Document:

<PAGE>

                                                                     EXHIBIT 4.1

                                                                  EXECUTION COPY

                     MERRILL LYNCH MORTGAGE INVESTORS, INC.
                                    Depositor

                               THE PROVIDENT BANK,
                                    Servicer

                                       and

                WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
                                     Trustee
                     --------------------------------------

                         POOLING AND SERVICING AGREEMENT
                           Dated as of October 1, 2003

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

                     MERRILL LYNCH MORTGAGE INVESTORS TRUST
            MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2003-HE1

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                               PAGE
<S>                                                                                                            <C>
ARTICLE I        DEFINITIONS...............................................................................      1
ARTICLE II       CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES..............................     43
         SECTION 2.01.              Conveyance of Mortgage Loans...........................................     43
         SECTION 2.02.              Acceptance by Trustee of the Mortgage Loans............................     46
         SECTION 2.03.              Representations, Warranties and Covenants of the Depositor.............     47
         SECTION 2.04.              Representations and Warranties of the Servicer.........................     50
         SECTION 2.05.              Substitutions and Repurchases of Mortgage Loans which are not
                                    "Qualified Mortgages"..................................................     52
         SECTION 2.06.              Authentication and Delivery of Certificates............................     52
         SECTION 2.07.              REMIC Elections........................................................     52
         SECTION 2.08.              Covenants of the Servicer..............................................     56
         SECTION 2.09.              [RESERVED].............................................................     56
         SECTION 2.10.              [RESERVED].............................................................     56
         SECTION 2.11.              Permitted Activities of the Trust......................................     56
         SECTION 2.12.              Qualifying Special Purpose Entity......................................     56
ARTICLE III           ADMINISTRATION AND SERVICING  OF MORTGAGE LOANS......................................     56
         SECTION 3.01.              Servicer to Service Mortgage Loans.....................................     56
         SECTION 3.02.              Servicing and Subservicing; Enforcement of the Obligations of Servicer.     57
         SECTION 3.03.              Rights of the Depositor and the Trustee in Respect of the Servicer.....     58
         SECTION 3.04.              Trustee to Act as Servicer.............................................     58
         SECTION 3.05.              Collection of Mortgage Loan Payments; Collection Account; Certificate
                                    Account................................................................     59
         SECTION 3.06.              Collection of Taxes, Assessments and Similar Items; Escrow Accounts....     62
         SECTION 3.07.              Access to Certain Documentation and Information Regarding the
                                    Mortgage Loans.........................................................     62
         SECTION 3.08.              Permitted Withdrawals from the Collection Account and Certificate
                                    Account................................................................     62
         SECTION 3.09.              [RESERVED].............................................................     64
         SECTION 3.10.              Maintenance of Hazard Insurance........................................     64
         SECTION 3.11.              Enforcement of Due-On-Sale Clauses; Assumption Agreements..............     65
         SECTION 3.12.              Realization Upon Defaulted Mortgage Loans; Determination of Excess
                                    Proceeds...............................................................     66
         SECTION 3.13.              Trustee to Cooperate; Release of Mortgage Files........................     68
         SECTION 3.14.              Documents, Records and Funds in Possession of Servicer to be Held for
                                    the Trustee............................................................     69
         SECTION 3.15.              Servicing Compensation.................................................     70
         SECTION 3.16.              Access to Certain Documentation........................................     70
         SECTION 3.17.              Annual Statement as to Compliance......................................     70
         SECTION 3.18.              Annual Independent Public Accountants' Servicing Statement; Financial
                                    Statements.............................................................     71
         SECTION 3.19.              Rights of the NIMs Insurer.............................................     71
         SECTION 3.20.              Periodic Filings.......................................................     71
         SECTION 3.21.              Annual Certificate by Trustee..........................................     72
</TABLE>

                                        i
<PAGE>

                                TABLE OF CONTENTS
                                   (continued)

<TABLE>
<CAPTION>
                                                                                                               PAGE
<S>                                                                                                            <C>
         SECTION 3.22.              Annual Certificate by Servicer.........................................     72
         SECTION 3.23.              Prepayment Penalty Reporting Requirements..............................     73
         SECTION 3.24.              Statements to Trustee..................................................     73
         SECTION 3.25.              Indemnification........................................................     73
         SECTION 3.26.              Nonsolicitation........................................................     74
ARTICLE IV            DISTRIBUTIONS........................................................................     74
         SECTION 4.01.              Advances...............................................................     74
         SECTION 4.02.              Reduction of Servicing Compensation in Connection with Prepayment
                                    Interest Shortfalls....................................................     75
         SECTION 4.03.              Distributions on the REMIC Interests...................................     75
         SECTION 4.04.              Distributions..........................................................     75
         SECTION 4.05.              Monthly Statements to Certificateholders...............................     80
ARTICLE V             THE CERTIFICATES.....................................................................     83
         SECTION 5.01.              The Certificates.......................................................     83
         SECTION 5.02.              Certificate Register; Registration of Transfer and Exchange of
                                    Certificates...........................................................     84
         SECTION 5.03.              Mutilated, Destroyed, Lost or Stolen Certificates......................     88
         SECTION 5.04.              Persons Deemed Owners..................................................     88
         SECTION 5.05.              Access to List of Certificateholders' Names and Addresses..............     88
         SECTION 5.06.              Book-Entry Certificates................................................     89
         SECTION 5.07.              Notices to Depository..................................................     89
         SECTION 5.08.              Definitive Certificates................................................     90
         SECTION 5.09.              Maintenance of Office or Agency........................................     90
         SECTION 5.10.              [RESERVED].............................................................     90
ARTICLE VI            THE DEPOSITOR AND THE SERVICER.......................................................     90
         SECTION 6.01.              Respective Liabilities of the Depositor and the Servicer...............     90
         SECTION 6.02.              Merger or Consolidation of the Depositor or the Servicer...............     90
         SECTION 6.03.              Limitation on Liability of the Depositor, the Servicer and Others......     91
         SECTION 6.04.              Limitation on Resignation of Servicer..................................     91
         SECTION 6.05.              Errors and Omissions Insurance; Fidelity Bonds.........................     92
ARTICLE VII           DEFAULT; TERMINATION OF SERVICER.....................................................     92
         SECTION 7.01.              Events of Default......................................................     92
         SECTION 7.02.              Trustee to Act; Appointment of Successor...............................     93
         SECTION 7.03.              Notification to Certificateholders.....................................     94
ARTICLE VIII          CONCERNING THE TRUSTEE...............................................................     94
         SECTION 8.01.              Duties of Trustee......................................................     94
         SECTION 8.02.              Certain Matters Affecting the Trustee..................................     96
         SECTION 8.03.              Trustee Not Liable for Mortgage Loans..................................     97
         SECTION 8.04.              Trustee May Own Certificates...........................................     97
         SECTION 8.05.              Trustee's Fees and Expenses............................................     97
         SECTION 8.06.              Indemnification of Trustee.............................................     97
         SECTION 8.07.              Eligibility Requirements for Trustee...................................     98
         SECTION 8.08.              Resignation and Removal of Trustee.....................................     98
         SECTION 8.09.              Successor Trustee......................................................     99
         SECTION 8.10.              Merger or Consolidation of Trustee.....................................    100
         SECTION 8.11.              Appointment of Co-Trustee or Separate Trustee..........................    100
         SECTION 8.12.              Tax Matters............................................................    101
</TABLE>

                                       ii
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                                TABLE OF CONTENTS
                                   (continued)

<TABLE>
<CAPTION>
                                                                                                               PAGE
<S>                                                                                                            <C>
ARTICLE IX            TERMINATION..........................................................................    103
         SECTION 9.01.              Termination upon Liquidation or Repurchase of all Mortgage Loans.......    103
         SECTION 9.02.              Final Distribution on the Certificates.................................    104
         SECTION 9.03.              Additional Termination Requirements....................................    105
ARTICLE X             MISCELLANEOUS PROVISIONS.............................................................    105
         SECTION 10.01.             Amendment..............................................................    105
         SECTION 10.02.             Counterparts...........................................................    107
         SECTION 10.03.             Governing Law..........................................................    107
         SECTION 10.04.             Intention of Parties...................................................    107
         SECTION 10.05.             Notices................................................................    107
         SECTION 10.06.             Severability of Provisions.............................................    108
         SECTION 10.07.             Assignment.............................................................    109
         SECTION 10.08.             Limitation on Rights of Certificateholders.............................    109
         SECTION 10.09.             Inspection and Audit Rights............................................    109
         SECTION 10.10.             Certificates Nonassessable and Fully Paid..............................    110
         SECTION 10.11.             Third Party Rights.....................................................    110
         SECTION 10.12.             Additional Rights of the NIMs Insurer..................................    110
         SECTION 10.13.             Credit Risk Manager....................................................    110
</TABLE>

EXHIBIT A                  FORMS OF OFFERED CERTIFICATES
EXHIBIT B-1                MORTGAGE LOAN SCHEDULE
EXHIBIT B-2                MORTGAGE LOAN SCHEDULE - PMI 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'S AFFIDAVIT
EXHIBIT F                  FORM OF TRANSFEROR CERTIFICATE
EXHIBIT G                  FORM OF INVESTMENT LETTER
EXHIBIT H                  FORM OF RULE 144A LETTER
EXHIBIT I                  REQUEST FOR RELEASE
EXHIBIT J                  MGIC POLICY
EXHIBIT K                  FORM OF OFFICER'S CERTIFICATE OF TRUSTEE
EXHIBIT L                  FORM OF OFFICER'S CERTIFICATE OF SERVICER
EXHIBIT M                  FORM OF TRANSFEREE LETTER
EXHIBIT N                  FORM OF CAP CONTRACT

                                       iii
<PAGE>

         POOLING AND SERVICING AGREEMENT, dated as of October 1, 2003, among
MERRILL LYNCH MORTGAGE INVESTORS, INC., a Delaware corporation, as depositor
(the "Depositor"), THE PROVIDENT BANK, an Ohio corporation, as servicer (the
"Servicer") and WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, a national
banking association, as trustee (the "Trustee").

         The Depositor is the owner of the Trust Fund that is hereby conveyed to
the Trustee in return for the Certificates. The Trust Fund for federal income
tax purposes will consist of (i) three real estate mortgage investment conduits,
(ii) the right to receive (x) proceeds from prepayment penalties on the Mortgage
Loans, (y) amounts paid by the Servicer or the Transferors in respect of
prepayment charges pursuant to this Agreement 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
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, the Lower Tier REMIC Regular
Interests and the Middle 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 Middle Tier REMIC will
consist of the Lower Tier REMIC Regular Interests and will be evidenced by the
Middle Tier REMIC Regular Interests (which will represent the "regular
interests" in the Middle Tier REMIC) and the Class MTR Interest as the single
"residual interest" in the Middle Tier REMIC. The Trustee will hold the Middle
Tier REMIC Regular Interests. The Upper Tier REMIC will consist of the Middle
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, the Class MTR 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 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 and, to the extent provided
herein, the NIMs Insurer.

         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, which will conform to the mortgage servicing practices of prudent
mortgage lending institutions which 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 the Certificates 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 the Certificates 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 of payments
of principal and interest (net of the Servicing Fee Rate) 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.

         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-1 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 a Mortgage Loan the proceeds of which
were used to purchase the related Mortgaged Property (or the related residential
dwelling unit in the Underlying Mortgaged Property in the case of a Co-op Loan),
the "Appraised Value" of a Mortgaged Property (or the related residential
dwelling unit in the Underlying Mortgaged Property, in the case of a Co-op Loan)
is the lesser of (1) the appraised value based on an appraisal made for the
Seller by an independent fee appraiser at the time of the origination of the
related Mortgage Loan, and (2) the sales price of such Mortgaged Property (or
the related residential dwelling unit in the Underlying Mortgaged Property, in
the case of a Co-op Loan) at such time of origination. With respect to a
Mortgage Loan the proceeds of which were used to refinance an existing mortgage
loan, the "Appraised Value" is the appraised value of the Mortgaged Property (or
the residential dwelling unit in the Underlying Mortgaged Property, in the case
of a Co-op Loan) based upon the appraisal obtained at the time of refinancing.

         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), 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

                                       -2-
<PAGE>

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.

         Available Funds Cap: As of any Distribution Date with respect to the
Certificates, a per annum rate equal to 12 times the quotient of (i) the total
scheduled interest on the Mortgage Loans based on the Net Mortgage Rates as of
the related Due Date divided by (ii) the Aggregate Certificate Principal Balance
as of the first day of the applicable Accrual Period 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 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-1, 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 Delaware, State of Ohio, State
of Maryland, State of Minnesota 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 Credit Suisse First Boston
International (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 Minnesota,
National Association, as Trustee, in trust for registered holders of Merrill
Lynch Mortgage Investors Trust, Mortgage Loan Asset-Backed Certificates, Series
2003-HE1." 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.

                                       -3-
<PAGE>

         Cap Contract Notional Balance: With respect to any Distribution Date,
the Cap Contract Notional Balance set forth below for such Distribution Date:

                            ONE MONTH LIBOR CAP TABLE

<TABLE>
<CAPTION>
  BEGINNING     ENDING                                 1ML LOWER      1ML UPPER
   ACCRUAL      ACCRUAL      NOTIONAL BALANCE($)    COLLAR (1) (%)    COLLAR (%)
--------------------------------------------------------------------------------
<S>             <C>          <C>                    <C>               <C>
  11/07/03     11/25/03         237,650,000.00          7.20171         9.85000
  11/25/03     12/25/03         232,440,280.88          6.65900         9.85000
  12/25/03      1/25/04         227,189,126.61          6.44587         9.85000
   1/25/04      2/25/04         221,896,542.89          6.44776         9.85000
   2/25/04      3/25/04         216,564,525.01          6.89471         9.85000
   3/25/04      4/25/04         211,244,577.98          6.45222         9.85000
   4/25/04      5/25/04         206,057,271.54          6.66978         9.85000
   5/25/04      6/25/04         200,999,240.57          6.45710         9.85000
   6/25/04      7/25/04         196,067,206.70          6.67497         9.85000
   7/25/04      8/25/04         191,257,976.07          6.46227         9.85000
   8/25/04      9/25/04         186,568,437.06          6.46496         9.85000
   9/25/04     10/25/04         181,995,558.22          6.68333         9.85000
  10/25/04     11/25/04         177,536,386.10          6.47060         9.85000
  11/25/04     12/25/04         173,188,043.27          6.68932         9.85000
  12/25/04      1/25/05         168,947,726.33          6.47656         9.85000
   1/25/05      2/25/05         164,812,703.96          6.47967         9.85000
   2/25/05      3/25/05         160,780,315.03          7.17948         9.85000
   3/25/05      4/25/05         156,847,994.83          6.49080         9.85000
   4/25/05      5/25/05         153,013,256.53          7.27492         9.85000
   5/25/05      6/25/05         149,283,207.18          8.16786         9.85000
   6/25/05      7/25/05         145,664,591.16          8.43918         9.85000
   7/25/05      8/25/05         142,134,845.12          8.16615         9.85000
   8/25/05      9/25/05         138,691,747.07          8.16608         9.85000
   9/25/05     10/25/05         135,333,137.24          8.43866         9.85000
  10/25/05     11/25/05         132,056,913.60          8.34770         9.85000
  11/25/05     12/25/05         128,863,007.69          9.01285         9.85000
  12/25/05      1/25/06         125,751,312.83          8.72055         9.85000
   1/25/06      2/25/06         122,715,685.47          8.75788         9.85000
   2/25/06      3/25/06         119,754,805.08          9.69535         9.85000
   3/25/06      4/25/06         116,866,228.70          8.76013         9.85000
   4/25/06      5/25/06         114,048,207.49          9.23584         9.85000
   5/25/06      6/25/06         111,300,408.69          9.30591         9.85000
   6/25/06      7/25/06         108,622,518.29          9.61397         9.85000
   7/25/06      8/25/06         106,009,794.46          9.31647         9.85000
   8/25/06      9/25/06         103,460,763.08          9.31531         9.85000
   9/25/06     10/25/06         100,973,705.85          9.62628         9.85000
  10/25/06     11/25/06          98,547,102.17          9.49057         9.85000
  11/25/06     12/25/06          96,180,529.50          9.85000         9.85000
  12/25/06      1/25/07          93,873,557.62          9.76966         9.85000
   1/25/07      2/25/07          91,622,496.40          9.77241         9.85000
   2/25/07      3/25/07          89,426,070.55          9.85000         9.85000
   3/25/07      4/25/07          87,282,827.41          9.75183         9.85000
</TABLE>

                                       -4-
<PAGE>

                  (1) With respect to any Distribution Date, if One-Month LIBOR
                      exceeds the lower collar, the Trust Fund will receive
                      payments pursuant to the Cap Contract; provided, however,
                      that no amounts will be paid under the Cap Contract on the
                      Distribution Dates in November 2006 and February 2007,
                      regardless of the level of One-Month LIBOR..

         Cap Contract Termination Date: The Distribution Date in April 2007.

         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
Minnesota, National Association, as Trustee, in trust for registered holders of
Merrill Lynch Mortgage Investors Trust, Mortgage Loan Asset-Backed Certificates,
Series 2003-HE1." 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).

         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 and the NIMs Insurer are entitled to rely conclusively on
a certification of the Depositor or any Affiliate of the Depositor in
determining which Certificates are registered in the name of an Affiliate of the
Depositor.

         Class: All Certificates bearing the same Class designation as set forth
in Section 5.01 hereof.

                                       -5-
<PAGE>

         Class A Certificate Principal Balance: For any date of determination,
the sum of the Class A-1 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-1 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) 67.50% 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 $1,188,250; 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-1 Certificate: Any Certificate designated as a "Class A-1
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.

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

         Class A-1 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class A-1 Pass-Through Rate on
the Class A-1 Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the portion of any previous distributions on
such Class in respect of Current Interest or an 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-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 A-1 Interest Carry Forward Amount: As of any Distribution Date,
the sum of (1) the excess of (A) the Class A-1 Current Interest with respect to
prior Distribution Dates (excluding any Class A-1 Interest Carryover Amount)
over (B) the amount actually distributed to the Class A-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 A-1 Pass-Through
Rate for the related Accrual Period.

         Class A-1 Interest Carryover Amount: As of any Distribution Date, the
sum of (1) if on such Distribution Date the Pass-Through Rate for the Class A-1
Certificates is based upon the Available Funds Cap, the excess of (A) the amount
of interest the Class A-1 Certificates would otherwise be entitled to receive on
such Distribution Date had such rate been calculated as the sum of One-Month
LIBOR and the applicable Class A-1 Margin for such Distribution Date, up to the
Weighted Maximum Rate Cap, plus the portion of any previous distributions on
such Class in respect of Interest Carryover Amounts that is recovered as a
voidable preference by a trustee in bankruptcy, over (B) the amount of interest
payable on the Class A-1 Certificates at the Available Funds Cap, up to but not
exceeding the Weighted Maximum Rate Cap for such Distribution Date and (2) the
Class A-1 Interest Carryover Amount for all previous Distribution Dates not
previously paid pursuant to Section 4.04(f)(viii), together with interest
thereon at a rate equal to the sum of One-Month LIBOR and the applicable Class
A-1 Margin for such Distribution Date.

                                      -6-

<PAGE>

         Class A-1 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.45% per annum and, as of any
Distribution Date after the Optional Termination Date, 0.90% per annum.

         Class A-1 Pass-Through Rate: For the first Distribution Date, 1.57% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class A-1 Margin, (2) the Weighted 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.

         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 the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the portion of any previous distributions on
such Class in respect of Current Interest or Interest Carry Forward Amounts 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 (excluding any Class A-2A Interest Carryover Amount)
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 Interest Carryover Amount: As of any Distribution Date, the
sum of (1) if on such Distribution Date the Pass-Through Rate for the Class A-2A
Certificates is based upon the Available Funds Cap, the excess of (A) the amount
of interest the Class A-2A Certificates would otherwise be entitled to receive
on such Distribution Date had such rate been calculated as the sum of One-Month
LIBOR and the applicable Class A-2A Margin for such Distribution Date, up to the
Weighted Maximum Rate Cap, plus the portion of any previous distributions on
such Class in respect of Interest Carryover Amounts that is recovered as a
voidable preference by a trustee in bankruptcy, over (B) the amount of interest
payable on the Class A-2A Certificates at the Available Funds Cap, up to but not
exceeding the Weighted Maximum Rate Cap for such Distribution Date and (2) the
Class A-2A Interest Carryover Amount for all previous Distribution Dates not
previously paid pursuant to Section 4.04(f)(viii), together with interest
thereon at a rate equal to the sum of One-Month LIBOR and the applicable Class
A-2A Margin for such Distribution Date.

         Class A-2A Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.22% per annum and, as of any
Distribution Date after the Optional Termination Date, 0.44% per annum.

         Class A-2A Pass-Through Rate: For the first Distribution Date, 1.34%
per annum. As of any Distribution Date thereafter, the least of (1) One-Month
LIBOR plus the Class A-2A Margin, (2) the Weighted Maximum Rate Cap and (3) the
Available Funds Cap for such Distribution Date.

                                      -7-

<PAGE>

         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 the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the portion of any previous distributions on
such Class in respect of Current Interest or Interest Carry Forward Amounts 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 (excluding any Class A-2B Interest Carryover Amount)
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 Interest Carryover Amount: As of any Distribution Date, the
sum of (1) if on such Distribution Date the Pass-Through Rate for the Class A-2B
Certificates is based upon the Available Funds Cap, the excess of (A) the amount
of interest the Class A-2B Certificates would otherwise be entitled to receive
on such Distribution Date had such rate been calculated as the sum of One-Month
LIBOR and the applicable Class A-2B Margin for such Distribution Date, up to the
Weighted Maximum Rate Cap, plus the portion of any previous distributions on
such Class in respect of Interest Carryover Amounts that is recovered as a
voidable preference by a trustee in bankruptcy, over (B) the amount of interest
payable on the Class A-2B Certificates at the Available Funds Cap, up to but not
exceeding the Weighted Maximum Rate Cap for such Distribution Date and (2) the
Class A-2B Interest Carryover Amount for all previous Distribution Dates not
previously paid pursuant to Section 4.04(f)(viii), together with interest
thereon at a rate equal to the sum of One-Month LIBOR and the applicable Class
A-2B Margin for such Distribution Date.

         Class A-2B Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.55% per annum and, as of any
Distribution Date after the Optional Termination Date, 1.10% per annum.

         Class A-2B Pass-Through Rate: For the first Distribution Date, 1.67%
per annum. As of any Distribution Date thereafter, the least of (1) One-Month
LIBOR plus the Class A-2B Margin, (2) the Weighted Maximum Rate Cap and (3) the
Available Funds Cap for such Distribution Date.

         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.

                                      -8-

<PAGE>

         Class B-1 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class B-1 Pass-Through Rate on
the Class B-1 Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the portion of any previous distributions on
such Class in respect of Current Interest or Interest Carry Forward Amounts 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 M-1 Current Interest with respect to
prior Distribution Dates (excluding any Class B-1 Interest Carryover Amount)
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 Interest Carryover Amount: As of any Distribution Date, the
sum of (1) if on such Distribution Date the Pass-Through Rate for the Class B-1
Certificates is based upon the Available Funds Cap, the excess of (A) the amount
of interest the Class B-1 Certificates would otherwise be entitled to receive on
such Distribution Date had such rate been calculated as the sum of One-Month
LIBOR and the applicable Class B-1 Margin for such Distribution Date, up to the
Weighted Maximum Rate Cap, plus the portion of any previous distributions on
such Class in respect of Interest Carryover Amounts that is recovered as a
voidable preference by a trustee in bankruptcy, over (B) the amount of interest
payable on the Class B-1 Certificates at the Available Funds Cap, up to but not
exceeding the Weighted Maximum Rate Cap for such Distribution Date and (2) the
Class B-1 Interest Carryover Amount for all previous Distribution Dates not
previously paid pursuant to Section 4.04(f)(viii), together with interest
thereon at a rate equal to the sum of One-Month LIBOR and the applicable Class
B-1 Margin for such Distribution Date.

         Class B-1 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 3.00% per annum and, as of any
Distribution Date after the Optional Termination Date, 4.50% per annum.

         Class B-1 Pass-Through Rate: For the first Distribution Date, 4.12% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class B-1 Margin, (2) the Weighted 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 Distribution Date over (2) the lesser of (A) 93.00% 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 of the Mortgage Loans as of the end of the immediately preceding Due
Period over $1,188,250.

                                      -9-

<PAGE>

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 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 A,
Class M-1, Class M-2 and Class M-3 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 all
distributions in reduction of the Class B-1 Applied Realized Loss Amounts on all
previous Distribution Dates.

         Class B-2 Applied Realized Loss Amount: As of any Distribution Date,
the sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class B-2 Certificates.

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

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

         Class B-2 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class B-2 Pass-Through Rate on
the Class B-2 Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the portion of any previous distributions on
such Class in respect of Current Interest or Interest Carry Forward Amounts 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 (excluding any Class B-2 Interest Carryover Amount)
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 Interest Carryover Amount: As of any Distribution Date, the
sum of (1) if on such Distribution Date the Pass-Through Rate for the Class B-2
Certificates is based upon the Available Funds Cap, the excess of (A) the amount
of interest the Class B-2 Certificates would otherwise be entitled to receive on
such Distribution Date had such rate been calculated as the sum of One-Month
LIBOR and the applicable Class B-2 Margin for such Distribution Date, up to the
Weighted Maximum Rate Cap, plus the portion of any previous distributions on
such Class in respect of Interest Carryover Amounts that is recovered as a
voidable preference by a trustee in bankruptcy, over (B) the amount of interest
payable on the Class B-2 Certificates at the Available Funds Cap, up to but not
exceeding the Weighted Maximum Rate Cap for such Distribution Date and (2) the
Class B-2 Interest Carryover Amount for all previous Distribution Dates not
previously paid pursuant to Section 4.04(f)(viii), together with interest
thereon at a rate equal to the sum of One-Month LIBOR and the applicable Class
B-2 Margin for such Distribution Date.

                                      -10-

<PAGE>

         Class B-2 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 3.00% per annum and, as of any
Distribution Date after the Optional Termination Date, 4.50% per annum.

         Class B-2 Pass-Through Rate: For the first Distribution Date, 4.12% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class B-2 Margin, (2) the Weighted Maximum Rate Cap and (3) the
Available Funds Cap for such Distribution Date.

         Class B-2 Principal Distribution Amount: With respect to any
Distribution Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount for such Distribution Date if the Class A Certificate
Principal Balance, the Class 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) 95.00% 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 of the Mortgage Loans as of the end of the
immediately preceding Due Period over $1,188,250. 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 Class M 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 A, Class M-1, Class M-2, Class M-3 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 all
distributions in reduction of the Class B-2 Applied Realized Loss Amounts on all
previous Distribution Dates.

         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 the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the portion of any previous distributions on
such Class in respect of Current Interest or Interest Carry Forward Amounts that
is recovered as a voidable preference by a trustee

                                      -11-

<PAGE>

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.

         Class B-3 Interest Carry Forward Amount: As of any Distribution Date,
the sum of (1) the excess of (A) the Class B-3 Current Interest with respect to
prior Distribution Dates (excluding any Class B-3 Interest Carryover Amount)
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 Interest Carryover Amount: As of any Distribution Date, the
sum of (1) if on such Distribution Date the Pass-Through Rate for the Class B-3
Certificates is based upon the Available Funds Cap, the excess of (A) the amount
of interest the Class B-3 Certificates would otherwise be entitled to receive on
such Distribution Date had such rate been calculated as the sum of One-Month
LIBOR and the applicable Class B-3 Margin for such Distribution Date, up to the
Weighted Maximum Rate Cap, plus the portion of any previous distributions on
such Class in respect of Interest Carryover Amounts that is recovered as a
voidable preference by a trustee in bankruptcy, over (B) the amount of interest
payable on the Class B-3 Certificates at the Available Funds Cap, up to but not
exceeding the Weighted Maximum Rate Cap for such Distribution Date and (2) the
Class B-3 Interest Carryover Amount for all previous Distribution Dates not
previously paid pursuant to Section 4.04(f)(viii), together with interest
thereon at a rate equal to the sum of One-Month LIBOR and the applicable Class
B-3 Margin for such Distribution Date.

         Class B-3 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 3.00% per annum and, as of any
Distribution Date after the Optional Termination Date, 4.50% per annum.

         Class B-3 Pass-Through Rate: For the first Distribution Date, 4.12% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class B-3 Margin, (2) the Weighted 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
immediately prior to such Distribution Date and (G) the Class B-3 Certificate
Principal Balance (after taking into account distributions of the Class B-3
Principal Distribution Amount on such Distribution Date) over (2) the lesser of
(A) 97.00% 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 of the Mortgage Loans as of the end of the immediately
preceding Due Period over $1,188,250. Notwithstanding the foregoing, (I) on any
Distribution Date prior to the Stepdown Date on which the

                                      -12-

<PAGE>

Certificate Principal Balance of each Class of Class A Certificates and Class M
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 A, Class M-1, Class M-2,
Class M-3, 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 all
distributions in reduction of the Class B-3 Applied Realized Loss Amounts on all
previous Distribution Dates.

         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 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.

         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 of the aggregate principal
balance of the Lower Tier REMIC Regular Interests immediately prior to such
Distribution Date (such amount of interest representing 100 percent of the
interest payments on the Class MTC Interest), 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 the Corresponding Middle Tier Interest 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
sum of (1) 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 and
(2) interest on such excess (to the extent permitted by applicable law) at the
Net Rate.

         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 all
distributions in reduction of the Class C Applied Realized Loss Amount on all
previous Distribution Dates.

         Class LTA-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 Corresponding Middle Tier Interests and an interest
rate equal to the Net Rate.

                                      -13-

<PAGE>

         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 Corresponding Middle Tier Interest 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 Corresponding Middle Tier Interest 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 Corresponding Middle Tier Interest and an interest rate
equal to the Net Rate.

         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 Corresponding Middle Tier Interest 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 Corresponding Middle Tier Interest 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 Corresponding Middle Tier Interest 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 Corresponding Middle Tier Interest 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 Corresponding Middle Tier Interest 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 Balances of the Mortgage Loans over (ii) the
aggregate initial principal balances of the Lower Tier REMIC Marker Classes and
an interest rate equal to the Net Rate.

         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 the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to

                                      -14-

<PAGE>

be made as of such first day) plus the portion of any previous distributions on
such Class in respect of Current Interest or Interest Carry Forward Amounts 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 (excluding any Class M-1 Interest Carryover Amount)
over (B) the amount actually distributed to the Class M-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 M-1 Pass-Through
Rate for the related Accrual Period.

         Class M-1 Interest Carryover Amount: As of any Distribution Date, the
sum of (1) if on such Distribution Date the Pass-Through Rate for the Class M-1
Certificates is based upon the Available Funds Cap, the excess of (A) the amount
of interest the Class M-1 Certificates would otherwise be entitled to receive on
such Distribution Date had such rate been calculated as the sum of One-Month
LIBOR and the applicable Class M-1 Margin for such Distribution Date, up to the
Weighted Maximum Rate Cap, plus the portion of any previous distributions on
such Class in respect of Interest Carryover Amounts that is recovered as a
voidable preference by a trustee in bankruptcy, over (B) the amount of interest
payable on the Class M-1 Certificates at the Available Funds Cap, up to but not
exceeding the Weighted Maximum Rate Cap for such Distribution Date and (2) the
Class M-1 Interest Carryover Amount for all previous Distribution Dates not
previously paid pursuant to Section 4.04(f)(viii), together with interest
thereon at a rate equal to the sum of One-Month LIBOR and the applicable Class
M-1 Margin for such Distribution Date.

         Class M-1 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.70% per annum and, as of any
Distribution Date after the Optional Termination Date, 1.05% per annum.

         Class M-1 Pass-Through Rate: For the first Distribution Date, 1.82% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class M-1 Margin, (2) the Weighted 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) 78.50% 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 $1,188,250.
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.

                                      -15-

<PAGE>

         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 all
distributions in reduction of the Class M-1 Applied Realized Loss Amounts on all
previous Distribution Dates.

         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 the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the portion of any previous distributions on
such Class in respect of Current Interest or Interest Carry Forward Amounts 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 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 (excluding any Class M-2 Interest Carryover Amount)
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 Interest Carryover Amount: As of any Distribution Date, the
sum of (1) if on such Distribution Date the Pass-Through Rate for the Class M-2
Certificates is based upon the Available Funds Cap, the excess of (A) the amount
of interest the Class M-2 Certificates would otherwise be entitled to receive on
such Distribution Date had such rate been calculated as the sum of One-Month
LIBOR and the applicable Class M-2 Margin for such Distribution Date, up to the
Weighted Maximum Rate Cap, plus the portion of any previous distributions on
such Class in respect of Interest Carryover Amounts that is recovered as a
voidable preference by a trustee in bankruptcy, over (B) the amount of interest
payable on the Class M-2 Certificates at the Available Funds Cap, up to but not
exceeding the Weighted Maximum Rate Cap for such Distribution Date and (2) the
Class M-2 Interest Carryover Amount for all previous Distribution Dates not
previously paid pursuant to Section 4.04(f)(viii), together with interest
thereon at a rate equal to the sum of One-Month LIBOR and the applicable Class
M-2 Margin for such Distribution Date.

         Class M-2 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 1.65% per annum and, as of any
Distribution Date after the Optional Termination Date, 2.475% per annum.

         Class M-2 Pass-Through Rate: For the first Distribution Date, 2.77% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class M-2 Margin, (2) the Weighted Maximum Rate Cap and (3) the
Available Funds Cap for such Distribution Date.

                                      -16-
<PAGE>

         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) 88.00% 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 of the Mortgage Loans as of the end of the
immediately preceding Due Period over $1,188,250. 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 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 all
distributions in reduction of the Class M-2 Applied Realized Loss Amounts on all
previous Distribution Dates.

         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.

         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 the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the portion of any previous distributions on
such Class in respect of Current Interest or Interest Carry Forward Amounts 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 (excluding any Class M-3 Interest Carryover Amount)
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 Interest Carryover Amount: As of any Distribution Date, the
sum of (1) if on such Distribution Date the Pass-Through Rate for the Class M-3
Certificates is based upon the Available Funds Cap, the excess of (A) the amount
of interest the Class M-3 Certificates would otherwise be entitled to

                                      -17-

<PAGE>

receive on such Distribution Date had such rate been calculated as the sum of
One-Month LIBOR and the applicable Class M-3 Margin for such Distribution Date,
up to the Weighted Maximum Rate Cap, plus the portion of any previous
distributions on such Class in respect of Interest Carryover Amounts that is
recovered as a voidable preference by a trustee in bankruptcy, over (B) the
amount of interest payable on the Class M-3 Certificates at the Available Funds
Cap, up to but not exceeding the Weighted Maximum Rate Cap for such Distribution
Date and (2) the Class M-3 Interest Carryover Amount for all previous
Distribution Dates not previously paid pursuant to Section 4.04(f)(viii),
together with interest thereon at a rate equal to the sum of One-Month LIBOR and
the applicable Class M-3 Margin for such Distribution Date.

         Class M-3 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 2.00% per annum and, as of any
Distribution Date after the Optional Termination Date, 3.00% per annum.

         Class M-3 Pass-Through Rate: For the first Distribution Date, 3.12 per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class M-3 Margin, (2) the Weighted 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)91.00% 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 $1,188,250. 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 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 all
distributions in reduction of the Class M-3 Applied Realized Loss Amounts on all
previous Distribution Dates.

         Class MTA-1 Interest: An uncertificated regular interest in the Middle
Tier REMIC with an initial principal balance equal to the initial principal
balance of the Related Certificates and bearing interest at the lesser of (i)
the greater of (x) One-Month LIBOR plus the Class A-1 Margin and (y) 1.60% plus
the Class A-1 Margin and (ii) the Net Rate. For the first Distribution Date, the
percentage described in clause (i)(x) of the preceding sentence will equal
1.57%.

         Class MTA-2A Interest: An uncertificated regular interest in the Middle
Tier REMIC with an initial principal balance equal to the initial principal
balance of the Related Certificates and bearing interest at the lesser of (i)
the greater of (x) One-Month LIBOR plus the Class A-2A Margin and (y)

                                      -18-

<PAGE>

1.60% plus the Class A-2A Margin and (ii) the Net Rate. For the first
Distribution Date, the percentage described in clause (i)(x) of the preceding
sentence will equal 1.34%.

         Class MTA-2B Interest: An uncertificated regular interest in the Middle
Tier REMIC with an initial principal balance equal to the initial principal
balance of the Related Certificates and bearing interest at the lesser of (i)
the greater of (x) One-Month LIBOR plus the Class A-2B Margin and (y) 1.60% plus
the Class A-2B Margin and (ii) the Net Rate. For the first Distribution Date,
the percentage described in clause (i)(x) of the preceding sentence will equal
1.67%.

         Class MTB-1 Interest: An uncertificated regular interest in the Middle
Tier REMIC with an initial principal balance equal to the initial principal
balance of the Related Certificates and bearing interest at the lesser of (i)
the greater of (x) One-Month LIBOR plus the Class B-1 Margin and (y) 1.60% plus
the Class B-1 Margin and (ii) the Net Rate. For the first Distribution Date, the
percentage described in clause (i)(x) of the preceding sentence will equal
4.12%.

         Class MTB-2 Interest: An uncertificated regular interest in the Middle
Tier REMIC with an initial principal balance equal to the initial principal
balance of the Related Certificates and bearing interest at the lesser of (i)
the greater of (x) One-Month LIBOR plus the Class B-2 Margin and (y) 1.60% plus
the Class B-2 Margin and (ii) the Net Rate. For the first Distribution Date, the
percentage described in clause (i)(x) of the preceding sentence will equal
4.12%.

         Class MTB-3 Interest: An uncertificated regular interest in the Middle
Tier REMIC with an initial principal balance equal to the initial principal
balance of the Related Certificates and bearing interest at the lesser of (i)
the greater of (x) One-Month LIBOR plus the Class B-3 Margin and (y) 1.60% plus
the Class B-3 Margin and (ii) the Net Rate. For the first Distribution Date, the
percentage described in clause (i)(x) of the preceding sentence will equal
4.12%.

         Class MTC Interest: An uncertificated regular interest in the Middle
Tier REMIC with an initial principal balance equal to the excess of the
principal balance of the Mortgage Loans over the aggregate Certificate Principal
Balance of the Class A-1 Certificates, Class A-2A Certificates, Class A-2B
Certificates, Class B-1 Certificates, Class B-2 Certificates, Class B-3
Certificates, Class M-1 Certificates, Class M-2 Certificates, Class M-3
Certificates and Class R Certificates and bearing interest on a notional amount
equal to the aggregate of the principal balances of the Lower Tier REMIC Regular
Interests immediately prior to such Distribution Date at a rate equal to the
Class MTC Interest Rate.

         Class MTC 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
on the Corresponding Middle Tier Interest and treating the Class LTX Interest as
being capped at zero). The weighted 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 MTM-1 Interest: An uncertificated regular interest in the Middle
Tier REMIC with an initial principal balance equal to the initial principal
balance of the Related Certificates and bearing interest at the lesser of (i)
the greater of (x) One-Month LIBOR plus the Class M-1 Margin and (y) 1.60% plus
the Class M-1 Margin and (ii) the Net Rate. For the first Distribution Date, the
percentage described in clause (i)(x) of the preceding sentence will equal
1.82%.

         Class MTM-2 Interest: An uncertificated regular interest in the Middle
Tier REMIC with an initial principal balance equal to the initial principal
balance of the Related Certificates and bearing interest at the lesser of (i)
the greater of (x) One-Month LIBOR plus the Class M-2 Margin and (y) 1.60%

                                      -19-

<PAGE>

plus the Class M-2 Margin and (ii) the Net Rate. For the first Distribution
Date, the percentage described in clause (i)(x) of the preceding sentence will
equal 2.77%.

         Class MTM-3 Interest: An uncertificated regular interest in the Middle
Tier REMIC with an initial principal balance equal to the initial principal
balance of the Related Certificates and bearing interest at the lesser of (i)
the greater of (x) One-Month LIBOR plus the Class M-3 Margin and (y) 1.60% plus
the Class M-3 Margin and (ii) the Net Rate. For the first Distribution Date, the
percentage described in clause (i)(x) of the preceding sentence will equal
3.12%.

         Class MTR Interest: The sole class of "residual interest" in the Middle
Tier REMIC, as described in the Preliminary Statement and Section 2.07.

         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 the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the 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 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 (excluding any Class R Interest Carryover Amount) 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 Interest Carryover Amount: As of any Distribution Date, the sum
of (1) if on such Distribution Date the Pass-Through Rate for the Class R
Certificate is based upon the Available Funds Cap, the excess of (1) the amount
of interest the Class R Certificate would otherwise be entitled to receive on
such Distribution Date had such rate been calculated as the sum of One-Month
LIBOR and the applicable Class R Margin for such Distribution Date, up to the
Weighted Maximum Rate Cap, over (2) the amount of interest payable on the Class
R Certificate at the Available Funds Cap, up to but not exceeding the Weighted
Maximum Rate Cap for such Distribution Date and (2) the Class R Interest
Carryover Amount for all previous Distribution Dates not previously paid
pursuant to Section 4.04(f)(viii), together with interest thereon at a rate
equal to the sum of One-Month LIBOR and the applicable Class R Margin for such
Distribution Date.

         Class R Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.45% per annum and, as of any
Distribution Date after the Optional Termination Date, 0.90% per annum.

                                      -20-

<PAGE>

         Class R Pass-Through Rate: For the first Distribution Date, 1.57% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class R Margin, (2) the Weighted Maximum Rate Cap and (3) the Available
Funds Cap for such Distribution Date.

         Class S Certificate: Any Certificate designated as a "Class S
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein. For federal income tax purposes,
the Class S Certificates represent the nine UTS Components each of which is a
"regular interest" in the Upper Tier REMIC.

         Class S Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class S Pass-Through Rate on
the Class S Notional Balance as of the first day of such Accrual Period (after
giving effect to all distributions of principal made or deemed to be made as of
such first day) plus the 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 S 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 S Notional Amount: For any Distribution Date, the aggregate
Certificate Principal Balance of the Class A-1, 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
Certificates immediately prior to such Distribution Date.

         Class S Pass-Through Rate: As of any Distribution Date, the greater of
(1) 1.60% minus One-Month LIBOR and (2) 0.00%; provided, however, the rate on
the Class S Certificates with respect to the portion of the notional balance of
the Class S Certificates that corresponds to each class of Offered Certificates
will be subject to a cap equal to the excess of (x) the Net Rate over (y)
One-Month LIBOR plus the applicable margin for such class of Offered
Certificates.

         Closing Date:  November 7, 2003.

         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 "The Provident
Bank, as Servicer for Wells Fargo Bank Minnesota, National Association, as
Trustee, in trust for registered holders of Merrill Lynch Mortgage Investors
Trust, Mortgage Loan Asset-Backed Certificates, Series 2003-HE1". 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 related Mortgage Loan (such sum calculated at the
date of origination of such related Mortgage Loan) and the denominator of which
is the lesser of (A) the Appraised Value of the related Mortgaged Property (or
applicable dwelling unit, in the case of a Co-op Loan) and (B) the sales price
of the related Mortgaged Property (or applicable dwelling unit, in the case of a
Co-op Loan) at time of origination.

