Document:

<PAGE>

                                                                     Exhibit 4.1

                                                                  EXECUTION COPY

                     MERRILL LYNCH MORTGAGE INVESTORS, INC.,
                                    Depositor

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

                                       and

                      HSBC BANK USA, NATIONAL ASSOCIATION,
                                     Trustee

                         POOLING AND SERVICING AGREEMENT

                           Dated as of October 1, 2007

                                   ----------

            Mortgage Pass-Through Certificates, MANA Series 2007-OAR5

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            PAGE
                                                                            ----
<S>                                                                         <C>
ARTICLE I      DEFINITIONS...............................................      5

   Section 1.02    Accounting............................................     44

ARTICLE II     CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF
               CERTIFICATES..............................................     44

   Section 2.01    Conveyance of Mortgage Loans to Trustee...............     44
   Section 2.02    Acceptance of Mortgage Loans by Trustee...............     48
   Section 2.03    Assignment of Interest in the Mortgage Loan Purchase
                   Agreement.............................................     50
   Section 2.04    Substitution of Mortgage Loans........................     51
   Section 2.05    Issuance of Certificates..............................     53
   Section 2.06    Representations and Warranties Concerning the
                   Depositor.............................................     53
   Section 2.07    Representations and Warranties Concerning the Master
                   Servicer and Securities Administrator.................     55

ARTICLE III    ADMINISTRATION AND SERVICING OF MORTGAGE LOANS............     56

   Section 3.01    Master Servicer.......................................     56
   Section 3.02    REMIC-Related Covenants...............................     57
   Section 3.03    Monitoring of Servicers...............................     57
   Section 3.04    Fidelity Bond.........................................     58
   Section 3.05    Power to Act; Procedures..............................     58
   Section 3.06    Due-on-Sale Clauses; Assumption Agreements............     59
   Section 3.07    Release of Mortgage Files.............................     59
   Section 3.08    Documents, Records and Funds in Possession of Master
                   Servicer To Be Held for Trustee.......................     60
   Section 3.09    Standard Hazard Insurance and Flood Insurance
                   Policies..............................................     61
   Section 3.10    Presentment of Claims and Collection of Proceeds......     62
   Section 3.11    Maintenance of the Primary Mortgage Insurance
                   Policies..............................................     62
   Section 3.12    Trustee to Retain Possession of Certain Insurance
                   Policies and Documents................................     62
   Section 3.13    Realization Upon Defaulted Mortgage Loans.............     63
   Section 3.14    Compensation for the Master Servicer..................     63
   Section 3.15    REO Property..........................................     63
   Section 3.16    Annual Statement as to Compliance.....................     64
</TABLE>

                                       -i-

<PAGE>

                                TABLE OF CONTENTS
                                   (continued)

<TABLE>
<CAPTION>
                                                                            PAGE
                                                                            ----
<S>                                                                         <C>
   Section 3.17    Reports on Assessment of Compliance and Attestation...     65
   Section 3.18    Periodic Filings......................................     67
   Section 3.19    Compliance with Regulation AB.........................     74
   Section 3.20    Servicing Rights Owner................................     75

ARTICLE IV     ACCOUNTS..................................................     75

   Section 4.01    Protected Accounts....................................     75
   Section 4.02    Master Servicer Collection Account....................     77
   Section 4.03    Permitted Withdrawals and Transfers from the Master
                   Servicer Collection Account...........................     78
   Section 4.04    Distribution Account..................................     78
   Section 4.05    Permitted Withdrawals and Transfers from the
                   Distribution Account..................................     79

ARTICLE V      CERTIFICATES..............................................     81

   Section 5.01    The Certificates......................................     81
   Section 5.02    Certificate Register; Registration of Transfer and
                   Exchange of Certificates..............................     81
   Section 5.03    Mutilated, Destroyed, Lost or Stolen Certificates.....     86
   Section 5.04    Persons Deemed Owners.................................     86
   Section 5.05    Access to List of Certificateholders' Names and
                   Addresses.............................................     86
   Section 5.06    Book-Entry Certificates...............................     87
   Section 5.07    Notices to Depository.................................     87
   Section 5.08    Definitive Certificates...............................     88
   Section 5.09    Maintenance of Office or Agency.......................     88

ARTICLE VI     PAYMENTS TO CERTIFICATEHOLDERS............................     88

   Section 6.01    Distributions on the Certificates.....................     88
   Section 6.02    Allocation of Losses..................................     93
   Section 6.03    Payments..............................................     94
   Section 6.04    Statements to Certificateholders......................     95
   Section 6.05    Monthly Advances......................................     97
   Section 6.06    Compensating Interest Payments........................     97
</TABLE>

                                      -ii-

<PAGE>

                                TABLE OF CONTENTS
                                   (continued)

<TABLE>
<CAPTION>
                                                                            PAGE
                                                                            ----
<S>                                                                         <C>
ARTICLE VII    THE MASTER SERVICER AND THE DEPOSITOR.....................     98

   Section 7.01    Liabilities of the Master Servicer....................     98
   Section 7.02    Merger or Consolidation of the Master Servicer........     98
   Section 7.03    Indemnification from the Master Servicer and the
                   Depositor.............................................     98
   Section 7.04    Limitations on Liability of the Master Servicer and
                   Others................................................     99
   Section 7.05    Master Servicer Not to Resign.........................    100
   Section 7.06    Successor Master Servicer.............................    100
   Section 7.07    Sale and Assignment of Master Servicing...............    100

ARTICLE VIII   DEFAULT...................................................    101

   Section 8.01    Events of Default.....................................    101
   Section 8.02    Trustee to Act; Appointment of Successor..............    102
   Section 8.03    Notification to Certificateholders....................    104
   Section 8.04    Waiver of Defaults....................................    104
   Section 8.05    List of Certificateholders............................    104

ARTICLE IX     CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR...    104

   Section 9.01    Duties of Trustee.....................................    104
   Section 9.02    Certain Matters Affecting the Trustee and the
                   Securities Administrator..............................    107
   Section 9.03    Trustee and Securities Administrator Not Liable for
                   Certificates or Mortgage Loans........................    108
   Section 9.04    Trustee and Securities Administrator May Own
                   Certificates..........................................    109
   Section 9.05    Trustee's and Securities Administrator's Fees and
                   Expenses..............................................    109
   Section 9.06    Eligibility Requirements for Trustee and Securities
                   Administrator.........................................    110
   Section 9.07    Insurance.............................................    111
   Section 9.08    Resignation and Removal of the Trustee and Securities
                   Administrator.........................................    111
   Section 9.09    Successor Trustee and Successor Securities
                   Administrator.........................................    112
   Section 9.10    Merger or Consolidation of Trustee or Securities
                   Administrator.........................................    112
   Section 9.11    Appointment of Co-Trustee or Separate Trustee.........    112
</TABLE>

                                      -iii-

<PAGE>

                                TABLE OF CONTENTS
                                   (continued)

<TABLE>
<CAPTION>
                                                                            PAGE
                                                                            ----
<S>                                                                         <C>
   Section 9.12    Federal Information Returns and Reports to
                   Certificateholders; REMIC Administration..............    114

ARTICLE X      TERMINATION...............................................    118

   Section 10.01   Termination upon Liquidation or Repurchase of all
                   Mortgage Loans........................................    118
   Section 10.02   Final Distribution on the Certificates................    119
   Section 10.03   Additional Termination Requirements...................    120

ARTICLE XI     MISCELLANEOUS PROVISIONS..................................    121

   Section 11.01   Intent of Parties.....................................    121
   Section 11.02   Amendment.............................................    121
   Section 11.03   Recordation of Agreement..............................    123
   Section 11.04   Limitation on Rights of Certificateholders............    123
   Section 11.05   Acts of Certificateholders............................    124
   Section 11.06   Governing Law.........................................    125
   Section 11.07   Notices...............................................    125
   Section 11.08   Severability of Provisions............................    125
   Section 11.09   Successors and Assigns................................    125
   Section 11.10   Article and Section Headings..........................    125
   Section 11.11   Counterparts..........................................    126
   Section 11.12   Notice to Rating Agencies.............................    126
   Section 11.13   Third Party Rights....................................    126

ARTICLE XII    REMIC ADMINISTRATION......................................    126

   Section 12.01   [Reserved]............................................    126
   Section 12.02   Prohibited Transactions and Activities................    126
   Section 12.03   Indemnification with Respect to Prohibited
                   Transactions or Loss of REMIC Status..................    127
   Section 12.04   REO Property..........................................    127
</TABLE>

                                      -iv-

<PAGE>

EXHIBITS

Exhibit A-1   -   Form of Class A and Class M Certificates
Exhibit A-2   -   Form of Class B Certificates
Exhibit A-3   -   Form of Class A-R Certificate
Exhibit A-4   -   Form of Class P Certificate
Exhibit A-5   -   Form of Class X Certificates
Exhibit B     -   Mortgage Loan Schedule
Exhibit C     -   [Reserved]
Exhibit D     -   Request for Release of Documents
Exhibit E-1   -   Form of Transferee's Letter and Affidavit
Exhibit E-2   -   Form of Transferor Certificate
Exhibit F-1   -   Form of Transferor Representation Letter
Exhibit F-2   -   Form of Investor Representation Letter (non-Rule 144A)
Exhibit F-3   -   Form of Rule 144A Letter
Exhibit F-4   -   Form of Middleman Representation Letter
Exhibit G     -   Form of Custodial Agreement
Exhibit H     -   [Reserved]
Exhibit I     -   Countrywide Assignment Agreement
Exhibit J     -   Mortgage Loan Purchase Agreement
Exhibit K     -   Servicing Criteria To Be Addressed in Assessment of Compliance
Exhibit L     -   Form of Sarbanes-Oxley Certification
Exhibit M     -   Form of Back-up Sarbanes-Oxley Certification
Exhibit N-1   -   CMC Servicing Agreement
Exhibit N-2   -   Countrywide Servicing Agreement
Exhibit N-3   -   HLS Servicing Agreement
Exhibit N-4   -   Wilshire Servicing Agreement
Exhibit O     -   Additional Disclosure Notification
Exhibit P     -   Form of Item 1123 Certification of Servicer
Exhibit Q-1   -   Additional Form 10-D Disclosure
Exhibit Q-2   -   Additional Form 10-K Disclosure
Exhibit Q-3   -   Form 8-K Disclosure Information

SCHEDULE I    -   Prepayment Charge Mortgage Loans

                                       -v-
<PAGE>

                         POOLING AND SERVICING AGREEMENT

     This Pooling and Servicing Agreement is dated as of October 1, 2007 (the
"Agreement"), among MERRILL LYNCH MORTGAGE INVESTORS, INC., as depositor (the
"Depositor"), WELLS FARGO BANK, N.A., as master servicer (in such capacity, the
"Master Servicer") and as securities administrator (in such capacity, the
"Securities Administrator") and HSBC BANK USA, NATIONAL ASSOCIATION, as trustee
(the "Trustee").

                              PRELIMINARY STATEMENT

     The Depositor has acquired the Mortgage Loans from the Seller and at the
Closing Date is the owner of the Mortgage Loans and the other property being
conveyed by the Depositor to the Trustee hereunder for inclusion in the Trust
Fund. On the Closing Date, the Depositor will acquire the Certificates from the
Securities Administrator as consideration for the Depositor's transfer to the
Trust Fund of the Mortgage Loans and the other property constituting the Trust
Fund. The Depositor has duly authorized the execution and delivery of this
Agreement to provide for the conveyance to the Trustee of the Mortgage Loans and
the other property constituting the Trust Fund. All covenants and agreements
made by the Seller in the Mortgage Loan Purchase Agreement and in this Agreement
and all covenants and agreements made by the Depositor, the Trustee, the
Securities Administrator and the Master Servicer 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. The Depositor, the
Trustee, the Securities Administrator and the Master Servicer are entering into
this Agreement, and the Trustee is accepting the Trust Fund created hereby, for
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged.

     As provided herein, the Securities Administrator shall elect that the Trust
Fund be treated for federal income tax purposes as consisting of (i) two real
estate mortgage investment conduits (each a "REMIC" or, in the alternative,
"REMIC 1" and the "Upper Tier REMIC," respectively) in a tiered structure, (ii)
the right to receive payments distributable to the Class P Certificates and
(iii) the grantor trust described in Section 9.12 hereof. The Certificates,
other than the Class A-R and Class P Certificates, shall represent ownership of
regular interests in the Upper Tier REMIC. The Class X Certificates shall also
represent certain non-REMIC rights described in Section 9.12 hereof. The Class
A-R Certificate represents the sole class of residual interest in each of REMIC
1 and the Upper Tier REMIC.

     The Upper Tier REMIC shall hold as its assets the several classes of
uncertificated REMIC 1 Regular Interests. REMIC 1 shall hold as its assets the
property of the Trust Fund other than the REMIC 1 Interests and other than the
right to receive payments distributable to the Class P Certificates.

     Each Upper Tier REMIC Regular Interest is hereby designated as a regular
interest in the Upper Tier REMIC for purposes of the REMIC Provisions. Each
REMIC 1 Regular Interest is hereby designated as a regular interest in REMIC 1
for purposes of the REMIC Provisions.

     The Class LT1-R Interest is hereby designated as the sole class of residual
interest in REMIC 1 for purposes of the REMIC Provisions. The Class A-R
Certificate, other than the

                                      -1-

<PAGE>

portion thereof representing the right to receive payments in respect of the
Class LT1-R Interest, is hereby designated as the sole class of residual
interest in the Upper Tier REMIC for purposes of the REMIC provisions. The Class
A-R Certificate will also represent the Class LT1-R Interest.

THE REMIC 1 INTERESTS

     The following table sets forth (or describes) the class designation,
interest rate, initial principal balance and Classes of Corresponding
Certificates for each class of REMIC 1 Interests:

<TABLE>
<CAPTION>
          Initial                Class(es) of
         Principal   Interest   Corresponding
Class     Balance      Rate      Certificates
-----    ---------   --------   -------------
<S>      <C>         <C>        <C>
LT1A-1      (1)         (3)        A-1, A-R
LT1A-2      (1)         (3)          A-2
LT1M-1      (1)         (3)          M-1
LT1M-2      (1)         (3)          M-2
LT1M-3      (1)         (3)          M-3
LT1B-1      (1)         (3)          B-1
LT1B-2      (1)         (3)          B-2
LT1B-3      (1)         (3)          B-3
LT1Z        (2)         (3)          N/A
LT1-R       (4)         (4)          N/A
</TABLE>

(1)  The initial principal balance of each of these REMIC 1 Regular Interests
     shall equal 1/2 of the initial Certificate Principal Balance of its
     Corresponding Certificates.

(2)  The initial principal balance of the Class LT1Z Interest shall equal the
     excess of (i) the aggregate Outstanding Principal Balance of the Mortgage
     Loans as of the Cut-off Date over (ii) the initial principal balance of the
     REMIC 1 Marker Interests.

(3)  For each Distribution Date, the interest rate for each of the REMIC 1
     Regular Interests shall be a per annum rate equal to the Net WAC.

(4)  The Class LTR Interest shall have no principal amount and shall bear no
     interest.

THE UPPER TIER REMIC INTERESTS

<TABLE>
<CAPTION>
                                   Initial
                                  Principal   Interest
Class                              Balance      Rate
-----                             ---------   --------
<S>                               <C>         <C>
Class A-1 Certificates               (1)         (2)
Class A-2 Certificates               (1)         (2)
Class M-1 Certificates               (1)         (2)
Class M-2 Certificates               (1)         (2)
Class M-3 Certificates               (1)         (2)
Class B-1 Certificates               (1)         (2)
Class B-2 Certificates               (1)         (2)
</TABLE>

                                      -2-

<PAGE>

<TABLE>
<S>                               <C>         <C>
Class B-3 Certificates               (1)         (2)
Uncertificated Class X Interest      (3)         (3)
Residual Interest                    (4)         (4)
</TABLE>

(1)  The initial principal balance of each of these Upper Tier REMIC Regular
     Interests shall be as set forth in this Agreement.

(2)  The interest rates on each of these Upper Tier REMIC Regular Interests
     shall be as set forth in this Agreement.

(3)  The Uncertificated Class X Interest shall have an initial principal balance
     equal to the initial Certificate Principal Balance of the Class X
     Certificates. The Uncertificated Class X Interest shall accrue interest on
     a notional balance set forth in the definition of Class X Current Interest
     at a rate equal to the Class X Distributable Interest Rate. The
     Uncertificated Class X Interest shall be represented by the Class X
     Certificates.

(4)  The Residual Interest shall have an initial principal balance equal to the
     initial Certificate Principal Balance of the Class A-R Certificates and an
     interest rate equal to the Pass-Through Rate for the Class A-R
     Certificates. The Residual Interest shall be represented by the Class A-R
     Certificates.

THE CERTIFICATES

     The following table sets forth (or describes) the Class designation,
Pass-Through Rate, initial Certificate Principal Balance or initial notional
amount, and minimum denomination for each Class of Certificates comprising
interests in the Trust Fund created hereunder.

<TABLE>
<CAPTION>
                                                                  Initial        Minimum
                Related Class or Classes of                     Certificate   Denominations
   Class        interests in the Upper Tier     Pass-Through     Principal    or Percentage
Designation                REMIC                    Rate          Balance        Interest
-----------   -------------------------------   ------------   ------------   -------------
<S>           <C>                               <C>            <C>            <C>
 Class A-1               Class A-1                  (1)        $410,922,800     $25,000
 Class A-2               Class A-2                  (1)        $102,731,000     $25,000
 Class X      Uncertificated Class X Interest       (2)        $        100     $25,000
 Class A-R           Residual Interest              (1)        $        100         100%
 Class M-1               Class M-1                  (1)        $ 18,355,000     $25,000
 Class M-2               Class M-2                  (1)        $ 11,013,000     $25,000
 Class M-3               Class M-3                  (1)        $  4,518,000     $25,000
 Class B-1               Class B-1                  (1)        $  5,648,000     $25,000
 Class B-2               Class B-2                  (1)        $  5,365,000     $25,000
 Class B-3               Class B-3                  (1)        $  6,212,703     $25,000
 Class P                  N/A(3)                   N/A(3)            N/A(3)         100%
</TABLE>

(1)  The Pass-Through Rate with respect to any Distribution Date (and the
     related Interest Accrual Period) for the Certificates (other than the Class
     X and Class P Certificates) will be the Net WAC less 0.800% per annum.

(2)  The Pass-Through Rate of the Class X-IO Component Notional Amount will
     equal 0.800% per annum, calculated on the basis of a 360 day year divided
     into twelve 30 day months. The initial Class X-IO Component Notional Amount
     is approximately $564,765,703. The Pass-Through Rate of the Class X-PO
     Component Principal Balance will equal the Net WAC less 0.800% per annum.
     The initial Class X-PO Component Principal Balance is $100.

(3)  The Class P Certificates shall not have minimum dollar denominations or
     Certificate Principal Balance and shall be issued in a minimum percentage
     interest of 10% and an aggregate percentage interest of 100%. The Class P
     Certificates will be entitled to receive Prepayment Charges on the
     Prepayment Charge Mortgage Loans outside of the REMICs and will not
     represent an interest in either the Upper Tier REMIC or REMIC 1.

     As of the Cut-off Date, the Mortgage Loans had an aggregate Stated
Principal Balance of $564,765,703.01.

                                      -3-

<PAGE>

     In consideration of the mutual agreements herein contained, the Depositor,
the Trustee, Securities Administrator and the Master Servicer hereby agree as
follows:

                                      -4-

<PAGE>

                                   ARTICLE I
                                  DEFINITIONS

     Whenever used in this Agreement, the following words and phrases, unless
otherwise expressly provided or unless the context otherwise requires, shall
have the meanings specified in this Article.

     Accepted Master Servicing Practices: With respect to any Mortgage Loan, as
applicable, either (x) those customary mortgage master servicing practices of
prudent mortgage servicing institutions that master service mortgage loans of
the same type and quality as such Mortgage Loan in the jurisdiction where the
related Mortgaged Property is located, to the extent applicable to the Trustee
or the Master Servicer (except in its capacity as successor to a Servicer), or
(y) as provided in the applicable Servicing Agreement, to the extent applicable
to any Servicer, but in no event below the standard set forth in clause (x).

     Account: The Master Servicer Collection Account, Distribution Account and
any Protected Account as the context may require.

     Accountant's Attestation: As defined in Section 3.17.

     Accrued Certificate Interest: (A) With respect to each Class of
Certificates, other than the Class X Certificates, an amount equal to the
interest accrued during the related Interest Accrual Period on the Certificate
Principal Balance thereof at the applicable Pass-Through Rate and (B) with
respect to the Class X Certificates, the sum of (x) the interest accrued during
the related Interest Accrual Period on the Class X-IO Component Notional Amount
at the applicable Pass-Through Rate and (y) the interest accrued during the
related Interest Accrual Period on the Certificate Principal Balance of the
Class X-PO Component Principal Balance at the applicable Pass-Through Rate.
Accrued Certificate Interest on any Class of Certificates will be reduced by the
amount of (i) Prepayment Interest Shortfalls (to the extent not offset by the
related Servicer or Master Servicer with a Compensating Interest Payment as
provided in Section 6.06), (ii) the interest portion of Realized Losses
allocated to such Class of Certificates pursuant to Section 6.02 and (iii) any
other interest shortfalls not covered by the subordination provided by the Class
M Certificates and Class B Certificates, including shortfalls as a result of the
Relief Act or similar legislation or regulations, with all such reductions
allocated among all of the Certificates in proportion to their respective
amounts of Accrued Certificate Interest payable on such Distribution Date which
would have resulted absent such reductions; provided, however, that shortfalls
due to the application of Negative Amortization shall not constitute interest
shortfalls for purposes of this definition.

     Additional Disclosure Notification: As defined in Section 3.18(b).

     Additional Form 10-D Disclosure: As defined in Section 3.18(e).

     Additional Form 10-K Disclosure: As defined in Section 3.18(h).

     Adverse REMIC Event: As defined in Section 9.12(g).

                                      -5-

<PAGE>

     Affiliate: As to any Person, any other Person controlling, controlled by or
under common control with such Person. "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. "Controlled" and
"Controlling" have meanings correlative to the foregoing. The Master Servicer
may conclusively presume that a Person is not an Affiliate of another Person
unless a Responsible Officer of the Master Servicer has actual knowledge to the
contrary.

     Agreement: This Pooling and Servicing Agreement, including the exhibits
hereto, and all amendments hereof and supplements hereto.

     Applicable Credit Rating: For any long-term deposit or security, a credit
rating of "AAA" in the case of S&P, "P-1" in the case of Moody's or "AAA" in the
case of Fitch. For any short-term deposit or security, a rating of "A-l+" in the
case of S&P or "A-1+" in the case of Fitch. For any short-term deposit or
security, a rating of "A-l+" in the case of S&P or "P-1" in the case of Moody's.

     Applicable Credit Support Percentage: With respect to any Class of
Subordinate Certificates, the sum of the related Class Subordination Percentages
of such Class and all Classes of Subordinate Certificates which have a lower
relative priority of payment than such Class.

     Appraised Value: For any Mortgaged Property related to a Mortgage Loan, the
amount set forth as the appraised value of such Mortgaged Property in an
appraisal made for the mortgage originator in connection with its origination of
the related Mortgage Loan.

     Assessment of Compliance: As defined in Section 3.17.

