimately recoverable by the Servicer from the related
Mortgagor, related Liquidation Proceeds or otherwise with respect to the related
Mortgage Loan.

                                      -27-

<PAGE>

      Non-Supported Interest Shortfall: As defined in Section 4.02.

      Offered Certificates: The Class A-1A, Class A-1B, Class A-2A, Class A-2B,
Class M-1, Class M-2, Class M-3, Class B-1, Class B-2, Class B-3 and Class R
Certificate.

      Officer's Certificate: A certificate (1) signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, a vice president (however
denominated), an Assistant Vice President, the Treasurer, the Secretary, or one
of the assistant treasurers or assistant secretaries of the Depositor, the
Servicer (or any other officer customarily performing functions similar to those
performed by any of the above designated officers and also to whom, with respect
to a particular matter, such matter is referred because of such officer's
knowledge of and familiarity with a particular subject) or (2), if provided for
in this Agreement, signed by a Servicing Officer, as the case may be, and
delivered to the Depositor, the Servicer or the Trustee, as the case may be, as
required by this Agreement.

      One-Month LIBOR: With respect to any Accrual Period, the rate determined
by the Trustee on the related Interest Determination Date on the basis of (a)
the offered rates for one-month United States dollar deposits, as such rates
appear on Telerate page 3750, as of 11:00 a.m. (London time) on such Interest
Determination Date or (b) if such rate does not appear on Telerate Page 3750 as
of 11:00 a.m. (London time), the offered rates of the Reference Banks for
one-month United States dollar deposits, as such rates appear on the Reuters
Screen LIBO Page, as of 11:00 a.m. (London time) on such Interest Determination
Date. If One-Month LIBOR is determined pursuant to clause (b) above, on each
Interest Determination Date, One-Month LIBOR for the related Accrual Period will
be established by the Trustee as follows:

                        (i)   If on such Interest Determination Date two or more
                              Reference Banks provide such offered quotations,
                              One-Month LIBOR for the related Accrual Period
                              shall be the arithmetic mean of such offered
                              quotations (rounded upwards if necessary to the
                              nearest whole multiple of 0.03125%).

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

      Opinion of Counsel: A written opinion of counsel, who may be counsel for
the Depositor or the Servicer, reasonably acceptable to each addressee of such
opinion; provided, however, that with respect to Section 6.04 or 10.01, or the
interpretation or application of the REMIC Provisions, such counsel must (1) in
fact be independent of the Depositor and the Servicer, (2) not have any direct
financial interest in the Depositor or the Servicer or in any affiliate of
either, and (3) not be connected with the Depositor or the Servicer as an
officer, employee, promoter, underwriter, trustee, partner, director or person
performing similar functions.

      Optional Termination: The termination of the Trust Fund hereunder pursuant
to clause (a) of Section 9.01 hereof.

      Optional Termination Amount: The amount received by the Trustee in
connection with any purchase of all of the Mortgage Loans and REO Properties
pursuant to Section 9.01(b) hereof.

                                      -28-

<PAGE>

      Optional Termination Price: On any date after the Initial Optional
Termination Date, an amount equal to the sum of (A) the aggregate Stated
Principal Balance of each Mortgage Loan (other than any Mortgage Loan that has
become an REO Property), as of the Distribution Date on which the proceeds of
the Optional Termination are distributed to the Certificateholders, plus accrued
interest thereon at the applicable Mortgage Rate as of the Due Date preceding
the Distribution Date on which the proceeds of the Optional Termination are
distributed to Certificateholders and the fair market value of any REO Property,
plus accrued interest thereon as of the Distribution Date on which the proceeds
of the Optional Termination are distributed to Certificateholders, (B) any
unreimbursed out-of-pocket costs and expenses owed to the Trustee (including any
amounts incurred by the Trustee in connection with conducting the Auction) or
the Servicer and any unpaid or unreimbursed Servicing Fees, Advances and
Servicing Advances, (C) any unreimbursed costs, penalties and/or damages
incurred by the Trust Fund in connection with any violation relating to any of
the Mortgage Loans of any predatory or abusive lending law; and (D) in the event
an Auction has been conducted, all reasonable fees and expenses incurred by the
Trustee to conduct the Auction.

      OTS: The Office of Thrift Supervision.

      Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except: (1) Certificates theretofore canceled by the Trustee or
delivered to the Trustee for cancellation; and (2) Certificates in exchange for
which or in lieu of which other Certificates have been executed by the Trustee
and delivered by the Trustee pursuant to this Agreement.

      Outstanding Mortgage Loan: As of any Distribution Date, a Mortgage Loan
with a Stated Principal Balance greater than zero that was not the subject of a
Principal Prepayment in full, and that did not become a Liquidated Loan, prior
to the end of the related Due Period.

      Overcollateralization Amount: As of any date of determination, the excess
of (1) the Stated Principal Balance of the Mortgage Loans over (2) the
Certificate Principal Balance of the Certificates (other than the Class P
Certificates and the Class C Certificates).

      Ownership Interest: As to any Certificate, any ownership 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.

      Pass-Through Rate: With respect to any Class of Certificates, the
corresponding Pass-Through Rate for such Class of Certificates.

      Percentage Interest: With respect to:

                        (i)   any Class, the percentage interest in the
                              undivided beneficial ownership interest evidenced
                              by such Class which shall be equal to the Class
                              Certificate Principal Balance of such Class
                              divided by the Class Principal Balance of all
                              Classes; and

                        (ii)  any Certificate, the Percentage Interest evidenced
                              thereby of the related Class shall equal the
                              percentage obtained by dividing the Denomination
                              of such Certificate by the aggregate of the
                              Denominations of all Certificates of such Class;
                              except that in the case of any Class P
                              Certificates, the Percentage Interest with respect
                              to such Certificate shown on the face of such
                              Certificate.

                                      -29-

<PAGE>

      Periodic Rate Cap: As to each Adjustable Rate Mortgage Loan and the
related Mortgage Note, the provision therein that limits permissible increases
and decreases in the Mortgage Rate on any Adjustment Date.

      Permitted Activities: The primary activities of the trust created pursuant
to this Agreement which shall be:

                        (i)   holding Mortgage Loans transferred from the
                              Depositor and other assets of the Trust Fund,
                              including the Cap Contract and any credit
                              enhancement and passive derivative financial
                              instruments that pertain to beneficial interests
                              issued or sold to parties other than the
                              Depositor, its Affiliates, or its agents;

                        (ii)  issuing Certificates and other interests in the
                              assets of the Trust Fund;

                        (iii) receiving collections on the Mortgage Loans and
                              the Cap Contract and making payments on such
                              Certificates and interests in accordance with the
                              terms of this Agreement; and

                        (iv)  engaging in other activities that are necessary or
                              incidental to accomplish these limited purposes,
                              which activities cannot be contrary to the status
                              of the Trust Fund as a qualified special purpose
                              entity under existing accounting literature.

      Permitted Investments: At any time, any one or more of the following
obligations and securities:

                        (i)   obligations of the United States or any agency
                              thereof, provided such obligations are backed by
                              the full faith and credit of the United States;

                        (ii)  general obligations of or obligations guaranteed
                              by any state of the United States or the District
                              of Columbia receiving the highest long-term debt
                              rating of each Rating Agency rating the
                              Certificates;

                        (iii) commercial or finance company paper, other than
                              commercial or finance company paper issued by the
                              Depositor, the Trustee or any of its Affiliates,
                              which is then receiving the highest commercial or
                              finance company paper rating of each such Rating
                              Agency;

                        (iv)  certificates of deposit, demand or time deposits,
                              or bankers' acceptances (other than bankers'
                              acceptances issued by the Trustee or any of its
                              Affiliates) issued by any depository institution
                              or trust company incorporated under the laws of
                              the United States or of any state thereof and
                              subject to supervision and examination by federal
                              and/or state banking authorities, provided that
                              the commercial paper and/or long term unsecured
                              debt obligations of such depository institution or
                              trust company are then rated one of the two
                              highest long-term and the highest short-term
                              ratings of each such Rating Agency for such
                              securities;

                        (v)   demand or time deposits or certificates of deposit
                              issued by any bank or trust company or savings
                              institution to the extent that such deposits are
                              fully insured by the FDIC;

                                      -30-

<PAGE>

                        (vi)  guaranteed reinvestment agreements issued by any
                              bank, insurance company or other corporation rated
                              in the two highest long-term or the highest
                              short-term ratings of each Rating Agency
                              containing, at the time of the issuance of such
                              agreements, such terms and conditions as will not
                              result in the downgrading or withdrawal of the
                              rating then assigned to the Certificates by any
                              such Rating Agency as evidenced by a letter from
                              each Rating Agency;

                        (vii) repurchase obligations with respect to any
                              security described in clauses (i) and (ii) above,
                              in either case entered into with a depository
                              institution or trust company (acting as principal)
                              described in clause (v) above;

                        (viii) securities (other than stripped bonds, stripped
                              coupons or instruments sold at a purchase price in
                              excess of 115% of the face amount thereof) bearing
                              interest or sold at a discount issued by any
                              corporation, other than the Trustee or any of its
                              Affiliates, incorporated under the laws of the
                              United States or any state thereof which, at the
                              time of such investment, have one of the two
                              highest long term ratings of each Rating Agency;

                        (ix)  interests in any money market fund (including
                              those managed or advised by the Trustee or its
                              affiliates) which at the date of acquisition of
                              the interests in such fund and throughout the time
                              such interests are held in such fund has the
                              highest applicable long term rating by each Rating
                              Agency rating such fund; and

                        (x)   short term investment funds sponsored by any trust
                              company or national banking association
                              incorporated under the laws of the United States
                              or any state thereof, other than the Trustee or
                              any of its Affiliates, which on the date of
                              acquisition has been rated by each such Rating
                              Agency in their respective highest applicable
                              rating category;

provided, that no such instrument shall be a Permitted Investment if such
instrument (i) evidences the right to receive interest only payments with
respect to the obligations underlying such instrument, (ii) is purchased at a
premium or above par or (iii) is purchased at a deep discount; provided,
further, that no such instrument shall be a Permitted Investment (A) if such
instrument evidences principal and interest payments derived from obligations
underlying such instrument and the interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations, or (B) if it may be redeemed at
a price below the purchase price (the foregoing clause (B) not to apply to
investments in units of money market funds pursuant to clause (ix) above); and
provided, further, (I) that no amount beneficially owned by any REMIC
(including, without limitation, any amounts collected by the Servicer but not
yet deposited in the Collection Account) may be invested in investments (other
than money market funds) treated as equity interests for Federal income tax
purposes, unless the Servicer and/or the Trustee shall receive an Opinion of
Counsel acceptable to the Servicer and/or the Trustee, at the expense of the
party requesting that such investment be made, to the effect that such
investment will not adversely affect the status of the any REMIC provided for
herein as a REMIC under the Code or result in imposition of a tax on the Trust
Fund or any REMIC provided for herein and (II) any such investment must be a
"permitted investment" within the meaning of Section 860G(a)(5) of the Code.
Permitted Investments that are subject to prepayment or call may not be
purchased at a price in excess of par.

                                      -31-

<PAGE>

      Permitted Transferee: Any Person other than (i) the United States, any
State or political subdivision thereof, or any agency or instrumentality of any
of the foregoing, (ii) a foreign government, International Organization or any
agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in Section 521 of the Code) that
is exempt from tax imposed by Chapter 1 of the Code (including the tax imposed
by Section 511 of the Code on unrelated business taxable income) on any excess
inclusions (as defined in Section 860E(c)(1) of the Code) with respect to the
Class R Certificate, (iv) rural electric and telephone cooperatives described in
Section 1381(a)(2)(C) of the Code, and (v) a Person that is not a citizen or
resident of the United States, a corporation or partnership (or other entity
treated as a corporation or partnership for United States federal income tax
purposes) created or organized in or under the laws of the United States or any
State thereof or the District of Columbia or an estate whose income from sources
without the United States is includable in gross income for United States
federal income tax purposes regardless of its connection with the conduct of a
trade or business within the United States, or a trust if a court within the
United States is able to exercise primary supervision over the administration of
the trust and one or more United States persons have authority to control all
substantial decisions of the trust, unless, in the case of this clause (v), such
Person has furnished the transferor, the Trustee with a duly completed Internal
Revenue Service Form W-8ECI or applicable successor form. The terms "United
States," "State" and "International Organization" shall have the meanings set
forth in Section 7701 of the Code. A corporation will not be treated as an
instrumentality of the United States or of any State thereof for these purposes
if all of its activities are subject to tax and, with the exception of the
Federal Home Loan Mortgage Corporation, a majority of its board of directors is
not selected by such government unit.

      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.

      PMI: PMI Mortgage Insurance Co., an Arizona insurance corporation, or its
successor in interest.

      Pool Stated Principal Balance: As to any Distribution Date, the aggregate
of the Stated Principal Balances, as of such Distribution Date, of the Mortgage
Loans that were Outstanding Mortgage Loans as of such date.

      Preference Claim: The meaning set forth in Section 4.04(l) hereof.

      Prepayment Assumption: A rate or rates of prepayment, as described in the
Prospectus Supplement in the definition of "Modeling Assumptions," relating to
the Certificates.

      Prepayment Charges: Any prepayment fees, premiums or charges to be paid by
the Mortgagor on a Mortgage Loan pursuant to the terms of the related Mortgage
Note or Mortgage, as applicable, as identified on the Mortgage Loan Schedule.

      Prepayment Interest Shortfall: With respect to any Distribution Date, for
each Mortgage Loan that was the subject of a partial Principal Prepayment or a
Principal Prepayment in full (other than a Principal Prepayment in full
resulting from the purchase of a Mortgage Loan pursuant to Section 2.02, 2.03 or
9.01 hereof), the amount, if any, by which (i) one month's interest at the
applicable Net Mortgage Rate on the Stated Principal Balance of such Mortgage
Loan as of the preceding Distribution Date or in the case of a partial Principal
Prepayment on the amount of such prepayment exceeds (ii) the amount of interest
paid or collected in connection with such Principal Prepayment.

                                      -32-

<PAGE>

      Prepayment Period: As to any Distribution Date, the period beginning with
the opening of business on the first day of the calendar month preceding the
month in which such Distribution Date occurs and ending on the close of business
on the last day of such month.

      Principal Distribution Amount: With respect to each Distribution Date, the
sum of (i) the Principal Funds for such Distribution Date and (ii) any Extra
Principal Distribution Amount for such Distribution Date.

      Principal Funds: With respect to the Mortgage Loans and any Distribution
Date, the sum, without duplication, of (1) all scheduled principal due during
the related Due Period and received or advanced on or before the related
Servicer Remittance Date, (2) all Principal Prepayments collected in the related
Prepayment Period, (3) the Stated Principal Balance of each Mortgage Loan that
was purchased by the Depositer or the Servicer pursuant to Section 2.02 or 2.03
during the related Prepayment Period or, in the case of a purchase pursuant to
Section 9.01, on any Business Day prior to such Distribution Date, (4) the
amount, if any, by which the aggregate unpaid principal balance of any
Replacement Mortgage Loan is less than the aggregate unpaid principal of the
related Deleted Mortgage Loans delivered by the Seller in connection with a
substitution of a Mortgage Loan pursuant to Section 2.03(c), (5) all Liquidation
Proceeds collected during the related Prepayment Period (to the extent that such
Liquidation Proceeds relate to principal) and (6) all Subsequent Recoveries
received during the related Due Period and (7) other collections and recoveries
in respect of principal during the related Prepayment Period less (A) all
Non-Recoverable Advances relating to principal with respect to the Mortgage
Loans and (B) all other amounts reimbursable to the Servicer and the Trustee
pursuant to this Agreement and allocable to principal.

      Principal Prepayment: Any Mortgagor payment or other recovery of (or
proceeds with respect to) principal on a Mortgage Loan (including Mortgage Loans
purchased or repurchased under Sections 2.02, 2.03, 3.12 and 9.01 hereof) that
is received or recovered in advance of its scheduled Due Date and is not
accompanied by an amount as to interest representing scheduled interest due on
any date or dates in any month or months subsequent to the month of prepayment.
Partial Principal Prepayments shall be applied by the Servicer in accordance
with the terms of the related Mortgage Note.

      Prospectus Supplement: The Prospectus Supplement dated October 15, 2004
relating to the public offering of the Class A-1A, Class A-2B, Class A-2A, Class
2B, Class M-1, Class M-2, Class M-3, Class R, Class B-1, Class B-2 and Class B-3
Certificates.

      PUD: A Planned Unit Development.

      Purchase Price: With respect to any Mortgage Loan required to be
repurchased by the Seller or the Transferor, pursuant to Section 2.02 or 2.03
hereof, an amount equal to the sum of (i) 100% of the unpaid principal balance
of the Mortgage Loan as of the date of such purchase together with any related
unreimbursed Servicing Advances, (ii) accrued interest on such unpaid principal
balance at the applicable Mortgage Rate from (a) the date through which interest
was last paid by the Mortgagor to (b) the Due Date in the month in which the
Purchase Price is to be distributed to Certificateholders and (iii) any
unreimbursed costs, penalties and/or damages incurred by the Trust Fund (or the
Trustee on behalf of the Trust Fund) in connection with any violation relating
to such Mortgage Loan of any predatory or abusive lending law.

      Radian: Radian Guaranty Inc., a Pennsylvania corporation, or its successor
in interest.

      Rating Agency: Either of S&P and Fitch. If any such organization or its
successor is no longer in existence, "Rating Agency" shall be a nationally
recognized statistical rating organization, or other comparable Person,
designated by the Depositor, notice of which designation shall be given to the

                                      -33-

<PAGE>

Trustee. References herein to a given rating category of a Rating Agency shall
mean such rating category without giving effect to any modifiers.

      Realized Loss: With respect to (1) a Liquidated Loan, the amount, if any,
by which the Stated Principal Balance and accrued interest thereon at the Net
Mortgage Rate exceeds the amount actually recovered by the Servicer with respect
thereto (net of reimbursement of Advances and Servicing Advances) at the time
such Mortgage Loan became a Liquidated Loan or (2) a Mortgage Loan which is not
a Liquidated Loan, any amount of principal that the Mortgagor is no longer
legally required to pay (except for the extinguishment of debt that results from
the exercise of remedies due to default by the Mortgagor).

      Record Date: With respect to any Distribution Date, the close of business
on the last Business Day of the month preceding the month in which the
applicable Distribution Date occurs (or, in the case of the first Distribution
Date, the Closing Date).

      Reference Banks: Barclays Bank PLC, JPMorgan Chase Bank, Citibank, N.A.,
Wells Fargo Bank, N.A. and NatWest, N.A.; provided that if any of the foregoing
banks are not suitable to serve as a Reference Bank, then any leading banks
selected by the Trustee which are engaged in transactions in Eurodollar deposits
in the international Eurocurrency market (i) with an established place of
business in London, England and (ii) whose quotations appear on the Reuters
Screen LIBO Page on the relevant Interest Determination Date.

      Refinanced Mortgage Loan: A Mortgage Loan the proceeds of which were not
used to purchase the related Mortgaged Property (or Underlying Mortgaged
Property, in the case of a Co-op Loan).

      Regular Certificate: Any one of the Class A-1A, Class A-1B, Class A-2A,
Class A-2B, Class M-1, Class M-2, Class M-3, Class B-1, Class B-2 and Class B-3
Certificates.

      Related Certificates: With respect to the Class LTA-1A Interest, the Class
A-1A and Class R Certificates. With respect to the Class LTA-1B Interest, the
Class A-1B Certificates. With respect to the Class LTA-2A Interest, the Class
A-2A Certificates. With respect to the Class LTA-2B Interest, the Class A-2B
Certificates. With respect to the Class LTB-1 Interest, the Class B-1
Certificates. With respect to the Class LTB-2 Interest, the Class B-2
Certificates. With respect to the Class LTB-3 Interest, the Class B-3
Certificates. With respect to the Class LTM-1 Interest, the Class M-1
Certificates. With respect to the Class LTM-2 Interest, the Class M-2
Certificates. With respect to the Class LTM-3 Interest, the Class M-3
Certificates.

      Relief Act: The Servicemembers Civil Relief Act, together with any
comparable state legislation.

      Relief Act Shortfall: With respect to any Distribution Date and any
Mortgage Loan, any reduction in the amount of interest or principal collectible
on such Mortgage Loan for the most recently ended calendar month as a result of
the application of the Relief Act.

      REMIC: A "real estate mortgage investment conduit" within the meaning of
section 860D of the Code. References herein to "the REMICs" or "a REMIC" shall
mean any of or, as the context requires, all of) the Lower Tier REMIC and the
Upper Tier REMIC.

      REMIC Pass-Through Rate: The Pass-Through Rate for a Class of Related
Certificates calculated by replacing "Available Funds Cap" in such definition
with "Net Rate."

      REMIC Provisions: Provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at sections 860A through
860G of Subchapter M of Chapter 1 of the

                                      -34-

<PAGE>

Code, and related provisions, and proposed, temporary and final regulations and
published rulings, notices and announcements promulgated thereunder, as the
foregoing may be in effect from time to time as well as provisions of applicable
state laws.

      REMIC Regular Interests: (i) any of the rights under any of the
Certificates (other than the Class P Certificates, the Class R Certificate and
the Class C Certificates) other than the rights in interest rate cap contracts
described in Section 2.07, and (ii) the Uncertificated Class C Interest.

      REO Disposition: The final sale by the Servicer of any REO Property.

      REO Disposition Proceeds: All amounts received by the Servicer in
connection with an REO Disposition.

      REO Property: A Mortgaged Property acquired by the Servicer through
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted
Mortgage Loan.

      Replacement Mortgage Loan: A Mortgage Loan substituted by the Depositor
for a Deleted Mortgage Loan, which must, on the date of such substitution, as
confirmed in a Request for Release, substantially in the form of Exhibit I (1)
have a Stated Principal Balance, after deduction of the principal portion of the
Scheduled Payment due in the month of substitution, not in excess of, and not
less than 90% of the Stated Principal Balance of the Deleted Mortgage Loan; (2)
with respect to any Fixed Rate Mortgage Loan, have a Mortgage Rate not less than
or no more than 1% per annum higher than the Mortgage Rate of the Deleted
Mortgage Loan and, with respect to any Adjustable Rate Mortgage Loan: (A) have a
Maximum Mortgage Rate no more than 1% per annum higher or lower than the Maximum
Mortgage Rate of the Deleted Mortgage Loan; (B) have a Minimum Mortgage Rate no
more than 1% per annum higher or lower than the Minimum Mortgage Rate of the
Deleted Mortgage Loan; (C) have the same index and Periodic Rate Cap as that of
the Deleted Mortgage Loan and a Gross Margin not more than 1% per annum higher
or lower than that of the Deleted Mortgage Loan; (D) not permit conversion of
the related Mortgage Rate to a fixed Mortgage Rate and (F) currently be accruing
interest at a rate not more than 1% per annum higher or lower than that of the
Deleted Mortgage Loan; (3) have a similar or higher FICO score or credit grade
than that of the Deleted Mortgage Loan; (4) have a Loan-to-Value Ratio (or
Combined Loan-to-Value Ratio, in the case of the Mortgage Loans in a second lien
position) no higher than that of the Deleted Mortgage Loan; (5) have a remaining
term to maturity no greater than (and not more than one year less than) that of
the Deleted Mortgage Loan; (6) provide for a Prepayment Charge on terms
substantially similar to those of the Prepayment Charge, if any, of the Deleted
Mortgage Loan; (7) have the same lien priority as the Deleted Mortgage Loan; (8)
constitute the same occupancy type as the Deleted Mortgage Loan; (9) be covered
by the applicable MI Policy if such Deleted Mortgage Loan was covered by such MI
Policy; and (10) comply with each representation and warranty set forth in
Section 2.03 hereof.

      Request for Release: The Request for Release of Documents submitted by the
Servicer to the Trustee, substantially in the form of Exhibit I hereto.

      Required Insurance Policy: With respect to any Mortgage Loan, any
insurance policy that is required to be maintained from time to time under this
Agreement including, without limitation, in the case of the MI Mortgage Loans,
the MI Policy.

      Required Loss Percentage: For any Distribution Date, the applicable
percentage for such Distribution Date set forth in the following table:

                                      -35-

<PAGE>

<TABLE>
<CAPTION>
DISTRIBUTION DATE OCCURRING IN         REQUIRED LOSS PERCENTAGE
------------------------------         ------------------------
<S>                                    <C>
November 2007 - October 2008           1.25% with respect to November
                                       2007, plus an additional 1/12th
                                       of 0.50% for each month thereafter

November 2008 - October 2009           1.75% with respect to November
                                       2008, plus an additional 1/12th
                                       of 0.25% for each month thereafter

November 2009 - October 2010           2.00% with respect to November
                                       2009, plus an additional 1/12th
                                       of 0.25% for each month thereafter

November 2010 and thereafter           2.25%
</TABLE>

      Required Percentage: As of any Distribution Date following a Stepdown
Date, the quotient of (1) the excess of (A) the Stated Principal Balances of the
Mortgage Loans as of such Distribution Date, over (B) the Certificate Principal
Balance of the most senior Class of Certificates outstanding as of such
Distribution Date, prior to giving effect to distributions to be made on such
Distribution Date and (2) the Stated Principal Balance of the Mortgage Loans as
of such Distribution Date.

      Reserve Interest Rate: With respect to any Interest Determination Date,
the rate per annum that the Trustee determines to be (1) the arithmetic mean
(rounded upwards if necessary to the nearest whole multiple of 0.03125%) of the
one-month United States dollar lending rates which New York City banks selected
by the Trustee are quoting on the relevant Interest Determination Date to the
principal London offices of leading banks in the London interbank market or (2)
in the event that the Trustee can determine no such arithmetic mean, the lowest
one-month United States dollar lending rate which New York City banks selected
by the Trustee are quoting on such Interest Determination Date to leading
European banks.

      Residual Interest: An interest in the Upper Tier REMIC that is entitled to
all distributions of principal and interest on the Class R Certificate other
than distributions in respect of the Class LTR Interest and distributions to the
extent attributable to an interest rate in excess of the Net Rate.

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

      Reuters Screen LIBO Page: The display designated as page "LIBO" on the
Reuters Monitor Money Rates Service (or such other page as may replace such LIBO
page on that service for the purpose of displaying London interbank offered
rates of major banks.

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

      Sale Agreement: The Mortgage Loan Sale and Assignment Agreement dated as
of October 1, 2004 between the Depositor and the Seller.

                                      -36-

<PAGE>

      Scheduled Payment: The scheduled monthly payment on a Mortgage Loan due on
any Due Date allocable to principal and/or interest on such Mortgage Loan.

      Section 302 Requirements: Any rules or regulations promulgated pursuant
to the Sarbanes-Oxley Act of 2002 (as such may be amended from time to time).

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

      Seller: Merrill Lynch Mortgage Capital Inc., a Delaware corporation, or
its successor in interest.

      Servicer: Option One Mortgage Corporation, a California corporation, or
its successor in interest.

      Servicer Remittance Date: With respect to any Distribution Date, the 18th
day (or if such day is not a Business Day, the next succeeding Business Day) of
the month in which the related Distribution Date occurs.

      Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses (including attorneys' fees and disbursements)
incurred by the Servicer in the performance of its servicing obligations
hereunder in connection with a default, delinquency or other unanticipated
event, including, but not limited to, the cost of (1) the preservation,
inspection, restoration and protection of a Mortgaged Property (or Underlying
Mortgaged Property, in the case of a Co-op Loan), including without limitation
advances in respect of real estate taxes and assessments, (2) any collection,
enforcement or judicial proceedings, including without limitation foreclosures,
collections and liquidations, (3) the conservation, management, sale and
liquidation of any REO Property and (4) compliance with the obligations under
Sections 3.01 and 3.10.

      Servicing Fee: As to each Mortgage Loan and any Distribution Date, an
amount equal to one month's interest at the applicable Servicing Fee Rate on the
Stated Principal Balance of such Mortgage Loan as of the 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 applicable Servicing
Fee Rate on the Stated Principal Balance of such Mortgage Loan as of the
preceding Distribution Date for the period covered by such payment of interest.

      Servicing Fee Rate: For any Distribution Date, the applicable fee for such
Distribution Date is as set forth in the following table:

<TABLE>
<S>                                               <C>
November 2004 - August 2005                       0.30% per annum
September 2005 - April 2006                       0.40% per annum
May 2007 and thereafter                           0.65% per annum
</TABLE>

      Servicing Officer: Any officer of the Servicer involved in, or responsible
for, the administration and servicing of the Mortgage Loans whose name and
facsimile signature appear on a list of servicing officers furnished to the
Trustee by the Servicer on the Closing Date pursuant to this Agreement, as such
lists may from time to time be amended.

      Servicing Transfer Costs: All costs associated with the transfer of
servicing from the Servicer, including, without limitation, any costs or
expenses associated with the termination of the predecessor Servicer, the
appointment of a successor servicer, the complete transfer of all servicing data
and the completion, correction or manipulation of such servicing data as may be
required by the Trustee or any successor servicer to correct any errors or
insufficiencies in the servicing data or otherwise to enable the Trustee or
successor servicer to service the Mortgage Loans properly and effectively.

                                      -37-

<PAGE>

      SFAS 140: Statement of Financial Accounting Standard No. 140, Accounting
for Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities dated September 2000, published by the Financial Accounting
Standards Board of the Financial Accounting Foundation.

      Startup Day: As defined in Section 2.07 hereof.

      Stated Principal Balance: With respect to any Mortgage Loan or related REO
Property (1) as of the Cut-off Date, the Cut-off Date Principal Balance thereof,
and (2) as of any Distribution Date, such Cut-off Date Principal Balance, minus
the sum of (A) the principal portion of the Scheduled Payments (x) due with
respect to such Mortgage Loan during each Due Period ending prior to such
Distribution Date and (y) that were received by the Servicer as of the close of
business on the Determination Date related to such Distribution Date or with
respect to which Advances were made on the Servicer Remittance Date prior to
such Distribution Date and (B) all Principal Prepayments with respect to such
Mortgage Loan received on or prior to the last day of the related Prepayment
Period, and all Liquidation Proceeds to the extent applied by the Servicer as
recoveries of principal in accordance with Section 3.12 with respect to such
Mortgage Loan, that were received by the Servicer as of the close of business on
the last day of the related Due Period. Notwithstanding the foregoing, the
Stated Principal Balance of a Liquidated Loan shall be deemed to be zero.

      Stepdown Date: The later to occur of (1) the Distribution Date in November
2007 or (2) the first Distribution Date on which (A) the Class A Certificate
Principal Balance (reduced by the Principal Funds with respect to such
Distribution Date) is less than or equal to (B) 81.50% of the Stated Principal
Balances of the Mortgage Loans as of such Distribution Date.

      Subordinated Certificates: The Class M-1, Class M-2, Class M-3, Class B-1,
Class B-2 and Class B-3 Certificates.

      Subsequent Recovery: Any amount received on a Mortgage Loan (net of
amounts reimbursed to the Servicer related to such Mortgage Loan) subsequent to
such Mortgage Loan being determined to be a Liquidated Mortgage Loan

      Subservicing Agreement: As defined in Section 3.02(a).

      Substitution Adjustment Amount: The meaning ascribed to such term pursuant
to Section 2.03(c).

      Tax Matters Person: The Person designated as "tax matters person" in the
manner provided under Treasury regulation Section 1.860F-4(d) and Treasury
regulation Section 301.6231(a)(7)-1.

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

      Transfer Agreement: The Master Mortgage Loan Purchase and Servicing
Agreement, dated as of July 1, 2003, as amended, between the Seller and the
Transferor and the other parties named therein, as supplemented by the letter
agreement dated the date hereof from the Transferor to the Seller.

      Transferor: Option One Mortgage Corporation.

      Trigger Event: With respect to the Certificates after the Stepdown Date, a
Distribution Date on which (1) the quotient of (A) the aggregate Stated
Principal Balance of all Mortgage Loans which are 60 or more days Delinquent
measured on a rolling three month basis (including, for the purposes of this
calculation, Mortgage Loans in foreclosure, REO Properties and Mortgage Loans
with respect to which the applicable Mortgagor is in bankruptcy) and (B) the
Stated Principal Balance of the Mortgage Loans as

                                      -38-

<PAGE>

of the preceding Servicer Remittance Date, equals or exceeds the product of (i)
80.00% and (ii) Required Percentage or (2) the quotient (expressed as a
percentage) of (A) the aggregate Realized Losses incurred from the Cut-off Date
through the last day of the calendar month preceding such Distribution Date and
(B) the aggregate principal balance of the Mortgage Loans as of the Cut-off Date
exceeds the Required Loss Percentage.

      Trust Fund: The corpus of the trust (the "Merrill Lynch Mortgage Investors
Trust, Series 2004-OPT1") created hereunder consisting of (i) the Mortgage Loans
and all interest and principal received on or with respect thereto on and after
the Cut-off Date to the extent not applied in computing the Cut-off Date
Principal Balance thereof, exclusive of interest not required to be deposited in
the Collection Account; (ii) the Collection Account and the Certificate Account
and all amounts deposited therein pursuant to the applicable provisions of this
Agreement; (iii) property that secured a Mortgage Loan and has been acquired by
foreclosure, deed in lieu of foreclosure or otherwise; (iv) the mortgagee's
rights under the Insurance Policies with respect to the Mortgage Loans and/or
the related Mortgaged Properties (including, without limitation, the MI Policy);
(v) all proceeds of the conversion, voluntary or involuntary, of any of the
foregoing into cash or other liquid property (including Insurance Proceeds and
other Liquidation Proceeds); and (vi) the Cap Contract and Cap Contract Account.

      Trustee: Wells Fargo Bank, N.A., a national banking association, not in
its individual capacity, but solely in its capacity as trustee for the benefit
of the Certificateholders under this Agreement, and any successor thereto, and
any corporation or national banking association resulting from or surviving any
consolidation or merger to which it or its successors may be a party and any
successor trustee as may from time to time be serving as successor trustee
hereunder.

      Uncertificated Class C Interest: An uncertificated interest having (i) the
same rights to payments as the Class C Certificates, other than the rights to
payments of amounts with respect to the Cap Contract, and (ii) the rights to the
payments treated as distributed to the Class C Certificates under Section
2.07(d), provided, however, that such interest shall have no obligation to make
any payments treated as paid by the Class C Certificates pursuant to interest
rate cap agreements under Section 2.07(d).

      Underlying Mortgaged Property: With respect to each Co-op Loan, the
underlying real property owned by the related residential cooperative housing
corporation.

      Unpaid Realized Loss Amount: The Class M-1 Unpaid Realized Loss Amount,
Class M-2 Unpaid Realized Loss Amount, Class M-3 Unpaid Realized Loss Amount,
Class B-1 Unpaid Realized Loss Amount, Class B-2 Unpaid Realized Loss Amount,
Class B-3 Unpaid Realized Loss Amount and Class C Unpaid Realized Loss Amount,
collectively.

      Upper Tier REMIC: As described in the Preliminary Statement and Section
2.07.

      USAP Report: A report in compliance with the Uniform Single Attestation
Program for Mortgage Bankers delivered in accordance with Section 3.18.

      Voting Rights: The portion of the voting rights of all the Certificates
that is allocated to any of the Certificates for purposes of the voting
provisions hereunder. Voting Rights allocated to each Class of Certificates
shall be allocated 95% to the Offered Certificates, 5% to the Class C and Class
P Certificates, with the allocation among the Offered Certificates to be in
proportion to the Class Certificate Principal Balance of each Class relative to
the Class Certificate Principal Balance of all other Classes. Voting Rights will
be allocated among the Certificates of each such Class in accordance with their
respective Percentage Interests.

                                      -39-

<PAGE>

                                   ARTICLE II
                          CONVEYANCE OF MORTGAGE LOANS;
                         REPRESENTATIONS AND WARRANTIES

      SECTION 2.01. Conveyance of Mortgage Loans

      The Depositor, concurrently with the execution and delivery hereof, does
hereby sell, transfer, assign, set over and convey to the Trustee without
recourse all the right, title and interest of the Depositor in and to the assets
of the Trust Fund. Such assignment includes all interest and principal received
on or with respect to the Mortgage Loans on or after the Cut-off Date (other
than Scheduled Payments due on the Mortgage Loans on or before the Cut-off
Date).

      It is agreed and understood by the Depositor, the Servicer and the Trustee
that it is not intended that any Mortgage Loan be included in the Trust that is
either (i) a "High-Cost Home Loan" as defined in the New Jersey Home Ownership
Act effective November 27, 2003; or (ii) a "High-Cost Home Loan" as defined in
the New Mexico Home Loan Protection Act effective January 1, 2004.

      In connection with such assignment, the Depositor does hereby deliver to,
and deposit with, the Trustee the following documents or instruments with
respect to each Mortgage Loan so assigned that is not a Co-op Loan:

            (A) The original Mortgage Note (or a lost note affidavit (including
      a copy of the original Mortgage Note)) endorsed in blank or "Pay to the
      order of Wells Fargo Bank, N.A., as trustee, without recourse." The
      Mortgage Note shall include all intervening endorsements showing a
      complete chain of the title from the originator to [______________];

            (B) Except as provided below and for each Mortgage Loan that is not
      a MERS Loan, the original recorded Mortgage, with evidence of recording
      thereon, or, if the original Mortgage has not yet been returned from the
      recording office, a copy of the original Mortgage certified by the
      Transferor to be true copy of the original of the Mortgage that has been
      delivered for recording in the appropriate recording office of the
      jurisdiction in which the Mortgaged Property is located and in the case of
      each MERS Loan, the original Mortgage, noting the presence of the MIN of
      the Loan and either language indicating that the Mortgage Loan is a MOM
      Loan or if the Mortgage Loan was not a MOM Loan at origination, the
      original Mortgage and the assignment thereof to MERS, with evidence of
      recording indicated thereon, or a copy of the Mortgage certified by the
      public recording office in which such Mortgage has been recorded;

            (C) In the case of each Mortgage Loan that is not a MERS Loan, the
      original Assignment of each Mortgage, endorsed either in blank or to
      "Wells Fargo Bank, N.A., as trustee;"

            (D) The original policy of title insurance (or a preliminary title
      report, commitment or binder if the original title insurance policy has
      not been received from the title insurance company);

            (E) Originals of any intervening assignments of the Mortgage, with
      evidence of recording thereon or, if the original intervening assignment
      has not yet been returned from the recording office, a copy of such
      assignment certified to be a true copy of the original of the assignment
      which has been sent for recording in the appropriate jurisdiction in which
      the Mortgaged Property is located; and

            (F) Originals of all assumption and modification agreements, if any.