         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.

                                      -21-
<PAGE>
         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.

         Corresponding Middle Tier Interests: With respect to the Class LTA-1
Interest, the Class MTA-1 Interest. With respect to the Class LTA-2A Interest,
the Class MTA-2A Interest. With respect to the Class LTA-2B Interest, the Class
MTA-2B Interest. With respect to the Class LTM-1 Interest, the Class MTM-1
Interest. With respect to the Class LTM-2 Interest, the Class MTM-2 Interest.
With respect to the Class LTM-3 Interest, the Class MTM-3 Interest. With respect
to the Class LTB-1 Interest, the Class MTB-1 Interest. With respect to the Class
LTB-2 Interest, the Class MTB-2 Interest. With respect to the Class LTB-3
Interest, the Class MTB-3 Interest.

         Credit Risk Manager: The Murrayhill Company, a Colorado corporation, or
its successor in interest.

         Credit Risk Manager Fee: The fee payable on each Distribution Date to
the Credit Risk Manager as compensation for all services rendered by it in
exercise and performance of any of the powers and duties of the Credit Risk
Manager under the Credit Risk Manager Agreement, which amount shall equal
one-twelfth of the product of (1) the Credit Risk Manager Fee Rate and (2) the
Stated Principal Balance of the Mortgage Loans as of the first day of the
related Due Period.

         Credit Risk Manager Fee Rate: 0.0175% per annum.

         Current Interest: Any of the Class A-1 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, Class B-3 Current Interest and the Class S Current Interest.

         Cut-off Date: October 1, 2003.

         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.

                                      -22-
<PAGE>

         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
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 after the
initial issuance of the Certificates, or if such 25th day is not a Business Day,
the next succeeding Business Day, commencing in November 2003.

         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 (or, in the case of the first Distribution Date,
beginning on the Cut-off Date) 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,

                                      -23-
<PAGE>

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, the NIMs Insurer 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 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 and the NIMs Insurer.

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

         ERISA Restricted Certificate: The Class C, Class P and 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.

         Event of Default: As defined in Section 7.01 hereof.

         Excess Interest: On any Distribution Date, for the Class A-1
Certificates, Class A-2A Certificates, Class A-2B Certificates, Class R
Certificate, Class M-1 Certificates, Class M-2 Certificates, Class M-3
Certificates, Class B-1 Certificates, Class B-2 Certificates and Class B-3
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) $3,564,750 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) 3.00% of the Pool Stated Principal
Balances of

                                      -24-
<PAGE>

the Mortgage Loans and (b) $1,188,250 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.

         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.

         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.

         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.

         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.

         Indenture: An indenture relating to the issuance of notes guaranteed by
the NIMs Insurer.

         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.

         Insurance Policy: With respect to any Mortgage Loan included in the
Trust Fund, any insurance policy, including all riders and endorsements thereto
in effect with respect to such Mortgage Loan, including any replacement policy
or policies for any insurance policies, including, without limitation, the PMI
Policies.

         Insurance Proceeds: Proceeds paid in respect of the Mortgage Loans
pursuant to any Insurance Policy or any other insurance policy covering a
Mortgage 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 Underlying
Mortgaged Property, in the case of a Co-op Loan) or released to the Mortgagor 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 the Mortgage Loans.

                                      -25-
<PAGE>

         Interest Carry Forward Amount: Any of the Class A-1 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 Carryover Amount: Any of the Class A-1 Interest Carryover
Amount, the Class A-2A Interest Carryover Amount, the Class A-2B Interest
Carryover Amount, the Class R Interest Carryover Amount, the Class M-1 Interest
Carryover Amount, the Class M-2 Interest Carryover Amount, the Class M-3
Interest Carryover Amount, the Class B-1 Interest Carryover Amount, the Class
B-2 Interest Carryover Amount, the Class B-3 Interest Carryover 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, November 5, 2003.

         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 Servicing Fee, the Credit Risk
Manager Fee and each PMI Insurer's Fee, (2) all Advances relating to interest
with respect to the Mortgage Loans, (3) all Compensating Interest with respect
to the Mortgage Loans, (4) Liquidation Proceeds with respect to the Mortgage
Loans (to the extent such Liquidation Proceeds relate to interest) collected
during the related Prepayment Period, (5) proceeds of any purchase pursuant to
Sections 2.02, 2.03 or 9.01 (to the extent such proceeds relate to interest) and
(6) prepayment penalties 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) has been 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.

         Liquidation Proceeds: Amounts, including Insurance Proceeds, received
in connection with the partial or complete liquidation of Mortgage Loans,
whether through trustee's sale, foreclosure sale, sale by the Servicer pursuant
to this Agreement or otherwise or amounts received in connection with any
condemnation or partial release of a Mortgaged Property (or applicable dwelling
unit, in the case of a Co-op Loan)/(or Underlying Mortgaged Property, in the
case of a Co-op Loan) and any other proceeds received in connection with an REO
Property, less the sum of related unreimbursed Advances, Servicing Fees,
Servicing Advances and any other expenses related to such Mortgage Loan.

                                      -26-
<PAGE>

         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 lesser
of (X) the Appraised Value of the related Mortgaged Property (or applicable
dwelling unit, in the case of a Co-op Loan) and (Y) the sales price of the
related Mortgaged Property (or applicable dwelling unit, in the case of a Co-op
Loan) at the time of origination.

         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-1 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.

         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.

         MGIC: Mortgage Guaranty Insurance Corporation, a Wisconsin stock
insurance corporation, or its successor in interest.

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

         Middle Tier REMIC Interests: Each of the Class MTA-1 Interest, the
Class MTA-2A Interest, the Class MTA-2B Interest, the Class MTM-1 Interest, the
Class MTM-2 Interest, the Class MTM-3 Interest, the Class MTB-1 Interest, the
Class MTB-2 Interest, the Class MTB-3 Interest, the Class MTC Interest and the
Class MTR Interest.

         Middle Tier REMIC Regular Interests: Each of the Middle Tier REMIC
Interests other than the Class MTR Interest.

         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.

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

                                      -27-
<PAGE>

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

         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.

         Mortgage: With respect to a Mortgage Loan that is not a Co-op Loan, the
mortgage, deed of trust or other instrument creating a first or second lien or a
first or second priority ownership interest in an estate in fee simple in real
property securing a Mortgage Note. With respect to a Co-op Loan, the security
agreement 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 any REO Property), 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.

         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) 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 and B-2,
setting forth the following information with respect to each Mortgage Loan:

         (i)      the loan number;

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

         (iii)    the Initial Mortgage Rate;

         (iv)     the maturity date and the months remaining before maturity
                  date;

         (v)      the original principal balance;

         (vi)     the Cut-off Date Principal Balance;

         (vii)    the first payment date of the Mortgage Loan;

         (viii)   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;

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

         (x)      a code indicating the property type;

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

                                      -28-
<PAGE>

                  (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;

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

         (xiii)   a code indicating whether a prepayment penalty is applicable
                  and, if so, the term of such prepayment penalty;

         (xiv)    the Credit Score and date obtained;

         (xv)     a code indicating whether such loan is a PMI Mortgage Loan;

         (xvi)    each PMI Insurer's Fee Rate; and

         (xvii)   the coverage percentage under the applicable PMI 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 thereto.

         Mortgage Pool: The aggregate of the Mortgage Loans identified in the
Mortgage Loan Schedule.

         Mortgage Rate: The annual rate of interest borne by a Mortgage Note
from time to time.

         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, (2) the Credit Risk Manager Fee Rate and (3) each PMI
Insurer's Fee Rate.

         Net Rate: With respect to any Distribution Date, the product of (I) the
weighted average Net Mortgage Rate for Mortgage Loans calculated based on the
Net Mortgage Rates and the Stated Principal Balance of such Mortgage Loans as of
the related Due Period and (II) a fraction, the numerator of which is 30 and the
denominator of which is the actual number of days in the related Accrual Period.

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

         NIMs Insurer: Any of the one or more insurers that is guaranteeing
certain payments under any NIM Notes.

                                      -29-
<PAGE>

         NIMs Insurer Default: A default by each of the NIMs Insurers as such
default is defined in 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, 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.

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

         Offered Certificates: The Class A-1, Class A-2A, Class A-2B, Class S,
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)

                                      -30-
<PAGE>

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 hereunder pursuant
to clause (a) of Section 9.01 hereof.

         Optional Termination Amount: The repurchase price received by the
Trustee in connection with any repurchase of all of the Mortgage Loans pursuant
to Section 9.01.

         Optional Termination Date: The 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.

         Optional Termination Price: (1) in the case of an Optional Termination
effected by the Trustee, as of any Distribution Date on or after the Optional
Termination Date, an amount equal to the sum of (A) aggregate Stated Principal
Balance of the Mortgage Loans, plus accrued interest thereon, (B) any
unreimbursed out-of-pocket costs and expenses owed to the Trustee or the
Servicer and any unreimbursed Servicing Fees, Advances and Servicing Advances,
(C) all interest accrued on, as well as amounts necessary to retire the
principal balance of, the notes guaranteed by the NIMs Insurer and any and all
amounts owed to the NIMs Insurer at the time the option is exercised and (D) 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; (2) in the case of an Optional Termination
effected by the NIMs Insurer, an amount equal to the greater of (A) aggregate
Outstanding Principal Balance of the Offered Certificates, plus accrued interest
thereon, any unreimbursed out-of-pocket costs and expenses owed to the Trustee
or the Servicer and any unreimbursed Servicing Fees, Advances and Servicing
Advances plus 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 (B) 100% of the Stated
Principal Balance of each Mortgage Loan (other than in respect of REO Property),
accrued interest thereon at the applicable Mortgage Rate, the appraised value of
any REO Property (up to the Stated Principal Balance of the related Mortgage
Loan), such appraisal to be conducted by an appraiser mutually agreed upon by
the Depositor and the NIMs Insurer and any unreimbursed out-of-pocket costs and
expenses owed to the Servicer and the Trustee and any unreimbursed Servicing
Fees, Advances and Servicing Advances plus 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.

         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.

                                      -31-
<PAGE>

         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 the Class A-1 Certificates, the
Class A-1 Pass-Through Rate; with respect to the Class A-2A Certificates, the
Class A-2A Pass-Through Rate; with respect to the Class A-2B Certificates, the
Class A-2B Pass-Through Rate; with respect to the Class M-1 Certificates, the
Class M-1 Pass-Through Rate; with respect to the Class M-2 Certificates, the
Class M-2 Pass-Through Rate; with respect to the Class M-3 Certificates, the
Class M-3 Pass-Through Rate; with respect to the Class B-1 Certificates, the
Class B-1 Pass-Through Rate; with respect to the Class B-2 Certificates, the
Class B-2 Pass-Through Rate; with respect to the Class B-3 Certificates, the
Class B-3 Pass-Through Rate; with respect to the Class S Certificates, the Class
S Pass-Through Rate and with respect to the Class R Certificate, the Class R
Pass-Through Rate.

         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.

         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

                                      -32-
<PAGE>

                           (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 banker's 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;

                           (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

                                      -33-
<PAGE>

                                    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 shall receive an Opinion of Counsel, 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.

         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

                                      -34-
<PAGE>

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 Insurers: MGIC and Radian.

         PMI Insurer Fee: The amount payable to a PMI Insurer on each
Distribution Date, which amount shall be calculated for each Distribution Date
by (A) calculating, for each PMI Mortgage Loan, one-twelfth of the product of
(i) the applicable PMI Insurer Fee Rate, and (ii) the Stated Principal Balance
of the applicable PMI Mortgage Loan or the related REO Property as of the first
day of the related Due Period and (B) summing the results.

         PMI Insurer's Fee Rate: With respect to each PMI Mortgage Loan, the
rate specified for such Mortgage Loan on Exhibit B-2.

         PMI Mortgage Loans: The list of Mortgage Loans insured by the PMI
Insurers attached hereto as Exhibit B-2.

         PMI Policies: The Mortgage Guaranty Master Policy No. 22-400-4-2701
with respect to the PMI Mortgage Loans insured by MGIC, including the letter,
dated November 7, 2003 from MGIC to the Depositor, issued by MGIC, which is
attached hereto as Exhibit J, and the primary mortgage insurance policies with
respect to the PMI Mortgage Loans insured by Radian.

         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.

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

         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.

         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) the scheduled principal
due during the related Due Period and received before the

                                      -35-
<PAGE>

related Servicer Remittance Date or advanced on or before the related Servicer
Remittance Date, (2) prepayments collected in the related Prepayment Period, (3)
the Stated Principal Balance of each Mortgage Loan that was purchased by the
Depositor or the Servicer during the related Prepayment Period or, in the case
of a purchase pursuant to Section 9.01, on the 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 such Liquidation Proceeds related to principal) and (6)
all 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) other amounts reimbursable to the
Servicer and the Trustee pursuant to this Agreement.

         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 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 November 6, 2003
relating to the public offering of the Class A-1, Class A-2A, Class A-2B, Class
S, 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 applicable 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
unreimbursed Servicing Advances, (ii) accrued interest thereon 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 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: Any of Moody's, 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 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).

                                      -36-
<PAGE>

         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 Minnesota, National Association 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 with the consent
of the NIMs Insurer which are engaged in transactions in Eurodollar deposits in
the international Eurocurrency market (i) with an established place of business
in London, England and (ii) whose quotations appear on the Reuters Screen LIBO
Page on the relevant Interest Determination Date.

         Regular Certificate: Any one of the Class A-1, 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 MTA-1 Interest, the
Class A-1 and Class R Certificates. With respect to the Class MTA-2A Interest,
the Class A-2A Certificates. With respect to the Class MTA-2B Interest, the
Class A-2B Certificates. With respect to the Class MTB-1 Interest, the Class B-1
Certificates. With respect to the Class MTB-2 Interest, the Class B-2
Certificates. With respect to the Class MTB-3 Interest, the Class B-3
Certificates. With respect to the Class MTM-1 Interest, the Class M-1
Certificates. With respect to the Class MTM-2 Interest, the Class M-2
Certificates. With respect to the Class MTM-3 Interest, the Class M-3
Certificates.

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

         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 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.

         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

                                      -37-
<PAGE>

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 PMI Policy if such Deleted Mortgage Loan was covered by such
PMI 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 PMI Mortgage Loans,
the PMI Policies.

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

<TABLE>
<CAPTION>
DISTRIBUTION DATE OCCURRING IN             REQUIRED LOSS PERCENTAGE
------------------------------         ----------------------------------
<S>                                    <C>
November 2006 - October 2007           2.00% with respect to November
                                       2006, plus an additional 1/12th
                                       of 1.25% for each month thereafter

November 2007 - October 2008           3.25% with respect to November
                                       2007, plus an additional 1/12th
                                       of 0.50% for each month thereafter

November 2008 - October 2009           3.75% with respect to November
                                       2008, plus an additional 1/12th
                                       of 0.25% for each month thereafter

November 2009 and thereafter           4.00%
</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, 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

                                      -38-
<PAGE>

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 the Class MTR
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, 2003 between the Depositor and the Seller.

         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: The Provident Bank, an Ohio corporation, or its successor in
interest.

         Servicer Advance Date: As to any Distribution Date, the related
Servicer Remittance Date.

         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 incurred in the performance by the Servicer of its
servicing obligations hereunder, including, but not limited to, the cost of (1)
the preservation, 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 Section 3.10.

         Servicing Fee: As to each Mortgage Loan and any Distribution Date, an
amount equal to one month's interest at the Servicing Fee Rate on the Stated
Principal Balance of such Mortgage Loan as of the preceding Distribution Date
or, in the event of any payment of interest that accompanies a Principal
Prepayment in full made by the Mortgagor, interest at the Servicing Fee Rate on
the Stated Principal

                                      -39-
<PAGE>

Balance of such Mortgage Loan as of the preceding Distribution Date for the
period covered by such payment of interest.

         Servicing Fee Rate: 0.50% per annum.

         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: In the event that the Servicer does not
reimburse the Trustee under the this Agreement, all costs associated with the
transfer of servicing from the predecessor 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 property
and effectively.

         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 Date: 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 Advance 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 2006 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) 67.50% 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.

         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.

                                      -40-
<PAGE>

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

         Transfer Agreement: Each of (a) the Master Mortgage Loan Purchase and
Interim Servicing Agreement, dated as of September 1, 2001, between the Seller
and The Provident Bank, (b) the Master Mortgage Loan Purchase and Interim
Servicing Agreement, dated as of May 1, 2003, between the Seller and The
Provident Bank and (c) the Seller's Purchase, Warranties and Interim Servicing
Agreement, dated as of June 1, 2003, between Novelle Financial Services, Inc.
and Terwin Advisors LLC, which was subsequently assigned to the Seller pursuant
to an Assignment, Assumption and Recognition Agreement, dated as of June 30,
2003 among the Seller, Novelle Financial Services, Inc. and Terwin Advisors LLC.

         Transferor: Each of The Provident Bank and Novelle Financial Services,
Inc.

         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 of the preceding Servicer
Advance Date, equals or exceeds the product of (i) 44.00% 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 2003-HE1") 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 (including, without limitation, the PMI Policies); (v) all proceeds of the
conversion, voluntary or involuntary, of any of the foregoing into cash or other
liquid property; and (vi) the Cap Contract and Cap Contract Account.

         Trustee: Wells Fargo Bank Minnesota, National Association, 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.

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

                                      -41-
<PAGE>

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

         UTS-A1 Component: An interest-only "regular interest" in the Upper Tier
REMIC entitled to the interest, if any, that accrues on the Class MTA-1 Interest
at a rate in excess of One-Month LIBOR plus the Class A-1 Margin. The UTS-A1
Component is represented by the Class S Certificates.

         UTS-A2A Component: An interest-only "regular interest" in the Upper
Tier REMIC entitled to the interest, if any, that accrues on the Class MTA-2A
Interest at a rate in excess of One-Month LIBOR plus the Class A-2A Margin. The
UTS-A2A Component is represented by the Class S Certificates.

         UTS-A2B Component: An interest-only "regular interest" in the Upper
Tier REMIC entitled to the interest, if any, that accrues on the Class MTA-2B
Interest at a rate in excess of One-Month LIBOR plus the Class A-2B Margin. The
UTS-A2B Component is represented by the Class S Certificates.

         UTS-B1 Component: An interest-only "regular interest" in the Upper Tier
REMIC entitled to the interest, if any, that accrues on the Class MTB-1 Interest
at a rate in excess of One-Month LIBOR plus the Class B-1 Margin. The UTS-B1
Component is represented by the Class S Certificates.

         UTS-B2 Component: An interest-only "regular interest" in the Upper Tier
REMIC entitled to the interest, if any, that accrues on the Class MTB-2 Interest
at a rate in excess of One-Month LIBOR plus the Class B-2 Margin. The UTS-B2
Component is represented by the Class S Certificates.

         UTS-B3 Component: An interest-only "regular interest" in the Upper Tier
REMIC entitled to the interest, if any, that accrues on the Class MTB-3 Interest
at a rate in excess of One-Month LIBOR plus the Class B-3 Margin. The UTS-B3
Component is represented by the Class S Certificates.

         UTS-M1 Component: An interest-only "regular interest" in the Upper Tier
REMIC entitled to the interest, if any, that accrues on the Class MTM-1 Interest
at a rate in excess of One-Month LIBOR plus the Class M-1 Margin. The UTS-M1
Component is represented by the Class S Certificates.

         UTS-M2 Component: An interest-only "regular interest" in the Upper Tier
REMIC entitled to the interest, if any, that accrues on the Class MTM-2 Interest
at a rate in excess of One-Month LIBOR plus the Class M-2 Margin. The UTS-M2
Component is represented by the Class S Certificates.

         UTS-M3 Component: An interest-only "regular interest" in the Upper Tier
REMIC entitled to the interest, if any, that accrues on the Class MTM-3 Interest
at a rate in excess of One-Month LIBOR plus the Class M-3 Margin. The UTS-M3
Component is represented by the Class S Certificates.

         UTS REMIC Components: Each of the UTS-A1 Component, the UTS-A2A
Component, the UTS-A2B Component, the UTS-M1 Component, the UTS-M2 Component,
the UTS-M3 Component, the UTS-B1 Component, the UTS-B2 Component and the UTS-B3
Component.

         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.

         Weighted Maximum Rate Cap: As of any Distribution Date, a rate equal to
the product of (x)(i) the weighted average of the Maximum Mortgage Rates on the
Mortgage Loans (calculated based upon the Stated Principal Balance of such
Mortgage Loans as of the preceding Distribution Date) on such Distribution Date
minus (ii) the Servicing Fee Rate, the Credit Risk Manager Fee Rate and each PMI

                                      -42-
<PAGE>

Insurer's Fee Rate 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.

                                   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).

         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 which is not a Co-op Loan:

                  (A)      The Original Mortgage Note endorsed, "Pay to the
         order of Wells Fargo Bank Minnesota, National Association, as trustee,
         without recourse." The Mortgage Note shall include all intervening
         endorsements showing a complete chain of the title from the originator
         to the applicable Transferor.

                  (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 applicable 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, to "Wells Fargo Bank
         Minnesota, National Association, 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.

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

                                      -43-
<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 which 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 either case endorsed, "Pay
         to the order of Wells Fargo Bank Minnesota, National Association, 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 to "Wells Fargo
         Bank Minnesota, National Association, 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 applicable
         Transferor or its agent assigning the security interest covered by such
         Form UCC-1 to "Wells Fargo Bank Minnesota, National Association, 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 applicable 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.

                  (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

                                      -44-
<PAGE>

delivered to the appropriate public recording office for recordation.
Thereafter, the Depositor shall 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 which 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 refereed 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.

         The ownership of each Mortgage Note, the Mortgage and the contents of
the related Mortgage File is vested in the Trustee. 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 and the benefit
of the repurchase obligations and the obligation of the Seller contained in the
Sale 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

                                      -45-
<PAGE>

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 Agreements and the Sale Agreement.

         The Trustee agrees, for the benefit of Certificateholders and the NIMs
Insurer, 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 NIMs Insurer, 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, the Depositor and the NIMs Insurer. In addition, the
Trustee shall also notify the Servicer, the Seller, the Depositor and the NIMs
Insurer, 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
officer 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 material defect in or
omission of a constituent document exists shall constitute the sole remedy
respecting such defect or omission available

                                      -46-
<PAGE>

to the Trustee on behalf of Certificateholders and the NIMs Insurer. The
preceding sentence shall not, however, limit any remedies available to the
Certificateholders, the Depositor, the Trustee or the NIMs Insurer pursuant to
the Sale Agreement and the Transfer Agreements. 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 shall keep confidential the name of each Mortgagor and the Trustee 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, the Servicer and the NIMs Insurer 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,
the Trustee and the NIMs Insurer 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 breach or
         violation may materially impair the Depositor's ability to perform or
         meet any of its obligations under this Agreement.

                                      -47-
<PAGE>

                  (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 each Transferor with
respect to the related Mortgage Loans in the applicable Transfer Agreement,
which have been assigned to the Trustee hereunder, were made as of the date
specified in the applicable Transfer Agreement (or underlying agreement, if such
Transfer Agreement is in the form of an assignment of a prior agreement). 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 applicable
Transferor under the applicable Transfer Agreement and (ii) a representation or
warranty of the Seller under the Sale Agreement, the only right or remedy of the
Trustee, the NIMs Insurer or of any Certificateholder shall be the Trustee's
right to enforce the obligations of the applicable 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 applicable Transferor in the applicable
Transfer Agreement, without regard to whether such 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 NIMs Insurer, 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 applicable 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 any Transferor, the
Depositor or the Seller, the Trustee shall enforce its rights under the
applicable Transfer Agreement and the Sale Agreement for the benefit of
Certificateholders and the NIMs Insurer. If a breach of the representations and
warranties set forth in a Transfer Agreement exists solely due to the
unenforceability of a prepayment charge, the Trustee shall notify the NIMs
Insurer thereof and not seek to enforce the repurchase remedy provided for
herein unless directed in writing to do so by the NIMs Insurer. In the event of
a breach of the representations and warranties with respect to the Mortgage
Loans set forth in a Transfer Agreement, the Trustee shall at the request of the
NIMs Insurer enforce the right of the Trust Fund and the NIMs Insurer to be
indemnified for such breach of representation and warranty. In the event that
such breach relates

                                      -48-
<PAGE>

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)(B). As provided in the Sale
Agreement, if any Transferor substitutes for a Mortgage Loan for which there is
a breach of any representations and warranties in the related 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 Date. As provided in the Sale Agreement,
the Seller indemnifies and holds the Trust Fund, the Trustee, the Depositor, the
NIMs Insurer, 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 NIMs Insurer, 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 date" 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 any
Transferor pursuant to the applicable Transfer Agreement, the principal portion
of the funds received by the Trustee in respect of such repurchase of a Mortgage
Loan will be considered a Principal Prepayment and shall be deposited in the
Certificate Account pursuant to Section 3.05. 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 applicable 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 applicable 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 Trustee shall review the Mortgage File with
respect to each Replacement Mortgage Loan and certify to the NIMs Insurer and
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

                                      -49-
<PAGE>

prepayment penalties 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 penalties 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 deposited into the Certificate Account by the Seller 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.

         The Trustee shall cause the Mortgage Loan Schedule 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 and the NIMs Insurer 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 NIMs Insurer 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.

         In addition, the Seller shall obtain at its own expense and deliver to
the Trustee and the NIMs Insurer an Opinion of Counsel to the effect that such
substitution will not (a) cause any federal 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 date" under Section 860G(d)(1) of the Code or
(b) adversely affect the status of any REMIC provided for herein as a REMIC. If
any such Opinion of Counsel can not be delivered, then such substitution may
only be effected at such time as the required Opinion of Counsel can be given.

         (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 each 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 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.

                                      -50-
<PAGE>

                  (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 servicer of conventional
         mortgage loans for Fannie Mae or Freddie Mac.

                  (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.

                  (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 a prepayment premium in any
         instance when the mortgage debt is accelerated as the result of the
         Mortgagor's default in making the Mortgage Loan payments.

                                      -51-
<PAGE>

         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, the Middle
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, the Middle 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 Date" 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 penalties, (ii) amounts paid by
the Servicer or the Transferors in respect of prepayment charges pursuant to
this Agreement, (iii) 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 a Transfer Agreement, (iv) the
interests issued by the Lower Tier REMIC and the Middle 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-1
Interest, 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.

                                      -52-
<PAGE>

         The assets of the Middle Tier REMIC shall be the Lower Tier REMIC
Regular Interests. The Middle Tier REMIC Regular Interests shall be designated
as the regular interests in the Middle Tier REMIC and the Class MTR Interest
shall be designated as the sole class of residual interests in the Middle Tier
REMIC. Each of the Middle Tier REMIC Regular Interests shall have the
characteristics set forth in its definition.

         The assets of the Upper Tier REMIC shall be the Middle 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 UTS REMIC Components and 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, the Class MTR
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. The Class MTR 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 the Class A-1 Certificates,
Class A-2A Certificates, Class A-2B Certificates, Class R Certificate, Class M-1
Certificates, Class M-2 Certificates, Class M-3 Certificates, Class B-1
Certificates, Class B-2 Certificates and Class B-3 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 the Class A-1 Certificates, Class A-2A Certificates, Class A-2B
Certificates, Class R Certificate, Class M-1 Certificates, Class M-2
Certificates, Class M-3 Certificates, Class B-1 Certificates, Class B-2
Certificates and Class B-3 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-1 Certificates, Class A-2A
Certificates, Class A-2B Certificates, M-1 Certificates, Class M-2 Certificates,
Class M-3 Certificates, Class B-1 Certificates, Class B-2 Certificates, Class
B-3 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-1 Certificates, Class A-2A
Certificates, Class A-2B Certificates, Class R Certificate, Class M-1
Certificates, Class M-2 Certificates, Class M-3 Certificates, Class B-1
Certificates, Class B-2 Certificates and Class B-3 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-1 Certificates,
Class A-2A Certificates, Class A-2B Certificates, Class R Certificate, Class M-1
Certificates, Class M-2

                                      -53-
<PAGE>

Certificates, Class M-3 Certificates, Class B-1 Certificates, Class B-2
Certificates and Class B-3 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 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-1
Certificates, Class A-2A Certificates, Class A-2B Certificates, Class R
Certificate, Class M-1 Certificates, Class M-2 Certificates, Class M-3
Certificates, Class B-1 Certificates, Class B-2 Certificates, Class B-3
Certificates 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 penalties collected
on the Mortgage Loans, amounts paid by the Servicer or Transferors in respect of
prepayment charges pursuant to this Agreement 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 a 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)      The parties intend that the portion of the Trust Fund
consisting of the Class R Certificate and the right of the Class C Certificates
to receive the amounts described in the last paragraph of Section 9.01 hereof
shall be treated as a "grantor trust" under the Code and the provisions hereof
shall be interpreted consistent with this intention. In furtherance of this
intention, the Trustee shall (i) furnish or cause to be furnished to the holders
of the Class R Certificate and the Class C Certificates information regarding
their allocable share 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 as may be applicable under the Code.

         All payments of principal and interest at the Net Mortgage Rate on each
of the Mortgage Loans (other than prepayment penalties, amounts paid by the
Servicer in respect of prepayment charges pursuant to this Agreement and amounts
received with respect to any amounts 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 a 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 Corresponding Middle Tier
REMIC Interests) 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 Corresponding Middle Tier
Interests in reduction of their principal amounts). Notwithstanding the
preceding sentence, an amount equal to the

                                      -54-
<PAGE>

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 Corresponding Middle Tier Interests 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 Corresponding Middle Tier
Interest 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.

         All payments of scheduled principal and prepayments on the Mortgage
Loans, and Realized Losses on the Mortgage Loans that are allocated to the
Certificates, shall be allocated among the Middle Tier REMIC Regular Interests
in the same manner as such payments or Realized Losses are allocated to the
Related Certificates (treating the Class S Certificates as Related Certificates
with respect to each of the Class MTA-1, Class MTA-2A, Class M2A-2B, Class
MTM-1, Class MTM-2, Class MTM-3, Class MTB-1, Class MTB-2 and Class MTB-3
Interests in proportion to their respective principal balances and treating the
Class C Certificate as a Related Certificate with respect to the Class MTC
Interest). Each Middle Tier REMIC Regular Interest shall be entitled to receive
all amounts distributed to the Certificates in respect of unreimbursed amounts
of Realized Losses (treating the Class S Certificates as Related Certificates
with respect to each of the Class MTA-1, Class MTA-2A, Class MTA-2B, Class
MTM-1, Class MTM-2, Class MTM-3, Class MTB-1, Class MTB-2 and Class MTB-3
Interests in proportion to their respective principal balances and treating the
Class C Certificate as a Related Certificate with respect to the Class MTC
Interest).

         In the event that any REMIC provided for herein fails to qualify as a
REMIC, loses its status 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 NIMs Insurer, the Trustee and the
Trust Fund against any and all Losses 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 arising 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 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 NIMs Insurer 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

                                      -55-
<PAGE>

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 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.

         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;

         (b)      no written information, certificate of an officer, statement
furnished in writing or written report delivered to the Depositor, the Trustee
or the NIMs Insurer, any affiliate of the Depositor, the Trustee or the NIMs
Insurer 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, an insurance and indemnity
agreement with a NIMs Insurer 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

                                      -56-
<PAGE>

(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. The Servicer shall represent and protect the interest
of the Trust Fund in the same manner as it 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.

         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.

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

         The Servicer shall deliver all reports required to be delivered by a
PMI Insurer to such PMI Insurer.

         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.

         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, (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 and the NIMs Insurer and (iii) the NIMs Insurer shall
have consented to such subservicing agreement. Notwithstanding the provisions of
any subservicing agreement, any of the provisions of this Agreement

                                      -57-
<PAGE>

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 with the consent of
the NIMs Insurer 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 NIMs
Insurer and 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.

         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 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 terminated or resigning
Servicer's obligation to make Advances and Servicing Advances. No such
termination 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 costs or expenses 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, or if the NIMs Insurer so directs the Trustee, the Trustee shall
seek to appoint a successor

                                      -58-
<PAGE>

servicer that is eligible in accordance with the criteria specified this
Agreement and reasonably acceptable to the NIMs Insurer.

         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; provided, further, that the NIMs Insurer's prior written consent shall
be required for any modification, waiver or amendment since the Cut-off Date if
the aggregate number of outstanding Mortgage Loans which have been modified,
waived or amended exceeds 5% of the number of Mortgage Loans as of the Cut-Off
Date. 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 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 penalty 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) the prepayment of the
Mortgage Loan is made in connection with the voluntary sale of the related
Mortgaged Property, or (iv) 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 Penalty and related Mortgage
Loan and (z) doing so is standard and customary in servicing similar Mortgage
Loans (including any waiver of a prepayment penalty in connection with a
refinancing of a Mortgage Loan that is related to a default or a reasonably
foreseeable default). Except as provided in the preceding sentence, in no event
will the Servicer waive a prepayment penalty 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 penalty 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 penalty (or such portion
thereof as had been

                                      -59-
<PAGE>

waived for deposit) into the Certificate 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 Certificateholders, the Collection Account. The Servicer shall deposit
into the Collection Account daily, within two Business Days 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;

                  (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 the Mortgagor in accordance with the Servicer's normal servicing
         procedures;

                  (iv)     all Compensating Interest;

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

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

                  (vii)    the Purchase Price and any Substitution Adjustment
         Amount;

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

                  (ix)     all prepayment penalties; and

                  (x)      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 (other than prepayment penalties)
if collected, need not be remitted by the Servicer. 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

                                      -60-
<PAGE>

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 NIMs Insurer and 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 NIMs Insurer and, upon request, 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].

         (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 Trustee
         or the NIMs Insurer pursuant to Section 9.01.

         Any amounts received by the Trustee prior to 3:00 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 the NIMs Insurer and
the 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

                                      -61-
<PAGE>

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 it
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 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.

         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, if
required by law or the terms of the related Mortgage or Mortgage Note, to
Mortgagors on balances in the Escrow Account 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.

         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 of interest
         that equals the Servicing Fee for the period with respect to which such
         interest payment was made, and, as additional servicing compensation,
         those other amounts set forth in Section 3.15;

                                      -62-
<PAGE>

                  (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 amounts received on
         particular Mortgage Loan(s) (including, for this purpose, Liquidation
         Proceeds) that represent late recoveries of payments of principal
         and/or interest on such particular Mortgage Loan(s) in respect of which
         any such Advance was made;

                  (iii)    to reimburse the Servicer for any Non-Recoverable
         Advance previously made and, to the extent that such Non-Recoverable
         Servicing Advances 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, any Non-Recoverable Servicing
         Advance;

                  (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, the Servicer's
         right to reimbursement of Servicing Advances pursuant to this subclause
         (vi) with respect to any Mortgage Loan being limited to amounts
         received on particular Mortgage Loan(s)(including, for this purpose,
         Liquidation Proceeds and purchase and repurchase proceeds) that
         represent late recoveries of the payments for which such advances were
         made pursuant to Section 3.01 or Section 3.06;

                  (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 any of them in connection with the Mortgage Loans
         or Certificates and reimbursable pursuant to Section 3.25 or Section
         6.03 hereof;

                  (ix)     to pay to each PMI Insurer, the applicable PMI
         Insurer Fee;

                  (x)      to reimburse the Trustee for enforcement expenses
         reasonably incurred in respect of a breach of 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 subclause (x) only to the that 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; and

                  (xii)    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 Standard 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.

                                      -63-
<PAGE>

         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 and the
NIMs Insurer 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 to 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 may 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 the Credit Risk Manager, the Credit Risk
         Manager 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.

         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), 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

                                      -64-
<PAGE>

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 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

                                      -65-
<PAGE>

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 and the NIMs Insurer that any such substitution or assumption agreement
has been completed by forwarding to the Trustee (with a copy to the NIMs
Insurer) 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 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

                                      -66-
<PAGE>

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 each Determination Date. 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, request 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 and the NIMs Insurer shall have been supplied
with an Opinion of Counsel (such Opinion of Counsel not to be an expense of the
Trustee or the NIMs Insurer) 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 rented (or allowed to continue to be rented) or otherwise
used for the production of income by or on 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 unreimbursed Servicing Fees,
Advances, Servicing Advances and any management fee paid or to be paid

                                      -67-
<PAGE>

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 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
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 the 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 on the next succeeding Determination Date following receipt
thereof for distribution on the related Distribution Date.

         The proceeds of any Liquidated Loan, as well as any recovery resulting
from a partial collection of Liquidation Proceeds or any 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
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 penalties 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 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 two copies of such request, the Trustee or its
designee shall promptly release the related Mortgage File to the Servicer, and
the Trustee or its designee shall at the Servicer's written direction execute
and deliver to the Servicer the request for reconveyance, deed of reconveyance
or release or satisfaction of mortgage or such instrument releasing the lien of
the Mortgage in each case provided by the Servicer, 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

                                      -68-
<PAGE>

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.

         On each day that the Servicer remits to the Trustee or its designee
Requests for Releases pursuant to clauses (ii) or (iii) above, the Servicer
shall also submit to the Trustee or its designee a summary of the total amount
of such Requests for Releases requested on such day by the same method as
described in such clauses (ii) and (iii) above.

         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 shall
deliver or cause to be delivered to the Trustee or its designee, for signature,
as appropriate, 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.

         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 Trustee, 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

                                      -69-
<PAGE>

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
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
payable by the Mortgagor, 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 hazard insurance, as required
by Section 3.10 hereof and maintenance of the other forms of insurance coverage
required by 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.

         SECTION 3.17. Annual Statement as to Compliance.

         Pursuant to this Agreement, the Servicer shall deliver to the
Depositor, the Trustee and the NIMs Insurer on or before March 15 of each year,
beginning in 2004 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.

                                      -70-
<PAGE>

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

         On or before March 15 of each year, beginning in 2004 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. The Trustee shall
deliver to the NIMs Insurer upon written request: (i) a copy of such USAP
Report, and (ii) the Servicer's annual officer's certificate as to compliance
with this Agreement provided by the Servicer to the Trustee pursuant to Section
3.17. In addition, at the NIMs Insurer's written request, the Servicer shall
deliver copies of evidence of the Servicer's fidelity bond or errors and
omissions insurance coverage to the NIMs Insurer.

         SECTION 3.19. Rights of the NIMs Insurer. Each of the rights of the
NIMs Insurer set forth in this agreement shall exist so long as the notes issued
pursuant to the Indenture remain outstanding or the NIMs Insurer is owed amounts
in respect of its guarantee of payment on such notes.

         SECTION 3.20. Periodic Filings.

         (a)      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
2004 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 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].

                                      -71-
<PAGE>

         (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 Servicing Agreement (the
         "Servicing Information").

                  (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

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         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 their respective officers, directors, agents and affiliates from and against
any losses, damages, penalties, fines, forfeitures, reasonable legal fees and
related costs, judgments and other costs and expenses arising out of or based
upon a breach by the 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, the Trustee and the NIMs Insurer 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 penalty amount due;

                  (vi)     prepayment penalty amount collected;

                  (vii)    amount of prepayment penalty paid; and

                  (viii)   reason why full prepayment penalty 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 and the NIMs Insurer 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 described in
Section 4.05(a).

         SECTION 3.25. Indemnification

         (a)      The Servicer shall indemnify the Seller, the Trust Fund,
Trustee, the Depositor and the NIMs Insurer and hold each of them harmless
against any and all claims, losses, damages, penalties,

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fines, forfeitures, reasonable and necessary legal fees and related costs,
judgements, 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 compliance with the terms of this Agreement.
The Servicer immediately shall notify the Seller, the Trustee, the Depositor and
the NIMs Insurer 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 judgement 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 and the NIMs Insurer in
connection with such claim. The Servicer shall provide the Trustee, the
Depositor and the NIMs Insurer with a written report of all expenses and
advances incurred by the Servicer pursuant to this Section 3.25, and the
Servicer from the assets of the Trust Fund in the Collection Account promptly
shall reimburse itself 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.

                                   ARTICLE IV
                                  DISTRIBUTIONS

         SECTION 4.01. Advances.

         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 Standard time on the Servicer Advance 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, the NIMs Insurer, 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.

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<PAGE>

         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 Advance 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 such Mortgage
Loan is paid in full or 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.

         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 Servicing
Fee for such Distribution Date, deposit into the Collection Account, as a
reduction of the Servicing Fee (but not below zero) for such Distribution Date,
no later than the Servicer Advance 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 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.

         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 both the Lower Tier REMIC and the Middle 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)      [Reserved].

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

                  (i)      to the Class P Certificates, an amount equal to any
         prepayment penalties collected on the Mortgage Loans and any amounts
         paid by the Transferors (A) in respect of prepayment charges pursuant
         to this Agreement (or amounts deposited by the Servicer pursuant to
         Section 3.05(b))or (B) any amounts received in respect of any
         indemnification paid by the Servicer as a result of a prepayment charge
         being unenforceable in breach of the representations and warranties set
         forth in a Transfer Agreement received during the related Prepayment
         Period;

                  (ii)     to each Class of the Class R, Class A-1, Class A-2A,
         Class A-2B and Class S Certificates, the Current Interest and any
         Interest Carry Forward Amount with respect to each

                                      -75-
<PAGE>

         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, Class A-1, Class A-2A,
         Class A-2B and Class S Certificates, such amount will be distributed
         pro rata among the Class R, Class A-1, Class A-2A, Class A-2B and Class
         S Certificates based on the ratio of (x) the Current Interest and
         Interest Carry Forward Amount for each of the Class R, Class A-1, Class
         A-2A, Class A-2B and Class S Certificates to (y) the total amount of
         Current Interest and any Interest Carry Forward Amount for the Class of
         R, Class A-1, Class A-2A, Class A-2B and Class S 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-2 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)      [RESERVED].

         (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(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 as follows:

                           (A)      first, to the Class R Certificate, until its
                  Certificate Principal Balance has been reduced to zero;

                           (B)      second, on a pro rata basis between the
                  Class A-1 Certificates on the one hand and the Class A-2A and
                  Class A-2B Certificates on the other hand, until their
                  respective Certificate Principal Balances are reduced to zero.
                  Amounts allocated to the Class A-2A and Class A-2B
                  Certificates pursuant to this Section 4.04(d)(i)(B) shall be
                  distributed sequentially with all amounts paid to the Class
                  A-2A Certificates until their Certificate Principal Balance
                  has been reduced to zero, and thereafter to the Class A-2B
                  Certificates until its 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;

                                      -76-
<PAGE>

                  (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 (i) Class R Certificate, the Class R Interest
         Carryover Amount, (ii) Class A-1 Certificates, the Class A-1 Interest
         Carryover Amount, (iii) Class A-2A Certificates, the Class A-2A
         Interest Carryover Amount, (iv) Class A-2B Certificates, the Class A-2B
         Interest Carryover Amount , (v) Class M-1 Certificates, the Class M-1
         Interest Carryover Amount, (vi) Class M-2 Certificates, the Class M-2
         Interest Carryover Amount, (vii) Class M-3 Certificates, the Class M-3
         Interest Carryover Amount, (vii) Class B-1 Certificates, the Class B-1
         Interest Carryover Amount, (viii) Class B-2 Certificates, the Class B-2
         Interest Carryover Amount and (ix) Class B-3 Certificates, the Class
         B-3 Interest Carryover Amount on a pro rata basis based upon the amount
         of unreimbursed Interest Carryover Amounts for each Class, in each case
         until the Interest Carryover Amount of such Certificates has been
         reduced to zero; and

                  (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

                                      -77-
<PAGE>

         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 8.05 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 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 to the Trustee and the NIMs Insurer in the form of a computer
readable magnetic tape (or by such other means as the Servicer, the Trustee and
the NIMs Insurer 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 (the "Remittance Report").