     Assignment: An assignment of the Mortgage, notice of transfer or equivalent
instrument, in recordable form, sufficient under the laws of the jurisdiction
wherein the related Mortgaged Property is located to reflect of record the sale
of the Mortgage Loan to the Trustee for the benefit of Certificateholders, which
assignment, notice of transfer or equivalent instrument may be in the form of
one or more blanket assignments covering Mortgages secured by Mortgaged
Properties located in the same county, if permitted by law and accompanied by an
Opinion of Counsel to that effect.

     Assumed Final Distribution Date: For all Classes of Certificates, October
25, 2047, or if such day is not a Business Day, the next succeeding Business
Day.

     Auction: The one-time auction conducted by the Securities Administrator, as
described in Section 10.01(b) hereof.

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

                                      -6-

<PAGE>

Servicer or the Master Servicer in respect of related Prepayment Interest
Shortfalls for such Distribution Date, (e) the aggregate of any related Monthly
Advances made by the related Servicer or the Master Servicer for such
Distribution Date and (f) Prepayment Charges received with respect to the
Mortgage Loans, over (ii) the sum of (a) related amounts reimbursable or payable
to the related Servicer or the Master Servicer pursuant to Sections 4.03 and
4.05, (b) related amounts deposited in the Master Servicer Collection Account or
the Distribution Account, as the case may be, in error and (c) any Extraordinary
Trust Fund Expenses.

     Average Loss Severity: With respect to any period, the fraction obtained by
dividing (x) the aggregate amount of Realized Losses for the related Mortgage
Loans for such period by (y) the number of related Mortgage Loans which had
Realized Losses for such period.

     Back-Up Certification: As defined in Section 3.18(k).

     Bankruptcy Code: The United States Bankruptcy Code, as amended as codified
in 11 U.S.C. Sections 101-1330.

     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 hereof). On the Closing Date, the
Certificates (other than the Class A-R Certificate) shall be Book-Entry
Certificates.

     Business Day: Either (a) any day other than (i) a Saturday or a Sunday, or
(ii) a day on which the New York Stock Exchange or Federal Reserve is closed or
on which banking institutions in the jurisdiction in which the Trustee, the
Master Servicer, any Servicer or the Securities Administrator are authorized or
obligated by law or executive order to be closed or (b) with respect to each
Servicer, as defined in the applicable Servicing Agreement.

     Certificate: Any mortgage pass-through certificate evidencing a beneficial
ownership interest in the Trust Fund signed and countersigned by the Securities
Administrator.

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

     Certificate Principal Balance: With respect to any Certificate as of any
date of determination, the Certificate Principal Balance of such Certificate on
the Distribution Date immediately prior to such date of determination, plus (i)
any Subsequent Recoveries added to the Certificate Principal Balance of such
Certificate pursuant to Section 6.01 and (ii) any Deferred Interest allocated to
such Certificate on previous Distribution Dates, and reduced by the aggregate of
(a) all distributions of principal made thereon on such immediately prior
Distribution Date and (b) without duplication of amounts described in clause (a)
above, reductions in the Certificate Principal Balance thereof in connection
with allocations thereto of Realized Losses on the Mortgage Loans and
Extraordinary Trust Fund Expenses on such immediately prior Distribution Date
(or, in the case of any date of determination up to and including the initial
Distribution Date, the initial Certificate Principal Balance of such
Certificate, as stated on the face thereof); provided, however, that the
Certificate Principal

                                      -7-

<PAGE>

Balance of each Subordinate Certificate of the Class of Subordinate Certificates
outstanding with the Lowest Priority at any given time shall be calculated to
equal the Percentage Interest evidenced by such Certificate multiplied by the
excess, if any, of (A) the then aggregate Stated Principal Balance of the
Mortgage Loans over (B) the then aggregate Certificate Principal Balance of all
other Classes of Certificates then outstanding.

     Certificate Register: The register maintained pursuant to Section 5.02
hereof.

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

     Certification Parties: As defined in Section 3.18(k).

     Certifying Person: As defined in Section 3.18(k).

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

     Class A Certificate: Any of the Class A-1, Class A-2 or Class A-R
Certificates as designated on the face thereof substantially in the form annexed
(other than the Class A-R Certificate) hereto as Exhibit A-1, executed by the
Securities Administrator and authenticated and delivered by the Securities
Administrator, representing the right to distributions as set forth herein and
therein.

     Class A-R Certificate: The Class A-R Certificate executed, authenticated
and delivered by the Securities Administrator substantially in the form annexed
hereto as Exhibit A-3 and evidencing the ownership of the Class LT1-R Interest
and the residual interest in the Upper Tier REMIC.

     Class A Certificateholder: Any Holder of a Class A Certificate.

     Class B Certificate: Any one of the Class B-1, Class B-2 or Class B-3
Certificates as designated on the face thereof substantially in the form annexed
hereto as Exhibit A-2, executed by the Securities Administrator and
authenticated and delivered by the Securities Administrator, representing the
right to distributions as set forth herein and therein.

     Class B Percentage: The Class B-1 Percentage, Class B-2 Percentage or Class
B-3 Percentage.

     Class B-1 Percentage: With respect to any Distribution Date, the lesser of
100% and a fraction, expressed as a percentage, the numerator of which is the
aggregate Certificate Principal Balance of the Class B-1 Certificates
immediately prior to such Distribution Date and the denominator of which is the
aggregate Stated Principal Balance of all of the Mortgage Loans (or related REO
Properties) immediately prior to such Distribution Date.

                                      -8-

<PAGE>

     Class B-2 Percentage: With respect to any Distribution Date, the lesser of
100% and a fraction, expressed as a percentage, the numerator of which is the
aggregate Certificate Principal Balance of the Class B-2 Certificates
immediately prior to such Distribution Date and the denominator of which is the
aggregate Stated Principal Balance of all of the Mortgage Loans (or related REO
Properties) immediately prior to such Distribution Date.

     Class B-3 Percentage: With respect to any Distribution Date, the lesser of
100% and a fraction, expressed as a percentage, the numerator of which is the
aggregate Certificate Principal Balance of the Class B-3 Certificates
immediately prior to such Distribution Date and the denominator of which is the
aggregate Stated Principal Balance of all of the Mortgage Loans (or related REO
Properties) immediately prior to such Distribution Date.

     Class M Certificate: Any one of the Class M-1, Class M-2 or Class M-3
Certificates as designated on the face thereof substantially in the form annexed
hereto as Exhibit A-1, executed by the Securities Administrator and
authenticated and delivered by the Securities Administrator, representing the
right to distributions as set forth herein and therein.

     Class M Percentage: The Class M-1 Percentage, Class M-2 Percentage or Class
M-3 Percentage.

     Class M-1 Percentage: With respect to any Distribution Date, the lesser of
100% and a fraction, expressed as a percentage, the numerator of which is the
aggregate Certificate Principal Balance of the Class M-1 Certificates
immediately prior to such date and the denominator of which is the aggregate
Stated Principal Balance of all of the Mortgage Loans (or related REO
Properties) immediately prior to such Distribution Date.

     Class M-2 Percentage: With respect to any Distribution Date, the lesser of
100% and a fraction, expressed as a percentage, the numerator of which is the
aggregate Certificate Principal Balance of the Class M-2 Certificates
immediately prior to such date and the denominator of which is the aggregate
Stated Principal Balance of all of the Mortgage Loans (or related REO
Properties) immediately prior to such Distribution Date.

     Class M-3 Percentage: With respect to any Distribution Date, the lesser of
100% and a fraction, expressed as a percentage, the numerator of which is the
aggregate Certificate Principal Balance of the Class M-3 Certificates
immediately prior to such date and the denominator of which is the aggregate
Stated Principal Balance of all of the Mortgage Loans (or related REO
Properties) immediately prior to such Distribution Date.

     Class P Certificate: Any one of the Class P Certificates as designated on
the face thereof substantially in the form annexed hereto as Exhibit A-4,
executed by the Securities Administrator and authenticated and delivered by the
Securities Administrator representing the right to distributions of Prepayment
Charges received on the Prepayment Charge Mortgage Loans as set forth herein.

     Class Subordination Percentage: With respect to any Distribution Date and
each Class of Subordinate Certificates, the fraction (expressed as a percentage)
the numerator of which is the Certificate Principal Balance of such Class of
Subordinate Certificates immediately prior to such

                                      -9-

<PAGE>

Distribution Date and the denominator of which is the aggregate of the
Certificate Principal Balances of all Classes of Certificates immediately prior
to such Distribution Date.

     Class X Certificate: Any one of the Class X Certificates, as designated on
the face thereof substantially in the form annexed hereto as Exhibit A-5,
executed by the Securities Administrator and authenticated and delivered by the
Securities Administrator, representing the right to distributions as set forth
herein and therein.

     Class X Current Interest: As of any Distribution Date, the interest accrued
during the related Interest Accrual Period at the Class X Distributable Interest
Rate on a notional amount equal to the aggregate principal balance of the REMIC
1 Regular Interests immediately prior to such Distribution Date.

     Class X Distributable Interest Rate: The excess, if any, of (a) the
weighted average of the interest rates on the REMIC 1 Regular Interests over (b)
two times the weighted average of the interest rates on the REMIC 1 Regular
Interests (treating for purposes of this clause (b) the interest rate on each of
the REMIC 1 Marker Interests as being subject to a cap equal to the interest
rate of the Corresponding Certificates and treating the interest rate on the
Class LT1Z 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 REMIC 1 Regular Interests immediately prior to any date of
determination.

     Class X-IO Component Notional Amount: The interest-only component of the
Class X Certificates which, as of any Determination Date, is equal to the Stated
Principal Balance of the Mortgage Loans.

     Class X-PO Component Principal Balance: The principal and interest
component of the Class X Certificates, which is equal to the Certificate
Principal Balance of the Class X Certificates.

     Closing Date: October 31, 2007.

     CMC: Central Mortgage Company or any successor thereto.

     CMC Loans: The Mortgage Loans serviced by CMC pursuant to the CMC Servicing
Agreement.

     CMC Servicing Agreement: The Servicing Agreement, dated as of October 1,
2007, among CMC, the Depositor and the Master Servicer and acknowledged by the
Securities Administrator and the Trustee.

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

     Commission: The Securities and Exchange Commission.

     Compensating Interest Payment: As defined in Section 6.06.

                                      -10-
<PAGE>

     Cooperative: A corporation that has been formed for the purpose of
cooperative apartment ownership.

     Cooperative Assets: Shares issued by Cooperatives, the related Cooperative
Lease and any other collateral securing the Cooperative Loans.

     Cooperative Lease: With respect to a Cooperative Loan, the proprietary
lease or occupancy agreement with respect to the cooperative apartment occupied
by the Mortgagor and relating to the related Cooperative Assets, which lease or
agreement confers an exclusive right to the holder of such Cooperative Assets to
occupy such apartment.

     Cooperative Loan: The indebtedness of a Mortgagor evidenced by a Mortgage
Note which is secured by Cooperative Assets and which is being sold to the
Depositor pursuant to this Agreement, the Mortgage Loans so sold being
identified in the Mortgage Loan Schedule.

     Cooperative Stock: With respect to a Cooperative Loan, the single
outstanding class of stock, partnership interest or other ownership instrument
in the related Cooperative.

     Corporate Trust Office: With respect to the Trustee, the principal
corporate trust office of the Trustee at which at any particular time its
corporate trust business in connection with this Agreement shall be
administered, which office at the date of the execution of this instrument is
located at HSBC Bank USA, National Association, 452 Fifth Avenue, New York, New
York 10018, Attention: Issuer Services - Merrill Lynch Mortgage Investors, Inc.,
MANA Series 2007-OAR5, or at such other address as the Trustee may designate
from time to time by notice to the Certificateholders, the Depositor and the
Master Servicer and with respect to the Securities Administrator, for
Certificate transfer purposes, Wells Fargo Center, Sixth Street and Marquette
Avenue, Minneapolis, Minnesota 55479, Attn: Corporate Trust Services - MANA
2007-OAR5, and for all other purposes, 9062 Old Annapolis Road, Columbia,
Maryland, 21045, Attn: Corporate Trust Services - MANA 2007-OAR5.

     Corresponding Certificates: With respect to each class of REMIC 1 Marker
Interests, the Class or Classes of Certificates listed on the same row in the
table entitled "The REMIC 1 Interests" in the Preliminary Statement.

     Countrywide: Countrywide Home Loans Servicing LP or any successor thereto.

     Countrywide Assignment Agreement: The Assignment, Assumption and
Recognition Agreement, dated as of October 1, 2007, among the Seller, the
Depositor, Countrywide and Countrywide Home Loans, Inc., pursuant to which the
Countrywide Servicing Agreement (other than the rights to enforce the
representations and warranties with respect to the Countrywide Loans) were
assigned to the Depositor for the benefit of the Certificateholders.

     Countrywide Loans: The Mortgage Loans serviced by Countrywide pursuant to
the Countrywide Servicing Agreement.

     Countrywide Servicing Agreement: The Master Mortgage Loan Purchase and
Servicing Agreement dated as of February 1, 2007, between Countrywide Home
Loans, Inc. and MLML.

                                      -11-

<PAGE>

     Credit Support Depletion Date: The first Distribution Date on which the
aggregate Certificate Principal Balance of the Subordinate Certificates is
reduced to zero.

     Curtailment: Any Principal Prepayment made by a Mortgagor which is not a
Principal Prepayment in Full.

     Custodial Agreement: An agreement, dated as of the Closing Date among the
Depositor, the Master Servicer, the Securities Administrator, the Trustee and
the Custodian in substantially the form of Exhibit G hereto.

     Custodian: Wells Fargo Bank, N.A., including any successors in interest, or
any successor custodian appointed pursuant to the provisions hereof and of the
Custodial Agreement.

     Cut-off Date: October 1, 2007.

     Debt Service Reduction: Any reduction of the Monthly Payments which a
Mortgagor is obligated to pay with respect to a Mortgage Loan as a result of any
proceeding under the Bankruptcy Code or any other similar state law or other
proceeding.

     Defective Mortgage Loan: A Mortgage Loan replaced or to be replaced by one
or more Substitute Mortgage Loans.

     Deferred Interest: Any interest shortfall resulting from Net Negative
Amortization.

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

     Definitive Certificates: As defined in Section 5.06.

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

     Depository: The Depository Trust Company, the nominee of which is Cede &
Co., or any successor thereto.

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

     Designated Depository Institution: A depository institution (commercial
bank, federal savings bank, mutual savings bank or savings and loan association)
or trust company (which may include the Trustee), the deposits of which are
fully insured by the FDIC to the extent provided by law.

     Determination Date: With respect to each Mortgage Loan, the Determination
Date as defined in the related Servicing Agreement.

                                      -12-

<PAGE>

     Disqualified Organization: A "disqualified organization" as defined in
Section 860E(e)(5) of the Code.

     Distribution Account: The trust account or accounts created and maintained
pursuant to Section 4.04, which shall be denominated "Wells Fargo Bank, National
Association, as Securities Administrator for HSBC Bank USA, National
Association, as Trustee f/b/o holders of Merrill Lynch Mortgage Investors, Inc.,
Mortgage Pass-Through Certificates, MANA Series 2007-OAR5 - Distribution
Account." The Distribution Account shall be an Eligible Account.

     Distribution Account Deposit Date: The Business Day prior to each
Distribution Date.

     Distribution Date: The 25th day of any month, beginning in November 2007,
or, if such 25th day is not a Business Day, the Business Day immediately
following.

     Due Date: With respect to each Mortgage Loan, the date in each month on
which its Monthly Payment is due if such due date is the first day of a month
and otherwise is deemed to be the first day of the following month or such other
date specified in the related Servicing Agreement.

     Due Period: With respect to any Distribution Date and each Mortgage Loan,
the period commencing on the second day of the month preceding the month in
which the Distribution Date occurs and ending at the close of business on the
first day of the month in which the Distribution Date occurs.

     Eligible Account: Any of (i) a segregated account maintained with a federal
or state chartered depository institution (A) the short-term obligations of
which are rated "A-1" or better by S&P, "S-1" by Fitch and "P-1" by Moody's at
the time of any deposit therein or (B) the long term unsecured debt obligations
of which are rated at least "AA-" by S&P (if so rated) if the deposits are to be
held in the account more than 30 days; following a downgrade, withdrawal, or
suspension of such institution's rating, each account should promptly (and in
any case within not more than 30 calendar days) be moved to a qualifying
institution or to one or more segregated trust accounts in the trust department
of such institution, if permitted, (ii) a segregated trust account or accounts
maintained with a federal or state chartered depository institution or trust
company with trust powers acting in its fiduciary capacity or (iii) a segregated
account or accounts of a depository institution acceptable to the Rating
Agencies (as evidenced by a letter from each Rating Agency that use of any such
account as the Distribution Account will not have an adverse effect on the
then-current ratings assigned to the Classes of the Certificates then rated by
the Rating Agencies). Eligible Accounts may bear interest.

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

     ERISA-Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that would satisfy the requirements of
Prohibited Transaction Exemption 90-29, Exemption Application No. D-8012, 55
Fed. Reg. 21459 (1990), as amended, granted to the Underwriter by the United
States Department of Labor (or any other applicable underwriter's exemption
granted by the United States Department of Labor), except, in relevant part, for
the requirement that the certificates have received a rating at the time of
acquisition that is in one of the two highest generic rating categories by at
least one of the Rating Agencies.

                                      -13-

<PAGE>

     ERISA Restricted Certificates: Any of the Class M, Class B or Class P
Certificates, and any other Certificate, as long as the acquisition and holding
of such Certificate is not covered by and exempt under an underwriter's
exemption.

     Event of Default: An event of default described in Section 8.01.

     Excess Liquidation Proceeds: To the extent that such amount is not required
by law to be paid to the related Mortgagor, the amount, if any, by which
Liquidation Proceeds with respect to a Liquidated Mortgage Loan exceed the sum
of (i) the Outstanding Principal Balance of such Mortgage Loan and accrued but
unpaid interest at the related Mortgage Interest Rate through the last day of
the month in which the related Liquidation Date occurs, plus (ii) related
Liquidation Expenses.

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

     Extraordinary Loss: Any Realized Loss or portion thereof caused by or
resulting from:

          (i) nuclear or chemical reaction or nuclear radiation or radioactive
     or chemical contamination, all whether controlled or uncontrolled and
     whether such loss be direct or indirect, proximate or remote;

          (ii) hostile or warlike action in time of peace or war, including
     action in hindering, combating or defending against an actual, impending or
     expected attack by any government or sovereign power, de jure or de facto,
     or by any authority maintaining or using military, naval or air forces, or
     by military, naval or air forces, or by an agent of any such government,
     power, authority or forces;

          (iii) any weapon of war employing atomic fission or radioactive forces
     whether in time of peace or war, and

          (iv) insurrection, rebellion, revolution, civil war, usurped power or
     action taken by governmental authority in hindering, combating or defending
     against such an occurrence, seizure or destruction under quarantine or
     customs regulations, confiscation by order of any government or public
     authority, or risks of contraband or illegal transactions or trade.

     Extraordinary Trust Fund Expenses: Any amounts reimbursable to the Master
Servicer or the Depositor pursuant to this Agreement, including but not limited
to Sections 4.03, 4.05 and 7.04, any amounts reimbursable to the Trustee and the
Securities Administrator from the Trust Fund pursuant to this Agreement,
including but not limited to Section 9.05, and any other costs, expenses,
liabilities and losses borne by the Trust Fund (exclusive of any cost, expense,
liability or loss that is specific to a particular Mortgage Loan or REO Property
and is taken into account in calculating a Realized Loss in respect thereof) for
which the Trust Fund has not and, in the reasonable good faith judgment of the
Securities Administrator, shall not, obtain reimbursement or indemnification
from any other Person.

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

                                      -14-

<PAGE>

     FDIC: Federal Deposit Insurance Corporation or any successor thereto.

     Final Certification: The certification substantially in the form of Exhibit
Two to the Custodial Agreement.

     Fitch: Fitch Ratings or its successor in interest.

     Forgiven Amount: Any amount of principal or delinquent interest that the
related Mortgagor is no longer required to pay as a result of any modification
by the related Servicer of the terms of the related Mortgage Note.

     Form 8-K Disclosure Information: As defined in Section 3.18(a).

     Freddie Mac: Freddie Mac, formerly the Federal Home Loan Mortgage
Corporation, or any successor thereto.

     Global Certificate: Any Private Certificate registered in the name of the
Depository or its nominee, beneficial interests in which are reflected on the
books of the Depository or on the books of a Person maintaining an account with
such Depository (directly or as an indirect participant in accordance with the
rules of such depository).

     Gross Margin: As to each Mortgage Loan, the fixed percentage set forth in
the related Mortgage Note and indicated on the Mortgage Loan Schedule which
percentage is added to the related Index on each Interest Adjustment Date to
determine (subject to rounding, the minimum and maximum Mortgage Interest Rate
and the Periodic Rate Cap) the Mortgage Interest Rate until the next Interest
Adjustment Date.

     Highest Priority: As of any date of determination, the Class of Subordinate
Certificates then outstanding with the earliest priority for payments pursuant
to Section 6.01, in the following order: Class M-1, Class M-2, Class M-3, Class
B-1, Class B-2 and Class B-3 Certificates.

     HLS: Home Loan Service, Inc. or any successor thereto.

     HLS Loans: The Mortgage Loans serviced by HLS pursuant to the HLS Servicing
Agreement.

     HLS Servicing Agreement: The Servicing Agreement, dated as of October 1,
2007, between HLS and the Depositor and the Master Servicer and acknowledged by
the Master Servicer and the Trustee.

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

     Independent: When used with respect to any specified Person, any such
Person who (a) is in fact independent of the Depositor, the Master Servicer and
their respective Affiliates, (b) does not have any direct financial interest in
or any material indirect financial interest in the Depositor or the Master
Servicer or any Affiliate thereof, and (c) is not connected with the

                                      -15-

<PAGE>

Depositor or the Master Servicer or any Affiliate thereof as an officer,
employee, promoter, underwriter, trustee, partner, director or Person performing
similar functions; provided, however, that a Person shall not fail to be
Independent of the Depositor or the Master Servicer or any Affiliate thereof
merely because such Person is the beneficial owner of 1% or less of any class of
securities issued by the Depositor or the Master Servicer or any Affiliate
thereof, as the case may be.

     Index: The index, if any, specified in a Mortgage Note by reference to
which the related Mortgage Interest Rate will be adjusted from time to time.

     Individual Certificate: Any Private Certificate registered in the name of
the Holder other than the Depository or its nominee.

     Initial Certification: The certification substantially in the form of
Exhibit One to the Custodial Agreement.

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

     Initial Optional Termination Date: The first Distribution Date following
the date on which the aggregate Stated Principal Balance of the Mortgage Loans
is less than 5% of the aggregate Stated Principal Balance of the Mortgage Loans
as of the Cut-off Date.

     Initial Subordinate Class Percentage: With respect to each Class of
Subordinate Certificates, an amount which is equal to the initial aggregate
Certificate Principal Balance of such Class of Subordinate Certificates divided
by the aggregate Stated Principal Balance of all the Mortgage Loans as of the
Cut-off Date as follows:

Class M-1: 3.25%
Class M-2: 1.95%
Class M-3: 0.80%
Class B-1: 1.00%
Class B-2: 0.95%
Class B-3: 1.10%

     Insurance Policy: With respect to any Mortgage Loan, any standard hazard
insurance policy, flood insurance policy or title insurance policy.

     Insurance Proceeds: Amounts paid by the insurer under any Insurance Policy
covering any Mortgage Loan or Mortgaged Property other than amounts required to
be paid over to the Mortgagor pursuant to law or the related Mortgage Note or
Security Instrument and other than amounts used to repair or restore the
Mortgaged Property or to reimburse insured expenses.