                                      -40-

<PAGE>

            In connection with such assignment, the Depositor does hereby
      deliver to, and deposit with, the Trustee the following documents or
      instruments with respect to each Mortgage Loan so assigned that is a Co-op
      Loan:

            (A) (i) The original Mortgage Note (or a lost note affidavit
      (including a copy of the original Mortgage Note)) or (ii) original
      consolidation, extension and modification agreement (or a lost note
      affidavit (including a copy of the original consolidation, extension and
      modification agreement)), in each case endorsed either in blank or "Pay to
      the order of Wells Fargo Bank, N.A., as trustee, without recourse;"

            (B) The original Mortgage entered into by the Mortgagor with respect
      to such Co-Op Loan;

            (C) The original Assignment of Mortgage either in blank or to "Wells
      Fargo Bank, N.A., as trustee;"

            (D) Original assignments of Mortgage showing a complete chain of
      assignment from the originator of the related Co-Op Loan to the last
      endorsee on the Mortgage Note;

            (E) Original Form UCC-1 and any continuation statements with
      evidence of filing thereon entered into by the Mortgagor with respect to
      such Co-Op Loan (or a recorded copy thereof);

            (F) Form UCC-3 (or copy thereof) by the Transferor or its agent
      assigning the security interest covered by such Form UCC-1 to "Wells Fargo
      Bank, N.A., as trustee," together with all Forms UCC-3 (or copies thereof)
      showing a complete chain of assignment from the originator of the related
      Co-op Loan to the Transferor, with evidence of recording thereon;

            (G) Original stock certificate representing the stock allocated to
      the related dwelling unit in the related residential cooperative housing
      corporation and pledged by the related Mortgagor to the originator of such
      Co-op Loan with a stock power in blank attached;

            (H) Original proprietary lease;

            (I) Original assignment of proprietary lease or a copy thereof, to
      the Trustee or in blank, and all intervening assignments thereof;

            (J) Original recognition agreement or a copy thereof of the
      interests of the mortgagee with respect to the Co-op Loan by the
      residential cooperative housing corporation, the stock of which was
      pledged by the related Mortgagor to the originator of such Co-op Loan; and

            (K) Originals of any assumption, consolidation or modification
      agreements relating to any of the items specified in (A) through (F) above
      with respect to such Co-op Loan.

      If in connection with any Mortgage Loan which is not a Co-op Loan, the
Depositor cannot deliver the Mortgage, Assignments of Mortgage or assumption,
consolidation or modification, as the case may be, with evidence of recording
thereon, if applicable, concurrently with the execution and delivery of this
Agreement solely because of a delay caused by the public recording office where
such Mortgage, Assignments of Mortgage or assumption, consolidation or
modification, as the case may be, has been delivered for recordation, the
Depositor shall deliver or cause to be delivered to the Trustee written notice
stating that such Mortgage or assumption, consolidation or modification, as the
case may be, has been delivered to the appropriate public recording office for
recordation. Thereafter, the Depositor shall

                                      -41-

<PAGE>

deliver or cause to be delivered to the Trustee such Mortgage, Assignments of
Mortgage or assumption, consolidation or modification, as the case may be, with
evidence of recording indicated thereon, if applicable, upon receipt thereof
from the public recording office. To the extent any required endorsement is not
contained on a Mortgage Note or an Assignment of Mortgage, the Depositor shall
make or cause such endorsement to be made.

      With respect to any Mortgage Loan that is not a Co-op Loan, none of the
Depositor, the Servicer or the Trustee shall be obligated to cause to be
recorded the Assignment of Mortgage referred to in this Section 2.01. With
respect to any Co-op Loan, none of the Depositor, the Servicer or the Trustee
shall be obligated to cause to be filed the Form UCC-3 referred to in this
Section 2.01. In the event that any Assignment of Mortgage referred to in this
Section 2.01 is not recorded or is improperly recorded, the Servicer and the
Trustee shall have no liability for any failure to receive or act or notices
related to such Assignment of Mortgage.

      The ownership of each Mortgage Note, the Mortgage and the contents of the
related Mortgage File is vested in the Trustee on behalf of the
Certificateholders. Neither the Depositor nor the Servicer shall take any action
inconsistent with such ownership and shall not claim any ownership interest
therein. The Depositor and the Servicer shall respond to any third party
inquiries with respect to ownership of the Mortgage Loans by stating that such
ownership is held by the Trustee on behalf of the Certificateholders. Mortgage
documents relating to the Mortgage Loans not delivered to the Trustee are and
shall be held in trust by the Servicer, for the benefit of the Trustee as the
owner thereof, and the Servicer's possession of the contents of each Mortgage
File so retained is for the sole purpose of servicing the related Mortgage Loan,
and such retention and possession by the Servicer is in a custodial capacity
only. The Depositor agrees to take no action inconsistent with the Trustee's
ownership of the Mortgage Loans, to promptly indicate to all inquiring parties
that the Mortgage Loans have been sold and to claim no ownership interest in the
Mortgage Loans.

      It is the intention of this Agreement that the conveyance of the
Depositor's right, title and interest in and to the Trust Fund pursuant to this
Agreement shall constitute a purchase and sale and not a loan. If a conveyance
of Mortgage Loans from the Seller to the Depositor is characterized as a pledge
and not a sale, then the Depositor shall be deemed to have transferred to the
Trustee all of the Depositor's right, title and interest in, to and under the
obligations of the Seller deemed to be secured by said pledge; and it is the
intention of this Agreement that the Depositor shall also be deemed to have
granted to the Trustee a first priority security interest in all of the
Depositor's right, title, and interest in, to and under the obligations of the
Seller to the Depositor deemed to be secured by said pledge and that the Trustee
shall be deemed to be an independent custodian for purposes of perfection of the
security interest granted to the Depositor. If the conveyance of the Mortgage
Loans from the Depositor to the Trustee is characterized as a pledge, it is the
intention of this Agreement that this Agreement shall constitute a security
agreement under applicable law, and that the Depositor shall be deemed to have
granted to the Trustee a first priority security interest in all of the
Depositor's right, title and interest in, to and under the Mortgage Loans, all
payments of principal of or interest on such Mortgage Loans, all other rights
relating to and payments made in respect of the Trust Fund, and all proceeds of
any thereof. If the trust created by this Agreement terminates prior to the
satisfaction of the claims of any Person in any Certificates, the security
interest created hereby shall continue in full force and effect and the Trustee
shall be deemed to be the collateral agent for the benefit of such Person.

      In addition to the conveyance made in the first paragraph of this Section
2.01, the Depositor does hereby convey, assign and set over to the Trustee for
the benefit of the Certificateholders its rights and interests under the Sale
Agreement, including the Depositor's right, title and interest in the
representations and warranties contained in the Sale Agreement, the rights in
the Transfer Agreement described therein and the benefit of the repurchase
obligations and the obligation of the Seller contained in the Sale

                                      -42-

<PAGE>

Agreement to take, at the request of the Depositor or the Trustee, all action on
its part which is reasonably necessary to ensure the enforceability of a
Mortgage Loan. The Trustee hereby accepts such assignment, and shall be entitled
to exercise all rights of the Depositor under the Sale Agreement as if, for such
purpose, it were the Depositor. 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.

      SECTION 2.02. Acceptance by Trustee of the Mortgage Loans.

      Except as set forth in the Exception Report delivered contemporaneously
herewith (the "Exception Report"), the Trustee acknowledges receipt of the
Mortgage Note for each Mortgage Loan and delivery of a Mortgage File (but does
not acknowledge receipt of all documents required to be included in such
Mortgage File) with respect to each Mortgage Loan and declares that it holds and
will hold such documents and any other documents constituting a part of the
Mortgage Files delivered to it in trust for the use and benefit of all present
and future Certificateholders. The Depositor will cause the Seller to repurchase
any Mortgage Loan to which a material exception was taken in the Exception
Report unless such exception is cured to the satisfaction of the Trustee within
45 Business Days of the Closing Date.

      The Trustee acknowledges receipt of the Cap Contract (a form of which is
attached hereto), the Transfer Agreement and the Sale Agreement.

      The Trustee agrees, for the benefit of Certificateholders, to review each
Mortgage File delivered to it within 60 days after the Closing Date to ascertain
and to certify, within 70 days of the Closing Date, to the Depositor and the
Servicer that all documents required by Section 2.01 have been executed and
received, and that such documents relate to the Mortgage Loans identified in
Exhibit B-1 that have been conveyed to it. If the Trustee finds any document or
documents constituting a part of a Mortgage File to be missing or defective
(that is, mutilated, damaged, defaced or unexecuted) in any material respect,
the Trustee shall promptly (and in any event within no more than five Business
Days) after such finding so notify the Servicer, the Seller and the Depositor.
In addition, the Trustee shall also notify the Servicer, the Seller and the
Depositor, if the original Mortgage with evidence of recording thereon with
respect to a Mortgage Loan is not received within 60 days of the Closing Date;
if it has not been received because of a delay caused by the public recording
office where such Mortgage has been delivered for recordation, the Depositor
shall deliver or cause to be delivered to the Trustee written notice stating
that such Mortgage has been delivered to the appropriate public recording office
for recordation and thereafter the Depositor shall deliver or cause to be
delivered such Mortgage with evidence of recording thereon upon receipt thereof
from the public recording office. The Trustee shall request that the Seller
correct or cure such omission, defect or other irregularity, or substitute a
Mortgage Loan pursuant to the provisions of Section 2.03(c), within 90 days from
the date the Seller was notified of such omission or defect and, if the Seller
does not correct or cure such omission or defect within such period, that the
Seller purchase such Mortgage Loan from the Trust Fund within 90 days from the
date the Trustee notified the Seller of such omission, defect or other
irregularity at the Purchase Price of such Mortgage Loan. The Purchase Price for
any Mortgage Loan purchased pursuant to this Section 2.02 shall be paid to the
Servicer and deposited by the Servicer in the Collection Account promptly upon
receipt, and, upon receipt by the Trustee of written notification of such
deposit signed by a Servicing Officer, the Trustee, upon receipt of a Request
for Release, shall promptly release to the Seller the related Mortgage File and
the Trustee shall execute and deliver such instruments of transfer or
assignment, without recourse, as shall be necessary to vest in the Seller or its
designee, as the case may be, any Mortgage Loan released pursuant hereto, and
the Trustee shall have no further responsibility with regard to such Mortgage
Loan. It is understood and agreed that the obligation of the Seller to purchase,
cure or substitute any Mortgage Loan as to which a

                                      -43-

<PAGE>

material defect in or omission of a constituent document exists shall constitute
the sole remedy respecting such defect or omission available to the Trustee on
behalf of Certificateholders. The preceding sentence shall not, however, limit
any remedies available to the Certificateholders, the Depositor or the Trustee
pursuant to the Sale Agreement and the Transfer Agreement. The Trustee shall be
under no duty or obligation to inspect, review and examine such documents,
instruments, certificates or other papers to determine that they are genuine,
enforceable or appropriate to the represented purpose, or that they have
actually been recorded, or that they are other than what they purport to be on
their face. The Trustee and the Servicer shall keep confidential the name of
each Mortgagor except as required by this Agreement and the Trustee and the
Servicer shall not solicit any such Mortgagor for the purpose of refinancing the
related Mortgage Loan. It is understood and agreed that all rights and benefits
relating to the solicitation of any Mortgagors and the attendant rights, title
and interest in and to the list of Mortgagors and data relating to their
Mortgages shall be retained by the Servicer.

      Within 70 days of the Closing Date, the Trustee shall deliver to the
Depositor and the Servicer the Trustee's Certification, substantially in the
form of Exhibit D attached hereto, evidencing the completeness of the Mortgage
Files, with any exceptions noted thereto.

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

      (a) The Depositor hereby represents and warrants to the Servicer and the
Trustee as follows, as of the date hereof:

            (i) The Depositor is duly organized and is validly existing as a
      corporation in good standing under the laws of the State of Delaware and
      has full power and authority (corporate and other) necessary to own or
      hold its properties and to conduct its business as now conducted by it and
      to enter into and perform its obligations under this Agreement and the
      Sale Agreement.

            (ii) The Depositor has the full corporate power and authority to
      execute, deliver and perform, and to enter into and consummate the
      transactions contemplated by, this Agreement and the Sale Agreement and
      has duly authorized, by all necessary corporate action on its part, the
      execution, delivery and performance of this Agreement and the Sale
      Agreement; and this Agreement and the Sale Agreement, assuming the due
      authorization, execution and delivery hereof by the other parties hereto,
      constitutes a legal, valid and binding obligation of the Depositor,
      enforceable against the Depositor in accordance with its terms, subject,
      as to enforceability, to (i) bankruptcy, insolvency, reorganization,
      moratorium and other similar laws affecting creditors' rights generally
      and (ii) general principles of equity, regardless of whether enforcement
      is sought in a proceeding in equity or at law.

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

                                      -44-

<PAGE>

      breach or violation may materially impair the Depositor's ability to
      perform or meet any of its obligations under this Agreement.

            (iv) No litigation is pending, or, to the best of the Depositor's
      knowledge, threatened, against the Depositor that would materially and
      adversely affect the execution, delivery or enforceability of this
      Agreement and the Sale Agreement or the ability of the Depositor to
      perform its obligations under this Agreement and the Sale Agreement in
      accordance with the terms hereof.

            (v) No consent, approval, authorization or order of any court or
      governmental agency or body is required for the execution, delivery and
      performance by the Depositor of, or compliance by the Depositor with, this
      Agreement and the Sale Agreement or the consummation of the transactions
      contemplated hereby, or if any such consent, approval, authorization or
      order is required, the Depositor has obtained the same. The Depositor
      hereby represents and warrants to the Trustee with respect to each
      Mortgage Loan as of the Closing Date, and following the transfer of the
      Mortgage Loans to it by the Seller, the Depositor had good title to the
      Mortgage Loans and the Mortgage Notes were subject to no offsets, claims,
      liens, mortgage, pledge, charge, security interest, defenses or
      counterclaims.

      (b) The representations and warranties of the Transferor with respect to
the related Mortgage Loans in the Transfer Agreement, which have been assigned
to the Trustee hereunder, were made as of the date specified in the Transfer
Agreement (or underlying agreement, if the Transfer Agreement is in the form of
an assignment of a prior agreement), except to the extent such representations
and warranties were brought forward in the letter agreement dated as of the date
hereof from the Transferor to the Seller. The representations and warranties of
the Seller with respect to the Mortgage Loans contained in the Sale Agreement
were made as of the Closing Date. To the extent that any fact, condition or
event with respect to a Mortgage Loan constitutes a breach of both (i) a
representation or warranty of the Transferor under the Transfer Agreement and
(ii) a representation or warranty of the Seller under the Sale Agreement, the
only right or remedy of the Trustee or of any Certificateholder shall be the
Trustee's right to enforce the obligations of the Transferor under any
applicable representation or warranty made by it. The Trustee acknowledges that
the Seller shall have no obligation or liability with respect to any breach of a
representation or warranty made by it with respect to the Mortgage Loans if the
fact, condition or event constituting such breach also constitutes a breach of a
representation or warranty made by the Transferor in the Transfer Agreement,
without regard to whether the Transferor fulfills its contractual obligations in
respect of such representation or warranty. The Trustee also acknowledges that
the Seller shall have no obligation or liability with respect to any breach of a
representation or warranty made solely by the Transferor with respect to the
Mortgage Loans, without regard to whether the Transferor fulfills its
contractual obligations in respect of such representation or warranty. The
Trustee further acknowledges that the Depositor shall have no obligation or
liability with respect to any breach of any representation or warranty with
respect to the Mortgage Loans (except as set forth in Section 2.03(a)(v)) under
any circumstances.

      (c) Upon discovery by any of the Depositor, the Servicer or the Trustee of
a breach of any of such representations and warranties that adversely and
materially affects the value of the related Mortgage Loan, Prepayment Charges or
the interests of the Certificateholders, the party discovering such breach shall
give prompt written notice to the other parties. Within 90 days of the discovery
of such breach of any representation or warranty the Transferor or the Seller,
as applicable, shall either (a) cure such breach in all material respects, (b)
repurchase such Mortgage Loan or any property acquired in respect thereof from
the Trustee at the Purchase Price or (c) within the two year period following
the Closing Date, substitute a Replacement Mortgage Loan for the affected
Mortgage Loan. In the event of discovery of a breach of any representation and
warranty of the Transferor, the Depositor or the Seller, the Trustee shall

                                      -45-

<PAGE>

enforce its rights under the Transfer Agreement or the Sale Agreement for the
benefit of the Certificateholders. If a breach of the representations and
warranties set forth in the Transfer Agreement exists solely due to the
unenforceability of a Prepayment Charge, the Trustee not seek to enforce the
repurchase remedy provided for herein unless directed in writing to do so by the
Depositor. In the event of a breach of the representations and warranties with
respect to the Mortgage Loans set forth in the Transfer Agreement, the Trustee
shall enforce the right of the Trust Fund to be indemnified for such breach of
representation and warranty. In the event that such breach relates solely to the
unenforceability of a Prepayment Charge, amounts received in respect of such
indemnity up to the amount of such Prepayment Charge shall be distributed
pursuant to Section 4.04(b)(i). As provided in the Sale Agreement, if the
Transferor substitutes for a Mortgage Loan for which there is a breach of any
representations and warranties in the Transfer Agreement which adversely and
materially affects the value of such Mortgage Loan and such substitute mortgage
loan is not a Replacement Mortgage Loan, under the terms of the Sale Agreement,
the Seller will, in exchange for such substitute Mortgage Loan, (i) provide the
applicable Purchase Price for the affected Mortgage Loan or (ii) within two
years of the Closing Date, substitute such affected Mortgage Loan with a
Replacement Mortgage Loan. Any such substitution shall not be effected prior to
the additional delivery to the Trustee of a Request for Release substantially in
the form of Exhibit I and shall not be effected unless it is within two years of
the Startup Day. As provided in the Sale Agreement, the Seller indemnifies and
holds the Trust Fund, the Trustee, the Depositor, the Servicer and each
Certificateholder harmless against any and all taxes, claims, losses, penalties,
fines, forfeitures, reasonable legal fees and related costs, judgments, and any
other costs, fees and expenses that the Trust Fund, the Trustee, the Depositor,
the Servicer and any Certificateholder may sustain in connection with any
actions of the Seller relating to a repurchase of a Mortgage Loan other than in
compliance with the terms of this Section 2.03 and the Sale Agreement, to the
extent that any such action causes (i) any federal or state tax to be imposed on
the Trust Fund or any REMIC provided for herein, including without limitation,
any federal tax imposed on "prohibited transactions" under Section 860F(a)(1) of
the Code or on "contributions after the startup day" under Section 860(d)(1) of
the Code, or (ii) any REMIC created hereunder to fail to qualify as a REMIC at
any time that any Certificate is outstanding.

      With respect to any Mortgage Loan repurchased by the Depositor pursuant to
this Agreement, by the Seller pursuant to the Sale Agreement or by the
Transferor pursuant to the Transfer Agreement, the principal portion of the
funds received by the Servicer in respect of such repurchase of a Mortgage Loan
will be considered a Principal Prepayment and shall be deposited by the Servicer
in the Collection Account pursuant to Section 3.05(d) and the Servicer shall
notify the Trustee of its receipt of the same. The Trustee, upon receipt of the
full amount of the Purchase Price for a Deleted Mortgage Loan, or upon receipt
of the Mortgage File for a Replacement Mortgage Loan substituted for a Deleted
Mortgage Loan, shall release or cause to be released and reassign to the
Depositor, the Seller or the Transferor, as applicable, the related Mortgage
File for the Deleted Mortgage Loan and shall execute and deliver such
instruments of transfer or assignment, in each case without recourse,
representation or warranty as shall be necessary to vest in such party or its
designee or assignee title to any Deleted Mortgage Loan released pursuant
hereto, free and clear of all security interests, liens and other encumbrances
created by this Agreement, which instruments shall be prepared by the Trustee,
and the Trustee shall not have any further responsibility with respect to the
Mortgage File relating to such Deleted Mortgage Loan.

      With respect to each Replacement Mortgage Loan to be delivered to the
Trustee pursuant to the terms of this Article II in exchange for a Deleted
Mortgage Loan: (i) the Depositor, the Transferor or the Seller, as applicable,
must deliver to the Trustee the Mortgage File for the Replacement Mortgage Loan
containing the documents set forth in Section 2.01 along with a written
certification certifying as to the delivery of such Mortgage File and containing
the granting language set forth in Section 2.01; and (ii) the Depositor will be
deemed to have made, with respect to such Replacement Mortgage Loan, each of the
representations and warranties made by it with respect to the related Deleted
Mortgage Loan. The

                                      -46-

<PAGE>

Trustee shall review the Mortgage File with respect to each Replacement Mortgage
Loan and certify to the Depositor that all documents required by Section 2.01
have been executed and received.

      For any month in which the Seller substitutes one or more Replacement
Mortgage Loans for one or more Deleted Mortgage Loans, the Seller will determine
the amount (if any) by which the aggregate principal balance of all such
Replacement Mortgage Loans as of the date of substitution and the aggregate
Prepayment Charges with respect to such Replacement Mortgage Loans is less than
the aggregate Stated Principal Balance (after application of the principal
portion of the Scheduled Payment due in the month of substitution) and aggregate
Prepayment Charges of all such Deleted Mortgage Loans. An amount equal to the
aggregate of the deficiencies described in the preceding sentence (such amount,
the "Substitution Adjustment Amount") plus an amount equal to any unreimbursed
costs, penalties and/or damages incurred by the Trust Fund in connection with
any violation relating to such Deleted Mortgage Loan of any predatory or abusive
lending law shall be remitted by the Seller to the Servicer for deposit into the
Collection Account on the Determination Date for the Distribution Date relating
to the Prepayment Period during which the related Mortgage Loan became required
to be purchased or replaced hereunder.

      Notwithstanding any other provision of this Agreement, the right to
substitute Mortgage Loans pursuant to this Article II shall be subject to the
additional limitations that no substitution of a Replacement Mortgage Loan for a
Deleted Mortgage Loan shall be made unless the Trustee shall have received an
Opinion of Counsel (at the expense of the party seeking to make the
substitution) that, under current law, such substitution will not (A) affect
adversely the status of any REMIC established hereunder as a REMIC, or of the
related "regular interests" as "regular interests" in any such REMIC, or (B)
cause any such REMIC to engage in a "prohibited transaction" or prohibited
contribution pursuant to the REMIC Provisions.

      The Trustee shall cause the relevant Mortgage Loan Schedules to be amended
in accordance with the terms of this Agreement.

      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 Replacement Mortgage
Loan or Replacement Mortgage Loans and shall deliver a copy of such amended
Mortgage Loan Schedule to the Servicer and the Trustee. Upon such substitution
by the Seller, such Replacement Mortgage Loan or Replacement Mortgage Loans
shall constitute part of the Mortgage Pool and shall be subject in all respects
to the terms of this Agreement and the Sale Agreement, including all applicable
representations and warranties thereof included in the Sale Agreement as of the
date of substitution.

      (d) It is understood and agreed that the representations, warranties and
indemnification (i) set forth in this Section 2.03, (ii) of the Seller and the
Depositor set forth in the Sale Agreement and assigned to the Trustee by the
Depositor hereunder and (iii) of the Transferor, assigned by the Seller to the
Depositor pursuant to the Sale Agreement and assigned to the Trustee by the
Depositor hereunder shall each survive delivery of the Mortgage Files and the
Assignment of Mortgage of each Mortgage Loan to the Trustee and shall continue
throughout the term of this Agreement.

      SECTION 2.04. Representations and Warranties of the Servicer.

      The Servicer hereby represents and warrants to the Depositor and the
Trustee as follows, as of the date hereof:

            (i) The Servicer is a duly organized corporation and is validly
      existing and in good standing under the laws of the state of its
      incorporation and is duly authorized and qualified to

                                      -47-

<PAGE>

      transact any and all business contemplated by this Agreement to be
      conducted by the Servicer in any state in which a Mortgaged Property (or
      Underlying Mortgaged Property, in the case of a Co-op Loan) is located or
      is otherwise not required under applicable law to effect such
      qualification and, in any event, is in compliance with the doing business
      laws of any such state, to the extent necessary to ensure its ability to
      enforce each Mortgage Loan, to service the Mortgage Loans in accordance
      with the terms of this Agreement and to perform any of its other
      obligations under this Agreement in accordance with the terms hereof.

            (ii) The Servicer has the full corporate power and authority and to
      service each Mortgage Loan, and to execute, deliver and perform, and to
      enter into and consummate the transactions contemplated by this Agreement
      and has duly authorized by all necessary corporate action on the part of
      the Servicer the execution, delivery and performance of this Agreement;
      and this Agreement, assuming the due authorization, execution and delivery
      hereof by the other parties hereto, constitutes a legal, valid and binding
      obligation of the Servicer, enforceable against the Servicer in accordance
      with its terms, except that (a) the enforceability hereof may be limited
      by bankruptcy, insolvency, moratorium, receivership and other similar laws
      relating to creditors' rights generally and (b) the remedy of specific
      performance and injunctive and other forms of equitable relief may be
      subject to equitable defenses and to the discretion of the court before
      which any proceeding therefor may be brought.

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

            (iv) The Servicer is an approved seller/servicer of conventional
      mortgage loans for Fannie Mae or Freddie Mac and is a HUD approved
      mortgagee pursuant to Section 203 of the National Housing Act.

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

            (vi) No consent, approval, authorization or order of any court or
      governmental agency or body is required for the execution, delivery and
      performance by the Servicer of, or compliance by the Servicer with, this
      Agreement or the consummation of the transactions contemplated hereby, or
      if any such consent, approval, authorization or order is required, the
      Servicer has obtained the same.

                                      -48-

<PAGE>

            (vii) The Servicer has fully furnished and will fully furnish (for
      the period it serviced the Mortgage Loans), in accordance with the Fair
      Credit Reporting Act and its implementing regulations, accurate and
      complete information (e.g., favorable and unfavorable) on its borrower
      credit files to Equifax, Experian and Trans Union Credit Information
      Company on a monthly basis.

            (viii) Notwithstanding any state or federal law to the contrary, the
      Servicer shall not impose or collect a Prepayment Charge in any instance
      when the mortgage debt is accelerated as the result of the Mortgagor's
      default in making the Mortgage Loan payments.

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

      Upon discovery by the Depositor, the Servicer or the Trustee that any
Mortgage Loan does not constitute a "qualified mortgage" within the meaning of
section 860G(a)(3) of the Code, the party discovering such fact shall promptly
(and in any event within 5 Business Days of discovery) give written notice
thereof to the other parties. In connection therewith, the Depositor shall, at
the Depositor's option, either (i) substitute, if the conditions in Section
2.03(c) with respect to substitutions are satisfied, a Replacement Mortgage Loan
for the affected Mortgage Loan, or (ii) repurchase the affected Mortgage Loan
within 90 days of such discovery in the same manner as it would a Mortgage Loan
for a breach of representation or warranty contained in Section 2.03. The
Trustee shall reconvey to the Depositor the Mortgage Loan to be released
pursuant hereto in the same manner, and on the same terms and conditions, as it
would a Mortgage Loan repurchased for breach of a representation or warranty
contained in Section 2.03.

      SECTION 2.06. Authentication and Delivery of Certificates.

      The Trustee acknowledges the transfer and assignment to it of the Trust
Fund and, concurrently with such transfer and assignment, the Trustee has caused
to be authenticated and delivered to or upon the order of the Depositor, in
exchange for the Mortgage Loans, Certificates duly authenticated by the Trustee
in authorized denominations evidencing ownership of the entire Trust Fund. The
Trustee agrees to hold the Trust Fund and exercise the rights referred to above
for the benefit of all present and future Holders of the Certificates and to
perform the duties set forth in this Agreement to the best of its ability, to
the end that the interests of the Holders of the Certificates may be adequately
and effectively protected.

      SECTION 2.07. REMIC Elections.

      (a) The Depositor hereby instructs and authorizes the Trustee to make an
appropriate election to treat each of the Upper Tier REMIC and the Lower Tier
REMIC as a REMIC. The Trustee shall sign the returns providing for such
elections and such other tax or information returns which are required to be
signed by the Trustee under applicable law. This Agreement shall be construed so
as to carry out the intention of the parties that each of the Upper Tier REMIC
and the Lower Tier REMIC be treated as a REMIC at all times prior to the date on
which the Trust Fund is terminated.

      (b) The Preliminary Statement sets forth the designations and "latest
possible maturity date" for federal income tax purposes of all interests created
hereby. The "Startup Day" for purposes of the REMIC Provisions shall be the
Closing Date. Each REMIC's fiscal year shall be the calendar year.

      The Lower Tier REMIC shall consist of all of the assets of the Trust Fund
(other than (i) any proceeds of Prepayment Charges, (ii) amounts paid by the
Servicer, the Seller or the Transferor in respect of Prepayment Charges pursuant
to this Agreement or the Transfer Agreement, as applicable, (iii)

                                      -49-

<PAGE>

amounts received in respect of any indemnification paid as a result of a
Prepayment Charge being unenforceable in breach of the representations and
warranties set forth in the Sale Agreement or the Transfer Agreement, (iv) the
interests issued by the Lower Tier REMIC, (v) the grantor trusts described in
Section 2.07 hereof and (vi) the Cap Contract and Cap Contract Account). The
Lower Tier REMIC shall issue the Class LTA-1A Interest, Class LTA-1B, Class
LTA-2A Interest, Class LTA-2B Interest, Class LTB-1 Interest, Class LTB-2
Interest, Class LTB-3 Interest, Class LTM-1 Interest, Class LTM-2 Interest,
Class LTM-3 Interest and Class LTX Interest which shall be designated as regular
interests of such REMIC and shall issue the Class LTR Interest that shall be
designated as the sole class of residual interest in the Lower Tier REMIC. Each
of the Lower Tier REMIC Regular Interests shall have the characteristics set
forth in its definition.

      The assets of the Upper Tier REMIC shall be the Lower Tier REMIC Regular
Interests. The REMIC Regular Interests shall be designated as the regular
interests in the Upper Tier REMIC and the Residual Interest shall be designated
as the sole class of residual interest in the Upper Tier REMIC. For federal
income tax purposes, the pass-through rate on each REMIC Regular Interest (other
than the Uncertificated Class C Interest) and on the sole class of residual
interest in the Upper Tier REMIC shall be subject to a cap equal to the Net
Rate.

      The beneficial ownership of the Class LTR Interest and the Residual
Interest shall be represented by the Class R Certificate. The Class LTR Interest
shall not have a principal balance or bear interest.

      (c) The "tax matters person" with respect to each REMIC for purposes of
the REMIC Provisions shall be the beneficial owner of the Class R Certificate;
provided, however, that the Holder of a Class R Certificate, by its acceptance
thereof, irrevocably appoints the Trustee as its agent and attorney-in-fact to
act as "tax matters person" with respect to each REMIC for purposes of the REMIC
Provisions. If there is more than one beneficial owner of the Class R
Certificate, the "tax matters person" shall be the Person with the greatest
percentage interest in the Class R Certificate and, if there is more than one
such Person, shall be determined under Treasury regulation Section 1.860F-4(d)
and Treasury regulation Section 301.6231(a)(7)-1.

      (d) It is intended that the rights of each Class of the Class A, Class M
and Class B Certificates to receive payments in respect of Excess Interest shall
be treated as a right in interest rate cap contracts written by the Class C
Certificateholders in favor of the holders of each Class of the Class A, Class M
and Class B Certificates and such shall be accounted for as property held
separate and apart from the regular interests in the Upper Tier REMIC held by
the holders of the Class A (other than the Class R Certificate), Class M and
Class B Certificates and the residual interest in the Upper Tier REMIC held by
the holder of the Class R Certificate. This provision is intended to satisfy the
requirements of Treasury Regulations Section 1.860G-2(i) for the treatment of
property rights coupled with REMIC interests to be separately respected and
shall be interpreted consistently with such regulation. On each Distribution
Date, to the extent that any of the Class A, Class M and Class B Certificates
receive payments of Excess Interest, such amounts, to the extent not derived
from payments received on the Cap Contract, will be treated as distributed by
the Upper-Tier REMIC to the Class C Certificates pro rata in payment of the
amounts specified in Section 4.04(g) and then paid to the relevant Class of
Certificates pursuant to the related interest cap agreement.

      (e) The parties intend that the portion of the Trust Fund consisting of
the Uncertificated Class C Interest, the Cap Contract, the Cap Contract Account
and the obligation of the holders of the Class C Certificates to pay amounts of
Excess Interest to the holders of the Class A, Class M and Class B Certificates
shall be treated as a "grantor trust" under the Code, and the provisions hereof
shall be interpreted consistently with this intention. In furtherance of such
intention, the Trustee shall (i) furnish or cause to be furnished to the holders
of the Class C Certificates information regarding their allocable

                                      -50-

<PAGE>

share, if any, of the income with respect to such grantor trust, (ii) file or
cause to be filed with the Internal Revenue Service Form 1041 (together with any
necessary attachments) and such other forms as may be applicable and (iii)
comply with such information reporting obligations with respect to payments from
such grantor trust to the holders of Class A, Class M, Class B and Class C
Certificates as may be applicable under the Code.

      (f) The parties intend that the portion of the Trust Fund consisting of
the right to receive proceeds from Prepayment Charges collected on the Mortgage
Loans, amounts paid by the Servicer, the Seller or Transferor in respect of
Prepayment Charges pursuant to this Agreement or the Transfer Agreement, as
applicable and amounts received in respect of any indemnification paid as a
result of a Prepayment Charge being unenforceable in breach of the
representations and warranties set forth in the Sale Agreement or the Transfer
Agreement shall be treated as a "grantor trust" under the Code, and the
provisions hereof shall be interpreted consistently with this intention. In
furtherance of such intention, the Trustee shall (i) furnish or cause to be
furnished to the holders of the Class P Certificates information regarding their
allocable share of the income with respect to such grantor trust and (ii) file
or cause to be filed with the Internal Revenue Service Form 1041 (together with
any necessary attachments) and such other forms as may be applicable.

      (g) [RESERVED]

      (h) All payments of principal and interest at the Net Mortgage Rate on
each of the Mortgage Loans (other than Prepayment Charges, amounts paid by the
Servicer, the Seller or the Transferor in respect of Prepayment Charges pursuant
to this Agreement or the Transfer Agreement, as applicable and amounts received
in respect of any indemnification paid as a result of a Prepayment Charge being
unenforceable in breach of the representations and warranties set forth in the
Sale Agreement or the Transfer Agreement) received from the Mortgage Loans shall
be paid to the Lower Tier REMIC Regular Interests until the principal balance of
all such interests have been reduced to zero and any losses allocated to such
interests have been reimbursed. Any excess amounts shall be distributed to the
Class LTR Interest. On each Distribution Date, an amount equal to 50% of the
increase in the Overcollateralization Amount shall be payable as a reduction of
the principal amounts of the Lower Tier REMIC Marker Classes (with such amount
allocated among the Lower Tier REMIC Marker Classes so that each Lower Tier
REMIC Marker Class will have its principal reduced by an amount equal to 50% of
any increase in the Overcollateralization Amount that results in a reduction in
the principal balance of its Related Certificates) and will be accrued and added
to the principal balance of the Class LTX Interest. All payments of scheduled
principal and prepayments of principal on the Mortgage Loans shall be allocated
50% to the Class LTX Interest and 50% to the Lower Tier REMIC Marker Classes
(with principal payments allocated to each of the Lower Tier REMIC Marker
Classes in an amount equal to 50% of the principal amounts distributed to the
Related Certificates in reduction of their principal amounts). Notwithstanding
the preceding sentence, an amount equal to the principal payments that result in
a reduction in the Overcollateralization Amount shall be treated as payable
entirely to the Class LTX Interest. Realized Losses that are allocated to the
Certificates shall be applied to the Lower Tier REMIC Marker Classes and the
Class LTX Interest so that after all distributions have been made on each
Distribution Date (i) the principal balance of each of the Lower Tier REMIC
Marker Classes is equal to 50% of the principal balance of the Related
Certificates and (ii) the principal balance of the Class LTX Interest is equal
to the sum of (x) 50% of the aggregate Stated Principal Balance of the Mortgage
Loans and (y) 50% of the Overcollateralization Amount. Each Lower Tier REMIC
Marker Class shall be entitled to receive an amount equal to 50% of all amounts
distributed to the Related Certificates in respect of unreimbursed amounts of
Realized Losses. The Class LTX Interest shall be entitled to receive all other
amounts distributed to the Certificates in respect of unreimbursed amounts of
Realized Losses.

                                      -51-

<PAGE>

      If on any Distribution Date the Certificate Principal Balance of any Class
of Certificates is increased pursuant to the last sentence of the definition of
"Certificate Principal Balance", then there shall be an equivalent increase in
the principal amounts of the Lower Tier REMIC Regular Interests, with such
increase allocated (before the making of distributions and the allocation of
losses on the Lower Tier REMIC Regular Interests on such Distribution Date)
among the Lower Tier REMIC Regular Interests so that (i) each of the Lower Tier
Marker Classes has a principal balance equal to 50% of the principal balance of
the Related Certificates, (ii) the Class LTX Interest has a principal balance
equal to the sum of (x) 50% of the aggregate Stated Principal Balance of the
Mortgage Loans and (y) 50% of the Overcollateralization Amount.