                                      -78-
<PAGE>

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

         (k)      Any payments received under the terms of the Cap Contract will
be available to pay the holders of the Offered Certificates (other than the
Class S Certificates) in respect of Interest Carryover Amounts other than
Interest Carryover Amounts resulting from the fact that this Agreement does not
allocate the Applied Realized Loss Amount to the Class A Certificates. Any
amounts received under the terms of the Cap Contract on a Distribution Date that
are not used to pay such Interest Carryover Amounts will be distributed to the
holder of the Class C Certificates. Payments in respect of such Interest
Carryover Amounts shall be paid to the Offered Certificates, pro rata based upon
such Interest Carryover Amounts for each class of Offered Certificates.

                  (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 and will be used to pay Interest
         Carryover Amounts on the Offered Certificates (other than the Class S
         Certificates) other than Interest Carryover Amounts resulting from the
         fact that this Agreement does not allocate the Applied Realized Loss
         Amount to the Class A Certificates. Any amounts that are received on
         the Cap Contract that are not used to pay such Interest Carryover
         Amounts on the Offered Certificates (other than the Class S
         Certificates), will be distributed to the holder of the Class C
         Certificates. 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 9.850%), 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 Balances 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 send a notice on the Business Day prior to the
         related Distribution Date stating the amount received on the Cap
         Contract, the amount paid with respect to Interest 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.

                                      -79-
<PAGE>

                  (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 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 NIMs Insurer, 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 penalties, 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 Mortgage Loans serviced by the Servicer;

                  (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 Mortgage Loans serviced by the
         Servicer;

                  (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

                                      -80-
<PAGE>

         preceding such Distribution Date, in the aggregate and with respect to
         the Mortgage Loans serviced by the Servicer;

                  (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 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 Mortgage Loans serviced by the Servicer;

                  (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 Mortgage Loans serviced by the Servicer;

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

                  (xv)     whether a Trigger Event has occurred;

                  (xvi)    with respect to each Class of Certificates, any
         Interest Carry Forward Amount with respect to such Distribution Date
         for each such Class, any Interest Carry Forward Amount paid for each
         such Class and any remaining Interest Carry Forward Amount for each
         such Class;

                  (xvii)   with respect to each Class Certificates any Interest
         Carryover Amount with respect to such Distribution Date for each such
         Class, any Interest Carryover Amount paid for each such Class and any
         remaining Interest Carryover Amount for each such Class;

                  (xviii)  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;

                  (xix)    the number of Mortgage Loans for which prepayment
         penalties 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;

                  (xx)     the related amount of each PMI Insurer's Fee paid to
         such PMI Insurer;

                  (xxi)    the related amount of the Credit Risk Manager Fee
         paid to the Credit Risk Manager;

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

                  (xxiii)  the number and aggregate Stated Principal Balance of
         Mortgage Loans covered by the PMI Policies as of the end of the related
         Due Period;

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

                                      -81-
<PAGE>

                  (xxv)    the amount of any payments to each Class of
         Certificates that are treated as payments received in respect of a
         REMIC Regular 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; and

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

         The Trustee will make the monthly statement to Certificateholders (and,
at its option, any additional files containing the same information in an
alternative format) available each month to Certificateholders, and other
parties to this Agreement 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
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)      The Servicer shall deliver to the NIMs Insurer a copy of any
report delivered by the Servicer to the Trustee.

         (c)      Within a reasonable period of time after the end of each
calendar year, the Trustee shall cause to be furnished to the NIMs Insurer and
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 and the NIMs Insurer the
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;

                                      -82-
<PAGE>

                  (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

                  (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 8.11.

         (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:

                                      -83-
<PAGE>

<TABLE>
<CAPTION>
                                                      Original Certificate
                 Minimum      Integral Multiples in   Principal Balance or
Class         Denomination     Excess of Minimum        Notional Balance
-----         ------------     -----------------        ----------------
<S>          <C>              <C>                     <C>
A-1          $    25,000.00       $       1.00          $  82,456,000.00
A-2A         $    25,000.00       $       1.00          $  75,576,000.00
A-2B         $    25,000.00       $       1.00          $  41,000,000.00
S            $ 1,000,000.00       $       1.00          $ 234,087,100.00
M-1          $    25,000.00       $       1.00          $  13,071,000.00
M-2          $    25,000.00       $       1.00          $  11,288,000.00
M-3          $    25,000.00       $       1.00          $   3,565,000.00
B-1          $    25,000.00       $       1.00          $   2,377,000.00
B-2          $    25,000.00       $       1.00          $   2,377,000.00
B-3          $    25,000.00       $       1.00          $   2,377,000.00
C            $   250,000.00       $   1,000.00          $   3,563,816.00
R            $       100.00                N/A          $         100.00
P                        (1)                (1)                       (1)
</TABLE>

----------------------
(1)      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%.

         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

                                      -84-
<PAGE>

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, whether or not such notes are guaranteed by the NIMs Insurer)
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 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 shall be made unless the
Trustee shall have received either (i) a representation from the transferee of
such Certificate acceptable to and in form and substance satisfactory to the
Trustee and the NIMs Insurer, to the effect that such transferee is not an
employee benefit plan subject to Title I of ERISA or a plan subject to Section
4975 of the Code or a plan subject to any applicable Federal, state or local law
materially similar to the foregoing provisions of ERISA and the Code ("Similar
Law"), or a Person acting on behalf of any such plan or using the assets of any
such plan, (ii) except in the case of a Class R Certificate which may not be
transferred to a transferee that does not provide the representation described
in clause (i), a representation that the transferee is an insurance company that
is purchasing such Certificates with funds contained in an "insurance company
general account" (as such term is defined in Section V(e) of Prohibited
Transaction Class Exemption 95-60, 60 Fed. Reg. 35925 (July 12, 1995) ("PTCE
95-60")) and that the purchase and holding of such Certificates is covered under
Sections I and III of PTCE 95-60, or (iii) in the case of any such ERISA
Restricted Certificate, other than a Class R Certificate, presented for
registration in the name of an employee benefit plan subject to ERISA, a plan
subject to Section 4975 of the Code, or a plan subject to

                                      -85-
<PAGE>

Similar Law (or comparable provisions of any subsequent enactments), or a
trustee of any such plan or any other person acting on behalf of any such plan,
an Opinion of Counsel satisfactory to the Trustee and the NIMs Insurer to the
effect that the purchase and holding of such ERISA Restricted Certificate will
not result in a prohibited transaction under ERISA or the Code or Similar Law
and will not subject the NIMs Insurer or the Trustee to any obligation in
addition to those expressly undertaken in this Agreement, which Opinion of
Counsel shall not be an expense of the NIMs Insurer or the Trustee. For purposes
of clause (i) of the preceding sentence, such representation 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) unless the
Trustee shall have received from the transferee an alternative representation
acceptable in form and substance to the Trustee. Notwithstanding anything else
to the contrary herein, any purported transfer of an ERISA Restricted
Certificate to or on behalf of an employee benefit plan subject to Title I of
ERISA, a plan subject to Section 4975 of the Code, or a plan subject to Similar
Law without the delivery to the Trustee and the NIMs Insurer 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 be under no liability to any Person for
any registration of transfer of any ERISA Restricted Certificate that is in fact
not permitted by this Section 5.02(b) 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 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 fact an employee benefit plan subject
to Title I of ERISA, a plan subject to Section 4975 of the Code, or a plan
subject to Similar Law or a Person acting on behalf of any such plan at the time
it became a Holder or, at such subsequent time as it became such a plan or
Person acting on behalf of such a plan, all payments made on such ERISA
Restricted 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 Holder of such Certificate that is not such a plan or Person acting on
behalf of a plan.

         No Transfer of a Class C Certificate may be made to a person that is
either (i) not a "United States person" (as defined for purposes of Section 7701
of the Code) or (ii) a Disqualified Organization or a Person acquiring such
Certificate on behalf (as a broker, agent, nominee or otherwise) of a
Disqualified Organization. The Trustee shall not register any Transfer of a
Class C Certificate unless the Trustee shall have been furnished with a
Transferee Letter in the form attached as Exhibit N (except with respect to the
transfer of a Class C Certificate to any trust which issues NIM Notes). Any
Transfer of a Class C Certificate in violation of the provisions of this Section
5.02(b) shall be absolutely null and void and shall absolutely have no rights in
the purported Transferee.

         (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, without the
         express written consent of the Trustee. 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

                                      -86-
<PAGE>

         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 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, the Class MTR 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 NIMs Insurer and the
         Trustee receive 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, the Class MTR Interest and the residual interest in the
         Upper Tier REMIC shall be severed and represented by separate
         Certificates.

                                      -87-
<PAGE>

         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 and the NIMs Insurer 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 and the NIMs Insurer 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
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 NIMs Insurer, the Trustee and any agent of the NIMs Insurer or 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 NIMs
Insurer nor the Trustee, nor any agent of the NIMs Insurer or 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 NIMs
Insurer or the Depositor shall request such information in writing from the
Trustee, then the Trustee shall, within ten Business Days after the receipt

                                      -88-
<PAGE>

of such request, provide the NIMs Insurer, 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, the Trustee and the NIMs Insurer 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;

         (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.

                                      -89-
<PAGE>

         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, at its sole option, advises the Trustee that it
elects to terminate the book-entry system with respect to such Certificates
through the Depository 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 and
the NIMs Insurer, 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.

         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
2003-WMC3 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.

                                      -90-
<PAGE>

         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 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 any loss, liability
or expense (i) 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). 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 Servicer 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.

         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

                                      -91-
<PAGE>

such effect delivered to the Trustee and the NIMs Insurer. No such resignation
shall become effective until the Trustee or a successor servicer reasonably
acceptable to the Trustee and the NIMs Insurer 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 and the NIMs Insurer, 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 and the NIMs
Insurer.

                                  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
         calendar days and, with respect to a payment required to be made under
         Section 4.01 hereof, for one calendar 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
         NIMs Insurer or 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 the NIMs Insurer or
         the 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

                                      -92-
<PAGE>

                  (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
(with the written consent of the NIMs Insurer, except after a NIMs Insurer
Default), or at the direction of the NIMs Insurer or the Holders of Certificates
evidencing not less than 25% of the Voting Rights evidenced by the Certificates
(with the written consent of the NIMs Insurer, except after a NIMs Insurer
Default), 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. 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, 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

                                      -93-
<PAGE>

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 the appointment of which successor shall be approved by the NIMs
Insurer and 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 acceptable to the NIMs Insurer and 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 and the
NIMs Insurer shall have consented thereto, prior written consent of the NIMs
Insurer is obtained 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 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, the NIMs Insurer 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 and the NIMs
Insurer notice of each such Event of Default hereunder known to the Trustee,
unless such Event of Default shall have been cured or waived.

                                      -94-
<PAGE>

                                  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 the NIMs
Insurer, or may, proceed to protect and enforce its rights and the rights of the
Certificateholders or the NIMs Insurer 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, the NIMs Insurer 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
provide notice thereof to the NIMs Insurer and the Certificateholders and take
such further action as directed by the NIMs Insurer and 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 NIMs
         Insurer or the Holders of each Class of Certificates evidencing not
         less than 25% of the

                                      -95-
<PAGE>

         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
         NIMs Insurer or 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;

                  (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 NIMs Insurer or 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;

                                      -96-
<PAGE>

                  (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 any of the NIMs Insurer or the
         Certificateholders, pursuant to the provisions of this Agreement,
         unless the NIMs Insurer or such 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 may 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 a power of attorney
         in such form as may be agreed to by the Trustee and the Servicer.

         (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.

         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, of any
guarantee of a NIMs Insurer 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:

                                      -97-
<PAGE>

                  (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.

         (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, excluding any Servicing Transfer Costs, in the
aggregate in any calendar year; 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 and all amounts which the NIMs Insurer is
entitled to be paid or reimbursed shall have been paid or reimbursed. 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) and reasonably acceptable to the NIMs
Insurer. 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

                                      -98-
<PAGE>

the NIMs Insurer and their respective 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 NIMs Insurer 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
acceptable to the NIMs Insurer 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 or the NIMs Insurer, (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
(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 or the NIMs
Insurer may remove the Trustee and the Depositor with the consent of the NIMs
Insurer 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, with the consent of the NIMs Insurer, or the NIMs Insurer 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 (or by the NIMs Insurer), 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 NIMs Insurer and 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, the NIMs Insurer 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.

                                      -99-
<PAGE>

         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 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 and the NIMs Insurer to act as co-trustee or
co-trustees jointly with the Trustee, or separate trustee or separate trustees,
of all or any part of 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 and the NIMs Insurer. 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 and the NIMs
Insurer 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

                                     -100-
<PAGE>

         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 with the consent of the NIMs Insurer 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, the NIMs Insurer 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 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

                                     -101-
<PAGE>

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 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,

                                     -102-
<PAGE>

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
Certificate) (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.

                                   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) the exercise by the Trustee or the
NIMs Insurer of 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 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.

         Any termination pursuant to clause (a) above shall be effected by the
auction by the Trustee of all of the Mortgage Loans and REO Properties via a
solicitation of bids from at least three (3) bidders, each of whom shall be a
nationally recognized participant in mortgage finance. The Trustee shall accept
the highest such bid, provided that such bid equals or exceeds the amount
described in clause (i) of the definition of "Optional Termination Price." If
the Trustee elects not to exercise its right to effect an Optional Termination,
the NIMs Insurer may, at its option, terminate the Trust Fund by purchasing all
of the Mortgage Loans and REO Properties at the price equal to the amount
described in clause (ii) of the definition of "Optional Termination Price."
Notwithstanding anything to the contrary herein, the Optional Termination Amount
paid by either the Trustee or the NIMs Insurer shall be deposited by the Trustee
directly into the Certificate Account immediately upon Optional Termination. Any
Optional Termination Amount to be paid by the NIMs Insurer may be paid by the
NIMs Insurer to the Trustee for deposit into the Certificate Account.

         The right of the Trustee or the NIMs Insurer to effect an Optional
Termination pursuant to clause (a) above shall be conditioned upon the aggregate
Stated Principal Balance of the Mortgage Loans, at the time of any such
repurchase, aggregating ten (10) percent or less of the Stated Principal Balance
of the Mortgage Loans as of the Cut-off Date.

                                     -103-
<PAGE>

         The Class R Certificateholder hereby assigns to the Class C
Certificateholders that portion of any amount received by the Class R
Certificate upon an Optional Termination of the trust created hereunder that is
attributable to clause (i)(C) of the definition of Optional Termination Price
and required to cover what would otherwise be a shortfall in the amounts
described in clause (i)(C) of the definition of Optional Termination Price.

         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 and the NIMs Insurer or
(ii) the Trustee 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. If the Trustee elects to terminate the Trust Fund pursuant to clause
(a) of Section 9.01, at least 10 days prior to the date notice is to be mailed
to the affected Certificateholders, the Trustee shall notify the Depositor and
the Servicer of the date such electing party intends to terminate the Trust Fund
and of the applicable repurchase price of the Mortgage Loans and REO Properties.

         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 not earlier than the 10th
day and no later than the 15th 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 the NIMs Insurer and 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 or the NIMs
Insurer, as applicable, 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

                                     -104-
<PAGE>

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 or the NIMs Insurer exercises its
option to effect 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 or the NIMs Insurer, as applicable, 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:

                  (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 or the NIMs Insurer, as
         applicable;

                  (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)      The Trustee as agent for each REMIC hereby agrees to
         adopt and sign such a plan of complete liquidation upon the written
         request of the Depositor, and the receipt of the Opinion of Counsel
         referred to in Section 9.03(a)(i) and to 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, with the consent of the NIMs Insurer and without the
consent of any of the Certificateholders to cure any ambiguity, to correct or
supplement any provisions herein, or to make such other provisions with respect
to matters or questions arising under this Agreement, as shall not be
inconsistent with any other

                                     -105-
<PAGE>

provisions herein if such action shall not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Certificateholder; provided, however, that any such amendment shall be deemed
not to adversely affect in any material respect the interests of the
Certificateholders and no such Opinion of Counsel shall be required if the
Person requesting such amendment obtains a letter from each Rating Agency
stating that such amendment would not result in the downgrading or withdrawal of
the respective ratings then assigned to the Certificates, it being understood
and agreed that any such letter in and of itself will not represent a
determination as to the materiality of any such amendment and will represent a
determination only as to the credit issues affecting any such rating.

         Notwithstanding the foregoing, without the consent of the
Certificateholders but with the consent of the NIMs Insurer, 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 and the NIMs Insurer have been provided an Opinion of Counsel,
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 each Class of Certificates affected
thereby evidencing not less than 66 2/3% of the Voting Rights of such Class,
with the consent of the NIMs Insurer, 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 anything to the contrary in this Agreement, this
Agreement may be amended from time to time by the Depositor, the Servicer and
the Trustee with the consent of the NIMs Insurer and Certificateholders
evidencing not less than 66 2/3% of the Voting Rights of each Class of
Certificates (excluding the Voting Rights of the Depositor, its Affiliates or
its agents) for the purpose of significantly changing the Permitted Activities
of the Trust.

         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, 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 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. A copy of
such Opinion of Counsel shall be provided to the NIMs Insurer.

         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

                                     -106-
<PAGE>

furnish written notification of the substance of such amendment to each
Certificateholder, the NIMs Insurer 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.

         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

                                     -107-
<PAGE>

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 and the NIMs Insurer with respect to each of the
following of which 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;

                  (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
Minnesota, National Association, P.O. Box 98, Columbia, Maryland, 21046,
Attention: Client Manger - MLMI Series 2003-HE1, with a copy to Wells Fargo Bank
Minnesota, National Association, 9062 Old Annapolis Road, Columbia, Maryland
21045, Attention: Client Manager - MLMI Series 2003-HE1; (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 MGIC, Mortgage Guaranty Insurance Corporation, 270 East
Kilbourn Avenue, Milwaukee, Wisconsin 53202, Attention: _________; (e) in the
case of Radian, Radian Guaranty Inc., 1601 Market Street, Philadelphia,
Pennsylvania 19103, Attention: _______________; (f) in the case of the Credit
Risk Manager, The Murrayhill Company, 1700 Lincoln Street, Suite 1600, Denver,
Colorado 80203; (g) in the case of the Servicer, the Provident Bank, One East
Fourth Street, Cincinnati, Ohio 45202, 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

                                     -108-
<PAGE>

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.

         Notwithstanding anything to the contrary contained herein, except as
provided pursuant to Section 6.02, this Agreement may not be assigned by the
Servicer without the prior written consent of the Trustee and 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 and/or the NIMs
Insurer, or to obtain or seek to obtain priority over or preference to any other
such Holder and/or the NIMs Insurer 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.

                                     -109-
<PAGE>

         SECTION 10.09. Inspection and Audit Rights.

         The Servicer agrees that, on reasonable prior notice, it will permit
any representative of the NIMs Insurer, 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 NIMs Insurer, 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 NIMs
Insurer, 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.

         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. Third Party Rights.

         The NIMs Insurer shall be deemed a third-party beneficiary of this
Agreement to the same extent as if it were a party hereto, and shall have the
right to enforce the provisions of this Agreement.

         SECTION 10.12. Additional Rights of the NIMs Insurer.

         (a)      Each party to this Agreement, any agent thereof and any
successor thereto shall furnish to the NIMs Insurer a copy of any notice,
direction, demand, opinion, schedule, list, certificate, report, statement,
filing, information, data or other communication provided by it or on its behalf
to any other Person pursuant to this Agreement at the same time, in the same
form and in the same manner as such communication is so provided and shall
address or cause such communication to be addressed to the NIMs Insurer in
addition to any other addressee thereof. The Servicer shall cause the NIMs
Insurer to be an addressee of any report furnished pursuant to this Agreement.

         (b)      Wherever in this Agreement there shall be a requirement that
there be no downgrade, reduction, withdrawal or qualification of or other effect
on the rating of any Class of Certificates by any Rating Agency as of any date,
there also shall be deemed to be a requirement that there be no such effect on
any class of notes issued pursuant to the Indenture and guaranteed by the NIMs
Insurer as of such date. In addition, unless there exists a continuance of any
failure by the NIMs Insurer to make a required payment under the policy insuring
the NIM Notes (such event, a "NIMs Insurer Default"), wherever in this Agreement
there shall be a requirement that any Person or any communication, object or
other matter be acceptable or satisfactory to or otherwise receive the consent
or other approval of any other Person (whether as a condition to the eligibility
of such Person to act in any capacity, as a condition to any circumstance or
state of affairs related to such matter, or otherwise), there also shall be
deemed to be a requirement that such Person or matter be approved in writing by
the NIMs Insurer, which approval shall not be unreasonably withheld or delayed.

                                     -110-
<PAGE>

         SECTION 10.13. Credit Risk Manager

         (a)      For and on behalf of the Depositor, the Credit Risk Manager
will provide reports and recommendations concerning certain delinquent and
defaulted Mortgage Loans, and as to the collection of any Prepayment Charges
with respect to the Mortgage Loans. Upon their request, the Depositor shall
forward copies of such reports to the Trustee and the NIMs Insurer. Such reports
and recommendations will be based upon information provided to the Credit Risk
Manager pursuant to the Credit Risk Management Agreement, and the Credit Risk
Manager shall look solely to the related Servicer for all information and data
(including loss and delinquency information and data) relating to the servicing
of the Mortgage Loans. Upon any termination of the Credit Risk Manager or the
appointment of a successor Credit Risk Manager, the Depositor shall give written
notice thereof to the Servicer, the Trustee, and each Rating Agency.
Notwithstanding the foregoing, the termination of the Credit Risk Manager
pursuant to this Section shall not become effective until the appointment of a
successor Credit Risk Manager.

         (b)      Neither the Credit Risk Manager, nor any of its directors,
officers, employees, or agents shall be under any liability to the Trustee, the
Certificateholders, or the Depositor for any action taken or for refraining from
the taking of any action made in good faith pursuant to this Agreement, in
reliance upon information provided by the Servicer under the applicable Credit
Risk Management Agreement, or for errors in judgment; provided, however, that
this provision shall not protect the Credit Risk Manager or any such person
against liability that would otherwise be imposed by reason of willful
malfeasance or bad faith in its performance of its duties. The Credit Risk
Manager and any director, officer, employee, or agent of the Credit Risk Manager
may rely in good faith on any document of any kind prima facie properly executed
and submitted by any Person respecting any matters arising hereunder, and may
rely in good faith upon the accuracy of information furnished by the Servicer
pursuant to the applicable Credit Risk Management Agreement in the performance
of its duties thereunder and hereunder.

         (c)      The Credit Risk Manager may be removed as Credit Risk Manager
by Certificateholders holding not less than 66 2/3% of the Voting Rights in the
Trust, in the exercise of its or their sole discretion. The Certificateholders
shall provide written notice of the Credit Risk Manager's removal to the
Trustee. Upon receipt of such notice, the Trustee shall provide written notice
to the Credit Risk Manager of its removal, which shall be effective upon receipt
of such notice by the Credit Risk Manager.

                                     -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

                                         THE PROVIDENT BANK,
                                             as Servicer

                                         By: ___________________________________
                                         Name:
                                         Title:

                                         WELLS FARGO BANK MINNESOTA, NATIONAL
                                         ASSOCIATION,
                                             not in its individual capacity,
                                             but solely as Trustee

                                         By: ___________________________________
                                         Name:  Sandra L. Whalen
                                         Title: Vice President

<PAGE>

Solely for purposes of Section 10.13,
accepted and agreed to by:

THE MURRAYHILL COMPANY

By: _________________________________
    Name:
    Title:

<PAGE>

                                    EXHIBIT A

                          FORMS OF OFFERED CERTIFICATES

                             [INTENTIONALLY OMITTED]

                                       A-1

<PAGE>

                                    EXHIBIT B

                             MORTGAGE LOAN SCHEDULE

                             [INTENTIONALLY OMITTED]

                                       B-1

<PAGE>

                                   EXHIBIT B-2

                   MORTGAGE LOAN SCHEDULE - PMI MORTGAGE LOANS

                             [INTENTIONALLY OMITTED]

                                      B-2-1

<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

Radian Guaranty Inc.
1601 Market Street
Philadelphia, Pennsylvania 19103

The Provident Bank
One East Fourth Street
Cincinnati, Ohio 45202

Re:      Pooling and Servicing Agreement dated as of October 1, 2003 among
         Merrill Lynch Mortgage Investors, Inc., as depositor, The Provident
         Bank, as servicer and Wells Fargo Bank Minnesota, National Association,
         as trustee, relating to the Merrill Lynch Mortgage Investors Trust,
         Mortgage Loan Asset-Backed Certificates, Series 2003-HE1

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 the Mortgage Loan
number and the name of the Mortgagor in each Mortgage File conform to the
respective Mortgage Loan number and name listed on the Mortgage Loan Schedule
and (ii) the existence in each Mortgage File of each of the documents listed in
subparagraphs

                                       D-1

<PAGE>

(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, 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 MINNESOTA, NATIONAL
                                            ASSOCIATION,
                                            as Trustee

                                            By: ________________________________
                                            Name: ______________________________
                                            Title: _____________________________

                                       D-2

<PAGE>

                                   EXHIBIT E-1

                           FORM OF TRANSFEREE'S LETTER
        MERRILL LYNCH MORTGAGE INVESTORS, INC. MORTGAGE LOAN ASSET-BACKED
                          CERTIFICATES, SERIES 2003-HE1

                                     [DATE]

Wells Fargo Bank Minnesota, National Association
9062 Old Annapolis Road
Columbia, Maryland 21045
Attention: Corporate Trust Services - MLMI 2003-HE1

Ladies and Gentlemen:

         We propose to purchase Merrill Lynch Mortgage Investors Trust, Mortgage
Loan Asset-Backed Certificates, Series 2003-HE1, Class R, described in the
Prospectus Supplement, dated November __, 2003, and Prospectus, dated July 3,
2003.

         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 held in the name of
                           our nominee, _________________, which is not a
                           disqualified organization.

         4.       We certify that we are not an employee benefit plan subject to
Title I of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or a plan within the meaning of Section 4975 of the Code or a plan
subject to federal, state or local law materially similar to the foregoing
provisions of ERISA and the Code (each, a "Plan"), and are not directly or
indirectly purchasing the Class R Certificate on behalf of, as investment
manager of, as named fiduciary of, as trustee of or with the assets of a Plan or
directly or indirectly purchasing the Class R Certificate with the assets of any
insurance company separate account or general account containing any "plan
assets" or of any 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.

                                      E-1-2

<PAGE>

         7.       We hereby designate _______________________ as our fiduciary
to act as the tax matters person for each of the REMICs provided for in the
Agreement.

                                             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
         2003-HE1, 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:

                                      E-1-4
<PAGE>

         (A)      the present value of any consideration given to the Transferee
                  to acquire such residual interest;

         (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
        MERRILL LYNCH MORTGAGE INVESTORS, INC. MORTGAGE LOAN ASSET-BACKED
                          CERTIFICATES, SERIES 2003-HE1

                                     [DATE]

Wells Fargo Bank Minnesota, National Association
9062 Old Annapolis Road
Columbia, Maryland 21045
Attention: Corporate Trust Services - MLMI 2003-HE1

Re:      Merrill Lynch Mortgage Investors Trust Mortgage Loan Asset-Backed
         Certificates, Series 2003-HE1

                  _______________________ (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 Minnesota, National Association
9062 Old Annapolis Road
Columbia, Maryland 21045
Attention: Corporate Trust Services - MLMI 2003-HE1

RE:      Merrill Lynch Mortgage Investors Trust, Mortgage Loan Asset-Backed
         Certificates, Series 2003-HE1

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, 2003, among Merrill Lynch
Mortgage, Inc., as depositor, The Provident Bank, as servicer and Wells Fargo
Bank Minnesota, National Association, 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 Minnesota, National Association
9062 Old Annapolis Road
Columbia, Maryland 21045
Attention: Corporate Trust Services - MLMI 2003-HE1

Re:      Merrill Lynch Mortgage Investors Trust, Mortgage Loan Asset-Backed
         Certificates, Series 2003-HE1 [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
2003-HE1, [CLASS C OR P] (the "Certificates"), issued pursuant to a Pooling and
Servicing Agreement, dated as of October 1, 2003 (the "Pooling and Servicing
Agreement"), among Merrill Lynch Mortgage Investors, Inc., as depositor (the
"Depositor"), The Provident Bank, as servicer (the "Servicer") and Wells Fargo
Bank Minnesota, National Association, 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 MADE UNLESS THE TRUSTEE SHALL
         HAVE RECEIVED EITHER (I) A REPRESENTATION LETTER FROM THE TRANSFEREE OF
         THIS CERTIFICATE TO THE EFFECT THAT SUCH TRANSFEREE EITHER (A) IS NOT
         AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT
         INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA") OR SECTION 4975 OF
         THE CODE OR ANY APPLICABLE FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW")
         (EACH, A "PLAN") MATERIALLY SIMILAR TO THE FOREGOING PROVISIONS OF
         ERISA AND THE CODE, AND IS NOT DIRECTLY OR INDIRECTLY PURCHASING ANY
         CERTIFICATE ON BEHALF OF, AS INVESTMENT MANAGER OF, AS NAMED FIDUCIARY
         OF, AS TRUSTEE OF OR WITH ASSETS OF A PLAN OR, IN THE CASE OF AN
         INSURANCE COMPANY, THE ASSETS OF ANY SEPARATE ACCOUNTS CONTAINING ANY
         "PLAN ASSETS" PURSUANT TO THE DEPARTMENT OF LABOR REGULATIONS SET FORTH
         IN 29 CFR ss.2510.3-101 TO EFFECT SUCH ACQUISITION OR (B) A
         REPRESENTATION LETTER THAT THE TRANSFEREE IS AN INSURANCE COMPANY THAT
         IS PURCHASING THE CERTIFICATE WITH FUNDS CONTAINED IN AN "INSURANCE
         COMPANY GENERAL ACCOUNT" (AS SUCH TERM IS DEFINED IN SECTION V(E) OF
         PROHIBITED TRANSACTION CLASS EXEMPTION 95-60, 60 FED. REG. 35925 (JULY
         12, 1995) ("PTCE 95-60"), AND THE PURCHASE AND HOLDING OF THE
         CERTIFICATE IS COVERED UNDER SECTIONS I AND III OF PTCE 95-60, OR (II)
         AN OPINION OF COUNSEL TO THE EFFECT THAT THE PURCHASE AND HOLDING OF
         THE CERTIFICATE WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER
         ERISA, THE CODE OR SIMILAR LAW AND WILL NOT SUBJECT THE NIMS INSURER OR
         THE TRUSTEE TO ANY OBLIGATION IN ADDITION TO THOSE EXPRESSLY UNDERTAKEN
         IN THE POOLING AND SERVICING AGREEMENT, WHICH REPRESENTATION LETTER OR
         OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE NIMS INSURER OR THE
         TRUSTEE.

         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.

         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

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

* Not required of a broker/dealer purchaser.

                                       G-2
<PAGE>

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 either (A) is not an employee benefit plan
subject to Title I of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or a plan within the meaning of Section 4975 of the Internal
Revenue Code of 1986, as amended (the "Code") or a plan subject to federal state
or local law materially similar to the foregoing provisions of ERISA and the
Code ("Similar Law") (each, a "Plan"), and is not directly or indirectly
purchasing any Certificate on behalf of, as investment manager of, as named
fiduciary of, as trustee of or with assets of a Plan or directly or indirectly
purchasing any certificates with the assets of any insurance company separate
account containing any "plan assets" or of any Plan, (B) is an insurance company
that is purchasing the Certificate with funds contained in an "insurance company
general account" (as such term is defined in Section V(e) of Prohibited
Transaction Class Exemption 95-60, 60 Fed. Reg. 35925 (July 12, 1995) ("PTCE
95-60"), and the purchase and holding of the Certificate is covered under
Sections I and III of PTCE 95-60, or (C) herewith delivers to the Trustee an
Opinion of Counsel satisfactory to the Trustee, and upon which the Trustee shall
be entitled to rely, to the effect that the purchase and holding of the
Certificate by the Purchaser will not result in a prohibited transaction under
ERISA, the Code or Similar Law and will not subject the NIMs Insurer or the
Trustee to any obligation in addition to those expressly undertaken in the
Pooling and Servicing Agreement, which Opinion of Counsel shall not be an
expense of the NIMs Insurer or the Trustee.

         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 Minnesota, National Association
9062 Old Annapolis Road
Columbia, Maryland 21045
Attention: Corporate Trust Services - MLMI 2003-HE1

Re:      Merrill Lynch Mortgage Investors Trust, Mortgage Loan Asset-Backed
         Certificates, Series 2003-HE1 [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
2003-HE1, [CLASS C OR P] (the "Certificates"), issued pursuant to a Pooling and
Servicing Agreement, dated as of October 1, 2003 (the "Pooling and Servicing
Agreement"), among Merrill Lynch Mortgage Investors, Inc., as depositor (the
"Depositor"), The Provident Bank, as servicer (the "Servicer"), and Wells Fargo
Bank Minnesota, National Association, 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 either (i) are not an employee benefit plan subject to Title I of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or a plan
within the meaning of Section 4975 of the Internal Revenue Code of 1986, as
amended (the "Code") or a plan subject to federal, state or local law materially
similar to the foregoing provisions of ERISA and the Code ("Similar Law") (each,
a "Plan"), nor are we directly or indirectly purchasing any Certificate on
behalf of, as investment manager of, as named fiduciary of, as trustee of or
with assets of a Plan or directly or indirectly purchasing any certificates with
the assets of any insurance company separate account containing any "plan
assets" or of any Plan, (ii) are an insurance

                                       H-1
<PAGE>

company that is purchasing the Transferred Certificates with funds contained in
an "insurance company general account" (as such term is defined in Section V(e)
of Prohibited Transaction Class Exemption 95-60, 60 Fed. Reg. 35925 (July 12,
1995) ("PTCE 95-60"), and the purchase and holding of the Certificates is
covered under Sections I and III of PTCE 95-60, or (iii) herewith have delivered
to the Trustee an Opinion of Counsel satisfactory to the Trustee, and upon which
the Trustee shall be entitled to rely, to the effect that the purchase and
holding of the Transferred Certificates by the Purchaser will not result in a
prohibited transaction under ERISA, the Code or Similar Law and will not subject
the NIMs Insurer or the Trustee to any obligation in addition to those expressly
undertaken in the Pooling and Servicing Agreement, which Opinion of Counsel
shall not be an expense of the NIMs Insurer or the Trustee, (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.

                  ____     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.

                  ____     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

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

* 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>

                           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.

                  ____     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.

         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.

         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.

                                       H-4
<PAGE>

                                              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 Minnesota, National Association
         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, 2003 among
         Merrill Lynch Mortgage Investors, Inc., as depositor, The Provident
         Bank, as servicer and Wells Fargo Bank Minnesota, National Association,
         as trustee, relating to the Merrill Lynch Mortgage Investors Trust,
         Mortgage Loan Asset-Backed Certificates, Series 2003-HE1

         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

_______ 6.        Other Reason: __________________________

Address to which the Trustee should deliver the Mortgage File:

                                         By:______________________________
                                                  (authorized signer)

                                         Address:__________________________

                                         Date:_____________________________

                                       I-1

<PAGE>

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.

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 Minnesota, National Association, as Trustee

By: ____________________________                ________________________________
    Signature                                   Date

Documents returned to Trustee:

By: ____________________________                ________________________________
    Trustee                                     Date

                                      I-2
<PAGE>

                                    EXHIBIT J

                                   MGIC POLICY

                             [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, 2003 among Merrill Lynch Mortgage Investors, Inc., as depositor, The
         Provident Bank, as servicer and Wells Fargo Bank Minnesota, National
         Association, as trustee, Merrill Lynch Mortgage Investors Trust,
         Mortgage Loan Asset-Backed Certificates, Series 2003-HE1

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 Minnesota, National Association,
                             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 Minnesota, N.A.
9062 Old Annapolis Road, 47th Floor
Columbia, Maryland 21045
Attention: Client Manager - MLMI Series 2003-HE1

Re:      Merrill Lynch Mortgage Investors Trust, Mortgage Loan Asset-Backed
         Certificates, Series 2003-HE1

         Reference is made to the Pooling and Servicing Agreement, dated as of
October 1, 2003 (the "Agreement"), by and among Merrill Lynch Mortgage
Investors, Inc., as depositor, The Provident Bank, as servicer (the "Servicer")
and Wells Fargo Bank Minnesota, National Association, 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

                                       L-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:

                                            The Provident Bank, as Servicer

                                            By: ____________________________

                                            Name: __________________________

                                            Title: _________________________

                                       L-2
<PAGE>

                                    EXHIBIT M

                               TRANSFEREE'S LETTER

Wells Fargo Bank Minnesota, N.A.
9062 Old Annapolis Road, 47th Floor
Columbia, Maryland 21045
Attention: Client Manager - MLMI Series 2003-HE1

Re:      Merrill Lynch Mortgage Investors Trust, Mortgage Loan Asset-Backed
         Certificates, Series 2003-HE1: Class C Certificates

[if provided by Transferee:

         The undersigned represents to the Trustee that (i) it is a United
States person (as such term is defined for purposes of Section 7701 of the
Code), (ii) it is not a Disqualified Organization, (iii) it is not acquiring an
interest in a Class C Certificate on behalf of a Person that is (x) not a United
States person (as defined for purposes of Section 7701 of the Code) or (y) a
Disqualified Organization and (iv) it will not Transfer an interest in a Class C
Certificate to any Person unless such Person provides it and the Trustee with a
Transferee Letter in the form of this letter.]

[if provided by the Transferor:

         The undersigned represents to the Trustee that (i) the transferee of
the Class C Certificate (the "Transferee") is not treated for federal income tax
purposes as an entity separate from [Transferor's name] (the "Transferor"), the
transferor of such Class C Certificate, (ii) the Transferor will not, so long as
the Transferee holds the Class C Certificate, permit the Transferee to be
treated for federal income tax purposes as an entity separate from the
Transferor (other than in connection with a transaction as to which the
requirements of clause (iii) below are complied with) without first obtaining
from the Transferee, for the benefit of the Trustee as Trustee of the Merrill
Lynch Mortgage Investors Trust, Series 2003-HE1, a Transferee Letter in the form
set forth above and (iii) the Transferor will not, so long as the Transferee
holds the Class C Certificate, transfer all of the equity ownership interests in
the Transferee (as determined for federal income tax purposes) to another Person
unless such Person provides it and the Trustee with a Transferee Letter in the
form set forth above (substituting references to "the [Transferee's name]" for
references to "a Class C Certificate")].

                                            By: ____________________________

                                            Name: __________________________

                                            Title: _________________________

                                       M-1

<PAGE>

                                    EXHIBIT N

                              FORM OF CAP CONTRACT

                             [INTENTIONALLY OMITTED]

                                       N-1exv4w1

Table of Contents

     EXHIBIT 4.1

EXECUTION COPY

DELPHI CORPORATION

AND

BANK ONE TRUST COMPANY, N.A.