     Interest Accrual Period: With respect to each Distribution Date, for each
Class of Certificates, the calendar month preceding the month in which such
Distribution Date occurs.

     Interest Adjustment Date: With respect to a Mortgage Loan, the date, if
any, specified in the related Mortgage Note on which the Mortgage Interest Rate
is subject to adjustment.

                                      -16-

<PAGE>

     Investor Representation Letter: As defined in Section 5.02(b).

     Issuing Entity: Merrill Lynch Alternative Note Asset Trust, Series
2007-OAR5.

     Latest Possible Maturity Date: The Distribution Date in November 2047.

     Liquidated Mortgage Loan: Any defaulted Mortgage Loan (including any REO
Property) as to which the related Servicer has determined that all amounts it
expects to recover from or on account of such Mortgage Loan have been recovered.

     Liquidation Date: With respect to any Liquidated Mortgage Loan, the date on
which the related Servicer has certified that such Mortgage Loan has become a
Liquidated Mortgage Loan.

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

     Liquidation Proceeds: With respect to any Mortgage Loan, cash received in
connection with the liquidation of a defaulted Mortgage Loan, whether through
trustee's sale, foreclosure sale or otherwise, and amounts received through
Insurance Proceeds and condemnation proceeds.

     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
Original Value of the related Mortgaged Property.

     Lost Notes: The original Mortgage Notes that have been lost, as indicated
on the Mortgage Loan Schedule.

     Lower Priority: As of any date of determination and with respect to any
Class of Subordinate Certificates, any other Class of Subordinate Certificates
then outstanding with a later priority for payments pursuant to Section 6.01.

     Lower Tier Regular Interests: Any of the REMIC 1 Regular Interests.

     Lower Tier REMIC Interests: Any of the REMIC 1 Interests.

     Lowest Priority: As of any date of determination, the Class of Subordinate
Certificates then outstanding with the latest priority for payments pursuant to
Section 6.01, in the following order: Class B-3, Class B-2, Class B-1, Class
M-3, Class M-2 and Class M-1 Certificates.

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

                                      -17-

<PAGE>

     Master Servicer: Wells Fargo Bank, N.A. including any successors in
interest who meet the qualifications of the Servicing Agreements and this
Agreement, and any successor master servicer appointed hereunder.

     Master Servicer Collection Account: The trust account or accounts created
and maintained pursuant to Section 4.02, which shall be denominated "Wells Fargo
Bank, National Association as Master Servicer for HSBC Bank USA, National
Association, as Trustee f/b/o holders of Merrill Lynch Mortgage Investors, Inc.,
Mortgage Pass-Through Certificates, MANA Series 2007-OAR5 - Master Servicer
Collection Account." The Master Servicer Collection Account shall be an Eligible
Account.

     Master Servicing Compensation: The meaning specified in Section 3.14.

     Maximum Lifetime Mortgage Rate: The maximum level to which a Mortgage
Interest Rate can adjust in accordance with its terms, regardless of changes in
the applicable Index.

     Minimum Lifetime Mortgage Rate: The minimum level to which a Mortgage
Interest Rate can adjust in accordance with its terms, regardless of changes in
the applicable Index.

     MLML: Merrill Lynch Mortgage Lending, Inc., a Delaware corporation, or any
successor in interest.

     Monthly Advance: An advance of principal or interest required to be made by
the applicable Servicer pursuant to the related Servicing Agreement or the
Master Servicer pursuant to Section 6.05.

     Monthly Payment: With respect to any Mortgage Loan, the scheduled monthly
payment of principal and interest on such Mortgage Loan which is payable by the
related Mortgagor from time to time under the related Mortgage Note, determined:
(a) after giving effect to (i) any Deficient Valuation and/or Debt Service
Reduction with respect to such Mortgage Loan and (ii) any reduction in the
amount of interest collectible from the related Mortgagor pursuant to the Relief
Act; (b) without giving effect to any extension granted or agreed to by the
related Servicer pursuant to related Servicing Agreement; and (c) on the
assumption that all other amounts, if any, due under such Mortgage Loan are paid
when due.

     Monthly Principal: The principal portion of any Monthly Payment.

     Monthly Statement: The statement distributed to Certificateholders pursuant
to Section 6.04.

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

     Mortgage: The mortgage, deed of trust or other instrument creating a first
lien on, or first priority security interest in, a Mortgaged Property securing a
Mortgage Note.

     Mortgage File: The mortgage documents listed in Section 2.01(b) pertaining
to a particular Mortgage Loan and any additional documents required to be added
to the Mortgage File pursuant to this Agreement.

                                      -18-

<PAGE>

     Mortgage Insurance Premium Rate: The annual rate paid by a Servicer to a
mortgage insurance provider for any Mortgage Loan.

     Mortgage Interest Rate: The annual rate at which interest accrues from time
to time on any Mortgage Loan pursuant to the related Mortgage Note, which rate
is equal to the "Mortgage Interest Rate" set forth with respect thereto on the
Mortgage Loan Schedule.

     Mortgage Loan: A mortgage loan transferred and assigned to the Trustee
pursuant to Section 2.01 or Section 2.04 and held as a part of the Trust Fund,
as identified in the Mortgage Loan Schedule, including a mortgage loan the
property securing which has become an REO Property.

     Mortgage Loan Purchase Agreement: The Mortgage Loan Purchase Agreement
dated as of October 31, 2007, between the Seller and the Depositor, as
purchaser, and all amendments thereof and supplements thereto, attached hereto
as Exhibit J.

     Mortgage Loan Schedule: The schedule, attached hereto as Exhibit B with
respect to the Mortgage Loans and as amended from time to time to reflect the
repurchase or substitution of Mortgage Loans pursuant to this Agreement.

     Mortgage Note: The originally executed note or other evidence of the
indebtedness of a Mortgagor under the related Mortgage Loan.

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

     Mortgaged Property: Land and improvements securing the indebtedness of a
Mortgagor under the related Mortgage Loan or, in the case of REO Property, such
REO Property.

     Mortgagor: The obligor on a Mortgage Note.

     Negative Amortization: With respect to each Distribution Date, the amount
of interest on the Mortgage Loans that the related Mortgagors are not obligated
to pay as interest (and which shall be added to the Stated Principal Balance of
each such Mortgage Loan) due to the negative amortization feature of such
Mortgage Loans, in each case during the related Due Period.

     Negative Amortization Certificate: Any Certificate other than the Class P
Certificate.

     Net Liquidation Proceeds: As to any Liquidated Mortgage Loan, Liquidation
Proceeds net of (i) Liquidation Expenses which are payable therefrom by the
related Servicer or the Master Servicer in accordance with the related Servicing
Agreement or this Agreement and (ii) unreimbursed advances by the related
Servicer or the Master Servicer and Monthly Advances.

     Net Mortgage Rate: With respect to each Mortgage Loan, the Mortgage
Interest Rate in effect from time to time less the sum of (a) the Servicing Fee
Rate (expressed as a per annum rate) and (b) the Mortgage Insurance Premium Rate
(expressed as a per annum rate) for such Mortgage Loan, as applicable.

                                      -19-

<PAGE>

     Net Negative Amortization: For any Distribution Date, the excess, if any,
of (i) the Negative Amortization with respect to the Mortgage Loans for the
related calendar month prior to that Distribution Date, over (ii) aggregate
amount of Principal Prepayments in Full and partial prepayments received with
respect to the Mortgages collected during the related Prepayment Period.

     Net WAC: The weighted average of the Net Mortgage Rates on the Mortgage
Loans weighted on the basis of the respective Stated Principal Balance of each
such Mortgage Loan as of the beginning of the Due Period immediately preceding
such Distribution Date.

     Nonrecoverable Advance: With respect to any Mortgage Loan any advance or
Monthly Advance (i) which was previously made or is proposed to be made by the
applicable Servicer, or the Master Servicer as successor Servicer, or the
Trustee as successor Master Servicer and (ii) which, in the good faith judgment
of the Master Servicer, the Trustee or applicable Servicer, will not or, in the
case of a proposed advance or Monthly Advance, would not, be ultimately
recoverable by the Master Servicer, the Trustee (as successor Master Servicer)
or applicable Servicer from Liquidation Proceeds, Insurance Proceeds or future
payments on the Mortgage Loan for which such advance or Monthly Advance was
made.

     Offered Certificate: Any Senior Certificate or Class M Certificate.

     Officer's Certificate: A certificate signed by the Chairman of the Board,
the Vice Chairman of the Board, the President or a Vice President or Assistant
Vice President or other authorized officer of the Master Servicer or the
Depositor, as applicable, and delivered to the Trustee, as required by this
Agreement.

     Opinion of Counsel: A written opinion of counsel who is or are acceptable
to the Trustee and who, unless required to be Independent (an "Opinion of
Independent Counsel"), may be internal counsel for the Master Servicer or the
Depositor.

     Optional Termination: The termination of the Trust Fund hereunder pursuant
to Section 10.01(a) hereof.

     Optional Termination Amount: The amount received by the Securities
Administrator in connection with any purchase of all of the Mortgage Loans and
REO Properties pursuant to Section 10.01(b) hereof.

     Optional Termination Price: On any date after the Initial Optional
Termination Date, an amount equal to the sum of (A) the aggregate Stated
Principal Balance of each Mortgage Loan (other than any Mortgage Loan that has
become an REO Property) as of the Distribution Date on which the proceeds of the
Optional Termination are distributed to the Certificateholders, plus accrued
interest thereon at the applicable Mortgage Rate as of the Due Date preceding
the Distribution Date on which the proceeds of the Optional Termination are
distributed to Certificateholders and the fair market value of any REO Property,
plus accrued interest thereon as of the Distribution Date on which the proceeds
of the Optional Termination are distributed to Certificateholders, (B) any
unreimbursed out-of-pocket costs and expenses owed to the Master Servicer, the
Trustee or the Securities Administrator (including any amounts incurred by the
Securities Administrator in connection with conducting the Auction), a Servicer
or the Master

                                      -20-

<PAGE>

Servicer and any unpaid or unreimbursed Servicing Fees, Monthly Advances and
Servicing Advances, (C) any unreimbursed costs, penalties and/or damages
incurred by the Trust Fund in connection with any violation relating to any of
the Mortgage Loans of any predatory or abusive lending law and (D) in the event
an Auction has been conducted, all reasonable fees and expenses incurred by the
Securities Administrator to conduct the Auction.

     Original Subordinate Principal Balance: The sum of the aggregate
Certificate Principal Balances of each Class of Subordinate Certificates as of
the Closing Date.

     Original Value: The lesser of (i) the Appraised Value or (ii) the sales
price of a Mortgaged Property at the time of origination of a Mortgage Loan,
except in instances where either clauses (i) or (ii) is unavailable, the other
may be used to determine the Original Value, or if both clauses (i) and (ii) are
unavailable, Original Value may be determined from other sources reasonably
acceptable to the Depositor.

     Outstanding Mortgage Loan: With respect to any Due Date, a Mortgage Loan
which, prior to such Due Date, was not the subject of a Principal Prepayment in
Full, did not become a Liquidated Mortgage Loan and was not purchased or
replaced.

     Outstanding Principal Balance: As of the time of any determination, the
principal balance of a Mortgage Loan remaining to be paid by the Mortgagor, or,
in the case of an REO Property, the principal balance of the related Mortgage
Loan remaining to be paid by the Mortgagor at the time such property was
acquired by the Trust Fund less any Net Liquidation Proceeds with respect
thereto to the extent applied to principal.

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

     Pass-Through Rate: With respect to the Certificates (other than the Class X
and Class P Certificates) on each Distribution Date, a per annum rate equal to
the Net WAC for such Distribution Date less 0.800% per annum. The Pass-Through
Rate on the Class X-IO Component Notional Amount will be 0.800% per annum and
the Pass-Through Rate on the Class X-PO Component Principal Balance will be the
Net WAC for such Distribution Date less 0.800% per annum. The Class P
Certificates do not have a Pass-Through Rate.

     Paying Agent: The Securities Administrator or any successor Paying Agent
appointed by the Securities Administrator.

     Percentage Interest: With respect to any Certificate (other than the Class
A-R and Class P Certificates), a fraction, expressed as a percentage, the
numerator of which is the Initial Certificate Principal Balance represented by
such Certificate and the denominator of which is the Initial Certificate
Principal Balance of the related Class. With respect to the Class A-R and Class
P Certificates, the Percentage Interest evidenced thereby shall be as specified
on the face thereof, or otherwise, be equal to 100%.

                                      -21-

<PAGE>

     Periodic Rate Cap: With respect to each Mortgage Loan, the maximum
adjustment that can be made to the Mortgage Interest Rate on each Interest
Adjustment Date in accordance with its terms, regardless of changes in the
applicable Index.

     Permitted Investments: Any one or more of the following obligations or
securities held in the name of the Trustee for the benefit of the
Certificateholders (provided that such obligation or security must be a
"permitted investment" within the meaning of such term as provided for in
Section 860G(a)(5) of the Code):

          (i) direct obligations of, and obligations the timely payment of which
     are fully guaranteed by the United States of America or any agency or
     instrumentality of the United States of America the obligations of which
     are backed by the full faith and credit of the United States of America;

          (ii) (a) demand or time deposits, federal funds or bankers'
     acceptances issued by any depository institution or trust company
     incorporated under the laws of the United States of America or any state
     thereof (including the Trustee or the Master Servicer or its Affiliates
     acting in its commercial banking capacity) and subject to supervision and
     examination by federal and/or state banking authorities, provided that the
     commercial paper and/or the short-term debt rating and/or the long-term
     unsecured debt obligations of such depository institution or trust company
     at the time of such investment or contractual commitment providing for such
     investment have the Applicable Credit Rating or better from each Rating
     Agency and (b) any other demand or time deposit or certificate of deposit
     that is fully insured by the Federal Deposit Insurance Corporation;

          (iii) repurchase obligations with respect to (a) any security
     described in clause (i) above or (b) any other security issued or
     guaranteed by an agency or instrumentality of the United States of America,
     the obligations of which are backed by the full faith and credit of the
     United States of America, in either case entered into with a depository
     institution or trust company (acting as principal) described in clause
     (ii)(a) above where the Trustee holds the security therefor;

          (iv) securities bearing interest or sold at a discount issued by any
     corporation (including the Trustee or the Master Servicer or its
     Affiliates) incorporated under the laws of the United States of America or
     any state thereof that have the Applicable Credit Rating or better from
     each Rating Agency at the time of such investment or contractual commitment
     providing for such investment; provided, however, that securities issued by
     any particular corporation will not be Permitted Investments to the extent
     that investments therein will cause the then outstanding principal amount
     of securities issued by such corporation and held as part of the Issuing
     Entity to exceed 10% of the aggregate Outstanding Principal Balances of all
     the Mortgage Loans and Permitted Investments held as part of the Issuing
     Entity;

          (v) commercial paper (including both non-interest-bearing discount
     obligations and interest-bearing obligations payable on demand or on a
     specified date not more than one year after the date of issuance thereof)
     having the Applicable Credit Rating or better from each Rating Agency at
     the time of such investment;

                                      -22-

<PAGE>

          (vi) a Reinvestment Agreement issued by any bank, insurance company or
     other corporation or entity;

          (vii) any other demand, money market or time deposit, obligation,
     security or investment as may be acceptable to either Rating Agency as
     evidenced in writing by each Rating Agency to the Trustee or Master
     Servicer;

          (viii) any money market or common trust fund having the Applicable
     Credit Rating or better from each Rating Agency (if such fund is rated by
     each Rating Agency), including any such fund for which the Trustee or
     Master Servicer or any affiliate of the Trustee or Master Servicer acts as
     a manager or an advisor; provided, however, that no instrument or security
     shall be a Permitted Investment if such instrument or security evidences a
     right to receive only interest payments with respect to the obligations
     underlying such instrument or if such security provides for payment of both
     principal and interest with a yield to maturity in excess of 120% of the
     yield to maturity at par or if such instrument or security is purchased at
     a price greater than par;

          (ix) units of a taxable money-market portfolio having the highest
     rating assigned by each Rating Agency (except if S&P is a Rating Agency,
     "AAAm" or "AAAM-G" by S&P) and restricted to obligations issued or
     guaranteed by the United States of America or entities whose obligations
     are backed by the full faith and credit of the United States of America and
     repurchase agreements collateralized by such obligations; and

          (x) investments that have maturities of up to 60 calendar days rated
     at least "A-1" (or "A+" or higher if it has no short-term rating).

     Permitted Transferee: Any Person other than a Disqualified Organization or
an "electing large partnership" (as defined by Section 775 of the Code).

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

     Physical Certificate: The Residual Certificate.

     Prepayment Assumption: A rate or rates of prepayment, as described in the
Prospectus Supplement related to the Offered Certificates.

     Prepayment Charge: With respect to any Prepayment Period, any prepayment
premium, charge or penalty payable by a Mortgagor in connection with any
Principal Prepayment on the Prepayment Charge Mortgage Loans.

     Prepayment Charge Mortgage Loans: Any of the Mortgage Loans set forth on
Schedule I hereto that are subject to existing prepayment premiums.

     Prepayment Distribution Trigger: With respect to any Distribution Date and
any Class of Subordinate Certificates (other than the Class M-1 Certificates), a
test that shall be satisfied if the

                                      -23-

<PAGE>

fraction (expressed as a percentage) equal to the sum of the Certificate
Principal Balances of such Class and each Class of Subordinate Certificates with
a Lower Priority than such Class immediately prior to such Distribution Date
divided by the aggregate Stated Principal Balance of all of the Mortgage Loans
(or related REO Properties) immediately prior to such Distribution Date is
greater than or equal to the sum of the related Initial Subordinate Class
Percentages of such Classes of Subordinate Certificates.

     Prepayment Interest Shortfall: As to any Distribution Date and any Mortgage
Loan (other than a Mortgage Loan relating to an REO Property) that was the
subject of (a) a Principal Prepayment in Full during the related Prepayment
Period, an amount equal to the excess of one month's interest at the Net
Mortgage Rate on the Stated Principal Balance of such Mortgage Loan over the
amount of interest (adjusted to the Net Mortgage Rate) paid by the Mortgagor for
such Prepayment Period to the date of such Principal Prepayment in Full or (b) a
Curtailment during the prior calendar month, an amount equal to one month's
interest at the Net Mortgage Rate on the amount of such Curtailment. The
obligations of the Master Servicer in respect of any Prepayment Interest
Shortfall are set forth in Section 6.06.

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

     Primary Mortgage Insurance Policy: Any primary mortgage guaranty insurance
policy issued in connection with a Mortgage Loan which provides compensation to
a Mortgage Note holder in the event of default by the obligor under such
Mortgage Note or the related Security Instrument, if any or any replacement
policy therefor through the related Interest Accrual Period for such Class
relating to a Distribution Date.

     Principal Prepayment: Any Principal Prepayment in Full or Curtailment or
other recovery of principal on a Mortgage Loan which is received in advance of
its scheduled Due Date to the extent that it 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, including Insurance
Proceeds and Repurchase Proceeds, but excluding the principal portion of Net
Liquidation Proceeds.

     Principal Prepayment in Full: Any Principal Prepayment made by a Mortgagor
of the entire unpaid principal balance of the Mortgage Loan.

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

     Prospectus Supplement: The Prospectus Supplement dated October 30, 2007,
relating to the public offering of the Offered Certificates.

     Protected Account: An account established and maintained for the benefit of
Certificateholders by each Servicer with respect to the related Mortgage Loans
and with respect to REO Property pursuant to the respective Servicing Agreement.
Each Protected Account shall be an Eligible Account.

     Purchase Price: With respect to any Mortgage Loan or REO Property to be
purchased pursuant to or as contemplated by Section 2.03 or 10.01, and as
confirmed by an Officers'

                                      -24-

<PAGE>

Certificate from the Master Servicer to the Trustee, an amount equal to the sum
of (i) 100% of the Stated Principal Balance thereof as of the date of purchase
(or such other price as provided in Section 10.01), (ii) accrued interest on
such Stated Principal Balance at the applicable Mortgage Interest Rate in effect
from time to time from the Due Date as to which interest was last covered by a
payment by the Mortgagor or an advance by the related Servicer or Master
Servicer, which payment or advance had as of the date of purchase been
distributed to Certificateholders, through the end of the calendar month in
which the purchase is to be effected less any unreimbursed Monthly Advances and
any unpaid Servicing Fees payable to the purchaser of the Mortgage Loan and
(iii) any costs and damages incurred by the Issuing Entity in connection with
any violation by such Mortgage Loan or REO Property of any predatory or
abusive-lending law.

     Qualified Insurer: Any insurance company duly qualified as such under the
laws of the state or states in which the related Mortgaged Property or Mortgaged
Properties is or are located, duly authorized and licensed in such state or
states to transact the type of insurance business in which it is engaged and
approved as an insurer by the Master Servicer, so long as the claims paying
ability of which is acceptable to the Rating Agencies for pass-through
certificates having the same rating as the Certificates rated by the Rating
Agencies as of the Closing Date.

     Qualified Servicer: Any servicer with a servicer rating by each of the
Rating Agencies equal to or better than the servicer rating of HLS or Wilshire,
as applicable, at the time of any such servicing transfer.

     Rating Agencies: Fitch, Moody's and S&P.

     Realized Loss: With respect to a Liquidated Mortgage Loan, the amount by
which the remaining unpaid principal balance of the Mortgage Loan exceeds (i)
the amount of Liquidation Proceeds applied to the principal balance of the
related Mortgage Loan plus (ii) the Net Liquidation Proceeds received during the
month in which such liquidation occurred, to the extent applied as recoveries of
interest at the Net Mortgage Rate and to principal of the Liquidated Mortgage
Loan. To the extent the Master Servicer receives Subsequent Recoveries with
respect to any Mortgage Loan, the amount of the Realized Loss with respect to
that Mortgage Loan will be reduced to the extent such recoveries are applied to
reduce the Certificate Principal Balance of any Class of Certificates on any
Distribution Date.

     Record Date: With respect to each Distribution Date and each class of
Offered Certificates, the close of business on the last Business Day of the
month immediately preceding the month in which the related Distribution Date
occurs.

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

     Regular Certificates: Any of the Class A, Class X, Class M or Class B
Certificates.

     Regulation AB: Subpart 22.1100 - Asset Backed Securities (Regulation AB),
17 C.F.R. Sections 229.1100-229.1123, as such may be amended from time to time,
and subject to such clarification and interpretation as have been provided by
the Commission in the adopting release (Asset-Backed Securities, Securities Act
Release No. 33-8518, 70 Fed Reg. 1,506-1,631 (Jan. 7,

                                      -25-

<PAGE>

2005) or by the staff of the Commission, or as may be provided by the Commission
or its staff from time to time.

     Reinvestment Agreements: One or more reinvestment agreements, acceptable to
each of the Rating Agencies, from a bank, insurance company or other corporation
or entity (including the Trustee).

     Related Class of Upper Tier REMIC Interest: With respect to any Class of
Certificates, the interest in the Upper Tier REMIC appearing opposite such Class
in the Preliminary Statement hereto.

     Relevant Servicing Criteria: The Servicing Criteria applicable to the
various parties, as set forth on Exhibit K hereto. For clarification purposes,
multiple parties can have responsibility for the same Relevant Servicing
Criteria. With respect to a Servicing Function Participant engaged by the Master
Servicer, the Securities Administrator, the Trustee, the Custodian or a
Servicer, the term "Relevant Servicing Criteria" may refer to one or more
discrete functions specified in the Relevant Servicing Criteria applicable to
such parties.

     Relief Act: The Servicemembers Civil Relief Act, as amended, or similar
state statute.