      (i) In the event that any REMIC provided for herein fails to qualify as a
REMIC, loses its status as a REMIC or incurs federal, state or local taxes as a
result of a prohibited transaction or prohibited contribution under the REMIC
Provisions due to the negligent performance by the Servicer of its duties and
obligations set forth herein, the Servicer shall indemnify the Trustee and the
Trust Fund against any and all Losses directly resulting from such negligence;
provided, however, that the Servicer shall not be liable for any such Losses
attributable to the action or inaction of the Trustee, the Depositor or the
Holder of such Class R Certificate, as applicable, nor for any such Losses
resulting from misinformation provided by the Holder of such Class R Certificate
on which the Servicer has relied. The foregoing shall not be deemed to limit or
restrict the rights and remedies of the Holder of such Class R Certificate now
or hereafter existing at law or in equity. Notwithstanding the foregoing,
however, in no event shall the Servicer have any liability (1) for any action or
omission that is taken in accordance with and in compliance with the express
terms of, or which is expressly permitted by the terms of, this Agreement, (2)
for any Losses other than those arising directly out of a negligent performance
by the Servicer of its duties and obligations set forth herein, and (3) for any
special or consequential damages to Certificateholders (in addition to payment
of principal and interest on the Certificates). In the event that the Servicer
in good faith believes that there exists a substantial question of law about
whether a particular act or omission might cause any REMIC provided for herein
to fail to qualify as a REMIC, lose its status as a REMIC or incur federal,
state or local taxes as a result of a prohibited transaction or prohibited
contribution under the REMIC Provisions within the meaning of this paragraph
(whether such question arises by reason of a change in the relevant statutes,
regulations judicial decisions, administrative rulings and other authorities or
otherwise), the Servicer shall be entitled to retain counsel to advise it on
such question and the reasonable fees and expenses of such counsel incurred by
the Servicer in connection therewith shall be deemed a Non-Recoverable Servicing
Advance for all purposes of this Agreement.

      (j) In the event that any REMIC provided for herein fails to qualify as a
REMIC, loses its status as a REMIC, or incurs federal, state or local taxes as a
result of a prohibited transaction or prohibited contribution under the REMIC
Provisions due to the negligent performance by the Trustee of its duties and
obligations set forth herein, the Trustee shall indemnify the Servicer and the
Trust Fund against any and all Losses resulting from such negligence; provided,
however, that the Trustee shall not be liable for any such Losses attributable
to the action or inaction of the Servicer, the Depositor or the Holder of such
Class R Certificate, as applicable, nor for any such Losses resulting from
misinformation provided by the Holder of such Class R Certificate on which the
Trustee has relied. The foregoing shall not be deeded to limit or restrict the
rights and remedies of the Holder of such Class R Certificate now or hereafter
existing at law or in equity. Notwithstanding the foregoing, however, in no
event shall the Trustee have any liability (1) for any action or omission that
is taken in accordance with and in compliance with the express terms of, or
which is expressly permitted by the terms of, this Agreement, (2) for any Losses
other than those arising out of a negligent performance by the Trustee of its
duties and obligations set forth herein, and (3) for any special or
consequential damages to Certificateholders (in addition to payment of principal
and interest on the Certificates).

      SECTION 2.08. Covenants of the Servicer.

                                      -52-

<PAGE>

      The Servicer hereby covenants to each of the other parties to this
Agreement as follows:

      (a) the Servicer shall comply in the performance of its obligations under
this Agreement with all reasonable rules and requirements of the insurer under
each Required Insurance Policy (but only to the extent that such rules and
requirements of the insurer do not impose any additional cost or expense, other
than incidental and non-material costs or expenses, on the Servicer);

      (b) no written information, certificate of an officer, statement furnished
in writing or written report delivered to the Depositor or the Trustee, any
affiliate of the Depositor or the Trustee and prepared by the Servicer pursuant
to this Agreement will be inaccurate in any material respect, provided, however,
that the Servicer shall not be responsible for inaccurate information provided
to it by third parties.

      SECTION 2.09. [RESERVED]

      SECTION 2.10. [RESERVED]

      SECTION 2.11. Permitted Activities of the Trust. The Trust is created for
the object and purpose of engaging in the Permitted Activities. In furtherance
of the foregoing, the Trustee is hereby authorized and directed to execute and
deliver on behalf of the Trust, and to perform the duties and obligations of the
Trustee under the Cap Contract and any other agreement or instrument related
thereto, in each case in such form as the Depositor shall direct or shall
approve, the execution and delivery of any such agreement by the Depositor to be
conclusive evidence of its approval thereof.

      SECTION 2.12. Qualifying Special Purpose Entity. For purposes of SFAS 140,
the parties hereto intend that the Trust Fund shall be treated as a "qualifying
special purpose entity" as such term is used in SFAS 140 and any successor rule
thereto and its power and authority as stated in Section 2.11 of this Agreement
shall be limited in accordance with paragraph 35 thereof.

                                   ARTICLE III
                          ADMINISTRATION AND SERVICING
                                OF MORTGAGE LOANS

      SECTION 3.01. Servicer to Service Mortgage Loans.

            For and on behalf of the Certificateholders, the Servicer shall
service and administer the Mortgage Loans in accordance with Accepted Servicing
Practices. In connection with such servicing and administration, the Servicer
shall have full power and authority, acting alone and/or through subservicers as
provided in Section 3.02 hereof, to do or cause to be done any and all things
that it may deem necessary or desirable in connection with such servicing and
administration, including but not limited to, the power and authority, subject
to the terms hereof (i) to execute and deliver, on behalf of the
Certificateholders and the Trustee, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any Mortgaged
Property (or the stock allocated to a dwelling unit related to a Co-op Loan) and
assumptions of the Mortgage Notes and related Mortgages (but only in the manner
provided in this Agreement), (iii) to collect any Insurance Proceeds and other
Liquidation Proceeds and (iv) subject to Section 3.12(a), to effectuate
foreclosure or other conversion of the ownership of the Mortgaged Property (or
the stock allocated to a dwelling unit related to a Co-op Loan) securing any
Mortgage Loan; provided that, subject to Section 6.03, the Servicer shall not
take any action that is inconsistent with or prejudices the interests of the
Trust Fund or the Certificateholders in any Mortgage Loan serviced by it under
this Agreement or the rights and interests of the other parties to this
Agreement except as otherwise required by this Agreement or by law. Subject to
the other provisions of this Agreement, the Servicer shall represent and protect
the interest of the Trust Fund in the same manner as it

                                      -53-

<PAGE>

currently protects its own interest in mortgage loans in its own portfolio in
any claim, proceeding or litigation regarding a Mortgage Loan and shall not make
or permit any modification, waiver or amendment of any term of any Mortgage Loan
which would cause any of the REMICs provided for herein to fail to qualify as a
REMIC or result in the imposition of any tax under Section 860G(a) or 860G(d) of
the Code. Without limiting the generality of the foregoing, the Servicer, in its
own name or in the name of the Depositor and the Trustee, is hereby authorized
and empowered by the Depositor and the Trustee, when the Servicer believes it
appropriate in its reasonable judgment, to execute and deliver, on behalf of the
Trustee, the Depositor, the Certificateholders or any of them, any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge and all other comparable instruments, with respect to the Mortgage
Loans, and with respect to the Mortgaged Properties held for the benefit of the
Certificateholders. The Servicer shall prepare and deliver to the Depositor
and/or the Trustee such documents requiring execution and delivery by any or all
of them as are necessary or appropriate to enable the Servicer to service and
administer the Mortgage Loans, including without limitation, any powers of
attorney. Upon receipt of such documents, the Depositor and/or the Trustee shall
execute such documents and deliver them to the Servicer. For purposes of this
Section 3.01, the Trustee hereby grants to the Servicer a limited power of
attorney to execute and file any and all documents necessary to fulfill the
obligations of the Servicer under this Section 3.01.

      In accordance with the standards of the preceding paragraph, the Servicer
shall advance or cause to be advanced funds as necessary for the purpose of
effecting the payment of taxes and assessments on the Mortgaged Properties,
which advances shall be reimbursable in the first instance from related
collections from the Mortgagors pursuant to Section 3.06, and further as
provided in Section 3.08. All costs incurred by the Servicer, if any, in
effecting the timely payments of taxes and assessments on the Mortgaged
Properties and related insurance premiums shall not, for the purpose of
calculating monthly distributions to the Certificateholders, be added to the
Stated Principal Balance under the related Mortgage Loans, notwithstanding that
the terms of such Mortgage Loans so permit.

      In the event that the Mortgage Loan Documents relating to any Mortgage
Loan contain provisions requiring the related Mortgagor to submit to binding
arbitration any disputes arising in connection with such Mortgage Loan, the
Servicer shall be entitled to waive any such provisions on behalf of the Trust
and to send written notice of such waiver to the related Mortgagor, although the
Mortgagor may still require arbitration of such disputes at its option.

                                      -54-

<PAGE>

      The Servicer shall deliver a list of Servicing Officers to the Trustee by
the Closing Date.

      The Servicer shall deliver to each MI Insurer all reports required by such
MI Insurer that are reasonably available to the Servicer.

      The Servicer will transmit full-file credit reporting data for each
Mortgage Loan pursuant to Fannie Mae Guide Announcement 97-02 and that for each
Mortgage Loan, the Servicer agrees that it shall report one of the following
statuses each month as follows: current, delinquent (30-, 60-, 90-days, etc.),
foreclosed or charged-off.

      The Servicer further is authorized and empowered by the Trustee, on behalf
of the Certificateholders and the Trustee, in its own name or in the name of the
Sub-Servicer, when the Servicer or the Sub-Servicer, as the case may be,
believes it is appropriate in its best judgment to register any Mortgage Loan on
the MERS System, or cause the removal from the registration of any Mortgage Loan
on the MERS System, to execute and deliver, on behalf of the Trustee and the
Certificateholders or any of them, any and all instruments of assignment,
release and other comparable instruments with respect to such assignment,
release or re-recording of a Mortgage in the name of MERS, solely as nominee for
the Trustee and its successors and assigns. Any reasonable expenses incurred in
connection with the actions described in the preceding sentence or as a result
of MERS discontinuing or becoming unable to continue operations in connection
with the MERS System, shall be subject to withdrawal by the Servicer from the
Collection Account.

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

      (a) The Servicer may arrange for the subservicing of any Mortgage Loan by
a subservicer, which may be an affiliate (each, a "subservicer") pursuant to a
subservicing agreement (each, a "subservicing agreement"); provided, however,
that (i) such subservicing arrangement and the terms of the related subservicing
agreement must provide for the servicing of such Mortgage Loans in a manner
consistent with the servicing arrangements contemplated hereunder and (ii) that
such agreement would not result in a withdrawal or downgrading by any Rating
Agency of the ratings of any Certificates or any of the NIM Notes evidenced by a
letter to that effect delivered by each Rating Agency to the Depositor.
Notwithstanding the provisions of any subservicing agreement, any of the
provisions of this Agreement relating to agreements or arrangements between the
Servicer and a subservicer or reference to actions taken through a subservicer
or otherwise, the Servicer shall remain obligated and liable to the Depositor,
the Trustee and the Certificateholders for the servicing and administration of
the Mortgage Loans in accordance with the provisions of this Agreement without
diminution of such obligation or liability by virtue of such subservicing
agreements or arrangements or by virtue of indemnification from the subservicer
and to the same extent and under the same terms and conditions as if the
Servicer alone were servicing and administering the Mortgage Loans. Every
subservicing agreement entered into by the Servicer shall contain a provision
giving any successor servicer the option to terminate such agreement in the
event a successor servicer is appointed. All actions of the each subservicer
performed pursuant to the related subservicing agreement shall be performed as
an agent of the Servicer with the same force and effect as if performed directly
by the Servicer. The Servicer shall deliver to the Trustee copies of all
subservicing agreements.

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

                                      -55-

<PAGE>

      SECTION 3.03. Rights of the Depositor and the Trustee in Respect of the
Servicer.

      Neither the Trustee nor the Depositor shall have any responsibility or
liability for any action or failure to act by the Servicer, and neither of them
is obligated to supervise the performance of the Servicer hereunder or
otherwise.

      SECTION 3.04. Trustee to Act as Servicer.

      In the event that the Servicer shall for any reason no longer be the
servicer hereunder (including by reason of an Event of Default), the Trustee or
its designee shall, within a period of time not to exceed ninety (90) days from
the date of notice of termination or resignation, thereupon assume all of the
rights and obligations of the Servicer hereunder arising thereafter (except that
the Trustee shall not be (i) liable for losses of the Servicer pursuant to
Section 3.10 hereof or for any acts or omissions of such predecessor servicer
hereunder, (ii) obligated to make Advances if it is prohibited from doing so by
applicable law, (iii) obligated to effectuate repurchases or substitutions of
Mortgage Loans hereunder, including pursuant to Section 2.02 or 2.03 hereof,
(iv) responsible for any expenses of the Servicer pursuant to Section 2.03 or
(v) deemed to have made any representations and warranties hereunder, including
pursuant to Section 2.04 or the first paragraph of Section 6.02 hereof;
provided, however that the Trustee or its designee, in its capacity as the
successor servicer, shall immediately assume the Servicer's obligation to make
Advances and Servicing Advances. No such termination or resignation shall affect
any obligation of the Servicer to pay amounts owed under this Agreement and to
perform its duties under this Agreement until its successor assumes all of its
rights and obligations hereunder. If the Servicer shall for any reason no longer
be the servicer (including by reason of any Event of Default), the Trustee (or
any other successor servicer) may, at its option, succeed to any rights and
obligations of the Servicer under any subservicing agreement in accordance with
the terms thereof; provided, however, that the Trustee (or any other successor
servicer) shall not incur any liability or have any obligations in its capacity
as servicer under a subservicing agreement arising prior to the date of such
succession unless it expressly elects to succeed to the rights and obligations
of the Servicer thereunder; and the Servicer shall not thereby be relieved of
any liability or obligations under the subservicing agreement arising prior to
the date of such succession. To the extent any Servicing Transfer Costs are not
paid by the Servicer pursuant to this Agreement, such amounts shall be payable
out of the Certificate Account; provided that the terminated servicer shall
reimburse the Trust Fund for any such expense incurred by the Trust Fund upon
receipt of a reasonably detailed invoice evidencing such expenses. If the
Trustee is unwilling or unable to act as servicer, the Trustee shall seek to
appoint a successor servicer that is eligible in accordance with the criteria
specified this Agreement.

      The Servicer shall, upon request of the Trustee, but at the expense of the
Servicer, deliver to the assuming party all documents and records relating to
each subservicing agreement and the Mortgage Loans then being serviced and
otherwise use its best efforts to effect the orderly and efficient transfer of
the subservicing agreement to the assuming party.

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

      (a) The Servicer shall make reasonable efforts in accordance with Accepted
Servicing Practices to collect all payments called for under the terms and
provisions of the Mortgage Loans to the extent such procedures shall be
consistent with this Agreement and the terms and provisions of any related
Required Insurance Policy. Consistent with the foregoing, the Servicer may in
its discretion waive any late payment charge or, if applicable, any penalty
interest. Notwithstanding the foregoing, in the event that any Mortgage Loan is
in default or, in the judgment of the Servicer, such default is reasonably
foreseeable, the Servicer, consistent with the standards set forth in Section
3.01, may also waive, modify

                                      -56-

<PAGE>

or vary any term of such Mortgage Loan (including modifications that would
change the Mortgage Rate, forgive the payment of principal or interest or extend
the final maturity date of such Mortgage Loan), accept payment from the related
Mortgagor of an amount less than the Stated Principal Balance in final
satisfaction of such Mortgage Loan, or consent to the postponement of strict
compliance with any such term or otherwise grant indulgence to any Mortgagor
(any and all such waivers, modifications, variances, forgiveness of principal or
interest, postponements, or indulgences collectively referred to herein as
"forbearance"), provided, however, that in no event shall the Servicer grant any
such forbearance (other than as permitted by the second sentence of this
Section) with respect to any one Mortgage Loan more than once in any 12 month
period or more than three times over the life of such Mortgage Loan, and
provided, further, that in determining which course of action permitted by this
sentence it shall pursue, the Servicer shall adhere to the standards of Section
3.01. The Servicer's analysis supporting any forbearance and the conclusion that
any forbearance meets the standards of Section 3.01 shall be reflected in
writing in the Mortgage File.

      (b) The Servicer will not waive any Prepayment Charge or portion thereof
unless, (i) the enforceability thereof shall have been limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditors' rights generally or is otherwise prohibited by law, or (ii) the
collectability thereof shall have been limited due to acceleration in connection
with a foreclosure or other involuntary payment, or (iii) in the Servicer's
reasonable judgment as described in Section 3.01 hereof, (x) such waiver relates
to a default or a reasonably foreseeable default, (y) such waiver would maximize
recovery of total proceeds taking into account the value of such Prepayment
Charge and related Mortgage Loan and (z) doing so is standard and customary in
servicing similar Mortgage Loans (including any waiver of a Prepayment Charge in
connection with a refinancing of a Mortgage Loan that is related to a default or
a reasonably foreseeable default), or (iv) this Agreement expressly provides
that the Servicer shall not impose or collect a Prepayment Charge. Except as
provided in the preceding sentence, in no event will the Servicer waive a
Prepayment Charge in connection with a refinancing of a Mortgage Loan that is
not related to a default or a reasonably foreseeable default. If the Servicer
waives or does not collect all or a portion of a Prepayment Charge relating to a
Principal Prepayment in full or in part due to any action or omission of the
Servicer, other than as provided above, the Servicer shall deposit the amount of
such Prepayment Charge (or such portion thereof as had been waived for deposit)
into the Collection Account for distribution in accordance with the terms of
this Agreement.

      (c) The Servicer shall not be required to institute or join in litigation
with respect to collection of any payment (whether under a Mortgage, Mortgage
Note or otherwise or against any public or governmental authority with respect
to a taking or condemnation) if it reasonably believes that enforcing the
provision of the Mortgage or other instrument pursuant to which such payment is
required is prohibited by applicable law.

      (d) The Servicer shall establish and initially maintain, on behalf of the
Trustee for the benefit of the Certificateholders, the Collection Account. The
Servicer shall deposit into the Collection Account daily, within two Business
Days (or, in the case of the Optional Termination Amount, one Business Day) of
receipt thereof, in immediately available funds, the following payments and
collections received or made by it on and after the Cut-Off Date with respect to
the Mortgage Loans:

            (i) all payments on account of principal, including Principal
      Prepayments, on the Mortgage Loans, other than principal due on the
      Mortgage Loans on or prior to the Cut-off Date;

            (ii) all payments on account of interest on the Mortgage Loans net
      of the related Servicing Fee permitted under Section 3.15, other than
      interest due on the Mortgage Loans on or prior to the Cut-off Date;

                                      -57-

<PAGE>

            (iii) all Liquidation Proceeds, other than proceeds to be applied to
      the restoration or repair of the Mortgaged Property (or Underlying
      Mortgaged Property, in the case of a Co-op Loan) or released to either the
      Mortgagor or the holder of a senior lien on the Mortgaged Property (or
      Underlying Mortgaged Property, in the case of a Co-op Loan) in accordance
      with the Servicer's normal servicing procedures;

            (iv) all Subsequent Recoveries;

            (v) all Compensating Interest;

            (vi) any amount required to be deposited by the Servicer pursuant to
      Section 3.05(g) in connection with any losses on Permitted Investments;

            (vii) any amounts required to be deposited by the Servicer pursuant
      to Section 3.10 hereof;

            (viii) all Purchase Prices and Substitution Adjustment Amounts;

            (ix) all Advances made by the Servicer pursuant to Section 4.01;

            (x) all Prepayment Charges;

            (xi) all net monthly rental income from REO Properties required to
      be deposited by the Servicer pursuant to Section 3.12; and

            (xii) any other amounts required to be deposited hereunder.

      The foregoing requirements for remittance by the Servicer into the
Collection Account shall be exclusive, it being understood and agreed that,
without limiting the generality of the foregoing, late payment charges,
insufficient funds charges and payments in the nature of assumption fees (i.e.
fees related to the assumption of a Mortgage Loan upon the purchase of the
related Mortgaged Property or stock allocated to a dwelling unit in the case of
a Co-op Loan) and other similar ancillary fees and charges (other than
Prepayment Charges) if collected, need not be remitted by the Servicer. Rather,
such fees and charges and similar amounts may be retained by the Servicer as
additional servicing compensation. In the event that the Servicer shall remit
any amount not required to be remitted and not otherwise subject to withdrawal
pursuant to Section 3.08 hereof, it may at any time withdraw or direct the
Trustee, or such other institution maintaining the Collection Account, to
withdraw such amount from the Collection Account, any provision herein to the
contrary notwithstanding. The Servicer shall maintain adequate records with
respect to all withdrawals made pursuant to this Section. All funds deposited in
the Collection Account shall be held in trust for the Certificateholders until
withdrawn in accordance with Section 3.08. In no event shall the Trustee incur
liability for withdrawals from the Collection Account at the direction of the
Servicer.

      The Servicer shall give notice to the Trustee of the location of the
Collection Account maintained by it when established and prior to any change
thereof. Not later than twenty days after each Distribution Date, the Servicer
shall forward to the Trustee and the Depositor the most current available bank
statement for the Collection Account. Copies of such statement shall be provided
by the Trustee to any Certificateholder and to any Person identified to the
Trustee as a prospective transferee of a Certificate, upon request at the
expense of the requesting party, provided such statement is delivered by the
Servicer to the Trustee.

         (e) [RESERVED].

                                      -58-

<PAGE>

      (f) The Trustee shall establish and maintain, on behalf of the
Certificateholders, the Certificate Account. The Trustee shall, promptly upon
receipt, deposit or cause to be deposited in the Certificate Account and retain
therein the following:

            (i) the aggregate amount withdrawn by the Servicer from the
      Collection Account and required to be deposited in the Certificate
      Account;

            (ii) any amount required to be deposited by the Trustee pursuant to
      Section 3.05(g) in connection with any losses on Permitted Investments;
      and

            (iii) the Optional Termination Amount paid by the winning bidder at
      the Auction.

      Any amounts received by the Trustee prior to 1:00 p.m. New York City time
(or such earlier deadline for investment in the Permitted Investments designated
by the Trustee) which are required to be deposited in the Certificate Account by
the Servicer shall be invested in Permitted Investments on the Business Day on
which they were received. The foregoing requirements for remittance by the
Servicer and deposit by the Servicer into the Certificate Account shall be
exclusive. In the event that the Servicer shall remit any amount not required to
be remitted and not otherwise subject to withdrawal pursuant to Section 3.08
hereof, it may at any time withdraw such amount from the Certificate Account,
any provision herein to the contrary notwithstanding. All funds deposited in the
Certificate Account shall be held by the Trustee in trust for the
Certificateholders until disbursed in accordance with this Agreement or
withdrawn in accordance with Section 3.08. In no event shall the Trustee incur
liability for withdrawals from the Certificate Account at the direction of the
Servicer. The Trustee shall give notice to Servicer of the location of the
Certificate Account maintained by it when established and prior to any change
thereof.

      (g) Each institution that maintains the Collection Account or the
Certificate Account shall invest the funds in each such account, as directed by
the Servicer or the Trustee, as applicable, in writing, in Permitted
Investments, which shall mature not later than (i) in the case of the Collection
Account the Business Day preceding the related Servicer Remittance Date (except
that if such Permitted Investment is an obligation of the institution that
maintains such Collection Account or is otherwise immediately available, then
such Permitted Investment shall mature not later than the Servicer Remittance
Date) and (ii) in the case of the Certificate Account, the Business Day
immediately preceding the first Distribution Date that follows the date of such
investment (except that if such Permitted Investment is an obligation of the
institution that maintains such Certificate Account or is otherwise immediately
available, then such Permitted Investment shall mature not later than such
Distribution Date) and, in each case, shall not be sold or disposed of prior to
its maturity. All such Permitted Investments shall be made in the name of the
Servicer or the Trustee, as applicable, for the benefit of the
Certificateholders. All income and gain (net of any losses) realized from
amounts on deposit in the Collection Account shall be for the benefit of the
Servicer as servicing compensation and shall be remitted to or withdrawn by it
no less often than monthly as provided herein. The amount of any losses incurred
in the Collection Account in respect of any such investments shall be deposited
by the Servicer in the Collection Account out of the Servicer's own funds
immediately as realized. All income and gain (net of any losses other than those
losses that the Servicer has previously covered pursuant to this Section)
realized from amounts on deposit in the Certificate Account shall be for the
benefit of the Trustee and shall be remitted to or withdrawn by it monthly as
provided herein. The amount of any losses incurred in the Certificate Account in
respect of any such investments shall be deposited by the Trustee, in the
Certificate Account out of the Trustee's own funds immediately as realized.

                                      -59-

<PAGE>

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

      To the extent required by the related Mortgage Note, the Servicer shall
establish and maintain one or more accounts (each, an "Escrow Account") and
deposit and retain therein all collections from the Mortgagors (or advances by
the Servicer) for the payment of taxes, assessments, hazard insurance premiums
or comparable items for the account of the Mortgagors. Nothing herein shall
require the Servicer to compel a Mortgagor to establish an Escrow Account in
violation of applicable law.

      Withdrawals of amounts so collected from the Escrow Accounts may be made
only to effect timely payment of taxes, assessments, hazard insurance premiums,
condominium or PUD association dues, or comparable items, to reimburse the
Servicer out of related collections for any payments made pursuant to Sections
3.01 hereof (with respect to taxes and assessments and insurance premiums) and
3.10 hereof (with respect to hazard insurance), to refund to any Mortgagors any
sums as may be determined to be overages, to pay interest to itself, or, if
required by law or the terms of the related Mortgage or Mortgage Note, certain
Mortgagors, on balances in the Escrow Account, to withdraw funds deposited in
error, or to clear and terminate the Escrow Account at the termination of this
Agreement in accordance with Section 9.01 hereof. The Escrow Accounts shall not
be a part of the Trust Fund.

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

      Upon reasonable advance notice in writing if required by federal
regulation, the Servicer will provide to each Certificateholder that is a
savings and loan association, bank or insurance company certain reports and
reasonable access to information and documentation regarding the Mortgage Loans
sufficient to permit such Certificateholder to comply with applicable
regulations of the OTS or other regulatory authorities with respect to
investment in the Certificates; provided, that the Servicer shall be entitled to
be reimbursed by each such Certificateholder for actual expenses incurred by the
Servicer in providing such reports and access. In addition, with respect to each
MI Mortgage Loan that is subject to a modification, the Servicer shall provide
the related MI Insurer with written notice of such modification which shall
include the nature of such modification.

      SECTION 3.08. Permitted Withdrawals from the Collection Account and
Certificate Account.

      (a) The Servicer may from time to time, make withdrawals from the
Collection Account for the following purposes:

            (i) to pay to the Servicer (to the extent not previously paid to or
      withheld by the Servicer), as servicing compensation in accordance with
      Section 3.15, that portion of any payment or recovery of interest on a
      Mortgage Loan that equals the Servicing Fee for the period with respect to
      which such interest payment or recovery was made or allocated, and, as
      additional servicing compensation, those other amounts set forth in
      Section 3.15;

            (ii) to reimburse the Servicer for Advances made by it with respect
      to the Mortgage Loans, such right of reimbursement pursuant to this
      subclause (ii) being limited to (A) any amounts received on particular
      Mortgage Loan(s) (including, for this purpose, Liquidation Proceeds and
      purchase and repurchase proceeds) that represent (I) late payments or
      recoveries of principal and/or interest on such particular Mortgage
      Loan(s) in respect of which any such Advance was made or (II) amounts
      allocated to principal and/or interest out of the net monthly rental
      income from REO Property in respect of which any such Advance was made and
      (B) any amounts allocated to principal and/or interest or to unreimbursed
      Advances out of the Optional Termination Amount;

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<PAGE>

            (iii) to reimburse the Servicer for any Non-Recoverable Advance
      previously made by it and, any Non-Recoverable Servicing Advance
      previously made by it, provided that, in the case of Non-Recoverable
      Servicing Advances, reimbursement therefor constitutes "unanticipated
      expenses" within the meaning of Treasury Regulation Section
      1.860G-1(b)(3)(ii);

            (iv) to pay to the Servicer earnings on or investment income with
      respect to funds in or credited to the Collection Account;

            (v) to reimburse the Servicer from Insurance Proceeds for Insured
      Expenses covered by the related Insurance Policy;

            (vi) to pay the Servicer any unpaid Servicing Fees and to reimburse
      it for any unreimbursed Servicing Advances, (to the extent that
      reimbursement for Servicing Advances would constitute an "unanticipated
      expense" within the meaning of Treasury Regulation Section
      1.860G-1(b)(3)(ii)), the Servicer's right to reimbursement of Servicing
      Advances pursuant to this subclause (vi) with respect to any Mortgage Loan
      being limited to (A) any amounts received on particular Mortgage
      Loan(s)(including, for this purpose, Liquidation Proceeds and purchase and
      repurchase proceeds) that represent (I) late recoveries of the payments
      for which such advances were made pursuant to Section 3.01 or Section 3.06
      or (II) amounts allocated to unreimbursed Servicing Advances out of the
      net monthly rental income from REO Property in respect of which such
      Servicing Advances were made and (B) amounts allocated to unreimbursed
      Servicing Advances out of the Optional Termination Amount;

            (vii) to pay to the Depositor or the Servicer, as applicable, with
      respect to each Mortgage Loan or property acquired in respect thereof that
      has been purchased pursuant to Section 2.02, 2.03 or 3.12, all amounts
      received thereon and not taken into account in determining the related
      Stated Principal Balance of such repurchased Mortgage Loan;

            (viii) to reimburse the Servicer or the Depositor for expenses
      incurred by either of them in connection with the Mortgage Loans or the
      Certificates and reimbursable pursuant to Section 3.25 or 6.03 hereof;

            (ix) to pay any obligations under the MI Policies;

            (x) to reimburse the Trustee for enforcement expenses reasonably
      incurred in respect of a breach or defect giving rise to the purchase
      obligation in Section 2.03 that were incurred in the Purchase Price of the
      Mortgage Loans including any expenses arising out of the enforcement of
      the purchase obligation; provided that any such expenses will be
      reimbursable under this subclosure (x) only if such expenses would
      constitute "unanticipated expenses" within the meaning of Treasury
      Regulation Section 1.860G-1(b)(3)(ii) if paid by one of the REMICs
      provided for herein;

            (xi) to withdraw pursuant to Section 3.05 any amount deposited in
      the Collection Account and not required to be deposited therein;

            (xii) to transfer funds to another Eligible Account in accordance
      with Section 3.05;

            (xiii) to withdraw funds deposited in error or amounts previously
      deposited but returned as unpaid due to a "not sufficient funds" or other
      denial by the related Mortgagor's banking institution; and

                                      -61-

<PAGE>

            (xiv) to clear and terminate the Collection Account upon termination
      of this Agreement pursuant to Section 9.01 hereof.

      In addition, no later than 12:00 noon Eastern Time on the Servicer
Remittance Date, the Servicer shall cause to be withdrawn from the Collection
Account Interest Funds and the Principal Funds, to the extent on deposit, and
such amount shall be deposited in the Certificate Account; provided, if the
Trustee does not received such Interest Funds and Principal Funds by 2:00 p.m.
Eastern Time, such Interest Funds and Principal Funds shall be deposited in the
Certificate Account on the next Business Day.

      The Servicer shall keep and maintain separate accounting, on a Mortgage
Loan by Mortgage Loan basis, for the purpose of justifying any withdrawal from
the Collection Account.

      The Servicer shall provide written notification to the Trustee on or prior
to the next succeeding Servicer Remittance Date upon making any withdrawals from
the Collection Account pursuant to subclauses (iii) and (viii) above.

      In the event of any failure by the Servicer to remit to the Trustee for
deposit into the Certificate Account any amounts (including any P&I Advance)
required to be so remitted by the Servicer on the Servicer Remittance Date, the
Servicer shall pay to the Trustee, for its own account, interest on such amounts
at the "prime rate" (as specified in the New York edition of The Wall Street
Journal) until such failure is remedied.

      Unless otherwise specified, any amounts reimbursable to the Servicer or
the Trustee from amounts on deposit in the Collection Account or the Certificate
Accounts shall be deemed to come from first, Interest Funds, and thereafter,
Principal Funds for the related Distribution Date.

      (b) The Trustee shall withdraw funds from the Certificate Account for
distribution to the Certificateholders in the manner specified in this Agreement
(and shall withhold from the amounts so withdrawn, the amount of any taxes that
it is authorized to retain pursuant to this Agreement). In addition, the Trustee
shall from time to time make withdrawals from the Certificate Account for the
following purposes:

            (i) to reimburse the Trustee for expenses incurred by the Trustee
      and reimbursable pursuant to Section 8.06 hereof;

            (ii) to pay to the Trustee earnings on or investment income with
      respect to funds in or credited to the Certificate Account;

            (iii) to pay to each MI Insurer, the applicable MI Insurer Fee;

            (iv) to withdraw pursuant to Section 3.05 any amount deposited in
      the Certificate Account and not required to be deposited therein; and

            (v) to clear and terminate the Certificate Account upon termination
      of the Agreement pursuant to Section 9.01 hereof (after paying all amounts
      necessary to the Trustee or the Servicer in connection with any such
      termination.)

                                      -62-

<PAGE>

      SECTION 3.09. [RESERVED].

      SECTION 3.10. Maintenance of Hazard Insurance.

      The Servicer shall cause to be maintained, for each Mortgage Loan (other
than a Co-op Loan), fire and hazard insurance with extended coverage in an
amount that is at least equal to the lesser of (i) the replacement value of the
improvements that are part of such Mortgaged Property and (ii) the greater of
(a) the outstanding principal balance of the Mortgage Loan and (b) an amount
such that the proceeds of such policy shall be sufficient to prevent the related
Mortgagor and/or mortgagee from becoming a co-insurer. Each such policy of
standard hazard insurance shall contain, or have an accompanying endorsement
that contains, a standard mortgagee clause. The Servicer shall also cause flood
insurance to be maintained on property acquired upon foreclosure or deed in lieu
of foreclosure of any Mortgage Loan, to the extent described below. Pursuant to
Section 3.05 hereof, any amounts collected by the Servicer under any such
policies (other than the amounts to be applied to the restoration or repair of
the related Mortgaged Property or property thus acquired or amounts released to
the Mortgagor in accordance with the Servicer's normal servicing procedures)
shall be deposited in the Collection Account. Any cost incurred by the Servicer
in maintaining any such insurance shall not, for the purpose of calculating
monthly distributions to the Certificateholders or remittances to the Trustee
for their benefit, be added to the principal balance of the Mortgage Loan,
notwithstanding that the terms of the Mortgage Loan so permit. Such costs shall
be recoverable by the Servicer out of late payments by the related Mortgagor or
out of Liquidation Proceeds to the extent and as otherwise permitted by Section
3.08 hereof. It is understood and agreed that no earthquake or other additional
insurance is to be required of any Mortgagor or maintained on property acquired
in respect of a Mortgage other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such
additional insurance. If the Mortgaged Property is located at the time of
origination of the Mortgage Loan in a federally designated special flood hazard
area and such area is participating in the national flood insurance program, the
Servicer shall cause flood insurance to be maintained with respect to such
Mortgage Loan. Such flood insurance shall be in an amount equal to the lesser of
(i) the original principal balance of the related Mortgage Loan, (ii) the
replacement value of the improvements that are part of such Mortgaged Property,
or (iii) the maximum amount of such insurance available for the related
Mortgaged Property under the Flood Disaster Protection Act of 1973, as amended.

      In the event that the Servicer shall obtain and maintain a blanket policy
insuring against hazard losses on all of the Mortgage Loans, it shall
conclusively be deemed to have satisfied its obligations as set forth in the
first sentence of this Section 3.10, it being understood and agreed that such
policy may contain a deductible clause on terms substantially equivalent to
those commercially available and maintained by comparable servicers. If such
policy contains a deductible clause, the Servicer shall, in the event that there
shall not have been maintained on the related Mortgaged Property a policy
complying with the first sentence of this Section 3.10, and there shall have
been a loss that would have been covered by such policy, deposit in the
Collection Account the amount not otherwise payable under the blanket policy
because of such deductible clause. In connection with its activities as servicer
of the Mortgage Loans, the Servicer agrees to present, on behalf of itself, the
Depositor and the Trustee for the benefit of the Certificateholders, claims
under any such blanket policy.

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

      (a) Except as otherwise provided in this Section 3.11(a), when any
property subject to a Mortgage has been or is about to be conveyed by the
Mortgagor, the Servicer shall to the extent that it has knowledge of such
conveyance, enforce any due-on-sale clause contained in any Mortgage Note or
Mortgage, to the extent permitted under applicable law and governmental
regulations, but only to the extent that such enforcement will not adversely
affect or jeopardize coverage under any Required

                                      -63-

<PAGE>

Insurance Policy. Notwithstanding the foregoing, the Servicer is not required to
exercise such rights with respect to a Mortgage Loan if the Person to whom the
related Mortgaged Property (or stock allocated to a dwelling unit, in the case
of a Co-op Loan) has been conveyed or is proposed to be conveyed satisfies the
terms and conditions contained in the Mortgage Note and Mortgage related thereto
and the consent of the mortgagee under such Mortgage Note or Mortgage is not
otherwise so required under such Mortgage Note or Mortgage as a condition to
such transfer. In the event that the Servicer is prohibited by law from
enforcing any such due-on-sale clause, or if coverage under any Required
Insurance Policy would be adversely affected, or if nonenforcement is otherwise
permitted hereunder, the Servicer is authorized, subject to Section 3.11(b), to
take or enter into an assumption and modification agreement from or with the
Person to whom such property has been or is about to be conveyed, pursuant to
which such Person becomes liable under the Mortgage Note and, unless prohibited
by applicable state law, the Mortgagor remains liable thereon, provided that the
Mortgage Loan shall continue to be covered (if so covered before the Servicer
enters such agreement) by the applicable Required Insurance Policies. The
Servicer, subject to Section 3.11(b), is also authorized with the prior approval
of the insurers under any Required Insurance Policies to enter into a
substitution of liability agreement with such Person, pursuant to which the
original Mortgagor is released from liability and such Person is substituted as
Mortgagor and becomes liable under the Mortgage Note. Notwithstanding the
foregoing, the Servicer shall not be deemed to be in default under this Section
3.11(a) by reason of any transfer or assumption that the Servicer reasonably
believes it is restricted by law from preventing.