TRUSTEE

INDENTURE

DATED AS OF OCTOBER 28, 2003

SUBORDINATED DEBT SECURITIES

 

TABLE OF CONTENTS

									
	ARTICLE ONE DEFINITIONS
		SECTION 1.01. DEFINITIONS.
		SECTION 1.02. NOTICE TO SECURITYHOLDERS.
	ARTICLE TWO ISSUE, EXECUTION, REGISTRATION AND EXCHANGE OF DEBT SECURITIES
		SECTION 2.01. AMOUNT UNLIMITED; ISSUABLE IN SERIES.
		SECTION 2.02. FORM OF TRUSTEE’S CERTIFICATE OF AUTHENTICATION.
		SECTION 2.03. FORM, EXECUTION, AUTHENTICATION, DELIVERY AND DATING OF DEBT SECURITIES.
		SECTION 2.04. DENOMINATIONS; RECORD DATE.
		SECTION 2.05. EXCHANGE AND REGISTRATION OF TRANSFER OF DEBT SECURITIES.
		SECTION 2.06. TEMPORARY DEBT SECURITIES.
		SECTION 2.07. MUTILATED, DESTROYED, LOST OR STOLEN DEBT SECURITIES.
		SECTION 2.08. CANCELLATION.
		SECTION 2.09. COMPUTATION OF INTEREST.
		SECTION 2.10. DEBT SECURITIES IN GLOBAL FORM.
		SECTION 2.11. MEDIUM-TERM SECURITIES.
		SECTION 2.12. CUSIP NUMBERS.
	ARTICLE THREE REDEMPTION OF DEBT SECURITIES
		SECTION 3.01. APPLICABILITY OF ARTICLE.
		SECTION 3.02. NOTICE OF REDEMPTION; SELECTION OF DEBT SECURITIES.
		SECTION 3.03. PAYMENT OF DEBT SECURITIES CALLED FOR REDEMPTION.
	ARTICLE FOUR PARTICULAR COVENANTS OF THE CORPORATION
		SECTION 4.01. PAYMENT OF PRINCIPAL, PREMIUM, INTEREST AND ADDITIONAL AMOUNTS.
		SECTION 4.02. OFFICES FOR NOTICES AND PAYMENTS, ETC.
		SECTION 4.03. PROVISIONS AS TO PAYING AGENT.
		SECTION 4.04. LUXEMBOURG PUBLICATIONS.
		SECTION 4.05. STATEMENT BY OFFICERS AS TO DEFAULT.
	ARTICLE FIVE SECURITYHOLDER LISTS AND REPORTS BY THE CORPORATION AND THE TRUSTEE
		SECTION 5.01. SECURITYHOLDER LISTS.
		SECTION 5.02. PRESERVATION AND DISCLOSURE OF LISTS.
		SECTION 5.03. REPORTS BY THE CORPORATION.
		SECTION 5.04. REPORTS BY THE TRUSTEE.
	ARTICLE SIX REMEDIES ON DEFAULT
		SECTION 6.01. EVENTS OF DEFAULT.
		SECTION 6.02. PAYMENT OF DEBT SECURITIES ON DEFAULT; SUIT THEREFOR.
		SECTION 6.03. APPLICATION OF MONIES COLLECTED BY TRUSTEE.
		SECTION 6.04. PROCEEDINGS BY SECURITYHOLDERS.
		SECTION 6.05. REMEDIES CUMULATIVE AND CONTINUING.
		SECTION 6.06. DIRECTION OF PROCEEDINGS.
		SECTION 6.07. NOTICE OF DEFAULTS.
		SECTION 6.08. UNDERTAKING TO PAY COSTS.
	ARTICLE SEVEN CONCERNING THE TRUSTEE
		SECTION 7.01. DUTIES AND RESPONSIBILITIES OF TRUSTEE.
		SECTION 7.02. RELIANCE ON DOCUMENTS, OPINIONS, ETC.
		SECTION 7.03. NO RESPONSIBILITY FOR RECITALS, ETC.
		SECTION 7.04. OWNERSHIP OF DEBT SECURITIES OR COUPONS.
		SECTION 7.05. MONIES TO BE HELD IN TRUST.
		SECTION 7.06. COMPENSATION AND EXPENSES OF TRUSTEE.
		SECTION 7.07. OFFICERS’ CERTIFICATE AS EVIDENCE.
		SECTION 7.08. CONFLICTING INTEREST OF TRUSTEE.
		SECTION 7.09. ELIGIBILITY OF TRUSTEE.
		SECTION 7.10. RESIGNATION OR REMOVAL OF TRUSTEE.
		SECTION 7.11. ACCEPTANCE BY SUCCESSOR TRUSTEE.
		SECTION 7.12. SUCCESSOR BY MERGER, ETC.
		SECTION 7.13. LIMITATIONS ON RIGHTS OF TRUSTEE AS CREDITOR.
	ARTICLE EIGHT CONCERNING THE SECURITYHOLDERS
		SECTION 8.01. ACTION BY SECURITYHOLDERS.
		SECTION 8.02. PROOF OF EXECUTION BY SECURITYHOLDERS.
		SECTION 8.03. WHO ARE DEEMED ABSOLUTE OWNERS.
		SECTION 8.04. CORPORATION-OWNED DEBT SECURITIES DISREGARDED.
		SECTION 8.05. REVOCATION OF CONSENTS; FUTURE SECURITYHOLDERS BOUND.
		SECTION 8.06. SECURITIES IN A FOREIGN CURRENCY.
	ARTICLE NINE SECURITYHOLDERS’ MEETINGS
		SECTION 9.01. PURPOSES OF MEETINGS.
		SECTION 9.02. CALL OF MEETINGS BY TRUSTEE.
		SECTION 9.03. CALL OF MEETINGS BY CORPORATION OR SECURITYHOLDERS.
		SECTION 9.04. QUALIFICATION FOR VOTING.
		SECTION 9.05. REGULATIONS.
		SECTION 9.06. VOTING.
	ARTICLE TEN SUPPLEMENTAL INDENTURES
		SECTION 10.01. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF SECURITYHOLDERS.
		SECTION 10.02. SUPPLEMENTAL INDENTURES WITH CONSENT OF SECURITYHOLDERS.
		SECTION 10.03. COMPLIANCE WITH TRUST INDENTURE ACT; EFFECT OF SUPPLEMENTAL INDENTURES.
		SECTION 10.04. NOTATION ON DEBT SECURITIES.
	ARTICLE ELEVEN CONSOLIDATION, MERGER, SALE OR CONVEYANCE
		SECTION 11.01. CORPORATION MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.
		SECTION 11.02. SUCCESSOR CORPORATION SUBSTITUTED.
		SECTION 11.03. CERTIFICATE TO TRUSTEE.
	ARTICLE TWELVE SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONIES
		SECTION 12.01. DISCHARGE OF INDENTURE.
		SECTION 12.02. SATISFACTION, DISCHARGE AND DEFEASANCE OF DEBT SECURITIES OF ANY SERIES.
		SECTION 12.03. DEPOSITED MONIES TO BE HELD IN TRUST BY TRUSTEE.
		SECTION 12.04. PAYING AGENT TO REPAY MONIES HELD.
		SECTION 12.05. RETURN OF UNCLAIMED MONIES.
	ARTICLE THIRTEEN IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
		SECTION 13.01. INDENTURE AND DEBT SECURITIES SOLELY CORPORATE OBLIGATIONS.
	ARTICLE FOURTEEN MISCELLANEOUS PROVISIONS
		SECTION 14.01. BENEFITS OF INDENTURE RESTRICTED TO PARTIES AND SECURITYHOLDERS.
		SECTION 14.02. PROVISIONS BINDING ON CORPORATION’S SUCCESSORS.
		SECTION 14.03. ADDRESSES FOR NOTICES, ETC.
		SECTION 14.04. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
		SECTION 14.05. LEGAL HOLIDAYS.
		SECTION 14.06. TRUST INDENTURE ACT TO CONTROL.
		SECTION 14.07. EXECUTION IN COUNTERPARTS.
		SECTION 14.08. NEW YORK CONTRACT.
		SECTION 14.09. JUDGMENT CURRENCY.
		SECTION 14.10. SEVERABILITY OF PROVISIONS.
		SECTION 14.11. CORPORATION RELEASED FROM INDENTURE REQUIREMENTS UNDER CERTAIN CIRCUMSTANCES.
	ARTICLE FIFTEEN SINKING FUNDS
		SECTION 15.01. APPLICABILITY OF ARTICLE.
		SECTION 15.02. SATISFACTION OF SINKING FUND PAYMENTS WITH DEBT SECURITIES.
		SECTION 15.03. REDEMPTION OF DEBT SECURITIES FOR SINKING FUND.
		ARTICLE SIXTEEN REPAYMENT AT THE OPTION OF HOLDERS
		SECTION 16.01. APPLICABILITY OF ARTICLE.
		SECTION 16.02. REPAYMENT OF DEBT SECURITIES.
		SECTION 16.03. EXERCISE OF OPTION; NOTICE.
		SECTION 16.04. ELECTION OF REPAYMENT BY REMARKETING ENTITIES.
		SECTION 16.05. DEBT SECURITIES PAYABLE ON THE REPAYMENT DATE.
	ARTICLE SEVENTEEN SUBORDINATION OF DEBT SECURITIES
		SECTION 17.01. DEBT SECURITIES SUBORDINATE TO SENIOR DEBT.
		SECTION 17.02. TRUSTEE AND HOLDERS OF DEBT SECURITIES MAY RELY ON CERTIFICATE OF LIQUIDATING AGENT; TRUSTEE MAY REQUIRE FURTHER EVIDENCE AS TO OWNERSHIP OF SENIOR DEBT; TRUSTEE NOT FIDUCIARY TO HOLDERS OF SENIOR DEBT.
		SECTION 17.03. PAYMENT PERMITTED IF NO DEFAULT.
		SECTION 17.04. TRUSTEE NOT CHARGED WITH KNOWLEDGE OF PROHIBITION.
		SECTION 17.05. TRUSTEE TO EFFECTUATE SUBORDINATION.
		SECTION 17.06. RIGHTS OF TRUSTEE AS HOLDER OF SENIOR DEBT.
		SECTION 17.07. ARTICLE APPLICABLE TO PAYING AGENTS.
		SECTION 17.08. SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS OF THE CORPORATION OR HOLDERS OF SENIOR DEBT.
		ARTICLE EIGHTEEN CONVERSION OF CONVERTIBLE SECURITIES
		SECTION 18.01. APPLICABILITY OF ARTICLE.
		SECTION 18.02. RIGHT TO CONVERT.
		SECTION 18.03. EXERCISE OF CONVERSION PRIVILEGE; DELIVERY OF COMMON STOCK ON CONVERSION; NO ADJUSTMENT FOR INTEREST OR DIVIDENDS.
		SECTION 18.04. CASH PAYMENTS IN LIEU OF FRACTIONAL SHARES.
		SECTION 18.05. CONVERSION PRICE.
		SECTION 18.06. ADJUSTMENT TO CONVERSION PRICE.
		SECTION 18.07. EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE.
		SECTION 18.08. TAXES ON SHARES ISSUED.
		SECTION 18.09. SHARES TO BE FULLY PAID; COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS; LISTING OF COMMON STOCK.
		SECTION 18.10. TRUSTEE NOT RESPONSIBLE.
		SECTION 18.11. NOTICE TO HOLDERS PRIOR TO CERTAIN ACTIONS.
		SECTION 18.12. COVENANT TO RESERVE SHARES.
	Underwriting Agreement
	Subordinated Indenture
	Certificate of Amendment
	Junior Subordinated Note
	Opinion of Shearman & Sterling LLP
	Statement of Eligibility on Form T
	Statement of Eligibility on Form T

Table of Contents

TABLE OF CONTENTS

	 	 	 	 	 	 
	 	 	 	PAGE
	 	 	 	

	ARTICLE ONE DEFINITIONS
	 	 	1	 
	 	SECTION 1.01. DEFINITIONS
	 	 	1	 
	 	SECTION 1.02. NOTICE TO SECURITYHOLDERS
	 	 	9	 
	ARTICLE TWO ISSUE, EXECUTION, REGISTRATION AND EXCHANGE OF DEBT SECURITIES
	 	 	9	 
	 	SECTION 2.01. AMOUNT UNLIMITED; ISSUABLE IN SERIES
	 	 	9	 
	 	SECTION 2.02. FORM OF TRUSTEE’S CERTIFICATE OF AUTHENTICATION
	 	 	12	 
	 	SECTION 2.03. FORM, EXECUTION, AUTHENTICATION, DELIVERY AND DATING OF DEBT SECURITIES
	 	 	12	 
	 	SECTION 2.04. DENOMINATIONS; RECORD DATE
	 	 	14	 
	 	SECTION 2.05. EXCHANGE AND REGISTRATION OF TRANSFER OF DEBT SECURITIES
	 	 	15	 
	 	SECTION 2.06. TEMPORARY DEBT SECURITIES
	 	 	16	 
	 	SECTION 2.07. MUTILATED, DESTROYED, LOST OR STOLEN DEBT SECURITIES
	 	 	17	 
	 	SECTION 2.08. CANCELLATION
	 	 	18	 
	 	SECTION 2.09. COMPUTATION OF INTEREST
	 	 	18	 
	 	SECTION 2.10. DEBT SECURITIES IN GLOBAL FORM
	 	 	18	 
	 	SECTION 2.11. MEDIUM-TERM SECURITIES
	 	 	20	 
	 	SECTION 2.12. CUSIP NUMBERS
	 	 	20	 
	ARTICLE THREE REDEMPTION OF DEBT SECURITIES
	 	 	21	 
	 	SECTION 3.01. APPLICABILITY OF ARTICLE
	 	 	21	 
	 	SECTION 3.02. NOTICE OF REDEMPTION; SELECTION OF DEBT SECURITIES
	 	 	21	 
	 	SECTION 3.03. PAYMENT OF DEBT SECURITIES CALLED FOR REDEMPTION
	 	 	22	 
	ARTICLE FOUR PARTICULAR COVENANTS OF THE CORPORATION
	 	 	23	 
	 	SECTION 4.01. PAYMENT OF PRINCIPAL, PREMIUM, INTEREST AND ADDITIONAL AMOUNTS
	 	 	23	 
	 	SECTION 4.02. OFFICES FOR NOTICES AND PAYMENTS, ETC
	 	 	23	 
	 	SECTION 4.03. PROVISIONS AS TO PAYING AGENT
	 	 	24	 
	 	SECTION 4.04. LUXEMBOURG PUBLICATIONS
	 	 	25	 
	 	SECTION 4.05. STATEMENT BY OFFICERS AS TO DEFAULT
	 	 	25	 

 

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	ARTICLE FIVE SECURITYHOLDER LISTS AND REPORTS BY THE CORPORATION AND THE TRUSTEE
	 	 	25	 
	 	SECTION 5.01. SECURITYHOLDER LISTS
	 	 	25	 
	 	SECTION 5.02. PRESERVATION AND DISCLOSURE OF LISTS
	 	 	26	 
	 	SECTION 5.03. REPORTS BY THE CORPORATION
	 	 	27	 
	 	SECTION 5.04. REPORTS BY THE TRUSTEE
	 	 	28	 
	ARTICLE SIX REMEDIES ON DEFAULT
	 	 	28	 
	 	SECTION 6.01. EVENTS OF DEFAULT
	 	 	28	 
	 	SECTION 6.02. PAYMENT OF DEBT SECURITIES ON DEFAULT; SUIT THEREFOR
	 	 	30	 
	 	SECTION 6.03. APPLICATION OF MONIES COLLECTED BY TRUSTEE
	 	 	32	 
	 	SECTION 6.04. PROCEEDINGS BY SECURITYHOLDERS
	 	 	33	 
	 	SECTION 6.05. REMEDIES CUMULATIVE AND CONTINUING
	 	 	34	 
	 	SECTION 6.06. DIRECTION OF PROCEEDINGS
	 	 	34	 
	 	SECTION 6.07. NOTICE OF DEFAULTS
	 	 	35	 
	 	SECTION 6.08. UNDERTAKING TO PAY COSTS
	 	 	35	 
	ARTICLE SEVEN CONCERNING THE TRUSTEE
	 	 	35	 
	 	SECTION 7.01. DUTIES AND RESPONSIBILITIES OF TRUSTEE
	 	 	35	 
	 	SECTION 7.02. RELIANCE ON DOCUMENTS, OPINIONS, ETC
	 	 	36	 
	 	SECTION 7.03. NO RESPONSIBILITY FOR RECITALS, ETC
	 	 	37	 
	 	SECTION 7.04. OWNERSHIP OF DEBT SECURITIES OR COUPONS
	 	 	38	 
	 	SECTION 7.05. MONIES TO BE HELD IN TRUST
	 	 	38	 
	 	SECTION 7.06. COMPENSATION AND EXPENSES OF TRUSTEE
	 	 	38	 
	 	SECTION 7.07. OFFICERS’ CERTIFICATE AS EVIDENCE
	 	 	38	 
	 	SECTION 7.08. CONFLICTING INTEREST OF TRUSTEE
	 	 	39	 
	 	SECTION 7.09. ELIGIBILITY OF TRUSTEE
	 	 	39	 
	 	SECTION 7.10. RESIGNATION OR REMOVAL OF TRUSTEE
	 	 	39	 
	 	SECTION 7.11. ACCEPTANCE BY SUCCESSOR TRUSTEE
	 	 	40	 
	 	SECTION 7.12. SUCCESSOR BY MERGER, ETC
	 	 	41	 
	 	SECTION 7.13. LIMITATIONS ON RIGHTS OF TRUSTEE AS CREDITOR
	 	 	42	 
	ARTICLE EIGHT CONCERNING THE SECURITYHOLDERS
	 	 	42	 
	 	SECTION 8.01. ACTION BY SECURITYHOLDERS
	 	 	42	 
	 	SECTION 8.02. PROOF OF EXECUTION BY SECURITYHOLDERS
	 	 	42	 
	 	SECTION 8.03. WHO ARE DEEMED ABSOLUTE OWNERS
	 	 	43	 

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	 	SECTION 8.04. CORPORATION-OWNED DEBT SECURITIES DISREGARDED
	 	 	43	 
	 	SECTION 8.05. REVOCATION OF CONSENTS; FUTURE SECURITYHOLDERS BOUND
	 	 	44	 
	 	SECTION 8.06. SECURITIES IN A FOREIGN CURRENCY
	 	 	44	 
	ARTICLE NINE SECURITYHOLDERS’ MEETINGS
	 	 	45	 
	 	SECTION 9.01. PURPOSES OF MEETINGS
	 	 	45	 
	 	SECTION 9.02. CALL OF MEETINGS BY TRUSTEE
	 	 	45	 
	 	SECTION 9.03. CALL OF MEETINGS BY CORPORATION OR SECURITYHOLDERS
	 	 	46	 
	 	SECTION 9.04. QUALIFICATION FOR VOTING
	 	 	46	 
	 	SECTION 9.05. REGULATIONS
	 	 	46	 
	 	SECTION 9.06. VOTING
	 	 	47	 
	ARTICLE TEN SUPPLEMENTAL INDENTURES
	 	 	47	 
	 	SECTION 10.01. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF SECURITYHOLDERS
	 	 	47	 
	 	SECTION 10.02. SUPPLEMENTAL INDENTURES WITH CONSENT OF SECURITYHOLDERS
	 	 	49	 
	 	SECTION 10.03. COMPLIANCE WITH TRUST INDENTURE ACT; EFFECT OF SUPPLEMENTAL INDENTURES
	 	 	50	 
	 	SECTION 10.04. NOTATION ON DEBT SECURITIES
	 	 	50	 
	ARTICLE ELEVEN CONSOLIDATION, MERGER, SALE OR CONVEYANCE
	 	 	50	 
	 	SECTION 11.01. CORPORATION MAY CONSOLIDATE, ETC., ON CERTAIN TERMS
	 	 	50	 
	 	SECTION 11.02. SUCCESSOR CORPORATION SUBSTITUTED
	 	 	51	 
	 	SECTION 11.03. CERTIFICATE TO TRUSTEE
	 	 	51	 
	ARTICLE TWELVE SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONIES
	 	 	51	 
	 	SECTION 12.01. DISCHARGE OF INDENTURE
	 	 	51	 
	 	SECTION 12.02. SATISFACTION, DISCHARGE AND DEFEASANCE OF DEBT SECURITIES OF ANY SERIES
	 	 	52	 
	 	SECTION 12.03. DEPOSITED MONIES TO BE HELD IN TRUST BY TRUSTEE
	 	 	53	 
	 	SECTION 12.04. PAYING AGENT TO REPAY MONIES HELD
	 	 	54	 
	 	SECTION 12.05. RETURN OF UNCLAIMED MONIES
	 	 	54	 

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	ARTICLE THIRTEEN IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
	 	 	54	 
	 	SECTION 13.01. INDENTURE AND DEBT SECURITIES SOLELY CORPORATE OBLIGATIONS
	 	 	54	 
	ARTICLE FOURTEEN MISCELLANEOUS PROVISIONS
	 	 	55	 
	 	SECTION 14.01. BENEFITS OF INDENTURE RESTRICTED TO PARTIES AND SECURITYHOLDERS
	 	 	55	 
	 	SECTION 14.02. PROVISIONS BINDING ON CORPORATION’S SUCCESSORS
	 	 	55	 
	 	SECTION 14.03. ADDRESSES FOR NOTICES, ETC
	 	 	55	 
	 	SECTION 14.04. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT
	 	 	55	 
	 	SECTION 14.05. LEGAL HOLIDAYS
	 	 	56	 
	 	SECTION 14.06. TRUST INDENTURE ACT TO CONTROL
	 	 	56	 
	 	SECTION 14.07. EXECUTION IN COUNTERPARTS
	 	 	56	 
	 	SECTION 14.08. NEW YORK CONTRACT
	 	 	56	 
	 	SECTION 14.09. JUDGMENT CURRENCY
	 	 	56	 
	 	SECTION 14.10. SEVERABILITY OF PROVISIONS
	 	 	57	 
	 	SECTION 14.11. CORPORATION RELEASED FROM INDENTURE REQUIREMENTS UNDER CERTAIN CIRCUMSTANCES
	 	 	57	 
	ARTICLE FIFTEEN SINKING FUNDS
	 	 	57	 
	 	SECTION 15.01. APPLICABILITY OF ARTICLE
	 	 	57	 
	 	SECTION 15.02. SATISFACTION OF SINKING FUND PAYMENTS WITH DEBT SECURITIES
	 	 	57	 
	 	SECTION 15.03. REDEMPTION OF DEBT SECURITIES FOR SINKING FUND
	 	 	58	 
	ARTICLE SIXTEEN REPAYMENT AT THE OPTION OF HOLDERS
	 	 	58	 
	 	SECTION 16.01. APPLICABILITY OF ARTICLE
	 	 	58	 
	 	SECTION 16.02. REPAYMENT OF DEBT SECURITIES
	 	 	58	 
	 	SECTION 16.03. EXERCISE OF OPTION; NOTICE
	 	 	58	 
	 	SECTION 16.04. ELECTION OF REPAYMENT BY REMARKETING ENTITIES
	 	 	60	 
	 	SECTION 16.05. DEBT SECURITIES PAYABLE ON THE REPAYMENT DATE
	 	 	60	 

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	ARTICLE SEVENTEEN SUBORDINATION OF DEBT SECURITIES
	 	 	60	 
	 	SECTION 17.01. DEBT SECURITIES SUBORDINATE TO SENIOR DEBT
	 	 	60	 
	 	SECTION 17.02. TRUSTEE AND HOLDERS OF DEBT SECURITIES MAY RELY ON CERTIFICATE OF LIQUIDATING
AGENT; TRUSTEE MAY REQUIRE FURTHER EVIDENCE AS TO OWNERSHIP OF SENIOR DEBT; TRUSTEE
NOT FIDUCIARY TO HOLDERS OF SENIOR DEBT
	 	 	62	 
	 	SECTION 17.03. PAYMENT PERMITTED IF NO DEFAULT
	 	 	63	 
	 	SECTION 17.04. TRUSTEE NOT CHARGED WITH KNOWLEDGE OF PROHIBITION
	 	 	63	 
	 	SECTION 17.05. TRUSTEE TO EFFECTUATE SUBORDINATION
	 	 	64	 
	 	SECTION 17.06. RIGHTS OF TRUSTEE AS HOLDER OF SENIOR DEBT
	 	 	64	 
	 	SECTION 17.07. ARTICLE APPLICABLE TO PAYING AGENTS
	 	 	64	 
	 	SECTION 17.08. SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS OF THE CORPORATION OR
HOLDERS OF SENIOR DEBT
	 	 	64	 
	ARTICLE EIGHTEEN CONVERSION OF CONVERTIBLE SECURITIES
	 	 	65	 
	 	SECTION 18.01. APPLICABILITY OF ARTICLE
	 	 	65	 
	 	SECTION 18.02. RIGHT TO CONVERT
	 	 	65	 
	 	SECTION 18.03. EXERCISE OF CONVERSION PRIVILEGE; DELIVERY OF COMMON STOCK ON CONVERSION; NO
ADJUSTMENT FOR INTEREST OR DIVIDENDS
	 	 	65	 
	 	SECTION 18.04. CASH PAYMENTS IN LIEU OF FRACTIONAL SHARES
	 	 	67	 
	 	SECTION 18.05. CONVERSION PRICE
	 	 	67	 
	 	SECTION 18.06. ADJUSTMENT TO CONVERSION PRICE
	 	 	67	 
	 	SECTION 18.07. EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE
	 	 	70	 
	 	SECTION 18.08. TAXES ON SHARES ISSUED
	 	 	71	 
	 	SECTION 18.09. SHARES TO BE FULLY PAID; COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS; LISTING OF
COMMON STOCK
	 	 	71	 
	 	SECTION 18.10. TRUSTEE NOT RESPONSIBLE
	 	 	71	 
	 	SECTION 18.11. NOTICE TO HOLDERS PRIOR TO CERTAIN ACTIONS
	 	 	72	 
	 	SECTION 18.12. COVENANT TO RESERVE SHARES
	 	 	72	 

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     The following is a comparison of provisions of Trust Indenture Act of 1939
with Indenture dated as of October 28, 2003, between DELPHI CORPORATION and
BANK ONE TRUST COMPANY, N. A. as Trustee;

	 	 	 	 	 
	SECTION OF ACT	 	SECTION OF INDENTURE
	
	 	

	310(a)(1), (2)and (5)
	 	 	7.09	 
	310(a)(3) and (4)	 	Not applicable
	310(b)
	 	 	7.08	 
	310(c)	 	Not applicable
	311(a) and (b)
	 	 	7.13	 
	311(c)	 	Not applicable
	312(a)	 	5.01 and 5.02(a)
	312(b) and (c)	 	5.02(b) and (c)
	313(a) and (b)
	 	 	5.04	(a)
	313(c)
	 	 	5.04	(a)
	313(d)
	 	 	5.04	(b)
	314(a)
	 	 	5.03	 
	314(b)	 	Not applicable
	314(c)(1) and (2)
	 	 	14.04	 
	314(c)(3)	 	Not applicable
	314(d)	 	Not applicable
	314(e)
	 	 	14.04	 
	315(a), (c) and (d)
	 	 	7.01	 
	315(b)
	 	 	6.07	 
	315(e)
	 	 	6.08	 
	316(a)(1)
	 	 	6.06	 
	316(a)(2)	 	Omitted
	316(a) last sentence
	 	 	8.04	 
	316(b)
	 	 	6.04	 
	316(c)
	 	 	9.02	 
	317(a)
	 	 	6.02	 
	317(b)
	 	 	4.03	 
	318(a)
	 	 	14.06	 

This tie-sheet is not part of the Indenture as executed.

 

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     THIS INDENTURE, dated as of the 28th day of October, 2003 between DELPHI
CORPORATION, a corporation duly organized and existing under the laws of the
State of Delaware (hereinafter sometimes called the “Corporation”), party of
the first part, and BANK ONE TRUST COMPANY, N. A., a banking association duly
incorporated and existing under the laws of the United States of America, as
trustee hereunder (hereinafter sometimes called the “Trustee,” which term shall
include any successor trustee appointed pursuant to Article Seven).

WITNESSETH:

     WHEREAS, the Corporation deems it necessary or appropriate to issue from
time to time for its lawful purposes securities (hereinafter called the “Debt
Securities” or, in the singular, “Debt Security”) evidencing its unsecured
indebtedness and has duly authorized the execution and delivery of this
Indenture to provide for the issuance of the Debt Securities in one or more
series, unlimited as to principal amount, to bear such rates of interest, to
mature at such time or times and to have such other provisions as shall be
established as hereinafter provided; and

     WHEREAS, the Corporation represents that all acts by it necessary to
constitute a valid indenture and agreement according to its terms have been
done and performed, and the execution of this Indenture has in all respects
been duly authorized by the Corporation, and the Corporation, in the exercise
of legal rights and power in it vested, is executing this Indenture;

     NOW, THEREFOR: In order to declare the terms and conditions upon which the
Debt Securities are authenticated, issued and received, and in consideration of
the premises, of the purchase and acceptance of the Debt Securities by the
Holders thereof and of the sum of one dollar to it duly paid by the Trustee at
the execution of these presents, the receipt whereof is hereby acknowledged,
the Corporation covenants and agrees with the Trustee, for the equal and
proportionate benefit of the respective Holders from time to time of the Debt
Securities, as follows:

ARTICLE ONE

DEFINITIONS

SECTION 1.01. DEFINITIONS. The terms defined in this Section (except as herein
otherwise expressly provided or unless the context otherwise requires) for all
purposes of this Indenture and of any indenture supplemental hereto shall have
the respective meanings specified in this Section. All other terms used in
this Indenture which are defined in the Trust Indenture Act of 1939 or which
are by reference therein defined in the Securities Act of 1933, as amended,
shall have the meanings (except as herein otherwise expressly provided or
unless the context otherwise clearly requires) assigned to such terms in said
Trust Indenture Act and in said Securities Act as in force at the date of this
Indenture as originally executed. The words “herein,” “hereof” and “hereunder”
and other words of similar import refer to this Indenture as a whole, including
the Exhibits to this instrument, and not to any particular Article, Section or
other subdivision. Certain terms used wholly or principally within an Article
of this Indenture may be defined in that Article.

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ADDITIONAL AMOUNTS:

     The term “Additional Amounts” shall mean any additional amounts which are
required by a Debt Security or by or pursuant to a Board Resolution under
circumstances specified therein, to be paid by the Corporation in respect of
certain taxes, assessments or governmental charges imposed on certain Holders
of Debt Securities and which are owing to such Holders of Debt Securities.

AFFILIATE:

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

AUTHORIZED NEWSPAPER:

     The term “Authorized Newspaper” shall mean a newspaper in an official
language of the country of publication of general circulation in the place in
connection with which the term is used. If it shall be impracticable in the
opinion of the Trustee to make any publication of any notice required hereby in
an Authorized Newspaper, any publication or other notice in lieu thereof which
is made or given with the approval of the Trustee shall constitute a sufficient
publication of such notice.

BOARD OF DIRECTORS:

     The term “Board of Directors” shall mean the Board of Directors of the
Corporation or the Executive Committee or Finance Committee of the Corporation
or any committee established by the Board of Directors.

BOARD RESOLUTION:

     The term “Board Resolution” shall mean a resolution certified by the
Secretary or an Assistant Secretary of the Corporation or in lieu thereof by a
Treasurer or Assistant Treasurer to have been duly adopted by the Board of
Directors and to be in full force and effect on the date of such certification,
and delivered to the Trustee.

BUSINESS DAY:

     The term “Business Day” shall mean, with respect to any Debt Security, a
day (other than a Saturday or Sunday) that in the city (or in any of the
cities, if more than one) in which amounts are payable as specified on the face
of the form of such Debt Security, is neither a legal holiday nor a day on
which banking institutions are authorized or required by law, regulation or
executive order to close.

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CLEARSTREAM:

     The term “Clearstream” means Clearstream Banking, Luxemborg, societe
anonyme.

CLOSING PRICE:

     The term “Closing Price” has the meaning specified in Section 18.06(d).

COMMISSION:

     The term “Commission” means the Securities and Exchange Commission, as
from time to time constituted, created under the Securities Exchange Act of
1934, or if at any time after the execution of this instrument such Commission
is not existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties on such date.

COMMON STOCK:

     The term “Common Stock” means when used with reference to the capital
stock of the Corporation, the class of stock which, at the date of execution of
this Indenture, is designated as common stock of the Corporation and stock of
any class or classes into which such common stock or any such other class may
thereafter be changed or reclassified.

CONVERSION PRICE:

     The term “Conversion Price” has the meaning specified in Section 18.05.

CONVERTIBLE SECURITIES:

     The term “Convertible Securities” means any series of Debt Securities that
are designated as such pursuant to Section 2.01.

CORPORATE TRUST OFFICE:

     The term “Corporate Trust Office” means the office of the Trustee at which
at any particular time its corporate trust business shall be principally
administered, which office at the date hereof is located at 1111 Polaris
Parkway, Mail Suite OH1-0181, Columbus, Ohio 43240, except that, with respect
to presentation of Debt Securities for payment or registration of transfers and
exchanges and the location of the Security Registrar, such term means the
office or agency of the Trustee located at 55 Water Street, 1st Floor,
Jeannette Park Entrance, New York, New York 10041.

CORPORATION:

     The term “Corporation” shall mean the person named as the “Corporation” in
the first paragraph of this instrument until a successor corporation shall have
become such pursuant to the applicable provisions of this Indenture, and
thereafter “Corporation” shall mean such successor corporation.

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CORPORATION ORDER:

     The term “Corporation Order” shall mean any request, order or confirmation
to the Trustee signed by any one of the following: the Chairman of the Board of
Directors, Vice Chairman of the Board of Directors, the President or any Vice
President, the Treasurer or any Assistant Treasurer, or the Secretary or any
Assistant Secretary of the Corporation.

COUPON:

     The term “Coupon” shall mean any interest coupon appertaining to a Debt
Security.

COUPON SECURITY:

     The term “Coupon Security” shall mean any Debt Security authenticated and
delivered with one or more Coupons appertaining thereto.

CURRENCY:

     The term “Currency” means dollars or foreign currency.

DEBT SECURITIES:

     The term “Debt Securities” shall have the meaning stated in the first
recital of this Indenture and more particularly means any Debt Securities
authenticated and delivered under this Indenture.

DEPOSITORY:

     The term “Depository” shall mean, with respect to the Debt Securities of
any series issuable or issued in whole or in part in the form of one or more
Global Securities, the Person designated as Depository by the Corporation
pursuant to Section 2.01 until a successor Depository shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
“Depository” shall mean or include each Person who is then a Depository
hereunder, and if at any time there is more than one such Person, “Depository”
as used with respect to the Debt Securities of any such series shall mean the
Depository with respect to the Debt Securities of that series.

EVENT OF DEFAULT:

     The term “Event of Default” shall mean any event specified as such in
Section 6.01.

GLOBAL SECURITY:

     The term “Global Security” shall mean a Registered Security or an
Unregistered Security evidencing all or part of a series of Debt Securities
issued to the Depository for such series in accordance with Section 2.03.

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HOLDER:

     The terms “Holder,” “Holder of Debt Securities,” “Securityholder” or other
similar terms, shall mean (a) in the case of any Registered Security, the
person in whose name at the time such Debt Security is registered on the
registration books kept for that purpose in accordance with the terms hereof,
and (b) in the case of any Unregistered Security, the bearer of such Debt
Security.

INDENTURE:

     The term “Indenture” shall mean this instrument as originally executed or
as it may from time to time be supplemented or amended by one or more
indentures supplemental hereto entered into pursuant to the applicable
provisions hereof.

INTEREST PAYMENT DATE:

     The term “Interest Payment Date” when used with respect to any Debt
Security, means the Stated Maturity of an installment of interest on such Debt
Security.

ISSUE DATE:

     The term “Issue Date” shall mean, with respect to any Debt Security,
whether evidenced by a Registered Security or an Unregistered Security, the
date such Debt Security is authenticated pursuant to Section 2.03.

MATURITY DATE:

     The term “Maturity Date” when used with respect to any Debt Security,
shall mean the date on which the principal of such Debt Security becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration or acceleration, call for redemption or exchange, prepayment at the
option of the Holder or otherwise.

OFFICERS’ CERTIFICATE:

     The term “Officers’ Certificate” shall mean a certificate signed on behalf
of the Corporation (and without personal liability), and complying with Section
14.04, by any two of the Chairman of the Board of Directors, Vice Chairman of
the Board of Directors, the President or any Vice President, the Treasurer or
any Assistant Treasurer, or the Secretary or any Assistant Secretary of the
Corporation.

OPINION OF COUNSEL:

     The term “Opinion of Counsel” shall mean an opinion in writing, complying
with Section 14.04, signed by legal counsel who may be an employee of or
counsel to the Corporation or who may be other counsel acceptable to the
Trustee.

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Table of Contents

ORIGINAL ISSUE DISCOUNT SECURITIES:

     The term “Original Issue Discount Securities” shall mean any Debt
Securities that are initially sold at a discount from the principal amount
thereof and that provide upon an Event of Default for declaration of an amount
less than the principal amount thereof to be due and payable upon acceleration
thereof.

OUTSTANDING:

     The term “outstanding” when used with reference to Debt Securities, shall,
subject to the provisions of Section 8.01, Section 8.04 and Section 8.06, mean,
as of any particular time, all Debt Securities authenticated and delivered by
the Trustee under this Indenture, except

                 (a) Debt Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;

                 (b) Debt Securities, or portions thereof, for the payment or redemption of
which monies in the necessary amount shall have been deposited in trust with
the Trustee or with any paying agent (other than the Corporation) or shall have
been set aside and segregated in trust by the Corporation (if the Corporation
shall act as its own Paying Agent), provided, that if such Debt Securities are
to be redeemed prior to the maturity thereof, notice of such redemption shall
have been given as provided in Article Three, or provisions satisfactory to the
Trustee shall have been made for giving such notice; and

                 (c) Debt Securities in lieu of and in substitution for which other Debt
Securities shall have been authenticated and delivered pursuant to the terms of
Article Two, unless proof satisfactory to the Trustee is presented that any
such Debt Securities are held by bona fide Holders in due course.

PAYING AGENT:

     The term “Paying Agent” shall mean initially Bank One Trust Company, N.A.
and, subsequently, any other paying agent appointed by the Corporation from
time to time in respect of the Debt Securities.

PERSON:

     The term “person” shall mean any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock company
trust or other entity, unincorporated organization or government or any agency
or political subdivision thereof.

PLACE OF PAYMENT:

     The term “Place of Payment,” when used with respect to the Debt Securities
of any series, means the place or places where the principal of (and premium,
if any) and interest, if any, (and Additional Amounts, if any) on the Debt
Securities of that series are payable.

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REDEMPTION DATE:

     The term “Redemption Date,” when used with respect to any Debt Security to
be redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.

REDEMPTION PRICE:

     The term “Redemption Price,” when used with respect to any Debt Security
to be redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.

REGISTERED SECURITY:

     The term “Registered Security” shall mean any Debt Security registered on
the Security registration books of the Corporation.

REGULAR RECORD DATE:

     The term “Regular Record Date” for the interest payable on any Interest
Payment Date on the Debt Securities of any series means the date specified for
that purpose as contemplated by Sections 2.01 and 2.04.

REMARKETING ENTITY:

     The term “Remarketing Entity”, when used with respect to Debt Securities
of any series that are repayable at the option of the Holders thereof before
their Stated Maturity, means any person designated by the Corporation to
purchase any such Debt Securities.

REPAYMENT DATE:

     The term “Repayment Date”, when used with respect to any Debt Security to
be repaid upon exercise of option for repayment by the Holder, means the date
fixed for such repayment pursuant to this Indenture.

REPAYMENT PRICE:

     The term “Repayment Price”, when used with respect to any Debt Security to
be repaid upon exercise of option for repayment by the Holder, means the price
at which it is to be repaid pursuant to this Indenture.

RESPONSIBLE OFFICER:

     The term “responsible officer” when used with respect to the Trustee shall
mean any officer assigned by the Trustee to administer its corporate trust
matters.

RIGHTS:

     The term “Rights” has the meaning specified in Section 18.06(c).

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SECURITY REGISTER AND SECURITY REGISTRAR:

     The term “Security Register” and “Security Registrar” shall have the
respective meanings specified in Section 2.05.

SENIOR DEBT:

     The term “Senior Debt” means any obligation of the Corporation to its
creditors whether now outstanding or subsequently incurred other than (i) any
obligation as to which, in the instrument creating or evidencing the same or
pursuant to which the same is outstanding, it is provided that such obligation
ranks equal or subordinate to the Debt Securities, (ii) obligations evidenced
by the Debt Securities, and (iii) obligations that are expressly stated in the
terms of the Debt Securities (or in this Indenture, any indenture supplement,
or any Officers’ Certificate delivered under Section 2.01 hereof with respect
to such Debt Securities) not to be Senior Debt.

SIGNIFICANT SUBSIDIARY:

     The term “Significant Subsidiary” shall mean any Subsidiary of the
Corporation that, at any time, has at least 5% of the consolidated revenues of
the Corporation and its Subsidiaries at such time as reflected in the most
recent annual audited consolidated financial Statements of the Corporation.

STATED MATURITY:

     The term “Stated Maturity” when used with respect to any Debt Security or
any installment of interest thereon, means the date specified in such Debt
Security or a Coupon representing such installment of interest as the fixed
date on which the principal of such Debt Security or, with respect to a Coupon,
on which such installment of interest is due and payable.

SUBSIDIARY:

     The term “Subsidiary” shall mean any corporation or other entity of which
at least a majority of the outstanding stock or other beneficial interests
having by the terms thereof ordinary voting power to elect a majority of the
board of directors or other governing body of such corporation or other entity
(irrespective of whether or not at the time stock or other beneficial interests
of another class or classes of such corporation or other entity shall have or
might have voting power by reason of the happening of any contingency) is at
the time owned by the Corporation, or by one or more Subsidiaries, or by the
Corporation and one or more Subsidiaries.

TRUST INDENTURE ACT OF 1939:

     The term “Trust Indenture Act of 1939” shall mean the Trust Indenture Act
of 1939, as amended.

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UNITED STATES:

     The term “United States” shall mean the United States of America
(including the states thereof and the District of Columbia) and its possessions
(including the Commonwealth of Puerto Rico, the U.S. Virgin Islands, Guam,
American Samoa, Wake Island and the Northern Mariana Islands).

UNREGISTERED SECURITY:

     The term “Unregistered Security” shall mean any Debt Security other than a
Registered Security.

U.S. DOLLAR:

     The term “U.S. Dollar” or “$” means a dollar or other equivalent unit in
such coin or currency of the United States of America as at the time shall be
legal tender for the payment of public and private debts.

SECTION 1.02. NOTICE TO SECURITYHOLDERS. Except as otherwise expressly
provided herein, where this Indenture provides for notice to Holders of Debt
Securities of any event, such notice shall be sufficiently given if in writing
and mailed, first class, postage prepaid, to each Holder at such Holder’s
address as it appears in the Security Register, not later than the latest date,
and not earlier than the earliest date, prescribed for such notice.

     Neither the failure to mail such notice nor any defect in any notice so
mailed to any particular Holder of a Debt Security shall affect the sufficiency
of such notice with respect to other Holders of Debt Securities.

     In case by reason of the suspension of regular mail service or by reason
of any other cause it shall be impracticable to give such notice by mail, then
such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.

     Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders of Debt Securities shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.

ARTICLE TWO

ISSUE, EXECUTION, REGISTRATION AND

EXCHANGE OF DEBT SECURITIES

SECTION 2.01. AMOUNT UNLIMITED; ISSUABLE IN SERIES. The aggregate principal amount
of Debt Securities that may be authenticated and delivered under this Indenture is
unlimited.

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     The Debt Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution, and set forth in an Officers’
Certificate, or established in one or more indentures supplemental hereto,
prior to the issuance of Debt Securities of any series:

                 (1) the designation of the Debt Securities of the series (which shall
distinguish the Debt Securities of the series from all other Debt Securities);

                 (2) any limit upon the aggregate principal amount of the Debt Securities
of the series which may be authenticated and delivered under this Indenture
(except for Debt Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Debt Securities of the
series pursuant to Section 2.05, 2.06, 2.07, 3.02, 10.04, 16.03, or 18.03);

                 (3) the date or dates on which the principal of the Debt Securities of the
series is payable;

                 (4) the rate or rates, which may be fixed or variable, at which the Debt
Securities of the series shall bear interest, if any, and if the rate or rates
are variable, the manner of calculation thereof, the date or dates from which
such interest shall accrue, the Interest Payment Dates on which such interest
shall be payable and, in the case of Registered Securities, the Regular Record
Date for the determination of Holders of such Debt Securities to whom interest
is payable on any Interest Payment Date;

                 (5) the Place of Payment (in addition to such place or places specified in
this Indenture);

                 (6) the right, if any, of the Corporation to redeem Debt Securities of the
Series, in whole or in part, at its option and the period or periods within
which, the price or prices at which and the terms and conditions upon which
Debt Securities of the series may be redeemed pursuant to any sinking fund or
otherwise;

                 (7) the obligation, if any, of the Corporation to redeem, purchase or
repay Debt Securities of the series pursuant to any mandatory redemption,
sinking fund or analogous provisions or at the option of a Holder thereof and
the period or periods within which, the price or prices at which and the terms
and conditions upon which Debt Securities of the series shall be redeemed,
purchased or repaid, in whole or in part, pursuant to such obligation;

                 (8) if other than U.S. Dollars, the currency or currencies, including
Euros, in which the Debt Securities of the series shall be denominated and in
which payments of principal of (premium, if any), interest, if any, and
Additional Amounts, if any, payable with respect to such Debt Securities shall
or may be payable; the manner in which such currency or currencies will be
determined; and if the principal of (and premium, if any), interest, if any,
and Additional Amounts, if any, on the Debt Securities of such series are to be
payable, at the election of the Corporation or a Holder thereof, in a currency
or currencies, other than that or those in which the Debt Securities are stated
to be payable, the currency or currencies in which
payment of the principal of (and premium, if any), interest, if any, and
Additional Amounts, if

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any, on Debt Securities of such series as to which such
election is made shall be payable, and the periods within which and the terms
and conditions upon which such election is to be made;

                 (9) if the amount of principal of and interest on the Debt Securities of
the series may be determined with reference to an index based on a currency or
currencies other than that in which the Debt Securities of the series are
denominated, the manner in which such amounts shall be determined;

                 (10) the denominations in which Debt Securities of the series shall be
issuable, if other than U.S. $1,000 or integral multiples thereof, with respect
to Registered Securities, and denominations of U.S. $1,000 and U.S. $5,000 for
Unregistered Securities;

                 (11) if other than the principal amount thereof, the portion of the
principal amount of Debt Securities of the series which shall be payable upon
declaration of acceleration of the maturity thereof or which the Trustee shall
be entitled to claim pursuant to Section 6.02;

                 (12) whether the Debt Securities of the series will be issuable as
Registered Securities or Unregistered Securities (with or without Coupons), or
both, any restrictions applicable to the offer, sale or delivery of
Unregistered Securities and, if other than as provided for in Section 2.05, the
terms upon which Unregistered Securities of the series may be exchanged for
Registered Securities of such series and vice versa; and whether the Debt
Securities of the series shall be issued in whole or in part in the form of one
or more Global Securities and, in such case, the Depository for such Global
Security or Debt Securities and whether any Global Securities of the series are
to be issuable initially in temporary form and whether any Global Securities of
the series are to be issuable in definitive form with or without Coupons and,
if so, whether beneficial owners of interests in any such definitive Global
Security may exchange such interests for Debt Securities of such series and of
like tenor of any authorized form and denomination, and the circumstances under
which and the place or places where any such exchanges may occur, if other than
in the manner provided in Section 2.05;

                 (13) whether and under what circumstances the Corporation will pay
Additional Amounts on the Debt Securities of the series in respect of any tax,
assessment or governmental charge withheld or deducted and, if so, whether the
Corporation will have the option to redeem such Debt Securities rather than pay
such Additional Amounts;

                 (14) the provisions, if any, for the defeasance of the Debt Securities of
the series;

                 (15) if the Debt Securities of such series are to be issuable in
definitive form (whether upon original issue or upon exchange of a temporary
Debt Security of such series) only upon receipt of certain certificates or
other documents or satisfaction of other conditions, the form and terms of such
certificates, documents or conditions;

                 (16) except as otherwise provided herein, any trustees, depositories,
authenticating or paying agents, transfer agents, registrars or any other
agents with respect to the Debt Securities of such series;

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                 (17) the percentage of their principal amount at which the Debt Securities
will be issued;

                 (18) any securities exchanges on which the Debt Securities will be listed;

                 (19) whether the Debt Securities of the series are Convertible Securities
and the terms related thereto including the Conversion Price and the date on
which the right to convert expires; and

                 (20) any other terms of the series (which terms shall not be inconsistent
with the provisions of this Indenture).