     Relief Act Mortgage Loan: Any Mortgage Loan as to which the Monthly Payment
or portion thereof has been reduced or postponed due to the application of the
Relief Act.

     REMIC: Each pool of assets in the Trust Fund designated as a REMIC as
described in the Preliminary Statement.

     REMIC Interests: Any regular or residual interest in any of REMIC 1 or the
Upper Tier REMIC, as described in the Preliminary Statement.

     REMIC Opinion: An Opinion of Counsel to the effect that a contemplated
action will neither adversely affect the status as a REMIC of any REMIC created
hereunder nor subject any such REMIC to any tax under the REMIC Provisions.

     REMIC Provisions: The 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
regulations, including proposed regulations and rulings, and administrative
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.

     REMIC 1: As described in the Preliminary Statement.

     REMIC 1 Interest: Each class of interest in REMIC 1 as described in the
Preliminary Statement.

     REMIC 1 Marker Interests: Each of the classes of REMIC 1 Regular Interests
other than the Class LT1Z Interest.

                                      -26-

<PAGE>

     REMIC 1 Regular Interest: Each of the REMIC 1 Interests other than the
Class LT1-R Interest.

     REMIC 1 Subordinate Balance Ratio: [Reserved].

     REO Property: A Mortgaged Property acquired by a Servicer or Master
Servicer on behalf of the Trust Fund through foreclosure or deed-in-lieu of
foreclosure, as described in Section 3.15 in connection with a defaulted
Mortgage Loan.

     Reportable Event: As defined in Section 3.18(a).

     Reporting Servicer: As defined in Section 3.18(h).

     Repurchase Proceeds: The Repurchase Price in connection with any repurchase
of a Mortgage Loan by the Seller and any cash deposit in connection with the
substitution of a Mortgage Loan.

     Request for Release: A request for release in the form attached hereto as
Exhibit D.

     Required Insurance Policy: With respect to any Mortgage Loan, any insurance
policy which is required to be maintained from time to time under this Agreement
with respect to such Mortgage Loan.

     Residual Certificate: The Class A-R Certificate.

     Residual Interest: The Residual Certificate, other than the portion thereof
representing the right to payments in respect of the Class LT1-R Interest.

     Responsible Officer: When used with respect to the Trustee, any officer in
the corporate trust department or similar group of the Trustee with direct
responsibility for the administration of this Agreement and also, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of his or her knowledge of and familiarity with the particular
subject. Any officer assigned to the Corporate Trust Office (or any successor
thereto), including any Vice President, Assistant Vice President, Trust Officer,
any Assistant Secretary, any trust officer or any other officer of the
Securities Administrator customarily performing functions similar to those
performed by any of the above designated officers and having direct
responsibility for the administration of this Agreement, and any other officer
of the Securities Administrator to whom a matter arising hereunder may be
referred because of such officers familiarity with the subject matter thereof.

     Rule 144A Letter: The certificate to be furnished by each purchaser of a
Private Certificate (which is also a Physical Certificate) which is a Qualified
Institutional Buyer as defined under Rule 144A promulgated under the Securities
Act, substantially in the form set forth as Exhibit F-3 hereto.

     Sarbanes-Oxley Act: The Sarbanes-Oxley Act of 2002 and the rules and
regulations of the Commission promulgated thereunder (including any
interpretations thereof by the Commission's staff).

                                      -27-

<PAGE>

     Sarbanes-Oxley Certification: A written certification signed by an officer
of the Master Servicer that complies with (i) the Sarbanes-Oxley Act, and (ii)
Exchange Act Rules 13a-14(d) and 15d-14(d), as in effect from time to time;
provided that if, after the Closing Date (a) the Sarbanes-Oxley Act is amended,
(b) the Rules referred to in clause (ii) are modified or superseded by any
subsequent statement, rule or regulation of the Commission or any statement of a
division thereof, or (c) any future releases, rules and regulations are
published by the Commission from time to time pursuant to the Sarbanes-Oxley
Act, which in any such case affects the form or substance of the required
certification and results in the required certification being, in the reasonable
judgment of the Master Servicer, materially more onerous that then form of the
required certification as of the Closing Date, the Sarbanes-Oxley Certification
shall be as agreed to by the Master Servicer and the Depositor following a
negotiation in good faith to determine how to comply with any such new
requirements.

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

     Scheduled Payment: With respect to any Mortgage Loan and any month, the
scheduled payment or payments of principal and interest due during such month on
such Mortgage Loan which either is payable by a Mortgagor in such month under
the related Mortgage Note or, in the case of REO Property, would otherwise have
been payable under the related Mortgage Note.

     Scheduled Principal: The principal portion of any Scheduled Payment.

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

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

     Security Agreement: With respect to a Cooperative Loan, the agreement
creating a security interest in favor of the originator in the related
Cooperative Stock.

     Security Instrument: A written instrument creating a valid first lien on a
Mortgaged Property securing a Mortgage Note, which may be any applicable form of
mortgage, deed of trust, deed to secure debt or security deed, including any
riders or addenda thereto.

     Seller:  MLML.

     Senior Accelerated Distribution Percentage: With respect to any
Distribution Date, the percentage indicated below:

<TABLE>
<CAPTION>
                                             Senior Accelerated
         Distribution Date                 Distribution Percentage
         -----------------                 -----------------------
<S>                                  <C>
November 2007 through October 2014   100%
November 2014 through October 2015   Senior Percentage, plus 70% of the
                                     Subordinate Percentage
November 2015 through October 2016   Senior Percentage, plus 60% of the
                                     Subordinate Percentage
</TABLE>

                                      -28-

<PAGE>

<TABLE>
<S>                                  <C>
November 2016 through October 2017   Senior Percentage, plus 40% of the
                                     Subordinate Percentage
November 2017 through October 2018   Senior Percentage, plus 20% of the
                                     Subordinate Percentage
November 2018 and thereafter         Senior Percentage
</TABLE>

provided, however, (i) that any scheduled reduction to the Senior Accelerated
Distribution Percentage described above shall not occur as of any Distribution
Date unless either (a)(1)(x) the outstanding principal balance of Mortgage Loans
that either (i) are delinquent 60 days or more (including Mortgage Loans in
foreclosure, REO Properties and any Mortgage Loans the Mortgagors of which are
in bankruptcy) averaged over the last six months or (ii) have had their Mortgage
Note modified during the immediately preceding twelve calendar months (other
than Mortgage Loans that were purchased from the Issuing Entity by the Seller or
Mortgage Loans that were modified prior to the Closing Date), as a percentage of
the aggregate outstanding Certificate Principal Balance of the Subordinate
Certificates, is less than 50%, or (y) the outstanding principal balance of
Mortgage Loans delinquent 60 days or more (including Mortgage Loans in
foreclosure and REO Properties) averaged over the last six months, as a
percentage of the aggregate outstanding principal balance of all Mortgage Loans
averaged over the last six months, does not exceed 2% and (2) the sum of (x)
Realized Losses on the Mortgage Loans to date for such Distribution Date and (y)
Forgiven Amounts to date for such Distribution Date if occurring during the
eighth, ninth, tenth, eleventh or twelfth year (or any year thereafter) after
the Closing Date are less than 30%, 35%, 40%, 45% or 50%, respectively, of the
sum of the Initial Certificate Principal Balances of the Subordinate
Certificates or (b) (1) the aggregate outstanding principal balance of Mortgage
Loans that either (i) are delinquent 60 days or more (including Mortgage Loans
in foreclosure, REO Properties and any Mortgage Loans the Mortgagors of which
are in bankruptcy) averaged over the last six months, or (ii) have had their
Mortgage Note modified during the immediately preceding twelve calendar months
(other than Mortgage Loans that were purchased from the Issuing Entity by the
Seller or Mortgage Loans that were modified prior to the Closing Date), as a
percentage of the aggregate Stated Principal Balance of all Mortgage Loans
averaged over the last six months, does not exceed 4% and (2) the sum of (x)
Realized Losses on the Mortgage Loans to date for such Distribution Date and (y)
Forgiven Amounts to date for such Distribution Date, if occurring during the
eighth, ninth, tenth, eleventh or twelfth year (or any year thereafter) after
the Closing Date are less than 10%, 15%, 20%, 25% or 30%, respectively, of the
sum of the Initial Certificate Principal Balances of the Subordinate
Certificates and (ii) that for any Distribution Date on which the Senior
Percentage is greater than the Original Senior Percentage, the Senior
Accelerated Distribution Percentage for such Distribution Date shall be 100%.
Notwithstanding the foregoing, upon the reduction of the aggregate Certificate
Principal Balance of the Class A-1 and Class A-2 Certificates to zero, the
Senior Accelerated Distribution Percentage will equal 0%.

     In addition, on any Distribution Date on or after the Distribution Date
occurring in November 2010, if the current Subordinate Percentage for the
Certificates is equal to or greater than two times the initial Subordinate
Percentage for the Certificates, and (a) the outstanding principal balance of
the Mortgage Loans that either (i) are delinquent 60 days or more (including
Mortgage Loans in foreclosure or bankruptcy and REO Properties), averaged over
the last six

                                      -29-

<PAGE>

months, or (ii) have had their Mortgage Note modified during the immediately
preceding twelve calendar months (other than Mortgage Loans that were purchased
from the Issuing Entity by the Seller or Mortgage Loans that were modified prior
to the Closing Date), as a percentage of the Subordinate Percentage for that
Distribution Date times the aggregate Stated Principal Balance of the Mortgage
Loans, does not exceed 50% and (b) the sum of (x) cumulative Realized Losses on
the Mortgage Loans to date for such Distribution Date and (y) Forgiven Amounts
to date for such Distribution Date do not exceed 20% of the initial Subordinate
Percentage times the aggregate Stated Principal Balance of the Mortgage Loans as
of the Cut-off Date, then, in each case, the Senior Accelerated Distribution
Percentage for such Distribution Date will be equal to, prior to the
Distribution Date occurring in November 2010, the Senior Percentage plus 50% of
the Subordinate Percentage and, on or after the Distribution Date occurring in
November 2010, the Senior Percentage.

     Senior Certificates: The Class A-1 Certificates, Class A-2 Certificates,
Class X Certificates and Class A-R Certificates.

     Senior Percentage: As of any Distribution Date, the lesser of 100% and a
fraction, expressed as a percentage, the numerator of which is the aggregate
Certificate Principal Balance of the Senior Certificates immediately prior to
such Distribution Date and the denominator of which is the aggregate Stated
Principal Balance of all of the Mortgage Loans or related REO Properties
immediately prior to such Distribution Date.

     Senior Principal Distribution Amount: As to any Distribution Date, the
lesser of (a) the balance of the Available Funds remaining after the
distribution of all amounts required to be distributed pursuant to subclauses
first, second and third of Section 6.01(A) and (b) the sum of the following:

               (A) the Senior Percentage for such Distribution Date times the
     sum of the following:

                    (1) the principal portion of each Monthly Payment due during
          the related Due Period on each Outstanding Mortgage Loan, whether or
          not received on or prior to the related Determination Date, minus the
          principal portion of any Debt Service Reduction;

                    (2) the Stated Principal Balance of any Mortgage Loan
          repurchased during the related Prepayment Period pursuant to Section
          2.02 or 2.03 hereof or pursuant to the related Servicing Agreement
          less any portion of such Stated Principal Balance applied to offset
          Deferred Interest on any Distribution Date; and

                    (3) the principal portion of all other unscheduled
          collections, including Subsequent Recoveries (other than Principal
          Prepayments in Full and Curtailments and amounts received in
          connection with the liquidation or disposition of a Mortgage Loan,
          including without limitation Insurance Proceeds, Liquidation Proceeds
          and REO Proceeds) received during the related Prepayment Period to the
          extent applied by the related Servicer as recoveries of principal of

                                      -30-
<PAGE>

          the related Mortgage Loan pursuant to related Servicing Agreement;

               (B) with respect to the liquidation or other disposition of a
     Mortgage Loan which occurred during the related Prepayment Period and did
     not result in any Extraordinary Losses, an amount equal to the lesser of
     (a) the Senior Percentage for such Distribution Date times the Stated
     Principal Balance of such Mortgage Loan and (b) the Senior Accelerated
     Distribution Percentage for such Distribution Date times the related
     unscheduled collections (including without limitation Insurance Proceeds,
     Liquidation Proceeds and REO Proceeds) to the extent applied by the related
     Servicer or the Master Servicer as recoveries of principal of the related
     Mortgage Loan pursuant to the related Servicing Agreement or this
     Agreement;

               (C) the Senior Accelerated Distribution Percentage for such
     Distribution Date times the aggregate of all Principal Prepayments in Full
     and Curtailments received in the related Prepayment Period with respect to
     the Mortgage Loans that are not applied to offset Deferred Interest on any
     Distribution Date;

               (D) any amounts described in clauses (A), (B) or (C) of this
     definition, as determined for any previous Distribution Date, which remain
     unpaid after application of amounts previously distributed pursuant to this
     clause (D) to the extent that such amounts are not attributable to Realized
     Losses which have been allocated to the Class M Certificates or Class B
     Certificates;

     Servicer: With respect to each Mortgage Loan, CMC, Countrywide, HLS or
Wilshire, as applicable and as specified on the Mortgage Loan Schedule.

     Servicer Remittance Date: With respect to each Mortgage Loan, the date set
forth in the related Servicing Agreement.

     Servicing Advances: With respect to any Mortgage Loan, all customary,
reasonable and necessary "out-of-pocket" costs and expenses incurred by the
Servicer in the performance of its servicing obligations, including, but not
limited to, the cost of (i) preservation, restoration, protection and repair of
a Mortgaged Property or Cooperative Unit, as applicable, (ii) any enforcement or
judicial proceedings with respect to a Mortgage Loan, including foreclosure
actions and (iii) the management and liquidation of REO Property.

     Servicing Agreements: The CMC Servicing Agreement, the Countrywide
Servicing Agreement (as modified by the Countrywide Assignment Agreement), the
HLS Servicing Agreement and the Wilshire Servicing Agreement and attached hereto
as Exhibits N-1, N-2, N-3 and N-4, respectively.

     Servicing Criteria: The "servicing criteria" set forth in Item 1122(d) of
Regulation AB, as such may be amended from time to time.

     Servicing Fee: As to any Mortgage Loan and Distribution Date, an amount
equal to the product of (i) the Stated Principal Balance of such Mortgage Loan
as of the Due Date in the preceding calendar month and (ii) the applicable
Servicing Fee Rate. Such fee shall be payable monthly, computed on the basis of
the same principal amount and period respectively which any

                                      -31-

<PAGE>

related interest payment on a Mortgage Loan is computed. If the Index and/or
Gross Margin are adjusted as provided in the related Mortgage Note, the
Servicing Fee shall be the rate per annum in effect immediately prior to such
adjustment.

     Servicing Fee Rate: As to any Mortgage Loan, a per annum rate as set forth
in the Mortgage Loan Schedule.

     Servicing Function Participant: Any Sub-Servicer, Subcontractor or any
other Person, other than a Servicer, the Custodian, the Master Servicer, the
Paying Agent, the Securities Administrator and the Trustee, that is
participating in the servicing function within the meaning of Regulation AB.

     Servicing Officer: Any officer of the Master Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
names and specimen signatures appear on a list of servicing officers furnished
to the Trustee by the Master Servicer, as such list may be amended from time to
time.

     Servicing Rights Owner: With respect to each Mortgage Loan serviced by HLS
or Wilshire as specified on the Mortgage Loan Schedule, MLML, or its transferee
or assignee, in its capacity as owner of the servicing rights.

     Startup Day: The Closing Date.

     Stated Principal Balance: With respect to any Mortgage Loan and Due Date,
the unpaid principal balance of such Mortgage Loan as of such Due Date, as
specified in the amortization schedule at the time relating thereto (before any
adjustment to such amortization schedule by reason of any moratorium or similar
waiver or grace period), after giving effect to any previous partial prepayments
and Liquidation Proceeds received and to the payment of principal due on such
Due Date and irrespective of any delinquency in payment by the related Mortgagor
and as increased by the amounts of any Negative Amortization with respect to
such Mortgage Loan after the Cut-off Date through the Due Date in the related
Due Period.

     Subcontractor: Any vendor, subcontractor or other Person that is not
responsible for the overall servicing of Mortgage Loans but performs one or more
discrete functions identified in Item 1122(d) of Regulation AB with respect to
Mortgage Loans under the direction or authority of any Servicer (or a
Sub-Servicer of any Servicer), the Master Servicer, the Custodian or the
Securities Administrator.

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

     Subordinate Percentage: For any Distribution Date, the difference between
100% and the Senior Percentage for such date.

     Subordinate Prepayment Percentage: With respect to any Distribution Date
and each Class of Subordinate Certificates, under the applicable circumstances
set forth below, the respective percentages set forth below:

                                      -32-

<PAGE>

          (i) For any Distribution Date prior to the Distribution Date in
     November 2014 (unless the Certificate Principal Balances of the Senior
     Certificates have been reduced to zero), 0%.

          (ii) For any Distribution Date for which clause (i) does not apply,
     and on which any Class of Subordinate Certificates are outstanding:

               (a) in the case of the Class of Subordinate Certificates then
          outstanding with the Highest Priority and each other Class of
          Subordinate Certificates for which the related Prepayment Distribution
          Trigger has been satisfied, a fraction, expressed as a percentage, the
          numerator of which is the Certificate Principal Balance of such Class
          immediately prior to such date and the denominator of which is the sum
          of the Certificate Principal Balances immediately prior to such date
          of (1) the Class of Subordinate Certificates then outstanding with the
          Highest Priority and (2) all other Classes of Subordinate Certificates
          for which the respective Prepayment Distribution Triggers have been
          satisfied; and

               (b) in the case of each other Class of Subordinate Certificates
          for which the Prepayment Distribution Triggers have not been
          satisfied, 0%; and

          (iii) Notwithstanding the foregoing, if the application of the
     foregoing percentages on any Distribution Date as provided in Section 6.01
     of this Agreement (determined without regard to the proviso in the
     definition of "Subordinate Principal Distribution Amount") would result in
     a distribution in respect of principal of any Class or Classes of
     Subordinate Certificates in an amount greater than the remaining
     Certificate Principal Balance thereof (any such class, a "Maturing Class"),
     then: (a) the Subordinate Prepayment Percentage of each Maturing Class
     shall be reduced to a level that, when applied as described above, would
     exactly reduce the Certificate Principal Balance of such Class to zero; (b)
     the Subordinate Prepayment Percentage of each other Class of Subordinate
     Certificates (any such Class, a "Non-Maturing Class") shall be recalculated
     in accordance with the provisions in paragraph (ii) above, as if the
     Certificate Principal Balance of each Maturing Class had been reduced to
     zero (such percentage as recalculated, the "Recalculated Percentage"); (c)
     the total amount of the reductions in the Subordinate Prepayment
     Percentages of the Maturing Class or Classes pursuant to clause (a) of this
     sentence, expressed as an aggregate percentage, shall be allocated among
     the Non-Maturing Classes in proportion to their respective Recalculated
     Percentages (the portion of such aggregate reduction so allocated to any
     Non-Maturing Class, the "Adjustment Percentage"); and (d) for purposes of
     such Distribution Date, the Subordinate Prepayment Percentage of each
     Non-Maturing Class shall be equal to the sum of (1) the Subordinate
     Prepayment Percentage thereof, calculated in accordance with the provisions
     in paragraph (ii) above as if the Certificate Principal Balance of each
     Maturing Class had not been reduced to zero, plus (2) the related
     Adjustment Percentage.

     Subordinate Principal Distribution Amount: With respect to any Distribution
Date and each Class of Class M Certificates and Class B Certificates, the sum of
the following:

                                      -33-

<PAGE>

               (i) the product of (x) the related Class M Percentage or Class B
     Percentage for such Class and (y) the aggregate of the following amounts:

                    (1) the principal portion of each Monthly Payment due during
          the related Due Period on each Outstanding Mortgage Loan, whether or
          not received on or prior to the related Determination Date, minus the
          principal portion of any Debt Service Reduction;

                    (2) the Stated Principal Balance of any Mortgage Loan
          repurchased during the related Prepayment Period pursuant to Section
          2.02 or 2.03 or pursuant to the related Servicing Agreement less any
          portion of such Stated Principal Balance applied to offset Deferred
          Interest on any Distribution Date; and

                    (3) the principal portion of all other unscheduled
          collections including Subsequent Recoveries (other than Principal
          Prepayments in Full and Curtailments and amounts received in
          connection with the liquidation or other disposition of a Mortgage
          Loan, including without limitation Insurance Proceeds, Liquidation
          Proceeds and REO Proceeds) received during the related Prepayment
          Period to the extent applied by the related Servicer as recoveries of
          principal of the related Mortgage Loan pursuant to the related
          Servicing Agreement;

               (ii) such Class's pro rata share, based on the Certificate
     Principal Balance of each Class of Subordinate Certificates then
     outstanding, of, with respect to each Mortgage Loan for which a liquidation
     or other disposition occurred during the related Prepayment Period and did
     not result in any Extraordinary Losses, an amount equal to the related
     unscheduled collections (including without limitation Insurance Proceeds,
     Liquidation Proceeds and REO Proceeds) to the extent applied by the related
     Servicer as recoveries of principal of the related Mortgage Loan pursuant
     to the related Servicing Agreement, to the extent such collections are not
     otherwise distributed to the Senior Certificates;

               (iii) the portion of Principal Prepayments in Full and
     Curtailments of the Mortgage Loans received in the related Prepayment
     Period that are not applied to offset Deferred Interest on any Distribution
     Date, to the extent not payable to the Senior Certificates; and

               (iv) any amounts described in clauses (i), (ii) and (iii) as
     determined for any previous Distribution Date, that remain undistributed to
     the extent that such amounts are not attributable to Realized Losses which
     have been allocated to a Class of Subordinate Certificates;

provided, however, that such amount shall in no event exceed the outstanding
Certificate Principal Balance of such Class of Certificates immediately prior to
such date.

     Subsequent Recoveries: Any amount recovered by a Servicer or the Master
Servicer (net of reimbursable expenses) with respect to a Liquidated Mortgage
Loan with respect to which a Realized Loss was incurred after the liquidation or
disposition of such Mortgage Loan.

                                      -34-

<PAGE>

     Sub-Servicer: Any Person that services Mortgage Loans on behalf of a
Servicer, and is responsible for the performance (whether directly or through
sub-servicers or Subcontractors) of servicing functions required to be performed
under this Agreement, any related Servicing Agreement or any sub-servicing
agreement that are identified in Item 1122(d) of Regulation AB.

     Substitute Mortgage Loan: With respect to any Mortgage Loan, which is
tendered to the Trustee or its custodian pursuant to the related Servicing
Agreement, the Mortgage Loan Purchase Agreement or Section 2.04 of this
Agreement, as applicable, in each case, (i) which has an Outstanding Principal
Balance not greater nor materially less than the Mortgage Loan for which it is
to be substituted; (ii) which has a Mortgage Interest Rate and Net Rate not less
than, and not materially greater than, such Mortgage Loan; (iii) which has a
maturity date not materially earlier or later than such Mortgage Loan and not
later than the latest maturity date of any Mortgage Loan; (iv) which is of the
same property type and occupancy type as such Mortgage Loan; (v) which has a
Loan-to-Value Ratio not greater than the Loan-to-Value Ratio of such Mortgage
Loan; (vi) which is current in payment of principal and interest as of the date
of substitution; (vii) as to which the payment terms do not vary in any material
respect from the payment terms of the Mortgage Loan for which it is to be
substituted and (viii) which has a Gross Margin, Periodic Rate Cap and Maximum
Lifetime Mortgage Rate no less than those of such Mortgage Loan, has the same
Index and interval between Interest Adjustment Dates as such Mortgage Loan, and
a Minimum Lifetime Mortgage Rate no lower than that of such Mortgage Loan.