      (b) Subject to the Servicer's duty to enforce any due-on-sale clause to
the extent set forth in Section 3.11(a) hereof, in any case in which a Mortgaged
Property (or stock allocated to a dwelling unit, in the case of Co-op Loan) has
been conveyed to a Person by a Mortgagor, and such Person is to enter into an
assumption agreement or modification agreement or supplement to the Mortgage
Note or Mortgage that requires the signature of the Trustee, or if an instrument
of release signed by the Trustee is required releasing the Mortgagor from
liability on the Mortgage Loan, the Servicer shall prepare and deliver or cause
to be prepared and delivered to the Trustee for signature and shall direct, in
writing, the Trustee to execute the assumption agreement with the Person to whom
the Mortgaged Property (or the stock allocated to a dwelling unit, in the case
of a Co-op Loan) is to be conveyed and such modification agreement or supplement
to the Mortgage Note or Mortgage or other instruments as are reasonable or
necessary to carry out the terms of the Mortgage Note or Mortgage or otherwise
to comply with any applicable laws regarding assumptions or the transfer of the
Mortgaged Property (or stock allocated to a dwelling unit, in the case of a
Co-op Loan) to such Person. In connection with any such assumption, no material
term of the Mortgage Note (including, but not limited to, the Mortgage Rate, the
amount of the Scheduled Payment, the Maximum Rate, the Minimum Rate, the Gross
Margin, the Periodic Rate Cap, the Adjustment Date, any prepayment penalty and
any other term affecting the amount or timing of payment on the Mortgage Loan)
may be changed. The Servicer shall notify the Trustee that any such substitution
or assumption agreement has been completed by forwarding to the Trustee the
original of such substitution or assumption agreement, which in the case of the
original shall be added to the related Mortgage File and shall, for all
purposes, be considered a part of such Mortgage File to the same extent as all
other documents and instruments constituting a part thereof. Any fee collected
by the Servicer for entering into an assumption or substitution of liability
agreement will be retained by the Servicer as additional servicing compensation.

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

      (a) The Servicer shall use reasonable efforts consistent with the
servicing standard set forth in Section 3.01 to foreclose upon or otherwise
comparably convert the ownership of properties securing such of the Mortgage
Loans as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of Delinquent payments. In connection
with such foreclosure or

                                      -64-

<PAGE>

other conversion, the Servicer shall follow such practices and procedures as it
shall deem necessary or advisable and as shall be normal and usual in its
general mortgage servicing activities and the requirements of the insurer under
any Required Insurance Policy; provided, however, that the Servicer shall not be
required to expend its own funds in connection with the restoration of any
property that shall have suffered damage due to an uninsured cause unless it
shall determine (i) that such restoration increase the proceeds of liquidation
of the Mortgage Loan after reimbursement to itself of such expenses and (ii)
that such expenses will be recoverable to it through Liquidation Proceeds
(respecting which it shall have priority for purposes of withdrawals from the
Collection Account pursuant to Section 3.08 hereof). The Servicer shall be
responsible for all other costs and expenses incurred by it in any such
proceedings; provided, however, that it shall be entitled to reimbursement
thereof from the proceeds of liquidation of the related Mortgaged Property (or
stock allocated to a dwelling unit, in the case of a Co-op Loan), as
contemplated in Section 3.08 hereof. If the Servicer has knowledge that a
Mortgaged Property (or Underlying Mortgaged Property, in the case of a Co-op
Loan) that the Servicer is contemplating acquiring in foreclosure or by
deed-in-lieu of foreclosure is located within a one-mile radius of any site with
environmental or hazardous waste risks known to the Servicer, the Servicer will,
prior to acquiring the Mortgaged Property (or stock allocated to a dwelling
unit, in the case of a Co-op Loan), consider such risks and only take action in
accordance with Accepted Servicing Practices.

      With respect to any REO Property, the deed or certificate of sale shall be
taken in the name of the Trustee or its nominee. Pursuant to its efforts to sell
such REO Property, the Servicer shall either itself or through an agent selected
by the Servicer protect and conserve such REO Property in the same manner and to
such extent as is customary in the locality where such REO Property is located
and may, incident to its conservation and protection of the interests of the
Certificateholders, rent the same, or any part thereof, as the Servicer deems to
be in the best interest of the Servicer and the Certificateholders for the
period prior to the sale of such REO Property. The Servicer shall prepare a
statement with respect to each REO Property that has been rented showing the
aggregate rental income received and all expenses incurred in connection with
the management and maintenance of such REO Property at such times as is
necessary to enable the Servicer to comply with the reporting requirements of
the REMIC Provisions. The net monthly rental income, if any, from such REO
Property shall be deposited in the Collection Account no later than the close of
business on the Determination Date immediately following the month concerned.
The Servicer shall perform the tax reporting and withholding related to
foreclosures, abandonments and cancellation of indebtedness income as specified
by Sections 1445, 6050J and 6050P of the Code by preparing and filing such tax
and information returns, as may be required.

      In the event that the Trust Fund acquires any Mortgaged Property (or stock
allocated to a dwelling unit, in the case of a Co-op Loan) as aforesaid or
otherwise in connection with a default or imminent default on a Mortgage Loan,
the Servicer shall dispose of such Mortgaged Property (or stock allocated to a
dwelling unit, in the case of a Co-op Loan) prior to the expiration of three
years from the end of the year of its acquisition by the Trust Fund or, at the
expense of the Trust Fund, obtain more than 60 days prior to the day on which
such three-year period would otherwise expire, an extension of the three-year
grace period unless the Trustee shall have been supplied with an Opinion of
Counsel (such Opinion of Counsel not to be an expense of the Trustee) to the
effect that the holding by the Trust Fund of such Mortgaged Property (or stock
allocated to a dwelling unit, in the case of a Co-op Loan) subsequent to such
three-year period will not result in the imposition of taxes on "prohibited
transactions" of the Trust Fund or any of the REMICs provided for herein as
defined in section 860F of the Code or cause any of the REMICs provided for
herein to fail to qualify as a REMIC at any time that any Certificates are
outstanding, in which case the Trust Fund may continue to hold such Mortgaged
Property (or stock allocated to a dwelling unit, in the case of Co-op Loan)
(subject to any conditions contained in such Opinion of Counsel).
Notwithstanding any other provision of this Agreement, no Mortgaged Property (or
stock allocated to a dwelling unit, in the case of Co-op Loan) acquired by the
Trust Fund shall be held, rented (or allowed to continue to be rented) or
otherwise used for the production of income by or on

                                      -65-

<PAGE>

behalf of the Trust Fund in such a manner or pursuant to any terms that would
(i) cause such Mortgaged Property(or stock allocated to a dwelling unit, in the
case of Co-op Loan) to fail to qualify as "foreclosure property" within the
meaning of section 860G(a)(8) of the Code or (ii) subject the Trust Fund or any
REMIC provided for herein to the imposition of any federal, state or local
income taxes on the income earned from such Mortgaged Property (or stock
allocated to a dwelling unit, in the case of Co-op Loan) under section 860G(c)
of the Code or otherwise, unless the Servicer or the Depositor has agreed to
indemnify and hold harmless the Trust Fund with respect to the imposition of any
such taxes.

      The decision of the Servicer to foreclose on a defaulted Mortgage Loan
shall be subject to a determination by the Servicer that the proceeds of such
foreclosure would exceed the costs and expenses of bringing such a proceeding.
The income earned from the management of any Mortgaged Properties acquired
through foreclosure or other judicial proceeding, net of reimbursement to the
Servicer for expenses incurred (including any property or other taxes) in
connection with such management and net of any unpaid or unreimbursed Servicing
Fees, Advances, Servicing Advances and any management fee paid or to be paid
with respect to the management of such Mortgaged Property (or stock allocated to
a dwelling unit, in the case of Co-op Loan), shall be applied for the purpose of
the Trust Fund to the payment of principal of, and interest on, the related
defaulted Mortgage Loans (with interest accruing as though such Mortgage Loans
were still current) and all such net income shall be deemed, for all purposes in
this Agreement, to be payments on account of principal and interest on the
related Mortgage Notes and shall be deposited into the Collection Account. To
the extent that any such net income received during a Prepayment Period is in
excess of the amount attributable to amortizing principal and accrued interest
at the related Mortgage Rate on the related Mortgage Loan, such excess shall be
considered to be a partial Principal Prepayment for all purposes hereof.

      The Liquidation Proceeds from any liquidation of a Mortgage Loan, net of
any payment to the Servicer as provided above, shall be deposited in the
Collection Account within two Business Days after receipt thereof for
distribution pursuant to the provisions hereof on the Distribution Date
immediately following the Prepayment Period in which such Liquidation Proceeds
are received.

      The proceeds of any Liquidated Loan, as well as any recovery resulting
from a partial collection of Liquidation Proceeds and any net income from an REO
Property, will be applied in the following order of priority: first, to
reimburse the Servicer for any related unreimbursed Servicing Advances and
unpaid Servicing Fees, pursuant to Section 3.08(a)(vi) or this Section 3.12;
second, to reimburse the Servicer for any unreimbursed Advances, pursuant to
Section 3.08(a)(ii) or this Section 3.12; third, to any Prepayment Charges and
then to accrued and unpaid interest (to the extent no Advance has been made for
such amount) on the Mortgage Loan or related REO Property, at the applicable Net
Mortgage Rate to the Due Date occurring in the month in which such amounts are
required to be distributed; and fourth, as a recovery of principal of the
Mortgage Loan.

      (b) On each Determination Date, the Servicer shall determine the
respective aggregate amounts of Excess Proceeds, if any, that occurred in the
related Prepayment Period.

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

      Upon the payment in full of any Mortgage Loan, or the receipt by the
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Servicer will promptly notify the Trustee or
its designee by delivering a Request for Release substantially in the form of
Exhibit I. Upon receipt of such request, the Trustee or its designee shall
promptly release the related Mortgage File to the Servicer, and the Servicer is
authorized to cause the removal from the registration on the MERS System of any
such Mortgage, if applicable, and the Servicer on behalf of the Trustee shall
execute and deliver the request for reconveyance, deed of reconveyance or
release or satisfaction of

                                      -66-

<PAGE>

mortgage or such instrument releasing the lien of the Mortgage, together with
the Mortgage Note with written evidence of cancellation thereon. No expenses
incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the Collection Account, the Certificate
Account or the related subservicing account. From time to time and as shall be
appropriate for the servicing or foreclosure of any Mortgage Loan, including for
such purpose, collection under any policy of flood insurance, any fidelity bond
or errors or omissions policy, or for the purposes of effecting a partial
release of any Mortgaged Property (or stock allocated to a dwelling unit, in the
case of Co-op Loan) from the lien of the Mortgage or the making of any
corrections to the Mortgage Note or the Mortgage or any of the other documents
included in the Mortgage File, the Trustee or its designee shall, upon delivery
to the Trustee or its designee of a Request for Release in the form of Exhibit I
signed by a Servicing Officer, release the Mortgage File to the Servicer.
Subject to the further limitations set forth below, the Servicer shall cause the
Mortgage File or documents so released to be returned to the Trustee or its
designee when the need therefor by the Servicer no longer exists, unless the
Mortgage Loan is liquidated and the proceeds thereof are deposited in the
Collection Account, in which case the Trustee or its designee shall deliver the
Request for Release to the Servicer.

      Each Request for Release may be delivered to the Trustee or its designee
(i) via mail or courier, (ii) via facsimile or (iii) by such other means,
including, without limitation, electronic or computer readable medium, as the
Servicer and the Trustee or its designee shall mutually agree. The Trustee or
its designee shall promptly release the related Mortgage File(s) within five (5)
Business Days of receipt of a properly completed Request for Release pursuant to
clauses (i), (ii) or (iii) above. Receipt of a properly completed Request for
Release shall be authorization to the Trustee or its designee to release such
Mortgage Files, provided the Trustee or its designee has determined that such
Request for Release has been executed, with respect to clauses (i) or (ii)
above, or approved, with respect to clause (iii) above, by an authorized
Servicing Officer of the Servicer, and so long as the Trustee or its designee
complies with its duties and obligations under the agreement. If the Trustee or
its designee is unable to release the Mortgage Files within the period
previously specified, the Trustee or its designee shall immediately notify the
Servicer indicating the reason for such delay. If the Servicer is required to
pay penalties or damages due to the Trustee or its designee's negligent failure
to release the related Mortgage File or the Trustee or its designee's negligent
failure to execute and release documents in a timely manner, the Trustee or its
designee, shall be liable for such penalties or damages respectively caused by
it.

      If the Servicer at any time seeks to initiate a foreclosure proceeding in
respect of any Mortgaged Property (or stock allocated to a dwelling unit, in the
case of Co-op Loan) as authorized by this Agreement, the Servicer may deliver or
cause to be delivered to the Trustee or its designee, for signature, as
appropriate, or on behalf of the Trustee, execute any court pleadings, requests
for trustee's sale or other documents necessary to effectuate such foreclosure
or any legal action brought to obtain judgment against the Mortgagor on the
Mortgage Note or the Mortgage or to obtain a deficiency judgment or to enforce
any other remedies or rights provided by the Mortgage Note or the Mortgage or
otherwise available at law or in equity. Notwithstanding the foregoing, the
Servicer shall cause possession of any Mortgage File or of the documents therein
that shall have been released by the Trustee or its designee to be returned to
the Trustee promptly after possession thereof shall have been released by the
Trustee or its designee unless (i) the Mortgage Loan has been liquidated and the
Liquidation Proceeds relating to the Mortgage Loan have been deposited in the
Collection Account, and the Servicer shall have delivered to the Trustee or its
designee a Request for Release in the form of Exhibit I or (ii) the Mortgage
File or document shall have been delivered to an attorney or to a public trustee
or other public official as required by law for purposes of initiating or
pursuing legal action or other proceedings for the foreclosure of the Mortgaged
Property (or stock allocated to a dwelling unit, in the case of Co-op Loan) and
the Servicer shall have delivered to the Trustee or its designee an Officer's
Certificate of a Servicing Officer certifying as to the name and address of the
Person to which the Mortgage File or the documents therein were delivered and
the purpose or purposes of such delivery.

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<PAGE>

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

      All Mortgage Files and funds collected or held by, or under the control
of, the Servicer in respect of any Mortgage Loans, whether from the collection
of principal and interest payments or from Liquidation Proceeds, including but
not limited to, any funds on deposit in the Collection Account, shall be held by
the Servicer for and on behalf of the Trustee and shall be and remain the sole
and exclusive property of the Trust Fund, subject to the applicable provisions
of this Agreement. The Servicer also agrees that it shall not create, incur or
subject any Mortgage File or any funds that are deposited in the Collection
Account or Certificate Account or in any Escrow Account, or any funds that
otherwise are or may become due or payable to the Trustee for the benefit of the
Certificateholders, to any claim, lien, security interest, judgment, levy, writ
of attachment or other encumbrance, or assert by legal action or otherwise any
claim or right of set off against any Mortgage File or any funds collected on,
or in connection with, a Mortgage Loan, except, however, that the Servicer shall
be entitled to set off against and deduct from any such funds any amounts that
are properly due and payable to the Servicer under this Agreement.

      SECTION 3.15. Servicing Compensation.

      As compensation for its activities hereunder, the Servicer shall be
entitled to retain or withdraw from the Collection Account out of each payment
or recovery of interest on a Mortgage Loan included in the Trust Fund an amount
equal to interest at the applicable Servicing Fee Rate on the Stated Principal
Balance of the related Mortgage Loan as of the immediately preceding
Distribution Date.

      Additional servicing compensation in the form of any Excess Proceeds, late
payment fees, assumption fees (i.e. fees related to the assumption of a Mortgage
Loan upon the purchase of the related Mortgaged Property (or stock allocated to
a dwelling unit, in the case of Co-op Loan)) and similar fees or charges payable
by the Mortgagor (including any fees, charges, and similar amounts described in
Section 3.05(d) hereof and further including any fees described in Section
3.11(b) hereof, and all income and gain net of any losses realized from
Permitted Investments in the Collection Account shall be retained by the
Servicer to the extent not required to be deposited in the Collection Account
pursuant to Sections 3.05 or 3.12(a) hereof. The Servicer shall be required to
pay all expenses incurred by it in connection with its servicing activities
hereunder (including payment of any premiums for maintenance of blanket
insurance coverage pursuant to Section 3.10 hereof) and shall not be entitled to
reimbursement therefor except as specifically provided in Sections 3.08 and 3.12
hereof.

      SECTION 3.16. Access to Certain Documentation.

      The Servicer shall provide to the OTS and the FDIC and to comparable
regulatory authorities supervising Holders of the Certificates and the examiners
and supervisory agents of the OTS, the FDIC and such other authorities, access
to the documentation regarding the Mortgage Loans required by applicable
regulations of the OTS and the FDIC. Such access shall be afforded without
charge, but only upon reasonable and prior written request and during normal
business hours at the offices of the Servicer designated by it provided, that
the Servicer shall be entitled to be reimbursed by each such Certificateholder
for actual expenses incurred by the Servicer in providing such reports and
access. Nothing in this Section shall limit the obligation of the Servicer to
observe any applicable law prohibiting disclosure of information regarding the
Mortgagors and the failure of the Servicer to provide access as provided in this
Section as a result of such obligation shall not constitute a breach of this
Section.

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<PAGE>

      SECTION 3.17. Annual Statement as to Compliance.

      Pursuant to this Agreement, the Servicer shall deliver to the Depositor
and the Trustee on or before March 1 of each year, beginning in 2005 or such
other date in order to remain in compliance with the Section 302 Requirements,
an Officer's Certificate stating, as to each signatory thereof, that (i) a
review of the activities of the Servicer during the preceding calendar year and
of performance under this Agreement has been made under such officer's
supervision, and (ii) to the best of such officers' knowledge, based on such
review, the Servicer has fulfilled all of its obligations under this Agreement
throughout such year, or, if there has been a default in the fulfillment of any
such obligation, specifying each such default known to such officers and the
nature and status thereof. The Trustee shall forward a copy of each such
statement to each Rating Agency. Copies of such statement shall be provided by
the Trustee to any Certificateholder upon written request at the
Certificateholder's expense, provided such statement has been delivered by the
Servicer to the Trustee.

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

      On or before March 10 of each year, beginning in 2005 or such other date
in order to remain in compliance with the Section 302 Requirements, the Servicer
at its expense shall cause a nationally recognized firm of independent public
accountants (who may also render other services to the Servicer or any Affiliate
thereof) that is a member of the American Institute of Certified Public
Accountants to furnish a USAP Report to the Trustee and the Depositor. Copies of
the USAP Report shall be provided by the Trustee to any Certificateholder upon
request at the Certificateholder's expense, provided such report has been
delivered by the Servicer to the Trustee.

      SECTION 3.19. [RESERVED]. -

      SECTION 3.20. Periodic Filings.

      (a) Promptly upon receipt of any report of the independent public
accountants required pursuant to Section 3.18, the Trustee shall review such
report. As part of the Form 10-K required to be filed pursuant to the terms of
this Agreement, the Trustee shall include such accountants report as well as the
Officer's Certificate delivered by the Servicer pursuant to Section 3.17
relating to the Servicer's performance of its obligations under this Agreement
and any significant deficiencies relating to the Servicer's compliance set forth
in the report of the Servicer's certified independent accountants described
above.

      (b) The Depositor shall prepare and file the initial report on Form 8-K.
The Trustee shall prepare for filing, and execute (other than the Form 10-Ks and
the Certification), on behalf of the Trust Fund, and file with the Securities
and Exchange Commission, (i) within 15 days after each Distribution Date in each
month, each Monthly Statement on Form 8-K under the Exchange Act executed by the
Trustee, (ii) on or before March 31 of each year beginning in 2005 or such other
date in order to remain in compliance with the Section 302 Requirements, a Form
10-K under the Exchange Act executed by the Depositor, including any
certification (the "Certification") required by the Section 302 Requirements,
and (iii) any and all reports, statements and information respecting the Trust
Fund and/or the Certificates required to be filed on behalf of the Trust Fund
under the Exchange Act executed by the Trustee. The Certification shall be
executed by a senior officer of the Depositor. Upon such filing with the
Securities and Exchange Commission, the Trustee shall promptly deliver to the
Depositor a copy of any such executed report, statement or information. Prior to
making any such filings and certifications, the Trustee shall comply with the
provisions set forth in this Section. If permitted by applicable law and unless
the Depositor otherwise directs, the Trustee shall file a Form 15 under the
Exchange Act as soon as it is able

                                      -69-

<PAGE>

to do so. The Depositor hereby grants to the Trustee a limited power of attorney
to execute (other than the Form 10-Ks and the Certification) and file each such
document on behalf of the Depositor. Such power of attorney shall continue until
either the earlier of (i) receipt by the Trustee from the Depositor of written
termination of such power of attorney and (ii) the termination of the Trust
Fund. The Depositor agrees to promptly furnish to the Trustee, from time to time
upon request, such further information, reports, and financial statements within
its control related to this Agreement and the Mortgage Loans as the Trustee
reasonably deems appropriate to prepare and file all necessary reports with the
Commission. The Trustee shall have no responsibility to file any items other
than those specified in this Section.

      (c) [Reserved].

      (d) The obligations set forth in paragraphs (a) through (c) of this
Section shall only apply with respect to periods for which the Trustee is
obligated to file Form 8-Ks and 10-Ks pursuant to paragraph (b) of this Section.
In the event a Form 15 is properly filed pursuant to paragraph (b) of this
Section, there shall be no further obligations under paragraphs (a) through (c)
of this Section commencing with the fiscal year in which the Form 15 is filed
(other than the obligations in paragraphs (a) and (b) of this Section to be
performed in such fiscal year that relate back to the prior fiscal year).

      SECTION 3.21. Annual Certificate by Trustee

      (a) Within 15 days prior to the date on which a Form 10-K is to be filed
with a Certification by the Depositor, an officer of the Trustee shall execute
and deliver an Officer's Certificate, signed by the senior officer in charge of
the Trustee or any officer to whom that officer reports, to the Depositor for
the benefit of such Depositor and its officers, directors and affiliates,
certifying as to the matters described in the Officer's Certificate attached
hereto as Exhibit K.

      (b) The Trustee shall indemnify and hold harmless the Depositor and its
officers, directors, agents and affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments and other costs and expenses arising out of or based upon a breach by
the Trustee or any of its officers, directors, agents or affiliates of its
obligations under this Section 3.21 any material misstatement or omission in the
Officer's Certificate required under this Section or the negligence, bad faith
or willful misconduct of the Trustee in connection therewith. If the
indemnification provided for herein is unavailable or insufficient to hold
harmless the Depositor, then the Trustee agrees that it shall contribute to the
amount paid or payable by the Depositor as a result of the losses, claims,
damages or liabilities of the Depositor in such proportion as is appropriate to
reflect the relative fault of the Trustee on the one had and the Depositor on
the other in connection with a breach of the Trustee's obligations under this
Section 3.21, any material misstatement or omission in the Officer's Certificate
required under this Section or the Trustee's negligence, bad faith or willful
misconduct in connection therewith.

      SECTION 3.22. Annual Certificate by Servicer

      (a) Within 15 days prior to the date on which a Form 10-K is required to
be filed with a Certification by the Depositor, the Servicer shall execute and
deliver an Officer's Certificate in the form of Exhibit L attached hereto,
signed by the senior officer in charge of servicing of the Servicer or any
officer to whom that officer reports, to the Trustee and Depositor for the
benefit of the Trustee and Depositor and their respective officers, directors
and affiliates, certifying as to the following matters:

            (i) I have reviewed the information required to be delivered to the
      Trustee pursuant to the Pooling and Servicing Agreement (the "Servicing
      Information").

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<PAGE>

            (ii) Based on my knowledge, the information in the Annual Statement
      of Compliance, and all servicing reports, officer's certificates and other
      information relating to the servicing of the Mortgage Loans submitted to
      the Trustee by the Servicer taken as a whole, does not contain any untrue
      statement of a material fact or omit to state a material fact necessary to
      make the statements made, in light of the circumstances under which such
      statements were made, not misleading as of the last day of the period
      covered by the Annual Statement of Compliance;

            (iii) Based on my knowledge, the Servicing Information required to
      be provided to the Trustee by the Servicer under this Agreement has been
      provided to the Trustee; and

            (iv) I am responsible for reviewing the activities performed by the
      Servicer under this Agreement and based upon the review required
      hereunder, and except as disclosed in the Annual Statement of Compliance,
      the Annual Independent Certified Public Accountant's Servicing Report and
      all servicing reports, officer's certificates and other information
      relating to the servicing of the Mortgage Loans submitted to the Trustee
      by the Servicer, the Servicer has, as of the last day of the period
      covered by the Annual Statement of Compliance fulfilled its obligations
      under this Agreement.

      (b) The Servicer shall indemnify and hold harmless the Depositor and its
officers, directors, agents and affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments and other costs and expenses arising out of or based upon a breach by
the Servicer or any of its officers, directors, agents or affiliates of its
obligations under this Section 3.22, any material misstatement or omission in
the Officer's Certificate required under this Section or the negligence, bad
faith or willful misconduct of the Servicer in connection therewith. If the
indemnification provided for herein is unavailable or insufficient to hold
harmless the Depositor, then the Servicer agrees that it shall contribute to the
amount paid or payable by the Trustee and the Depositor as a result of the
losses, claims, damages or liabilities of the Depositor in such proportion as is
appropriate to reflect the relative fault of the Depositor on the one hand and
the Servicer on the other in connection with a breach of the Servicer's
obligations under this Section 3.22, any material misstatement or omission in
the Officer's Certificate required under this Section or the Servicer's
negligence, bad faith or willful misconduct in connection therewith.

      SECTION 3.23. Prepayment Penalty Reporting Requirements

      (a) Promptly after each Distribution Date, the Servicer shall provide to
the Depositor and the Trustee the following information with regard to each
Mortgage Loan that has prepaid during the related Prepayment Period:

            (i) loan number;

            (ii) current Mortgage Rate;

            (iii) current principal balance;

            (iv) original principal balance;

            (v) Prepayment Charge amount due;

            (vi) Prepayment Charge amount collected;

            (vii) amount of Prepayment Charge paid; and

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<PAGE>

            (viii) reason why full Prepayment Charge amount was not collected,
      if applicable.

      SECTION 3.24. Statements to Trustee

      (a) Not later than the tenth calendar day of each month, the Servicer
shall furnish to the Trustee an electronic file providing loan level accounting
data for the period ending on the last Business Day of the preceding month in
the format mutually agreed upon between the Servicer and the Trustee, including
but not limited to information sufficient to allow the Trustee to prepare the
Monthly Statement described in Section 4.05(a).

      SECTION 3.25. Indemnification

      (a) The Servicer shall indemnify the Seller, the Trust Fund, the Trustee,
the Depositor and their respective officers, directors, employees and agents and
hold each of them harmless against any and all claims, losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and any other costs, fees and expenses that any of such
parties may sustain in any way related to the failure of the Servicer to perform
its duties and service the Mortgage Loans in material compliance with the terms
of this Agreement. The Servicer immediately shall notify the Seller, the Trustee
and the Depositor or any other relevant party if a claim is made by a third
party with respect to this Agreement or the Mortgage Loans, assume (with the
prior written consent of the indemnified party, which consent shall not be
unreasonably withheld or delayed) the defense of any such claim and pay all
expenses in connection therewith, including counsel fees, and promptly pay,
discharge and satisfy any judgment or decree which may be entered against it or
any of such parties in respect of such claim. The Servicer shall follow any
written instructions received from the Trustee in connection with any such
claim. The Servicer shall provide the Trustee and the Depositor with a written
report of all expenses and advances incurred by the Servicer pursuant to this
Section 3.25, and the Servicer shall promptly reimburse itself from the assets
of the Trust Fund in the Collection Account for all amounts advanced by it
pursuant to the preceding sentence except when the claim in any way relates to
the failure of the Servicer to service and administer the Mortgage Loans in
material compliance with the terms of this Agreement or the gross negligence,
bad faith or willful misconduct of the Servicer. The provisions of this
paragraph shall survive the termination of this Agreement and the payment of the
outstanding Certificates.

      SECTION 3.26. Nonsolicitation.

      (a) For as long as the Servicer services the Mortgage Loans, the Servicer
covenants that it will not, and that it will ensure that its affiliates and
agents, will not, directly solicit or provide information for any other party to
solicit for prepayment or refinancing of any of the Mortgage Loans by the
related Mortgagors. It is understood that the promotions undertaken by the
Servicer which are directed to the general public at large, or certain segments
thereof, shall not constitute solicitation as that term is used in this Section
3.26.

      SECTION 3.27. MI Policies, Claims Under the MI Policies.

      (a) Notwithstanding anything to the contrary elsewhere in this Agreement,
the Servicer shall not agree to any modification or assumption of a MI Mortgage
Loan or take any other action with respect to an MI Mortgage Loan that could
result in denial of coverage under the related ML Policy. The Servicer shall
notify the related MI Insurer that the Trustee, on behalf of the
Certificateholders, is the "Insured," as that term is defined in the related MI
Policy, of each MI Mortgage Loan insured by such MI Insurer.; provided, that
such designation is made solely for the purpose of entitling the Trust Fund to
receive payments for claims under the MI Policies and the Trustee shall not,
except as provided herein, be deemed to assume the obligations of the "Insured"
thereunder. The Servicer shall, on behalf of the

                                      -72-

<PAGE>

Trustee, prepare and file on a timely basis with the related MI Insurer, with a
copy to the Trustee, all claims which may be made under the related MI Policy
with respect to the MI Mortgage Loans. Consistent with all rights and
obligations hereunder, the Servicer shall take all actions required under the
related MI Policy as a condition to the payment of any such claim. Any amount
received from an MI Insurer with respect to any such MI Mortgage Loan shall be
deposited by the Servicer, no later than two Business Days following receipt
thereof, into the Collection Account.

                                   ARTICLE IV
                                  DISTRIBUTIONS

      SECTION 4.01. Advances.

      (a) Subject to the conditions of this Article IV, the Servicer, as
required below, shall make an Advance and deposit such Advance in the Collection
Account. Each such Advance shall be remitted to the Collection Account no later
than 1:00 p.m. Eastern Time on the Servicer Remittance Date in immediately
available funds. The Servicer shall be obligated to make any such Advance only
to the extent that such advance would not be a Non-Recoverable Advance. If the
Servicer shall have determined that it has made a Non-Recoverable Advance or
that a proposed Advance or a lesser portion of such Advance would constitute a
Non-Recoverable Advance, the Servicer shall deliver (i) to the Trustee for the
benefit of the Certificateholders funds constituting the remaining portion of
such Advance, if applicable, and (ii) to the Depositor, each Rating Agency and
the Trustee an Officer's Certificate setting forth the basis for such
determination. The Servicer may, in its sole discretion, make an Advance with
respect to the principal portion of the final Scheduled Payment on a Balloon
Loan, but the Servicer is under no obligation to do so; provided, however, that
nothing in this sentence shall affect the Servicer's obligation under this
Section 4.01 to advance the interest portion of the final Scheduled Payment with
respect to a Balloon Loan as if such Balloon Loan were a fully amortizing
Mortgage Loan. If a Mortgagor does not pay its final Scheduled Payment on a
Balloon Loan when due, the Servicer shall Advance (unless it determines in its
good faith judgment that such amounts would constitute a Non-Recoverable
Advance) a full month of interest (net of the Servicing Fee) on the Stated
Principal Balance thereof each month until its Stated Principal Balance is
reduced to zero.

      In lieu of making all or a portion of such Advance from its own funds, the
Servicer may (i) cause to be made an appropriate entry in its records relating
to the Collection Account that any amount held for future distribution has been
used by the Servicer in discharge of its obligation to make any such Advance and
(ii) transfer such funds from the Collection Account to the Certificate Account.
Any funds so applied and transferred shall be replaced by the Servicer by
deposit in the Collection Account no later than the close of business on the
Servicer Remittance Date on which such funds are required to be distributed
pursuant to this Agreement. The Servicer shall be entitled to be reimbursed from
the Collection Account for all Advances of its own funds made pursuant to this
Section as provided in Section 3.08. The obligation to make Advances with
respect to any Mortgage Loan shall continue until the earlier of (i) the date
such Mortgage Loan is paid in full or (ii) the date the related Mortgaged
Property (or stock allocated to a dwelling unit, in the case of Co-op Loan) or
related REO Property has been liquidated or until the purchase or repurchase
thereof (or substitution therefor) from the Trust Fund pursuant to any
applicable provision of this Agreement, except as otherwise provided in this
Section 4.01.

      (b) Notwithstanding anything in this Agreement to the contrary (including,
but not limited to, Sections 3.01 and 4.01(a) hereof), no Advance or Servicing
Advance shall be required to be made hereunder by the Servicer if such Advance
or Servicing Advance would, if made, constitute a Non-recoverable Advance or a
Non-recoverable Servicing Advance. The determination by the Servicer that it has
made a Non-recoverable Advance or a Non-recoverable Servicing Advance or that
any proposed Advance or Servicing Advance, if made, would constitute a
Non-recoverable Advance or a Non-

                                      -73-

<PAGE>

recoverable Servicing Advance, respectively, shall be evidenced by an Officer's
Certificate of the Servicer delivered to the Depositor, each Rating Agency and
the Trustee. In addition, the Servicer shall not be required to advance any
Relief Act Shortfalls.

      SECTION 4.02. Reduction of Servicing Compensation in Connection with
Prepayment Interest Shortfalls.

      In the event that any Mortgage Loan is the subject of a Prepayment
Interest Shortfall, the Servicer shall, from amounts in respect of the related
Servicing Fee for such Distribution Date, deposit into the Collection Account,
as a reduction of the related Servicing Fee (but not below zero) for such
Distribution Date, no later than the Servicer Remittance Date immediately
preceding such Distribution Date, an amount up to the Prepayment Interest
Shortfall; and in case of such deposit, the Servicer shall not be entitled to
any recovery or reimbursement from the Depositor, the Trustee, the Trust Fund or
the Certificateholders. With respect to any Mortgage Loan and Distribution Date,
to the extent that the Prepayment Interest Shortfall exceeds Compensating
Interest (such excess, a "Non-Supported Interest Shortfall"), such Non-Supported
Interest Shortfall shall reduce the Current Interest with respect to each Class
of Offered Certificates, pro rata based upon the amount of interest each such
Class would otherwise be entitled to receive on such Distribution Date.
Notwithstanding the foregoing, the Servicer shall not be obligated to pay
Compensating Interest with respect to any Relief Act Shortfall.

      SECTION 4.03. Distributions on the REMIC Interests.

      On each Distribution Date, amounts on deposit in the Certificate Account
shall be treated for federal income tax purposes as applied to distributions on
the interests in the Lower Tier REMIC in an amount sufficient to make the
distributions on the respective Certificates on such Distribution Date in
accordance with the provisions of Section 4.04.

      SECTION 4.04. Distributions.

      (a) On each Distribution Date, prior to any distributions to the
Certificateholders, the Trustee shall pay to each MI Insurers, the related MI
Insurer Fee for such Distribution Date from Interest Funds then on deposit in
the Certificate Account.

      (b) On each Distribution Date, the Trustee shall make the following
distributions from the Certificate Account of an amount equal to the Interest
Funds remaining after the distributions in (a) above, in the following order of
priority:

            (i) to the Class P Certificates, an amount equal to any Prepayment
      Charges received with respect to the Mortgage Loans and all amounts paid
      by the Servicer, the Seller or the Transferor in respect of Prepayment
      Charges pursuant to this Agreement or the Transfer Agreement and any
      amounts received in respect of any indemnification paid as a result of a
      Prepayment Charge being unenforceable in breach of the representations and
      warranties set forth in the Sale Agreement or the Transfer Agreement
      received during the related Prepayment Period;

            (ii) to each Class of the Class R Certificate, Class A-1A
      Certificates, Class A-1B Certificates, Class A-2A Certificates and Class
      A-2B Certificates, the Current Interest and any Interest Carry Forward
      Amount with respect to such Class; provided, however, if such amount is
      not sufficient to make a full distribution of the Current Interest and any
      Interest Carry Forward Amount with respect to the Class R Certificate,
      Class A-1A Certificates, Class A-1B Certificates, Class A-2A Certificates
      and Class A-2B Certificates, such amount will be distributed pro rata
      among the Class R Certificate, Class A-1A Certificates, Class A-1B
      Certificates, Class A-2A

                                      -74-

<PAGE>

      Certificates and Class A-2B Certificates based on the ratio of (x) the
      Current Interest and Interest Carry Forward Amount for each of the Class R
      Certificate, Class A-1A Certificates, Class A-1B Certificates, Class A-2A
      Certificates and Class A-2B Certificates to (y) the total amount of
      Current Interest and any Interest Carry Forward Amount for the Class R
      Certificate, Class A-1A Certificates, Class A-1B Certificates, Class A-2A
      Certificates and Class A-2B Certificates;

            (iii) to the Class M-1 Certificates, the Class M-1 Current Interest
      and any Class M-1 Interest Carry Forward Amount;

            (iv) to the Class M-2 Certificates, the Class M-2 Current Interest
      and any Class M-2 Interest Carry Forward Amount;

            (v) to the Class M-3 Certificates, the Class M-3 Current Interest
      and any Class M-3 Interest Carry Forward Amount;

            (vi) to the Class B-1 Certificates, the Class B-1 Current Interest
      and any Class B-1 Interest Carry Forward Amount;

            (vii) to the Class B-2 Certificates, the Class B-2 Current Interest
      and any Class B-2 Interest Carry Forward Amount;

            (viii) to the Class B-3 Certificates, the Class B-3 Current Interest
      and any Class B-3 Interest Carry Forward Amount; and

            (ix) any remainder pursuant to Section 4.04(f) hereof.

      (c) On each Distribution Date, subject to the proviso in (ii) above,
Interest Funds received on the Group One Mortgage Loans will be deemed to be
distributed to the Class R, Class A-1A and Class A-1B Certificates and Interest
Funds received on the Group Two Mortgage Loans will be deemed to be distributed
to the Class A-2A, and Class A-2B Certificates, in each case, until the related
Current Interest and Interest Carry Forward Amount of each such Class of
Certificates for such Distribution Date has been paid in full. Thereafter,
Interest Funds not required for such distributions are available to be applied,
if necessary, to the Class or Classes of Certificates that are not related to
such group of Mortgage Loans.