     All Debt Securities of any one series shall be substantially identical
except (i) as to denomination, (ii) that Debt Securities of any series may be
issuable as either Registered Securities or Unregistered Securities and (iii)
as may otherwise be provided in or pursuant to such Board Resolution and set
forth in such Officers’ Certificate or in any such indenture supplemental
hereto.

     If any of the terms of the series are established by action taken pursuant
to a Board Resolution, a copy of an appropriate record of such action shall be
certified by the Secretary or any Assistant Secretary of the Corporation or in
lieu thereof by a Treasurer or Assistant Treasurer and delivered to the Trustee
at the same time as or prior to the delivery of the Officers’ Certificate
setting forth the terms of the series.

SECTION 2.02. FORM OF TRUSTEE’S CERTIFICATE OF AUTHENTICATION. The Trustee’s
certificate of authentication shall be in the following form:

{FORM OF TRUSTEE’S CERTIFICATE OF AUTHENTICATION}

     This is one of the Debt Securities of the series designated therein
referred to in the within-mentioned Indenture.

	 	 	 	 	 
	 	 	Bank One Trust Company, N.A.,
	 	 	as Trustee,
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Authorized Signatory

SECTION 2.03. FORM, EXECUTION, AUTHENTICATION, DELIVERY AND DATING OF DEBT
SECURITIES. The Debt Securities of each series and the Coupons, if any, to be
attached thereto, shall be in the forms approved from time to time by or
pursuant to a Board Resolution, or established in one or more indentures
supplemental hereto, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as the Corporation may deem appropriate and as
are not inconsistent with the provisions
of this Indenture, or as may be required to comply with any

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law or with any rule or regulation made pursuant thereto or with any rule or
regulation of any securities exchange on which the Debt Securities may be
listed, or to conform to usage.

     Each Debt Security and Coupon shall be executed on behalf of the
Corporation by its Chairman of the Board of Directors or the President or any
Vice Chairman or Vice President or its Treasurer and the Secretary or any
Assistant Secretary, or, if the other signatory is other than the Treasurer,
any assistant Treasurer, under its Corporate seal. Such signatures may be the
manual or facsimile signatures of the present or any future such officers. The
seal of the Corporation may be in the form of a facsimile thereof and may be
impressed, affixed, imprinted or otherwise reproduced on the Debt Securities.

     Each Debt Security and Coupon bearing the manual or facsimile signatures
of individuals who were at any time the proper officers of the Corporation
shall bind the Corporation, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the authentication and delivery
of such Debt Security, or the Debt Security to which such Coupon appertains.
At any time and from time to time after the execution and delivery of this
Indenture, the Corporation may deliver Debt Securities of any series executed
by the Corporation and, in the case of Coupon Securities, having attached
thereto appropriate Coupons, to the Trustee for authentication, together with a
Corporation Order for the authentication and delivery of such Debt Securities,
and the Trustee in accordance with such Corporation Order shall authenticate
and deliver such Debt Securities. If the form or terms of the Debt Securities
or Coupons of the series have been established in or pursuant to one or more
Board Resolutions as permitted by this Section and Section 2.01, in
authenticating such Debt Securities and accepting the additional
responsibilities under this Indenture in relation to such Debt Securities, the
Trustee shall be entitled to receive, and (subject to Section 7.01) shall be
fully protected in relying upon, an Opinion of Counsel stating:

                 (a) if the form of such Debt Securities or Coupons has been established by
or pursuant to Board Resolution as permitted by Section 2.01, that such form
has been established in conformity with the provisions of this Indenture;

                 (b) if the terms of such Debt Securities have been established by or
pursuant to Board Resolution as Permitted by Section 2.01, that such terms have
seen established in conformity with the provisions of this Indenture; and

                 (c) that each such Debt Security and Coupon, when authenticated and
delivered by the Trustee and issued by the Corporation in the manner and
subject to any conditions specified in such Opinion of Counsel, will constitute
valid and legally binding obligations of the Corporation, enforceable in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other laws of general applicability
relating to or affecting the enforcement of creditors’ rights and to general
equity principles, whether applied in a proceeding at law or in equity.

     If such form or terms have been so established, the Trustee shall not be
required to authenticate such Debt Securities if the issue of such Debt
Securities pursuant to this Indenture
will affect the Trustee’s own rights, duties or immunities under the Debt
Securities and the Indenture or otherwise in a manner that is not reasonably
acceptable to the Trustee.

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     Every Registered Security shall be dated the date of its authentication.
Each Unregistered Security shall be dated as provided in or pursuant to the
Board Resolution or supplemental indenture referred to in Section 2.01 or, if
no such terms are specified, the date of its original issuance.

     No Debt Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Debt
Security a certificate of authentication substantially in the form provided for
herein executed by the Trustee by manual signature, and such certificate upon
any Debt Security shall be conclusive evidence, and the only evidence, that
such Debt Security has been duly authenticated and delivered hereunder and is
entitled to the benefits of this Indenture. Notwithstanding the foregoing, if
any Debt Security shall have been duly authenticated and delivered hereunder
but never issued and sold by the Corporation, and the Corporation shall deliver
such Debt Security to the Trustee for cancellation as provided in Section 2.08
together with a written statement (which need not comply with Section 14.04 and
need not be accompanied by an Opinion of Counsel) stating that such Debt
Security has never been issued and sold by the Corporation, for all purposes of
this Indenture such Debt Security shall be deemed never to have been
authenticated and delivered hereunder and shall never be entitled to the
benefits of this Indenture.

     If the Corporation shall establish pursuant to Section 2.01 that the Debt
Securities of a series are to be issued in whole or in part in the form of a
Global Security, then the Corporation shall execute and the Trustee shall in
accordance with this Section and the Corporation Order with respect to such
series authenticate and deliver the Global Security that (i) shall represent
and shall be denominated in an aggregate amount equal to the aggregate
principal amount of outstanding Debt Securities of such series to be
represented by the Global Security, (ii) shall be registered, if in registered
form, in the name of the Depository for such Global Security or the nominee of
such Depository, and (iii) shall be delivered by the Trustee to such Depository
or pursuant to such Depository’s instructions and (iv) shall bear a legend
substantially to the following effect: “Except as otherwise provided in Section
2.03 of the Indenture, this Security may be transferred, in whole but not in
part, only to another nominee of the Depository or to a successor Depository or
to a nominee of such successor Depository” and such other legend or legends as
may be required by the Depositary.

SECTION 2.04. DENOMINATIONS; RECORD DATE. The Debt Securities shall be
issuable as Registered Securities or Unregistered Securities in such
denominations as may be specified as contemplated in Section 2.01. In the
absence of any such specification with respect to any series, such Debt
Securities, other than Global Securities, shall be issuable in the denomination
contemplated by Section 2.01.

     The term “record date” as used with respect to an Interest Payment Date
(except a date for payment of defaulted interest) shall mean such day or days
as shall be specified in the terms of the Registered Securities of any
particular series as contemplated by Section 2.01; provided, however, that in
the absence of any such provisions with respect to any series, such term shall
mean (1) the last day of the calendar month next preceding such Interest
Payment Date if such Interest Payment Date is the fifteenth day of a calendar
month; or (2) the fifteenth day of a calendar month next preceding such
Interest Payment Date if such Interest Payment Date is the first day of the
calendar month.

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     The person in whose name any Registered Security is registered at the
close of business on the Regular Record Date with respect to an Interest
Payment Date shall be entitled to receive the interest payable and Additional
Amounts, if any, payable on such Interest Payment Date notwithstanding the
cancellation of such Registered Security upon any transfer or exchange thereof
subsequent to such Regular Record Date and prior to such Interest Payment Date;
provided, however, that if and to the extent the Corporation shall default in
the payment of the interest and Additional Amounts, if any, due on such
Interest Payment Date, such defaulted interest and Additional Amounts, if any,
shall be paid to the persons in whose names outstanding Registered Securities
are registered on a subsequent record date established by notice given by mail
by or on behalf of the Corporation to the Holders of Debt Securities of the
series in default not less than fifteen days preceding such subsequent record
date, such record date to be not less than five days preceding the date of
payment of such defaulted interest.

SECTION 2.05. EXCHANGE AND REGISTRATION OF TRANSFER OF DEBT SECURITIES.
Registered Securities of any series, except for Global Securities, may be
exchanged for a like aggregate principal amount of Registered Securities of
other authorized denominations of such series. Registered Securities to be
exchanged shall be surrendered at the office or agency to be designated and
maintained by the Corporation for such purpose in the Borough of Manhattan, The
City of New York, in accordance with the provisions of Section 4.02, and the
Corporation shall execute and register and the Trustee shall authenticate and
deliver in exchange therefor the Registered Security or Registered Securities
that the Holder making the exchange shall been titled to receive.

     If the Debt Securities of any series are issued in both registered and
unregistered form, except as otherwise specified pursuant to Section 2.01, at
the option of the Holder thereof, Unregistered Securities of any series may be
exchanged for Registered Securities of such series of any authorized
denominations and of a like aggregate principal amount, upon surrender of such
Unregistered Securities to be exchanged at the agency of the Corporation that
shall be maintained for such purpose in accordance with Section 4.02, with, in
the case of Unregistered Securities that are Coupon Securities, all unmatured
Coupons and all matured Coupons in default thereto appertaining. At the option
of the Holder thereof, if Unregistered Securities of any series are issued in
more than one authorized denomination, except as otherwise specified pursuant
to Section 2.01, such Unregistered Securities may be exchanged for Unregistered
Securities of such series of other authorized denominations and of a like
aggregate principal amount, upon surrender of such Unregistered Securities to
be exchanged at the agency of the Corporation that shall be maintained for such
purpose in accordance with Section 4.02 or as specified pursuant to Section
2.01, with, in the case of Unregistered Securities that are Coupon Securities,
all unmatured Coupons and all matured Coupons in default thereto appertaining.
Unless otherwise specified pursuant to Section 2.01, Registered Securities of
any series may not be exchanged for Unregistered Securities of such series.
Whenever any Debt Securities are so surrendered for
exchange the Corporation shall execute, and the Trustee shall authenticate
and deliver, the Debt Securities that the Holder making the exchange is
entitled to receive.

     Transfers or exchanges of Global Securities shall be made in accordance
with this Section and Section 2.10.

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     The Corporation or its designated agent (the “Security Registrar”) shall
keep, at such office or agency, a Security Register (the “Security Register”)
in which, subject to such reasonable regulations as it may prescribe, the
Corporation shall register Debt Securities and shall register the transfer of
Registered Securities as provided in this Article Two. The Security Register
shall be in written form or in any other form capable of being converted into
written form within a reasonable time. At all reasonable times the Security
Register shall be open for inspection by the Trustee. Upon due presentment for
registration of transfer of any Registered Security of a particular series at
such office or agency, the Corporation shall execute and the Corporation or the
Security Registrar shall register and the Trustee shall authenticate and
deliver in the name of the transferee or transferees a new Registered Security
or Registered Securities of such series for an equal aggregate principal
amount.

     Unregistered Securities (except for any temporary bearer Debt Securities)
and Coupons shall be transferable by delivery.

     All Debt Securities presented for registration of transfer or for
exchange, redemption or payment, as the case may be, shall (if so required by
the Corporation or the Trustee) be duly endorsed by, or be accompanied by, a
written instrument or instruments of transfer in form satisfactory to the
Corporation and the Trustee duly executed by the Holder or his, her or its
attorney duly authorized in writing.

     No service charge shall be made for any exchange or registration of
transfer of Registered Securities, but the Corporation may require payment of a
sum sufficient to cover any tax or other governmental charge that may be
imposed in connection therewith.

     The Corporation shall not be required to exchange or register a transfer
of (a) any Registered Securities of any series for a period of fifteen days
next preceding any selection of Registered Securities of such series to be
redeemed, or (b) any Debt Security of any such series selected for redemption
except in the case of any such series to be redeemed in part, the portion
thereof not to be so redeemed.

     Notwithstanding anything herein or in the terms of any series of Debt
Securities to the contrary, neither the Corporation nor the Trustee (which
shall rely on an Officers’ Certificate and an Opinion of Counsel) shall be
required to exchange any Unregistered Security for a Registered Security if
such exchange would result in adverse Federal income tax consequences to the
Corporation (including the inability of the Corporation to deduct from its
income, as computed for Federal income tax purposes, the interest payable on
any Debt Securities) under then applicable United States Federal income tax
laws.

SECTION 2.06. TEMPORARY DEBT SECURITIES. Pending the preparation of definitive
Debt Securities of any series, the
Corporation may execute and on receipt of a Corporation Order the Trustee shall
authenticate and deliver temporary Debt Securities of such series (printed or
lithographed). Temporary Debt Securities of any series shall be issuable in
any authorized denominations, and in the form approved from time to time by or
pursuant to a Board Resolution but with such omissions, insertions and
variations as may be appropriate for temporary Debt Securities, all as may be
determined by the Corporation. Every temporary Debt Security shall be executed
by the Corporation and authenticated by the Trustee upon the same conditions
and in

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substantially the same manner, and with like effect, as the definitive
Debt Securities. Without unnecessary delay the Corporation shall execute and
furnish definitive Debt Securities of such series and thereupon any or all
temporary Registered Securities of such series may be surrendered in exchange
therefor without charge at the office or agency to be designated and maintained
by the Corporation for such purpose in the Borough of Manhattan, The City of
New York, in accordance with the provisions of Section 4.02 and in the case of
Unregistered Securities at any agency maintained by the Corporation for such
purpose as specified pursuant to Section 2.01, and the Trustee shall
authenticate and deliver in exchange for such temporary Debt Securities an
equal aggregate principal amount of definitive Debt Securities of the same
series of authorized denominations and in the case of such Debt Securities that
are Coupon Securities, having attached thereto the appropriate Coupons. Until
so exchanged the temporary Debt Securities of any series shall be entitled to
the same benefits under this Indenture as definitive Debt Securities of such
series. The provisions of this Section 2.06 are subject to any restrictions or
limitations on the issue and delivery of temporary Unregistered Securities of
any series that may be established pursuant to Section 2.01 (including any
provision that Unregistered Securities of such series initially be issued in
the form of a single global Unregistered Security to be delivered to a
depositary or agency of the Corporation located outside the United States and
the procedures pursuant to which definitive Unregistered Securities of such
series would be issued in exchange for such temporary global Unregistered
Security).

SECTION 2.07. MUTILATED, DESTROYED, LOST OR STOLEN DEBT SECURITIES. In case
any temporary or definitive Debt Security of any series or, in the case of a
Coupon Security, any Coupon appertaining thereto, shall become mutilated or be
destroyed, lost or stolen, the Corporation in the case of a mutilated Debt
Security or Coupon shall, and in the case of a lost, stolen or destroyed Debt
Security or Coupon may, in its discretion, execute, and upon receipt of a
Corporation Order the Trustee shall authenticate and deliver, a new Debt
Security of the same series as the mutilated, destroyed, lost or stolen Debt
Security or, in the case of a Coupon Security, a new Coupon Security of the
same series as the mutilated, destroyed, lost or stolen Coupon Security or, in
the case of a Coupon, a new Coupon of the same series as the Coupon Security to
which such mutilated, destroyed, lost or stolen Coupon appertains, bearing a
number not contemporaneously outstanding, in exchange and substitution for the
mutilated Debt Security, or in lieu of and in substitution for the Debt
Security so destroyed, lost or stolen or in exchange for the Coupon Security to
which such mutilated, destroyed, lost or stolen Coupon appertains, with all
appurtenant Coupons not destroyed, lost or stolen. In every case the applicant
for a substituted Debt Security or Coupon shall furnish to the Corporation and
to the Trustee such security or indemnity as may be required by them to save
each of them harmless, and, in every case of destruction, loss or theft, the
applicant shall also furnish to the Corporation and to the Trustee evidence to
their satisfaction of the destruction, loss or theft of such Debt Security or
Coupon, as the case may be, and of the ownership thereof. Upon the issuance of
any substituted Debt Security or Coupon, the Corporation 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 connected therewith and in
addition a further sum not exceeding ten dollars for each Debt Security so
issued in substitution. In case any Debt Security or Coupon which has matured
or is about to mature shall become mutilated or be destroyed, lost or stolen,
the Corporation may, instead of issuing a substituted Debt Security, pay or
authorize the payment of the same (without surrender thereof except in the case
of a mutilated Debt Security or Coupon) if the applicant for such payment shall
furnish the Corporation and the Trustee with

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such security or indemnity as they may require to save them harmless and, in case
of destruction loss or theft, evidence to the satisfaction of the Corporation and
the Trustee of the destruction, loss or theft of such Debt Security or Coupon and
of the ownership thereof.

     Every substituted Debt Security with, in the case of any such Debt
Security that is a Coupon Security, its Coupons, issued pursuant to the
provisions of this Section by virtue of the fact that any Debt Security or
Coupon is destroyed, lost or stolen shall, with respect to such Debt Security
or Coupon, constitute an additional contractual obligation of the Corporation,
whether or not the destroyed, lost or stolen Debt Security or Coupon shall be
found at any time, and shall be entitled to all the benefits of this Indenture
equally and proportionately with any and all other Debt Securities, and the
Coupons appertaining thereto, duly issued hereunder.

     All Debt Securities and any Coupons appertaining thereto shall be held and
owned upon the express condition that the foregoing provisions are exclusive
with respect to the replacement or payment of mutilated, destroyed, lost or
stolen Debt Securities and Coupons appertaining thereto and shall, to the
extent permitted by law, preclude any and all other rights or remedies,
notwithstanding any law or statute existing or hereafter enacted to the
contrary with respect to the replacement or payment of negotiable instruments
or other securities without their surrender.

SECTION 2.08. CANCELLATION. Unless otherwise provided with respect to a series
of Debt Securities, all Debt Securities and Coupons surrendered for payment,
redemption, repayment, transfer, exchange or credit against any sinking fund
payment pursuant to this Indenture, shall, if surrendered to the Corporation or
any agent of the Corporation or of the Trustee, be delivered to the Trustee and
promptly cancelled by it or, if surrendered to the Trustee, be cancelled by it,
and no Debt Securities or Coupons shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Indenture. The Trustee
shall destroy cancelled Debt Securities and Coupons and deliver a certificate
of destruction to the Corporation.

SECTION 2.09. COMPUTATION OF INTEREST. Except as otherwise specified as
contemplated by Section 2.01 for Debt Securities of any series, interest on the
Debt Securities of each series shall be computed on the basis of a 360-day year
of twelve 30-day months.

SECTION 2.10. DEBT SECURITIES IN GLOBAL FORM.
If Debt Securities of a series are issuable in global form, as specified as
contemplated by Section 2.01, then, notwithstanding clause (9) of Section 2.01
and the provisions of Sections 2.04 and 2.05, such Global Security shall
represent such of the outstanding Debt Securities of such series as shall be
specified therein and may provide that it shall represent the aggregate amount
of outstanding Debt Securities from time to time endorsed thereon and that the
aggregate amount of outstanding Debt Securities represented thereby may from
time to time be reduced to reflect exchanges. Any endorsement of a Debt
Security in global form to reflect the amount, or any increase or decrease in
the amount, of outstanding Debt Securities represented thereby shall be made by
the Trustee in such manner and upon instructions given by such Person or
Persons as shall be specified therein or in the Corporation Order to be
delivered to the Trustee pursuant to Section 2.03 or Section 2.06. Subject to
the provisions of Section 2.03 and, if applicable, Section 2.06, the Trustee
shall deliver and redeliver any Debt Security in definitive global bearer form
in the manner and upon written instructions given by the Person or Persons
specified therein or in the applicable Corporation Order. If a Corporation
Order pursuant to Section 2.03 or 2.06 has been, or

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simultaneously is, delivered, any instructions by the Corporation with respect to endorsement or
delivery or redelivery of a Debt Security in global form shall be in writing
but need not comply with Section 14.04 and need not be accompanied by an
opinion of Counsel. The beneficial owner of a Debt Security represented by a
definitive Global Security in bearer form may, upon no less than 30 days
written notice to the Trustee, given by the beneficial owner through a
Depository, exchange its interest in such definitive Global Security for a
definitive bearer Debt Security or Debt Securities, or a definitive Registered
Security or Debt Securities, of any authorized denomination, subject to the
rules and regulations of such Depository and its members. No individual
definitive bearer Debt Security will be delivered in or to the United States.

                    Unless otherwise specified as contemplated by Section 2.01 for Debt
Securities of any Series:

	 	(1)
	 	if at any time the Depository for a series of Debt Securities
notifies the Corporation that it is unwilling or unable to continue
as Depository for such series or if at any time the Depository for
such series shall no longer be registered or in good standing, if so
required, under the Securities Exchange Act of 1934, as amended, or
other applicable statute or regulation and a successor Depository
for such series is not appointed by the Corporation within 90 days
after the Corporation receives such notice or becomes aware of such
condition, as the case may be;

	 	(2)
	 	the Corporation may at any time determine that the Debt
Securities of any series shall no longer be represented by a Global
Security and that the provisions of this Indenture relating to
Global Securities shall no longer apply to the Debt Securities of
such series; or

	 	(3)
	 	if at any time there shall have occurred and be continuing an
Event of Default and the Holders of a majority in principal amount
of the Debt Securities outstanding determine that the Global
Security shall be exchangeable for Debt Securities in
definitive registered form, in authorized denominations, and in an
aggregate principal amount equal to the principal amount of the
Global Security of such series,

the Corporation will execute, and upon receipt of a Corporation Order the
Trustee will authenticate and deliver, Debt Securities of such series in
definitive registered form, in authorized denominations, and in an aggregate
principal amount equal to the principal amount of the Global Security of such
series, in exchange for such Global Security.

     Upon the exchange of the Global Security for such Debt Securities in
definitive registered form, in authorized denominations, the Global Security
shall be cancelled by the Trustee. Such Debt Securities in definitive
registered form issued in exchange for the Global Security pursuant to this
paragraph shall be registered in such names and in such authorized
denominations as the Depository, pursuant to instructions from its direct or
indirect participants

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or otherwise, shall instruct the Trustee. The Trustee
shall deliver such Debt Securities to the persons in whose names such Debt
Securities are so registered.

     The provisions of the last sentence of the second to the last paragraph of
Section 2.03 shall apply to any Debt Security represented by a Debt Security in
global form if such Debt Security was never issued and sold by the Corporation
and the Corporation delivers to the Trustee the Debt Security in global form
together with written instructions (which need not comply with Section 14.04
and need not be accompanied by an Opinion of Counsel) with regard to the
reduction in the principal amount of Debt Securities represented thereby
together with the written statement contemplated by the last sentence of the
second to the last paragraph of Section 2.03.

     Unless otherwise specified as contemplated by Section 2.01, payment of
principal of, and any premium and any interest on, any Debt Security in
definitive global form shall be made to the Person or Persons specified
therein.

SECTION 2.11. MEDIUM-TERM SECURITIES. Notwithstanding any contrary provision
herein, if all Debt Securities of a series are not to be originally issued at
one time, it shall not be necessary to deliver the Corporation Order, Officers’
Certificate, supplemental indenture or Opinion of Counsel otherwise required
pursuant to Sections 2.01, 2.03, 2.06, and 14.04 at or prior to the time of
authentication of each Debt Security of such series if such documents are
delivered at or prior to the authentication upon original issuance of the first
Debt Security of such series to be issued.

     An Officers’ Certificate or supplemental indenture, delivered pursuant to
this Section 2.11 in the circumstances set forth in the preceding paragraph may
provide that Debt Securities which are the subject thereof will be
authenticated and delivered by the Trustee on original issue from time to time
upon the written order of persons designated in such Officers’ Certificate or
supplemental indenture and that such persons are authorized to determine,
consistent with such Officers’ Certificate or any applicable supplemental
indenture such terms and conditions of said Debt Securities as are specified in
such Officers’ Certificate or supplemental indenture, provided that the
foregoing procedure is acceptable to the Trustee.

SECTION 2.12. CUSIP NUMBERS. The Corporation, in issuing the Debt Securities,
may use “CUSIP” numbers (if then generally in use), and, if so, the Trustee
shall use “CUSIP” numbers in notices of redemption as a convenience to Holders;
provided that any such notice may state that no representation is made as to
the correctness of such numbers either as printed on the Debt Securities or as
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Debt Securities, and any such
redemption shall not be affected by any defect in or omission of such numbers.
The Corporation will promptly notify the Trustee of any change in the “CUSIP”
numbers.

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ARTICLE THREE

REDEMPTION OF DEBT SECURITIES

SECTION 3.01. APPLICABILITY OF ARTICLE. Redemption of Debt Securities of any
series as permitted or required by the terms thereof shall be made in
accordance with such terms and this Article; provided, however, that if any
provision of any series of Debt Securities shall conflict with any provision of
this Article, the provision of such series of Debt Securities shall govern.

     The notice date for a redemption of Debt Securities shall mean the date on
which notice of such redemption is given in accordance with the provisions of
Section 3.02 hereof.

SECTION 3.02. NOTICE OF REDEMPTION; SELECTION OF DEBT SECURITIES. The election
of the Corporation to redeem any Debt Securities shall be evidenced by an
Officers’ Certificate. In case the Corporation shall desire to exercise the
right to redeem all, or, as the case may be, any part, of a series of Debt
Securities pursuant to the terms and provisions applicable to such series, it
shall fix a Redemption Date and shall mail a notice of such redemption at least
thirty and not more than sixty days prior to the Redemption Date to the Holders
of the Debt Securities of such series that are Registered Securities to be
redeemed as a whole or in part, at their last addresses as the same appear on
the Security Register. Such mailing shall be by prepaid first class mail. Any
notice that is mailed in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the Holder shall have received
such notice. In any case, failure to give notice by mail, or any defect in the
notice to the Holder of any Debt Security of a series designated for redemption
as a whole or in part shall not affect the validity of the proceedings for the
redemption of any other Debt Security of such series.

     Notice of redemption to the Holders of Unregistered Securities to be
redeemed as a whole or in part, who have filed their names and addresses with
the Trustee as described in Section 313(c) of the Trust Indenture Act of 1939,
shall be given by mailing notice of such redemption, by first class mail,
postage prepaid, at least thirty days and not more than sixty days prior to the
Redemption Date, to such Holders at such addresses as were so furnished to the
Trustee (and, in the case of any such notice given by the Corporation, the
Trustee shall make such information available to the Corporation for such
purpose). Notice of redemption to any other Holder of an
Unregistered Security of such series shall be published in an Authorized
Newspaper in the Borough of Manhattan, The City of New York and in an
Authorized Newspaper in London (and, if required by Section 4.04, in an
Authorized Newspaper in Luxembourg), in each case, once in each of two
successive calendar weeks, the first publication to be not less than thirty nor
more than sixty days prior to the Redemption Date. Any notice that is mailed
in the manner herein provided shall be conclusively presumed to have been duly
given, whether or not the Holder shall have received such notice. In any case,
failure to give notice by mail, or any defect in the notice to the Holder of
any Debt Security of a series designated for redemption as a whole or in part
shall not affect the validity of the proceedings for the redemption of any
other Debt Security of such series.

     Each such notice of redemption shall specify the provisions of such Debt
Securities under which such redemption is made, that the conditions precedent,
if any, to such redemption have

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occurred, shall describe the same and the
Redemption Date, the Redemption Price, the Place of Payment, that payment will
be made upon presentation and surrender of such Debt Securities and, in the
case of Coupon Securities, of all Coupons appertaining thereto maturing after
the Redemption Date, that interest and Additional Amounts, if any, accrued to
the Redemption Date will be paid as specified in said notice, and that on and
after said date interest, if any, thereon or on the portions thereof to be
redeemed will cease to accrue. If fewer than all of the Debt Securities of a
series are to be redeemed any notice of redemption shall specify the numbers of
the Debt Securities to be redeemed and, if applicable, the CUSIP Numbers
thereof. In case any Debt Security is to be redeemed in part only, the notice
of redemption shall state the portion of the principal amount thereof to be
redeemed and shall state that upon surrender of such Debt Security, a new Debt
Security or Debt Securities in principal amount equal to the unredeemed portion
thereof will be issued of the same series.

     At least one Business Day prior to the Redemption Date specified in the
notice of redemption given for Unregistered Securities as provided in this
Section and on or prior to the Redemption Date specified in the notice of
redemption given for all Debt Securities other than Unregistered Securities,
the Corporation will deposit in trust with the Trustee or with one or more
Paying Agents an amount of money sufficient to redeem on the Redemption Date
all the Debt Securities or portions of Debt Securities so called for redemption
at the Redemption Price, together with interest, if any, and Additional
Amounts, if any, accrued to the Redemption Date. The Corporation will give the
Trustee notice of each redemption at least forty-five days prior to the
Redemption Date (unless a shorter notice is acceptable to the Trustee) as to
the aggregate principal amount of Debt Securities to be redeemed.

     If fewer than all of the Debt Securities of a series are to be redeemed,
the Trustee shall select, pro rata or by lot or in such other manner as it
shall deem reasonable and fair, the numbers of the Debt Securities to be
redeemed in whole or in part.

SECTION 3.03. PAYMENT OF DEBT SECURITIES CALLED FOR REDEMPTION. If notice of
redemption has been given as above provided, the Debt Securities or portions of
Debt Securities with respect to which such notice has been given shall become
due and payable on the date and at the Place of Payment stated in such notice
at the Redemption Price, together with interest, if any, and Additional
Amounts, if any, accrued to the Redemption Date, and on and
after said date (unless the Corporation shall default in the payment of such
Debt Securities at the Redemption Price, together with interest, if any, and
Additional Amounts, if any, accrued to said date) interest on the Debt
Securities or portions of Debt Securities so called for redemption shall cease
to accrue. On presentation and surrender of such Debt Securities subject to
redemption at said Place of Payment in said notice specified, the said Debt
Securities or the specified portions thereof shall be paid and redeemed by the
Corporation at the Redemption Price, together with interest, if any, and
Additional Amounts, if any, accrued thereon to the Redemption Date. Interest,
if any, and Additional Amounts, if any, maturing on or prior to the Redemption
Date shall continue to be payable (but without interest thereon unless the
Corporation shall default in payment thereof) in the case of Coupon Securities
to the bearers of the Coupons for such interest upon surrender thereof, and in
the case of Registered Securities to the Holders thereof registered as such on
the Security Register on the relevant record date subject to the terms and
provisions of Section 2.04. At the option of the Corporation payment may be
made by check to (or to the

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order of) the Holders of the Debt Securities or
other persons entitled thereto against presentation and surrender of such Debt
Securities.

     If any Coupon Security surrendered for redemption shall not be accompanied
by all appurtenant Coupons maturing after the Redemption Date, the surrender of
such missing Coupon or Coupons may be waived by the Corporation and the
Trustee, if there be furnished to each of them such security or indemnity as
they may require to save each of them harmless.

     Upon presentation of any Debt Security redeemed in part only, the
Corporation shall execute, and the Trustee shall authenticate and deliver to
the Holder thereof, at the expense of the Corporation, a new Debt Security or
Debt Securities, of authorized denominations, in aggregate principal amount
equal to the unredeemed portion of the Debt Security so presented of the same
series.

ARTICLE FOUR

PARTICULAR COVENANTS OF THE CORPORATION

SECTION 4.01. PAYMENT OF PRINCIPAL, PREMIUM, INTEREST AND ADDITIONAL AMOUNTS.
The Corporation shall duly and punctually pay or cause to be paid the principal
of (and premium, if any), interest, if any, and Additional Amounts, if any, on
each of the Debt Securities at the place, at the respective times and in the
manner provided in the terms of the Debt Securities and in this Indenture. The
interest on Coupon Securities (together with any Additional Amounts) shall be
payable only upon presentation and surrender of the several Coupons for such
interest installments as are evidenced thereby as they severally mature. The
interest, if any, on any temporary bearer securities (together with any
Additional Amounts) shall be paid, as to the installments of interest evidenced
by Coupons attached thereto, if any, only upon presentation and surrender
thereof, and, as to the other installments of interest, if any, only upon
presentation of such Debt Securities for notation thereon of the payment of
such interest. The interest on Registered Securities (together with any
Additional Amounts) shall be payable only to the Holders thereof and at the
option of the Corporation may be paid by (i) mailing checks for such interest
payable to or upon the order of such Holders at their last addresses as they
appear on the Security Register for such Debt Securities or (ii) in the case of Holders of
U.S. $10,000,000 or more in aggregate principal amount of such Registered
Securities, by wire transfer of immediately available funds, but only if the
Trustee has received wire transfer instructions in writing not less than 15
days prior to the applicable Interest Payment Date.

SECTION 4.02. OFFICES FOR NOTICES AND PAYMENTS, ETC. As long as any of the
Debt Securities of a series remain outstanding, the Corporation shall designate
and maintain, in the Borough of Manhattan, The City of New York, an office or
agency where the Registered Securities of such series may be presented for
registration of transfer and for exchange as provided in this Indenture, an
office or agency where notices and demands to or upon the Corporation in
respect of the Debt Securities of such series or of this Indenture may be
served, and an office or agency where the Debt Securities of such series may be
presented for payment. The Corporation shall give to the Trustee notice of the
location of each such office or agency and of any change in the location
thereof. In case the Corporation shall fail to maintain any such office or
agency in the Borough of Manhattan, The City of New York, or shall fail to give
such

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notice of the location or of any change in the location thereof,
presentations may be made and notices and demands may be served at the
corporate trust office of the Trustee in the Borough of Manhattan, The City of
New York, and the Corporation hereby appoints the Trustee as its agent to
receive all such presentations, notices and demands.

     If Unregistered Securities of any series are outstanding, the Corporation
shall maintain or cause the Trustee to maintain one or more agencies in a city
or cities located outside the United States (including any city in which such
an agency is required to be maintained under the rules of any securities
exchange on which the Debt Securities of such series are listed) where such
Unregistered Securities, and Coupons, if any, appertaining thereto may be
presented for payment. No payment on any Unregistered Security or Coupon will
be made upon presentation of such Unregistered Security or Coupon at an agency
of the Corporation within the United States nor will any payment be made by
transfer to an account in, or by mail to an address in, the United States,
except, at the option of the Corporation, if the Corporation shall have
determined that, pursuant to applicable United States laws and regulations then
in effect such payment can be made without adverse tax consequences to the
Corporation. Notwithstanding the foregoing, payments in U.S. Dollars with
respect to Unregistered Securities of any series and Coupons appertaining
thereto that are payable in U.S. Dollars may be made at an agency of the
Corporation maintained in the Borough of Manhattan, The City of New York if
such payment in U.S. Dollars at each agency maintained by the Corporation
outside the United States for payment on such Unregistered Securities is
illegal or is effectively precluded by exchange controls or other similar
restrictions.

     The Corporation hereby initially designates Bank One Trust Company, N.A.,
located at its Corporate Trust Office, as the Security Registrar and as the
office or agency of the Corporation in the Borough of Manhattan, The City of
New York, where the Debt Securities may be presented for payment and, in the
case of Registered Securities, for registration of transfer and for exchange as
in this Indenture provided and where notices and demands to or upon the
Corporation in respect of the Debt Securities of any series or of this
Indenture may be served.

SECTION 4.03. PROVISIONS AS TO PAYING AGENT.

            (a) Whenever the Corporation shall appoint a paying agent other than the
Trustee with respect to the Debt Securities of any series, it will cause such
paying agent to execute and deliver to the Trustee an instrument in which such
agent shall agree with the Trustee, subject to the provisions of this Section:

                    (1) that it will hold sums held by it as such agent for the payment of the
principal of (and premium, if any), interest, if any, or Additional Amounts, if
any, on the Debt Securities of such series in trust for the benefit of the
Holders of the Debt Securities of such series, or Coupons appertaining thereto,
as the case may be, entitled thereto and will notify the Trustee of the receipt
of sums to be so held,

                    (2) that it will give the Trustee notice of any failure by the Corporation
(or by any other obligor on the Debt Securities of such series) to make a
payment of the principal of

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(or premium, if any), interest, if any, or
Additional Amounts, if any, on the Debt Securities of such series when the same
shall be due and payable, and

                    (3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held
in trust by such paying agent.

            (b) If the Corporation shall act as its own paying agent, it will, on or
before each due date of the principal of (and premium, if any), interest, if
any, or Additional Amounts, if any, on the Debt Securities of any series set
aside, segregate and hold in trust for the benefit of the Holders of the Debt
Securities of such series entitled thereto a sum sufficient to pay such
principal (and premium if any), interest, if any, or Additional Amounts, if
any, so becoming due. The Corporation will promptly notify the Trustee of any
failure to take such action.

            (c) Anything in this Section to the contrary notwithstanding, the
Corporation may, at any time, for the purpose of obtaining a satisfaction and
discharge with respect to one or more or all series of Debt Securities
hereunder, or for any other reason, pay or cause to be paid to the Trustee all
sums held in trust for such series by it or any paying agent hereunder as
required by this Section, such sums to be held by the Trustee upon the trusts
herein contained.

            (d) Anything in this Section to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section is subject to the
provisions of Sections 12.04 and 12.05.

SECTION 4.04. LUXEMBOURG PUBLICATIONS. In the event of the publication of any
notice pursuant to Section 3.02, 6.07, 7.10, 7.11, 9.02, 10.02 or 12.05, the
party making such publication shall also, to the extent that notice is required
so to be given to Holders of Debt Securities of a series by applicable
Luxembourg law or stock exchange regulation, make a similar publication the
same number of times in Luxembourg.

SECTION 4.05. STATEMENT BY OFFICERS AS TO DEFAULT.
The Corporation shall deliver to the Trustee, on or before a date not more than
four months after the end of each fiscal year of the Corporation (which, on the
date of execution hereof, ends on December 31) ending after the date hereof,
commencing with the fiscal year ended in 2003, an Officers’ Certificate,
stating whether or not to the best knowledge of the signers thereof the
Corporation is in default in the performance or observance of any of the terms,
provisions and conditions of this Indenture to be performed or observed by it
and, if the Corporation shall be in default, specifying all such defaults and
the nature thereof of which they may have knowledge.

ARTICLE FIVE

SECURITYHOLDER LISTS AND REPORTS BY THE

CORPORATION AND THE TRUSTEE

SECTION 5.01. SECURITYHOLDER LISTS. The Corporation covenants and agrees that
it will furnish or cause to be furnished to the Trustee with respect to the
Debt Securities of each series:

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            (a) semiannually, not later than each Interest Payment Date (in the case
of any series having semiannual Interest Payment Dates) or not later than the
dates determined pursuant to Section 2.01 (in the case of any series not having
semiannual Interest Payment Dates) a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Holders of Debt
Securities of such series as of the Regular Record Date (or as of such other
date as may be determined pursuant to Section 2.01 for such series) therefor,
and

            (b) at such other times as the Trustee may request in writing within
thirty days after receipt by the Corporation of any such request, a list in
such form as the Trustee may reasonably require of the names and addresses of
the Holders of Debt Securities of a particular series specified by the Trustee
as of a date not more than fifteen days prior to the time such information is
furnished; provided, however, that if and so long as the Trustee shall be the
Security Registrar any such list shall exclude names and addresses received by
the Trustee in its capacity as Security Registrar, and if and so long as all of
the Debt Securities of any series are Registered Securities, such list shall
not be required to be furnished.

SECTION 5.02. PRESERVATION AND DISCLOSURE OF LISTS.

            (a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the Holders of
each series of Debt Securities (i) contained in the most recent list furnished
to it as provided in Section 5.01, (ii) received by the Trustee in its capacity
as Security Registrar or Paying Agent, or (iii) filed with it within the
preceding two years pursuant to Section 313(c) of the Trust Indenture Act of
1939. The Trustee may destroy any list furnished to it as provided in Section
5.01 upon receipt of a new list so furnished.

            (b) In case three or more Holders of Debt Securities (hereinafter referred
to as “applicants”) apply in writing to the Trustee and furnish to the Trustee
reasonable proof that each such applicant has owned a Debt Security of such
series for a period of at least six months
preceding the date of such application, and such application states that
the applicants desire to communicate with other Holders of Debt Securities of a
particular series (in which case the applicants must hold Debt Securities of
such series) or with Holders of all Debt Securities with respect to their
rights under this Indenture or under such Debt Securities and it is accompanied
by a copy of the form of proxy or other communication that such applicants
propose to transmit, then the Trustee shall, within five business days after
the receipt of such application, at its election, either:

                    (1) afford to such applicants access to the information preserved at the
time by the Trustee in accordance with the provisions of subsection (a) of this
Section, or

                    (2) inform such applicants as to the approximate number of Holders of Debt
Securities of such series or all Debt Securities, as the case may be, whose
names and addresses appear in the information preserved at the time by the
Trustee, in accordance with the provisions of subsection (a) of this Section,
and as to the approximate cost of mailing to such Securityholders the form of
proxy or other communication, if any, specified in such application.