     Tax Matters Person: The Securities Administrator or any successor thereto
or assignee thereof shall serve as tax administrator hereunder and as agent for
the Tax Matters Person. The Holder of the Residual Certificates shall be the Tax
Matters Person for the related REMIC, as more particularly set forth in Section
9.12 hereof.

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

     Transferor Representation Letter: As defined in Section 5.02(b).

     Trustee: HSBC Bank USA, National Association, or its successor in interest,
or any successor trustee appointed as herein provided.

     Trust Fund: The corpus of the Issuing Entity created pursuant to this
Agreement, consisting of (i) the Mortgage Loans, including the right to all
payments of principal and interest received on or with respect to the Mortgage
Loans on and after the Cut-off Date (other than Scheduled Payments due on or
before such date), and all such payments due after such date but received prior
to such date and intended by the related Mortgagors to be applied after such
date; (ii) all of the Depositor's right, title and interest in and to all
amounts from time to time credited to and the proceeds of the Protected
Accounts, the Master Servicer Collection Account and the Distribution Account
established with respect to the Mortgage Loans; (iii) all of the Depositor's
rights under the Mortgage Loan Purchase Agreement, the Countrywide Assignment
Agreement and the Servicing Agreements; (iv) all of the Depositor's right, title
or interest in REO Property and the proceeds thereof; (v) all of the Depositor's
rights under any Insurance Policies relating to the Mortgage Loans; (vi) all
proceeds of the conversion, voluntary or involuntary, of any of the foregoing
into cash or other liquid assets, including without limitation, all Insurance
Proceeds,

                                      -35-

<PAGE>

Liquidation Proceeds and condemnation awards and any proceeds of the foregoing;
and (vii) the Depositor's security interest in any collateral pledged to secure
the Mortgage Loans, including the Mortgaged Properties.

     Uncertificated Class X Interest: An uncertificated Upper Tier REMIC Regular
Interest having the characteristics described in the Preliminary Statement.

     Uninsured Cause: Any cause of damage to a Mortgaged Property or related REO
Property such that the complete restoration of such Mortgaged Property or
related REO Property is not fully reimbursable by the hazard insurance policies
required to be maintained pursuant the related Servicing Agreement, without
regard to whether or not such policy is maintained.

     United States Person: A citizen or resident of the United States, a
corporation or partnership (including an entity treated as a corporation or
partnership for 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
(except, in the case of a partnership, to the extent provided in regulations),
provided that, for purposes solely of the Class A-R Certificate, no partnership
or other entity treated as a partnership for United States federal income tax
purposes shall be treated as a United States Person unless all persons that own
an interest in such partnership either directly or through any entity that is
not a corporation for United States federal income tax purposes are United
States Persons, or an estate whose income is subject to United 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 the
trust and one or more such United States Persons have the authority to control
all substantial decisions of the trust. To the extent prescribed in regulations
by the Secretary of the Treasury, which have not yet been issued, a trust which
was in existence on August 20, 1996 (other than a trust treated as owned by the
grantor under subpart E of part I of subchapter J of chapter 1 of the Code), and
which was treated as a United States person on August 20, 1996 may elect to
continue to be treated as a United States person notwithstanding the previous
sentence.

     Upper Tier REMIC: As described in the Preliminary Statement.

     Upper Tier REMIC Regular Interest: Each of the Class A-1 Certificates,
Class A-2 Certificates, 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 the Uncertificated Class X Interest.

     Voting Rights: The portion of the voting rights of all of the Certificates
which is allocated to any Certificate. The Voting Rights allocated among Holders
of such Certificates outstanding shall be the fraction, expressed as a
percentage, the numerator of which is the aggregate Certificate Principal
Balance of all the Certificates of such Class then outstanding and the
denominator of which is the aggregate Certificate Principal Balance of all the
Certificates then outstanding (other than the Class A-R Certificate). 99.00% of
all Voting Rights will be allocated among all holders of the Certificates (other
than the Class A-R Certificate) in proportion to their then outstanding
Certificate Principal Balances, and 1.00% of the Voting Rights shall be
allocated to the Class A-R Certificate; provided, however, that any Certificate
registered in the name of the Master Servicer, the Depositor or the Securities
Administrator or

                                      -36-

<PAGE>

any of their respective affiliates shall not be included in the calculation of
Voting Rights. The Class P Certificates shall have no voting rights.

     Wells Fargo: Wells Fargo Bank, N.A., or any successor thereto.

     WHFIT: A "widely held fixed investment trust" as that term is defined in
Treasury Regulations section 1.671-5(b)(22) or successor provisions.

     WHFIT Regulations: Treasury Regulations section 1.671-5, as amended.

     Wilshire: Wilshire Credit Corporation, or any successor thereto.

     Wilshire Mortgage Loans: The Mortgage Loans serviced by Wilshire pursuant
to the Wilshire Servicing Agreement.

     Wilshire Servicing Agreement: The Servicing Agreement, dated as of October
1, 2007, between Wilshire and the Depositor and the Master Servicer and
acknowledged by the Master Servicer and the Trustee.

     Section 1.02 Accounting.

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

                                   ARTICLE II

                             CONVEYANCE OF MORTGAGE
                    LOANS; ORIGINAL ISSUANCE OF CERTIFICATES

     Section 2.01 Conveyance of Mortgage Loans to Trustee.

     (a) The Depositor concurrently with the execution and delivery of this
Agreement, sells, transfers and assigns to the Issuing Entity without recourse
all its right, title and interest in and to (i) the Mortgage Loans identified in
the Mortgage Loan Schedule, including all interest and principal due with
respect to the Mortgage Loans after the Cut-off Date, but excluding any payments
of principal and interest due on or prior to the Cut-off Date; (ii) such assets
as shall from time to time be credited or are required by the terms of this
Agreement to be credited to the Master Servicer Collection Account, (iii) such
assets relating to the Mortgage Loans as from time to time may be held by the
Servicers in Protected Accounts, the Master Servicer in the Master Servicer
Collection Account and the Securities Administrator in the Distribution Account
for the benefit of the Trustee on behalf of the Certificateholders, (iv) any REO
Property, (v) the Required Insurance Policies and any amounts paid or payable by
the insurer under any Insurance Policy (to the extent the mortgagee has a claim
thereto), (vi) the Mortgage Loan Purchase Agreement to the extent provided in
Section 2.03(a), (vii) the rights with respect to the Servicing Agreements (as
assigned to the Depositor on behalf of the Certificateholders by the Countrywide
Assignment Agreement, in the case of the Countrywide Servicing Agreement),
(viii) any proceeds of the foregoing and (ix) the Depositor's security interest
in any collateral pledged to

                                      -37-

<PAGE>

secure the Mortgage Loans, including the Mortgaged Properties to have and to
hold, in trust. Although it is the intent of the parties to this Agreement that
the conveyance of the Depositor's right, title and interest in and to the
Mortgage Loans and other assets in the Trust Fund pursuant to this Agreement
shall constitute a purchase and sale and not a loan, in the event that such
conveyance is deemed to be a loan, it is the intent of the parties to this
Agreement that the Depositor shall be deemed to have granted to the Trustee a
first priority perfected security interest in all of the Depositor's right,
title and interest in, to and under the Mortgage Loans and other assets in the
Trust Fund, and that this Agreement shall constitute a security agreement under
applicable law.

     (b) In connection with the above transfer and assignment, the Depositor
hereby deposits with the Trustee or the Custodian, as its agent, the following
documents or instruments

     (I) with respect to each Mortgage Loan, other than a Cooperative Loan:

          (i) the original Mortgage Note, endorsed in the following form: "Pay
     to the order of HSBC Bank USA, National Association, as Trustee for the
     registered holders of the Merrill Lynch Alternative Note Asset Trust,
     Series 2007-OAR5 Mortgage Pass-Through Certificates, without recourse,"
     with all prior and intervening endorsements showing a complete chain of
     endorsement from the originator to the Person so endorsing to the Trustee;

          (ii) the original recorded Mortgage or a copy of the Mortgage
     certified by the public recording office in which such Mortgage has been
     recorded;

          (iii) an original Assignment of the Mortgage executed in the following
     form: "HSBC Bank USA, National Association, as Trustee for the registered
     holders of the Merrill Lynch Alternative Note Asset Trust, Series
     2007-OAR5, Mortgage Pass-Through Certificates.

          (iv) the original recorded Assignment or Assignments of the Mortgage
     showing a complete chain of assignment from the originator to the Person
     assigning the Mortgage to the Trustee as contemplated by the immediately
     preceding clause (iii), if applicable and only to the extent available to
     the Depositor with evidence of recording thereon;

          (v) the originals of all assumption, modification, consolidation or
     extension agreements, with evidence of recording thereon, if any;

          (vi) the original of any guarantee executed in connection with the
     Mortgage Note;

          (vii) the original mortgagee title insurance policy;

          (viii) the original of any security agreement, chattel mortgage or
     equivalent document executed in connection with the Mortgage;

          (ix) the original power of attorney, if applicable; and

                                      -38-

<PAGE>

and (II) with respect to each Mortgage Loan that is a Cooperative Loan:

          (i) the original Mortgage Note, endorsed in the following form: "Pay
     to the order of HSBC Bank USA, National Association, as Trustee for the
     registered holders of the Merrill Lynch Alternative Note Asset Trust,
     Series 2007-OAR5 Mortgage Pass-Through Certificates, without recourse,"
     with all prior and intervening endorsements showing a complete chain of
     endorsement from the originator to the Person so endorsing to the Trustee;

          (ii) the original duly executed assignment of Security Agreement to
     the Trustee;

          (iii) the acknowledgment copy of the original executed Form UCC-1 (or
     certified copy thereof) with respect to the Security Agreement, and any
     required continuation statements;

          (iv) the acknowledgment copy of the original executed Form UCC-3 with
     respect to the Security Agreement, indicating the Trustee as the assignee
     of the secured party;

          (v) the stock certificate representing the Cooperative Assets
     allocated to the cooperative unit, with a stock power in blank attached;

          (vi) the original collateral assignment of the proprietary lease by
     Mortgagor to the originator;

          (vii) a copy of the recognition agreement;

          (viii) if applicable and to the extent available, the original
     intervening assignments, including warehousing assignments, if any,
     showing, to the extent available, an unbroken chain of the related Mortgage
     Loan to the Trustee, together with a copy of the related Form UCC-3 with
     evidence of filing thereon; and

          (ix) the originals of each assumption, modification or substitution
     agreement, if any, relating to the Mortgage Loan;

provided, however, that in lieu of the foregoing, the Depositor may deliver the
following documents, under the circumstances set forth below: (w) the Depositor
may deliver a Mortgage Note pursuant to (a)(i) and (b)(i) endorsed in blank,
provided that the endorsement is completed within 60 days of the Closing Date;
(x) in lieu of the original Mortgage, assignments to the Trustee or its
Custodian, as applicable, or intervening assignments thereof which have been
delivered, are being delivered or will, upon receipt of recording information
relating to the Mortgage required to be included thereon, be delivered to
recording offices for recording and have not been returned to the Depositor in
time to permit their delivery as specified above, the Depositor may deliver a
true copy thereof with a certification by the Depositor on the face of such
copy, substantially as follows: "Certified to be a true and correct copy of the
original, which has been transmitted for recording"; and (y) in lieu of the
Mortgage, assignment to the Trustee or intervening assignments thereof, if the
applicable jurisdiction retains the originals of such

                                      -39-

<PAGE>

documents (as evidenced by a certification from the Depositor or the Master
Servicer, to such effect) the Depositor may deliver photocopies of such
documents containing an original certification by the judicial or other
governmental authority of the jurisdiction where such documents were recorded;
and provided, further, however, that in the case of Mortgage Loans which have
been prepaid in full after the Cut-off Date and prior to the Closing Date, the
Depositor, in lieu of delivering the above documents, may deliver to the Trustee
or its Custodian, as applicable, a certification to such effect and shall
deposit all amounts paid in respect of such Mortgage Loans in the Distribution
Account on the Closing Date. The Depositor shall deliver such original documents
(including any original documents as to which certified copies had previously
been delivered) to the Trustee or its Custodian, as applicable, promptly after
they are received. As of the date hereof, recordation of the assignment of the
Mortgage Loans to the Trustee or the Custodian, as applicable, is not required
in any state by either Rating Agency to obtain the initial rating on the
Certificates (upon which statement the Master Servicer, the Trustee and the
Custodian may each conclusively rely).

     If any original Mortgage Note referred to in Section 2.01(b)(I)(i) or
2.01(b)(II)(i) above cannot be located, the obligations of the Depositor to
deliver such documents shall be deemed to be satisfied upon delivery to the
Trustee or its Custodian, as applicable, of a photocopy of such Mortgage Note,
if available, with a lost note affidavit. If any of the original Mortgage Notes
for which a lost note affidavit was delivered to the Trustee or its Custodian,
as applicable, is subsequently located, such original Mortgage Note shall be
delivered to the Trustee or its Custodian, as applicable, within three Business
Days.

     (c) The parties hereto agree that it is not intended that any mortgage loan
be included in the Trust Fund that is, without limitation, a "High Cost Loan" as
defined by the Home Ownership and Equity Protection Act of 1994 or any other
applicable anti-predatory lending laws, including but not limited to (i) a
"High-Cost Home Loan" as defined in the New Jersey Home Ownership Act effective
November 27, 2003, (ii) a "High-Cost Home Loan" as defined in the New Mexico
Home Loan Protection Act effective January 1, 2004, (iii) a "High Cost Home
Mortgage Loan" as defined in the Massachusetts Predatory Home Loan Practices Act
effective November 7, 2004 or (iv) a "High-Cost Home Loan" as defined by the
Indiana High Cost Home Loan Law effective January 1, 2005.

     (d) Notwithstanding anything to the contrary contained herein, the parties
hereto acknowledge that the functions of the Trustee with respect to the
custody, acceptance, inspection and release of Mortgage Files, including but not
limited to certain insurance policies and documents contemplated by Section 3.12
of this Agreement, and preparation and delivery of the certifications shall be
performed by the Custodian(s) pursuant to the terms and conditions of the
Custodial Agreement(s).

     Section 2.02 Acceptance of Mortgage Loans by Trustee.

     (a) The Trustee acknowledges the sale, transfer and assignment of the Trust
Fund to it by the Depositor and its receipt thereof, subject to further review
and the exceptions which may be noted pursuant to the procedures described
below, and declares that it, or the Custodian on its behalf, holds the documents
(or certified copies thereof) delivered to it pursuant to Section 2.01, and
declares that it will continue to hold those documents and any amendments,

                                      -40-

<PAGE>

replacements or supplements thereto and all other assets of the Trust Fund
delivered to it as Trustee in trust for the use and benefit of all present and
future Holders of the Certificates. On or before the Closing Date (or, with
respect to any Substitute Mortgage Loan, within five Business Days after the
receipt by the Trustee or Custodian thereof), the Trustee agrees, for the
benefit of the Certificateholders, to review or cause to be reviewed by the
Custodian on its behalf (under the Custodial Agreement), each Mortgage File
delivered to it and to execute and deliver, or cause to be executed and
delivered, to the Depositor and, if applicable, to the Trustee, on the Closing
Date an Initial Certification. In conducting such review, the Trustee or
Custodian will certify as to each Mortgage Loan listed in the Mortgage Loan
Schedule (other than any Mortgage Loan paid in full or any Mortgage Loan
specifically identified in the exception report annexed thereto as not being
covered by such certification), (i) all documents constituting part of such
Mortgage File (other than such documents described in Section 2.01(b)(I)(iii))
required to be delivered to it pursuant to this Agreement are in its possession,
provided that with respect to the documents described in Section 2.01(b)(I)(v),
(vi), (viii) and (ix) and 2.01(b)(II)(viii) and (ix) to the extent the Trustee
or the Custodian on its behalf has actual knowledge that such documents exist,
(ii) such documents have been reviewed by it and are not torn, mutilated,
defaced or otherwise altered (except if initialed by the obligor) and appear to
relate on their face to such Mortgage Loan, (iii) based on its examination and
only as to the foregoing, the information set forth in the Mortgage Loan
Schedule corresponding to the loan number for the Mortgage Loan, the Mortgagor's
name, including the street address but excluding the zip code, the Mortgage
Interest Rate and the original principal balance of the Mortgage Loan accurately
reflects information set forth in the Mortgage File and (iv) with respect to
Mortgage Loans with a Mortgage Interest Rate subject to adjustment, the Gross
Margin, the lifetime cap and the periodic cap for such Mortgage Loan. In
performing any such review, the Trustee, or the Custodian, as its agent, may
conclusively rely on the purported due execution and genuineness of any such
document and on the purported genuineness of any signature thereon.
Notwithstanding anything to the contrary in this Agreement, it is herein
acknowledged that, in conducting such review, the Trustee or the Custodian on
its behalf is under no duty or obligation to inspect, review or examine any such
documents, instruments, certificates or other papers to determine whether they
are genuine, enforceable, or appropriate for the represented purpose or whether
they have actually been recorded or that they are other than what they purport
to be on their face, or to determine whether any Person executing any documents
is authorized to do so or whether any signature is genuine. If the Trustee or
the Custodian, as its agent, finds any document constituting part of the
Mortgage File not to have been executed or received, or to be unrelated to the
Mortgage Loans identified in Exhibit B or to appear to be defective on its face,
the Trustee or the Custodian, as its agent, shall promptly notify the Seller.

     In accordance with the Mortgage Loan Purchase Agreement, the Seller shall
correct or cure any such defect within ninety (90) days from the date of notice
from the Trustee or the Custodian, as its agent, of the defect and if the Seller
fails to correct or cure the defect within such period, and such defect
materially and adversely affects the interests of the Certificateholders in the
related Mortgage Loan, the Trustee, shall enforce the Seller's obligation
pursuant to the Mortgage Loan Purchase Agreement, within 90 days from the
Trustee's or the Custodian's notification, to purchase such Mortgage Loan at the
Purchase Price; provided that, if such defect would cause the Mortgage Loan to
be other than a "qualified mortgage" as defined in Section 860G(a)(3) of the
Code, any such cure or repurchase must occur within 90 days from the date such
breach was discovered; provided, however, that if such defect relates solely to
the

                                      -41-

<PAGE>

inability of the Seller to deliver the original Security Instrument or
intervening assignments thereof, or a certified copy because the originals of
such documents, or a certified copy have not been returned by the applicable
jurisdiction, the Seller shall not be required to purchase such Mortgage Loan if
the Seller delivers such original documents or certified copy promptly upon
receipt, but in no event later than 360 days after the Closing Date. The
foregoing repurchase obligation shall not apply in the event that the Seller
cannot deliver such original or copy of any document submitted for recording to
the appropriate recording office in the applicable jurisdiction because such
document has not been returned by such office; provided that the Seller shall
instead deliver a recording receipt of such recording office or, if such receipt
is not available, a certificate confirming that such documents have been
accepted for recording, and delivery to the Trustee or the Custodian, as its
agent, shall be effected by the Seller within thirty days of its receipt of the
original recorded document.

     (b) No later than 180 days after the Closing Date, the Trustee or the
Custodian, as its agent, will review, for the benefit of the Certificateholders,
the Mortgage Files delivered to it and will execute and deliver or cause to be
executed and delivered to the Depositor and, if applicable, to the Trustee, a
Final Certification. In conducting such review, the Trustee or the Custodian, as
its agent, will certify as to each Mortgage Loan listed in the Mortgage Loan
Schedule (other than any Mortgage Loan paid in full or any Mortgage Loan
specifically identified in the exception report annexed thereto as not being
covered by such certification), that (i) all documents constituting part of such
Mortgage File (other than such documents described in Section 2.01(b)(I)(v) and
(ix)) required to be delivered to it pursuant to this Agreement are in its
possession, provided that with respect to the documents described in Section
2.01(b)(I)(v), (vi), (viii) and (ix) and 2.01(b)(II)(viii) and (ix) to the
extent the Trustee or the Custodian on its behalf has actual knowledge that such
documents exist, (ii) such documents have been reviewed by it and are not torn,
mutilated, defaced or otherwise altered (except if initialed by the obligor) and
appear regular on their face and relate to such Mortgage Loan, (iii) based on
its examination and only as to the foregoing, the information set forth in the
Mortgage Loan Schedule corresponding to the loan number for the Mortgage Loan,
the Mortgagor's name, including the street address but excluding the zip code,
the Mortgage Interest Rate and the original principal balance of the Mortgage
Loan accurately reflects information set forth in the Mortgage File. In
performing any such review, the Trustee, or the Custodian, as its agent, may
conclusively rely on the purported due execution and genuineness of any such
document and on the purported genuineness of any signature thereon.
Notwithstanding anything to the contrary in this Agreement, it is herein
acknowledged that, in conducting such review, the Trustee or the Custodian on
its behalf is under no duty or obligation (i) to inspect, review or examine any
such documents, instruments, certificates or other papers to determine whether
they are genuine, enforceable, or appropriate for the represented purpose or
whether they have actually been recorded or that they are other than what they
purport to be on their face, or to determine whether any Person executing any
documents is authorized to do so or whether any signature is genuine. If the
Trustee or the Custodian, as its agent, finds any document constituting part of
the Mortgage File not to have been executed or received, or to be unrelated to
the Mortgage Loans identified in Exhibit B or to appear to be defective on its
face, the Trustee or the Custodian, as its agent, shall promptly notify the
Seller. In accordance with the Mortgage Loan Purchase Agreement, the Seller
shall correct or cure any such defect within 90 days from the date of notice
from the Trustee or its custodian of the defect and if the Seller is unable to
cure such defect within such period, and if such defect materially and adversely
affects the interests of the Certificateholders in the related Mortgage

                                      -42-

<PAGE>

Loan, the Trustee shall enforce the Seller's obligation under the Mortgage Loan
Purchase Agreement to purchase such Mortgage Loan at the Purchase Price,
provided, however, that if such defect relates solely to the inability of the
Seller to deliver the original Security Instrument or intervening assignments
thereof, or a certified copy, because the originals of such documents, or a
certified copy, have not been returned by the applicable jurisdiction, the
Seller shall not be required to purchase such Mortgage Loan, if the Seller
delivers such original documents or certified copy promptly upon receipt, but in
no event later than 360 days after the Closing Date.

     (c) In the event that a Mortgage Loan is purchased by the Seller in
accordance with Sections 2.02(a) or (b) above, the Seller shall remit to the
Master Servicer the Purchase Price for deposit in the Master Servicer Collection
Account and the Seller shall provide to the Trustee written notification
detailing the components of the Purchase Price. Upon deposit of the Purchase
Price in the Master Servicer Collection Account, the Depositor shall give
written notice thereof to the Trustee and the Custodian and the Trustee or the
Custodian, as its agent (upon receipt of a Request for Release in the form of
Exhibit D attached hereto with respect to such Mortgage Loan), shall release to
the Seller the related Mortgage File and the Trustee shall execute and deliver
all instruments of transfer or assignment, without recourse, furnished to it by
the Seller as are necessary to vest in the Seller title to and rights under the
Mortgage Loan. Such purchase shall be deemed to have occurred on the date on
which the Purchase Price in available funds is received by the Trustee. The
Depositor or Master Servicer shall amend the Mortgage Loan Schedule, to reflect
such repurchase and shall promptly notify the Rating Agencies and the Master
Servicer of such amendment. The obligation of the Seller to repurchase any
Mortgage Loan as to which such a defect in a constituent document exists shall
be the sole remedy respecting such defect available to the Certificateholders or
to the Trustee on their behalf.