      (d) On each Distribution Date, the Trustee shall make the following
distributions from the Certificate Account of an amount equal to the Principal
Distribution Amount in the following order of priority, and each such
distribution shall be made only after all distributions pursuant to Section
4.04(a) and (b) above shall have been made until such amount shall have been
fully distributed for such Distribution Date:

            (i) to the Class A Certificates, the Class A Principal Distribution
      Amount will be distributed as follows:

            (A) the Group One Principal Distribution Amount will be distributed
      sequentially as follows: first to the Class R Certificate until its
      Certificate Principal Balance is reduced to zero and second, pro rata, to
      the Class A-1A and Class A-1B Certificates until the respective
      Certificate Principal Balance of each such Class has been reduced to zero;
      provided, however, on any Distribution Date on which the Certificate
      Principal Balance of each class of Subordinated Certificates has been
      reduced to zero, the Group One Principal Distribution Amount will be
      distributed sequentially as follows: first, to the Class R Certificate
      until its Certificate Principal Balance has been reduced to zero; second,
      to the Class A-1A Certificates until their Certificate

                                      -75-

<PAGE>

      Principal Balance has been reduced to zero; and third, to the Class A-1B
      Certificates until their Certificate Principal Balance has been reduced to
      zero; and,

            (B) the Group Two Principal Distribution Amount will be distributed
      pro rata to the Class A-2A and Class A-2B Certificates until the
      respective Certificate Principal Balance of each such Class has been
      reduced to zero; provided, however, on any Distribution Date on which the
      Certificate Principal Balance of each class of Subordinated Certificates
      has been reduced to zero, the Group Two Principal Distribution Amount will
      be distributed sequentially as follows: first, to the Class A-2A
      Certificates until their Certificate Principal Balance has been reduced to
      zero; and second, to the Class A-2B Certificates until their Certificate
      Principal Balance has been reduced to zero;

            (ii) to the Class M-1 Certificates, the Class M-1 Principal
      Distribution Amount;

            (iii) to the Class M-2 Certificates, the Class M-2 Principal
      Distribution Amount;

            (iv) to the Class M-3 Certificates, the Class M-3 Principal
      Distribution Amount;

            (v) to the Class B-1 Certificates, the Class B-1 Principal
      Distribution Amount;

            (vi) to the Class B-2 Certificates, the Class B-2 Principal
      Distribution Amount;

            (vii) to the Class B-3 Certificates, the Class B-3 Principal
      Distribution Amount; and

            (viii) any remainder pursuant to Section 4.04(f) hereof.

            (e) [Reserved].

      (f) On each Distribution Date, the Trustee shall make the following
distributions up to the following amounts from the Certificate Account of the
remainders pursuant to Section 4.04(b)(ix) and (d)(viii) hereof and, to the
extent required to make the distributions set forth below in clauses (i) through
(vii) of this Section 4.04(f), and each such distribution shall be made only
after all distributions pursuant to Sections 4.04(b) and (d) above shall have
been made until such remainders shall have been fully distributed for such
Distribution Date:

            (i) for distribution as part of the Principal Distribution Amount,
      the Extra Principal Distribution Amount;

            (ii) to the Class M-1 Certificates, the Class M-1 Unpaid Realized
      Loss Amount;

            (iii) to the Class M-2 Certificates, the Class M-2 Unpaid Realized
      Loss Amount;

            (iv) to the Class M-3 Certificates, the Class M-3 Unpaid Realized
      Loss Amount;

            (v) to the Class B-1 Certificates, the Class B-1 Unpaid Realized
      Loss Amount;

            (vi) to the Class B-2 Certificates, the Class B-2 Unpaid Realized
      Loss Amount;

            (vii) to the Class B-3 Certificates, the Class B-3 Unpaid Realized
      Loss Amount;

            (viii) to the Class A, Class M and Class B Certificates, on a pro
      rata basis, based upon the outstanding Floating Rate Certificate Carryover
      for each such Class, the Floating Rate Certificate Carryover for each such
      Class; and,

                                      -76-

<PAGE>

            (ix) the remainder pursuant to Section 4.04(g) hereof.

      (g) on each Distribution Date, the Trustee shall allocate the remainders
pursuant to Section 4.01(f)(ix) as follows:

            (i) to the Class C Certificates in the following order of priority,
      (I) the Class C Current Interest, (II) the Class C Interest Carry Forward
      Amount, (III) as principal on the Class C Certificate until the
      Certificate Principal Balance of the Class C Certificates has been reduced
      to zero and (IV) the Class C Unpaid Realized Loss Amount; and

            (ii) the remainder pursuant to Section 4.04(h) hereof.

      (h) On each Distribution Date, the Trustee shall allocate the remainder
pursuant to Section 4.04(g)(ii) hereof, (i) to the Trustee to reimburse amounts
or pay indemnification amounts owing to the Trustee from the Trust Fund pursuant
to Section 8.06 to the extent such amounts shall have exceeded the cap set forth
in Section 8.06(c), and (ii) thereafter, to the Class R Certificate and such
distributions shall be made only after all preceding distributions shall have
been made until such remainder shall have been fully distributed.

      (i) On each Distribution Date, after giving effect to distributions on
such Distribution Date, the Trustee shall allocate the Applied Realized Loss
Amount for the Certificates to reduce the Certificate Principal Balances of the
Class C and Subordinated Certificates in the following order of priority:

            (i) to the Class C Certificates until the Class C Certificate
      Principal Balance is reduced to zero;

            (ii) to the Class B-3 Certificates until the Class B-3 Certificate
      Principal Balance is reduced to zero;

            (iii) to the Class B-2 Certificates until the Class B-2 Certificate
      Principal Balance is reduced to zero;

            (iv) to the Class B-1 Certificates until the Class B-1 Certificate
      Principal Balance is reduced to zero

            (v) to the Class M-3 Certificates until the Class M-3 Certificate
      Principal Balance is reduced to zero;

            (vi) to the Class M-2 Certificates until the Class M-2 Certificate
      Principal Balance is reduced to zero; and

            (vii) to the Class M-1 Certificates until the Class M-1 Certificate
      Principal Balance is reduced to zero.

      (j) Subject to Section 9.02 hereof respecting the final distribution, on
each Distribution Date the Trustee shall make distributions to each
Certificateholder of record on the preceding Record Date either by wire transfer
in immediately available funds to the account of such holder at a bank or other
entity having appropriate facilities therefor, if such Holder has so notified
the Trustee at least five (5) Business Days prior to the related Record Date or,
if not, by check mailed by first class mail to such Certificateholder at the
address of such holder appearing in the Certificate Register. Notwithstanding
the foregoing, but subject to Section 9.02 hereof respecting the final
distribution, distributions with respect to

                                      -77-

<PAGE>

Certificates registered in the name of a Depository shall be made to such
Depository in immediately available funds.

      In accordance with this Agreement, the Servicer shall prepare and deliver
a report (the "Remittance Report") to the Trustee in the form of a computer
readable magnetic tape (or by such other means as the Servicer and the Trustee
may agree from time to time) containing such data and information such as to
permit the Trustee to prepare the Monthly Statement to Certificateholders and
make the required distributions for the related Distribution Date.

      (k) The Trustee is hereby directed by the Depositor to execute the Cap
Contract on behalf of the Trust Fund in the form presented to it by the
Depositor and shall have no responsibility for the contents, adequacy or
sufficiency of such Cap Contract, including, without limitation, the
representations and warranties contained therein. Any funds payable by the
Trustee under the Cap Contract at closing shall be paid by the Depositor.
Notwithstanding anything to the contrary contained herein or in the Cap
Contract, the Trustee shall not be required to make any payments to the
counterparty under the Cap Contract. Any payments received under the terms of
the Cap Contract will be available to pay the holders of the Offered
Certificates up to the amount of any Floating Rate Certificate Carryover
remaining after the application of Section 4.04(f)(viii) on such Distribution
Date; provided, however, that payments received on the Cap Contract will not be
used to pay any Floating Rate Certificate Carryover that results from a failure
to allocate Applied Realized Loss Amounts to the Class A Certificates. Any
amounts in the Cap Contract Account on any Distribution Date in excess of
amounts required, subject to the restrictions set forth in the preceding
sentence, to pay outstanding Floating Rate Certificate Carryovers on such
Distribution Date will be distributed to the holders of the Class C
Certificates. Payments from the Cap Contract Account in respect of the Floating
Rate Certificate Carryovers shall, subject to the limitations set forth in the
second preceding sentence of this Section 4.04(k), be paid to the Offered
Certificates in accordance with the provisions of Section 4.04(f)(viii) hereof.

      (k) (i) On or prior to the Cap Contract Termination Date, amounts, if any,
received by the Trustee for the benefit of the Trust Fund in respect of the Cap
Contract shall be deposited by the Trustee into the Cap Contract Account. With
respect to any Distribution Date on or prior to the Cap Contract Termination
Date, the amount, if any, payable by the Cap Contract Counterparty under the Cap
Contract will equal the product of (i) the excess of (x) One-Month LIBOR (as
determined by the Cap Contract Counterparty and subject to a cap equal to
9.000%), over (y) the rate with respect to such Distribution Date as shown under
the heading "1ML Lower Collar" in the Cap Table, (ii) an amount equal to the Cap
Contract Notional Balance and (iii) the number of days in such Accrual Period,
divided by 360. If a payment is made to the Trust Fund under the Cap Contract
and the Trustee intends to distribute excess amounts to the holders of the Class
C Certificates as described above, the Trustee shall make available to the
holders of the Class C Certificates on its website, located at www.ctslink.com,
on the Business Day prior to the related Distribution Date, the amount received
on the Cap Contract, the amount paid with respect to any Floating Rate
Certificate Carryover Amounts and the amount due to the holders of the Class C
Certificates. Such notice shall be sent by the Trustee via facsimile to the
holders of the Class C Certificates.

            (ii) Amounts on deposit in the Cap Contract Account will remain
      uninvested pending distribution to Certificateholders.

            (iii) The Cap Contract is scheduled to remain in effect until the
      Cap Contract Termination Date and will be subject to early termination
      only in limited circumstances. Such circumstances include certain
      insolvency or bankruptcy events in relation to the Cap Contract
      Counterparty (after a grace period of three Local Business Days, as
      defined in the Cap Contract, after notice of such failure is received by
      the Cap Contract Counterparty) to make a payment due

                                      -78-

<PAGE>

      under the Cap Contract, the failure by the Cap Contract Counterparty or
      the Trustee (after a cure period of 20 days after notice of such failure
      is received) to perform any other agreement made by it under the Cap
      Contract, the termination of the Trust Fund and the Cap Contract becoming
      illegal or subject to certain kinds of taxation.

      SECTION 4.05. Monthly Statements to Certificateholders.

         (a) Not later than each Distribution Date based on information provided
by the Servicer, the Trustee shall prepare and make available on its website
located at www.ctslink.com to each Holder of a Class of Certificates of the
Trust Fund, the Servicer, the Rating Agencies and the Depositor a statement
setting forth for the Certificates:

            (i) the amount of the related distribution to Holders of each Class
      allocable to principal, separately identifying (A) the aggregate amount of
      any Principal Prepayments included therein, (B) the aggregate of all
      scheduled payments of principal included therein, (C) the Extra Principal
      Distribution Amount, if any, and (D) the aggregate amount of Prepayment
      Charges, if any;

            (ii) the amount of such distribution to Holders of each Class
      allocable to interest, together with any Non-Supported Interest Shortfalls
      allocated to each Class;

            (iii) any Interest Carry Forward Amount for each Class of the
      Offered Certificates;

            (iv) the Class Certificate Principal Balance of each Class after
      giving effect (i) to all distributions allocable to principal on such
      Distribution Date and (ii) the allocation of any Applied Realized Loss
      Amounts for such Distribution Date;

            (v) the Pool Stated Principal Balance for such Distribution Date;

            (vi) the related amount of the Servicing Fee paid to or retained by
      the Servicer;

            (vii) the Pass-Through Rate for each Class of Certificates for such
      Distribution Date;

            (viii) the amount of Advances included in the distribution on such
      Distribution Date;

            (ix) the cumulative amount of (A) Realized Losses and (B) Applied
      Realized Loss Amounts to date, in the aggregate and with respect to the
      Group One Mortgage Loans and Group Two Mortgage Loans;

            (x) the amount of (A) Realized Losses and (B) Applied Realized Loss
      Amounts with respect to such Distribution Date, in the aggregate and with
      respect to the Group One Mortgage Loans and Group Two Mortgage Loans;

            (xi) the number and aggregate principal amounts of Mortgage Loans
      (A) Delinquent (exclusive of Mortgage Loans in foreclosure) (1) 31 to 60
      days, (2) 61 to 90 days and (3) 91 or more days, and (B) in foreclosure
      and Delinquent (1) 31 to 60 days, (2) 61 to 90 days and (3) 91 or more
      days, in each case as of the close of business on the last day of the
      calendar month preceding such Distribution Date, in the aggregate and with
      respect to the Group One Mortgage Loans and Group Two Mortgage Loans;

            (xii) with respect to any Mortgage Loan that became an REO Property
      during the preceding calendar month, the loan number and Stated Principal
      Balance of such Mortgage Loan

                                      -79-

<PAGE>

      as of the close of business on the last day of the calendar month
      preceding such Distribution Date and the date of acquisition thereof, in
      the aggregate and with respect to the Group One Mortgage Loans, Group Two
      Mortgage Loans;

            (xiii) the total number and principal balance of any REO Properties
      as of the close of business on the last day of the calendar month
      preceding such Distribution Date, in the aggregate and with respect to the
      Group One Mortgage Loans and Group Two Mortgage Loans;

            (xiv) the aggregate Stated Principal Balance of all Liquidated Loans
      as of the preceding Distribution Date, in the aggregate and with respect
      to the Group One Mortgage Loans and Group Two Mortgage Loans;

            (xv) whether a Trigger Event has occurred;

            (xvi) the number and Stated Principal Balance (as of the preceding
      Distribution Date) of any Mortgage Loans which were purchased or
      repurchased during the preceding Due Period and since the Cut-off Date;

            (xvii) the number of Mortgage Loans for which Prepayment Charges
      were received during the related Prepayment Period and, for each such
      Mortgage Loan, the amount of prepayment penalties received during the
      related Prepayment Period and in the aggregate of such amounts for all
      such Mortgage Loans since the Cut-off Date;

            (xviii) the related amount of each MI Insurer Fee paid to each MI
      Insurer;

            (xix) the amount and purpose of any withdrawal from the Certificate
      Account pursuant to Section 3.08(a)(v);

            (xx) the number and aggregate Stated Principal Balance of Mortgage
      Loans covered by each MI Policy as of the end of the related Due Period;

            (xxi) the amount of any claims paid by each MI Insurer pursuant to
      the related MI Policy with respect to principal, the amount of any claims
      paid by each MI Insurer pursuant to the related MI Policy with respect to
      interest, the amount of any claims made under the related MI Policy and
      the amount of any claims rejected under the related MI Policy, each as of
      such Distribution Date;

            (xxii) the amount of any payments to each Class of Certificates that
      are treated as payments received in respect of a REMIC Regular Interest or
      REMIC "residual interest" and the amount of any payments to each Class of
      Certificates that are not treated as payments received in respect of a
      REMIC Regular Interest or REMIC "residual interest"; and

            (xxiii) as of each Distribution Date, the amount, if any, to be
      deposited in the Cap Contract Account pursuant to the Cap Contract as
      described in Section 4.04(k) and the amount thereof to be paid to the
      Offered Certificates as described in Section 4.04(k) hereof.

      The Trustee will make the Monthly Statement (and, at its option, any
additional files containing the same information in an alternative format)
available each month to Certificateholders, other parties to this Agreement and
other interested parties via the Trustee's Internet website. The Trustee's
Internet website shall initially be located at "www.ctslink.com". Assistance in
using the website can be obtained by calling the Trustee's customer service desk
at (301) 815-6600. Parties that are unable to use the website are entitled to
have a paper copy mailed to them via first class mail by calling the customer

                                      -80-

<PAGE>

service desk and indicating such. The Trustee shall have the right to change the
way the monthly statements to Certificateholders are distributed in order to
make such distribution more convenient and/or more accessible to the above
parties and the Trustee shall provide timely and adequate notification to all
above parties regarding any such changes.

      The Trustee shall also be entitled to rely on but shall not be responsible
for the content or accuracy of any information provided by third parties for
purposes of preparing the monthly statement and may affix thereto any disclaimer
it deems appropriate in its reasonable discretion (without suggesting liability
on the part of any other party hereto).

      As a condition to access the Trustee's internet website, the Trustee may
require registration and the acceptance of a disclaimer. The Trustee will not be
liable for the dissemination of information in accordance with this Agreement.

      (b) [RESERVED].

      (c) Within a reasonable period of time after the end of each calendar
year, the Trustee shall cause to be furnished to each Person who at any time
during the calendar year was a Certificateholder, a statement containing the
information set forth in clauses (a)(i) and (a)(ii) of this Section 4.05
aggregated for such calendar year or applicable portion thereof during which
such Person was a Certificateholder. Such obligation of the Trustee shall be
deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Trustee pursuant to any requirements of the
Code as from time to time in effect.

      (d) Upon filing with the Internal Revenue Service, the Trustee shall
furnish to the Holders of the Class R Certificate each Form 1066 and each Form
1066Q and shall respond promptly to written requests made not more frequently
than quarterly by any Holder of Class R Certificate with respect to the
following matters:

            (i) The original projected principal and interest cash flows on the
      Closing Date on each Class of regular and residual interests created
      hereunder and on the Mortgage Loans, based on the Prepayment Assumption;

            (ii) The projected remaining principal and interest cash flows as of
      the end of any calendar quarter with respect to each Class of regular and
      residual interests created hereunder and the Mortgage Loans, based on the
      Prepayment Assumption;

            (iii) The Prepayment Assumption and any interest rate assumptions
      used in determining the projected principal and interest cash flows
      described above;

            (iv) The original issue discount (or, in the case of the Mortgage
      Loans, market discount) or premium accrued or amortized through the end of
      such calendar quarter with respect to each Class of regular or residual
      interests created hereunder and to the Mortgage Loans, together with each
      constant yield to maturity used in computing the same;

            (v) The treatment of losses realized with respect to the Mortgage
      Loans or the regular interests created hereunder, including the timing and
      amount of any cancellation of indebtedness income of the REMICs with
      respect to such regular interests or bad debt deductions claimed with
      respect to the Mortgage Loans;

            (vi) The amount and timing of any non-interest expenses of the
      REMICs; and

                                      -81-

<PAGE>

            (vii) Any taxes (including penalties and interest) imposed on the
      REMICs, including, without limitation, taxes on "prohibited transactions,"
      "contributions" or "net income from foreclosure property" or state or
      local income or franchise taxes.

      The information pursuant to clauses (i), (ii), (iii) and (iv) above shall
be provided by the Depositor pursuant to Section 8.12.

      (e) The Servicer shall provide a report to the Rating Agencies at the end
of each fiscal quarter, which report shall indicate with respect to each
Mortgage Loan the terms of which have been modified, its loan number, the date
of modification, and a description of such modification.

                                    ARTICLE V
                                THE CERTIFICATES

      SECTION 5.01. The Certificates.

      The Certificates shall be substantially in the forms attached hereto as
exhibits. The Certificates shall be issuable in registered form, in the minimum
dollar denominations, integral dollar multiples in excess thereof (except that
one Certificate of each Class may be issued in a different amount which must be
in excess of the applicable minimum dollar denomination) and aggregate dollar
denominations as set forth in the following table:

<TABLE>
<CAPTION>
                                                                            Original Certificate
                             Minimum             Integral Multiples in      Principal Balance or
Class                     Denomination             Excess of Minimum          Notional Balance
-----                     ------------           ---------------------      --------------------
<S>                       <C>                    <C>                        <C>
A-1A                       $25,000.00                    $1.00                 $495,682,000
A-1B                       $25,000.00                    $1.00                 $ 26,088,000
A-2A                       $25,000.00                    $1.00                 $130,878,000
A-2B                       $25,000.00                    $1.00                 $  8,854,000
M-1                        $25,000.00                    $1.00                 $ 30,979,000
M-2                        $25,000.00                    $1.00                 $ 16,401,000
M-3                        $25,000.00                    $1.00                 $  3,645,000
B-1                        $25,000.00                    $1.00                 $  3,645,000
B-2                        $25,000.00                    $1.00                 $  3,645,000
B-3                        $25,000.00                    $1.00                 $  3,645,000
C                              (1)                        (1)                           100%
R                          $   100.00                     N/A                  $        100
P                              (2)                        (2)                        (2)
</TABLE>

-------------------
(1)   The Class C Certificates shall not have minimum dollar denominations or
      certificate notional balances and shall be issued in a minimum percentage
      interest of 25%. The initial Overcollateralization Amount is
      $5,465,683.46.

(2)   The Class P Certificates shall not have minimum dollar denominations or
      Certificate Principal Balances and shall be issued in a minimum percentage
      interest of 25%.

                                      -82-

<PAGE>

      The Certificates shall be executed by manual or facsimile signature on
behalf of the Trustee by an authorized officer. Certificates bearing the manual
or facsimile signatures of individuals who were, at the time when such
signatures were affixed, authorized to sign on behalf of the Trustee shall bind
the Trust Fund, notwithstanding that such individuals or any of them have ceased
to be so authorized prior to the authentication and delivery of such
Certificates or did not hold such offices at the date of such authentication and
delivery. No Certificate shall be entitled to any benefit under this Agreement,
or be valid for any purpose, unless there appears on such Certificate a
certificate of authentication substantially in the form set forth as attached
hereto executed by the Trustee by manual signature, and such certificate of
authentication upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication. On
the Closing Date, the Trustee shall authenticate the Certificates to be issued
at the written direction of the Depositor, or any Affiliate thereof.

      SECTION 5.02. Certificate Register; Registration of Transfer and Exchange
of Certificates.

      (a) The Trustee shall maintain, or cause to be maintained in accordance
with the provisions of Section 5.09 hereof, a Certificate Register for the Trust
Fund in which, subject to the provisions of subsections (b) and (c) below and to
such reasonable regulations as it may prescribe, the Trustee shall provide for
the registration of Certificates and of Transfers and exchanges of Certificates
as herein provided. Upon surrender for registration of Transfer of any
Certificate, the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of the same
Class and of like aggregate Percentage Interest.

      At the option of a Certificateholder, Certificates may be exchanged for
other Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest upon surrender of the Certificates to be
exchanged at the office or agency of a Trustee. Whenever any Certificates are so
surrendered for exchange, the Trustee shall execute and the Trustee shall
authenticate and deliver the Certificates that the Certificateholder making the
exchange is entitled to receive. Every Certificate presented or surrendered for
registration of Transfer or exchange shall be accompanied by a written
instrument of Transfer in form satisfactory to a Trustee duly executed by the
holder thereof or his attorney duly authorized in writing.

      No service charge to the Certificateholders shall be made for any
registration of Transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any Transfer or exchange of Certificates may be required. All
Certificates surrendered for registration of Transfer or exchange shall be
canceled and subsequently destroyed by a Trustee in accordance with such
Trustee's customary procedures.

      (b) No Transfer of a Class C or Class P Certificate shall be made unless
such Transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under the Securities Act and such state securities
laws. In the event that a Transfer is to be made in reliance upon an exemption
from the Securities Act and such laws, in order to assure compliance with the
Securities Act and such laws, the Certificateholder desiring to effect such
Transfer and such Certificateholder's prospective transferee shall (except with
respect to the initial transfer of a Class C or Class P Certificate by Merrill
Lynch & Co. or, in connection with a transfer of a Class C or Class P
Certificate to the indenture trustee under an Indenture pursuant to which NIM
Notes are issued) each certify to each Trustee in writing the facts surrounding
the Transfer in substantially the forms set forth in Exhibit F (the "Transferor
Certificate") and (i) deliver a letter in substantially the form of either
Exhibit G (the "Investment Letter") or Exhibit H (the "Rule 144A Letter") or
(ii) there shall be delivered to each Trustee an Opinion of Counsel that such
Transfer may be made pursuant to an exemption from the Securities Act, which
Opinion of Counsel shall not be an

                                      -83-

<PAGE>

expense of the Depositor or the Trustee. The Depositor shall provide to any
Holder of a Class C or Class P Certificate and any prospective transferee
designated by any such Holder, information regarding the related Certificates
and the Mortgage Loans and such other information as shall be necessary to
satisfy the condition to eligibility set forth in Rule 144A(d)(4) for Transfer
of any such Certificate without registration thereof under the Securities Act
pursuant to the registration exemption provided by Rule 144A. The Trustee shall
cooperate with the Depositor in providing the Rule 144A information referenced
in the preceding sentence, including providing to the Depositor such information
in the possession of the Trustee regarding the Certificates, the Mortgage Loans
and other matters regarding the Trust Fund as the Depositor shall reasonably
request to meet its obligation under the preceding sentence. Each Holder of a
Class C or Class P Certificate desiring to effect such Transfer shall, and does
hereby agree to, indemnify the Depositor and the Trustee against any liability
that may result if the Transfer is not so exempt or is not made in accordance
with such federal and state laws.

      No Transfer of an ERISA-Restricted Certificate that is a Class R
Certificate will be registered unless the Trustee receives a representation from
the transferee of the Class R Certificate, acceptable to and in form and
substance satisfactory to the Trustee, to the effect that the transferee is not
an employee benefit plan or arrangement subject to Title I of ERISA, a plan
subject to Section 4975 of the Code or a plan subject to any provisions under
any federal, state, local, non-U.S. or other laws or regulations that are
substantively similar to the foregoing provisions of ERISA or the Code ("Similar
Law") (collectively, a "Plan"), and is not directly or indirectly acquiring the
Class R Certificate for, on behalf of, or with any assets of any such Plan. Each
Person to whom a Class R Certificate is to be transferred shall be required or
deemed to represent that it is not a Plan.

      No Transfer of an ERISA-Restricted Certificate that is a Class C or Class
P Certificate will be registered unless the Trustee receives (A) a
representation that the transferee is not a Plan and is not directly or
indirectly acquiring the Certificate for, on behalf of, or with any assets of
any such Plan, (B) if the Certificate has been the subject of an
ERISA-Qualifying Underwriting, a representation that such transferee is an
insurance company that is acquiring the Certificate with assets contained in an
"insurance company general account," as defined in Section V(e) of Prohibited
Transaction Class Exemption ("PTCE") 95-60, and the acquisition and holding of
the Certificate are covered and exempt under Sections I and III of PTCE 95-60,
or (C) solely in the case of a Definitive Certificate, an Opinion of Counsel
satisfactory to the Trustee, and upon which the Trustee shall be entitled to
rely, to the effect that the acquisition and holding of such Certificate will
not constitute or result in a nonexempt prohibited transaction under ERISA or
the Code, or a violation of Similar Law, and will not subject the Trustee, the
Servicer or the Depositor to any obligation in addition to those expressly
undertaken in this Agreement, which Opinion of Counsel shall not be an expense
of the Trustee, the Servicer or the Depositor

      For purposes of the two immediately preceding paragraphs of this
Subsection 5.02(b), other than clause (C) in the immediately preceding
paragraph, the representations as set forth therein shall be deemed to have been
made to the Trustee by the transferee's acceptance of an ERISA-Restricted
Certificate (or the acceptance by a Certificate Owner of the beneficial interest
in any Class of ERISA-Restricted Certificates). Notwithstanding any other
provision herein to the contrary, any purported Transfer of an ERISA Restricted
Certificate to or on behalf of a Plan without the delivery to the Trustee of a
representation or an Opinion of Counsel satisfactory to the Trustee as described
above shall be void and of no effect. The Trustee shall not be under any
liability to any Person for any registration or transfer of any ERISA-Restricted
Certificate that is in fact not permitted by this Section 5.02(b) nor shall the
Trustee be under any liability for making any payments due on such Certificate
to the Holder thereof or taking any other action with respect to such Holder
under the provisions of this Agreement so long as the transfer was registered by
the Trustee in accordance with the foregoing requirements. The Trustee shall be
entitled, but not obligated, to recover from any Holder of any ERISA-Restricted
Certificate that was in

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<PAGE>

fact a Plan and that held such Certificate in violation of this Section 5.02(b)
all payments made on such ERISA-Restricted Certificate at and after the time it
commenced such holding. Any such payments so recovered shall be paid and
delivered to the last preceding Holder of such Certificate that is not a Plan.

      (c) Each Person who has or who acquires any Ownership Interest in a Class
R Certificate shall be deemed by the acceptance or acquisition of such Ownership
Interest to have agreed to be bound by the following provisions, and the rights
of each Person acquiring any Ownership Interest in a Class R Certificate are
expressly subject to the following provisions:

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

            (ii) No Ownership Interest in a Class R Certificate may be
      purchased, transferred or sold, directly or indirectly, except in
      accordance with the provisions hereof. No Ownership Interest in a Class R
      Certificate may be registered on the Closing Date or thereafter
      transferred, and the Trustee shall not register the Transfer of any Class
      R Certificate unless, in addition to the certificates required to be
      delivered to the Trustee under subparagraph (b) above, the Trustee shall
      have been furnished with an affidavit (a "Transfer Affidavit") of the
      initial owner or the proposed transferee in the form attached hereto as
      Exhibit E-1 and an affidavit of the proposed transferor in the form
      attached hereto as Exhibit E-2. In the absence of a contrary instruction
      from the transferor of a Class R Certificate, declaration (11) in Appendix
      A of the Transfer Affidavit may be left blank. If the transferor requests
      by written notice to the Trustee prior to the date of the proposed
      transfer that one of the two other forms of declaration (11) in Appendix A
      of the Transfer Affidavit be used, then the requirements of this Section
      5.02(c)(ii) shall not have been satisfied unless the Transfer Affidavit
      includes such other form of declaration.

            (iii) Each Person holding or acquiring any Ownership Interest in a
      Class R Certificate shall agree (A) to obtain a Transfer Affidavit from
      any other Person to whom such Person attempts to Transfer its Ownership
      Interest in a Class R Certificate, (B) to obtain a Transfer Affidavit from
      any Person for whom such Person is acting as nominee, trustee or agent in
      connection with any Transfer of a Class R Certificate and (C) not to
      Transfer its Ownership Interest in a Class R Certificate or to cause the
      Transfer of an Ownership Interest in a Class R Certificate to any other
      Person if it has actual knowledge that such Person is not a Permitted
      Transferee. Further, no transfer, sale or other disposition of any
      Ownership Interest in a Class R Certificate may be made to a person who is
      not a U.S. Person (within the meaning of Section 7701 of the Code) unless
      such person furnishes the transferor and the Trustee with a duly completed
      and effective Internal Revenue Service Form W-8ECI (or any successor
      thereto) and the Trustee consents to such transfer, sale or other
      disposition in writing.

            (iv) Any attempted or purported Transfer of any Ownership Interest
      in a Class R Certificate in violation of the provisions of this Section
      5.02(c) shall be absolutely null and void and shall vest no rights in the
      purported Transferee. If any purported transferee shall become a Holder of
      a Class R Certificate in violation of the provisions of this Section
      5.02(c), then the last preceding Permitted Transferee shall be restored to
      all rights as Holder thereof retroactive to the date of registration of
      Transfer of such Class R Certificate. The Trustee shall be under no
      liability to any Person for any registration of Transfer of a Class R
      Certificate that is in fact not permitted by Section 5.02(b) and this
      Section 5.02(c) or for making any payments due on such Certificate to the
      Holder thereof or taking any other action with respect to such Holder
      under the provisions of this Agreement so long as the Transfer was
      registered after receipt of the related Transfer Affidavit. The Trustee
      shall be entitled but not obligated to recover from any Holder of a Class

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<PAGE>

      R Certificate that was in fact not a Permitted Transferee at the time it
      became a Holder or, at such subsequent time as it became other than a
      Permitted Transferee, all payments made on such Class R Certificate at and
      after either such time. Any such payments so recovered by the Trustee
      shall be paid and delivered by the Trustee to the last preceding Permitted
      Transferee of such Certificate.

            (v) At the option of the Holder of the Class R Certificate, the
      Class LTR Interest, and the residual interest in the Upper Tier REMIC may
      be severed and represented by separate certificates; provided, however,
      that such separate certification may not occur until the Trustee receives
      an Opinion of Counsel to the effect that separate certification in the
      form and manner proposed would not result in the imposition of federal tax
      upon the Trust Fund or any of the REMICs provided for herein or cause any
      of the REMICs provided for herein to fail to qualify as a REMIC; and
      provided further, that the provisions of Sections 5.02(b) and (c) will
      apply to each such separate certificate as if the separate certificate
      were a Class R Certificate. If, as evidenced by an Opinion of Counsel, it
      is necessary to preserve the REMIC status of any of the REMICs provided
      for herein, the Class LTR Interest and the residual interest in the Upper
      Tier REMIC shall be severed and represented by separate Certificates.

      The restrictions on Transfers of a Class R Certificate set forth in this
Section 5.02(c) shall cease to apply (and the applicable portions of the legend
on a Class R Certificate may be deleted) with respect to Transfers occurring
after delivery to the Trustee of an Opinion of Counsel, which Opinion of Counsel
shall not be an expense of the Trustee or the Depositor, to the effect that the
elimination of such restrictions will not cause any of the REMICs provided for
herein to fail to qualify as a REMIC at any time that the Certificates are
outstanding or result in the imposition of any tax on the Trust Fund, any REMIC
provided for herein, a Certificateholder or another Person. Each Person holding
or acquiring any Ownership Interest in a Class R Certificate hereby consents to
any amendment of this Agreement that, based on an Opinion of Counsel furnished
to the Trustee, is reasonably necessary (a) to ensure that the record ownership
of, or any beneficial interest in, a Class R Certificate is not transferred,
directly or indirectly, to a Person that is not a Permitted Transferee and (b)
to provide for a means to compel the Transfer of a Class R Certificate that is
held by a Person that is not a Permitted Transferee to a Holder that is a
Permitted Transferee.

      (d) The transferor of the Class R Certificate shall notify the Trustee in
writing upon the transfer of the Class R Certificate.

      (e) The preparation and delivery of all certificates, opinions and other
writings referred to above in this Section 5.02 shall not be an expense of the
Trust Fund, the Depositor or the Trustee.

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

      If (a) any mutilated Certificate is surrendered to the Trustee or the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Certificate and of the ownership thereof and (b) there is delivered to
the Trustee such security or indemnity as may be required by them to save each
of them harmless, then, in the absence of notice to the Trustee that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute, authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
Class, tenor and Percentage Interest. In connection with the issuance of any new
Certificate under this Section 5.03, the Trustee may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other expenses (including the fees and expenses of
the Trustee) connected therewith. Any replacement Certificate issued pursuant to
this Section 5.03 shall constitute complete and indefeasible evidence of
ownership in the Trust Fund, as if originally issued, whether or not

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<PAGE>

the lost, stolen or destroyed Certificate shall be found at any time. All
Certificates surrendered to the Trustee under the terms of this Section 5.03
shall be canceled and destroyed by the Trustee in accordance with its standard
procedures without liability on its part.

      SECTION 5.04. Persons Deemed Owners.

      The Trustee and any agent of the Trustee may treat the Person in whose
name any Certificate is registered as the owner of such Certificate for the
purpose of receiving distributions as provided in this Agreement and for all
other purposes whatsoever, and neither the Trustee, nor any agent of the Trustee
shall be affected by any notice to the contrary.

      SECTION 5.05. Access to List of Certificateholders' Names and Addresses.

      If three or more Certificateholders (a) request such information in
writing from the Trustee, (b) state that such Certificateholders desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates, and (c) provide a copy of the
communication that such Certificateholders propose to transmit or if the
Depositor shall request such information in writing from the Trustee, then the
Trustee shall, within ten Business Days after the receipt of such request,
provide the Depositor or such Certificateholders at such recipients' expense the
most recent list of the Certificateholders of the Trust Fund held by the
Trustee, if any. The Depositor and every Certificateholder, by receiving and
holding a Certificate, agree that the Trustee shall not be held accountable by
reason of the disclosure of any such information as to the list of the
Certificateholders hereunder, regardless of the source from which such
information was derived.

      SECTION 5.06. Book-Entry Certificates.

      The Regular Certificates, upon original issuance, shall be issued in the
form of one or more typewritten Certificates representing the Book-Entry
Certificates, to be delivered to the Depository by or on behalf of the
Depositor. The Book-Entry Certificates shall initially be registered on the
Certificate Register in the name of the Depository or its nominee, and no
Certificate Owner of a Book-Entry Certificate will receive a definitive
certificate representing such Certificate Owner's interest in such Certificates,
except as provided in Section 5.08. Unless and until definitive, fully
registered Certificates ("Definitive Certificates") have been issued to the
Certificate Owners of the Book-Entry Certificates pursuant to Section 5.08:

      (a) the provisions of this Section shall be in full force and effect;

      (b) the Depositor and the Trustee may deal with the Depository and the
Depository Participants for all purposes (including the making of distributions)
as the authorized representative of the respective Certificate Owners of the
Book-Entry Certificates;

      (c) registration of the Book-Entry Certificates may not be transferred by
the Trustee except to another Depository;

      (d) the rights of the respective Certificate Owners of the Book-Entry
Certificates shall be exercised only through the Depository and the Depository
Participants and shall be limited to those established by law and agreements
between the Owners of the Book-Entry Certificates and the Depository and/or the
Depository Participants. Pursuant to the Depository Agreement, unless and until
Definitive Certificates are issued pursuant to Section 5.08, the Depository will
make book-entry transfers among the Depository Participants and receive and
transmit distributions of principal and interest on the related Certificates to
such Depository Participants;

                                      -87-

<PAGE>

      (e) the Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants;

      (f) the Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants; and

      (g) to the extent that the provisions of this Section conflict with any
other provisions of this Agreement, the provisions of this Section shall
control.

      For purposes of any provision of this Agreement requiring or permitting
actions with the consent of, or at the direction of, Certificateholders
evidencing a specified percentage of the aggregate unpaid principal amount of
any Class of Certificates, such direction or consent may be given by Certificate
Owners (acting through the Depository and the Depository Participants) owning
Book-Entry Certificates evidencing the requisite percentage of principal amount
of such Class of Certificates.

      SECTION 5.07. Notices to Depository.

      Whenever any notice or other communication is required to be given to
Certificateholders of the Class with respect to which Book-Entry Certificates
have been issued, unless and until Definitive Certificates shall have been
issued to the related Certificate Owners and the Trustee shall give all such
notices and communications to the Depository.

      SECTION 5.08. Definitive Certificates.