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     If the Trustee shall elect not to afford to such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each Holder of such series or all Debt Securities, as the case may be,
whose name and address appear in the information preserved at the time by the
Trustee in accordance with the provisions of subsection (a) of this Section, a
copy of the form of proxy or other communication that is specified in such
request, with reasonable promptness after a tender to the Trustee of the
material to be mailed and of payment, or provision for the payment, of the
reasonable expenses of mailing, unless within five days after such tender, the
Trustee shall mail to such applicants and file with the Commission, together
with a copy of the material to be mailed, a written statement to the effect
that, in the opinion of the Trustee, such mailing would be contrary to the best
interests of the Holders of Debt Securities of such series or all Debt
Securities, as the case may be, or would be in violation of applicable law.
Such written statement shall specify the basis of such opinion. If the
Commission, after opportunity for appearing upon the objections specified in
the written statement so filed, shall enter an order refusing to sustain any of
such objections or if, after the entry of an order sustaining one or more of
such objections, the Commission shall find, after notice and opportunity for
hearing, that all the objections so sustained have been met, and shall enter an
order so declaring, the Trustee shall mail copies of such material to all such
Holders with reasonable promptness after the entry of such order and the
renewal of such tender; otherwise the Trustee shall be relieved of any
obligation or duty to such applicants respecting their application.

                 (c) Each and every Holder of Debt Securities, by receiving and holding the
same, agrees with the Corporation and the Trustee that neither the Corporation
nor the Trustee nor any agent of the Corporation or of the Trustee shall be
held accountable by reason of the disclosure of any such information as to the
names and addresses of the Holders of Debt Securities in accordance with the
provisions of subsection (b) of this Section, regardless of the source from
which such information was derived, and that the Trustee shall not be held
accountable by reason of mailing any material pursuant to a request made under
said subsection (b).

SECTION 5.03. REPORTS BY THE CORPORATION. The Corporation covenants:

            (a) to file with the Trustee within fifteen days after the Corporation is
required to file the same with the Commission, copies of the annual reports and
of the information, documents and other reports (or copies of such portions of
any of the foregoing as the Commission may from time to time by rules and
regulations prescribe) which the Corporation may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934; or, if the Corporation is not required to file information,
documents or reports pursuant to either of such sections, then to file with the
Trustee and the Commission, in accordance with rules and regulations prescribed
from time to time by the Commission, such of the supplementary and periodic
information, documents and reports which may be required pursuant to Section 13
of the Securities Exchange Act of 1934 in respect of a security listed and
registered on a national securities exchange as may be prescribed from time to
time in such rules and regulations;

            (b) to file with the Trustee and the Commission, in accordance with the
rules and regulations prescribed from time to time by the Commission, such
additional information, documents, and reports with respect to compliance by
the Corporation with the conditions and

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covenants provided for in this Indenture as may be required from time to time by such rules and regulations;

            (c) to transmit by mail to all the Holders of Debt Securities of each
series, as the names and addresses of such Holders appear on the Security
Register, within thirty days after the filing thereof with the Trustee, such
summaries of any information, documents and reports required to be filed by the
Corporation with respect to each such series pursuant to subsections (a) and
(b) of this Section as may be required by rules and regulations prescribed from
time to time by the Commission; and

            (d) if Unregistered Securities of any series are outstanding and listed on
a stock exchange, to file with the listing agent of the Corporation with
respect to such series such documents and reports of the Corporation as may be
required from time to time by the rules and regulations of any stock exchange
on which such Unregistered Securities are listed.

SECTION 5.04. REPORTS BY THE TRUSTEE.

            (a) On or before May 15, 2004 and on or before May 15 of each year
thereafter, so long as any Debt Securities of any series are outstanding
hereunder, the Trustee shall transmit to the Holders of Debt Securities of such
series, in the manner provided by Section 313(c) of the Trust Indenture Act of
1939, a brief report dated as of the preceding February 15, as may be required
by Sections 313(a) and (b) of the Trust Indenture Act of 1939.

            (b) A copy of each such report shall, at the time of such transmission to
Holders of Debt Securities of a particular series, be filed by the Trustee with
each stock exchange upon which the Debt Securities of such series are listed
and also with the Commission. The Corporation agrees to notify the Trustee
when and as the Debt Securities of any series become listed on any stock
exchange.

ARTICLE SIX

REMEDIES ON DEFAULT

SECTION 6.01. EVENTS OF DEFAULT. In case one or more of the following Events
of Default with respect to a particular series of Debt Securities shall have
occurred and be continuing, that is to say:

            (a) default in the payment of the principal of (or premium, if any, on)
any of the Debt Securities of such series as and when the same shall become due
and payable either at maturity, upon redemption, by declaration or otherwise;
or

            (b) default in the payment of any installment of interest, if any, or in
the payment of any Additional Amounts upon any of the Debt Securities of such
series as and when the same shall become due and payable, and continuance of
such default for a period of thirty days after written notice from the Trustee;
or

            (c) failure on the part of the Corporation duly to observe or perform any
other of the covenants or agreements on the part of the Corporation applicable
to such series of the Debt

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Securities or contained in this Indenture for a
period of ninety days after the date on which written notice of such failure,
requiring the Corporation to remedy the same, shall have been given to the
Corporation by the Trustee, or to the Corporation and the Trustee by the
Holders of at least twenty-five percent in aggregate principal amount of the
Debt Securities of such series at the time outstanding; or

            (d) default by the Corporation or any Significant Subsidiary in any
payment of $25,000,000 or more of principal of or interest on any notes, bonds,
debentures and other similar evidences of indebtedness for money borrowed, or
in the payment of $25,000,000 or more on account of any guarantee in respect of
any notes, bonds, debentures and other similar evidences of indebtedness for
money borrowed, beyond any period of grace that may be provided in the
instrument or agreement under which such notes, bonds, debentures and other
similar evidences of indebtedness for money borrowed or guarantee was created;
or

            (e) a court having jurisdiction in the premises shall enter a decree or
order for relief in respect of the Corporation in an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or appoint a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of the Corporation or for any substantial
part of its property, or ordering the winding-up or liquidation of its affairs,
and such decree or order shall remain unstayed, undismissed and unbonded and in
effect for a period of ninety days; or

            (f) the Corporation shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
shall consent to the entry of an order for relief in an involuntary case under
any such law, or shall consent to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian,
sequestrator (or similar official) of the Corporation or for a substantial
part of its property, or shall make any general assignment for the benefit of
creditors;

then if an Event of Default described in clause (a), (b), (c) or (d) shall have
occurred and be continuing, and in each and every such case, unless the
principal amount of all the Debt Securities of such series shall have already
become due and payable, either the Trustee or the Holders of not less than
twenty-five percent in aggregate principal amount of the Debt Securities of all
series affected thereby then outstanding hereunder, by notice in writing to the
Corporation (and to the Trustee if given by Holders of such Debt Securities)
may declare the principal amount of all the Debt Securities (or, with respect
to Original Issue Discount Securities, such lesser amount as may be specified
in the terms of such Debt Securities) of the series affected thereby to be due
and payable immediately, and upon any such declaration the same shall become
and shall be immediately due and payable, any provision of this Indenture or
the Debt Securities of such series to the contrary notwithstanding, or, if an
Event of Default described in clause (e) or (f) shall have occurred and be
continuing, and in each and every such case, either the Trustee or the Holders
of not less than twenty-five percent in aggregate principal amount of all the
Debt Securities then outstanding hereunder (voting as one class), by notice in
writing to the Corporation (and to the Trustee if given by Holders of
securities), may declare the principal of all the Debt Securities not already
due and payable (or, with respect to Original Issue Discount Securities, such
lesser amount as may be specified in the terms of such Debt Securities) to be
due and payable immediately, and upon any such declaration the same shall
become and shall be

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immediately due and payable, any provision in this
Indenture or in the Debt Securities to the contrary notwithstanding. The
foregoing provisions, however, are subject to the conditions that if, at any
time after the principal of the Debt Securities of any one or more or all
series, as the case may be, shall have been so declared due and payable, and
before any judgment or decree for the payment of the monies due shall have been
obtained or entered as hereinafter provided, the Corporation shall pay or shall
deposit with the Trustee a sum sufficient to pay all matured installments of
interest, if any, and all Additional Amounts, if any, due upon all the Debt
Securities of such series or of all the Debt Securities, as the case may be,
and the principal of (and premium, if any, on) all Debt Securities of such
series or of all the Debt Securities, as the case may be (or, with respect to
Original Issue Discount Securities, such lesser amount as may be specified in
the terms of such Debt Securities), which shall have become due otherwise than
by acceleration (with interest, if any, upon such principal and premium, if
any, and, to the extent that payment of such interest is enforceable under
applicable law, on overdue installments of interest and Additional Amounts, if
any, at the same rate as the rate of interest specified in the Debt Securities
of such series, as the case may be (or, with respect to Original Issue Discount
Securities, at the rate specified in the terms of such Debt Securities for
interest on overdue principal thereof upon maturity, redemption or acceleration
of such series, as the case may be), to the date of such payment or deposit),
and such amount as shall be payable to the Trustee pursuant to Section 7.06,
and any and all defaults under the Indenture shall have been remedied, then and
in every such case the Holders of a majority in aggregate principal amount of
the Debt Securities of such series (or of all the Debt Securities, as the case
may be) then outstanding, by written notice to the Corporation and to the
Trustee, may waive all defaults with respect to that series or with respect to
all Debt Securities, as the case may be, and rescind and annul such declaration
and its consequences; but no such waiver or rescission and annulment shall
extend to or shall affect any subsequent default or shall impair any right
consequent thereon. If the principal of all Debt Securities shall have been
declared to be payable pursuant to this Section
6.01, in determining whether the Holders of a majority in aggregate principal
amount thereof have waived all defaults and rescinded and annulled such
declaration, all series of Debt Securities shall be treated as a single class
and the principal amount of Original Issue Discount Securities shall be deemed
to be the amount declared payable under the terms applicable to such Original
Issue Discount Securities.

     In case the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned
because of such rescission and annulment or for any other reason or shall have
been determined adversely to the Trustee, then and in every such case the
Corporation, Trustee and the Holders of Debt Securities, as the case may be,
shall be restored respectively to their former positions and rights hereunder,
and all rights, remedies and powers of the Corporation, the Trustee and the
Holders of Debt Securities, as the case may be, shall continue as though no
such proceedings had been taken.

SECTION 6.02. PAYMENT OF DEBT SECURITIES ON DEFAULT; SUIT THEREFOR. The
Corporation covenants that (1) in case default shall be made in the payment of
any installment of interest, if any, on any of the Debt Securities of any
series or any Additional Amounts payable in respect of any of the Debt
Securities of any series, as and when the same shall become due and payable,
and such default shall have continued for a period of thirty days or (2) in
case default shall be made in the payment of the principal of (or premium, if
any, on) any of the Debt Securities of any series, as and when the same shall
have become due and

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payable, whether upon maturity of such series or upon
redemption or upon declaration or otherwise, then upon demand of the Trustee,
the Corporation shall pay to the Trustee, for the benefit of the Holders of the
Debt Securities of such series, and the Coupons, if any, appertaining to such
Debt Securities, the whole amount that then shall have become due and payable
on all such Debt Securities of such series and such Coupons, for principal (and
premium, if any) or interest, if any, or Additional Amounts, if any as the case
may be, with interest upon the overdue principal (and premium, if any) and (to
the extent that payment of such interest is enforceable under applicable law)
upon overdue installments of interest, if any, and Additional Amounts, if any,
at the same rate as the rate of interest specified in the Debt Securities of
such series (or, with respect to Original Issue Discount Securities, at the
rate specified in the terms of such Debt Securities for interest on overdue
principal thereof upon maturity, redemption or acceleration); and, in addition
thereto, such further amounts as shall be payable pursuant to Section 7.06.

     In case the Corporation shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any action or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceedings to judgment or final decree, and may enforce any
such judgment or final decree against the Corporation or other obligor upon
such Debt Securities and collect in the manner provided by law out of the
property of the Corporation or other obligor upon such Debt Securities wherever
situated the monies adjudged or decreed to be payable.

     In case there shall be pending proceedings for the bankruptcy or for the
reorganization of the Corporation or any other obligor upon Debt Securities of
any series under Title 11 of the United States Code or any other applicable
law, or in case a receiver or trustee shall have been
appointed for the property of the Corporation or such other obligor, or in
case of any other judicial proceedings relative to the Corporation or such
other obligor, or to the creditors or property of the Corporation or such other
obligor, the Trustee, irrespective of whether the principal of the Debt
Securities of such series shall then be due and payable as therein expressed or
by declaration or otherwise and irrespective of whether the Trustee shall have
made any demand pursuant to the provisions of this Section, shall be entitled
and empowered, by intervention in such proceedings or otherwise, to file and
prove a claim or claims for the whole amount of principal (or, with respect to
Original Issue Discount Securities, such portion of the principal amount as may
be specified in the terms of that series), and premium, if any, interest, if
any, and Additional Amounts, if any, owing and unpaid in respect of the Debt
Securities of such series, and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee under Section
7.06 and of the Holders of the Debt Securities and Coupons of such series
allowed in any such judicial proceedings relative to the Corporation or other
obligor upon the Debt Securities of such series, or to the creditors or
property of the Corporation or such other obligor, and to collect and receive
any monies or other property payable or deliverable on any such claims, and to
distribute all amounts received with respect to the claims of the
Securityholders of such series and of the Trustee on their behalf; and any
receiver, assignee or trustee in bankruptcy or reorganization is hereby
authorized by each of the Holders of the Debt Securities and Coupons of such
series to make payments to the Trustee and, in the event that the Trustee shall
consent to the making of payments directly to the Securityholders of such
series, to pay to the Trustee such amount as shall be sufficient to cover
reasonable compensation to the Trustee, its agents, attorneys and counsel, and
all other reasonable expenses and liabilities incurred, and all advances made,
by the Trustee except as a result of its negligence or bad faith.

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     Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Debt
Securities or the rights of any Holder thereof, or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.

     All rights of action and of asserting claims under this Indenture, or
under any of the Debt Securities, may be enforced by the Trustee without the
possession of any of the Debt Securities or Coupons appertaining to such Debt
Securities, or the production thereof in any trial or other proceedings
relative thereto, and any such action or proceedings instituted by the Trustee
shall be brought in its own name and as trustee of an express trust, and any
recovery of judgment shall be for the ratable benefit of the Holders of the
Debt Securities or Coupons appertaining thereto.

     In case of a default hereunder the Trustee may in its discretion proceed
to protect and enforce the rights vested in it by this Indenture by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any of such rights, either at law or in equity or in
bankruptcy or otherwise, whether for the specific enforcement of any covenant
or agreement contained in this Indenture or in aid of the exercise of any power
granted in this Indenture, or to enforce any other legal or equitable right
vested in the Trustee by this Indenture or by law.

SECTION 6.03. APPLICATION OF MONIES COLLECTED BY TRUSTEE.
Any monies collected by the Trustee pursuant to Section 6.02 shall be applied
in the following order, at the date or dates fixed by the Trustee and, in case
of the distribution of such monies on account of principal (or premium, if any)
or interest, if any, upon presentation of the several Debt Securities and
Coupons in respect of which monies have been collected, and stamping thereon
the payment, if only partially paid, and upon surrender thereof, if fully paid:

     FIRST: To the payment of the amounts payable to the Trustee pursuant to
Section 7.06;

     SECOND: In case the principal of the Debt Securities in respect of which
monies have been collected shall not have become due, to the payment of
interest, if any, and Additional Amounts, if any, on the Debt Securities of
such series in the order of the maturity of the installments of such interest,
with interest (to the extent that such interest has been collected by the
Trustee) upon the overdue installments of interest and Additional Amounts, if
any, at the same rate as the rate of interest, if any, specified in the Debt
Securities of such series (or, with respect to Original Issue Discount
Securities, at the rate specified in the terms of such Debt Securities for
interest on overdue principal thereof upon maturity, redemption or
acceleration), such payments to be made ratably to the persons entitled
thereto, without discrimination or preference; and

     THIRD: In case the principal of the Debt Securities in respect of which
monies have been collected shall have become due, by declaration or otherwise,
to the payment of the whole amount then owing and unpaid upon the Debt
Securities of such series for principal (and premium, if any), interest, if
any, and Additional Amounts, if any, and (to the extent that such

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interest has been collected by the Trustee) upon overdue installments of interest, if any,
and Additional Amounts, if any, at the same rate as the rate of interest
specified in the Debt Securities of such series (or, with respect to Original
Issue Discount Securities, at the rate specified in the terms of such Debt
Securities for interest on overdue principal thereof upon maturity, redemption
or acceleration); and in case such monies shall be insufficient to pay in full
the whole amount so due and unpaid upon the Debt Securities of such series,
then to the payment of such principal (and premium, if any), interest, if any,
and Additional Amounts, if any, without preference or priority of principal
(and premium, if any), over interest, if any, and Additional Amounts, if any,
or of interest, if any, and Additional Amounts, if any, over principal (and
premium, if any), or of any installment of interest, if any, or Additional
Amounts, if any, over any other installment of interest, if any, or Additional
Amounts, if any, or of any Debt Security of such series over any other Debt
Security of such series, ratably to the aggregate of such principal (and
premium, if any), and accrued and unpaid interest, if any, and Additional
Amounts, if any.

SECTION 6.04. PROCEEDINGS BY SECURITYHOLDERS. No Holder of any Debt Security
of any series or of any Coupon appertaining thereto shall have any right by
virtue or by availing of any provision of this Indenture to institute any
action or proceedings at law or in equity or in bankruptcy or otherwise, upon
or under or with respect to this Indenture, or for the appointment of a
receiver or trustee, or for any other remedy hereunder, unless such Holder
previously shall have given to the Trustee written notice of default and of the
continuance thereof, as hereinbefore provided, and unless also the Holders of
not less than twenty-five percent in aggregate principal amount of the Debt
Securities of such series then
outstanding or, in the case of any Event of Default described in clause (d) or
(e) of Section 6.01, twenty-five per cent in aggregate principal amount of all
the Debt Securities at the time outstanding (voting as one class) shall have
made written request upon the Trustee to institute such action or proceedings
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 sixty days
after its receipt of such notice, request and offer of indemnity shall have
failed to institute any such action or proceedings and no direction
inconsistent with such written request shall have been given to the Trustee
pursuant to Section 6.06; it being understood and intended and being expressly
covenanted by the taker and Holder of every Debt Security with every other
taker and Holder and the Trustee, that no one or more Holders of Debt
Securities or Coupons appertaining to such Debt Securities shall have any right
in any manner whatever by virtue of or by availing himself, herself or itself
of any provision of this Indenture to affect, disturb or prejudice the rights
of any other Holder of Debt Securities or Coupons appertaining to such Debt
Securities, or to obtain or seek to obtain priority over or preference to any
other such Holder or to enforce any right under this Indenture, except in the
manner herein provided and for the equal, ratable and common benefit of all
Holders of Debt Securities and Coupons. For the protection and enforcement of
the revisions of this Section, each and every Securityholder and the Trustee
shall be entitled to such relief as can be given either at law or in equity.

     Notwithstanding any other provisions in this Indenture, however, the right
of any Holder of any Debt Security to receive payment of the principal of (and
premium, if any) and interest, if any, and Additional Amounts, if any, on such
Debt Security or Coupon, on or after the respective due dates expressed in such
Debt Security or Coupon, or to institute suit for the enforcement of

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any such payment on or after such respective dates, shall not be impaired or affected
without the consent of such Holder. With respect to original Issue Discount
Debt Securities, principal shall mean such amount as shall be due and payable
as may be specified in the terms of such Debt Securities.

SECTION 6.05. REMEDIES CUMULATIVE AND CONTINUING. All powers and remedies
given by this Article Six to the Trustee or to the Holders of Debt Securities
or Coupons shall, to the extent permitted by law, be deemed cumulative and not
exclusive of any thereof or of any other powers and remedies available to the
Trustee or the Holders of Debt Securities or Coupons, by judicial proceedings
or otherwise, to enforce the performance or observance of the covenants and
agreements contained in this Indenture, and no delay or omission of the Trustee
or of any Holder of any of the Debt Securities or Coupons to exercise any right
or power accruing upon any default occurring and continuing as aforesaid shall
impair any such right or power or shall be construed to be a waiver of any such
default or an acquiescence therein; and, subject to the provisions of Section
6.04, every power and remedy given by this Article Six or by law to the Trustee
or to the Holders of Debt Securities or Coupons may be exercised from time to
time, and as often as shall be deemed expedient, by the Trustee or by the
Holders of Debt Securities or Coupons, as the case may be.

SECTION 6.06. DIRECTION OF PROCEEDINGS. The Holders of a majority in aggregate
principal amount of the Debt Securities
of any or all series affected (voting as one class) at the time outstanding
shall have the right to direct the time, method, and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee; provided, however, that (i) such direction
shall not be in conflict with any rule of law or with this Indenture, (ii) the
Trustee may take any other action deemed proper by the Trustee that is not
inconsistent with such direction and (iii) the Trustee shall have the right to
decline to follow any such direction if the Trustee, being advised by counsel,
determines that the action or proceedings so directed would be prejudicial to
the Holders not joining in such direction or may not lawfully be taken or if
the Trustee in good faith by its board of directors or executive committee or a
trust committee of directors or trustees and/or responsible officers shall
determine that the action or proceedings so directed would involve the Trustee
in personal liability.

     Prior to any declaration accelerating the maturity of the Debt Securities
of any series, the holders of a majority in aggregate principal amount of the
Debt Securities of such series at the time outstanding may on behalf of the
Holders of all of the Debt Securities of such series waive any past default or
Event of Default hereunder and its consequences, except a default in the
payment of principal of (premium, if any) or interest, if any, or Additional
Amounts, if any, on any Debt Securities of such series or in respect of a
covenant or provision hereof that may not be modified or amended without the
consent of the Holders of each outstanding Debt Security of such series
affected. Upon any such waiver the Corporation, the Trustee and the Holders of
the Debt Securities of such series shall be restored to their former positions
and rights hereunder, respectively, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon. Whenever any default or Event of Default hereunder shall have been
waived as permitted by this Section 6.06, said default or Event of Default
shall for all purposes of the Debt Securities of such series and this Indenture
be deemed to have been cured and to be not continuing.

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SECTION 6.07. NOTICE OF DEFAULTS. The Trustee shall, within ninety days after
the occurrence of a default with respect to the Debt Securities of any series,
give notice of all defaults with respect to that series known to the Trustee
(i) if any Unregistered Securities of that series are then outstanding, to the
Holders thereof, by publication at least once in an Authorized Newspaper in the
Borough of Manhattan, The City of New York and at least once in an Authorized
Newspaper in London (and, if required by Section 4.04, at least once in an
Authorized Newspaper in Luxembourg), (ii) if any Unregistered Securities of
that series are then outstanding, to all Holders thereof who have filed their
names and addresses with the Trustee as described in Section 313(c) of the
Trust Indenture Act of 1939, by mailing such notice to such Holders at such
addresses and (iii) to all Holders of then outstanding Registered Securities of
that series, by mailing such notice to such Holders at their addresses as they
shall appear on the Security Register, unless in each case such defaults shall
have been cured before the mailing or publication of such notice (the term
“defaults” for the purpose of this Section being hereby defined to be the
events specified in Sections 6.01(a), (b), (c), (d) and (e) and any additional
events specified in the terms of any series of Debt Securities pursuant to
Section 2.01, not including periods of grace, if any, provided for therein, and
irrespective of the giving of written notice specified in Section 6.01(c) or in
the terms of any Debt Securities established pursuant to Section 2.01); and
provided that, except in the case of
default in the payment of the principal of (premium, if any), interest, if any,
or Additional Amounts, if any, on any of the Debt Securities of such series,
the Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee, or a trust committee of directors
or responsible officers of the Trustee in good faith determines that the
withholding of such notice is in the interests of the Holders of the Debt
Securities of such series.

SECTION 6.08. UNDERTAKING TO PAY COSTS. All parties to this Indenture agree,
and each Holder of any Debt Security by his, her or its acceptance thereof
shall be deemed to have agreed, that any court may in its discretion require,
in any suit for the enforcement of any right or remedy under this Indenture, or
in any suit against the Trustee for any action taken or omitted by it as
Trustee, the filing by any party litigant in such suit of an undertaking to pay
the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys’ fees, against any party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; provided that, the provisions
of this Section shall not apply to any suit instituted by the Trustee, to any
suit instituted by any Securityholders of any series, or group of such
Securityholders, holding in the aggregate more than ten percent in aggregate
principal amount of all Debt Securities (voting as one class) or to any suit
instituted by any Securityholders for the enforcement of the payment of the
principal of (or premium, if any), interest, if any, or Additional Amounts, if
any, on any Debt Security on or after the due date expressed in such Debt
Security.

ARTICLE SEVEN

CONCERNING THE TRUSTEE

SECTION 7.01. DUTIES AND RESPONSIBILITIES OF TRUSTEE. The Trustee, prior to
the occurrence of an Event of Default of a particular series and after the
curing of all Events of Default of such series that may have occurred,
undertakes to perform such duties and only such duties as are specifically set
forth in this Indenture. In case an Event of Default with respect to a

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particular series has occurred (which has not been cured) the Trustee shall
exercise such of the rights and powers vested in it, by this Indenture, and use
the same degree of care and skill in its exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.

     No provision of this Indenture shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act,
or its own willful misconduct, except that:

            (a) prior to the occurrence of an Event of Default with respect to a
particular series and after the curing of all Events of Default with respect to
such series that may have occurred:

                    (1) the duties and obligations of the Trustee with respect to such series
shall be determined solely by the express provisions of this Indenture, and the
Trustee shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the Trustee;
and

                    (2) in the absence of bad faith on the part of the Trustee, the Trustee
may conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture; but in the
case of any such certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee shall be
under a duty to examine the same to determine whether or not they conform to
the requirements of this Indenture;

            (b) the Trustee shall not be liable for any error of judgment made in good
faith by a responsible officer or officers, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts; and

            (c) the Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction of the
Holders of Debt Securities pursuant to Section 6.06 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 Indenture.

     No provision of this Indenture shall be construed as requiring the Trustee
to expend or risk its own funds or otherwise to incur any personal financial
liability in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers, if there shall be reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it.

SECTION 7.02. RELIANCE ON DOCUMENTS, OPINIONS, ETC. Subject to the provisions
of Section 7.01:

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            (a) the Trustee may rely, and shall be protected in acting or refraining
from acting, upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, bond, debenture, note, Coupon or other
paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;

            (b) any request, direction, order or demand of the Corporation mentioned
herein shall be sufficiently evidenced by an instrument signed in the name of
the Corporation by any two of the Chairman of the Board of Directors, any Vice
Chairman of the Board of Directors, the President or any Vice President, the
Treasurer, or the Secretary or any Assistant Secretary or, if the other
signatory is other than the Treasurer, any Assistant Treasurer (unless other
evidence in respect thereof be herein specifically prescribed); and a Board
Resolution may be evidenced to the Trustee by a copy thereof certified by the
Secretary or any Assistant Secretary of the Corporation or in lieu thereof by a
Treasurer or Assistant Treasurer ;

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

            (d) the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request, order or direction of
any of the Securityholders, pursuant to the provisions of this Indenture,
unless such Securityholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses, and liabilities which might
be incurred therein or thereby;

            (e) 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, direction, consent, order, bond, debenture,
note, coupon or other paper or document, but the Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters as it
may see fit, and, if the Trustee shall determine to make such further inquiry
or investigation, it shall be entitled to examine the relevant books, records
and premises of the Corporation, personally or by agent or attorney;

            (f) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys, provided, however, that the Trustee shall be responsible for any
misconduct or negligence on the part of any agent or attorney appointed by it
hereunder; and

            (g) the Trustee shall not be liable for any action taken 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 Indenture.

SECTION 7.03. NO RESPONSIBILITY FOR RECITALS, ETC. The recitals contained
herein and in the Debt Securities, other than the Trustee’s certificate of
authentication, shall be taken as the statements of the Corporation, and the
Trustee assumes no responsibility for the correctness of the same. The Trustee
makes no representations as to the validity or sufficiency of this Indenture or
of the Debt Securities, provided that the Trustee shall not be relieved of its
duty to authenticate Debt Securities only as authorized by this Indenture. The
Trustee shall not be accountable for the use or application by the Corporation
of Debt Securities or the proceeds thereof.

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SECTION 7.04. OWNERSHIP OF DEBT SECURITIES OR COUPONS. The Trustee or any
agent of the Corporation or of the Trustee, in its individual or any other
capacity, may become the owner or pledgee of Debt Securities or Coupons with
the same rights it would have if it were not Trustee, or an agent of the
Corporation or of the Trustee.

SECTION 7.05. MONIES TO BE HELD IN TRUST. Subject to the provisions of
Sections 12.04 and 12.05 hereof, all monies received by the Trustee or any
paying agent shall, until used or applied as herein provided, be held in trust
for the purposes for which they were received but need not be segregated from
other funds except to the
extent required by law. Neither the Trustee nor any paying agent shall be
under any liability for interest on any monies received by it hereunder except
such as it may agree with the Corporation to pay thereon. So long as no Event
of Default shall have occurred and be continuing, all interest allowed on any
such monies shall be paid from time to time upon the written order of the
Corporation, signed by its Chairman of the Board of Directors or any Vice
Chairman of the Board of Directors or its President or any Vice President or
its Treasurer or any Assistant Treasurer.

SECTION 7.06. COMPENSATION AND EXPENSES OF TRUSTEE. The Corporation covenants
and agrees to pay to the Trustee from time to time, and the Trustee shall be
entitled to, reasonable compensation, and, except as otherwise expressly
provided, the Corporation will pay or reimburse the Trustee upon its request
for all reasonable expenses, disbursements and advances incurred or made by the
Trustee in accordance with any of the provisions of this Indenture (including
the reasonable compensation, expenses and disbursements of its counsel and of
all persons not regularly in its employ) except any such expense, disbursement
or advance as may arise from its negligence or bad faith. If any property
other than cash shall at any time be subject to the lien of this Indenture, the
Trustee, if and to the extent authorized by a receivership or bankruptcy court
of competent jurisdiction or by the supplemental instrument subjecting such
property to such lien, shall be entitled to make advances for the purpose of
preserving such property or of discharging tax liens or other prior liens or
encumbrances hereon. The Corporation also covenants to indemnify the Trustee
for, and to hold it harmless against, any loss, liability or reasonable expense
incurred without negligence or bad faith on the part of the Trustee, arising
out of or in connection with the acceptance or administration of this trust,
including the reasonable costs and expenses of defending itself against any
claim of liability in the premises. The obligations of the Corporation under
this Section to compensate the Trustee and to pay or reimburse the Trustee for
reasonable expenses, disbursements and advances shall constitute additional
indebtedness hereunder. Such additional indebtedness shall be secured by a
lien prior to that of the Debt Securities upon all property and funds held or
collected by the Trustee as such, except funds held in trust for the benefit of
the Holders of particular Debt Securities or Coupons. The Trustee’s right to
compensation for its services, reimbursement for its costs and expenses, and
indemnification shall survive its resignation or removal and the termination of
this Indenture.

SECTION 7.07. OFFICERS’ CERTIFICATE AS EVIDENCE. Subject to the provisions of
Section 7.01, whenever in the administration of the provisions of this
Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or suffering

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any action to be taken
hereunder, such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of negligence or bad faith on the
part of the Trustee, be deemed to be conclusively proved and established by an
Officers’ Certificate delivered to the Trustee, and such Certificate, in the
absence of negligence or bad faith on the part of the Trustee, shall be full
warrant to the Trustee for any action taken, suffered or omitted by it under
the provisions of this Indenture upon the faith thereof.

SECTION 7.08. CONFLICTING INTEREST OF TRUSTEE.
The Trustee shall comply with Section 310(b) of the Trust Indenture Act of
1939.

SECTION 7.09. ELIGIBILITY OF TRUSTEE. There shall at all times be a trustee
hereunder which shall be a corporation organized and doing business under the
laws of the United States or of any State or Territory thereof or of the
District of Columbia, which (a) is authorized under such laws to exercise
corporate trust powers and (b) is subject to supervision or examination by
Federal, State, Territorial or District of Columbia authority and (c) shall
have at all times a combined capital and surplus of not less than U.S. $50
million. If such corporation 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, the combined
capital and surplus of such corporation at any time 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, the Trustee shall
resign immediately in the manner and with the effect specified in Section 7.10.

SECTION 7.10. RESIGNATION OR REMOVAL OF TRUSTEE.

            (a) The Trustee, or any trustee or trustees hereafter appointed, may, upon
sixty days written notice to the Corporation, at any time resign with respect
to one or more or all series by giving written notice of resignation to the
Corporation (i) if any Unregistered Securities of a series affected are then
outstanding, by giving notice of such resignation to the Holders thereof, by
publication at least once in an Authorized Newspaper in London (and, if
required by Section 4.04, at least once in an Authorized Newspaper in
Luxembourg), (ii) if any Unregistered Securities of a series affected are then
outstanding, by mailing notice of such resignation to the Holders thereof who
have filed their names and addresses with the Trustee as described in Section
313(c) of the Trust Indenture Act of 1939 at such addresses as were so
furnished to the Trustee and (iii) by mailing notice of such resignation to the
Holders of then outstanding Registered Securities of each series affected at
their addresses as they shall appear on the Security Register. Upon receiving
such notice of resignation the Corporation shall promptly appoint a successor
trustee with respect to the applicable series by written instrument, in
duplicate, executed by order of the Board of Directors of the Corporation, one
copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor trustee. If no successor trustee shall have been so
appointed and have accepted appointment within thirty days after the mailing of
such notice of resignation to the Securityholders, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
trustee, or any Securityholder who has been a bona fide Holder of a Debt
Security or Debt Securities of the applicable series for at least six months
may, subject to the provisions of Section 6.08, on behalf of himself, herself
or itself and all others similarly situated, petition any such court for the

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appointment of a successor trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, appoint a successor
trustee.

            (b) In case at any time any of the following shall occur:

                    (A) the Trustee shall fail to comply with Section 7.08 with respect to any
series of Debt Securities after written request therefor by the Corporation or
by any
Securityholder who has been a bona fide Holder of a Debt Security or Debt
Securities of such series for at least six months, or

                    (B) the Trustee shall cease to be eligible in accordance with the
provision of Section 7.09 with respect to any series of Debt Securities and
shall fail to resign after written request therefor by the Corporation or by
any such Securityholder, or

                    (C) the Trustee shall become incapable of acting with respect to any
series of Debt Securities, or shall be adjudged a 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, then,
in any such case, the Corporation may remove the Trustee with respect to the
applicable series of Debt Securities and appoint a successor trustee with
respect to such series by written instrument, in duplicate, executed by order
of the Board of Directors of the Corporation, one copy of which instrument
shall be delivered to the Trustee so removed and one copy to the successor
trustee, or, subject to the provisions of Section 6.08, any Securityholder of
such series who has been a bona fide Holder of a Debt Security or Debt
Securities of the applicable series for at least six months may, on behalf of
himself, herself or itself and all others similarly situated, petition any
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor trustee with respect to such series. Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe,
remove the Trustee and appoint a successor trustee.

            (c) The Holders of a majority in aggregate principal amount of the Debt
Securities of all series (voting as one class) at the time outstanding may at
any time remove the Trustee with respect to Debt Securities of all series and
appoint a successor trustee with respect to the Debt Securities of all series.

            (d) Any resignation or removal of the Trustee and any appointment of a
successor trustee pursuant to any of the provisions of this Section shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 7.11.

SECTION 7.11. ACCEPTANCE BY SUCCESSOR TRUSTEE. Any successor trustee appointed
as provided in Section 7.10 shall execute, acknowledge and deliver to the
Corporation and to its predecessor trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal the predecessor
trustee with respect to all or any applicable series shall become effective and
such successor trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, duties and obligations with respect
to such series of its predecessor hereunder, with like effect as if originally
named as trustee herein; but, on the written request of the Corporation or of
the successor trustee, the trustee ceasing to act shall, upon payment of any
amounts then due it pursuant to the provisions of

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Section 7.06, execute and
deliver an instrument transferring to such successor trustee all the rights and
powers of the trustee so ceasing to act. Upon request of any such successor
trustee, the Corporation shall execute any and all instruments in writing in
order more fully and certainly to vest in and confirm to such successor trustee
all such rights and powers. Any trustee ceasing to act shall, nevertheless,
retain a lien upon all property or funds
held or collected by such trustee to secure any amounts then due it pursuant to
the provisions of Section 7.06.

     In case of the appointment hereunder of a successor trustee with respect
to the Debt Securities of one or more (but not all) series, the Corporation,
the predecessor Trustee and each successor trustee with respect to the Debt
Securities of any applicable series shall execute and deliver an indenture
supplemental hereto that shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers, trusts and
duties of the predecessor Trustee with respect to the Debt Securities of any
series as to which the predecessor Trustee is not retiring shall continue to be
vested in the predecessor Trustee, and shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such trustees co-trustees of the same trust and that each such
trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such trustee.

     No successor trustee shall accept appointment as provided in this Section
unless at the time of such acceptance such successor trustee shall be qualified
under the provisions of Section 7.08 and eligible under the provisions of
Section 7.09.

     Upon acceptance of appointment by a successor trustee as provided in this
Section, the Corporation shall give notice of the succession of such trustee
hereunder (a) if any Unregistered Securities of a series affected are then
outstanding, to the Holders thereof by publication of such notice at least once
in an Authorized Newspaper in the Borough of Manhattan, The City of New York
and at least once in an Authorized Newspaper in London (and, if required by
Section 4.04, at least once in an Authorized Newspaper in Luxembourg), (b) if
any Unregistered Securities of a series affected are then outstanding, to the
Holders thereof who have filed their names and addresses with the Trustee
pursuant to Section 313(c) of the Trust Indenture Act, by mailing such notice
to such Holders at such addresses as were so furnished to the Trustee (and the
Trustee shall make such information available to the Corporation for such
purpose) and (c) to the Holders of Registered Securities of each series
affected, by mailing such notice to such Holders at their addresses as they
shall appear on the Security Register. If the Corporation fails to mail such
notice in the prescribed manner within ten days after the acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be so given at the expense of the Corporation.

SECTION 7.12. SUCCESSOR BY MERGER, ETC. 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 the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be qualified under the provisions of Section
7.08 and eligible under the provisions of Section 7.09, 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.

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SECTION 7.13. LIMITATIONS ON RIGHTS OF TRUSTEE AS CREDITOR.
The Trustee shall comply with Section 311(a) of the Trust Indenture Act of
1939.

ARTICLE EIGHT

CONCERNING THE SECURITYHOLDERS

SECTION 8.01. ACTION BY SECURITYHOLDERS. Whenever in this Indenture it is
provided that the Holders of a specified percentage in aggregate principal
amount of the Debt Securities of any or all series may take any action
(including the making of any demand or request, the giving of any notice,
consent or waiver or the taking of any other action), the fact that at the time
of taking any such action the Holders of such specified percentage have joined
therein may be evidenced (a) by any instrument or any number of instruments of
similar tenor executed by Securityholders in person or by agent or proxy
appointed in writing, or (b) by the record of the Holders of Debt Securities
voting in favor thereof at any meeting of Securityholders duly called and held
in accordance with the provisions of Article Nine, or (c) by a combination of
such instrument or instruments and any such record of such a meeting of
Securityholders.

     In determining whether the Holders of a specified percentage in aggregate
principal amount of the Debt Securities have taken any action (including the
making of any demand or request, the waiving of any notice, consent or waiver
or the taking of any other action), the principal amount of any Original Issue
Discount Security that may be counted in making such determination and that
shall be deemed to be outstanding for such purposes shall be equal to the
amount of the principal thereof that could be declared to be due and payable
upon an Event of Default pursuant to the terms of such Original Issue Discount
Security at the time the taking of such action is evidence to the Trustee.

SECTION 8.02. PROOF OF EXECUTION BY SECURITYHOLDERS. Subject to the provisions
of Sections 7.01, 7.02 and 9.05, proof of the execution of any instrument by a
Securityholder or its agent or proxy shall be sufficient if made in the
following manner:

            (a) In the case of Holders of Unregistered Securities, the fact and date
of the execution by any such person of any instrument may be proved by the
certificate of any notary public or other officer of any jurisdiction
authorized to take acknowledgments of deeds or administer oaths that the person
executing such instruments acknowledged to him the execution thereof or by an
affidavit of a witness to such execution sworn to before any such notary or
other such officer. Where such execution is by or on behalf of any legal
entity other than an individual, such certificate or affidavit shall also
constitute sufficient proof of the authority of the person executing the same.
The fact of the holding by any Holder of a Debt Security of any series, and the
identifying number of such Debt Security and the date of his holding the same,
may be proved by the production of such Debt Security or by a certificate
executed by any trust company, bank, banker or recognized securities dealer
wherever situated satisfactory to the Trustee, if such certificate shall be
deemed by the Trustee to be satisfactory. Each such

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certificate shall be dated
and shall state that on the date thereof a Debt Security of such series
bearing a specified identifying number was deposited with or exhibited to
such trust company, bank, banker or recognized securities dealer by the person
named in such certificate. Any such certificate may be issued in respect of
one or more Debt Securities of one or more series specified therein. The
holding by the person named in any such certificate of any Debt Securities of
any series specified therein shall be presumed to continue for a period of one
year from the date of such certificate unless at the time of any determination
of such holding (1) another certificate bearing a later date issued in respect
of the same Debt Securities shall be produced, or (2) the Debt Security of such
series specified in such certificate shall be produced by some other person, or
(3) the Debt Security of such series specified in such certificates shall have
ceased to be outstanding. Subject to Sections 7.01, 7.02 and 9.05, the fact
and date of the execution of any such instrument and the amount and numbers of
Debt Securities of any series held by the person so executing such instrument
and the amount and numbers of any Debt Security or Debt Securities for such
series may also be proven in accordance with such reasonable rules and
regulations as may be prescribed by the Trustee for such series or in any other
manner that the Trustee for such series may deem sufficient.

            (b) In the case of Registered Securities, the ownership of such Debt
Securities shall be proved by the Security Register or by a certificate of the
Security Registrar.

SECTION 8.03. WHO ARE DEEMED ABSOLUTE OWNERS. The Corporation, the Trustee,
any paying agent, any transfer agent and any Security Registrar may treat the
Holder of any Unregistered Security and the Holder of any Coupon as the
absolute owner of such Unregistered Security or Coupon (whether or not such
Unregistered Security or Coupon shall be overdue) for the purpose of receiving
payment thereof or on account thereof and for all other purposes and neither
the Corporation, the Trustee, any paying agent, any transfer agent nor any
Security Registrar shall be affected by any notice to the contrary. The
Corporation, the Trustee, any paying agent, any transfer agent and any Security
Registrar may, subject to Section 2.04 hereof, treat the person in whose name a
Registered Security shall be registered upon the Security Register as the
absolute owner of such Registered Security (whether or not such Registered
Security shall be overdue) for the purpose of receiving payment thereof or on
account thereof and for all other purposes and neither the Corporation, the
Trustee, any paying agent, any transfer agent nor any Security Registrar shall
be affected by any notice to the contrary.