     Section 2.03 Assignment of Interest in the Mortgage Loan Purchase
Agreement.

     (a) The Depositor hereby assigns to the Trustee, on behalf of the
Certificateholders, all of its right, title and interest in the Mortgage Loan
Purchase Agreement, including but not limited to Depositor's rights pursuant to
the Servicing Agreements (noting that the Seller has retained the right in the
event of breach of the representations, warranties and covenants, if any, with
respect to the related Mortgage Loans of the related Servicer under the related
Servicing Agreement to enforce the provisions thereof and to seek all or any
available remedies). The obligations of the Seller to substitute or repurchase,
as applicable, a Mortgage Loan shall be the Trustee's and the
Certificateholders' sole remedy for any breach thereof. At the request of the
Trustee, the Depositor shall take such actions as may be necessary to enforce
the above right, title and interest on behalf of the Trustee and the
Certificateholders or shall execute such further documents as the Trustee may
reasonably require in order to enable the Trustee to carry out such enforcement.
With respect to the representations and warranties described in the Mortgage
Loan Purchase Agreement that are made to the best of the Seller's knowledge, if
it is discovered by any of the Depositor, the Seller, the Master Servicer, the
Securities Administrator or the Trustee that the substance of such
representation and warranty is inaccurate and such inaccuracy materially and
adversely affects the value of the related Mortgage Loan, then notwithstanding
the Seller's lack of knowledge with respect to the substance of such
representation and warranty, such inaccuracy shall be deemed a breach of the
applicable representation or warranty.

                                      -43-

<PAGE>

     (b) If the Depositor, the Master Servicer, Securities Administrator or the
Trustee discovers a breach of any of the representations and warranties set
forth in the Mortgage Loan Purchase Agreement, which breach materially and
adversely affects the value of the interests of Certificateholders or the
Trustee in the related Mortgage Loan, the party discovering the breach shall
give prompt written notice of the breach to the other parties. The Seller,
within 90 days of its discovery or receipt of notice that such breach has
occurred (whichever occurs earlier), shall cure the breach in all material
respects or, subject to the Mortgage Loan Purchase Agreement or Section 2.04 of
this Agreement, as applicable, shall purchase the Mortgage Loan or any property
acquired with respect thereto from the Trustee; provided, however, that if there
is a breach of any representation set forth in the Mortgage Loan Purchase
Agreement or Section 2.04 of this Agreement, as applicable, and the Mortgage
Loan or the related property acquired with respect thereto has been sold, then
the Seller shall pay, in lieu of the Purchase Price, any excess of the Purchase
Price over the Net Liquidation Proceeds received upon such sale. (If the Net
Liquidation Proceeds exceed the Purchase Price, any excess shall be paid to the
Seller to the extent not required by law to be paid to the borrower.) Any such
purchase by the Seller shall be made by providing an amount equal to the
Purchase Price to the Master Servicer for deposit in the Master Servicer
Collection Account and written notification detailing the components of such
Purchase Price. The Depositor shall notify the Trustee in writing of the deposit
of the Purchase Price and submit to the Trustee or the Custodian, as its agent,
a Request for Release, and the Trustee shall release, or the Trustee shall cause
the Custodian to release, to the Seller the related Mortgage File and the
Trustee shall execute and deliver all instruments of transfer or assignment
furnished to it by the Seller, without recourse, as are necessary to vest in the
Seller title to and rights under the Mortgage Loan or any property acquired with
respect thereto. Such purchase shall be deemed to have occurred on the date on
which the Purchase Price in available funds is received by the Master Servicer.
The Depositor or the Master Servicer shall amend the Mortgage Loan Schedule to
reflect such repurchase and shall promptly notify the Master Servicer and the
Rating Agencies of such amendment. Enforcement of the obligation of the Seller
to purchase (or substitute a Substitute Mortgage Loan for) any Mortgage Loan or
any property acquired with respect thereto (or pay the Purchase Price as set
forth in the above proviso) as to which a breach has occurred and is continuing
shall constitute the sole remedy respecting such breach available to the
Certificateholders or the Trustee on their behalf.

     Section 2.04 Substitution of Mortgage Loans.

     (a) Notwithstanding anything to the contrary in this Agreement, in lieu of
purchasing a Mortgage Loan pursuant to the Mortgage Loan Purchase Agreement or
Sections 2.02 or 2.03 of this Agreement, the Seller may, no later than the date
by which such purchase by the Seller would otherwise be required, tender to the
Trustee or its custodian a Substitute Mortgage Loan accompanied by a certificate
of an authorized officer of the Seller that such Substitute Mortgage Loan
conforms to the requirements set forth in the definition of "Substitute Mortgage
Loan" in the Mortgage Loan Purchase Agreement or this Agreement, as applicable;
provided, however, that substitution pursuant to the Mortgage Loan Purchase
Agreement or Section 2.04 of this Agreement, as applicable, in lieu of purchase
shall not be permitted after the termination of the two-year period beginning on
the Startup Day; provided, further, that if the breach will cause the Mortgage
Loan to be other than a "qualified mortgage" as defined in Section 860G(a)(3) of
the Code, any such cure or substitution must occur within 90 days from the date
the breach is discovered. The Trustee or the Custodian, as its agent, shall
examine the Mortgage File for any

                                      -44-

<PAGE>

Substitute Mortgage Loan in the manner set forth in Section 2.02(a) and the
Trustee or the Custodian, as its agent, shall notify the Seller, in writing,
within five Business Days after receipt, whether the documents relating to the
Substitute Mortgage Loan satisfy the requirements of the third sentence of
Section 2.02(a).

     (b) Within two Business Days after such notification, the Seller shall
provide to the Securities Administrator for deposit in the Distribution Account
the amount, if any, by which the Outstanding Principal Balance as of the next
preceding Due Date of the Mortgage Loan for which substitution is being made,
after giving effect to Scheduled Principal due on such date, exceeds the
Outstanding Principal Balance as of such date of the Substitute Mortgage Loan,
after giving effect to Scheduled Principal due on such date, which amount shall
be treated for the purposes of this Agreement as if it were the payment by the
Seller of the Purchase Price for the purchase of a Mortgage Loan by the Seller.
After such notification to the Seller and, if any such excess exists, upon
written notification of the receipt of such deposit, the Trustee shall accept
such Substitute Mortgage Loan which shall thereafter be deemed to be a Mortgage
Loan hereunder. In the event of such a substitution, accrued interest on the
Substitute Mortgage Loan for the month in which the substitution occurs and any
Principal Prepayments made thereon during such month shall be the property of
the Issuing Entity and accrued interest for such month on the Mortgage Loan for
which the substitution is made and any Principal Prepayments made thereon during
such month shall be the property of the Seller. The Scheduled Principal on a
Substitute Mortgage Loan due on the Due Date in the month of substitution shall
be the property of the Seller and the Scheduled Principal on the Mortgage Loan
for which the substitution is made due on such Due Date shall be the property of
the Issuing Entity.

     (c) Upon acceptance of the Substitute Mortgage Loan (and delivery to the
Trustee or Custodian of a Request for Release for such Mortgage Loan), the
Trustee shall release or cause to be released to the Seller the related Mortgage
File related to any Mortgage Loan released pursuant to the Mortgage Loan
Purchase Agreement or Section 2.04 of this Agreement, as applicable, and shall
execute and deliver all instruments of transfer or assignment, without recourse,
in form as provided to it as are necessary to vest in the Seller title to and
rights under any Mortgage Loan released pursuant to the Mortgage Loan Purchase
Agreement or Section 2.04 of this Agreement, as applicable.

     (d) The Seller shall deliver the documents related to the Substitute
Mortgage Loan in accordance with the provisions of the Mortgage Loan Purchase
Agreement or Sections 2.01(b) and 2.02(b) of this Agreement, as applicable, with
the date of acceptance of the Substitute Mortgage Loan deemed to be the Closing
Date for purposes of the time periods set forth in those Sections. The
representations and warranties set forth in the Mortgage Loan Purchase Agreement
shall be deemed to have been made by the Seller with respect to each Substitute
Mortgage Loan as of the date of acceptance of such Mortgage Loan by the Trustee.
The Master Servicer shall amend the Mortgage Loan Schedule to reflect such
substitution and shall provide a copy of such amended Mortgage Loan Schedule to
the Trustee and the Rating Agencies.

     (e) Notwithstanding any other provision of this Agreement, the right to
substitute Mortgage Loans pursuant to this Article II shall be subject to the
additional limitations that no substitution of a Mortgage Loan shall be made
unless the Securities Administrator and the Trustee shall have received an
Opinion of Counsel (at the expense of the party seeking to make

                                      -45-

<PAGE>

the substitution) that, under current law, such substitution will not (A) affect
adversely the status of any REMIC established hereunder as a REMIC, or of the
related "regular interests" as "regular interests" in any such REMIC, or (B)
cause any such REMIC to engage in a "prohibited transaction" or prohibited
contribution pursuant to the REMIC provisions.

     Section 2.05 Issuance of Certificates. The Trustee acknowledges the
assignment to it on behalf of the Issuing Entity of the Mortgage Loans and the
other assets comprising the Trust Fund and, concurrently therewith, the
Securities Administrator has signed, and countersigned and delivered to the
Depositor, in exchange therefor, Certificates in such authorized denominations
representing such Percentage Interests as the Depositor has requested. The
Trustee agrees that it will hold the Mortgage Loans and such other assets as may
from time to time be delivered to it segregated on the books of the Trustee in
trust for the benefit of the Certificateholders.

     Section 2.06 Representations and Warranties Concerning the Depositor. The
Depositor hereby represents and warrants to the Trustee, the Master Servicer and
the Securities Administrator as follows:

          (i) the Depositor (a) is a corporation duly organized, validly
     existing and in good standing under the laws of the State of Delaware and
     (b) is qualified and in good standing as a foreign corporation to do
     business in each jurisdiction where such qualification is necessary, except
     where the failure so to qualify would not reasonably be expected to have a
     material adverse effect on the Depositor's business as presently conducted
     or on the Depositor's ability to enter into this Agreement and to
     consummate the transactions contemplated hereby;

          (ii) the Depositor has full corporate power to own its property, to
     carry on its business as presently conducted and to enter into and perform
     its obligations under this Agreement;

          (iii) the execution and delivery by the Depositor of this Agreement
     have been duly authorized by all necessary corporate action on the part of
     the Depositor; and neither the execution and delivery of this Agreement,
     nor the consummation of the transactions herein contemplated, nor
     compliance with the provisions hereof, will conflict with or result in a
     breach of, or constitute a default under, any of the provisions of any law,
     governmental rule, regulation, judgment, decree or order binding on the
     Depositor or its properties or the articles of incorporation or by-laws of
     the Depositor, except those conflicts, breaches or defaults which would not
     reasonably be expected to have a material adverse effect on the Depositor's
     ability to enter into this Agreement and to consummate the transactions
     contemplated hereby;

          (iv) the execution, delivery and performance by the Depositor of this
     Agreement and the consummation of the transactions contemplated hereby do
     not require the consent or approval of, the giving of notice to, the
     registration with, or the taking of any other action in respect of, any
     state, federal or other governmental authority or agency, except those
     consents, approvals, notices, registrations or other actions as have
     already been obtained, given or made;

                                      -46-

<PAGE>

          (v) this Agreement has been duly executed and delivered by the
     Depositor and, assuming due authorization, execution and delivery by the
     other parties hereto, constitutes a valid and binding obligation of the
     Depositor enforceable against it in accordance with its terms (subject to
     applicable bankruptcy and insolvency laws and other similar laws affecting
     the enforcement of the rights of creditors generally);

          (vi) there are no actions, suits or proceedings pending or, to the
     knowledge of the Depositor, threatened against the Depositor, before or by
     any court, administrative agency, arbitrator or governmental body (i) with
     respect to any of the transactions contemplated by this Agreement or (ii)
     with respect to any other matter which in the judgment of the Depositor
     will be determined adversely to the Depositor and will if determined
     adversely to the Depositor materially and adversely affect the Depositor's
     ability to enter into this Agreement or perform its obligations under this
     Agreement; and the Depositor is not in default with respect to any order of
     any court, administrative agency, arbitrator or governmental body so as to
     materially and adversely affect the transactions contemplated by this
     Agreement; and

          (vii) immediately prior to the transfer and assignment to the Trustee,
     each Mortgage Note and each Mortgage were not subject to an assignment or
     pledge, and the Depositor had good and marketable title to and was the sole
     owner thereof and had full right to transfer and sell such Mortgage Loan to
     the Trustee free and clear of any encumbrance, equity, lien, pledge,
     charge, claim or security interest.

     Section 2.07 Representations and Warranties Concerning the Master Servicer
and Securities Administrator. Wells Fargo Bank, N.A., in its capacity as Master
Servicer and Securities Administrator hereby represents and warrants to the
Seller, the Depositor and the Trustee as follows, as of the Closing Date:

          (i) It is a national banking association duly formed, validly existing
     and in good standing under the laws of the United States of America and is
     duly authorized and qualified to transact any and all business contemplated
     by this Agreement to be conducted by the Master Servicer and the Securities
     Administrator, to the extent necessary to ensure its ability to master
     service the Mortgage Loans in accordance with the terms of this Agreement
     and to perform any of its other obligations under this Agreement in
     accordance with the terms hereof;

          (ii) It 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 has duly authorized by all necessary corporate action
     on its part 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 its legal, valid and
     binding obligation, enforceable against it 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.

                                      -47-

<PAGE>

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

          (iv) No litigation is pending or, to the best of its knowledge,
     threatened, against it that would materially and adversely affect the
     execution, delivery or enforceability of this Agreement or its ability to
     perform any of its other obligations under this 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 its execution, delivery and
     performance of, or compliance with, this Agreement or the consummation of
     the transactions contemplated hereby, or if any such consent, approval,
     authorization or order is required, it has obtained the same.

                                   ARTICLE III
                 ADMINISTRATION AND SERVICING OF MORTGAGE LOANS

     Section 3.01 Master Servicer. The Master Servicer shall supervise, monitor
and oversee the obligation of the Servicers to service and administer their
respective Mortgage Loans in accordance with the terms of the applicable
Servicing Agreement and shall have full power and authority to do any and all
things which it may deem necessary or desirable in connection with such master
servicing and administration. In performing its obligations hereunder, the
Master Servicer shall act in a manner consistent with Accepted Master Servicing
Practices. Furthermore, the Master Servicer shall oversee and consult with each
Servicer as necessary from time-to-time to carry out the Master Servicer's
obligations hereunder, shall receive, review and evaluate all reports,
information and other data provided to the Master Servicer by each Servicer and
shall cause each Servicer to perform and observe the covenants, obligations and
conditions to be performed or observed by such Servicer under the applicable
Servicing Agreement. The Master Servicer shall independently and separately
monitor each Servicer's servicing activities with respect to each related
Mortgage Loan, reconcile the results of such monitoring with such information
provided in the previous sentence on a monthly basis and coordinate corrective
adjustments to the Servicers' and Master Servicer's records, and based on such
reconciled and corrected information, the Master Servicer shall provide such
information to the Securities Administrator as shall be necessary in order for
it to prepare the statements specified in Section 6.04, and prepare any other
information and statements required to be forwarded by the Master Servicer
hereunder. The Master Servicer shall reconcile the results of its monitoring
with the

                                      -48-

<PAGE>

actual remittances of the Servicers to the Master Servicer Collection Account
pursuant to the applicable Servicing Agreements.

     If the Master Servicer and the Securities Administrator are the same
entity, then at any time the Master Servicer is terminated as Master Servicer,
the Securities Administrator shall likewise be removed as securities
administrator.

     The Trustee shall furnish the Servicers and the Master Servicer with any
limited powers of attorney and other documents in form acceptable to it
necessary or appropriate to enable the Servicers and the Master Servicer to
service and administer the related Mortgage Loans and REO Property. The Trustee
shall have no liability with respect to the use of any such limited power of
attorney.

     The Trustee or the Custodian shall provide access to the records and
documentation in possession of the Trustee or the Custodian regarding the
related Mortgage Loans and REO Property and the servicing thereof to the
Certificateholders, the FDIC, and the supervisory agents and examiners of the
FDIC, such access being afforded only upon reasonable prior written request and
during normal business hours at the office of the Trustee or the Custodian;
provided, however, that, unless otherwise required by law, the Trustee or the
Custodian shall not be required to provide access to such records and
documentation if the provision thereof would violate the legal right to privacy
of any Mortgagor. The Trustee or the Custodian shall allow representatives of
the above entities to photocopy any of the records and documentation and shall
provide equipment for that purpose at a charge that covers the Trustee's or the
Custodian's actual costs.

     The Trustee shall execute and deliver to the related Servicer and the
Master Servicer upon request any court pleadings, requests for trustee's sale or
other documents necessary or desirable to (i) the foreclosure or trustee's sale
with respect to a Mortgaged Property; (ii) any legal action brought to obtain
judgment against any Mortgagor on the Mortgage Note or Security Instrument;
(iii) obtain a deficiency judgment against the Mortgagor; or (iv) enforce any
other rights or remedies provided by the Mortgage Note or Security Instrument or
otherwise available at law or equity.

                                      -49-

<PAGE>

     Section 3.02 REMIC-Related Covenants. For as long as each REMIC shall
exist, the Trustee and the Securities Administrator shall act in accordance
herewith to assure continuing treatment of such REMIC as a REMIC, and the
Trustee and the Securities Administrator shall comply with any directions of the
Depositor, the related Servicer or the Master Servicer to assure such continuing
treatment. In particular, the Trustee shall not (a) sell or permit the sale of
all or any portion of the Mortgage Loans or of any investment of deposits in an
Account unless such sale is as a result of a repurchase of the Mortgage Loans
pursuant to this Agreement or the Trustee has received a REMIC Opinion prepared
at the expense of the Issuing Entity; and (b) other than with respect to a
substitution pursuant to the Mortgage Loan Purchase Agreement or Section 2.04 of
this Agreement, as applicable, accept any contribution to any REMIC after the
Startup Day without receipt of a REMIC Opinion.

     Section 3.03 Monitoring of Servicers.

     (a) The Master Servicer shall be responsible for reporting to the Trustee
and the Depositor the compliance by each Servicer with its duties under the
related Servicing Agreement. In the review of each Servicer's activities, the
Master Servicer may rely upon an officer's certificate of the Servicer with
regard to such Servicer's compliance with the terms of its Servicing Agreement.
In the event that the Master Servicer, in its judgment, determines that a
Servicer should be terminated in accordance with its Servicing Agreement, or
that a notice should be sent pursuant to such Servicing Agreement with respect
to the occurrence of an event that, unless cured, would constitute grounds for
such termination, the Master Servicer shall notify the Depositor and the Trustee
thereof and the Master Servicer shall issue such notice or take such other
action as it deems appropriate.

     (b) The Master Servicer, for the benefit of the Trustee and the
Certificateholders, shall enforce the obligations of each Servicer under the
related Servicing Agreement, and shall, in the event that a Servicer fails to
perform its obligations in accordance with the related Servicing Agreement,
subject to the preceding paragraph, terminate the rights and obligations of such
Servicer thereunder and act as servicer of the related Mortgage Loans or, if the
Master Servicer is unwilling or unable to act as a Servicer, the Master Servicer
shall cause the Trustee to enter in to a new Servicing Agreement with a
successor Servicer selected by the Master Servicer that is eligible in
accordance with the criteria specified in this Agreement; provided, however, it
is understood and acknowledged by the parties hereto that there will be a period
of transition (not to exceed 90 days) before the actual servicing functions can
be fully transferred to such successor servicer. In either event, such
enforcement, including, without limitation, the legal prosecution of claims,
termination of the Servicing Agreements and the pursuit of other appropriate
remedies, shall be in such form and carried out to such an extent and at such
time as the Master Servicer, in its good faith business judgment, would require
were it the owner of the related Mortgage Loans. The Master Servicer shall pay
the costs of such enforcement at its own expense subject to Section 3.03(c),
provided that the Master Servicer shall not be required to prosecute or defend
any legal action except to the extent that the Master Servicer shall have
received reasonable indemnity for its costs and expenses in pursuing such
action.

     (c) To the extent that the costs and expenses of the Master Servicer
related to any termination of a Servicer, appointment of a successor Servicer or
the transfer and assumption of servicing by the Master Servicer with respect to
any Servicing Agreement (including, without

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limitation, (i) all legal costs and expenses and all due diligence costs and
expenses associated with an evaluation of the potential termination of a
Servicer as a result of an event of default by such Servicer and (ii) all costs
and expenses associated with the complete transfer of servicing, including all
servicing files and all servicing data and the completion, correction or
manipulation of such servicing data as may be required by the successor servicer
to correct any errors or insufficiencies in the servicing data or otherwise to
enable the successor service to service the Mortgage Loans in accordance with
the related Servicing Agreement) are not fully and timely reimbursed by the
terminated Servicer, the Master Servicer shall be entitled to reimbursement of
such costs and expenses from the Master Servicer Collection Account pursuant to
Section 4.03(b).

     (d) The Master Servicer shall require each Servicer to comply with the
remittance requirements and other obligations set forth in the related Servicing
Agreement.

     (e) If the Master Servicer acts as Servicer, it will not assume liability
for the representations and warranties of such Servicer, if any, that it
replaces.

     Section 3.04 Fidelity Bond. The Master Servicer, at its expense, shall
maintain in effect a blanket fidelity bond and an errors and omissions insurance
policy, affording coverage with respect to all directors, officers, employees
and other Persons acting on such Master Servicer's behalf, and covering errors
and omissions in the performance of the Master Servicer's obligations hereunder.
The errors and omissions insurance policy and the fidelity bond shall be in such
form and amount generally acceptable for entities serving as master servicers or
trustees.

     Section 3.05 Power to Act; Procedures. The Master Servicer shall master
service the Mortgage Loans and shall have full power and authority, subject to
the REMIC Provisions and the provisions of Article X hereof, to do any and all
things that it may deem necessary or desirable in connection with the master
servicing and administration of the Mortgage Loans, including but not limited to
the power and authority (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 and assumptions of the Mortgage Notes and related Mortgages, (iii) to
collect any Insurance Proceeds and Liquidation Proceeds, and (iv) to effectuate
foreclosure or other conversion of the ownership of the Mortgaged Property
securing any Mortgage Loan, in each case, in accordance with the provisions of
this Agreement and the related Servicing Agreement, as applicable; provided,
however, that the Master Servicer shall not (and, consistent with its
responsibilities under Section 3.03, shall not permit any Servicer to) knowingly
or intentionally take any action, or fail to take (or fail to cause to be taken)
any action reasonably within its control and the scope of duties more
specifically set forth herein, that, under the REMIC Provisions, if taken or not
taken, as the case may be, would cause any REMIC created hereunder to fail to
qualify as a REMIC or result in the imposition of a tax upon the Issuing Entity
(including but not limited to the tax on prohibited transactions as defined in
Section 860F(a)(2) of the Code and the tax on contributions to a REMIC set forth
in Section 860G(d) of the Code) unless the Master Servicer has received an
Opinion of Counsel (but not at the expense of the Master Servicer) to the effect
that the contemplated action will not would cause any REMIC created hereunder to
fail to qualify as a REMIC or result in the imposition of a tax upon any REMIC
created hereunder. The Trustee shall furnish the Master Servicer, upon written
request from a Servicing Officer, with any limited

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<PAGE>

powers of attorney (in form acceptable to the Trustee) empowering the Master
Servicer or any Servicer to execute and deliver instruments of satisfaction or
cancellation, or of partial or full release or discharge, and to foreclose upon
or otherwise liquidate Mortgaged Property, and to appeal, prosecute or defend in
any court action relating to the Mortgage Loans or the Mortgaged Property, in
accordance with the applicable Servicing Agreement and this Agreement, and the
Trustee shall execute and deliver such other documents, as the Master Servicer
may request, to enable the Master Servicer to master service and administer the
Mortgage Loans and carry out its duties hereunder, in each case in accordance
with Accepted Master Servicing Practices (and the Trustee shall have no
liability for misuse of any such powers of attorney by the Master Servicer or
any Servicer). If the Master Servicer or the Trustee has been advised that it is
likely that the laws of the state in which action is to be taken prohibit such
action if taken in the name of the Trustee or that the Trustee would be
adversely affected under the "doing business" or tax laws of such state if such
action is taken in its name, the Master Servicer shall join with the Trustee in
the appointment of a co-trustee pursuant to Section 9.11 hereof. In the
performance of its duties hereunder, the Master Servicer shall be an independent
contractor and shall not, except in those instances where it is taking action in
the name of the Trustee, be deemed to be the agent of the Trustee.