      If, after Book-Entry Certificates have been issued with respect to any
Certificates, (a) the Depository or the Depositor advises the Trustee that the
Depository is no longer willing, qualified or able to discharge properly its
responsibilities under the Depository Agreement with respect to such
Certificates and the Trustee or the Depositor is unable to locate a qualified
successor, (b) the Depositor, notifies the Trustee and the Depository to
terminate the book-entry system through the Depository and, upon receipt of
notice of such intent from the Depository, the Certificate Owners of the
Book-Entry Certificates agree to initiate such termination or (c) after the
occurrence and continuation of an Event of Default, Certificate Owners of such
Book-Entry Certificates having not less than 51% of the Voting Rights evidenced
by any Class of Book-Entry Certificates advise the Trustee and the Depository in
writing through the Depository Participants that the continuation of a
book-entry system with respect to Certificates of such Class through the
Depository (or its successor) is no longer in the best interests of the
Certificate Owners of such Class, then the Trustee shall notify all Certificate
Owners of such Book-Entry Certificates, through the Depository, of the
occurrence of any such event and of the availability of Definitive Certificates
to Certificate Owners of such Class requesting the same. The Depositor shall
provide the Trustee with an adequate inventory of certificates to facilitate the
issuance and transfer of Definitive Certificates. Upon surrender to the Trustee
of any such Certificates by the Depository, accompanied by registration
instructions from the Depository for registration, the Trustee shall
authenticate and deliver such Definitive Certificates. Neither the Depositor nor
the Trustee shall be liable for any delay in delivery of such instructions and
each may conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of such Definitive Certificates, all references
herein to obligations imposed upon or to be performed by the Depository shall be
deemed to be imposed upon and performed by the Trustee, to the extent applicable
with respect to such Definitive Certificates and the Trustee shall recognize the
Holders of such Definitive Certificates as Certificateholders hereunder.

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<PAGE>

      SECTION 5.09. Maintenance of Office or Agency.

      The Trustee will maintain or cause to be maintained at its expense an
office or offices or agency or agencies where Certificates may be surrendered
for registration of transfer or exchange. The Trustee initially designates its
offices at Sixth and Marquette Avenue, Minneapolis, Minnesota 55479, Attention:
Corporate Trust Services - Merrill Lynch Mortgage Investors Inc., Series
2004-OPT1 as offices for such purposes. The Trustee will give prompt written
notice to the Certificateholders of any change in such location of any such
office or agency.

      SECTION 5.10. [RESERVED]

                                   ARTICLE VI
                         THE DEPOSITOR AND THE SERVICER

      SECTION 6.01. Respective Liabilities of the Depositor and the Servicer.

      The Depositor and the Servicer shall each be liable in accordance herewith
only to the extent of the obligations specifically and respectively imposed upon
and undertaken by them herein.

      SECTION 6.02. Merger or Consolidation of the Depositor or the Servicer.

      Except as provided in the next paragraph, the Depositor and the Servicer
will each keep in full effect its existence, rights and franchises as a
corporation or banking association under the laws of the United States or under
the laws of one of the States thereof and will each obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its respective duties under this Agreement.

      Any Person into which the Depositor or Servicer may be merged or
consolidated, or any Person resulting from any merger or consolidation to which
the Depositor or Servicer shall be a party, or any Person succeeding to the
business of the Depositor or Servicer, shall be the successor of the Depositor
or Servicer, as the case may be, hereunder, without the execution or filing of
any paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding (except for the execution of an
assumption agreement where such succession is not effected by operation of law);
provided, however, that the successor or surviving Person to a Servicer shall be
qualified to sell mortgage loans to, and to service mortgage loans on behalf of,
Fannie Mae or Freddie Mac.

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

      None of the Depositor, the Servicer nor any of the directors, officers,
employees or agents of the Depositor or the Servicer shall be under any
liability to the Trust Fund or the Certificateholders for any action taken or
for refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Depositor, the Servicer or any such Person against any
breach of representations or warranties made by it herein or protect the
Depositor, the Servicer or any such Person from any liability that would
otherwise be imposed by reasons of willful misfeasance, bad faith or negligence
in the performance of duties or by reason of reckless disregard of obligations
and duties hereunder. The Depositor, the Servicer and any director, officer,
employee or agent of the Depositor or the Servicer may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder. The Depositor, the Servicer and any
director, officer, employee or agent of the Depositor or the Servicer shall be
indemnified by the Trust Fund and held harmless against any loss, liability or
expense, incurred in connection with the performance of their duties under this
agreement or incurred in connection with

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<PAGE>

any audit, controversy or judicial proceeding relating to a governmental taxing
authority or any legal action relating to this Agreement or the Certificates,
other than (i) any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or negligence in the performance of duties hereunder or
by reason of reckless disregard of obligations and duties hereunder or (ii)
which does not constitute an "unanticipated expense" within the meaning of
Treasury Regulation Section 1.860G-1(b)(3)(ii). Neither the Depositor nor the
Servicer shall be under any obligation to appear in, prosecute or defend any
legal action that is not incidental to its respective duties hereunder and that
in its opinion may involve it in any expense or liability; provided, however,
that any of the Depositor or the Servicer may, in its discretion undertake any
such action that it may deem necessary or desirable in respect of this Agreement
and the rights and duties of the parties hereto and interests of the Trustee and
the Certificateholders hereunder. In such event, the legal expenses and costs of
such action and any liability resulting therefrom shall be, expenses, costs and
liabilities of the Trust Fund, and the Depositor and the Servicer shall be
entitled to be reimbursed therefor out of the Collection Account as provided by
Section 3.08 hereof.

      SECTION 6.04. Limitation on Resignation of Servicer.

      Subject to the other provisions of this Agreement (including, but not
limited to, Sections 6.02 and 10.14 hereof), the Servicer shall neither assign
all or substantially all its rights under this Agreement or the servicing
hereunder nor delegate all or substantially all its duties hereunder or any
portion thereof, or sell or otherwise dispose of all or substantially all of its
property or assets without, in each case, the prior written consent of the
Trustee, which consent shall not be unreasonably withheld; provided, that in
each case, there must be delivered to the Trustee a letter from each Rating
Agency (at the expense of the Servicer) to the effect that such transfer of
servicing or sale or disposition of assets will not result in a qualification,
withdrawal or downgrade of the then-current rating of any of the Certificates or
of the NIMS Notes. Notwithstanding the foregoing, the Servicer, without the
consent of the Trustee, may retain third-party contractors to perform certain
servicing and loan administration functions, including, without limitation,
hazard insurance administration, tax payment and administration, flood
certification and administration, collection services and similar functions;
provided, however, that the retention of such contractors by Servicer shall not
limit the obligation of the Servicer to service the Mortgage Loans pursuant to
the terms and conditions of this Agreement. The Servicer shall not resign from
the obligations and duties hereby imposed on it except upon determination that
its duties hereunder are no longer permissible under applicable law. Any such
determination permitting the resignation of the Servicer shall be evidenced by
an Opinion of Counsel to such effect delivered to the Trustee. No such
resignation shall become effective until the Trustee or a successor servicer
reasonably acceptable to the Trustee is appointed and has assumed the Servicer's
responsibilities, duties, liabilities and obligations hereunder. Any such
resignation shall not relieve the Servicer of any of the obligations specified
in Section 7.01 and 7.02 as obligations that survive the resignation or
termination of the Servicer.

      SECTION 6.05. Errors and Omissions Insurance; Fidelity Bonds.

      The Servicer shall, for so long as it acts as servicer under this
Agreement, obtain and maintain in force (a) a policy or policies of insurance
covering errors and omissions in the performance of its obligations as servicer
hereunder, and (b) a fidelity bond in respect of its officers, employees and
agents. Each such policy or policies and bond shall, together, comply with the
requirements from time to time of Fannie Mae or Freddie Mac for Persons
performing servicing for mortgage loans purchased by Fannie Mae or Freddie Mac.
The Servicer shall provide the Trustee, upon request, with copies of such
policies and fidelity bond or a certification from the insurance provider
evidencing such policies and fidelity bond. In the event that any such policy or
bond ceases to be in effect, the Servicer shall use its reasonable best efforts
to obtain a comparable replacement policy or bond from an insurer or issuer
meeting the requirements set forth above as of the date of such replacement. Any
such policy or fidelity bond shall by its terms not be cancelable without thirty
days' prior written notice to the Trustee.

                                      -90-

<PAGE>

                                   ARTICLE VII
                        DEFAULT; TERMINATION OF SERVICER

      SECTION 7.01. Events of Default.

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

            (i) any failure by the Servicer to make any Advance, to deposit in
      the Collection Account or the Certificate Account or to remit to the
      Trustee any payment (excluding a payment required to be made under Section
      4.01 hereof) required to be made under the terms of this Agreement, which
      failure shall continue unremedied for three Business Days and, with
      respect to a payment required to be made under Section 4.01 hereof, for
      one Business Day, after the date on which written notice of such failure
      shall have been given to the Servicer by the Trustee or the Depositor, or
      to the Trustee and the Servicer by the Holders of Certificates evidencing
      not less than 25% of the Voting Rights evidenced by the Certificates; or

            (ii) any failure by the Servicer to observe or perform in any
      material respect any other of the covenants or agreements on the part of
      the Servicer contained in this Agreement or any representation or warranty
      shall prove to be untrue, which failure or breach shall continue
      unremedied for a period of 60 days after the date on which written notice
      of such failure shall have been given to the Servicer by the Trustee or
      the Depositor, or to the Trustee by Holders of Certificates evidencing not
      less than 25% of the Voting Rights evidenced by the Certificates; or

            (iii) a decree or order of a court or agency or supervisory
      authority having jurisdiction for the appointment of a receiver or
      liquidator in any insolvency, readjustment of debt, marshaling of assets
      and liabilities or similar proceedings, or for the winding-up or
      liquidation of its affairs, shall have been entered against the Servicer
      and such decree or order shall have remained in force undischarged or
      unstayed for a period of 60 consecutive days; or

            (iv) consent by the Servicer to the appointment of a receiver or
      liquidator in any insolvency, readjustment of debt, marshaling of assets
      and liabilities or similar proceedings of or relating to the Servicer or
      all or substantially all of the property of the Servicer; or

            (v) admission by a Servicer in writing of its inability to pay its
      debts generally as they become due, file a petition to take advantage of,
      or commence a voluntary case under, any applicable insolvency or
      reorganization statute, make an assignment for the benefit of its
      creditors, or voluntarily suspend payment of its obligations.

      If an Event of Default shall occur with respect to the Servicer, then, and
in each and every such case, so long as such Event of Default shall not have
been remedied within the applicable grace period, or solely with respect to
clause (i) above by 5:00 p.m. on the Servicer Remittance Date, the Trustee may,
or at the direction of the Holders of Certificates evidencing not less than 25%
of the Voting Rights evidenced by the Certificates, shall, by notice in writing
to the Servicer (with a copy to each Rating Agency), terminate all of the rights
and obligations of the Servicer under this Agreement and in and to the Mortgage
Loans and the proceeds thereof, other than its rights as a Certificateholder
hereunder. On or after the receipt by the Servicer of such written notice, all
authority and power of the Servicer hereunder, whether with respect to the
Mortgage Loans or otherwise, shall pass to and be vested in the Trustee or a
successor servicer. To the extent the Event of Default resulted from the failure
of the Servicer to make a required Advance, the Trustee shall thereupon make any
Advance described in Section 4.01 hereof subject to Section 3.04 hereof. The
Trustee is hereby authorized and empowered to execute and deliver, on behalf of
the Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments,

                                      -91-

<PAGE>

and to do or accomplish all other acts or things necessary or appropriate to
effect the purposes of such notice of termination, whether to complete the
transfer and endorsement or assignment of the Mortgage Loans and related
documents, or otherwise. Unless expressly provided in such written notice, no
such termination shall affect any obligation of the Servicer to pay amounts owed
pursuant to Article VIII. The Servicer agrees to cooperate with the Trustee in
effecting the termination of the Servicer's responsibilities and rights
hereunder, including, without limitation, the transfer to the Trustee of all
cash amounts which shall at the time be credited to the Collection Account, or
thereafter be received with respect to the Mortgage Loans. The Servicer and the
Trustee shall promptly notify the Rating Agencies of the occurrence of an Event
of Default or an event that, with notice, passage of time, other action or any
combination of the foregoing would be an Event of Default, such notice to be
provided in any event within two Business Days of such occurrence.

      Notwithstanding any termination of the activities of the Servicer
hereunder, the Servicer shall be entitled to receive, out of any late collection
of a Scheduled Payment on a Mortgage Loan that was due prior to the notice
terminating the Servicer's rights and obligations as Servicer hereunder and
received after such notice, that portion thereof to which the Servicer would
have been entitled pursuant to Sections 3.08(a)(i) through (viii), and any other
amounts payable to the Servicer hereunder the entitlement to which arose prior
to the termination of its activities hereunder. Notwithstanding anything herein
to the contrary, upon termination of the Servicer hereunder, any liabilities of
the Servicer which accrued prior to such termination shall survive such
termination.

      SECTION 7.02. Trustee to Act; Appointment of Successor.

      On and after the time the Servicer receives a notice of termination
pursuant to Section 7.01 hereof, the Trustee shall, to the extent provided in
Section 3.04, be the successor to the Servicer in its capacity as servicer under
this Agreement and the transactions set forth or provided for herein and shall
be subject to all the responsibilities, duties and liabilities relating thereto
placed on the Servicer by the terms and provisions hereof and applicable law,
including the obligation to make advances pursuant to Section 4.01. As
compensation therefor, subject to the last paragraph of Section 7.01, the
Trustee shall be entitled to all fees, costs and expenses relating to the
Mortgage Loans that the Servicer would have been entitled to if the Servicer had
continued to act hereunder. Notwithstanding the foregoing, if the Trustee has
become the successor to the Servicer in accordance with Section 7.01 hereof, the
Trustee may, if it shall be unwilling to so act, or shall, if it is prohibited
by applicable law from making Advances pursuant to Section 4.01 hereof or if it
is otherwise unable to so act, appoint, or petition a court of competent
jurisdiction to appoint, any established mortgage loan servicing institution
which does not adversely affect the then current rating of the Certificates by
each Rating Agency as the successor to the Servicer hereunder in the assumption
of all or any part of the responsibilities, duties or liabilities of the
Servicer hereunder. Any successor Servicer shall be an institution that is a
Fannie Mae and Freddie Mac approved seller/servicer in good standing, that has a
net worth of at least $15,000,000, and that is willing to service the Mortgage
Loans and executes and delivers to the Depositor and the Trustee an agreement
accepting such delegation and assignment, that contains an assumption by such
Person of the rights, powers, duties, responsibilities, obligations and
liabilities of the Servicer (other than liabilities of the Servicer under
Section 6.03 hereof incurred prior to termination of the Servicer under Section
7.01), with like effect as if originally named as a party to this Agreement; and
provided further that each Rating Agency acknowledges that its rating of the
Certificates in effect immediately prior to such assignment and delegation will
not be qualified or reduced as a result of such assignment and delegation. No
appointment of a successor to the Servicer hereunder shall be effective until
the Trustee shall have consented thereto and written notice of such proposed
appointment shall have been provided by the Trustee to each Certificateholder.
The Trustee shall not resign as servicer until a successor servicer has been
appointed and has accepted such appointment. Pending appointment of a successor
to the Servicer hereunder, the Trustee, unless the Trustee is prohibited by law
from so acting, shall, subject to Section 3.04 hereof, act in

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such capacity as hereinabove provided. In connection with such appointment and
assumption, the Trustee may make such arrangements for the compensation of such
successor out of payments on Mortgage Loans as it and such successor shall
agree; provided, however, that no such compensation shall be in excess of that
permitted the Servicer hereunder. The Trustee and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession. Neither the Trustee nor any other successor servicer shall be
deemed to be in default hereunder by reason of any failure to make, or any delay
in making, any distribution hereunder or any portion thereof or any failure to
perform, or any delay in performing, any duties or responsibilities hereunder,
in either case caused by the failure of the Servicer to deliver or provide, or
any delay in delivering or providing, any cash, information, documents or
records to it.

      Any successor to the Servicer as servicer shall give notice to the
Mortgagors of such change of servicer and shall, during the term of its service
as servicer maintain in force the policy or policies that the Servicer is
required to maintain pursuant to Section 6.05.

      SECTION 7.03. Notification to Certificateholders.

      (a) Upon any termination of or appointment of a successor to the Servicer,
the Trustee shall give prompt written notice thereof to Certificateholders and
to each Rating Agency.

      (b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Certificateholders notice of each such
Event of Default hereunder known to the Trustee, unless such Event of Default
shall have been cured or waived.

                                  ARTICLE VIII
                             CONCERNING THE TRUSTEE

      SECTION 8.01. Duties of Trustee.

      The Trustee, prior to the occurrence of an Event of Default and after the
curing of all Events of Default that may have occurred, shall undertake to
perform such duties and only such duties as are specifically set forth in this
Agreement. In case an Event of Default has occurred and remains uncured, the
Trustee shall exercise such of the rights and powers vested in it by this
Agreement and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs. In case an Event of Default or other default by the
Servicer or the Depositor hereunder shall occur and be continuing, the Trustee,
shall, at the direction of the majority of the Certificateholders, or may,
proceed to protect and enforce its rights and the rights of the
Certificateholders under this Agreement by a suit, action or proceeding in
equity or at law or otherwise, whether for the specific performance of any
covenant or agreement contained in this agreement or in aid of the execution of
any power granted in this Agreement or for the enforcement of any other legal,
equitable or other remedy, as the Trustee, being advised by counsel, and subject
to the foregoing, shall deem most effectual to protect and enforce any of the
rights of the Trustee and the Certificateholders.

      The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee that are specifically required to be furnished pursuant to any provision
of this Agreement shall examine them to determine whether they conform to the
requirements of this Agreement. If any such instrument is found not to conform
to the requirements of this Agreement in a material manner, the Trustee shall
take action as it deems appropriate to have the instrument corrected, and if the
instrument is not corrected to the Trustee's satisfaction, the Trustee will

                                      -93-

<PAGE>

provide notice thereof to the Certificateholders and take such further action as
directed by the Certificateholders.

      No provision of this Agreement shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act or
its own misconduct, its negligent failure to perform its obligations in
compliance with this Agreement, or any liability that would be imposed by reason
of its willful misfeasance or bad faith; provided, however, that:

            (i) prior to the occurrence of an Event of Default, and after the
      curing of all such Events of Default that may have occurred, the duties
      and obligations of the Trustee shall be determined solely by the express
      provisions of this Agreement, the Trustee shall not be liable,
      individually or as Trustee, except for the performance of such duties and
      obligations as are specifically set forth in this Agreement, no implied
      covenants or obligations shall be read into this Agreement against the
      Trustee and the Trustee may conclusively rely, as to the truth of the
      statements and the correctness of the opinions expressed therein, upon any
      certificates or opinions furnished to the Trustee and conforming to the
      requirements of this Agreement that it reasonably believed in good faith
      to be genuine and to have been duly executed by the proper authorities
      respecting any matters arising hereunder;

            (ii) the Trustee shall not be liable, individually or as Trustee,
      for an error of judgment made in good faith by a Responsible Officer or
      Responsible Officers of the Trustee, unless the Trustee was negligent or
      acted in bad faith or with willful misfeasance;

            (iii) the Trustee shall not be liable, individually or as Trustee,
      with respect to any action taken, suffered or omitted to be taken by it in
      good faith in accordance with the direction of the Holders of each Class
      of Certificates evidencing not less than 25% of the Voting Rights of such
      Class relating to the time, method and place of conducting any proceeding
      for any remedy available to the Trustee, or exercising any trust or power
      conferred upon the Trustee under this Agreement; and

            (iv) except as otherwise expressly provided in this Agreement, if
      any default occurs in the making of a payment due under any Permitted
      Investment, or if a default occurs in any other performance required under
      any Permitted Investment, the Trustee may and, subject to Section 8.01 and
      Section 8.02, upon the request of the Holders of the Certificates
      representing more than 50% of the Voting Rights allocated to any Class of
      Certificates, shall take such action as may be appropriate to enforce such
      payment or performance, including the institution and prosecution of
      appropriate proceedings.

      SECTION 8.02. Certain Matters Affecting the Trustee.

      (a) Except as otherwise provided in Section 8.01:

            (i) the Trustee may request and rely upon and shall be protected in
      acting or refraining from acting upon any resolution, Officer's
      Certificate, certificate of auditors or any other certificate, statement,
      instrument, opinion, report, notice, request, consent, order, appraisal,
      bond or other paper or document believed by it to be genuine and to have
      been signed or presented by the proper party or parties;

            (ii) the Trustee may consult with counsel of its choice and any
      Opinion of Counsel shall be full and complete authorization and protection
      in respect of any action taken or suffered or omitted by it hereunder in
      good faith and in accordance with such Opinion of Counsel;

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<PAGE>

            (iii) the Trustee shall not be liable, individually or as Trustee,
      for any action taken, suffered or omitted by it in good faith and believed
      by it to be authorized or within the discretion or rights or powers
      conferred upon it by this Agreement;

            (iv) prior to the occurrence of an Event of Default hereunder and
      after the curing of all Events of Default that may have occurred, the
      Trustee shall not be bound to make any investigation into the facts or
      matters stated in any resolution, certificate, statement, instrument,
      opinion, report, notice, request, consent, order, approval, bond or other
      paper or document, unless requested in writing so to do by the Holders of
      each Class of Certificates evidencing not less than 25% of the Voting
      Rights of such Class;

            (v) the Trustee may execute any of the trusts or powers hereunder or
      perform any duties hereunder either directly or by or through agents,
      accountants or attorneys;

            (vi) the Trustee shall not be required to expend its own funds or
      otherwise incur any financial liability in the performance of any of its
      duties hereunder if it shall have reasonable grounds for believing that
      repayment of such funds or adequate indemnity against such liability is
      not assured to it;

            (vii) the Trustee shall not be liable, individually or as Trustee,
      for any loss on any investment of funds pursuant to this Agreement (other
      than as issuer of the investment security);

            (viii) the Trustee shall not be deemed to have knowledge of an Event
      of Default until a Responsible Officer of the Trustee shall have received
      written notice thereof;

            (ix) the Trustee shall be under no obligation to exercise any of the
      trusts or powers vested in it by this Agreement or to make any
      investigation of matters arising hereunder or to institute, conduct or
      defend any litigation hereunder or in relation hereto at the request,
      order or direction of the Certificateholders, pursuant to the provisions
      of this Agreement, unless the Certificateholders shall have offered to the
      Trustee reasonable security or indemnity against the costs, expenses and
      liabilities that may be incurred therein or thereby; and

            (x) if requested by the Servicer, the Trustee shall appoint the
      Servicer as the Trustee's attorney-in-fact in order to carry out and
      perform certain activities that are necessary or appropriate for the
      servicing and administration of the Mortgage Loans pursuant to this
      Agreement. Such appointment shall be evidenced by powers of attorney in
      such form as may be agreed to by the Trustee and the Servicer. The Trustee
      shall have no liability for any action or inaction of the Servicer in
      connection with such powers of attorney and the Trustee shall be
      indemnified by the Servicer for all liabilities, costs, expenses incurred
      by the Trustee in connection with the Servicer's use or misuse of such
      powers of attorney.

      (b) All rights of action under this Agreement or under any of the
Certificates, enforceable by the Trustee, may be enforced by the Trustee without
the possession of any of the Certificates, or the production thereof at the
trial or other proceeding relating thereto, and any such suit, action or
proceeding instituted by the Trustee shall be brought in its name for the
benefit of all the Holders of the Certificates, subject to the provisions of
this Agreement.

      (c) The Trustee is hereby directed to execute and deliver on behalf of the
Trust Fund any letter agreements relating to the MI Policies.

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<PAGE>

      SECTION 8.03. Trustee Not Liable for Mortgage Loans.

      The recitals contained herein shall be taken as the statements of the
Depositor or the Servicer, as the case may be, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Agreement, of any Mortgage Loan, or related
document other than with respect to the Trustee's execution and authentication
of the Certificates. The Trustee shall not be accountable for the use or
application by the Depositor or the Servicer of any funds paid to the Depositor
or the Servicer in respect of the Mortgage Loans or deposited in or withdrawn
from the Collection Account or Certificate Account by the Depositor or the
Servicer.

      SECTION 8.04. Trustee May Own Certificates.

      The Trustee in its individual or any other capacity may become the owner
or pledgee of Certificates with the same rights as it would have if it were not
the Trustee.

      SECTION 8.05. Trustee's Fees and Expenses.

      The Trustee shall be entitled to earnings on or investment income with
respect to funds in or credited to the Certificate Account.

      SECTION 8.06. Indemnification of Trustee.

      (a) The Trustee and its respective directors, officers, employees and
agents shall be entitled to indemnification from the Trust Fund for any loss,
liability or expense incurred in connection with any legal proceeding or
incurred without negligence or willful misconduct on their part, arising out of,
or in connection with, the acceptance or administration of the trusts created
hereunder or in connection with the performance of their duties hereunder,
including any applicable fees and expenses payable hereunder and the costs and
expenses of defending themselves against any claim in connection with the
exercise or performance of any of their powers or duties hereunder, provided
that:

            (i) with respect to any such claim, the Trustee shall have given the
      Depositor and the Holders written notice thereof promptly after the
      Trustee shall have knowledge thereof; provided that failure to so notify
      shall not relieve the Trust Fund of the obligation to indemnify the
      Trustee; however, any reasonable delay by the Trustee to provide written
      notice to the Depositor and the Holders promptly after the Trustee shall
      have obtained knowledge of a claim shall not relieve the Trust Fund of the
      obligation to indemnify the Trustee under this Section 8.06;

            (ii) while maintaining control over its own defense, the Trustee
      shall cooperate and consult fully with the Depositor in preparing such
      defense;

            (iii) notwithstanding anything to the contrary in this Section 8.06,
      the Trust Fund shall not be liable for settlement of any such claim by the
      Trustee entered into without the prior consent of the Depositor, which
      consent shall not be unreasonably withheld; and

            (iv) any such loss, liability or expense to be indemnified by the
      Trust Fund must constitute an "unanticipated expense" of the Trust Fund
      within the meaning of Treasury Regulations Section 1.860G-1(b)(3)(ii).

      The provisions of this Section 8.06 shall survive any termination of this
Agreement and the resignation or removal of the Trustee and shall be construed
to include, but not be limited to any loss, liability or expense under any
environmental law.

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<PAGE>

      (b) The Trustee shall be entitled to all reasonable expenses,
disbursements and advancements incurred or made by the Trustee in accordance
with this Agreement (including fees and expenses of its counsel and all persons
not regularly in its employment), except any such expenses, disbursements and
advancements that either (i) arise from its negligence, bad faith or willful
misconduct or (ii) do not constitute "unanticipated expenses" within the meaning
of Treasury Regulations Section 1.860G-1(b)(3)(ii).

      (c) The Trustee's right to indemnification and reimbursement shall be
subject to a cap of $300,000 in the aggregate in any calendar year, excluding
(i) any Servicing Transfer Costs, and (ii) any costs, damages or expenses
incurred by the Trustee in connection with any "high cost" home loans or any
predatory or abusive lending laws, which amounts shall in no case be subject to
any such limitation; provided, however, that such cap shall apply only if NIM
Notes have been issued and shall cease to apply after the date on which any NIM
Notes are paid in full. Any amounts not in excess of this cap may be withdrawn
by the Trustee from the Certificate Account at any time.

      SECTION 8.07. Eligibility Requirements for Trustee.

      The Trustee hereunder shall, at all times, be a corporation or association
organized and doing business under the laws of a state or the United States of
America, authorized under such laws to exercise corporate trust powers having a
combined capital and surplus of at least $50,000,000, subject to supervision or
examination by federal or state authority and with a credit rating that would
not cause any of the Rating Agencies to reduce their respective ratings of any
Class of Certificates below the ratings issued on the Closing Date (or having
provided such security from time to time as is sufficient to avoid such
reduction). If such corporation or association publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section 8.07
the combined capital and surplus of such corporation or association shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Trustee shall cease to
be eligible in accordance with the provisions of this Section 8.07, the Trustee
shall resign immediately in the manner and with the effect specified in Section
8.08 hereof. The corporation or national banking association serving as Trustee
may have normal banking and trust relationships with the Depositor and its
Affiliates; provided, however, that such corporation cannot be an Affiliate of
the Servicer other than the Trustee in its role as successor to the Servicer.

      SECTION 8.08. Resignation and Removal of Trustee.

      The Trustee may at any time resign and be discharged from the trusts
hereby created by (1) giving written notice of resignation to the Depositor and
the Servicer and by mailing notice of resignation by first class mail, postage
prepaid, to the Certificateholders at their addresses appearing on the
Certificate Register and each Rating Agency, not less than 60 days before the
date specified in such notice when, subject to Section 8.09, such resignation is
to take effect, and (2) acceptance of appointment by a successor trustee in
accordance with Section 8.09 and meeting the qualifications set forth in Section
8.07. If no successor trustee shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice or resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee.

      If at any time (i) the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.07 hereof and shall fail to resign after
written request thereto by the Depositor, (ii) the Trustee shall become
incapable of acting, or shall be adjudged as bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, or

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(iii)(A) a tax is imposed with respect to the Trust Fund by any state in which
the Trustee or the Trust Fund is located, (B) the imposition of such tax would
be avoided by the appointment of a different trustee and (C) the Trustee fails
to indemnify the Trust Fund against such tax, then the Depositor may remove the
Trustee and the Depositor shall promptly appoint a successor trustee by written
instrument, in triplicate, one copy of which instrument shall be delivered to
the Trustee, one copy of which shall be delivered to the Servicer and one copy
of which shall be delivered to the successor trustee.

      The Holders evidencing at least 51% of the Voting Rights of all Classes of
Certificates, upon failure of the Trustee to perform its obligations hereunder
may at any time remove the Trustee and the Depositor shall appoint a successor
trustee by written instrument or instruments, in triplicate, signed by such
Holders or their attorneys-in-fact duly authorized, one complete set of which
instruments shall be delivered by the successor Trustee to the Servicer, one
complete set to the Trustee so removed and one complete set to the successor so
appointed. Notice of any removal of the Trustee shall be given to the each
Rating Agency by the successor trustee.

      Any resignation or removal of the Trustee and appointment of a successor
trustee pursuant to any of the provisions of this Section 8.08 shall become
effective upon acceptance of appointment by the successor trustee as provided in
Section 8.09 hereof.

      SECTION 8.09. Successor Trustee.

      Any successor trustee appointed as provided in Section 8.08 hereof shall
execute, acknowledge and deliver to the Depositor and to its predecessor trustee
and the Servicer an instrument accepting such appointment hereunder and
thereupon the resignation or removal of the predecessor trustee shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee herein.

      No successor trustee shall accept appointment as provided in this Section
8.09 unless at the time of such acceptance such successor trustee shall be
eligible under the provisions of Section 8.07 hereof and its appointment shall
not adversely affect the then current rating of the Certificates.

      Upon acceptance of appointment by a successor trustee as provided in this
Section 8.09, the Depositor shall mail notice of the succession of such trustee
hereunder to all Holders of Certificates. If the Depositor fails to mail such
notice within ten days after acceptance of appointment by the successor trustee,
the successor trustee shall cause such notice to be mailed at the expense of the
Depositor.

      SECTION 8.10. Merger or Consolidation of Trustee.

      Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided that such corporation shall be eligible under the provisions of Section
8.07 hereof without the execution or filing of any paper or further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding (except for the execution of an assumption agreement where such
succession is not effected by operation of law).

      SECTION 8.11. Appointment of Co-Trustee or Separate Trustee.

      Notwithstanding any other provisions of this Agreement, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust Fund or property securing any

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Mortgage Note may at the time be located, the Servicer and the Trustee acting
jointly shall have the power and shall execute and deliver all instruments to
appoint one or more Persons approved by the Trustee to act as co-trustee or
co-trustees jointly with the Trustee, or separate trustee or separate trustees,
of all or any part of the Trust Fund, and to vest in such Person or Persons, in
such capacity and for the benefit of the Certificateholders, such title to the
Trust Fund or any part thereof, whichever is applicable, and, subject to the
other provisions of this Section 8.11, such powers, duties, obligations, rights
and trusts as the Servicer and the Trustee may consider necessary or desirable.
Any such co-trustee or separate trustee shall be subject to the written approval
of the Servicer. The Trustee shall not be liable for the actions of any
co-trustee; provided, the appointment of a co-trustee shall not relieve the
Trustee of its obligations hereunder. If the Servicer shall not have joined in
such appointment within 15 days after the receipt by it of a request to do so,
or in the case an Event of Default shall have occurred and be continuing, the
Trustee alone shall have the power to make such appointment. No co-trustee or
separate trustee hereunder shall be required to meet the terms of eligibility as
a successor trustee under Section 8.07 and no notice to Certificateholders of
the appointment of any co-trustee or separate trustee shall be required under
Section 8.09.

      Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:

            (i) All rights, powers, duties and obligations conferred or imposed
      upon the Trustee, except for the obligation of the Trustee under this
      Agreement to advance funds on behalf of the Servicer, shall be conferred
      or imposed upon and exercised or performed by the Trustee and such
      separate trustee or co-trustee jointly (it being understood that such
      separate trustee or co-trustee is not authorized to act separately without
      the Trustee joining in such act), except to the extent that under any law
      of any jurisdiction in which any particular act or acts are to be
      performed (whether as Trustee hereunder or as successor to the Servicer
      hereunder), the Trustee shall be incompetent or unqualified to perform
      such act or acts, in which event such rights, powers, duties and
      obligations (including the holding of title to the Trust Fund or any
      portion thereof in any such jurisdiction) shall be exercised and performed
      singly by such separate trustee or co-trustee, but solely at the direction
      of the Trustee;

            (ii) No trustee hereunder shall be held personally liable by reason
      of any act or omission of any other trustee hereunder; and

            (iii) The Trustee may at any time accept the resignation of or
      remove any separate trustee or co-trustee.

      Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the then separate trustees and co-trustees, as
effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Servicer and the Depositor.

      Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts

                                      -99-

<PAGE>

shall vest in and be exercised by the Trustee, to the extent permitted by law,
without the appointment of a new or successor trustee.

      SECTION 8.12. Tax Matters.

      (a) It is intended that each of the REMICs provided for herein REMIC shall
constitute, and that the affairs of the Trust Fund shall be conducted so as to
allow each such REMIC to qualify as, a "real estate mortgage investment conduit"
as defined in and in accordance with the REMIC Provisions. In furtherance of
such intention, the Trustee covenants and agrees that it shall act as agent (and
the Trustee is hereby appointed to act as agent) on behalf of each of the REMICs
provided for herein and that in such capacity it shall: (a) prepare and file, or
cause to be prepared and filed, in a timely manner, a U.S. Real Estate Mortgage
Investment Conduit Income Tax Return (Form 1066 or any successor form adopted by
the Internal Revenue Service) and prepare and file or cause to be prepared and
filed with the Internal Revenue Service and applicable state or local tax
authorities income tax or information returns for each taxable year with respect
to each of the REMICs provided for herein, containing such information and at
the times and in the manner as may be required by the Code or state or local tax
laws, regulations, or rules, and furnish or cause to be furnished to
Certificateholders the schedules, statements or information at such times and in
such manner as may be required thereby; (b) within thirty days of the Closing
Date, furnish or cause to be furnished to the Internal Revenue Service, on Forms
8811 or as otherwise may be required by the Code, the name, title, address, and
telephone number of the person that the holders of the Certificates may contact
for tax information relating thereto, together with such additional information
as may be required by such Form, and update such information at the time or
times in the manner required by the Code for each of the REMICs provided for
herein; (c) make or cause to be made elections, on behalf of each of the REMICs
provided for herein to be treated as a REMIC on the federal tax return of such
REMICs for their first taxable years (and, if necessary, under applicable state
law); (d) prepare and forward, or cause to be prepared and forwarded, to the
Certificateholders and to the Internal Revenue Service and, if necessary, state
tax authorities, all information returns and reports as and when required to be
provided to them in accordance with the REMIC Provisions, including without
limitation, the calculation of any original issue discount using the Prepayment
Assumption; (e) provide information necessary for the computation of tax imposed
on the transfer of a Class R Certificate to a Person that is not a Permitted
Transferee, or an agent (including a broker, nominee or other middleman) of a
Person that is not a Permitted Transferee, or a pass-through entity in which a
Person that is not a Permitted Transferee is the record holder of an interest
(the reasonable cost of computing and furnishing such information may be charged
to the Person liable for such tax); (f) to the extent that they are under its
control conduct the affairs of each of the REMICs provided for herein at all
times that any Certificates are outstanding so as to maintain the status of each
of the REMICs provided for herein as a REMIC under the REMIC Provisions; (g) not
knowingly or intentionally take any action or omit to take any action that would
cause the termination of the REMIC status of any of the REMICs provided for
herein or result in the imposition of tax upon any such REMIC; (h) pay, from the
sources specified in the last paragraph of this Section 8.12, the amount of any
federal, state and local taxes, including prohibited transaction taxes as
described below, imposed on each of the REMICs provided for herein prior to the
termination of the Trust Fund when and as the same shall be due and payable (but
such obligation shall not prevent the Trustee or any other appropriate Person
from contesting any such tax in appropriate proceedings and shall not prevent
the Trustee from withholding payment of such tax, if permitted by law, pending
the outcome of such proceedings); (i) sign or cause to be signed federal, state
or local income tax or information returns; (j) maintain records relating to
each of the REMICs provided for herein, including but not limited to the income,
expenses, assets and liabilities of each of the REMICs provided for herein, and
the fair market value and adjusted basis of the Trust Fund property determined
at such intervals as may be required by the Code, as may be necessary to prepare
the foregoing returns, schedules, statements or information; and (k) as and when
necessary and appropriate, represent each of the REMICs provided for herein in
any administrative or judicial proceedings relating to an examination or audit
by any governmental taxing

                                     -100-

<PAGE>

authority, request an administrative adjustment as to any taxable year of any of
the REMICs provided for herein, enter into settlement agreements with any
governmental taxing agency, extend any statute of limitations relating to any
tax item of any of the REMICs provided for herein, and otherwise act on behalf
of each of the REMICs provided for herein in relation to any tax matter
involving any of such REMICs or any controversy involving the Trust Fund.

      In order to enable the Trustee to perform its duties as set forth herein,
the Depositor shall provide, or cause to be provided, to the Trustee within 10
days after the Closing Date all information or data that the Trustee requests in
writing and determines to be relevant for tax purposes to the valuations and
offering prices of the Certificates, including, without limitation, the price,
yield, prepayment assumption and projected cash flows of the Certificates and
the Mortgage Loans. Thereafter, the Depositor shall provide to the Trustee
promptly upon written request therefor, any such additional information or data
that the Trustee may, from time to time, request in order to enable the Trustee
to perform its duties as set forth herein. The Depositor hereby agrees to
indemnify the Trustee for any losses, liabilities, damages, claims or expenses
of the Trustee arising from any errors or miscalculations of the Trustee that
result from any failure of the Depositor to provide, or to cause to be provided,
accurate information or data to the Trustee on a timely basis.