SECTION 8.04. CORPORATION-OWNED DEBT SECURITIES DISREGARDED. In determining
whether the Holders of the required aggregate principal amount of Debt
Securities have concurred in any direction, consent or waiver under this
Indenture, Debt Securities that are owned by the Corporation or by any person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Corporation, shall be disregarded and deemed not to be
outstanding for the purpose of any such determination, except that for the
purpose of determining whether the Trustee shall be protected in relying on any
such direction, consent or waiver only Debt Securities that the Trustee knows
are so owned shall be disregarded. Debt Securities so owned that have been
pledged in good faith may be regarded as outstanding for the purposes of this
Section if the pledgee shall establish to the satisfaction of the Trustee the
pledgee’s right to vote such Debt Securities and that the pledgee is not a person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the

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Corporation. In the case of a dispute as to such
right, any decision by the Trustee taken upon the advice of counsel shall be
full protection to the Trustee.

SECTION 8.05. REVOCATION OF CONSENTS; FUTURE SECURITYHOLDERS BOUND. At any
time prior to the taking of any action by the Holders of the percentage in
aggregate principal amount of the Debt Securities specified in this Indenture
in connection with such action, any Holder of a Debt Security the identifying
number of which is shown by the evidence to be included in the Debt Securities
the Holders of which have consented to such action may, by filing written
notice with the Trustee at its office and upon proof of holding as provided in
Section 8.02, revoke such action so far as concerns such Debt Security. Except
as aforesaid any such action taken by the Holder of any Debt Security shall be
conclusive and binding upon such Holder and upon all future Holders and owners
of such Debt Security and of any Debt Security issued in exchange or
substitution therefor irrespective of whether or not any notation in regard
thereto is made upon such Debt Security. Any action taken by the Holders of
the percentage in aggregate principal amount of the Debt Securities specified
in this Indenture in connection with such action shall be conclusively binding
upon the Corporation, the Trustee and the Holders of all the Debt Securities of
each series intended to be affected thereby.

SECTION 8.06. SECURITIES IN A FOREIGN CURRENCY. Unless otherwise specified in
an Officers’ Certificate delivered pursuant to Section 2.01 of this Indenture
or in an indenture supplemental hereto with respect to a particular series of
Debt Securities, on any day when for purposes of this Indenture any action may
be taken by the Holders of a specified percentage in aggregate principal amount
of two or more series of outstanding Debt Securities and, at such time, there
are outstanding Debt Securities of at least one such series that are
denominated in a coin or currency other than that of at least one other such
series, then the principal amount of Debt Securities of each such series (other
than any such series denominated in U.S. Dollars) that shall be deemed to be
outstanding for the purpose of taking such action shall be that amount of U.S.
Dollars that could be obtained for such amount at the Market Exchange Rate.
For purposes of this Section 8.06, “Market Exchange Rate” shall mean (i) for
any conversion involving a Currency unit on the one hand and dollars or any
foreign currency on the other, the exchange rate between the relevant Currency
unit and dollars or such foreign currency, (ii) for any conversion of dollars
into any foreign currency, the noon U.S. Dollar buying rate for such foreign
currency for cable transfers quoted in The City of New York on such day as
certified for customs purposes by the Federal Reserve Bank of New York and
(iii) for any conversion of one foreign currency into dollars or another
foreign currency, the spot rate at noon local time in the relevant market at
which, in accordance with normal banking procedures, the dollars or foreign
currency into which conversion is being made could be purchased with the
foreign currency from which conversion is being made from major banks located
in either New York City, London or any other principal market for dollars or
such purchased foreign currency. In the event of the unavailability of any of
the exchange rates provided for in the foregoing clauses (i), (ii) and (iii)
the Trustee shall use, in its sole discretion and without liability on its
part, such quotation of the Federal Reserve Bank of New York as of the most
recent available date, or quotations from one or more major banks in New York
City, London or other principal market for such Currency or Currency unit in
question, or such other
quotations as the Trustee shall deem appropriate. Unless otherwise specified
by the Trustee, if there is more than one market for dealing in any Currency or
Currency unit by reason of foreign exchange regulations or otherwise, the
market to be used in respect of such Currency or Currency unit shall be that
upon which a nonresident issuer of

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securities designated in such Currency or
Currency unit would purchase such Currency or Currency unit in order to make
payments in respect of such securities. The provisions of this paragraph shall
apply in determining the equivalent number of votes that each Securityholder or
proxy shall be entitled to pursuant to Section 9.05, in respect of Debt
Securities of a series denominated in a currency other than U.S. Dollars.

     All decisions and determinations of the Corporation regarding the Market
Exchange Rate shall be in its sole discretion and shall, in the absence of
manifest error, be conclusive for all purposes and irrevocably binding upon the
Corporation and all Holders.

ARTICLE NINE

SECURITYHOLDERS’ MEETINGS

SECTION 9.01. PURPOSES OF MEETINGS. A meeting of Securityholders of any or all
series may be called at any time and from time to time pursuant to the
provisions of this Article for any of the following purposes:

                    (1) to give any notice to the Corporation or to the Trustee, or to give
any directions to the Trustee, or to waive any default hereunder and its
consequences, or to take any other action authorized to be taken by
Securityholders pursuant to any of the provisions of Article Six;

                    (2) to remove the Trustee and appoint a successor trustee pursuant to the
provisions of Article Seven;

                    (3) to consent to the execution of an indenture or indentures supplemental
hereto pursuant to the provisions of Section 10.02; or

                    (4) to take any other action authorized to be taken by or on behalf of the
Holders of any specified aggregate principal amount of the Debt Securities of
any or all series, as the case may be, under any other provision of this
Indenture or under applicable law.

SECTION 9.02. CALL OF MEETINGS BY TRUSTEE. The Trustee may at any time call a
meeting of Holders of Debt Securities of any or all series to take any action
specified in Section 9.01, to be held at such time and at such place in the
Borough of Manhattan, The City of New York, or in London, as the Trustee shall
determine. Notice of every meeting of the Holders of Debt Securities of any or
all series, setting forth the time and place of such meeting and in general
terms the action proposed to be taken at such meeting, shall be given (i) if
any Unregistered Securities of a series that may be affected by the action
proposed to be taken at such meeting are then outstanding, to all Holders
thereof, by publication at least twice in an Authorized Newspaper in the
Borough of Manhattan, The City of
New York and at least twice in an Authorized Newspaper in London (and, if
required by Section 4.04, at least once in an Authorized Newspaper in
Luxembourg) prior to the date fixed for the meeting, the first publication, in
each case, to be not less than twenty nor more than one hundred eighty days
prior to the date fixed for the meeting and the last publication to be not more
than five days prior to the date fixed for the meeting, (ii) if any
Unregistered Securities of a series that may be affected by

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the action proposed
to be taken at such meeting are then outstanding, to all Holders thereof who
have filed their names and addresses with the Trustee as described in Section
313(c) of the Trust Indenture Act of 1939, by mailing such notice to such
Holders at such addresses, not less than twenty nor more than one hundred
eighty days prior to the date fixed for the meeting and (iii) to all Holders of
then outstanding Registered Securities of each series that may be affected by
the action proposed to be taken at such meeting, by mailing such notice to such
Holders at their addresses as they shall appear on the Security Register, not
less than twenty nor more than one hundred eighty days prior to the date fixed
for the meeting. Failure of any Holder or Holders to receive such notice, or
any defect therein, shall in no case affect the validity of any action taken at
such meeting. Any meeting of Holders of Debt Securities of all or any series
shall be valid without notice if the Holders of all such Debt Securities
outstanding, the Corporation and the Trustee are present in person or by proxy
or shall have waived notice thereof before or after the meeting. The Trustee
may fix, in advance, a date as the record date for determining the Holders
entitled to notice of or to vote at any such meeting at not less than twenty or
more than one hundred eighty days prior to the date fixed for such meeting.

SECTION 9.03. CALL OF MEETINGS BY CORPORATION OR SECURITYHOLDERS. In case at
any time the Corporation, pursuant to a Board Resolution, or the Holders of at
least ten percent in aggregate principal amount of the Debt Securities of any
or all series, as the case may be, then outstanding, shall have requested the
Trustee to call a meeting of Securityholders of any or all series to take any
action authorized in Section 9.01, by written request setting forth in
reasonable detail the action proposed to be taken at the meeting, and the
Trustee shall not have mailed or published, as provided in Section 9.02, the
notice of such meeting within thirty days after receipt of such request, then
the Corporation or the Holders of such Debt Securities in the amount above
specified may determine the time and the place in said Borough of Manhattan,
The City of New York or London for such meeting and may call such meeting to
take any action authorized in Section 9.01, by mailing notice thereof as
provided in Section 9.02.

SECTION 9.04. QUALIFICATION FOR VOTING. To be entitled to vote at any meeting
of Securityholders a person shall be a Holder of one or more Debt Securities of
a series with respect to which a meeting is being held or a person appointed by
instrument in writing as proxy by such a Holder. The only persons who shall be
entitled to be present or to speak at any meeting of the Securityholders shall
be the persons entitled to vote at such meeting and their counsel and any
representatives of the Trustee and its counsel and any representatives of the
Corporation and its counsel.

SECTION 9.05. REGULATIONS.
Notwithstanding any other provisions of this Indenture, the Trustee may make
such reasonable regulations as it may deem advisable for any meeting of
Securityholders, in regard to proof of the holding of Debt Securities and of
the appointment of proxies, and in regard to the appointment and duties of
inspectors of votes, the submission and examination of proxies, certificates
and other evidence of the right to vote, and such other matters concerning the
conduct of the meeting as it shall think fit.

     The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Corporation or by Securityholders as provided in Section 9.03, in which case
the Corporation or the Securityholder calling the meeting, as the case may be,
shall in like manner appoint a temporary chairman. A permanent

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chairman and a permanent secretary of the meeting shall be elected by vote of the Holders of a
majority in principal amount of the Debt Securities represented at the meeting
and entitled to vote.

     Subject to the provisions of Sections 8.01 and 8.04, at any meeting each
Securityholder or proxy shall be entitled to one vote for each U.S. $1,000
principal amount of Debt Securities (or such other minimum denomination
specified by the Debt Securities of any series) held or represented by him, her
or it; provided, however, that no vote shall be cast or counted at any meeting
in respect of any Debt Security challenged as not outstanding and ruled by the
chairman of the meeting not to be outstanding. The chairman of the meeting
shall have no right to vote except as a Securityholder or proxy. Any meeting
of Securityholders duly called pursuant to the provisions of Section 9.02 or
9.03 may be adjourned from time to time, and the meeting may be held as so
adjourned without further notice.

SECTION 9.06. VOTING. The vote upon any resolution submitted to any meeting of
Securityholders shall be by written ballot on which shall be subscribed the
signatures of the Securityholders or proxies and on which shall be inscribed
the identifying number or numbers or to which shall be attached a list of
identifying numbers of the Debt Securities held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified reports in
duplicate of all votes cast at the meeting. A record in duplicate of the
proceedings of each meeting of Securityholders shall be prepared by the
secretary of the meeting and there shall be attached to said record the
original reports of the inspectors of votes on any vote by ballot taken thereat
and affidavit by one or more persons having knowledge of the facts setting
forth a copy of the notice of the meeting and showing that said notice was
mailed as provided in Section 9.02 or Section 9.03. The record shall be signed
and verified by the permanent chairman and secretary of the meeting and one of
the duplicates shall be delivered to the Corporation and the other to the
Trustee to be preserved by the Trustee, the latter to have attached thereto the
ballots voted at the meeting.

     Any record so signed and verified shall be conclusive evidence of the
matters therein stated.

ARTICLE TEN

SUPPLEMENTAL INDENTURES

SECTION 10.01. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF SECURITYHOLDERS. The
Corporation, when authorized by Board Resolution, and the Trustee may from time
to time and at any time enter into an indenture or indentures supplemental
hereto (which shall conform to the provisions of the Trust Indenture Act of
1939) for one or more of the following purposes:

            (a) to evidence the succession of another entity to the Corporation, or
successive successions, and the assumption by any successor entity of the
covenants, agreements and obligations of the Corporation pursuant to Article
Eleven hereof;

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            (b) to add to the covenants of the Corporation such further covenants,
restrictions, conditions or provisions as its Board of Directors and the
Trustee shall consider to be for the protection of the Holders of Debt
Securities of any or all series, or the Coupons appertaining to such Debt
Securities, and to make the occurrence, or the occurrence and continuance, of a
default in any of such additional covenants, restrictions, conditions or
provisions a default or an Event of Default with respect to any or all series
permitting the enforcement of all or any of the several remedies provided in
this Indenture as herein set forth, with such period of grace, if any, and
subject to such conditions as such supplemental indenture may provide;

            (c) to add or change any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the issuance of Debt
Securities of any series in bearer form, registrable or not registrable as to
principal, and with or without interest Coupons, and to provide for
exchangeability of such Debt Securities with Debt Securities issued hereunder
in fully registered form and to make all appropriate changes for such purpose,
and to add or change any of the provisions of this Indenture to such extent as
shall be necessary to permit or facilitate the issuance of uncertificated Debt
Securities of any series;

            (d) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture that may be defective or
inconsistent with any other provision contained herein or in any supplemental
indenture; or to make such other provisions in regard to matters or questions
arising under this Indenture as shall not adversely affect the interests of the
Holders of any series of Debt Securities or any Coupons appertaining to such
Debt Securities;

            (e) to convey, transfer, assign, mortgage or pledge any property to or
with the Trustee;

            (f) to evidence and provide for the acceptance and appointment hereunder
by a successor trustee with respect to the Debt Securities of one or more
series and to add or change provisions of this Indenture as shall be necessary
to provide for or facilitate the administration of the trusts hereunder by more
than one trustee, pursuant to Section 7.11;

            (g) to establish the form or terms of Debt Securities of any series as
permitted by Sections 2.01 and 2.03; and

            (h) to change or eliminate any provision of this Indenture, provided that
any such change or elimination (i) shall become effective only when there is no
Debt Security outstanding of any series created prior to the execution of such
supplemental indenture that is entitled to the benefit of such provision or
(ii) shall not apply to any Debt Security outstanding.

     The Trustee is hereby authorized to join with the Corporation in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations that may be therein contained and to accept the
conveyance, transfer, assignment, mortgage or pledge of any property
thereunder, but the Trustee shall not be obligated to enter into any such
supplemental indenture that adversely affects the Trustee’s own rights, duties
or immunities under this Indenture or otherwise.

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     Any supplemental indenture authorized by the provisions of this Section
may be executed by the Corporation and the Trustee without the consent of the
Holders of any of the Debt Securities at the time outstanding, notwithstanding
any of the provisions of Section 10.02.

SECTION 10.02. SUPPLEMENTAL INDENTURES WITH CONSENT OF SECURITYHOLDERS. With
the consent (evidenced as provided in Section 8.01) of the Holders of not less
than a majority in the aggregate principal amount of the Debt Securities of all
series at the time outstanding affected by such supplemental indenture (voting
as one class), the Corporation, when authorized by a Board Resolution, and the
Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture
or of any supplemental indentures or modifying in any manner the rights of the
Holders of the Debt Securities of each such series or any Coupons appertaining
to such Debt Securities; provided, however, that no such supplemental indenture
shall (i) change the fixed maturity of any Debt Securities, or reduce the
principal amount thereof (or premium, if any), or reduce the rate or extend the
time of payment of any interest or Additional Amounts thereon or reduce the
amount due and payable upon acceleration of the maturity thereof or the amount
provable in bankruptcy, or make the principal of (premium, if any) or interest,
if any, or Additional Amounts, if any, on any Debt Security payable in any coin
or currency other than that provided in such Debt Security, (ii) impair the
right to institute suit for the enforcement of any such payment on or after the
Stated Maturity (or, in the case of redemption, on or after the Redemption
Date) or (iii) reduce the aforesaid percentage of Debt Securities, the consent
of the Holders of which is required for any such supplemental indenture, or the
percentage required for the consent of the Holders pursuant to Section 6.01 to
waive defaults, without the consent of the Holder of each Debt Security so
affected.

     Upon the request of the Corporation, accompanied by a copy of a Board
Resolution certified by the Secretary or an Assistant Secretary of the
Corporation or in lieu thereof by a Treasurer or Assistant Treasurer
authorizing the execution of any such supplemental indenture, and upon the
filing with the Trustee of evidence of the consent of Securityholders as
aforesaid, the Trustee shall join with the Corporation in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee’s
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such supplemental indenture.

     It shall not be necessary for the consent of the Securityholders under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.

     Promptly after the execution and delivery by the Corporation and the
Trustee of any supplemental indenture pursuant to the provisions of this
Section, the Trustee shall give notice of such supplemental indenture (i) to
the Holders of then outstanding Registered Securities of each series affected
thereby, by mailing a notice thereof by first class mail to such Holders at
their addresses as they shall appear on the Security Register, (ii) if any
Unregistered Securities of a series affected thereby are then outstanding, to
the Holders thereof who have filed their names and addresses with the Trustee
as described in Section 313(c) of the Trust Indenture Act, by mailing a notice
thereof by first class mail to such Holders at such addresses as were so
furnished

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to the Trustee and (iii) if any Unregistered Securities of a series
affected thereby are then outstanding, to all Holders thereof, by Publication
of a notice thereof at least once in an Authorized Newspaper in the Borough of
Manhattan, The City of New York and at least once in an Authorized Newspaper in
London (and, if required by Section 4.04, at least once in an Authorized
Newspaper in Luxembourg), and in each case such notice shall set forth in
general terms the substance of such supplemental indenture. Any failure of the
Corporation to mail or publish such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such supplemental
indenture.

SECTION 10.03. COMPLIANCE WITH TRUST INDENTURE ACT; EFFECT OF SUPPLEMENTAL
INDENTURES. Any supplemental indenture executed pursuant to the provisions of
this Article Ten shall comply with the Trust Indenture Act of 1939. Upon the
execution of any supplemental indenture pursuant to the provisions of this
Article Ten, this Indenture shall be and be deemed to be modified and amended
in accordance therewith and the respective rights, limitations of rights,
obligations, duties and immunities under this Indenture of the Trustee, the
Corporation and the Holders of Debt Securities shall thereafter be determined,
exercised and enforced hereunder subject in all respects to such modifications
and amendments, and all the terms and conditions of any such supplemental
indenture shall be and be deemed to be part of the terms and conditions of this
Indenture for any and all purposes.

     The Trustee, subject to the provisions of Sections 7.01 and 7.02, shall be
provided an Officers’ Certificate and an Opinion of Counsel as conclusive
evidence that any such supplemental indenture complies with the provisions of
this Article Ten.

SECTION 10.04. NOTATION ON DEBT SECURITIES. Debt Securities of any series
authenticated and delivered after the execution of any supplemental indenture
pursuant to the provisions of this Article Ten may bear a notation in form
approved by the Trustee as to any matter provided for in such supplemental indenture. New
Debt Securities of any series so modified as to conform, in the opinion of the
Trustee and the Board of Directors of the Corporation, to any modification of
this Indenture contained in any such supplemental indenture may be prepared by
the Corporation, authenticated by the Trustee and delivered, without charge to
the Securityholders, in exchange for the Debt Securities of such series then
outstanding.

ARTICLE ELEVEN

CONSOLIDATION, MERGER, SALE OR CONVEYANCE

SECTION 11.01. CORPORATION MAY CONSOLIDATE, ETC., ON CERTAIN TERMS. The
Corporation covenants that it will not merge or consolidate with any other
entity or sell or convey all or substantially all of its assets to any person
or entity, unless (i) either the Corporation shall be the continuing
corporation, or the successor entity (if other than the Corporation) shall be
an entity organized and existing under the laws of the United States of America
or any State thereof and such successor entity shall expressly assume, by a
supplemental indenture in form satisfactory to the Trustee and executed and
delivered to the Trustee by such successor entity, the due and punctual payment
of the principal of (and premium, if any), interest, if any, and Additional
Amounts, if any, on all the Debt Securities and any Coupons, according to their
tenor, and the due and punctual performance and observance of

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all of the
covenants and conditions of this Indenture to be performed or satisfied by the
Corporation, (ii) immediately after giving effect to such merger or
consolidation, or such sale or conveyance, no Event of Default, and no event
that, after notice or lapse of time or both, would become an Event of Default,
shall have occurred and be continuing and (iii) the Corporation shall have
delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel,
each stating, that such consolidation, merger, sale or conveyance and such
supplemental indenture, and any such assumption by the successor entity,
complies with the provisions of this Article Eleven.

SECTION 11.02. SUCCESSOR CORPORATION SUBSTITUTED. In case of any such
consolidation, merger, sale or conveyance and upon any such assumption by the
successor entity, such successor entity shall succeed to and be substituted for
the Corporation, with the same effect as if it had been named herein as the
party of the first part. Such successor entity thereupon may cause to be
signed, and may issue either in its own name or in the name of Delphi
Automotive Systems Corporation, any or all of the Debt Securities, and any
Coupons appertaining thereto, issuable hereunder which theretofore shall not
have been signed by the Corporation and delivered to the Trustee; and, upon the
order of such successor entity, instead of the Corporation, and subject to all
the terms, conditions and limitations prescribed in this Indenture, the Trustee
shall authenticate and shall deliver any Debt Securities or Coupons which
previously shall have been signed and delivered by the officers of the
Corporation to the Trustee for authentication, and any Debt Securities or
Coupons that such successor entity thereafter shall cause to be signed and
delivered to the Trustee for that purpose. All of the Debt Securities, and any
Coupons appertaining thereto, so issued shall in all respects have the same
legal rank and benefit under this Indenture as the Debt Securities or Coupons
theretofore or thereafter issued in accordance with the terms of this Indenture
as though all of such Debt Securities, and any Coupons appertaining thereto,
had been issued at the date of the execution hereof.

     In case of any such consolidation, merger, sale or conveyance, such
changes in phraseology and form (but not in substance) may be made in the Debt
Securities and Coupons thereafter to be issued as may be appropriate.

SECTION 11.03. CERTIFICATE TO TRUSTEE. On or before April 1, 2004, and on or
before April 1 in each year thereafter, the Corporation will deliver to the
Trustee an Officers’ Certificate signed by the Corporation’s principal
executive officer, principal financial officer or principal accounting officer,
as to such Officer’s knowledge of the Corporation’s compliance with all
conditions and covenants under this Indenture (such compliance to be determined
without regard to any period of grace or requirement of notice provided under
this Indenture), as required by Section 314(a)(4) of the Trust Indenture Act of
1939.

ARTICLE TWELVE

SATISFACTION AND DISCHARGE OF INDENTURE;

UNCLAIMED MONIES

SECTION 12.01. DISCHARGE OF INDENTURE. If at any time (i) the Corporation
shall have delivered to the Trustee for cancellation all Debt Securities of any
series theretofore authenticated (other than any Debt Securities of such series
and Coupons pertaining thereto that

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shall have been destroyed, lost or stolen
and that shall have been replaced or paid as provided in Section 2.07) or (ii)
all Debt Securities of any series and any Coupons appertaining to such Debt
Securities not theretofore delivered to the Trustee for cancellation shall have
become due and payable, or are by their terms to become due and payable within
one year or are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption, and the
Corporation shall deposit or cause to be deposited with the Trustee as trust
funds the entire amount (other than monies repaid by the Trustee or any paying
agent to the Corporation in accordance with Sections 12.04 or 12.05) sufficient
to pay at maturity or upon redemption or repayment all Debt Securities of such
series and all Coupons appertaining to such Debt Securities not theretofore
delivered to the Trustee for cancellation (other than any Debt Securities of
such series and Coupons pertaining thereto that shall have been destroyed, lost
or stolen and that shall have been replaced or paid as provided in Section
2.07), including principal (and premium, if any), interest, if any, and
Additional Amounts, if any, due or to become due to such date of maturity,
Redemption Date or Repayment Date, as the case may be, and if in either case
the Corporation shall also pay or cause to be paid all other sums payable
hereunder by the Corporation with respect to such series, then this Indenture
shall cease to be of further effect with respect to the Debt Securities of such
series or any Coupons appertaining to such Debt Securities, and the Trustee, on
demand of and at the cost and expense of the Corporation and subject to Section
14.04, shall execute proper instruments acknowledging satisfaction of and
discharging this Indenture with respect to the
Debt Securities of such series and all Coupons appertaining to such Debt
Securities. The Corporation agrees to reimburse the Trustee for any costs or
expenses thereafter reasonably and properly incurred by the Trustee in
connection with this Indenture or the Debt Securities of such series or any
Coupons appertaining to such Debt Securities.

SECTION 12.02. SATISFACTION, DISCHARGE AND DEFEASANCE OF DEBT SECURITIES OF ANY
SERIES. If pursuant to Section 2.01 provision is made for the defeasance of
Debt Securities of a series, then the provisions of this Section 12.02 shall be
applicable except as otherwise specified as contemplated by Section 2.01 for
Debt Securities of such series. At the Corporation’s option, either (a) the
Corporation shall be deemed to have paid and discharged the entire indebtedness
on all the outstanding Debt Securities of any such series and the Trustee, at
the expense of the Corporation, shall execute proper instruments acknowledging
satisfaction and discharge of such indebtedness or (b) the Corporation shall
cease to be under any obligation to comply with any term, provision, condition
or covenant specified as contemplated by Section 2.01, when

            (a) either

                    (1) with respect to all outstanding Debt Securities of such series,

                         (A) the Corporation has deposited or caused to be deposited with the
Trustee as trust funds in trust for the purpose an amount (in such currency in
which such outstanding Debt Securities and any related Coupons are then
specified as payable at Stated Maturity) sufficient to pay and discharge the
entire indebtedness of all outstanding Debt Securities of such series for
principal (and premium, if any), interest, if any, and Additional Amounts, if
any, to the Stated Maturity or any Redemption Date as contemplated by the last
paragraph of this Section 12.02, as the case may be; or

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                         (B) the Corporation has deposited or caused to be deposited with the
Trustee as obligations in trust for the purpose such amount of direct
noncallable obligations of, or noncallable obligations the payment of principal
of and interest on which is fully guaranteed by, the United States of America,
or to the payment of which obligations or guarantees the full faith and credit
of the United States of America is pledged, maturing as to principal and
interest in such amounts and at such times as will, together with the income to
accrue thereon (but without reinvesting any proceeds thereof), be sufficient to
pay and discharge the entire indebtedness on all outstanding Debt Securities of
such series for principal (and premium, if any), interest, if any, and
Additional Amounts , if any, to the Stated Maturity or any Redemption Date as
contemplated by the last paragraph of this Section 12.02, as the case may be;
or

                    (2) the Corporation has properly fulfilled such other terms and conditions
of the satisfaction and discharge as is specified, as contemplated by Section
2.01, as applicable to the Debt Securities of such series, and

            (b) the Corporation has paid or caused to be paid all other sums payable
with respect to the outstanding Debt Securities of such series, and

            (c) The Corporation has delivered to the Trustee an Opinion of Counsel
stating that (i) the Corporation has received from, or there has been published
by, the Internal Revenue Service a ruling or (ii) since the date of execution
of this Indenture, there has been a change in the applicable Federal income tax
law, in either case to the effect that, and based thereon such opinion shall
confirm that, the holders of the outstanding Debt Securities and any related
Coupons will not recognize income, gain or loss for Federal income tax purposes
as a result of such deposit, defeasance and discharge and will be subject to
Federal income tax on the same amounts and in the same manner and at the same
times, as would have been the case if such deposit, defeasance and discharge
had not occurred, and

            (d) the Corporation has delivered to the Trustee an Officers’ Certificate
and an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of the entire
indebtedness on all outstanding Debt Securities of any such series have been
complied with.

     Any deposits with the Trustee referred to in Section 12.02(a)(l)(A) above
shall be irrevocable and shall be made under the terms of an escrow trust
agreement in form and substance satisfactory to the Trustee. If any
outstanding Debt Securities of such series are to be redeemed prior to their
Stated Maturity, whether pursuant to an optional redemption provision or in
accordance with any mandatory sinking fund requirement or otherwise, the
applicable escrow trust agreement shall provide therefor and the Corporation
shall make such arrangements as are satisfactory to the Trustee for the giving
of notice of redemption by the Trustee in the name, and at the expense, of the
Corporation.

SECTION 12.03. DEPOSITED MONIES TO BE HELD IN TRUST BY TRUSTEE. All monies
deposited with the Trustee pursuant to Section 12.01 or 12.02 shall be held in
trust and applied by it to the payment, either directly or through any paying
agent (including the Corporation acting as its own paying agent), to the
Holders of the particular Debt Securities and

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of any Coupons appertaining to
such Debt Securities for the payment or redemption of which such monies have
been deposited with the Trustee, of all sums due and to become due thereon for
principal (and premium, if any), interest, if any, and Additional Amounts, if
any.

SECTION 12.04. PAYING AGENT TO REPAY MONIES HELD. In connection with the
satisfaction and discharge of this Indenture with respect to Debt Securities of
any series, all monies with respect to such Debt Securities then held by any
paying agent under the provisions of this Indenture shall, upon demand of the
Corporation, be repaid to it or paid to the Trustee and thereupon such paying
agent shall be released from any further liability with respect to such monies.

SECTION 12.05. RETURN OF UNCLAIMED MONIES. Any monies deposited with or paid
to the Trustee or any paying agent for the payment of the principal of (and
premium, if any), interest, if any, and Additional Amounts, if any, on any Debt
Security and not applied but remaining unclaimed for two years after the date
upon which such principal (and premium, if any), interest, if any, and
Additional Amounts, if any, shall have
become due and payable, shall, unless otherwise required by mandatory
provisions of applicable escheat or abandoned or unclaimed property law, be
repaid to the Corporation by the Trustee or such paying agent on demand, and
the Holder of such Debt Security or any Coupon appertaining to such Debt
Security shall, unless otherwise required by mandatory provisions of applicable
escheat or abandoned or unclaimed property law, thereafter look only to the
Corporation for any payment that such Holder may be entitled to collect and all
liability of the Trustee or any paying agent with respect to such monies shall
thereupon cease; provided, however, that the Trustee or such paying agent,
before being required to make any such repayment with respect to monies
deposited with it or any payment in respect of Unregistered Securities of any
series, may at the expense of the Corporation cause to be published once, in an
Authorized Newspaper in the Borough of Manhattan, The City of New York and once
in an Authorized Newspaper in London (and, if required by Section 4.04, at
least once in an Authorized Newspaper in Luxembourg), notice that such monies
remain and that, after a date specified therein, which shall not be less than
thirty days from the date of such publication, any unclaimed balance of such
money then remaining will be repaid to the Corporation.

ARTICLE THIRTEEN

IMMUNITY OF INCORPORATORS, STOCKHOLDERS,

OFFICERS AND DIRECTORS

SECTION 13.01. INDENTURE AND DEBT SECURITIES SOLELY CORPORATE OBLIGATIONS. No
recourse under or upon any obligation, covenant or agreement contained in this
Indenture or any indenture supplemental hereto, or in any Debt Security, or
because or on account of any indebtedness evidenced thereby, shall be had
against any past, present or future incorporator, stockholder, officer or
director, or other applicable principal, as such, of the Corporation or of any
successor entity, either directly or through the Corporation or any successor
entity, under any rule of law, statute or constitutional provision or by the
enforcement of any assessment or by any legal or equitable proceeding or
otherwise, all such liability being expressly waived and released by the
acceptance of the Debt Securities by the Holders thereof and as part of the
consideration for the issue of the Debt Securities and Coupons.

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ARTICLE FOURTEEN

MISCELLANEOUS PROVISIONS

SECTION 14.01. BENEFITS OF INDENTURE RESTRICTED TO PARTIES AND SECURITYHOLDERS.
Nothing in this Indenture or in the Debt Securities or Coupons, expressed or
implied, shall give or be construed to give to any Person, other than the
parties hereto and their successors and the Holders of the Debt Securities or
Coupons, any legal or equitable right, remedy or claim under this Indenture or
under any covenant or provision herein contained, all such covenants and
provisions being for the sole benefit of the parties hereto and their
successors and of the Holders of the Debt Securities or Coupons.

SECTION 14.02. PROVISIONS BINDING ON CORPORATION’S SUCCESSORS. All the
covenants, stipulations, promises and agreements contained in this Indenture by
or on behalf of the Corporation shall bind its successors and assigns, whether
so expressed or not.

SECTION 14.03. ADDRESSES FOR NOTICES, ETC. Any notice or demand that by any
provision of this Indenture is required or permitted to be given or served by
the Trustee or by the Holders of Debt Securities to or on the Corporation may
be given or served by being deposited postage prepaid first class mail in a
post office letter box addressed (until another address is filed by the
Corporation with the Trustee), as follows: Delphi Corporation, 5725 Delphi
Drive, Troy, Michigan 48098, Attention General Counsel. Any notice, direction,
request or demand by any Securityholder to or upon the Trustee shall be deemed
to have been sufficiently given or made, for all purposes, if given or made in
writing at its Corporate Trust Office, which is, at the date of this Indenture,
1111 Polaris Parkway, Mail Code OH1-0181, Columbus, Ohio 43240, Attention:
Global Corporate Trust Securities; fax 614-248-5195.

SECTION 14.04. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT. Upon any
application or demand by the Corporation to the Trustee to take any action
under any of the provisions of this Indenture, the Corporation shall furnish to
the Trustee an Officers’ Certificate stating that all conditions precedent
provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent have been complied with, except that in
the case of any such application or demand as to which the furnishing of such
documents is specifically required by any provision of this Indenture relating
to such particular application or demand, no additional certificate or opinion
need be furnished.

     Each certificate or opinion provided for in this Indenture and delivered
to the Trustee with respect to compliance with a condition or covenant provided
for in this Indenture shall include (1) a statement that the person making such
certificate or opinion has read such covenant or condition, (2) a brief
statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are
based, (3) a statement that, in the opinion of such person, he or she has made
such examination or investigation as is necessary to enable him or her to
express an informed opinion as to whether or not such covenant or condition has
been complied with and (4) a statement as to whether or not, in the opinion of
such person, such condition or covenant has been complied with.

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SECTION 14.05. LEGAL HOLIDAYS. In any case where the Interest Payment Date,
Stated Maturity Date or the Redemption Date of any Debt Securities shall not be
a Business Day in a city where payment thereof is to be made, then payment of
any interest, premium or Additional Amounts on, or principal of, such Debt
Securities or exchange of Debt Securities need not be made on such date in such
city but may be made on the next succeeding Business Day with the same force
and effect as if made on the date
of maturity or the date fixed for redemption, or exchange, and no interest
shall accrue for the period after such date.

SECTION 14.06. TRUST INDENTURE ACT TO CONTROL. If and to the extent that any
provision of this Indenture limits, qualifies or conflicts with another
provision included in this Indenture by operation of Sections 310 to 317,
inclusive, of the Trust Indenture Act of 1939 (an “incorporated provision”),
such incorporated provision shall control.

SECTION 14.07. EXECUTION IN COUNTERPARTS. This Indenture may be executed in
any number of counterparts, each of which shall be an original; but such
counterparts shall together constitute one and the same instrument.

SECTION 14.08. NEW YORK CONTRACT. This Indenture and each Debt Security shall
be deemed to be a contract made under the laws of the State of New York, and
for all purposes shall be governed by and construed in accordance with the laws
of said State, regardless of the laws that might otherwise govern under
applicable New York principles of conflicts of law and except as may otherwise
be required by mandatory provisions of law. Any claims or proceedings in
respect of this Indenture shall be heard in a federal or state court located in
the State of New York.

SECTION 14.09. JUDGMENT CURRENCY. The Corporation agrees, to the fullest
extent that it may effectively do so under applicable law, that (a) if for the
purposes of obtaining judgment in any court it is necessary to convert the sum
due in respect of the principal of or interest on the Debt Securities of any
series (the “Required Currency”) into a currency in which a judgment will be
rendered (the “Judgment Currency”), the rate of exchange used shall be the rate
at which in accordance with normal banking procedures the Trustee could
purchase in he City of New York the Required Currency with the Judgment
Currency on the date on which final unappealable judgment is entered, unless
such day is not a New York Banking Day, then, to the extent permitted by
applicable law, the rate of exchange used shall be the rate at which in
accordance with normal banking procedures the Trustee could purchase in The
City of New York the Required Currency with the Judgment Currency on the New
York Banking Day next preceding the day on which final unappealable judgment is
entered and (b) its obligations under this Indenture to make payments in the
Required Currency (i) shall not be discharged or satisfied by any tender, or
any recovery pursuant to any judgment (whether or not entered in accordance
with subsection (a)), in any currency other than the Required Currency, except
to the extent that such tender or recovery shall result in the actual receipt,
by the payee, of the full amount of the Required Currency expressed to be
payable in respect of such payments, (ii) shall be enforceable as an
alternative or additional cause of action for the purpose of recovering in the
Required Currency the amount, if any, by which such actual receipt shall fall
short of the full amount of the Required Currency so expressed to be payable
and (iii) shall not be affected by judgment being obtained for any other sum
due under this Indenture. For purposes of the foregoing, “New York Banking
Day” means any day except a Saturday, Sunday
or a legal holiday in The City of New York or a day on which banking
institutions in The City of New York are authorized or required by law or
executive order to close.

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SECTION 14.10. SEVERABILITY OF PROVISIONS. Any prohibition, invalidity or
unenforceability of any provision of this Indenture in any jurisdiction shall
not invalidate or render unenforceable the remaining provisions hereto in such
jurisdiction and shall not invalidate or render unenforceable such provisions
in any other jurisdiction.

SECTION 14.11. CORPORATION RELEASED FROM INDENTURE REQUIREMENTS UNDER CERTAIN
CIRCUMSTANCES. Whenever in this Indenture the Corporation shall be required to
do or not to do any thing so long as any of the Debt Securities of any series
shall be Outstanding, the Corporation shall, notwithstanding any such
provision, not be required to comply with such provisions if it shall be
entitled to have this Indenture satisfied and discharged pursuant to the
provisions hereof, even though in either case the Holders of any of the Debt
Securities of that series shall have failed to present and surrender them for
payment pursuant to the terms of this Indenture.

ARTICLE FIFTEEN

SINKING FUNDS

SECTION 15.01. APPLICABILITY OF ARTICLE. The provisions of this Article shall
be applicable to any sinking fund for the retirement of Debt Securities of a
series except as otherwise specified as contemplated by Section 2.01 for Debt
Securities of such series.

     The minimum amount of any sinking fund payment provided for by the terms
of Debt Securities of any series is herein referred to as a “mandatory sinking
fund payment”, and any payment in excess of such minimum amount provided for by
the term of Debt Securities of any series is herein referred to as an “optional
sinking fund payment.” If provided for by the terms of Debt Securities of any
series, the amount of any sinking fund payment may be subject to reduction as
provided in Section 15.02. Each sinking fund payment shall be applied to the
redemption of Debt Securities of any series as provided for by the terms of
Debt Securities of such series.

SECTION 15.02. SATISFACTION OF SINKING FUND PAYMENTS WITH DEBT SECURITIES. The
Corporation (1) may deliver Outstanding Debt Securities of a series (other than
any previously called for redemption), together in the case of any Unregistered
Securities of such series with all unmatured Coupons, and (2) may apply as a
credit Debt Securities of a series which have been redeemed either at the
election of the Corporation pursuant to the terms of such Debt Securities or
through the application of permitted optional sinking fund payments pursuant
to the terms of such Debt Securities, in each case in satisfaction of all or
any part of any sinking fund payment with respect to the Debt Securities of
such series required to be made pursuant to the terms of such Debt Securities
as provided for by the terms of such series; provided that such Debt Securities
have not been previously so credited. Such Debt Securities shall be received
and credited for such purpose by the Trustee at the Redemption Price specified
in such Debt Securities for redemption through operation of the sinking fund
and the amount of such sinking fund payment shall be reduced accordingly. If
as a result of the delivery or credit of Debt

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Securities in lieu of cash
payments pursuant to this Section 15.02, the principal amount of Debt
Securities to be redeemed in order to exhaust the aforesaid cash payment shall
be less than $100,000, the Trustee need not call Debt Securities for
redemption, except upon Corporation Order, and such cash payment shall be held
by the Trustee or a Paying Agent and applied to the next succeeding sinking
fund payment, provided, however, that the Trustee or such Paying Agent shall at
the request of the Corporation from time to time pay over and deliver to the
Corporation any cash payment so being held by the Trustee or such Paying Agent
upon delivery by the Corporation to the Trustee of Debt Securities purchased by
the Corporation having an unpaid principal amount equal to the cash payment
requested to be released to the Corporation.

SECTION 15.03. REDEMPTION OF DEBT SECURITIES FOR SINKING FUND. Not less than
60 days prior to each sinking fund payment date for any series of Debt
Securities (unless a shorter period shall be satisfactory to the Trustee), the
Corporation will deliver to the Trustee an Officers’ Certificate specifying the
amount of the next ensuing sinking fund payment for that series pursuant to the
terms of that series, the portion thereof, if any, which is to be satisfied by
payment of cash, the portion thereof, if any, which is to be satisfied by
crediting Debt Securities of that series pursuant to Section 15.02 and the
basis for any such credit and, prior to or concurrently with the delivery of
such Officers’ Certificate, will also deliver to the Trustee any Debt
Securities to be so credited and not theretofore delivered to the Trustee. Not
less than 30 days (unless a shorter period shall be satisfactory to the
Trustee) before each such sinking fund payment date the Trustee shall select
the Debt Securities to be redeemed upon such sinking fund payment date in the
manner specified in Section 15.03 and cause notice of the redemption thereof to
be given in the name of and at the expense of the Corporation in the manner
provided in Section 3.02. Such notice having been duly given, the redemption
of such Debt Securities shall be made upon the terms and in the manner stated
in Sections 3.03 and 3.04.

ARTICLE SIXTEEN

REPAYMENT AT THE OPTION OF HOLDERS

SECTION 16.01. APPLICABILITY OF ARTICLE. Debt Securities of any series that
are repayable at the option of the Holders thereof before their Stated Maturity
shall be repaid in accordance with their terms and (except as otherwise
specified pursuant to Section 2.01 for Debt Securities of such series) in
accordance with this Article.

SECTION 16.02. REPAYMENT OF DEBT SECURITIES. Each Debt Security that is
subject to repayment in whole or in part at the option of the Holder thereof on
a Repayment Date shall be repaid at the applicable Repayment Price together
with interest accrued to such Repayment Date as specified pursuant to Section
2.01.