     Section 3.06 Due-on-Sale Clauses; Assumption Agreements. To the extent
provided in the applicable Servicing Agreement, to the extent Mortgage Loans
contain enforceable due-on-sale clauses, the Master Servicer shall cause the
Servicers to enforce such clauses in accordance with the applicable Servicing
Agreement. If applicable law prohibits the enforcement of a due-on-sale clause
or such clause is otherwise not enforced in accordance with the applicable
Servicing Agreement, and, as a consequence, a Mortgage Loan is assumed, the
original Mortgagor may be released from liability in accordance with the
applicable Servicing Agreement.

     Section 3.07 Release of Mortgage Files.

     (a) Upon becoming aware of the payment in full of any Mortgage Loan, or the
receipt by any Servicer of a notification that payment in full has been escrowed
in a manner customary for such purposes for payment to Certificateholders on the
next Distribution Date, the Servicers or the Master Servicer will, if required
under the applicable Servicing Agreement, promptly furnish to the Custodian, on
behalf of the Trustee, two copies of a certification substantially in the form
of Exhibit D hereto signed by a Servicing Officer or in a mutually agreeable
electronic format which will, in lieu of a signature on its face, originate from
a Servicing Officer (which certification shall include a statement to the effect
that all amounts received in connection with such payment that are required to
be deposited in the Protected Account maintained by the applicable Servicer
pursuant to its Servicing Agreement have been or will be so deposited) and shall
request that the Custodian, on behalf of the Trustee, deliver to the applicable
Servicer the related Mortgage File. Upon receipt of such certification and
request, the Custodian, on behalf of the Trustee, shall no later than five
Business Days (or, to the extent that the applicable Servicer notifies the
Seller that a document is not in the Servicer's possession as part of the
Servicing File which is needed for purposes of the Servicer complying with any
applicable law, within such shorter period as may be necessary to enable the
Servicer to comply with such law), release the related Mortgage File to the
applicable Servicer and the Trustee and Custodian shall have no further
responsibility with regard to such Mortgage File. Upon any such payment in full,
each

                                      -52-

<PAGE>

Servicer is authorized, to give, as agent for the Trustee, as the mortgagee
under the Mortgage that secured the Mortgage Loan, an instrument of satisfaction
(or assignment of mortgage without recourse) regarding the Mortgaged Property
subject to the Mortgage, which instrument of satisfaction or assignment, as the
case may be, shall be delivered to the Person or Persons entitled thereto
against receipt therefor of such payment, it being understood and agreed that no
expenses incurred in connection with such instrument of satisfaction or
assignment, as the case may be, shall be chargeable to the Protected Account.

     (b) From time to time and as appropriate for the servicing or foreclosure
of any Mortgage Loan and in accordance with the applicable Servicing Agreement,
the Trustee shall execute such documents as requested and as shall be prepared
and furnished to the Trustee by a Servicer or the Master Servicer and as are
necessary to the prosecution of any such proceedings. In connection with the
foregoing, the Custodian, on behalf of the Trustee, shall, upon the request of a
Servicer or the Master Servicer, and delivery to the Custodian, on behalf of the
Trustee, of two copies of a Request for Release signed by a Servicing Officer
substantially in the form of Exhibit D (or in a mutually agreeable electronic
format which will, in lieu of a signature on its face, originate from a
Servicing Officer), release the related Mortgage File held in its possession or
control to the related Servicer or the Master Servicer, as applicable. Such
trust receipt shall obligate the related Servicer or the Master Servicer to
return the Mortgage File to the Custodian on behalf of the Trustee, when the
need therefor by the Servicer or the Master Servicer no longer exists unless the
Mortgage Loan shall be liquidated, in which case, upon receipt of a certificate
of a Servicing Officer similar to that hereinabove specified, the Mortgage File
shall be released by the Custodian, on behalf of the Trustee, to the related
Servicer or the Master Servicer.

     Section 3.08 Documents, Records and Funds in Possession of Master Servicer
To Be Held for Trustee.

     (a) The Master Servicer shall transmit and each Servicer (to the extent
required by the related Servicing Agreement) shall transmit to the Trustee or
Custodian such documents and instruments coming into the possession of the
Master Servicer or such Servicer from time to time as are required by the terms
hereof, or in the case of the Servicers, the applicable Servicing Agreement, to
be delivered to the Trustee or Custodian. Any funds received by the Master
Servicer or by a Servicer in respect of any Mortgage Loan or which otherwise are
collected by the Master Servicer or by a Servicer as Liquidation Proceeds or
Insurance Proceeds in respect of any Mortgage Loan shall be held for the benefit
of the Trustee and the Certificateholders subject to the Master Servicer's right
to retain or withdraw from the Master Servicer Collection Account the Master
Servicing Compensation and other amounts provided in this Agreement, and to the
right of each Servicer to retain its Servicing Fee and other amounts as provided
in the applicable Servicing Agreement. The Master Servicer shall, and (to the
extent provided in the applicable Servicing Agreement) shall cause each Servicer
to, provide access to information and documentation regarding the Mortgage Loans
to the Trustee, its agents and accountants at any time upon reasonable request
and during normal business hours, and to Certificateholders that are savings and
loan associations, banks or insurance companies, the Office of Thrift
Supervision, the FDIC and the supervisory agents and examiners of such Office
and Corporation or examiners of any other federal or state banking or insurance
regulatory authority if so required by applicable regulations of the Office of
Thrift Supervision or other regulatory authority, such access to be afforded
without charge but only upon reasonable request in writing and during

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<PAGE>

normal business hours at the offices of the Master Servicer designated by it. In
fulfilling such a request, the Master Servicer shall not be responsible for
determining the sufficiency of such information.

     (b) All Mortgage Files and funds collected or held by, or under the control
of, the Master Servicer, in respect of any Mortgage Loans, whether from the
collection of principal and interest payments or from Liquidation Proceeds or
Insurance Proceeds, shall be held by the Master Servicer for and on behalf of
the Trustee and the Certificateholders and shall be and remain the sole and
exclusive property of the Trustee; provided, however, that the Master Servicer
and each Servicer shall be entitled to setoff against, and deduct from, any such
funds any amounts that are properly due and payable to the Master Servicer or
such Servicer under this Agreement or the applicable Servicing Agreement.

     Section 3.09 Standard Hazard Insurance and Flood Insurance Policies.

     (a) For each Mortgage Loan, the Master Servicer shall enforce any
obligation of the Servicers under the related Servicing Agreements to maintain
or cause to be maintained standard fire and casualty insurance and, where
applicable, flood insurance, all in accordance with the provisions of the
related Servicing Agreements. It is understood and agreed that such insurance
shall be with insurers meeting the eligibility requirements set forth in the
applicable Servicing Agreement and that no earthquake or other additional
insurance is to be required of any Mortgagor or to be maintained on property
acquired in respect of a defaulted loan, other than pursuant to such applicable
laws and regulations as shall at any time be in force and as shall require such
additional insurance.

     (b) Pursuant to Sections 4.01 and 4.02, any amounts collected by the
Servicers or the Master Servicer, under any insurance policies (other than
amounts to be applied to the restoration or repair of the property subject to
the related Mortgage or released to the Mortgagor in accordance with the
applicable Servicing Agreement) shall be deposited into the Master Servicer
Collection Account, subject to withdrawal pursuant to Sections 4.02 and 4.03 in
accordance with the terms and conditions of the related Servicing Agreement. Any
cost incurred by the Master Servicer or any Servicer in maintaining any such
insurance if the Mortgagor defaults in its obligation to do so shall be added to
the amount owing under the Mortgage Loan where the terms of the Mortgage Loan so
permit; provided, however, that the addition of any such cost shall not be taken
into account for purposes of calculating the distributions to be made to
Certificateholders and shall be recoverable by the Master Servicer or such
Servicer pursuant to Sections 4.02 and 4.03.

     Section 3.10 Presentment of Claims and Collection of Proceeds. The Master
Servicer shall (to the extent provided in the applicable Servicing Agreement)
cause the related Servicer to, prepare and present on behalf of the Trustee and
the Certificateholders all claims under the Insurance Policies and take such
actions (including the negotiation, settlement, compromise or enforcement of the
insured's claim) as shall be necessary to realize recovery under such policies.
Any proceeds disbursed to the Master Servicer (or disbursed to a Servicer and
remitted to the Master Servicer) in respect of such policies, bonds or contracts
shall be promptly deposited in the Master Servicer Collection Account upon
receipt, except that any amounts realized that are to be applied to the repair
or restoration of the related Mortgaged Property as a condition precedent to

                                      -54-

<PAGE>

the presentation of claims on the related Mortgage Loan to the insurer under any
applicable Insurance Policy need not be so deposited (or remitted).

     Section 3.11 Maintenance of the Primary Mortgage Insurance Policies.

     (a) The Master Servicer shall not take, or permit any Servicer (to the
extent such action is prohibited under the applicable Servicing Agreement) to
take, any action that would result in noncoverage under any applicable Primary
Mortgage Insurance Policy of any loss which, but for the actions of such Master
Servicer or Servicer, would have been covered thereunder. The Master Servicer
shall use its best reasonable efforts to cause each Servicer (to the extent
required under the related Servicing Agreement) to keep in force and effect (to
the extent that the Mortgage Loan requires the Mortgagor to maintain such
insurance), primary mortgage insurance applicable to each Mortgage Loan in
accordance with the provisions of this Agreement and the related Servicing
Agreement, as applicable. The Master Servicer shall not, and shall not permit
any Servicer (to the extent required under the related Servicing Agreement) to,
cancel or refuse to renew any such Primary Mortgage Insurance Policy that is in
effect at the date of the initial issuance of the Mortgage Note and is required
to be kept in force hereunder except in accordance with the provisions of this
Agreement and the related Servicing Agreement, as applicable.

     (b) The Master Servicer agrees to present, or to cause each Servicer (to
the extent required under the related Servicing Agreement) to present, on behalf
of the Trustee and the Certificateholders, claims to the insurer under any
Primary Mortgage Insurance Policies and, in this regard, to take such reasonable
action as shall be necessary to permit recovery under any Primary Mortgage
Insurance Policies respecting defaulted Mortgage Loans. Pursuant to Section 4.01
and 4.02, any amounts collected by the Master Servicer or any Servicer under any
Primary Mortgage Insurance Policies shall be deposited in the Master Servicer
Collection Account, subject to withdrawal pursuant to Section 4.03.

     Section 3.12 Trustee to Retain Possession of Certain Insurance Policies and
Documents. The Trustee or the Custodian shall retain possession and custody of
the originals (to the extent available) of any Primary Mortgage Insurance
Policies, or certificate of insurance if applicable, and any certificates of
renewal as to the foregoing as may be issued from time to time as contemplated
by this Agreement. Until all amounts distributable in respect of the
Certificates have been distributed in full and the Master Servicer otherwise has
fulfilled its obligations under this Agreement, the Trustee or its Custodian
shall also retain possession and custody of each Mortgage File in accordance
with and subject to the terms and conditions of this Agreement. The Master
Servicer shall promptly deliver or cause to be delivered to the Trustee or the
Custodian upon the execution or receipt thereof the originals of any Primary
Mortgage Insurance Policies, any certificates of renewal, and such other
documents or instruments that constitute portions of the Mortgage File that come
into the possession of the Master Servicer from time to time.

     Section 3.13 Realization Upon Defaulted Mortgage Loans. The Master Servicer
shall cause each Servicer (to the extent required under the related Servicing
Agreement) to foreclose upon, repossess or otherwise comparably convert the
ownership of Mortgaged Properties securing such of the Mortgage Loans as come
into and continue in default and as to which no

                                      -55-

<PAGE>

satisfactory arrangements can be made for collection of delinquent payments, all
in accordance with the terms and conditions of the applicable Servicing
Agreement.

     Section 3.14 Compensation for the Master Servicer. The Master Servicer will
be entitled to all income and gain realized from any investment of funds in the
Master Servicer Collection Account, pursuant to Article IV, for the performance
of its activities hereunder. Servicing compensation in the form of assumption
fees, if any, late payment charges, as collected, if any, or otherwise (but not
including any prepayment premium or penalty) shall be retained by the applicable
Servicer and shall not be deposited in the Protected Account. The Master
Servicer shall be required to pay all expenses incurred by it in connection with
its activities hereunder and shall not be entitled to reimbursement therefor
except as provided in this Agreement.

     Section 3.15 REO Property.

     (a) In the event the Issuing Entity acquires ownership of any REO Property
in respect of any related Mortgage Loan, the deed or certificate of sale shall
be issued to the Trustee, or to its nominee, on behalf of the related
Certificateholders. The Master Servicer shall, to the extent provided in the
applicable Servicing Agreement, cause the applicable Servicer to sell, any REO
Property as expeditiously as possible and in accordance with the provisions of
this Agreement and the related Servicing Agreement, as applicable. Pursuant to
its efforts to sell such REO Property, the Master Servicer shall cause the
applicable Servicer to protect and conserve, such REO Property in the manner and
to the extent required by the applicable Servicing Agreement, in accordance with
the REMIC Provisions and in a manner that does not result in a tax on "net
income from foreclosure property" or cause such REO Property to fail to qualify
as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code.

     (b) The Master Servicer shall, to the extent required by the related
Servicing Agreement, cause the applicable Servicer to deposit all funds
collected and received in connection with the operation of any REO Property in
the Protected Account.

     (c) The Master Servicer and the applicable Servicer, upon the final
disposition of any REO Property, shall be entitled to reimbursement for any
related unreimbursed Monthly Advances and other unreimbursed advances as well as
any unpaid Servicing Fees from Liquidation Proceeds received in connection with
the final disposition of such REO Property; provided, that any such unreimbursed
Monthly Advances as well as any unpaid Servicing Fees may be reimbursed or paid,
as the case may be, prior to final disposition, out of any net rental income or
other net amounts derived from such REO Property.

     (d) To the extent provided in the related Servicing Agreement, the
Liquidation Proceeds from the final disposition of the REO Property, net of any
payment to the Master Servicer and the applicable Servicer as provided above
shall be deposited in the Protected Account on or prior to the Determination
Date in the month following receipt thereof and be remitted by wire transfer in
immediately available funds to the Master Servicer for deposit into the related
Master Servicer Collection Account on the next succeeding Servicer Remittance
Date.

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     Section 3.16 Annual Statement as to Compliance.

     Not later than March 1 of each calendar year (other than the calendar year
during which the Closing Date occurs), each Servicer shall deliver (or otherwise
make available) and each Servicer shall cause any Servicing Function Participant
engaged by it to deliver to the Master Servicer, the Securities Administrator
and the Depositor, an Officer's Certificate in the form attached hereto as
Exhibit P stating, as to each signatory thereof, that (i) a review of the
activities of such signatory during the preceding calendar year, or portion
thereof, and of the performance of such signatory under the related Servicing
Agreement or such other applicable agreement in the case of a Servicing Function
Participant has been made under such officer's supervision, and (ii) to the best
of such officer's knowledge, based on such review, such signatory has fulfilled
all its obligations under this Agreement, the related Servicing Agreement or
such other applicable agreement in all material respects throughout such year or
a portion thereof, or, if there has been a failure to fulfill any such
obligation in any material respect, specifying each such failure known to such
officer and the nature and status thereof.

     The Master Servicer and the Securities Administrator shall deliver (or
otherwise make available) (and the Master Servicer and Securities Administrator
shall cause any Servicing Function Participant engaged by it to deliver) to the
Depositor and the Securities Administrator on or before March 1 (with a
ten-calendar day cure period) of each year, commencing in March 2008, an
Officer's Certificate stating, as to the signer thereof, that (A) a review of
such party's activities during the preceding calendar year or portion thereof
and of such party's performance under this Agreement, or such other applicable
agreement in the case of a Servicing Function Participant, has been made under
such officer's supervision and (B) to the best of such officer's knowledge,
based on such review, such party has fulfilled all its obligations under this
Agreement, or such other applicable agreement in the case of a Servicing
Function Participant, in all material respects throughout such year or portion
thereof, or, if there has been a failure to fulfill any such obligation in any
material respect, specifying each such failure known to such officer and the
nature and status thereof.

     The Master Servicer shall include all annual statements of compliance
received by it from each Servicer with its own annual statement of compliance to
be submitted to the Securities Administrator pursuant to this Section.

     In the event the Master Servicer, the Securities Administrator or any
Servicing Function Participant engaged by any such party is terminated, assigns
its rights and obligations under or resigns pursuant to the terms of this
Agreement, or such other applicable agreement in the case of a Servicing
Function Participant, as the case may be, such party shall provide, an annual
statement of compliance pursuant to this Section 3.16 or to such applicable
agreement, as the case may be, notwithstanding any such termination, assignment
or resignation.

     Section 3.17 Reports on Assessment of Compliance and Attestation.

     (a) Not later than March 1 of each calendar year (other than the calendar
year during which the Closing Date occurs) each Servicer at its own expense,
shall furnish, and shall cause any Servicing Function Participant engaged by it
to furnish (unless in the case of a Subcontractor, such Servicer has notified
the Depositor and the Master Servicer in writing that

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<PAGE>

such compliance statement is not required for the Subcontractor) to the Master
Servicer, the Securities Administrator and the Depositor an officer's assessment
of its compliance with the Relevant Servicing Criteria during the preceding
calendar year as required by Rules 13a-18 and 15d-18 of the Exchange Act and
Item 1122 of Regulation AB (the "Assessment of Compliance"), which assessment
shall contain (A) a statement by such party of its responsibility for assessing
compliance with the Relevant Servicing Criteria, (B) a statement that such party
used the Relevant Servicing Criteria to assess compliance with the Relevant
Servicing Criteria, (C) such party's assessment of compliance with the Relevant
Servicing Criteria as of and for the fiscal year covered by the Form 10-K
required to be filed pursuant to Section 3.18, including, if there has been any
material instance of noncompliance with the Relevant Servicing Criteria, a
discussion of each such failure and the nature and status thereof, which
assessment shall be based on the activities it performs with respect to
asset-backed securities transactions taken as a whole involving such party that
are backed by the same asset type as the Mortgage Loans, and (D) a statement
that a registered public accounting firm has issued an attestation report on
such party's assessment of compliance with the Relevant Servicing Criteria as of
and for such period.

     By March 1 (with a ten-calendar day cure period) of each year, commencing
in March 2008, the Master Servicer, the Securities Administrator and the
Custodian each at its own expense, shall furnish or otherwise make available,
and each such party shall cause any Servicing Function Participant engaged by it
to furnish, each at its own expense, to the Securities Administrator and the
Depositor, a report on an assessment of compliance with the Relevant Servicing
Criteria that contains (A) a statement by such party of its responsibility for
assessing compliance with the Relevant Servicing Criteria, (B) a statement that
such party used the Relevant Servicing Criteria to assess compliance with the
Relevant Servicing Criteria, (C) such party's assessment of compliance with the
Relevant Servicing Criteria as of and for the fiscal year covered by the Form
10-K required to be filed pursuant to Sections 3.18(h), (i), (j) and (k),
including, if there has been any material instance of noncompliance with the
Relevant Servicing Criteria, a discussion of each such failure and the nature
and status thereof, and (D) a statement that a registered public accounting firm
has issued an attestation report on such party's assessment of compliance with
the Relevant Servicing Criteria as of and for such period.

     No later than the end of each fiscal year for the Issuing Entity for which
a 10-K is required to be filed, the Master Servicer and the Custodian shall each
forward to the Securities Administrator and the Depositor the name of each
Servicing Function Participant engaged by it and what Relevant Servicing
Criteria will be addressed in the report on assessment of compliance prepared by
such Servicing Function Participant (provided, however, that the Master Servicer
need not provide such information to the Securities Administrator so long as the
Master Servicer and the Securities Administrator are the same Person). When the
Master Servicer, and the Securities Administrator (or any Servicing Function
Participant engaged by them) submit their assessments to the Securities
Administrator, such parties will also at such time include the assessment and
attestation pursuant to this Section 3.17 of each Servicing Function Participant
engaged by it.

     Promptly after receipt of each report on assessment of compliance, (i) the
Depositor shall review each such report and, if applicable, consult with such
Servicer, the Master Servicer, the Securities Administrator and any Servicing
Function Participant engaged by any such party as to the nature of any material
instance of noncompliance with the Relevant Servicing Criteria by

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<PAGE>

such Servicer by each such party, and (ii) the Securities Administrator shall
confirm that the assessments individually address the Relevant Servicing
Criteria for each party as set forth on Exhibit K or any similar exhibit set
forth in each Servicing Agreement in respect of each Servicer and notify the
Depositor of any exceptions.

     The Master Servicer shall include all annual reports on assessment of
compliance received by it from the Servicers with its own assessment of
compliance to be submitted to the Securities Administrator pursuant to this
Section.

     In the event the Master Servicer, the Securities Administrator or any
Servicing Function Participant engaged by any such party is terminated, assigns
its rights and obligations under or resigns pursuant to the terms of this
Agreement, or any other applicable agreement, as the case may be, such party
shall provide, an assessment of compliance pursuant to this Section 3.17,
coupled with an attestation as required in this Section 3.17, or such applicable
agreement notwithstanding any such termination, assignment or resignation.

     (b) Not later than March 1 of each calendar year (other than the calendar
year during which the Closing Date occurs) each Servicer at its own expense,
shall cause, and shall cause any Servicing Function Participant engaged by it to
cause (unless in the case of a Subcontractor, such Servicer has notified the
Depositor and the Master Servicer in writing that such report is not required
for the Subcontractor) a nationally or regionally recognized firm of independent
registered public accountants (who may also render other services to such
Servicer, the Master Servicer or any affiliate thereof) which is a member of the
American Institute of Certified Public Accountants to furnish a report (the
"Accountant's Attestation") to the Master Servicer, the Securities Administrator
and the Depositor to the effect that (i) it has obtained a representation
regarding certain matters from the management of such party, which includes an
assertion that such party has complied with the Relevant Servicing Criteria, and
(ii) on the basis of an examination conducted by such firm in accordance with
standards for attestation engagements issued or adopted by the Public Company
Accounting Oversight Board, it is expressing an opinion as to whether such
party's compliance with the Relevant Servicing Criteria was fairly stated in all
material respects, or it cannot express an overall opinion regarding such
party's assessment of compliance with the Relevant Servicing Criteria. In the
event that an overall opinion cannot be expressed, such registered public
accounting firm shall state in such report why it was unable to express such an
opinion. Such report must be available for general use and not contain
restricted use language. Such Accountant's Attestation shall be in accordance
with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities Act and
the Exchange Act.