      In the event that any tax is imposed on "prohibited transactions" of any
of the REMICs provided for herein as defined in Section 860F(a)(2) of the Code,
on the "net income from foreclosure property" of the any of such REMICs as
defined in Section 860G(c) of the Code, on any contribution to the Trust Fund
after the Startup Day pursuant to Section 860G(d) of the Code, or any other tax
is imposed, if not paid as otherwise provided for herein, such tax shall be paid
by (i) the Trustee, if any such other tax arises out of or results from a breach
by the Trustee of any of its obligations under this Agreement or as a result of
the location of the Trustee, (ii) any party hereto (other than the Trustee) to
the extent any such other tax arises out of or results from a breach by such
other party of any of its obligations under this Agreement or as a result of the
location of such other party or (iii) in all other cases, or in the event that
any liable party here fails to honor its obligations under the preceding clauses
(i) or (ii), any such tax will be paid first with amounts otherwise to be
distributed to the Class R Certificateholders (pro rata) pursuant to Section
4.04, and second with amounts (other than amounts derived by the Trust Fund from
a payment on the Cap Contract) otherwise to be distributed to all other
Certificateholders in the following order of priority: first, to the Class C
Certificates (pro rata), second, to the Class B-3 Certificates (pro rata),
third, to the Class B-2 Certificates (pro rata), fourth, to the Class B-1
Certificates (pro rata), fifth, to the Class M-3 Certificates (pro rata), sixth,
to the Class M-2 Certificates (pro rata), seventh, to the Class M-1 Certificates
(pro rata) and eighth, to the Class A Certificates (other than the Class R
Certificates) (pro rata). Notwithstanding anything to the contrary contained
herein, to the extent that such tax is payable by the Class R Certificate, the
Trustee is hereby authorized pursuant to such instruction to retain on any
Distribution Date, from the Holders of the Class R Certificate (and, if
necessary, from the Holders of all other Certificates in the priority specified
in the preceding sentence), funds otherwise distributable to such Holders in an
amount sufficient to pay such tax. The Trustee agrees to promptly notify in
writing the party liable for any such tax of the amount thereof and the due date
for the payment thereof.

      (b) Each of the Depositor and the Trustee agrees not to knowingly or
intentionally take any action or omit to take any action that would cause the
termination of the REMIC status of any of the REMICs provided for herein or
result in the imposition of a tax upon any of the REMICs provided for herein.

                                     -101-

<PAGE>

                                   ARTICLE IX
                                   TERMINATION

      SECTION 9.01. Termination upon Liquidation or Repurchase of all Mortgage
Loans.

      Subject to Section 9.03, the obligations and responsibilities of the
Depositor, the Servicer and the Trustee created hereby with respect to the Trust
Fund shall terminate upon the earlier of (a) an Optional Termination; and (b)
the later of (i) the maturity or other liquidation (or any Advance with respect
thereto) of the last Mortgage Loan remaining in the Trust Fund (or any Advance
with respect thereto) and the disposition of all REO Property and (ii) the
distribution to Certificateholders of all amounts required to be distributed to
them pursuant to this Agreement, as applicable. In no event shall the trusts
created hereby continue beyond the earlier of (i) the expiration of 21 years
from the death of the last survivor of the descendants of Joseph P. Kennedy, the
late Ambassador of the United States to the Court of St. James's, living on the
date hereof and (ii) the Latest Possible Maturity Date.

      (b) On or before the Determination Date following the Initial Optional
Termination Date, the Trustee shall attempt to terminate the Trust Fund by
conducting an auction of all of the Mortgage Loans and REO Properties via a
solicitation of bids from at least three (3) bidders, each of which shall be a
nationally recognized participant in mortgage finance (the "Auction"). The
Depositor and the Trustee agree to work in good faith to develop bid procedures
in advance of the Initial Optional Termination Date to govern the operation of
the Auction. The Trustee shall be entitled to retain an investment banking firm
and/or other agents in connection with the Auction, the cost of which shall be
included in the Optional Termination Price (unless an Optional Termination does
not occur in which case such costs shall be an expense of the Trust Fund). The
Trustee shall accept the highest bid received at the Auction; provided that the
amount of such bid equals or exceeds the Optional Termination Price. The Trustee
shall determine the Optional Termination Price based upon information provided
by (i) the Servicer with respect to the amounts described in clauses (A) and (B)
of the definition of "Optional Termination Price" (other than Trustee expenses)
and (ii) the Depositor with respect to the information described in clause (C)
of the definition of "Optional Termination Price." The Trustee may conclusively
rely upon the information provided to it in accordance with the immediately
preceding sentence and shall not have any liability for the failure of any party
to provide such information. In connection with such termination, the Optional
Termination Price shall be delivered to the Trustee no later than the Business
Day immediately preceding the related Distribution Date. Notwithstanding
anything to the contrary herein, the Optional Termination Amount paid to the
Trustee by the winning bidder at the Auction shall be deposited by the Trustee
directly into the Certificate Account immediately upon receipt. Upon any
termination as a result of an Auction, the Trustee shall, out of the Optional
Termination Amount deposited into the Certificate Account, (x) retain for its
own account, its costs and expenses necessary to conduct the Auction and any
other unreimbursed amounts owing to it (without regard to the limitation
contained in Section 8.06(c)) and (y) pay to the Servicer, the aggregate amount
of any unreimbursed out-of-pocket costs and expenses owed to the Servicer and
any unpaid or unreimbursed Servicing Fees, Advances and Servicing Advances.

      (c) Notwithstanding anything to the contrary in clause (b) above, in the
event that the Trustee receives the written opinion of a nationally recognized
participant in mortgage finance acceptable to the Seller that the Mortgage Loans
and REO Properties to be included in the Auction will not be saleable at a price
sufficient to achieve the Optional Termination Price, the Trustee need not
conduct the Auction.

      SECTION 9.02. Final Distribution on the Certificates.

      If on any Determination Date, (i) the Trustee determines that there are no
Outstanding Mortgage Loans and no other funds or assets in the Trust Fund other
than the funds in the Collection Account, the Trustee shall send a final
distribution notice promptly to each Certificateholder or (ii) the Trustee

                                     -102-

<PAGE>

determines that a Class of Certificates shall be retired after a final
distribution on such Class, the Trustee shall notify the Certificateholders
within seven (7) Business Days after such Determination Date that the final
distribution in retirement of such Class of Certificates is scheduled to be made
on the immediately following Distribution Date. Any final distribution made
pursuant to the immediately preceding sentence will be made only upon
presentation and surrender of the Certificates at the office of the Trustee.

      Notice of any termination of the Trust Fund, specifying the Distribution
Date on which Certificateholders may surrender their Certificates for payment of
the final distribution and cancellation, shall be given promptly by the Trustee
by letter to Certificateholders mailed (or with respect to an Auction, mailed no
later than one Business Day following completion of such Auction) no later than
the last calendar day of the month immediately preceding the month of such final
distribution. Any such notice shall specify (a) the Distribution Date upon which
final distribution on the Certificates will be made upon presentation and
surrender of Certificates at the office therein designated, (b) the location of
the office or agency at which such presentation and surrender must be made, and
(c) that the Record Date otherwise applicable to such Distribution Date is not
applicable, distributions being made only upon presentation and surrender of the
Certificates at the office therein specified. The Trustee will give such notice
to each Rating Agency at the time such notice is given to Certificateholders.

      In the event such notice is given, the Servicer shall cause all funds in
the Collection Account to be deposited in the Certificate Account on the
Business Day prior to the applicable Distribution Date in an amount equal to the
final distribution in respect of the Certificates. Upon such final deposit with
respect to the Trust Fund and the receipt by the Trustee of a Request for
Release therefor, the Trustee shall promptly release to the Trustee, the
Mortgage Files for the Mortgage Loans.

      Upon presentation and surrender of the Certificates, the Trustee shall
cause to be distributed to Certificateholders of each Class the amounts
allocable to such Certificates held in the Certificate Account in the order and
priority set forth in Section 4.04 hereof on the final Distribution Date and in
proportion to their respective Percentage Interests.

      In the event that any affected Certificateholders shall not surrender
Certificates for cancellation within six months after the date specified in the
above mentioned written notice, the Trustee shall give a second written notice
to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
six months after the second notice all the applicable Certificates shall not
have been surrendered for cancellation, the Trustee may take appropriate steps,
or may appoint an agent to take appropriate steps, to contact the remaining
Certificateholders concerning surrender of their Certificates, and the cost
thereof shall be paid out of the funds and other assets that remain a part of
the Trust Fund. If within one year after the second notice all Certificates
shall not have been surrendered for cancellation, the Class R Certificateholders
shall be entitled to all unclaimed funds and other assets of the Trust Fund that
remain subject hereto. Upon payment to the Class R Certificateholders of such
funds and assets, the Trustee shall have no further duties or obligations with
respect thereto.

      SECTION 9.03. Additional Termination Requirements.

      (a) In the event the Trustee completes an Optional Termination as provided
in Section 9.01, the Trust Fund shall be terminated in accordance with the
following additional requirements, unless the Trustee has been supplied with an
Opinion of Counsel, at the expense of the Trustee, to the effect that the
failure of the Trust Fund to comply with the requirements of this Section 9.03
will not (i) result in the imposition of taxes on "prohibited transactions" of
any of the REMICs provided for herein as defined in Section 860F of the Code, or
(ii) cause any of the REMICs provided for herein to fail to qualify as a REMIC
at any time that any Certificates are outstanding:

                                     -103-

<PAGE>

            (i) The Depositor shall establish a 90-day liquidation period and
      notify the Trustee thereof, which shall in turn specify the first day of
      such period in a statement attached to the final tax returns of each of
      the REMICs provided for herein pursuant to Treasury Regulation Section
      1.860F-1. The Depositor shall satisfy all the requirements of a qualified
      liquidation under Section 860F of the Code and any regulations thereunder,
      as evidenced by an Opinion of Counsel obtained at the expense of the
      Trustee;

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

            (iii) At the time of the making of the final payment on the
      Certificates, the Trustee shall distribute or credit, or cause to be
      distributed or credited, to the Class R Certificateholders all cash on
      hand (other than cash retained to meet outstanding claims known to the
      Trustee), and the Trust Fund shall terminate at that time, whereupon the
      Trustee shall have no further duties or obligations with respect to sums
      distributed or credited to the Class R Certificateholders.

      (b) By their acceptance of the Certificates, the Holders thereof hereby
authorize the Depositor to specify the 90-day liquidation period for the Trust
Fund, which authorization shall be binding upon all successor
Certificateholders.

      (c) Upon the written request of the Depositor, the Trustee as agent for
each REMIC hereby agrees to adopt and sign such a plan of complete liquidation
as provided to it by the Depositor. The Trustee's obligation to adopt and sign
such plan of complete liquidation is subject to the Trustee's receipt of the
Opinion of Counsel referred to in Section 9.03(a)(i). In addition, the Trustee
shall take such other action in connection therewith as may be reasonably
requested by the Depositor.

                                    ARTICLE X
                            MISCELLANEOUS PROVISIONS

      SECTION 10.01. Amendment.

      This Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee, without the consent of any of the Certificateholders
to,

            (i) to cure any ambiguity or correct any mistake,

            (ii) to correct, modify or supplement any provision herein which may
      be inconsistent with any other provision herein,

            (iii) to add any other provisions with respect to matters or
      questions arising under this Agreement, or

            (iv) to modify, alter, amend, add to or rescind any of the terms or
      provisions contained in this Agreement, provided, however, that, in the
      case of clauses (iii) and (iv), such amendment will not, as evidenced by
      an Opinion of Counsel addressed to the Trustee to such effect, adversely
      affect in any material respect the interests of any Holder; provided,
      further, however, that such amendment will be deemed to not adversely
      affect in any material respect the interest of any Certificateholder if
      the Person requesting such amendment obtains a letter from each Rating
      Agency stating that such amendment will not result in a reduction or
      withdrawal of its rating of any Class of the Certificates, it being
      understood and agreed that any such letter in

                                     -104-

<PAGE>

      and of itself will not represent a determination as to the materiality of
      any such amendment and will represent a determination only as to the
      credit issues affecting any such rating.

      Notwithstanding the foregoing, without the consent of the
Certificateholders, the Depositor, the Servicer and the Trustee may at any time
and from time to time amend this Agreement to modify, eliminate or add to any of
its provisions to such extent as shall be necessary or appropriate to maintain
the qualification of any of the REMICs provided for herein as REMICs under the
Code or to avoid or minimize the risk of the imposition of any tax on the Trust
Fund or any of the REMICs provided for herein pursuant to the Code that would be
a claim against the Trust Fund at any time prior to the final redemption of the
Certificates, provided that the Trustee has been provided an Opinion of Counsel
addressed to the Trustee, which opinion shall be an expense of the party
requesting such amendment but in any case shall not be an expense of the
Trustee, to the effect that such action is necessary or appropriate to maintain
such qualification or to avoid or minimize the risk of the imposition of such a
tax.

      This Agreement may also be amended from time to time by the Depositor, the
Servicer, the Trustee and the Holders of the Certificates affected thereby
evidencing not less than 66 2/3% of the Voting Rights, for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or of modifying in any manner the rights of the Holders of
Certificates; provided, however, that no such amendment shall (i) reduce in any
manner the amount of, or delay the timing of, payments required to be
distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) adversely affect in any material respect the interests of the
Holders of any Class of Certificates in a manner other than as described in (i),
without the consent of the Holders of Certificates of such Class evidencing 66
2/3% or more of the Voting Rights of such Class or (iii) reduce the aforesaid
percentages of Certificates the Holders of which are required to consent to any
such amendment without the consent of the Holders of all such Certificates then
outstanding.

      Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel addressed to the Trustee, which opinion shall be
an expense of the party requesting such amendment but in any case shall not be
an expense of the Trustee, to the effect that such amendment is permitted
hereunder, will not cause the imposition of any tax on the Trust Fund, any of
the REMICs provided for herein or the Certificateholders or cause any of the
REMICs provided for herein to fail to qualify as a REMIC at any time that any
Certificates are outstanding.

      Promptly after the execution of any amendment to this Agreement requiring
the consent of Certificateholders, the Trustee or upon the written request of
the Trustee to the Servicer, the Servicer shall furnish written notification of
the substance of such amendment to each Certificateholder and each Rating
Agency.

      It shall not be necessary for the consent of Certificateholders under this
Section to approve the particular form of any proposed amendment, but it shall
be sufficient if such consent shall approve the substance thereof. The manner of
obtaining such consents and of evidencing the authorization of the execution
thereof by Certificateholders shall be subject to such reasonable regulations as
the Trustee may prescribe.

      Nothing in this Agreement shall require the Trustee or the Servicer to
enter into an amendment without receiving an Opinion of Counsel, satisfactory to
the Trustee or the Servicer that (i) such amendment is permitted and is not
prohibited by this Agreement and that all requirements for amending this
Agreement have been complied with; and (ii) either (A) the amendment does not
adversely affect in any material respect the interests of any Certificateholder
or (B) the conclusion set forth in the immediately preceding clause (A) is not
required to be reached pursuant to this Section 10.01.

                                     -105-

<PAGE>

      The Trustee may, but shall not be obligated to, enter into any supplement,
modification or waiver which affects its rights, duties or obligations
hereunder.

      SECTION 10.02. Counterparts.

      This Agreement may be executed simultaneously in any number of
counterparts, each of which counterparts shall be deemed to be an original, and
such counterparts shall constitute but one and the same instrument.

      SECTION 10.03. Governing Law.

      THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO
BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES
THEREOF.

      SECTION 10.04. Intention of Parties.

      It is the express intent of the parties hereto that the conveyance of the
Mortgage Notes, Mortgages, assignments of Mortgages, title insurance policies
and any modifications, extensions and/or assumption agreements and private
mortgage insurance policies relating to the Mortgage Loans by the Depositor to
the Trustee be, and be construed as, an absolute sale thereof to the Trustee. It
is, further, not the intention of the parties that such conveyance be deemed a
pledge thereof by the Depositor to the Trustee. However, in the event that,
notwithstanding the intent of the parties, such assets are held to be the
property of the Depositor, or if for any other reason this Agreement is held or
deemed to create a security interest in such assets, then (i) this Agreement
shall be deemed to be a security agreement within the meaning of the Uniform
Commercial Code of the State of New York and (ii) the conveyance provided for in
this Agreement shall be deemed to be an assignment and a grant by the Depositor
to the Trustee, for the benefit of the Certificateholders, of a security
interest in all of the assets that constitute the Trust Fund, whether now owned
or hereafter acquired.

      The Depositor for the benefit of the Certificateholders shall, to the
extent consistent with this Agreement, take such actions as may be necessary to
ensure that, if this Agreement were deemed to create a security interest in the
assets of the Trust Fund, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of the Agreement. The Depositor shall
arrange for filing any Uniform Commercial Code continuation statements in
connection with any security interest granted or assigned to the Trustee for the
benefit of the Certificateholders.

      SECTION 10.05. Notices.

      (a) The Trustee shall use its best efforts to promptly provide notice to
each Rating Agency with respect to each of the following of which a Responsible
Officer of the Trustee it has actual knowledge:

            (i) Any material change or amendment to this Agreement;

            (ii) The occurrence of any Event of Default that has not been cured;

                                     -106-

<PAGE>

            (iii) The resignation or termination of the Trustee or the Servicer
      and the appointment of any successor;

            (iv) The repurchase or substitution of Mortgage Loans pursuant to
      Sections 2.02, 2.03 and 3.12;

            (v) The final payment to Certificateholders; and

            (vi) Any change in the location of the Certificate Account or the
      Certificate Account.

            The Trustee shall promptly furnish or make available to each Rating
      Agency copies of the following:

            (i) Each report to Certificateholders described in Section 4.05;

            (ii) Each annual statement as to compliance described in Section
      3.17; and

            (iii) Each annual independent public accountants' servicing report
      described in Section 3.18.

      (b) All directions, demands and notices hereunder shall be in writing and
shall be deemed to have been duly given when delivered to (a) in the case of the
Depositor, Merrill Lynch Mortgage Investors, Inc. 250 Vesey Street, 4 World
Financial Center, 10th Floor, New York, New York 10080, Attention: Asset-Backed
Finance; (b) in the case of the Trustee, Wells Fargo Bank, N.A., P.O. Box 98,
Columbia, Maryland, 21046, Attention: Client Manger - MLMI Series 2004-OPT1,
with a copy to Wells Fargo Bank, N.A., 9062 Old Annapolis Road, Columbia,
Maryland 21045, Attention: Client Manager - MLMI Series 2004-OPT1; (c) in the
case of the Rating Agencies, (i) Standard & Poor's Ratings Services, A Division
of The McGraw-Hill Companies, Inc., 55 Water Street, New York, New York 10041;
(ii) Fitch, Inc., 1 State Street Plaza, New York, New York 10004 and (iii)
Moody's Investors Service, Inc., 99 Church Street, 4th Floor, New York, New York
10007; (d) in the case of PMI 3003 Oak Road, Walnut Creek, California 94597; (e)
in the case of Radian 1601 Market Street, Philadelphia, Pennsylvania 19103, (f)
in the case of the Servicer, Option One Mortgage Corporation, 3 Ada, Irvine,
California 92618, Attention: Legal Department and in the case of any of the
foregoing persons, such other addresses as may hereafter be furnished by any
such persons to the other parties to this Agreement. Notices to
Certificateholders shall be deemed given when mailed, first class postage
prepaid, to their respective addresses appearing in the Certificate Register.

      SECTION 10.06. Severability of Provisions.

      If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.

      SECTION 10.07. Assignment; Delegation of Duties.

      Notwithstanding anything to the contrary contained herein, except as
provided pursuant to Section 6.02 or 10.14, this Agreement may not be assigned
by the Servicer without the prior written consent of the Trustee and Depositor.
Except as otherwise contemplated by this Agreement (including Sections 3.02(a)
and 6.02), the Servicer may not delegate to any third party all or substantially
all of its

                                     -107-

<PAGE>

duties and obligations under this Agreement without the prior written consent of
the Trustee and the Depositor.

      SECTION 10.08. Limitation on Rights of Certificateholders.

      The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition or winding up of the Trust
Fund, or otherwise affect the rights, obligations and liabilities of the parties
hereto or any of them.

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

      No Certificateholder shall have any right by virtue or by availing itself
of any provisions of this Agreement to institute any suit, action or proceeding
in equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of an Event
of Default and of the continuance thereof, as hereinbefore provided, the Holders
of Certificates evidencing not less than 25% of the Voting Rights evidenced by
the Certificates shall also have made written request to the Trustee to
institute such action, suit or proceeding in its own name as Trustee hereunder
and shall have offered to the Trustee such reasonable indemnity as it may
require against the costs, expenses, and liabilities to be incurred therein or
thereby, and the Trustee, for 60 days after its receipt of such notice, request
and offer of indemnity shall have neglected or refused to institute any such
action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates or to obtain or seek
to obtain priority over or preference to any other such Holder or to enforce any
right under this Agreement, except in the manner herein provided and for the
common benefit of all Certificateholders. For the protection and enforcement of
the provisions of this Section 10.08, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.

      SECTION 10.09. Inspection and Audit Rights.

      The Servicer agrees that, on reasonable prior notice, it will permit any
representative of the Depositor or the Trustee during the Servicer's normal
business hours, to examine all the books of account, records, reports and other
papers of the Servicer relating to the Mortgage Loans, to make copies and
extracts therefrom, to cause such books to be audited by independent certified
public accountants selected by the Depositor or the Trustee and to discuss its
affairs, finances and accounts relating to the Mortgage Loans with its officers,
employees, agents, counsel and independent public accountants (and by this
provision the Servicer hereby authorizes such accountants to discuss with such
representative such affairs, finances and accounts), all at such reasonable
times and as often as may be reasonably requested. Any out-of-pocket expense
incident to the exercise by the Depositor or the Trustee of any right under this
Section 10.09 shall be borne by the party requesting such inspection; all other
such expenses shall be borne by the Servicer.

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<PAGE>

      SECTION 10.10. Certificates Nonassessable and Fully Paid.

      It is the intention of the Depositor that Certificateholders shall not be
personally liable for obligations of the Trust Fund, that the interests in the
Trust Fund represented by the Certificates shall be nonassessable for any reason
whatsoever, and that the Certificates, upon due authentication thereof by the
Trustee pursuant to this Agreement, are and shall be deemed fully paid.

      SECTION 10.11. [RESRERVED].

      SECTION 10.12. [RESERVED].

      SECTION 10.13. [RESERVED].

      SECTION 10.14. Assignment; Sales; Advance Facilities.

      (a) The Servicer is hereby authorized to enter into a financing or other
facility (any such arrangement, an "Advance Facility"), the documentation for
which complies with Section 10.14(e) below, under which (1) the Servicer assigns
or pledges its rights under this Agreement to be reimbursed for any or all
Advances and/or Servicing Advances to (i) a Person, which may be a
special-purpose bankruptcy-remote entity (an "SPV"), (ii) a Person, which may
simultaneously assign or pledge such rights to an SPV or (iii) a lender (a
"Lender"), which, in the case of any Person or SPV of the type described in
either of the preceding clauses (i) and (ii), may directly or through other
assignees and/or pledgees, assign or pledge such rights to a Person, which may
include a trustee acting on behalf of holders of debt instruments (any such
Person or any such Lender described in the preceding clauses (i), (ii) and
(iii), an "Advance Financing Person"), and/or (2) an Advance Financing Person
agrees to finance all the Advances and/or Servicing Advances required to be made
by the Servicer pursuant to this Agreement. No consent of the Trustee,
Certificateholders or any other party shall be required before the Servicer may
enter into an Advance Facility nor shall the Trustee or the Certificateholders
be a third party beneficiary of any obligation of an Advance Financing Person to
the Servicer. Notwithstanding the existence of any Advance Facility under which
an Advance Financing Person agrees to fund Advances and/or Servicing Advances,
(A) the Servicer (i) shall remain obligated pursuant to this Agreement to make
Advances and/or Servicing Advances pursuant to and as required by this Agreement
and (ii) shall not be relieved of such obligations by virtue of such Advance
Facility and (B) neither the Advance Financing Person nor any Servicer's
Assignee (as hereinafter defined) shall have any right to proceed against or
otherwise contact any Mortgagor for the purpose of collecting any payment that
may be due with respect to any related Mortgage Loan or enforcing any covenant
of such Mortgagor under the related mortgage loan documents.

      (b) If the Servicer enters into an Advance Facility, the Servicer and the
related Advance Financing Person shall deliver to the Trustee at the address set
forth in Section 10.05 hereof a written notice (an "Advance Facility Notice"),
stating (a) the identity of the Advance Financing Person and (b) the identity of
the Person (the "Servicer's Assignee") that will, subject to Section 10.14(c)
hereof, have the right to receive amounts available from the Collection Account
pursuant to Section 3.08(a) hereof to reimburse previously unreimbursed Advances
and/or Servicing Advances ("Advance Reimbursement Amounts"). Advance
Reimbursement Amounts (i) shall consist solely of amounts in respect of Advances
and/or Servicing Advances for which the Servicer would be permitted to reimburse
itself in accordance with Section 3.08 hereof, assuming the Servicer had made
the related Advance(s) and/or Servicing Advance(s) and (ii) shall not consist of
amounts payable to a successor Servicer in accordance with Section 3.05 hereof
to the extent permitted under Section 10.14(e) below.

                                     -109-

<PAGE>

      (c) Notwithstanding the existence of an Advance Facility, the Servicer, on
behalf of the Advance Facility Person, shall be entitled to receive
reimbursements of Advances and/or Servicing Advances in accordance with Section
4.01 hereof, which entitlement may be terminated by the Advance Financing Person
and the Servicer acting jointly (unless the Servicer has previously notified the
Trustee in writing that the documentation for such Advance Facility provides
that such entitlement may be terminated by the Advance Financing Person alone)
pursuant to a written notice to the Trustee in the manner set forth in Section
10.05 hereof. Upon receipt of such written notice, the Servicer shall no longer
be entitled to receive reimbursement for any Advance Reimbursement Amounts and
the Servicer's Assignee shall immediately have the right to receive from the
Collection Account all Advance Reimbursement Amounts. Notwithstanding the
foregoing, an Advance Financing Person shall only be entitled to reimbursement
of Advance Reimbursement Amounts hereunder pursuant to Section 3.08 and/or 4.01
of this Agreement and shall not otherwise be entitled to receive amounts
designated for distribution to Certificateholders pursuant to Section 3.08
and/or 4.01 hereof. None of the Trustee or the Certificateholders shall have any
right to, or otherwise be entitled to, receive any amounts which constitute
Advance Reimbursement Amounts designated for reimbursement or distribution to
the Servicer pursuant to Section 3.08 and/or 4.01 hereof. An Advance Facility
may be terminated by the joint written direction of the Servicer and the related
Advance Financing Person. Written notice of such termination shall be delivered
to the Trustee in the manner set forth in Section 10.05 hereof. None of the
Depositor or the Trustee shall, as a result of the existence of any Advance
Facility, have any additional duty or liability with respect to the calculation
or payment of any Advance Reimbursement Amount, nor, as a result of the
existence of any Advance Facility, shall the Depositor or the Trustee have any
additional responsibility to track or monitor the administration of the Advance
Facility or the payment of Advance Reimbursement Amounts to the Servicer's
Assignee. The Servicer shall indemnify the Depositor, the Trustee, any successor
servicer and the Trust Fund from any loss or liability resulting from any claim
by the related Advancing Financing Person, except to the extent that such claim,
loss, liability or damage resulted from or arose out of negligence, recklessness
or willful misconduct on the part of the Depositor, the Trustee or any successor
servicer, or failure by the successor servicer or the Trustee to remit funds as
required by this Agreement or the commission of an act or omission to act by the
successor servicer or the Trustee, and the passage of any applicable cure or
grace period, such that an Event of Default under this Agreement occurs or such
entity is subject to termination for cause under this Agreement. The Servicer
shall maintain and provide to any successor servicer and, upon request, the
Trustee a detailed accounting on a loan-by-loan basis as to amounts advanced by,
pledged or assigned to, and reimbursed to any Advancing Financing Person. The
successor servicer shall be entitled to rely on any such information provided by
the predecessor servicer, and the successor servicer shall not be liable for any
errors in such information.

      (d) [RESERVED].

      (e) As between a predecessor Servicer and its Advance Financing Person, on
the one hand, and a successor Servicer and its Advance Financing Person if any,
on the other hand, Advance Reimbursement Amounts on a loan-by-loan basis with
respect to each Mortgage Loan as to which an Advance and/or Servicing Advance
shall have been made and be outstanding shall be allocated on a "first-in, first
out" basis. In the event the Servicer's Assignee shall have received some or all
of an Advance Reimbursement Amount related to Advances and/or Servicing Advances
that were made by a Person other than such predecessor Servicer or its related
Advance Financing Person in error, then such Servicer's Assignee shall be
required to remit any portion of such Advance Reimbursement Amount to each
Person entitled to such portion of such Advance Reimbursement Amount. Without
limiting the generality of the foregoing, the Servicer shall remain entitled to
be reimbursed by the Advance Financing Person for all Advances and/or Servicing
Advances funded by the Servicer to the extent the related Advance Reimbursement
Amounts have not been assigned or pledged to such Advance Financing Person or
Servicer's Assignee.

                                     -110-

<PAGE>

      (f) For purposes of any Officer's Certificate of the Servicer made
pursuant to Section 4.01, any Non-recoverable Advance or Non-recoverable
Servicing Advance referred to therein may have been made by such Servicer or any
predecessor Servicer. In making its determination that any Advance or Servicing
Advance theretofore made has become a Non-recoverable Advance or Non-recoverable
Servicing Advance, the Servicer shall apply the same criteria in making such
determination regardless of whether such Advance or Servicing Advance shall have
been made by the Servicer or any predecessor Servicer.

      (g) Any amendment to this Section 10.14 or to any other provision of this
Agreement that may be necessary or appropriate to effect the terms of an Advance
Facility as described generally in this Section 10.14, including amendments to
add provisions relating to a successor servicer, may be entered into by the
Trustee, the Depositor and the Servicer without the consent of any
Certificateholder, provided such amendment complies with Section 10.01 hereof.
All reasonable costs and expenses (including attorneys' fees) of each party
hereto of any such amendment shall be borne solely by the Servicer. The parties
hereto hereby acknowledge and agree that: (a) the Advances and/or Servicing
Advances financed by and/or pledged to an Advance Financing Person under any
Advance Facility are obligations owed to the Servicer payable only from the cash
flows and proceeds received under this Agreement for reimbursement of Advances
and/or Servicing Advances only to the extent provided herein, and the Trustee
and the Trust are not, as a result of the existence of any Advance Facility,
obligated or liable to repay any Advances and/or Servicing Advances financed by
the Advance Financing Person; (b) the Servicer will be responsible for remitting
to the Advance Financing Person the applicable amounts collected by it as
reimbursement for Advances and/or Servicing Advances funded by the Advance
Financing Person, subject to the provisions of this Agreement; and (c) the
Trustee shall not have any responsibility to track or monitor the administration
of the financing arrangement between the Servicer and any Advance Financing
Person.

                                     -111-

<PAGE>

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

                                        MERRILL LYNCH MORTGAGE INVESTORS, INC.,
                                             as Depositor

                                        By:_____________________________________
                                        Name: Matthew Whalen
                                        Title: President

                                        OPTION ONE MORTGAGE CORPORATION,
                                             as Servicer

                                        By:_____________________________________
                                        Name:
                                        Title:

                                        WELLS FARGO BANK, N.A.,
                                               not in its individual capacity,
                                             but solely as Trustee

                                        By:_____________________________________
                                        Name: Sandra L. Whalen
                                        Title: Vice President

<PAGE>

                                    EXHIBIT A

                          FORMS OF OFFERED CERTIFICATES

                             [INTENTIONALLY OMITTED]

                                      A-1

<PAGE>

                                   EXHIBIT B-1

                             MORTGAGE LOAN SCHEDULE

                             [INTENTIONALLY OMITTED]

                                      B-1

<PAGE>

                                   EXHIBIT B-2

                MORTGAGE LOAN SCHEDULE - GROUP ONE MORTGAGE LOANS

                             [INTENTIONALLY OMITTED]

                                      B-2-1
<PAGE>

                                   EXHIBIT B-3

                MORTGAGE LOAN SCHEDULE - GROUP TWO MORTGAGE LOANS

                             [INTENTIONALLY OMITTED]

                                      B-3-1
<PAGE>

                                   EXHIBIT B-4

                   MORTGAGE LOAN SCHEDULE - MI MORTGAGE LOANS

                             [INTENTIONALLY OMITTED]

                                      B-4-1
<PAGE>

                                    EXHIBIT C

                                   [RESERVED]

                                       C-1
<PAGE>

                                    EXHIBIT D

                          FORM OF TRUSTEE CERTIFICATION

                                     [DATE]

Merrill Lynch Mortgage Investors, Inc.
250 Vesey Street
4 World Financial Center, 10th Floor
New York, New York 10080

Option One Mortgage Corporation
3 Ada

Irvine, CA 92618

Re:   Pooling and Servicing Agreement dated as of October 1, 2004 among Merrill
      Lynch Mortgage Investors, Inc., as depositor, Option One Mortgage
      Corporation, as servicer and Wells Fargo Bank, N.A., as trustee, relating
      to the Merrill Lynch Mortgage Investors Trust, Mortgage Loan Asset-Backed
      Certificates, Series 2004-OPT1

Ladies and Gentlemen:

      In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that [,
except as set forth in Schedule A hereto,] as to each Mortgage Loan listed in
the Mortgage Loan Schedule attached hereto (other than any Mortgage Loan paid in
full or listed on the attachment hereto) it has reviewed the Mortgage File and
the Mortgage Loan Schedule and has determined that:

      (i)   All documents in the Mortgage File required to be delivered to the
Trustee pursuant to Section 2.01 of the Pooling and Servicing Agreement are in
its possession;

      (ii)  In connection with each Mortgage Loan or Assignment thereof as to
which documentary evidence of recording was not received on the Closing Date, it
has received evidence of such recording; and

      (iii) Such documents have been reviewed by it and such documents do not
contain any material omissions or defects within the meaning of Section 2.01 or
2.02.

      The Trustee has made no independent examination of any documents contained
in each Mortgage File beyond confirming (i) that each of the Mortgage Loan
number and the name of the Mortgagor, the street address (excluding zip code),
the Initial Mortgage Rate, the original maturity date, the original principal
balance, and the first payment due date of the Mortgage Loan conform to the
related information listed in the Mortgage Loan Schedule, (ii) with respect to
each Adjustable Rate Mortgage Loan, that each of the related Periodic Rate Cap,
the Gross Margin and the Lifetime Rate Cap conform to the related information
listed in the Mortgage Loan Schedule and (iii) the existence in each Mortgage
File of each of the documents listed in subparagraphs (i)(A) through (G),
inclusive, of Section 2.01 in the Agreement. The Trustee makes no
representations or warranties as to the validity, legality, recordability,
sufficiency,

                                       D-1
<PAGE>

enforceability or genuineness of any of the documents contained in each Mortgage
Loan or the collectibility, insurability, effectiveness or suitability of any
such Mortgage Loan.

      Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.

                                                 WELLS FARGO BANK, N.A.,
                                                 as Trustee

                                                 By: ___________________________
                                                 Name: _________________________
                                                 Title: ________________________

                                       D-2
<PAGE>

                                   EXHIBIT E-1

                           FORM OF TRANSFEREE'S LETTER

                                     [DATE]

Wells Fargo Bank, N.A.
9062 Old Annapolis Road
Columbia, Maryland 21045
Attention: Corporate Trust Services - MLMI 2004-OPT1

Ladies and Gentlemen:

      We propose to purchase Merrill Lynch Mortgage Investors Trust, Mortgage
Loan Asset-Backed Certificates, Series 2004-OPT1, Class R Certificate, described
in the Prospectus Supplement, dated October 15, 2004, and Prospectus, dated June
18, 2004.

      1.    We certify that (a) we are not a disqualified organization and (b)
we are not purchasing such Class R Certificate on behalf of a disqualified
organization; for this purpose the term "disqualified organization" means the
United States, any state or political subdivision thereof, any foreign
government, any international organization, any agency or instrumentality of any
of the foregoing (except any entity treated as other than an instrumentality of
the foregoing for purposes of Section 168(h)(2)(D) of the Internal Revenue Code
of 1986, as amended (the "Code")), any organization (other than a cooperative
described in Section 521 of the Code) that is exempt from taxation under the
Code (unless such organization is subject to tax on excess inclusions) and any
organization that is described in Section 1381(a)(2)(C) of the Code. We
understand that any breach by us of this certification may cause us to be liable
for an excise tax imposed upon transfers to disqualified organizations.

      2.    We certify that (a) we have historically paid our debts as they
became due, (b) we intend, and believe that we will be able, to continue to pay
our debts as they become due in the future, (c) we understand that, as
beneficial owner of the Class R Certificate, we may incur tax liabilities in
excess of any cash flows generated by the Class R Certificate, and (d) we intend
to pay any taxes associated with holding the Class R Certificate as they become
due and (e) we will not cause income from the Class R Certificate to be
attributable to a foreign permanent establishment or fixed base (within the
meaning of an applicable income tax treaty) of ours or another U.S. taxpayer.

      3.    We acknowledge that we will be the beneficial owner of the Class R
Certificate and:(1)

                  The Class R Certificate will be registered in our name.

----------

(1)   Check appropriate box and if necessary fill in the name of the
      Transferee's nominee.

                                      E-1-1
<PAGE>

                  The Class R Certificate will be registered in our name.
                  _________________, which is not a disqualified organization.

      4.    We certify that we are not an employee benefit plan or arrangement
subject to Title I of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), a plan subject to Section 4975 of the Internal Revenue Code
of 1986, as amended (the "Code") or a plan subject to any provisions under any
federal, state, local, non-U.S. or other laws or regulations that are
substantively similar to the foregoing provisions of ERISA or the Code
(collectively, a "Plan"), and are not directly or indirectly acquiring the Class
R Certificate for, on behalf of, or with any assets of any such Plan.