SECTION 16.03. EXERCISE OF OPTION; NOTICE. Each Holder desiring to exercise
such Holder’s option for repayment shall, as conditions to such repayment,
surrender the Debt Security to be repaid in whole or in part together with
written notice of the exercise of such option at any office or agency of the
Corporation in a Place of Payment, not less than 30 nor more than 45 days prior
to the Repayment Date; provided, however, that surrender of Unregistered
Securities together with written notice of exercise of such option shall be
made at an office or agency located outside the United States except as
otherwise provided in

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Section 4.02. Such notice, which shall be irrevocable,
shall specify the principal amount of such Debt Security to be repaid, which
shall be equal to the minimum authorized denomination for such Debt Security or
an integral multiple thereof, and shall identify the Debt Security to be repaid
and, in the case of a partial repayment of the Debt Security, shall specify the
denomination or denominations of the Debt Security or Debt Securities of the
same series to be issued to the Holder for the portion of the principal of the
Debt Security surrendered which is not to be repaid.

     If any Unregistered Security surrendered for repayment shall not be
accompanied by all unmatured Coupons and all matured Coupons in default, such
Unregistered Security may be paid after deducting from the Repayment Price an
amount equal to the face amount of all such missing Coupons, or the surrender
of such missing Coupon or Coupons may be waived by the Corporation and the
Trustee if there be furnished to them such security or indemnity as they may
require to save each of them and any Paying Agent harmless. If thereafter the
Holder of such Unregistered Security shall surrender to the Trustee or any
Paying Agent any such missing Coupon in respect of which a deduction shall have
been made from the Repayment Price, such Holder shall be entitled to receive
the amount so deducted without interest thereon; provided, however, that
interest represented by Coupons shall be payable only at an office or agency
located outside the United States except as otherwise provided in Section 4.02.

     The Corporation shall execute and the Trustee shall authenticate and
deliver without service charge to the Holder of any Registered Security so
surrendered a new Registered Security or Debt Securities of the same series, of
any authorized denomination specified in the foregoing notice, in an aggregate
principal amount equal to any portion of the principal of the Registered
Security so surrendered which is not to be repaid.

     The Corporation shall execute and the Trustee shall authenticate and
deliver without service charge to the Holder of any Unregistered Security so
surrendered a new Registered Security or Debt Securities or new Unregistered
Security or Debt Securities (and all unmatured Coupons and matured Coupons in
default) or any combination thereof of the same series of any authorized
denomination or denominations specified in the foregoing notice, in an
aggregate principal amount equal to any portion of the principal of the Debt
Security so surrendered which is not to be paid; provided, however, that the
issuance of a Registered Security therefor shall be subject to applicable laws
and regulations, including provisions of the United States federal income tax
laws and regulations in effect at the time of the exchange; neither the
Corporation, the Trustee nor the Security Registrar shall issue Registered Securities
for Unregistered Securities if it has received an Opinion of Counsel that as a
result of such issuance the Corporation would suffer adverse consequences under
the United States federal income tax laws then in effect and the Corporation
has delivered to the Trustee a Corporation Order directing the Trustee not to
make such issuances thereafter unless and until the Trustee receives a
subsequent Corporation Order to the contrary. The Corporation shall deliver
copies of such Corporation Order to the Security Registrar.

     For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the repayment of Debt Securities shall relate, in
the case of any Debt Security repaid or to be repaid only in part, to the
portion of the principal of such Debt Security which has been or is to be
repaid.

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SECTION 16.04. ELECTION OF REPAYMENT BY REMARKETING ENTITIES. The Corporation
may elect, with respect to Debt Securities of any series which are repayable at
the option of the Holders thereof before their Stated Maturity, at any time
prior to any Repayment Date to designate one or more Remarketing Entities to
purchase, at a price equal to the Repayment Price, Debt Securities of such
series from the Holders thereof who give notice and surrender their Debt
Securities in accordance with Section 16.03.

SECTION 16.05. DEBT SECURITIES PAYABLE ON THE REPAYMENT DATE. Notice of
exercise of the option of repayment having been given and the Debt Securities
so to be repaid having been surrendered as aforesaid, such Debt Securities
shall, unless purchased in accordance with Section 16.04, on the Repayment Date
become due and payable at the price therein specified and from and after the
Repayment Date such Debt Securities shall cease to bear interest and shall be
paid on the Repayment Date, and the Coupons to Unregistered Securities so to be
repaid, except to the extent provided above, shall be void, unless the
Corporation shall default in the payment of such price, in which case the
Corporation shall continue to be obligated for the principal amount of such
Debt Securities and shall be obligated to pay interest on such principal amount
at the rate borne by such Debt Securities from time to time until payment in
full of such principal amount.

ARTICLE SEVENTEEN

SUBORDINATION OF DEBT SECURITIES

SECTION 17.01. DEBT SECURITIES SUBORDINATE TO SENIOR DEBT. The Corporation
covenants and agrees that anything in this Indenture or the Debt Securities of
any series to the contrary notwithstanding, the indebtedness evidenced by the
Debt Securities of each series or any Coupons appurtenant thereto is
subordinate and junior in right of payment to all Senior Debt to the extent
provided herein, and each Holder of Debt Securities of each series or any
Coupons appurtenant thereto, by such Holder’s acceptance thereof, likewise
covenants and agrees to the subordination herein provided and shall be bound by
the provisions hereof. Senior Debt shall continue to be Senior Debt and
entitled to the benefits of these subordination
provisions irrespective of any amendment, modification or waiver of any term of
the Senior Debt or extension or renewal of the Senior Debt.

     In the event that the Corporation shall default in the payment of any
principal of (or premium, if any) or interest on any Senior Debt when the same
become due and payable, whether at maturity or at a date fixed for prepayment
or by declaration of acceleration or otherwise, then, upon written notice of
such default to the Corporation by the Holders of Senior Debt or any trustee
therefor, unless and until such default shall have been cured or waived or
shall have ceased to exist, no direct or indirect payment (in cash, property,
securities, by set-off or otherwise) shall be made or agreed to be made on
account of the principal of (or premium, if any) or interest on any of the Debt
Securities, or in respect of any redemption, repayment, retirement, purchase or
other acquisition of any of the Debt Securities.

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     In the event of

            (a) any insolvency, bankruptcy, receivership, liquidation, reorganization,
readjustment, composition or other similar proceeding relating to the
Corporation, its creditors or its property,

            (b) any proceeding for the liquidation, dissolution or other winding up of
the Corporation, voluntary or involuntary, whether or not involving insolvency
or bankruptcy proceedings,

            (c) any assignment by the Corporation for the benefit of creditors, or

            (d) any other marshalling of the assets of the Corporation,

all Senior Debt (including any interest thereon accruing after the commencement
of any such proceedings) shall first be paid in full before any payment or
distribution, whether in cash, securities or other property, shall be made to
any Holder of any of the Debt Securities or Coupons on account thereof. Any
payment or distribution, whether in cash, securities or other property (other
than securities of the Corporation or any other corporation provided for by a
plan of reorganization or readjustment the payment of which is subordinate, at
least to the extent provided in these subordination provisions with respect to
the indebtedness evidenced by the Debt Securities, to the payment of all Senior
Debt at the time outstanding and to any securities issued in respect thereof
under any such plan of reorganization or readjustment), which would otherwise
(but for these subordination provisions) be payable or deliverable in respect
of the Debt Securities of any series or any Coupons appurtenant thereto shall
be paid or delivered directly to the Holders of Senior Debt in accordance with
the priorities then existing among such Holders until all Senior Debt
(including any interest thereon accruing after the commencement of any such
proceedings) shall have been paid in full. In the event of any such
proceeding, after payment in full of all sums owing with respect to Senior
Debt, the Holders of the Debt Securities and Coupons, together with the Holders
of any obligations of the Corporation ranking on a parity with the Debt
Securities, shall be entitled to be paid from the remaining assets of the
Corporation the amounts at the time due and owing on account of unpaid
principal of (and premium, if any) and interest on the Debt Securities and such
other obligations before any payment or other distribution, whether in cash,
property or otherwise, shall be made on account of any capital
stock or any obligations of the Corporation ranking junior to the Debt
Securities and such other obligations.

     In the event that, notwithstanding the foregoing, any payment or
distribution of any character or any security, whether in cash, securities or
other property (other than securities of the Corporation or any other
corporation provided for by a plan of reorganization or readjustment the
payment of which is subordinate, at least to the extent provided in these
subordination provisions with respect to the indebtedness evidenced by the Debt
Securities, to the payment of all Senior Debt at the time outstanding and to
any securities issued in respect thereof under any such plan of reorganization
or readjustment), shall be received by the Trustee or any Holder in
contravention of any of the terms hereof such payment or distribution or
security shall be received in trust for the benefit of, and shall be paid over
or delivered and transferred to, the holders of the Senior Debt at the time
outstanding in accordance with the priorities then existing among such holders
for application to the payment of all Senior Debt remaining unpaid, to the
extent necessary to pay all such Senior Debt in full. In the event of the
failure of the Trustee or

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any Holder to endorse or assign any such payment,
distribution or security, each holder of Senior Debt is hereby irrevocably
authorized to endorse or assign the same.

     No present or future holder of any Senior Debt shall be prejudiced in the
right to enforce subordination of the indebtedness evidenced by the Debt
Securities by any act or failure to act on the part of the Corporation.
Nothing contained herein shall impair, as between the Corporation and the
Holders of Debt Securities of each series, the obligation of the Corporation to
pay to such Holders the principal of (and premium, if any) and interest upon
such Debt Securities and Coupons, or prevent the Trustee or the Holder from
exercising all rights, powers and remedies otherwise permitted by applicable
law or hereunder upon a default or Event of Default hereunder, all subject to
the rights of the holders of the Senior Debt to receive cash, securities or
other property otherwise payable or deliverable to the Holders.

     Senior Debt shall not be deemed to have been paid in full unless the
holders thereof shall have received cash, securities or other property equal to
the amount of such Senior Debt then outstanding. Upon the payment in full of
all Senior Debt, the Holders of Debt Securities of each series and Coupons, if
any, shall be subrogated to all rights of any holders of Senior Debt to receive
any further payments or distributions applicable to the Senior Debt until the
indebtedness evidenced by the Debt Securities of such series and Coupons, if
any, shall have been paid in full, and such payments or distributions received
by such Holders, by reason of such subrogation, of cash, securities or other
property which otherwise would be paid or distributed to the holders of Senior
Debt, shall, as between the Corporation and its creditors other than the
holders of Senior Debt, on the one hand, and such Holders, on the other hand,
be deemed to be a payment by the Corporation on account of Senior Debt, and not
on account of the Debt Securities of such series.

     The Trustee and Holders will take action (including, without limitation,
the delivery of this Indenture to an agent for the holders of Senior Debt or
consent to the filing of a financing statement with respect hereto) as may, in
the opinion of counsel designated by the holders of a majority in principal
amount of the Senior Debt at the time outstanding, be necessary or appropriate
to assure the effectiveness of the subordination effected by these provisions.

     The provisions of this Section 17.01 shall not impair any rights,
interests, remedies or powers of any secured creditor of the Corporation in
respect of any security interest the creation of which is not prohibited by the
provisions of this Indenture.

     The securing of any obligations of the Corporation, otherwise ranking on a
parity with the Debt Securities or ranking junior to the Debt Securities, shall
not be deemed to prevent such obligations from constituting, respectively,
obligations ranking on a parity with the Debt Securities or ranking junior to
the Debt Securities.

SECTION 17.02. TRUSTEE AND HOLDERS OF DEBT SECURITIES MAY RELY ON CERTIFICATE
OF LIQUIDATING AGENT; TRUSTEE MAY REQUIRE FURTHER EVIDENCE AS TO OWNERSHIP OF
SENIOR DEBT; TRUSTEE NOT FIDUCIARY TO HOLDERS OF SENIOR DEBT. Upon any payment
or distribution of assets of the Corporation referred to in this Article
Seventeen, the Trustee and the Holders shall be entitled to rely upon an order
or decree made by any court of competent jurisdiction in which such dissolution
or winding up or liquidation or reorganization or arrangement proceedings are
pending or upon a

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certificate of the trustee in bankruptcy, receiver, assignee
for the benefit of creditors or other Person making such payment or
distribution, delivered to the Trustee or to the Holders, for the purpose of
ascertaining the persons entitled to participate in such distribution, the
holders of the Senior Debt and other indebtedness of the Corporation, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article Seventeen. In
the absence of any such bankruptcy trustee, receiver, assignee or other Person,
the Trustee shall be entitled to rely upon a written notice by a Person
representing himself or herself to be a holder of Senior Debt (or a trustee or
representative on behalf of such holder) as evidence that such Person is a
holder of such Senior Debt (or is such a trustee or representative). In the
event that the Trustee determines, in good faith, that further evidence is
required with respect to the right of any person as holder of Senior Debt to
participate in any payments or distributions pursuant to this Article
Seventeen, the Trustee may request such person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Debt held by
such Person, as to the extent to which such Person is entitled to participate
in such payment or distribution, and as to other facts pertinent to the rights
of such Person under this Article Seventeen, and if such evidence is not
furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive payment. The Trustee,
however, shall not be deemed to owe any fiduciary duty to the holders of Senior
Debt.

SECTION 17.03. PAYMENT PERMITTED IF NO DEFAULT. Nothing contained in this
Article Seventeen or elsewhere in this Indenture, or in any of the Debt
Securities, shall prevent (a) the Corporation at any time, except during the
pendency of any dissolution, winding up, liquidation or reorganization
proceedings referred to in, or under the conditions described in, Section
17.01, from making payments of the principal of (or premium, if any) or
interest on the Debt Securities or (b) the application by the Trustee or any
Paying Agent of any moneys deposited with it hereunder to payments of the
principal of or interest on the Debt Securities, if, at the time of such
deposit, the Trustee or such Paying Agent, as the case may be, did not have the
written notice provided for in Section 17.04 of any event prohibiting the
making of such deposit, or if, at the time of such deposit (whether or not in trust)
by the Corporation with the Trustee or any Paying Agent (other than the
Corporation) such payment would not have been prohibited by the provisions of
this Article, and the Trustee or any Paying Agent shall not be affected by any
notice to the contrary received by it on or after such date.

SECTION 17.04. TRUSTEE NOT CHARGED WITH KNOWLEDGE OF PROHIBITION. Anything in
this Article Seventeen or elsewhere in this Indenture contained to the contrary
notwithstanding, the Trustee shall not at any time be charged with knowledge of
the existence of any facts which would prohibit the making of any payment of
money to or by the Trustee and shall be entitled conclusively to assume that no
such facts exist and that no event specified in Section 17.01 has happened,
unless and until a Responsible Officer of the Trustee shall have received
written notice to that effect from the Corporation or signed by or on behalf of
the holder or holders or their representatives, of Senior Debt who shall have
been certified by the Corporation or otherwise established to the reasonable
satisfaction of the Trustee to be such holder or holders or representatives or
from any trustee under the indenture pursuant to which such Senior Debt shall
be outstanding; and, prior to the receipt of any such written notice, the
Trustee, subject to the provisions of Section 7.01, shall be entitled in all
respects to assume that no such facts exist; provided, however, that if the
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provided for in this Section at
least three Business Days prior to the date upon which by the terms hereof any
money may become payable for any purpose (including, without limitation, the
payment of the principal of or interest on any Security), then, anything herein
contained to the contrary notwithstanding, but without limiting the rights and
remedies of the holders of Senior Debt or any representatives therefor, the
Trustee shall have full power and authority to receive such money and to apply
the same to the purpose for which such money was received and shall not be
affected by any notice to the contrary which may be received by it within two
Business Days prior to such date. Any notice required or permitted to be given
to the Trustee by a holder of Senior Debt or by any representatives thereof
shall be in writing and shall be sufficient for every purpose hereunder if in
writing and either (i) sent via facsimile to the Trustee, the receipt of which
shall be confirmed via telephone, or (ii) mailed, first class postage prepaid,
or sent by overnight carrier, to the Trustee addressed to its Corporate Trust
Office or to any other address furnished in writing to such holder of Senior
Debt by the Trustee. The Corporation shall give prompt written notice to the
Trustee and to the Paying Agent of any facts that would prohibit the payment of
money to or by the Trustee or any Paying Agent.

SECTION 17.05. TRUSTEE TO EFFECTUATE SUBORDINATION. Each Holder of Debt
Securities or Coupons by such Holder’s acceptance thereof authorizes and
directs the Trustee in such Holder’s behalf to take such action as may be
necessary or appropriate to effectuate the subordination as between such Holder
and holders of Senior Debt as provided in this Article and appoints the Trustee
its attorney-in-fact for any and all such purposes.

SECTION 17.06. RIGHTS OF TRUSTEE AS HOLDER OF SENIOR DEBT. The Trustee shall
be entitled to all the rights set forth in this Article with respect to any
Senior Debt which may at the time be held by it, to the same extent as any
other holder of Senior Debt, provided that nothing in this Article shall
deprive the Trustee of any rights as such holder and
provided further that nothing in this Article shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 7.06.

SECTION 17.07. ARTICLE APPLICABLE TO PAYING AGENTS. In case at any time any
Paying Agent other than the Trustee shall have been appointed by the
Corporation and be then acting hereunder, the term “Trustee” as used in this
Article shall in such case (unless the context shall otherwise require) be
construed as extending to and including such Paying Agent within its meaning as
fully for all intents and purposes as if the Paying Agent were named in this
Article in addition to or in place of the Trustee; provided, however, that
Sections 17.04 and 17.06 shall not apply to the Corporation or any Affiliate of
the Corporation if the Corporation or such Affiliate acts as Paying Agent.

SECTION 17.08. SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS OF THE
CORPORATION OR HOLDERS OF SENIOR DEBT. No right of any present or future
holders of any Senior Debt to enforce subordination as herein provided shall at
any time or in any way be prejudiced or impaired by any act or failure to act
on the part of the Corporation or by any act or failure to act, in good faith,
by any such holder, or by any noncompliance by the Corporation with the terms,
provision and covenants of this Indenture, regardless of any knowledge thereof
which any such holder may have or be otherwise charged with. The holders of
Senior Debt may, at any time or from time to time and in their absolute
discretion, change the manner, place or terms of payment, change or extend the
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any such Senior Debt, or amend or
supplement any instrument pursuant to which any such Senior Debt is issued or
by which it may be secured, or release any security therefor, or exercise or
refrain from exercising any other of their rights under the Senior Debt
including, without limitation, the waiver of default thereunder, all without
notice to or assent from the Holders of the Debt Securities or the Trustee and
without affecting the obligations of the Corporation, the Trustee or the
Holders of the Debt Securities under this Article.

ARTICLE EIGHTEEN

CONVERSION OF CONVERTIBLE SECURITIES

SECTION 18.01. APPLICABILITY OF ARTICLE. If an Officers’ Certificate or
supplemental indenture pursuant to Section 2.01 provides that the Debt
Securities of a series shall be Convertible Securities, Debt Securities of such
series shall be convertible in accordance with their terms and (except as
otherwise specified in such Officers’ Certificate or supplemental indenture) in
accordance with this Article. In case by reason of the operation of this
Article Eighteen, the Convertible Securities shall be convertible into any
other shares or other securities or property of the Corporation or any other
corporation, any reference in this Indenture to the conversion of Convertible
Securities pursuant to this Article Eighteen shall be deemed to refer to and
include conversion of Convertible Securities into such other shares or other
securities or property.

SECTION 18.02. RIGHT TO CONVERT. Subject to and upon compliance with the
provisions of this Article, the Holder of any Convertible Security shall have
the right, at such Holder’s option, at any time prior to the close of business
on the date set forth in the Officers’ Certificate delivered pursuant to
Section 2.01 hereof (or if such Convertible Security is called for redemption
or submitted for repayment, then in respect of such Convertible Security to and
including but not after the close of business on the second Business Day prior
to the Redemption or Repayment Date, as the case may be, unless the Corporation
shall default in the payment due) to convert the principal amount of any such
Convertible Security, or, in the case of any Convertible Security of a
denomination greater than $1,000, any portion (or such other minimum
denomination specified by the Convertible Securities pursuant to Section 2.01)
of such principal which is $1,000 (or such other minimum denomination) or an
integral multiple thereof, into that number of fully paid and nonassessable
shares of Common Stock (as such shares shall then be constituted) obtained by
dividing the principal amount of the Convertible Security or portion thereof
surrendered for conversion by the Conversion Price, by surrender of the
Convertible Security so to be converted in whole or in part in the manner
provided in Section 18.03. Such conversion shall be effected by the
Corporation.

SECTION 18.03. EXERCISE OF CONVERSION PRIVILEGE; DELIVERY OF COMMON STOCK ON
CONVERSION; NO ADJUSTMENT FOR INTEREST OR DIVIDENDS. In order to exercise the
conversion privilege, the Holder of any Convertible Security to be converted in
whole or in part shall surrender such Convertible Security at an office or
agency maintained by the Corporation pursuant to Section 4.02, accompanied by
the funds, if any, required by the last paragraph of this Section, together
with written notice of conversion in the form provided on the Convertible
Securities, that the Holder elects to convert such Convertible Security or the
portion thereof specified in said notice. Such notice shall also state the
name or names (with address) in

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which the certificate or certificates for
shares of Common Stock which shall be deliverable on such conversion shall be
registered, and shall be accompanied by transfer taxes, if required pursuant to
Section 18.08. Each Convertible Security surrendered for conversion shall,
unless the shares deliverable on conversion are to be registered in the same
name as the registration of such Convertible Security, be duly endorsed by, or
accompanied by instruments of transfer in form satisfactory to the Corporation
duly executed by, the Holder or such Holder’s duly authorized attorney.

     As promptly as practicable after the surrender of such Convertible
Security and the receipt of such notice and funds, if any, as aforesaid, the
Corporation shall deliver at such office or agency to such Holder, or on such
Holder’s written order, a certificate or certificates for the number of full
shares deliverable upon the conversion of such Convertible Security or portion
thereof in accordance with the provisions of this Article and a check or cash
in respect of any fractional interest in respect of a share of Common Stock
arising upon such conversion as provided in Section 18.04. In case any
Convertible Security of a denomination greater than $1,000 (or such other
minimum denomination) shall be surrendered for partial conversion and subject
to Section 2.04, the Corporation shall execute and the Trustee shall
authenticate and deliver to or upon the written order of the Holder of the
Convertible Security so surrendered, without charge to such Holder, a new
Convertible Security or Convertible Securities in authorized denominations in
an aggregate principal amount equal to the unconverted portion of the
surrendered Convertible Security.

     Each conversion shall be deemed to have been effected on the date on which
such Convertible Security shall have been surrendered (accompanied by the
funds, if any, required by the last paragraph of this Section) and such notice
shall have been received by the Corporation, as aforesaid, and the person in
whose name any certificate or certificates for shares of Common Stock shall be
registrable upon such conversion shall be deemed to have become on said date
the holder of record of the shares represented thereby; provided, however, that
any such surrender on any date when the stock transfer books of the Corporation
shall be closed shall constitute the person in whose name the certificates are
to be registered as the record holder thereof for all purposes on the next
succeeding day on which stock transfer books are open, but such conversion
shall be at the Conversion Price in effect on the date upon which such
Convertible Security shall have been surrendered.

     Any Convertible Security or portion thereof surrendered for conversion
during the period from the close of business on the Regular Record Date for any
Interest Payment Date shall (unless such Convertible Security or portion
thereof being converted shall have been called for redemption or submitted for
repayment on a date in such period) be accompanied by payment, in legal tender
or other funds acceptable to the Corporation, of an amount equal to the
interest otherwise payable on such Interest Payment Date on the principal
amount being converted; provided, however, that no such payment need be made if
there shall exist at the time of conversion a default on the payment of
interest on the Convertible Securities. An amount equal to such payment shall
be paid by the Corporation on such Interest Payment Date to the Holder of such
Convertible Security on such Regular Record Date, provided, however, that if
the Corporation shall default in the payment of interest on such Interest
Payment Date, such amount shall be paid to the person who made such required
payment. Except as provided above in this Section, no adjustment shall be made
for interest accrued on any Convertible Security converted or for dividends on
any shares issued upon the conversion of such Convertible Security as provided
in this Article.

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SECTION 18.04. CASH PAYMENTS IN LIEU OF FRACTIONAL SHARES. No fractional
shares of Common Stock or scrip representing fractional shares shall be
delivered upon conversion of Convertible Securities. If more than one
Convertible Security shall be surrendered for conversion at one time by the
same Holder, the number of full shares which shall be deliverable upon
conversion shall be computed on the basis of the aggregate principal amount of
the Convertible Securities (or specified portions thereof to the extent
permitted hereby) so surrendered. If any fractional share of stock would be
deliverable upon the conversion of any Convertible Security or Convertible
Securities, the Corporation shall make an adjustment therefor in cash at the
current market value of such fractional share of stock. The market value of a
share of Common Stock shall be the Closing Price on the Business Day
immediately preceding the day on which the Convertible Securities (or specified
portions thereof) are deemed to have been converted.

SECTION 18.05. CONVERSION PRICE. The Conversion Price shall be as specified in
the form of Convertible Security hereinafter set forth, subject to adjustment
as provided in this Article.

SECTION 18.06. ADJUSTMENT TO CONVERSION PRICE. The Conversion Price shall be
adjusted from time to time as follows:

            (a) In case the Corporation shall (i) pay a dividend or make a
distribution on the Common Stock in shares of its capital stock (whether shares
of Common Stock or of capital stock of any other class), (ii) subdivide or
reclassify its outstanding Common Stock into a greater number of securities
(including Common Stock), or (iii) combine or reclassify its outstanding Common
Stock into a smaller number of securities (including Common Stock), the
Conversion Price in effect immediately prior thereto shall be adjusted so that
the Holder of any Convertible Security thereafter surrendered for conversion
shall be entitled to receive the number of shares of capital stock of the
Corporation which such Holder would have owned or have been entitled to receive
after the happening of any of the events described above had such Convertible
Security been converted immediately prior to the happening of such event. An
adjustment made pursuant to this subsection (a) shall become effective
immediately after the record date in the case of a dividend and shall become
effective immediately after the effective date in the case of a subdivision or
combination. If, as a result of an adjustment made pursuant to this subsection
(a), the Holder of any Convertible Security thereafter surrendered for
conversion shall become entitled to receive shares of two or more classes of
capital stock of the Corporation, the Board of Directors of the Corporation
(whose determination shall be conclusive and shall be described in a written
statement filed with the Trustee and any conversion agent) shall determine the
allocation of the adjusted Conversion Price between or among shares of such
classes of capital stock.

     In the event that at any time, as a result of an adjustment made pursuant
to this subsection (a) of this Section 18.06, the Holder of any Convertible
Security thereafter converted shall become entitled to receive any shares or
other securities of the Corporation other than shares of Common Stock,
thereafter the number of such other shares so received upon conversion of any
Convertible Security shall be subject to adjustment from time to time in any
manner and on

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terms as nearly equivalent as practicable to the provisions with
respect to the shares of Common Stock contained in this Section 18.06, and
other provisions of this Article Eighteen with respect to the shares of Common
Stock shall apply on like terms to any such other shares or other securities.

            (b) In case the Corporation shall fix a record date for the issuance of
rights or warrants to all holders of its Common Stock (or securities
convertible into Common Stock) entitling them (for a period expiring within 45
days after such record date) to subscribe for or purchase Common Stock at a
price per share (or a conversion price per share) less than the current market
price per share of Common Stock (as defined in subsection (d) below) at such
record date, the Conversion Price in effect immediately prior thereto shall be
adjusted so that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to such record date by a fraction
of which the numerator shall be the number of shares of Common Stock
outstanding on such record date plus the number of shares which the aggregate
offering price of the total number of shares so offered (or the aggregate
initial conversion price of the convertible securities so offered) would
purchase at such current market price, and of which the denominator shall be
the number of shares of Common Stock outstanding on such record date plus the
number of additional shares of Common Stock offered for subscription or
purchase (or into which the convertible securities so offered are initially
convertible). Such
adjustment shall be made successively whenever such a record is fixed, and
shall become effective immediately after such record date. In determining
whether any rights or warrants entitle the holders to subscribe for or purchase
shares of Common Stock at less than such current market price, and in
determining the aggregate offering price of such shares, there shall be taken
into account any consideration determined by the Board of Directors of the
Corporation. Common Stock owned by or held for the account of the Corporation
or any majority owned subsidiary shall not be deemed outstanding for the
purpose of any adjustment required under this subsection (b).

            (c) In case the Corporation shall fix a record date for making a
distribution to all holders of its Common Stock evidences of its indebtedness
or assets (excluding regular quarterly or other periodic or recurrent cash
dividends or distributions paid from retained earnings of the Corporation or
dividends or distributions referred to in subsection (a) above) or rights or
warrants to subscribe or purchase (excluding those referred to in subsection
(b) above), then in each case the Conversion Price shall be adjusted so that
the same shall equal the price determined by multiplying the Conversion Price
in effect immediately prior to such record date by a fraction of which the
numerator shall be the current market price per share (as defined in subsection
(d) below) of the Common Stock on such record date less the then fair market
value (as determined by the Board of Directors of the Corporation whose
determination shall be conclusive, and described in a certificate filed with
the Trustee) of the portion of the assets or evidences of indebtedness so
distributed or of such rights or warrants applicable to one share of Common
Stock, and the denominator shall be the current market price per share (as
defined in subsection (d) below) of the Common Stock. Such adjustment shall be
made successively whenever such a record date is fixed and shall become
effective immediately after such record date. Notwithstanding the foregoing,
in the event that the Corporation shall distribute any rights or warrants to
acquire capital stock (“Rights”) pursuant to this subsection (c), the
distribution of separate certificates representing such Rights subsequent to
their initial distribution (whether or not such distribution shall have
occurred prior to the date of the issuance of such Convertible

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Securities) shall be deemed to be the distribution of such Rights for purposes of this
subsection (c); provided that the Corporation may, in lieu of making any
adjustment pursuant to this subsection (c) upon a distribution of separate
certificates representing such Rights, make proper provision so that each
Holder of such Convertible Security who converts such Convertible Security (or
any portion thereof) (i) before the record date for such distribution of
separate certificates shall be entitled to receive upon such conversion shares
of Common Stock issued with Rights and (ii) after such record date and prior
to the expiration, redemption or termination of such Rights shall be entitled
to receive upon such conversion, in addition to the shares of Common Stock
issuable upon such conversion, the same number of such Rights as would a holder
of the number of shares of Common Stock that such Convertible Security so
converted would have entitled the holder thereof to purchase in accordance with
the terms and provisions of and applicable to the Rights if such Convertible
Security were converted immediately prior to the record date for such
distribution. Common Stock owned by or held for the account of the Corporation
or any majority owned subsidiary shall not be deemed outstanding for the
purpose of any adjustment required under this subsection (c).

            (d) For the purpose of any computation under subsection (b) and (c) above,
the current market price per share of Common Stock at any date shall be deemed
to be the average of the daily Closing Prices for the thirty days (which are
not legal holidays as defined in
Section 14.05) commencing forty-five days (which are not legal holidays as
defined in Section 14.05) before the day in question. The Closing Price for
any day shall be (i) if the Common Stock is listed or admitted for trading on
any national securities exchange or the National Market System of the National
Association of Debt Securities Dealers, Inc. Automated Quotation System
(“NASDAQ”), the last sale price (regular way), or the average of the closing
bid and ask prices if no sale occurred, of Common Stock on the principal
securities exchange on which the Common Stock is listed, (ii) if not listed as
described in (i), the mean between the closing high bid and low asked
quotations of Common Stock on NASDAQ, or any similar system or automated
dissemination of quotations of securities prices then in common use, if so
quoted, or (iii) if not quoted as described in clause (ii), the mean between
the high bid and low asked quotations for Common Stock as reported by the
National Quotation Bureau Incorporated if at least two securities dealers have
inserted both bid and asked quotations for Common Stock on at least 5 of the 10
preceding days. If none of the conditions set forth above is met, the Closing
Price of Common Stock on any day or the average of such Closing Prices for any
period shall be the fair market value of Common Stock as determined by a member
firm of the New York Stock Exchange, Inc. selected by the Corporation.

            (e) (i) No adjustment in the Conversion price shall be required unless
such adjustment would require an increase or decrease of at least 1% in such
price; provided, however, that any adjustments which by reason of this
subsection (e)(i) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment; further provided, however,
that any adjustments which by reason of this subsection (e)(i) are not
otherwise required to be made shall be made no later than 3 years after the
date on which occurs an event that requires an adjustment to be made or carried
forward.

               (ii) All calculations under this Article Eighteen shall be made to the
nearest cent or to the nearest one-hundredth of a share, as the case may be.
Anything in this Section 18.06 to the contrary notwithstanding, the Corporation
shall be entitled to make such reductions

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in the Conversion Price, in addition
to those required by this Section 18.06, as it in its discretion shall
determine to be advisable in order that any stock dividends, subdivision of
shares, distribution of rights to purchase stock or securities, or distribution
of securities convertible into or exchangeable for stock hereafter made by the
Corporation to its shareholders shall not be taxable.

            (f) Whenever the Conversion Price is adjusted, as herein provided, the
Corporation shall promptly file with the Trustee and any conversion agent other
than the Trustee an Officers’ Certificate setting forth the Conversion Price
after such adjustment and setting forth a brief statement of the facts
requiring such adjustment. Promptly after delivery of such certificate, the
Corporation shall prepare a notice of such adjustment of the Conversion Price
setting forth the adjusted Conversion Price and the date on which such
adjustment becomes effective and shall mail such notice of such adjustment of
the Conversion Price to the Holder of each Convertible Security at such
Holder’s last address appearing on the Security Register provided for in
Section 2.01 of this Indenture.

            (g) In any case in which this Section 18.06 provides that an adjustment
shall become effective immediately after a record date for an event, the
Corporation may defer until the occurrence of such event (i) delivering to the
Holder of any Convertible Security converted after
such record date and before the occurrence of such event the additional
shares of Common Stock deliverable upon such conversion by reason of the
adjustment required by such event over and above the Common Stock deliverable
upon such conversion before giving effect to such adjustment and (ii) paying to
such Holder any amount in cash in lieu of any fraction pursuant to Section
18.04, provided, however, that the Corporation shall deliver to such Holder a
due bill or other appropriate instrument evidencing such Holder’s rights to
receive such additional shares, and such cash, upon the occurrence of the event
requiring such adjustment. If such event does not occur, no adjustments shall
be made pursuant to this Section 18.06.

SECTION 18.07. EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE. If
any of the following events occur, namely (i) any reclassification or change of
outstanding shares of Common Stock deliverable upon conversion of the
Convertible Securities (other than a change in par value, or from par value to
no par value, or from no par value to par value, or as a result of a
subdivision or combination, but including any change in the shares of Common
Stock into two or more classes or series of securities), (ii) any consolidation
or merger to which the Corporation is a party (other than a consolidation or
merger in which the Corporation is the continuing corporation and which does
not result in any reclassification of, or change (other than a change in par
value, or from par value to no par value, or from no par value to par value, or
as a result of a subdivision or combination) in, outstanding shares of its
Common Stock) or (iii) any sale or conveyance of the properties and assets of
the Corporation as, or substantially as, an entirety to any other corporation;
then the Corporation or such successor or purchasing corporation, as the case
may be, shall execute with the Trustee a supplemental indenture (which shall
conform to the Trust Indenture Act as in force at the date of execution of such
supplemental indenture and comply with the provisions of Article Nine)
providing that each Convertible Security shall be convertible into the kind and
amount of shares of stock and other securities or property, including cash,
receivable upon such reclassification, change, consolidation, merger, sale or
conveyance by a holder of a number of shares of Common Stock deliverable upon
conversion of such Convertible Securities immediately prior to such

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reclassification, change, consolidation, merger, sale or conveyance. Such
supplemental indenture shall provide for adjustments that shall be as nearly
equivalent as may be practicable to the adjustments provided for in this
Article. The Corporation shall cause notice of the execution of such
supplemental indenture to be mailed to each Holder of Convertible Securities,
at his address appearing on the Security Register provided for in Section 2.01
of this Indenture.

                    The above provisions of this Section shall similarly apply to successive
reclassifications, consolidations, mergers and sales.

SECTION 18.08. TAXES ON SHARES ISSUED. The delivery of stock certificates on
conversions of Convertible Securities shall be made without charge to the
Holder converting a Convertible Security for any tax in respect of the issue
thereof. The Corporation shall not, however, be required to pay any tax which
may be payable in respect of any transfer involved in the delivery of stock
registered in any name other than of the Holder of any Convertible Security
converted, and the Corporation shall not be required to deliver any such stock
certificate unless and until the person or persons requesting the delivery
thereof shall have paid to the Corporation the amount of such tax or shall have established
to the satisfaction of the Corporation that such tax has been paid.

SECTION 18.09. SHARES TO BE FULLY PAID; COMPLIANCE WITH GOVERNMENTAL
REQUIREMENTS; LISTING OF COMMON STOCK. The Corporation covenants that all
shares of Common Stock that may be delivered upon conversion of Convertible
Securities will upon delivery be fully paid and nonassessable by the
Corporation and free from all taxes, liens and charges with respect to the
issue thereof.

     The Corporation covenants that if any shares of Common Stock to be
provided for the purpose of conversion of Convertible Securities hereunder
require registration with or approval of any governmental authority under any
Federal or state law before such shares may be validly delivered upon
conversion, the Corporation will in good faith and as expeditiously as possible
endeavor to secure such registration or approval, as the case may be.

     The Corporation further covenants that if the Common Stock is then listed
on a national securities exchange or admitted for trading on NASDAQ it will
qualify all Common Stock deliverable upon conversion of the Convertible
Securities for trading on said national securities exchange or NASDAQ, if
permitted by and in accordance with the rules of said national securities
exchange or NASDAQ.

SECTION 18.10. TRUSTEE NOT RESPONSIBLE. Neither the Trustee nor any
authenticating agent nor any conversion agent shall at any time be under any
duty or responsibility to any Holder of Convertible Securities to determine
whether any facts exist which may require any adjustment of the Conversion
Price, or with respect to the nature or extent of any such adjustment when
made, or with respect to the method employed, or herein or in any supplemental
indenture provided to be employed, in making the same. Neither the Trustee nor
any authenticating agent nor any conversion agent shall be accountable with
respect to the validity or value (or the kind or amount) of any shares of
Common Stock, or of any securities or property, which may at any time be
delivered upon the conversion of any Convertible Security; and neither the
Trustee nor any authenticating agent nor any conversion agent makes any

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representation with respect thereto. Subject to the provisions of Section
7.01, neither the Trustee nor any authenticating agent nor any conversion agent
shall be responsible for any failure of the Corporation to deliver any shares
of Common Stock or stock certificates or other securities or property or cash
upon the surrender of any Convertible Security for the purpose of conversion or
for any failure of the Corporation to comply with any of the covenants
contained in this Article.

SECTION 18.11. NOTICE TO HOLDERS PRIOR TO CERTAIN ACTIONS. In case:

     (a) the Corporation shall declare a dividend (or any other distribution)
on the Common Stock (other than in cash out of its current or retained
earnings); or

     (b) the Corporation shall authorize the granting to the holders of the
Common Stock of rights or warrants to subscribe for or purchase any share of
any class or any other rights or warrants; or

     (c) of any reclassification or change of the Common Stock (other than a
subdivision or combination of its outstanding Common Stock, or a change in par
value, or from par value to no par value, or from no par value to par value)
or, of any consolidation or merger to which the Corporation is a party and for
which approval of any stockholders of the Corporation is required or for the
sale or transfer of all or substantially all of the assets of the Corporation;
or

     (d) of the voluntary or involuntary dissolution, liquidation or winding up
of the Corporation; the Corporation shall cause to be filed with the Trustee
and the Corporation shall cause to be mailed to each holder of Convertible
Securities at his address appearing on the Security Register, provided for in
Section 2.05 of this Indenture, as promptly as possible but in any event no
less than fifteen days prior to the applicable date hereinafter specified, a
notice stating (x) the date on which a record is to be taken for the purpose of
such dividend, distribution or rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be
entitled to such dividend, distribution or rights are to be determined, or (y)
the date on which such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up is expected to become effective, and the
date as of which it is expected that holders of Common Stock of record shall be
entitled to exchange their Common Stock for securities or other property
deliverable upon such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up. Failure to give such notice, or any
defect therein, shall not affect the legality or validity of such dividend,
distribution, reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up or any adjustment in the Conversion
Price required by this Article Eighteen.

SECTION 18.12. COVENANT TO RESERVE SHARES. The Corporation covenants that it
will at all times reserve and keep available, free from pre-emptive rights, out
of its authorized but unissued Common Stock, such number of shares of Common
Stock as shall then be deliverable upon the conversion of all outstanding
Convertible Securities.

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     Bank One Trust Company, N.A., the party of the second part, hereby accepts
the trusts in this Indenture declared and provided, upon the terms and
conditions hereinabove set forth.

     IN WITNESS WHEREOF, DELPHI CORPORATION, the party of the first part, has
caused this Indenture to be signed and acknowledged by its Chairman of the
Board of Directors, Vice Chairman of the Board of Directors, its President or
any Vice President, and the same to be attested by its Treasurer; and Bank One
Trust Company, N.A., the party of the second part, has caused this Indenture to
be signed, and its corporate seal to be affixed hereunto, and the same to be
attested by its duly authorized officers, all as of the day and year first
above written.

	 	 	 	 	 
	 	 	DELPHI CORPORATION
	 	 	 	 	 
	 	 	
By:	 	/s/ J. T. Battenberg
III
	 	 	 	

	 	 	
Name:
	 	J. T. Battenberg III
	 	 	
Title:
	 	Chairman of the Board, Chief Executive
	 	 	 	 	Officer and President

{Corporate Seal}

Attest

/s/ John G.
Blahnik

Name:  John G. Blahnik

Title:  Vice President and Treasurer

	 	 	 	 	 
	 	 	BANK ONE TRUST COMPANY, N. A.,
	 	 	as Trustee
	 	 	 	 	 
	 	 	
By:	 	/s/ Marla S. Roth
	 	 	 	 	

	 	 	
Name: 	 	Marla S. Roth
	 	 	
Title: 	 	Vice President

{Corporate Seal}

Attest

/s/ F. Henry Kleschen III

Name:  F. Henry Kleschen III

Title:  Vice President

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	STATE OF MICHIGAN	 	 	)
	 
	 	 	 	)	 ss.
	COUNTY OF OAKLAND	 	

	)

	

     On the          day of
              , 2003 before me personally came
                                  , to me known, who being by me duly sworn, did depose and
say that he/she resides at                                   , that he/she is the
                                   of Delphi Corporation, one of the corporations described
in and which executed the foregoing instrument; that he/she knows the seal of
said Corporation; that the seal affixed to said instrument is such Corporate
seal; that it was so affixed by authority of the Board of Directors of said
Corporation, and that he/she signed his/her name thereto by like authority.

{SEAL}

Notary Public

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	STATE OF                                    	 	

	)	

	 	 	

	)	 ss.

	COUNTY OF                                	 	

	)	

     On the          
day of                , 2003 before me personally came
                     , to me known, who being by me duly sworn, did depose and
say that he/she resides at                                           , that he/she is the
                                           of Bank One Trust Company, N.A., one of the corporations
described in and which executed the foregoing instrument; that he/she knows the
seal of said Corporation; that the seal affixed to said instrument is such
Corporate seal; that it was so affixed by authority of the Board of Directors
of said Corporation, and that he/she signed his/her name thereto by like
authority.

{SEAL}

Notary Public

75

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