      5.    We certify that (i) we are a U.S. person or (ii) we will hold the
Class R Certificate in connection with the conduct of a trade or business within
the United States and have furnished the transferor, the Trustee and the Trustee
with a duly completed and effective Internal Revenue Service Form W-8ECI or
successor form at the time and in the manner required by the Code; for this
purpose the term "U.S. person" means a citizen or resident of the United States,
a corporation, or partnership (unless, in the case of a partnership, Treasury
regulations are adopted that provide otherwise) created or organized in or under
the laws of the United States, any State thereof or the District of Columbia,
including an entity treated as a corporation or partnership for federal income
tax purposes, an estate whose income is subject to United States federal income
tax regardless of the source of its income, or a trust if a court within the
United States is able to exercise primary supervision over the administration of
the trust and one or more such U.S. persons have the authority to control all
substantial decisions of the trust (or, to the extent provided in applicable
Treasury regulations, certain trusts in existence on August 20, 1996 which are
eligible to elect to be treated as U.S. Persons. We agree that any breach by us
of this certification shall render the transfer of any interest in the Class R
Certificate to us absolutely null and void and shall cause no rights in the
Class R Certificate to vest in us.

      6.    We agree that in the event that at some future time we wish to
transfer any interest in the Class R Certificate, we will transfer such interest
in the Class R Certificate only (a) to a transferee that (i) is not a
disqualified organization and is not purchasing such interest in the Class R
Certificate on behalf of a disqualified organization, (ii) is a U.S. person or
will hold the Class R Certificate in connection with the conduct of a trade or
business within the United States and will furnish us, the Trustee and the
Trustee with a duly completed and effective Internal Revenue Service Form W-8ECI
or successor form at the time and in the manner required by the Code and (iii)
has delivered to the Trustee and the Trustee a letter in the form of this letter
(including the affidavit appended hereto) and, we will provide the Trustee and
the Trustee a written statement substantially in the form of Exhibit E-2 to the
Agreement.

      7.

                                     E-1-2
<PAGE>

      We hereby designate _______________________ as our fiduciary to act as the
tax matters person for each of the REMICs provided for in the Agreement in which
the Class R Certificate represents the residual interest.

                                                 Very truly yours,

                                                 [PURCHASER]

                                                 By:____________________________
                                                    Name:
                                                    Title:

Accepted as of __________ __, 200__

MERRILL LYNCH MORTGAGE INVESTORS, INC.

By:_____________________________
   Name:
   Title:

                                     E-1-3
<PAGE>

                                   APPENDIX A

                                    Affidavit pursuant to (i) Section 860E(e)(4)
                                    of the Internal Revenue Code of 1986, as
                                    amended, and (ii) certain provisions of the
                                    Pooling and Servicing Agreement

Under penalties of perjury, the undersigned declares that the following is true:

(1)   He or she is an officer of _________________________ (the "Transferee"),

(2)   the Transferee's Employer Identification number is __________,

(3)   the Transferee is not a "disqualified organization" (as defined below),
      has no plan or intention of becoming a disqualified organization, and is
      not acquiring any of its interest in the Merrill Lynch Mortgage Investors
      Trust, Mortgage Loan Asset-Backed Certificates, Series 2004-OPT1, Class R
      on behalf of a disqualified organization or any other entity,

(4)   unless Merrill Lynch Mortgage Investors, ("MLMI") has consented to the
      transfer to the Transferee by executing the form of Consent affixed as
      Appendix B to the Transferee's Letter to which this Certificate is affixed
      as Appendix A, the Transferee is a "U.S. person" (as defined below),

(5)   that no purpose of the transfer is to avoid or impede the assessment or
      collection of tax,

(6)   the Transferee has historically paid its debts as they became due,

(7)   the Transferee intends, and believes that it will be able, to continue to
      pay its debts as they become due in the future,

(8)   the Transferee understands that, as beneficial owner of the Class R
      Certificate, it may incur tax liabilities in excess of any cash flows
      generated by the Class R Certificate,

(9)   the Transferee intends to pay any taxes associated with holding the Class
      R Certificate as they become due,

(10)  the Transferee consents to any amendment of the Pooling and Servicing
      Agreement that shall be deemed necessary by MLMI (upon advice of counsel)
      to constitute a reasonable arrangement to ensure that the Class R
      Certificate will not be owned directly or indirectly by a disqualified
      organization, and

(11)  IF BRACKETED, THE FOLLOWING CERTIFICATIONS ARE INAPPLICABLE [the transfer
      is not a direct or indirect transfer of the Class R Certificate to a
      foreign permanent establishment or fixed base (within the meaning of an
      applicable income tax treaty) of the Transferee, and as to each of the
      residual interests represented by the Class R Certificate, the present
      value of the anticipated tax liabilities associated with holding such
      residual interest does not exceed the sum of:

      (A)   the present value of any consideration given to the Transferee to
            acquire such residual interest;

                                     E-1-4
<PAGE>

      (B)   the present value of the expected future distributions on such
            residual interest; and

      (C)   the present value of the anticipated tax savings associated with
            holding such residual interest as the related REMIC generates
            losses.

      For purposes of this declaration, (i) the Transferee is assumed to pay tax
      at a rate equal to the highest rate of tax specified in Section 11(b)(1)
      of the Code, but the tax rate specified in Section 55(b)(1)(B) of the Code
      may be used in lieu of the highest rate specified in Section 11(b)(1) of
      the Code if the Transferee has been subject to the alternative minimum tax
      under Section 55 of the Code in the preceding two years and will compute
      its taxable income in the current taxable year using the alternative
      minimum tax rate, and (ii) present values are computed using a discount
      rate equal to the Federal short-term rate prescribed by Section 1274(d) of
      the Code for the month of the transfer and the compounding period used by
      the Transferee;]

[(11) (A)   at the time of the transfer, and at the close of each of the
            Transferee's two fiscal years preceding the Transferee's fiscal year
            of transfer, the Transferee's gross assets for financial reporting
            purposes exceed $100 million and its net assets for financial
            reporting purposes exceed $10 million; and

      (B)   the Transferee is an eligible corporation as defined in Treasury
            regulations Section 1.860E-1(c)(6)(i) and has agreed in writing that
            any subsequent transfer of the Class R Certificate will be to
            another eligible corporation in a transaction that satisfies
            Treasury regulation Sections 1.860E-1(c)(4)(i), 1.860E-1(c)(4)(ii),
            1.860E-1(c)(4)(iii) and 1.860E-1(c)(5) and such transfer will not be
            a direct or indirect transfer to a foreign permanent establishment
            (within the meaning of an applicable income tax treaty) of a
            domestic corporation.

For purposes of this declaration, the gross and net assets of the Transferee do
not include any obligation of any related person as defined in Treasury
regulation Section 1.860E-1(c)(6)(ii) or any other asset if a principal purpose
for holding or acquiring the other asset is to permit the Transferee to make
this declaration or to satisfy the requirements of Treasury regulation Section
1.860E-1(c)(5)(i).]

(12)  The Transferee will not cause income from the Class R Certificate to be
attributable to a foreign permanent establishment or fixed base (within the
meaning of an applicable income tax treaty) of the Transferee or another U.S.
taxpayer.

                                     E-1-5
<PAGE>

For purpose of this affidavit, the term "disqualified organization" means the
United States, any state or political subdivision thereof, any foreign
government, any international organization, any agency or instrumentality of any
of the foregoing (except any entity treated as other than an instrumentality of
the foregoing for purposes of Section 168(h)(2)(D) of the Internal Revenue Code
of 1986, as amended (the "Code")), any organization (other than a cooperative
described in Section 521 of the Code) that is exempt from taxation under the
Code (unless such organization is subject to tax on excess inclusions) and any
organization that is described in Section 1381(a)(2)(C) of the Code and the term
"U.S. Person" means a citizen or resident of the United States, a corporation or
partnership (unless, in the case of a partnership, Treasury regulations are
adopted that provide otherwise) created or organized in or under the laws of the
United States, any state thereof or the District of Columbia, including an
entity treated as a corporation or partnership for federal income tax purposes,
an estate whose income is subject to Unites States federal income tax regardless
of its source, or a trust if a court within the United States is able to
exercise primary supervision over the administration of such trust, and one or
more such U.S. Persons have the authority to control all substantial decisions
of such trust, (or, to the extent provided in applicable Treasury regulations,
certain trusts in existence on August 20, 1996 which are eligible to elect to be
treated as U.S. Persons).

_____________________________________________________

By:  ________________________________________________

     Address of Investor for receipt of distribution:

     Address of Investor for receipt of tax information:

     (Corporate Seal)

     Attest:

                                             , Secretary

                                     E-1-6
<PAGE>

Personally appeared before me the above-named ______________, known or proved to
me to be the same person who executed the foregoing instrument and to be the
_______ of the Investor, and acknowledged to me that he executed the same as his
free act and deed and the free act and deed of the Investor.

Subscribed and sworn before me this       day of           , 200_ .

Notary Public

County of __________________________
State of ___________________________
My commission expires the ________ day of ______________

                                      By: ______________________________________
                                          Name: ________________________________
                                          Title: _______________________________

Dated: _____________________________

                                     E-1-7
<PAGE>

                                   EXHIBIT E-2

                         FORM OF TRANSFEROR'S AFFIDAVIT

                                     [DATE]

Wells Fargo Bank, N.A.
9062 Old Annapolis Road
Columbia, Maryland 21045
Attention: Corporate Trust Services - MLMI 2004-OPT1

Re:   Merrill Lynch Mortgage Investors Trust Mortgage Loan Asset-Backed
Certificates, Series 2004-OPT1

            _______________________ (the "Transferor") has reviewed the attached
affidavit of _____________________________ (the "Transferee"), and has no actual
knowledge that such affidavit is not true, and has no reason to believe that the
Transferee has the intention to impede the assessment or collection of any
federal, state or local taxes legally required to be paid with respect to the
Class R Certificate referred to in the attached affidavit. In addition, the
Transferor has conducted a reasonable investigation at the time of the transfer
and found that the Transferee had historically paid its debts as they came due
and found no significant evidence to indicate that the Transferee will not
continue to pay its debts as they become due.

                                                 Very truly yours,

                                                 _______________________________

                                                 Name:

                                                 Title:

                                      E-2-1
<PAGE>

                                    EXHIBIT F

                       FORM OF TRANSFEROR CERTIFICATE FOR
                        CLASS P AND CLASS C CERTIFICATES

Wells Fargo Bank, N.A.
9062 Old Annapolis Road
Columbia, Maryland 21045
Attention: Corporate Trust Services - MLMI 2004-OPT1

RE:   Merrill Lynch Mortgage Investors Trust, Mortgage Loan Asset-Backed
      Certificates, Series 2004-OPT1

Ladies and Gentlemen:

      In connection with our disposition of the Class [C or P] Certificate, we
certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are being disposed
by us in a transaction that is exempt from the registration requirements of the
Act, (b) we have not offered or sold any Certificates to, or solicited offers to
buy any Certificates from, any person, or otherwise approached or negotiated
with any person with respect thereto, in a manner that would be deemed, or taken
any other action that would result in, a violation of Section 5 of the Act and
(c) if we are disposing of a Class [C or P] Certificate, we have no knowledge
the Transferee is not a Permitted Transferee. All capitalized terms used herein
but not defined herein shall have the meanings assigned to them in the Pooling
and Servicing Agreement dated as of October 1, 2004, among Merrill Lynch
Mortgage, Inc., as depositor, Option One Mortgage Corporation, as servicer and
Wells Fargo Bank, N.A., as trustee.

                                                 Very truly yours,

                                                 _______________________________
                                                 Name of Transferor

                                                 By: ___________________________
                                                 Name:
                                                 Title

                                       F-1
<PAGE>

                                    EXHIBIT G

                            FORM OF INVESTMENT LETTER
                              (ACCREDITED INVESTOR)

                                     [DATE]

Wells Fargo Bank, N.A.
9062 Old Annapolis Road
Columbia, Maryland 21045
Attention: Corporate Trust Services - MLMI 2004-OPT1

Re:   Merrill Lynch Mortgage Investors Trust, Mortgage Loan Asset-Backed
      Certificates, Series 2004-OPT1 [CLASS C OR P]

Ladies and Gentlemen:

      ______________ (the "Purchaser") intends to purchase from ________________
(the "Transferor") $_______ by original principal balance (the "Transferred
Certificates") of Mortgage Loan Asset-Backed Certificates, Series 2004-OPT1,
[CLASS C OR P] (the "Certificates"), issued pursuant to a Pooling and Servicing
Agreement, dated as of October 1, 2004 (the "Pooling and Servicing Agreement"),
among Merrill Lynch Mortgage Investors, Inc., as depositor (the "Depositor"),
Option One Mortgage Corporation, as servicer (the "Servicer") and Wells Fargo
Bank, N.A., as trustee (the "Trustee"). [THE PURCHASER INTENDS TO REGISTER THE
TRANSFERRED CERTIFICATE IN THE NAME OF ____________________, AS NOMINEE FOR
_________________.] All terms used and not otherwise defined herein shall have
the meanings set forth in the Pooling and Servicing Agreement.

      For good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the Purchaser certifies, represents and warrants to, and
covenants with, the Depositor and the Trustee that:

      1.    The Purchaser understands that (a) the Certificates have not been
registered or qualified under the Securities Act of 1933, as amended (the
"Securities Act"), or the securities laws of any state, (b) neither the
Depositor nor the Trustee is required, and neither of them intends, to so
register or qualify the Certificates, (c) the Certificates cannot be resold
unless (i) they are registered and qualified under the Securities Act and the
applicable state securities laws or (ii) an exemption from registration and
qualification is available and (d) the Pooling and Servicing Agreement contains
restrictions regarding the transfer of the Certificates.

      2.    The Certificates will bear a legend to the following effect:

      THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
      AS AMENDED (THE "ACT"), THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED
      (THE "1940 ACT") OR ANY STATE SECURITIES OR "BLUE SKY" LAWS, AND MAY NOT,
      DIRECTLY OR INDIRECTLY, BE SOLD OR OTHERWISE TRANSFERRED, OR OFFERED FOR
      SALE, UNLESS SUCH TRANSFER IS NOT SUBJECT TO REGISTRATION UNDER THE ACT,
      THE 1940 ACT AND ANY APPLICABLE STATE SECURITIES LAWS AND SUCH TRANSFER
      ALSO COMPLIES WITH THE OTHER

                                       G-1
<PAGE>

      PROVISIONS OF SECTION 5.02 OF THE POOLING AND SERVICING AGREEMENT. NO
      TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE TRUSTEE SHALL HAVE
      RECEIVED, IN FORM AND SUBSTANCE SATISFACTORY TO THE SERVICER (A) AN
      INVESTMENT LETTER FROM THE PROSPECTIVE INVESTOR; AND (B) REPRESENTATIONS
      FROM THE TRANSFEROR REGARDING THE OFFERING AND SALE OF THE CERTIFICATES.

      NO TRANSFER OF THIS CERTIFICATE SHALL BE REGISTERED UNLESS THE TRUSTEE
      SHALL HAVE RECEIVED (A) A REPRESENTATION FROM THE TRANSFEREE OF THIS
      CERTIFICATE TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT
      PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME
      SECURITY ACT OF 1974, AS AMENDED ("ERISA"), A PLAN SUBJECT TO SECTION 4975
      OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") OR A PLAN
      SUBJECT TO ANY PROVISIONS UNDER ANY FEDERAL, STATE, LOCAL, NON-U.S. OR
      OTHER LAWS OR REGULATIONS THAT ARE SUBSTANTIVELY SIMILAR TO THE FOREGOING
      PROVISIONS OF ERISA OR THE CODE ("SIMILAR LAW") (COLLECTIVELY, A "PLAN"),
      AND IS NOT DIRECTLY OR INDIRECTLY ACQUIRING THIS CERTIFICATE FOR, ON
      BEHALF OF OR WITH ANY ASSETS OF ANY SUCH PLAN, (B) A REPRESENTATION THAT
      THE TRANSFEREE IS AN INSURANCE COMPANY THAT IS ACQUIRING THE CERTIFICATE
      WITH ASSETS OF AN "INSURANCE COMPANY GENERAL ACCOUNT" AS DEFINED IN
      SECTION V(E) OF PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 95-60, AND
      THE ACQUISITION AND HOLDING OF THE CERTIFICATE ARE COVERED AND EXEMPT
      UNDER SECTIONS I AND III OF PTCE 95-60 OR (C) SOLELY IN THE CASE OF A
      DEFINITIVE CERTIFICATE, AN OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE,
      AND UPON WHICH THE TRUSTEE SHALL BE ENTITLED TO RELY, TO THE EFFECT THAT
      THE ACQUISITION AND HOLDING OF THIS CERTIFICATE BY THE TRANSFEREE WILL NOT
      RESULT IN A NONEXEMPT PROHIBITED TRANSACTION UNDER ERISA OR THE CODE, OR A
      VIOLATION OF SIMILAR LAW, AND WILL NOT SUBJECT THE TRUSTEE, THE SERVICER
      OR THE DEPOSITOR TO ANY OBLIGATION IN ADDITION TO THOSE UNDERTAKEN BY SUCH
      ENTITIES IN THE POOLING AND SERVICING AGREEMENT, WHICH OPINION OF COUNSEL
      SHALL NOT BE AN EXPENSE OF THE TRUSTEE, THE SERVICER OR THE DEPOSITOR.

      3.    The Purchaser is acquiring the Transferred Certificates for its own
account [FOR INVESTMENT ONLY]* and not with a view to or for sale or other
transfer in connection with any distribution of the Transferred Certificates in
any manner that would violate the Securities Act or any applicable state
securities laws, subject, nevertheless, to the understanding that disposition of
the Purchaser's property shall at all times be and remain within its control.

      4.    The Purchaser (a) is a substantial, sophisticated institutional
investor having such knowledge and experience in financial and business matters,
and in particular in such matters related to securities similar to the
Certificates, such that it is capable of evaluating the merits and risks of
investment in the Certificates, (b) is able to bear the economic risks of such
an investment and (c) is an "accredited investor" within the meaning of Rule
501(a) promulgated pursuant to the Securities Act.

----------

*     Not required of a broker/dealer purchaser.

                                       G-2
<PAGE>

      5.    The Purchaser will not nor has it authorized nor will it authorize
any person to (a) offer, pledge, sell, dispose of or otherwise transfer any
Certificate, any interest in any Certificate or any other similar security to
any person in any manner, (b) solicit any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c)
otherwise approach or negotiate with respect to any Certificate, any interest in
any Certificate or any other similar security with any person in any manner, (d)
make any general solicitation by means of general advertising or in any other
manner, or (e) take any other action, that would constitute a distribution of
any Certificate under the Securities Act or the Investment Company Act of 1940,
as amended (the "1940 Act"), that would render the disposition of any
Certificate a violation of Section 5 of the Securities Act or any state
securities law, or that would require registration or qualification pursuant
thereto. Neither the Purchaser nor anyone acting on its behalf has offered the
Certificates for sale or made any general solicitation by means of general
advertising or in any other manner with respect to the Certificates. The
Purchaser will not sell or otherwise transfer any of the Certificates, except in
compliance with the provisions of the Pooling and Servicing Agreement.

      6.    The Purchaser shall provide the Trustee with (A) a representation
that it is not an employee benefit plan or arrangement subject to Title I of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), a plan
subject to Section 4975 of the Internal Revenue Code of 1986, as amended (the
"Code), or a plan subject to any provisions under any federal, state, local,
non-U.S. or other laws or regulations that are substantively similar to the
foregoing provisions of ERISA or the Code ("Similar Law") (collectively, a
"Plan"), and is not directly or indirectly acquiring the Certificates for, on
behalf of, or with any assets of any such Plan, (B) if the Certificates have
been the subject of an ERISA-Qualifying Underwriting, a representation that it
is an insurance company that is acquiring the Certificates with assets of an
"insurance company general account" as defined in Section V(e) of Prohibited
Transaction Class Exemption ("PTCE") 95-60 and the acquisition and holding of
the Certificates are covered and exempt under Sections I and III of PTCE 95-60
or (C) solely in the case of Definitive Certificates, an Opinion of Counsel
satisfactory to the Trustee, and upon which the Trustee shall be entitled to
rely, to the effect that the acquisition and holding of such Certificates by the
prospective transferee will not constitute or result in a nonexempt prohibited
transaction under ERISA or the Code, or a violation of Similar Law, and will not
subject the Trustee, the Servicer or the Depositor to any obligation in addition
to those undertaken by such entities in the Pooling and Servicing Agreement,
which Opinion of Counsel shall not be an expense of the Trustee, the Servicer or
the Depositor.

      7.    Prior to the sale or transfer by the Purchaser of any of the
Certificates, the Purchaser will obtain from any subsequent purchaser
substantially the same certifications, representations, warranties and covenants
contained in the foregoing paragraphs and in this letter or a letter
substantially in the form of Exhibit [H] to the Pooling and Servicing Agreement.

      8.    The Purchaser agrees to indemnify the Trustee, the Servicer and the
Depositor against any liability that may result from any misrepresentation made
herein.

                                                 Very truly yours,

                                                 [PURCHASER]

                                                 By:____________________________
                                                    Name:
                                                    Title:

                                       G-3
<PAGE>

                                    EXHIBIT H

                       FORM OF RULE 144A INVESTMENT LETTER
                         (QUALIFIED INSTITUTIONAL BUYER)

                                     [DATE]

Wells Fargo Bank, N.A.
9062 Old Annapolis Road
Columbia, Maryland 21045
Attention: Corporate Trust Services - MLMI 2004-OPT1

Re:   Merrill Lynch Mortgage Investors Trust, Mortgage Loan Asset-Backed
      Certificates, Series 2004-OPT1 [CLASS C OR P]

Ladies and Gentlemen:

      ______________ (the "Purchaser") intends to purchase from ________________
(the "Transferor") $_______ by original principal balance (the "Transferred
Certificates") of Mortgage Loan Asset-Backed Certificates, Series 2004-OPT1,
[CLASS C OR P] (the "Certificates"), issued pursuant to a Pooling and Servicing
Agreement, dated as of October 1, 2004 (the "Pooling and Servicing Agreement"),
among Merrill Lynch Mortgage Investors, Inc., as depositor (the "Depositor"),
Option One Mortgage Corporation, as servicer (the "Servicer"), and Wells Fargo
Bank, N.A., as trustee (the "Trustee"). [THE PURCHASER INTENDS TO REGISTER THE
TRANSFERRED CERTIFICATE IN THE NAME OF ____________________, AS NOMINEE FOR
__________________.] All terms used and not otherwise defined herein shall have
the meanings set forth in the Pooling and Servicing Agreement.

      For good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the Purchaser certifies, represents and warrants to, and
covenants with, the Depositor and the Trustee that:

      In connection with our acquisition of the above Transferred Certificates
we certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we have
such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the Certificates,
(c) we have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Transferred Certificates and all
matters relating thereto or any additional information deemed necessary to our
decision to purchase the Transferred Certificates, (d) we (A) are not an
employee benefit plan or arrangement subject to Title I of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), a plan subject to
Section 4975 of the Internal Revenue Code of 1986, as amended (the "Code), or a
plan subject to any provisions under any federal, state, local, non-U.S. or
other laws or regulations that are substantively similar to the foregoing
provisions of ERISA or the Code ("Similar Law") (collectively, a "Plan"), and
are not directly or indirectly acquiring this Certificate for, on behalf of, or
with any assets of any such Plan, (B) if the Certificate has been the subject of
an ERISA-Qualifying Underwriting, are an insurance company that is acquiring the
Certificate with assets of an "insurance company general account" as defined in
Section V(e) of Prohibited Transaction Class

                                       H-1
<PAGE>

Exemption ("PTCE") 95-60 and our acquisition and holding of the Certificate are
covered and exempt under Sections I and III of PTCE 95-60 or (C) solely in the
case of Definitive Certificates, have delivered herewith an Opinion of Counsel
satisfactory to the Trustee, and upon which the Trustee shall be entitled to
rely, to the effect that our acquisition and holding of the Certificate will not
constitute or result in a nonexempt prohibited transaction under ERISA or the
Code, or a violation of Similar Law, and will not subject the Trustee, the
Servicer or the Depositor to any obligation in addition to those undertaken by
such entities in the Pooling and Servicing Agreement, which Opinion of Counsel
shall not be an expense of the Trustee, the Servicer or the Depositor, (e) we
have not, nor has anyone acting on our behalf offered, transferred, pledged,
sold or otherwise disposed of the Certificates, any interest in the Certificates
or any other similar security to, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Certificates, any interest in the
Certificates or any other similar security from, or otherwise approached or
negotiated with respect to the Certificates, any interest in the Certificates or
any other similar security with, any person in any manner, or made any general
solicitation by means of general advertising or in any other manner, or taken
any other action, that would constitute a distribution of the Certificates under
the Securities Act or that would render the disposition of the Certificates a
violation of Section 5 of the Securities Act or require registration pursuant
thereto, nor will act, nor has authorized or will authorize any person to act,
in such manner with respect to the Certificates, (f) we are a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act and have completed one of the forms of certification to that effect attached
hereto as Annex 1 or Annex 2. We are aware that the sale of the Transferred
Certificates to us is being made in reliance on Rule 144A. We are acquiring the
Transferred Certificates for our own account or for resale pursuant to Rule 144A
and further understand that such Certificates may be resold, pledged or
transferred only (i) to a person reasonably believed by us, based upon
certifications of such purchaser or information we have in our possession, to be
a qualified institutional buyer that purchases for its own account or for the
account of a qualified institutional buyer to whom notice is given that the
resale, pledge or transfer is being made in reliance on Rule 144A, or (ii)
pursuant to another exemption from registration under the Securities Act.

      We agree to indemnify the Trustee, the Servicer and the Depositor against
any liability that may result from any misrepresentation made herein.

                                                 Very truly yours,

                                                [PURCHASER]

                                                 By:____________________________
                                                    Name:
                                                    Title:

                                       H-2
<PAGE>

                                                                         ANNEX 1

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

          [FOR TRANSFEREES OTHER THAN REGISTERED INVESTMENT COMPANIES]

      The undersigned (the "Buyer") hereby certifies as follows to the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates with respect to the Certificates described therein:

      1.    As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.

      2.    In connection with the purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned
and/or invested on a discretionary basis $____________* in securities (except
for the excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule 144A)
and (ii) the Buyer satisfies the criteria in the category marked below.

            ____  Savings and Loan. The Buyer (a) is a savings and loan
                  association, building and loan association, cooperative bank,
                  homestead association or similar institution, which is
                  supervised and examined by a State or Federal authority having
                  supervision over such institution or is a foreign savings and
                  loan association or equivalent institution and (b) has an
                  audited net worth of at least $25,000,000 as demonstrated in
                  its latest annual financial statements, a copy of which is
                  attached hereto.

            ____  Broker-dealer. The Buyer is a dealer registered pursuant to
                  Section 15 of the Securities Exchange Act of 1934, as amended.

            ____  Insurance Company. The Buyer is an insurance company whose
                  primary and predominant business activity is the writing of
                  insurance or the reinsuring of risks underwritten by insurance
                  companies and which is subject to supervision by the insurance
                  commissioner or a similar official or agency of the State,
                  territory or the District of Columbia.

            ____  State or Local Plan. The Buyer is a plan established and
                  maintained by a State, its political subdivisions, or any
                  agency or instrumentality of the State or its political
                  subdivisions, for the benefit of its employees.

            ____  ERISA Plan. The Buyer is an employee benefit plan subject to
                  Title I of the Employee Retirement Income Security Act of
                  1974, as amended.

            ____  Investment Advisor. The Buyer is an investment advisor
                  registered under the Investment Advisors Act of 1940, as
                  amended.

----------

*     Buyer must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Buyer is a dealer, and, in that case, Buyer
must own and/or invest on a discretionary basis at least $10,000,000 in
securities.

                                       H-3
<PAGE>

            ____  Small Business Investment Company. Buyer is a small business
                  investment company licensed by the U.S. Small Business
                  Administration under Section 301(c) or (d) of the Small
                  Business Investment Act of 1958, as amended.

            ____  Business Development Company. Buyer is a business development
                  company as defined in Section 202(a)(22) of the Investment
                  Advisors Act of 1940, as amended.

            ____  Corporation, etc. The Buyer is a corporation (other than a
                  bank, savings and loan association or similar institution),
                  Massachusetts or similar business trust, partnership, or
                  charitable organization described in Section 501(c)(3) of the
                  Internal Revenue Code of 1986, as amended.

            ____  Bank. The Buyer (a) is a national bank or banking institution
                  organized under the laws of any State, territory or the
                  District of Columbia, the business of which is substantially
                  confined to banking and is supervised by Federal, State or
                  territorial banking commission or similar official or is a
                  foreign bank or equivalent institution, and (b) has an audited
                  net worth of at least $25,000,000 as demonstrated in its
                  latest annual financial statements, a copy of which is
                  attached hereto.

      3.    The term "securities" as used for purposes of the calculation of the
dollar amount in paragraph 2 excludes: (i) securities of issuers that are
affiliated with the Buyer, (ii) securities that are part of an unsold allotment
to or subscription by the Buyer, if the Buyer is a dealer, (iii) securities
issued or guaranteed by the U.S. or any instrumentality thereof, (iv) bank
deposit notes and certificates of deposit, (v) loan participations, (vi)
repurchase agreements, (vii) securities owned but subject to a repurchase
agreement and (viii) currency, interest rate and commodity swaps.

      4.    For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.

      5.    The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.

                                      H-4
<PAGE>

      6.    Until the date of purchase of the Rule 144A Securities, the Buyer
will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan as provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.

                                                 By:____________________________
                                                    Name:
                                                    Title:

                                                 Date:__________________________

                                      H-5
<PAGE>

                                                                         ANNEX 2

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

           [FOR TRANSFEREES THAT ARE REGISTERED INVESTMENT COMPANIES]

      The undersigned (the "Buyer") hereby certifies as follows to the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates with respect to the Certificates described therein:

      1.    As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A"), because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.

      2.    In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.

            ____  The Buyer owned $___________ in securities (other than the
                  excluded securities referred to below) as of the end of the
                  Buyer's most recent fiscal year (such amount being calculated
                  in accordance with Rule 144A).

            ____  The Buyer is part of a Family of Investment Companies which
                  owned in the aggregate $__________ in securities (other than
                  the excluded securities referred to below) as of the end of
                  the Buyer's most recent fiscal year (such amount being
                  calculated in accordance with Rule 144A).

      3.    The term "Family of Investment Companies" as used herein means two
or more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).

      4.    The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with the Buyer or are part of the Buyer's Family
of Investment Companies, (ii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iii) bank deposit notes and certificates of deposit,
(iv) loan participations, (v) repurchase agreements, (vi) securities owned but
subject to a repurchase agreement and (vii) currency, interest rate and
commodity swaps.

      5.    The Buyer is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.

                                      H-6
<PAGE>

      6.    Until the date of purchase of the Certificates, the undersigned will
notify the parties listed in the Rule 144A Transferee Certificate to which this
certification relates of any changes in the information and conclusions herein.
Until such notice is given, the Buyer's purchase of the Certificates will
constitute a reaffirmation of this certification by the undersigned as of the
date of such purchase.

                                                 By:____________________________
                                                    Name:
                                                    Title:

                                                 IF AN ADVISER:

                                                 _______________________________
                                                 Print Name of Buyer

                                                 Date:__________________________

                                      H-7
<PAGE>

                                    EXHIBIT I

                        REQUEST FOR RELEASE OF DOCUMENTS

To:   Wells Fargo Bank, N.A.
      1015  10th Avenue S.E.
      Minneapolis, Minnesota  55414-0031
      Attention:  Inventory Control
      [and/or its designee]

Re:   Pooling and Servicing Agreement dated as of October 1, 2004 among Merrill
      Lynch Mortgage Investors, Inc., as depositor, Option One Mortgage
      Corporation, as servicer and Wells Fargo Bank, N.A., as trustee, relating
      to the Merrill Lynch Mortgage Investors Trust, Mortgage Loan Asset-Backed
      Certificates, Series 2004-OPT1

      In connection with the administration of the Mortgage Loans held by you,
as Trustee, pursuant to the above-captioned Pooling and Servicing Agreement, we
request the release, and hereby acknowledge receipt, of the Mortgage File for
the Mortgage Loan described below, for the reason indicated.

Mortgage Loan Number:

Mortgagor Name, Address & Zip Code:

Reason for Requesting Documents (check one):

_______ 1.    Mortgage Paid in Full

_______ 2.    Foreclosure

_______ 3.    Substitution

_______ 4.    Other Liquidation (Repurchases, etc.)

_______ 5.    Nonliquidation

Address to which the Trustee should deliver the Mortgage File:

                                            By:______________________________
                                                     (authorized signer)

                                            Address:__________________________

                                            Date:_____________________________

If box 1 or 2 above is checked, and if all or part of the Mortgage File was
previously released to us, please release to us our previous receipt on file
with you, as well as any additional documents in your possession relating to the
above specified Mortgage Loan.

                                       I-1
<PAGE>

If box 3, 4, 5 or 6 above is checked, upon our return of all of the above
documents to you as Trustee, please acknowledge your receipt by signing in the
space indicated below, and returning this form.

Please acknowledge the execution of the above request by your signature and date
below:

Wells Fargo Bank, N.A., as Trustee

By: ____________________________________      __________________________________
    Signature                                 Date

Documents returned to Trustee:

By: ____________________________________      __________________________________
    Trustee                                   Date

                                       I-2
<PAGE>

                                   EXHIBIT J-1

                     MI POLICY - PMI MORTGAGE INSURANCE CO.

                             [INTENTIONALLY OMITTED]

                                       J-1
<PAGE>

                                   EXHIBIT J-2

                        MI POLICY - RADIAN GUARANTY INC.

                             [INTENTIONALLY OMITTED

                                       J-1
<PAGE>

                                    EXHIBIT K

                        OFFICER'S CERTIFICATE OF TRUSTEE

Merrill Lynch Mortgage Investors, Inc.
250 Vesey Street
4 World Financial Center, 10th Floor
New York, New York 10080

Re:   Pooling and Servicing Agreement (the "Agreement") dated as of October 1,
      2004 among Merrill Lynch Mortgage Investors, Inc., as depositor, Option
      One Mortgage Corporation, as servicer and Wells Fargo Bank, N.A., as
      trustee, Merrill Lynch Mortgage Investors Trust, Mortgage Loan
      Asset-Backed Certificates, Series 2004-OPT1

I, [identify the certifying individual], a [title] of the Trustee hereby certify
to the Depositor, and its officers, directors and affiliates, and with the
knowledge and intent that they will rely upon this certification, that:

1.    I have reviewed the Monthly Statements delivered pursuant to the Agreement
      since the last Officer's Certificate executed pursuant to Section 4.02 of
      the Agreement [or in the case of the first certification, since the
      Cut-off Date] (the "Trustee Information").

2.    Based on my knowledge, the information in the Monthly Statement, taken as
      a whole, does not contain any untrue statement of a material fact or omit
      to state a material fact necessary to make the statements made, in light
      of the circumstances under which such statements were made, not misleading
      as of the date hereof;

3.    Based on my knowledge, the Monthly Statements required to be prepared by
      the Trustee under the Agreement has been prepared and provided in
      accordance with the Agreement; and

4.    I am responsible for reviewing the activities performed by the Trustee
      under the Agreement and the Trustee has, as of the date hereof fulfilled
      its obligations under the Agreement and there are no significant
      deficiencies relating to the Trustee's compliance with this Agreement.

Date:

                                       Wells Fargo Bank, N.A., as Trustee

                                       By:      ____________________________

                                       Name:    ____________________________

                                       Title:   ____________________________

                                       K-1
<PAGE>

                                    EXHIBIT L

                        OFFICER'S CERTIFICATE OF SERVICER

Merrill Lynch Mortgage Investors, Inc.
250 Vesey Street
4 World Financial Center, 10th Floor
New York, New York 10080

Wells Fargo Bank, N.A.
9062 Old Annapolis Road, 47th Floor
Columbia, Maryland 21045
Attention: Client Manager - MLMI Series 2004-OPT1

Re:   Merrill Lynch Mortgage Investors Trust, Mortgage Loan Asset-Backed
      Certificates, Series 2004-OPT1

      Reference is made to the Pooling and Servicing Agreement, dated as of
October 1, 2004 (the "Agreement"), by and among Merrill Lynch Mortgage
Investors, Inc., as depositor, Option One Mortgage Corporation, as servicer (the
"Servicer") and Wells Fargo Bank, N.A., as trustee.

      I, [identify the certifying individual], an authorized representative of
the Servicer hereby certify to the Trustee and the Depositor, and its officers,
directors and affiliates, and with the knowledge and intent that they will rely
upon this certification, that:

1.    I have reviewed the information required to be delivered to the Trustee
      pursuant to the Servicing Agreement (the "Servicing Information").

2.    Based on my knowledge, the information in the Annual Statement of
      Compliance, and all servicing reports, officer's certificates and other
      information relating to the servicing of the Mortgage Loans submitted to
      the Trustee by the Servicer taken as a whole, does not contain any untrue
      statement of a material fact or omit to state a material fact necessary to
      make the statements made, in light of the circumstances under which such
      statements were made, not misleading as of the last day of the period
      covered by the Annual Statement of Compliance;

3.    Based on my knowledge, the Servicing Information required to be provided
      to the Trustee by the Servicer under this Agreement has been provided to
      the Trustee; and

                                       M-1
<PAGE>

4.    I am responsible for reviewing the activities performed by the Servicer
      under this Agreement and based upon the review required hereunder, and
      except as disclosed in the Annual Statement of Compliance, the Annual
      Independent Certified Public Accountant's Servicing Report and all
      servicing reports, officer's certificates and other information relating
      to the servicing of the Mortgage Loans submitted to the Trustee by the
      Servicer, the Servicer has, as of the last day of the period covered by
      the Annual Statement of Compliance fulfilled its obligations under this
      Agreement in all material respects.

Date:

                                    Option One Mortgage Corporation, as Servicer

                                    By: _________________________________

                                    Name: _______________________________

                                    Title: ______________________________

                                        M-2
<PAGE>

                                    EXHIBIT N

                              FORM OF CAP CONTRACT

                             [INTENTIONALLY OMITTED]

                                       N-1
<PAGE>

                                    EXHIBIT O

                            ONE-MONTH LIBOR CAP TABLE

                             [INTENTIONALLY OMITTED]

                                       O-1