     By March 1 (with a ten-calendar day cure period) of each year, commencing
in March 2008, the Master Servicer, the Securities Administrator and the
Custodian, each at its own expense, shall cause, and each such party shall cause
any Servicing Function Participant engaged by it to cause, each at its own
expense, a registered public accounting firm (which may also render other
services to the Master Servicer, the Securities Administrator, or such other
Servicing Function Participants, as the case may be) and that is a member of the
American Institute of Certified Public Accountants to furnish an attestation
report to the Securities Administrator and the Depositor, to the effect that (i)
it has obtained a representation regarding certain matters from the management
of such party, which includes an assertion that such party has complied with the
Relevant Servicing Criteria, and (ii) on the basis of an examination

                                      -59-

<PAGE>

conducted by such firm in accordance with standards for attestation engagements
issued or adopted by the Public Company Accounting Oversight Board, it is
expressing an opinion as to whether such party's compliance with the Relevant
Servicing Criteria was fairly stated in all material respects, or it cannot
express an overall opinion regarding such party's assessment of compliance with
the Relevant Servicing Criteria. In the event that an overall opinion cannot be
expressed, such registered public accounting firm shall state in such report why
it was unable to express such an opinion. Such report must be available for
general use and not contain restricted use language.

     (c) Promptly after receipt of each assessment of compliance and attestation
report, the Securities Administrator shall confirm that each assessment
submitted pursuant to Section 3.17(a) is coupled with an attestation meeting the
requirements of Section 3.17(b) and notify the Depositor of any exceptions.

     The Master Servicer shall include each such attestation furnished to it by
the Servicers with its own attestation to be submitted to the Securities
Administrator pursuant to this Section.

     In the event the Master Servicer, the Securities Administrator, the
Custodian, any Servicer or any Servicing Function Participant engaged by any
such party, is terminated, assigns its rights and duties under, or resigns
pursuant to the terms of, this Agreement, or any applicable Custodial Agreement,
Servicing Agreement or sub-servicing agreement, as the case may be, such party
shall cause a registered public accounting firm to provide an attestation
pursuant to this Section 3.17, or such other applicable agreement,
notwithstanding any such termination, assignment or resignation.

     Section 3.18 Periodic Filings.

     (a) Within four (4) Business Days after the occurrence of an event
requiring disclosure on Form 8-K (each such event, a "Reportable Event"), and if
requested by the Depositor, the Securities Administrator shall prepare and file
on behalf of the Issuing Entity a Form 8-K, as required by the Exchange Act,
provided that the Depositor shall file the initial Form 8-K in connection with
the issuance of the Certificates. Any disclosure or information related to a
Reportable Event or that is otherwise required to be included on Form 8-K (other
than the initial Form 8-K) ("Form 8-K Disclosure Information") shall be reported
by the parties set forth on Exhibit Q-3 to the Depositor and the Securities
Administrator and directed and approved by the Depositor, and the Securities
Administrator will have no duty or liability for any failure hereunder to
determine or prepare any Form 8-K Disclosure Information or any Form 8-K except
as set forth in the next paragraph.

     (b) For so long as the Issuing Entity is subject to the reporting
requirements of the Exchange Act, following the occurrence of a Reportable Event
(A) each party listed on Exhibit Q-3 hereto shall use commercially reasonable
best efforts to provide immediate notice to the Master Servicer, the Securities
Administrator and the Depositor, by fax and by phone or by e-mail and by phone,
(B) each such party shall be required to provide to the Securities Administrator
and the Depositor, to the extent known, in EDGAR-compatible format or in such
other format as agreed upon by the Securities Administrator and such party, the
form and substance of any Form 8-K Disclosure Information if applicable,
together with the form set forth

                                      -60-

<PAGE>

on Exhibit O (the "Additional Disclosure Notification") by the close of business
New York City time on the 2nd Business Day following the occurrence of such
Reportable Event and (C) the Depositor, shall approve, as to form and substance,
or disapprove, as the case may be, the inclusion of the Form 8-K Disclosure
Information on Form 8-K. The Securities Administrator has no duty under this
Agreement to monitor or enforce the performance by the parties listed on Exhibit
Q-3 of their duties under this paragraph or proactively solicit or procure from
such parties any Form 8-K Disclosure Information. The Depositor will be
responsible for any reasonable fees and expenses assessed or incurred by the
Securities Administrator in connection with including any Form 8-K Disclosure
Information on Form 8-K pursuant to this paragraph.

     (c) After preparing the Form 8-K, the Securities Administrator shall, upon
request, forward electronically a copy of the Form 8-K to the Depositor.
Promptly, but no later than the close of business on the third Business Day
after the Reportable Event, the Depositor shall notify the Securities
Administrator in writing (which may be furnished electronically) of any changes
to or approval of such Form 8-K. In the absence of receipt of any written
changes or approval, or if the Depositor does not request a copy of a Form 8-K,
the Securities Administrator shall be entitled to assume that such Form 8-K is
in final form and the Securities Administrator may proceed with the process for
execution and filing of the Form 8-K. A duly authorized representative of the
Master Servicer shall sign each Form 8-K. If a Form 8-K cannot be filed on time
or if a previously filed Form 8-K needs to be amended, the Securities
Administrator will follow the procedures set forth in Section 3.18(n).

     (d) Promptly (but no later than one Business Day) after filing with the
Commission, the Securities Administrator will make available on its internet
website a final executed copy of each Form 8-K prepared and filed by the
Securities Administrator. The parties to this Agreement acknowledge that the
performance by the Master Servicer and the Securities Administrator of its
duties under this Section 3.18 related to the timely preparation, execution and
filing of Form 8-K is contingent upon the other parties hereto strictly
observing all applicable deadlines in the performance of their duties under this
Section 3.18. The Depositor acknowledges that the performance by the Master
Servicer and the Securities Administrator of its duties under this Section 3.18
related to the timely preparation, execution and filing of Form 8-K is also
contingent upon the Servicers, the Custodian and any Servicing Function
Participant strictly observing deadlines no later than those set forth in this
paragraph that are applicable to the parties to this Agreement in the delivery
to the Securities Administrator of any necessary Form 8-K Disclosure Information
pursuant to the related Servicing Agreements, the Custodial Agreement or any
other applicable agreement. Neither the Master Servicer nor the Securities
Administrator shall have any liability for any loss, expense, damage or claim
arising out of or with respect to any failure to properly prepare, execute
and/or timely file such Form 8-K, where such failure results from the Securities
Administrator's inability or failure to obtain or receive, on a timely basis,
any information from any other party hereto or any Servicer, Custodian or
Servicing Function Participant needed to prepare, arrange for execution or file
such Form 8-K.

     (e) Within fifteen (15) days after each Distribution Date (subject to
permitted extensions under the Exchange Act), the Securities Administrator
shall, on behalf of the Issuing Entity and in accordance with industry
standards, prepare and file with the Commission via the Electronic Data
Gathering and Retrieval System (EDGAR), a Form 10-D with a copy of the Monthly
Statement for such Distribution Date as an exhibit thereto. Any disclosure in
addition

                                      -61-

<PAGE>

to the Monthly Statement that is required to be included on Form 10-D
("Additional Form 10-D Disclosure") shall be reported by the parties set forth
on Exhibit Q-1 to the Depositor and the Securities Administrator and directed
and approved by the Depositor pursuant to the following paragraph, and the
Securities Administrator will have no duty or liability for any failure
hereunder to determine or prepare any Additional Form 10-D Disclosure except as
set forth in the next paragraph.

     (f) As set forth in Exhibit Q-1 hereto, for so long as the Issuing Entity
is subject to the reporting requirements of the Exchange Act, within five (5)
calendar days after the related Distribution Date (i) each party listed on
Exhibit Q-1 hereto shall be required to provide to the Depositor and the
Securities Administrator, to the extent known, in EDGAR-compatible format or in
such other format as agreed upon by the Securities Administrator and such party,
the form and substance of any Additional Form 10-D Disclosure if applicable
together with an Additional Disclosure Notification, and (ii) the Depositor will
approve, as to form and substance, or disapprove, as the case may be, the
inclusion of the Additional Form 10-D Disclosure on Form 10-D. The Securities
Administrator has no duty under this Agreement to monitor or enforce the
performance by the parties listed on Exhibit Q-1 of their duties under this
paragraph or proactively solicit or procure from such parties any Additional
Form 10-D Disclosure Information. The Depositor will be responsible for any
reasonable fees and expenses incurred by the Securities Administrator in
connection with including any Additional Form 10-D Disclosure on Form 10-D
pursuant to this paragraph.

     (g) After preparing the Form 10-D, the Securities Administrator shall, upon
request, forward electronically a copy of the Form 10-D to the Depositor
(provided that such Form 10-D includes any Additional Form 10-D Disclosure).
Within two Business Days after receipt of such copy, but no later than the 12th
calendar day after the Distribution Date, the Depositor shall notify the
Securities Administrator in writing (which may be furnished electronically) of
any changes to or approval of such Form 10-D. In the absence of receipt of any
written changes or approval, or if the Depositor does not request a copy of a
Form 10-D, the Securities Administrator shall be entitled to assume that such
Form 10-D is in final form and the Securities Administrator may proceed with the
process for execution and filing of the Form 10-D. A duly authorized
representative of the Master Servicer shall sign each Form 10-D. If a Form 10-D
cannot be filed on time or if a previously filed Form 10-D needs to be amended,
the Securities Administrator will follow the procedures set forth in Section
3.18(n). Promptly (but not later than one Business Day) after filing with the
Commission, the Securities Administrator will make available on its internet
website a final executed copy of each Form 10-D prepared and filed by the
Securities Administrator. Form 10-D requires the registrant to indicate (by
checking "yes" or "no") that it "(1) has filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days." The
Depositor hereby instructs the Securities Administrator, with respect to each
Form 10-D, to check "yes" for each item unless the Securities Administrator has
received timely prior written notice from the Depositor that the answer should
be "no" for an item. The parties to this Agreement acknowledge that the
performance by the Master Servicer and the Securities Administrator of its
respective duties under this Section 3.18 related to the timely preparation,
execution and filing of Form 10-D is contingent upon the other parties hereto
strictly observing all applicable deadlines in the performance of their duties
under this Section 3.18. The Depositor

                                      -62-

<PAGE>

acknowledges that the performance by the Master Servicer and the Securities
Administrator of its duties under this Section 3.18 related to the timely
preparation, execution and filing of Form 10-D is also contingent upon the
Servicers, the Custodian and any Servicing Function Participant strictly
observing deadlines no later than those set forth in this paragraph that are
applicable to the parties to this Agreement in the delivery to the Securities
Administrator of any necessary Additional Form 10-D Disclosure pursuant to the
related Servicing Agreements, the Custodial Agreement or any other applicable
agreement. Neither the Master Servicer nor the Securities Administrator will
have any liability for any loss, expense, damage or claim arising out of or with
respect to any failure to properly prepare, execute and/or timely file such Form
10-D resulting from the Securities Administrator's inability or failure to
obtain or receive any information needed to prepare, arrange for execution or
file such Form 10-D on a timely basis.

     (h) On or prior to the 90th calendar day after the end of the fiscal year
for the Issuing Entity or such earlier date as may be required by the Exchange
Act (the "10-K Filing Deadline") (it being understood that the fiscal year for
the Issuing Entity ends on December 31st of each year) commencing in March 2008,
the Securities Administrator shall, on behalf of the Issuing Entity and in
accordance with industry standards, prepare and file with the Commission via
EDGAR a Form 10-K with respect to the Issuing Entity. Such Form 10-K shall
include the following items, in each case, as applicable, to the extent they
have been delivered to the Securities Administrator within the applicable time
frames set forth in this Agreement, the related Servicing Agreements and
Custodial Agreement: (i) an annual compliance statement for the Master Servicer,
each Servicer, the Securities Administrator and any Servicing Function
Participant engaged by any such party (together with the Custodian, each a
"Reporting Servicer"), as described in Section 3.16 of this Agreement, the
related Servicing Agreement and the Custodial Agreement; provided, however, that
the Securities Administrator, at its discretion, may omit from the Form 10-K any
annual compliance statement that is not required to be filed with such Form 10-K
pursuant to Regulation AB; (ii)(A) the annual reports on assessment of
compliance with Servicing Criteria for each Reporting Servicer (unless the
Depositor has determined that such compliance statement is not required by
Regulation AB), as described in Section 3.17 of this Agreement, the related
Servicing Agreement and the Custodial Agreement, and (B) if any Reporting
Servicer's report on assessment of compliance with Servicing Criteria described
in Section 3.17 identifies any material instance of noncompliance, disclosure
identifying such instance of noncompliance, or if any Reporting Servicer's
report on assessment of compliance with Servicing Criteria described in Section
3.17 of this Agreement is not included as an exhibit to such Form 10-K,
disclosure that such report is not included and an explanation why such report
is not included; provided, however, that the Securities Administrator, at its
discretion, may omit from the Form 10-K any assessment of compliance or
attestation report described in clause (iii) below that is not required to be
filed with such Form 10-K pursuant to Regulation AB; (iii)(A) the registered
public accounting firm attestation report for each Reporting Servicer, as
described in Section 3.17 of this Agreement, the related Servicing Agreement and
the Custodial Agreement, and (B) if any registered public accounting firm
attestation report described under Section 3.17 of this Agreement identifies any
material instance of noncompliance, disclosure identifying such instance of
noncompliance, or if any such registered public accounting firm attestation
report is not included as an exhibit to such Form 10-K, disclosure that such
report is not included and an explanation why such report is not included, and
(iv) a Sarbanes-Oxley Certification in the form attached hereto as Exhibit L,
executed by the senior officer in charge of the master servicing functions. Any
disclosure or information in

                                      -63-

<PAGE>

addition to (i) through (iv) above that is required to be included on Form 10-K
("Additional Form 10-K Disclosure") shall be reported by the parties as set
forth in Exhibit Q-2 to the Depositor and the Securities Administrator and
directed and approved by the Depositor pursuant to the following paragraph and
the Securities Administrator will have no duty or liability for any failure
hereunder to determine or prepare any Additional Form 10-K Disclosure except or
set forth in the next paragraph.

     (i) As set forth in Exhibit Q-2 hereto, no later than March 1 (with a ten
calendar day cure period) of each year that the Issuing Entity is subject to the
Exchange Act reporting requirements, commencing in March 2008, (i) the parties
listed on Exhibit Q-2 hereto shall be required to provide to the Depositor and
the Securities Administrator, to the extent known, in EDGAR-compatible format or
in such other format as agreed upon by the Securities Administrator and such
party, the form and substance of any Additional Form 10-K Disclosure, if
applicable together with an Additional Disclosure Notification, and (ii) the
Depositor will approve, as to form and substance, or disapprove, as the case may
be, the inclusion of the Additional Form 10-K Disclosure. The Securities
Administrator has no duty under this Agreement to monitor or enforce the
performance by the parties listed on Exhibit Q-2 of their duties under this
paragraph or proactively solicit or procure from such parties any Additional
Form 10-K Disclosure Information. The Depositor will be responsible for any
reasonable fees and expenses incurred by the Securities Administrator in
connection with including any Additional Form 10-K Disclosure on Form 10-K
pursuant to this paragraph.

     (j) After preparing the Form 10-K, the Securities Administrator shall, upon
request, forward electronically a copy of the Form 10-K to the Depositor. Within
three Business Days after receipt of such copy, but no later than March 25th,
the Depositor shall notify the Securities Administrator in writing (which may be
furnished electronically) of any changes to or approval of such Form 10-K. In
the absence of receipt of any written changes or approval, or if the Depositor
does not request a copy of a Form 10-K, the Securities Administrator shall be
entitled to assume that such Form 10-K is in final form and the Securities
Administrator may proceed with the process for execution and filing of the Form
10-K. A senior officer of the Master Servicer in charge of the master servicing
function shall sign the Form 10-K. If a Form 10-K cannot be filed on time or if
a previously filed Form 10-K needs to be amended, the Securities Administrator
will follow the procedures set forth in Section 3.18(n). Promptly (but no later
than one Business Day) after filing with the Commission, the Securities
Administrator will make available on its internet website a final executed copy
of each Form 10-K prepared and filed by the Securities Administrator. Form 10-K
requires the registrant to indicate (by checking "yes" or "no") that it "(1) has
filed all reports required to be filed by Section 13 or 15(d) of the Exchange
Act during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days." The Depositor hereby instructs the
Securities Administrator, with respect to each Form 10-K, to check "yes" for
each item unless the Securities Administrator has received timely prior written
notice from the Depositor that the answer should be "no" for an item. The
parties to this Agreement acknowledge that the performance by the Master
Servicer and the Securities Administrator of its duties under this Section 3.18
related to the timely preparation, execution and filing of Form 10-K is
contingent upon such parties (and any Servicing Function Participant) strictly
observing all applicable deadlines in the performance of their duties under this
Section 3.18, Section 3.16 and Section 3.17. The Depositor acknowledges that the
performance by the

                                      -64-
<PAGE>

Master Servicer and the Securities Administrator of its duties under this
Section 3.18 related to the timely preparation, execution and filing of Form
10-K is also contingent upon the Servicers, the Custodian and any Servicing
Function Participant strictly observing deadlines no later than those set forth
in this paragraph that are applicable to the parties to this Agreement in the
delivery to the Securities Administrator of any necessary Additional Form 10-K
Disclosure, any annual statement of compliance and any assessment of compliance
and attestation pursuant to the related Servicing Agreement, the Custodial
Agreement or any other applicable agreement. Neither the Master Servicer nor the
Securities Administrator shall have any liability for any loss, expense, damage
or claim arising out of or with respect to any failure to properly prepare,
execute and/or timely file such Form 10-K resulting from the Securities
Administrator's inability or failure to obtain or receive any information from
any other party hereto or any Servicer, Custodian or Servicing Function
Participant needed to prepare, execute or file such Form 10-K.

     (k) Each Form 10-K shall include a Sarbanes-Oxley Certification, which
shall be in the form attached hereto as Exhibit L. Each Servicer shall sign and
provide, and each of the Servicers, the Master Servicer and the Securities
Administrator shall cause any Servicing Function Participant engaged by it to
sign and provide, to the person who signs the Sarbanes-Oxley Certification (the
"Certifying Person") by March 1 (with a ten day cure period) of each year in
which the Issuing Entity is subject to the reporting requirements of the
Exchange Act and otherwise within a reasonable period of time upon request, a
certification (a "Back-Up Certification") (in the form attached hereto as
Exhibit M) upon which the Certifying Person, the entity for which the Certifying
Person acts as an officer and such entity's officers, directors and affiliates
(collectively, with the Certifying Person, the "Certification Parties") can
reasonably rely. The senior officer of the Master Servicer in charge of the
master servicing function shall serve as the Certifying Person on behalf of the
Issuing Entity. Such officer of the Certifying Person can be contacted by e-mail
at cts.sec.notifications@wellsfargo.com or by facsimile at 443-367-3307. In the
event any such party or Servicing Function Participant engaged by any such party
is terminated or resigns pursuant to the terms of this Agreement, or any other
applicable agreement, as the case may be, such party shall provide a Back-Up
Certification to the Master Servicer pursuant to this Section 3.18 with respect
to the period of time it was subject to this Agreement or any other applicable
agreement, as the case may be. Notwithstanding the foregoing, (i) the Master
Servicer and the Securities Administrator shall not be required to deliver a
Back-Up Certification to each other if both are the same Person and the Master
Servicer is the Certifying Person and (ii) the Master Servicer shall not be
obligated to sign the Sarbanes-Oxley Certification in the event that it does not
receive any Back-Up Certification required to be furnished to it pursuant to
this section or any Servicing Agreement or Custodial Agreement.

     (l) The Securities Administrator shall have no responsibility to file any
items with the Commission other than those specified in this section and the
Master Servicer shall execute any and all Form 10-Ds, 8-Ks and 10-Ks required
hereunder.

     (m) On or prior to January 30 of the first year in which the Securities
Administrator is able to do so under applicable law, the Securities
Administrator shall prepare and file a Form 15 Suspension Notification relating
to the automatic suspension of reporting in respect of the Issuing Entity under
the Exchange Act.

                                      -65-

<PAGE>

     (n) In the event that the Securities Administrator is unable to timely file
with the Commission all or any required portion of any Form 8-K, 10-D or 10-K
required to be filed by this Agreement because required disclosure information
was either not delivered to it or delivered to it after the delivery deadlines
set forth in this Agreement or for any other reason, the Securities
Administrator will promptly notify electronically the Depositor of such
inability to make a timely filing with the Commission. In the case of Form 10-D
and 10-K, the parties to this Agreement will cooperate to prepare and file a
Form 12b-25 and a 10-D/A and 10K/A, as applicable, pursuant to Rule 12b-25 of
the Exchange Act. In the case of Form 8-K, the Securities Administrator will,
upon receipt of all required Form 8-K Disclosure Information and upon the
approval and direction of the Depositor, include such disclosure information on
the next succeeding Form 10-D to be filed for the Issuing Entity. In the event
that any previously filed Form 8-K, 10-D or 10-K needs to be amended, in
connection with any Additional Form 10-D Disclosure (other than, in the case of
Form 10-D, for the purpose of restating any Monthly Statement), Additional Form
10-K Disclosure or Form 8-K Disclosure Information, the Securities Administrator
will electronically notify the Depositor and such other parties to the
transaction as are affected by such amendment, and such parties will cooperate
to prepare any necessary 8-K/A, 10-D/A or 10-K/A. Any Form 15, Form 12b-25 or
any amendment to Form 8-K, 10-D or 10-K shall be signed by duly authorized
representative or a senior officer in charge of master servicing, as applicable,
of the Master Servicer. The parties to this Agreement acknowledge that the
performance by the Master Servicer of its duties under this Section 3.18 related
to the timely preparation, execution and filing of Form 15, a Form 12b-25 or any
amendment to Form 8-K, 10-D or 10-K is contingent upon each such party
performing its duties under this Section. Neither the Master Servicer nor the
Securities Administrator shall have any liability for any loss, expense, damage
or claim arising out of or with respect to any failure to properly prepare,
execute and/or timely file any such Form 15, Form 12b-25 or any amendments to
Forms 8-K, 10-D or 10-K, where such failure results from the Securities
Administrator's inability or failure to receive, on a timely basis, any
information from any other party hereto or any Servicer, any Custodian or any
Servicing Function Participant needed to prepare, arrange for execution or file
such Form 15, Form 12b-25 or any amendments to Forms 8-K, 10-D or 10-K.

     (o) The Depositor and the Securities Administrator agree to use their good
faith efforts to cooperate in complying with the requirements of this Section
3.18.

     (p) Each of the parties agrees to provide to the Securities Administrator
such additional information related to such party as the Securities
Administrator may reasonably request, including evidence of the authorization of
the person signing any certificate or statement, financial information and
reports, and such other information related to such party or its performance
hereunder.

     (q) Any notice or notification required to be delivered by the Securities
Administrator or Master Servicer to the Depositor pursuant to this Section 3.18,
may be delivered via facsimile to (212) 449-2700, via email to paul_park@ml.com
or telephonically by calling Paul Park at (212) 449-6380.

     Section 3.19 Compliance with Regulation AB. Each of the parties hereto
acknowledges and agrees that the purpose of Sections 3.16, 3.17 and 3.18 is to
facilitate compliance by the Depositor with the provisions of Regulation AB, as
such may be amended or

                                      -66-

<PAGE>

clarified from time to time. Therefore, each of the parties agrees that the
parties' obligations hereunder will be supplemented and modified as necessary to
be consistent with any such amendments, interpretive advice or guidance,
convention or consensus among active participants in the asset-backed securities
markets, advice of counsel, or otherwise in respect of the requirements of
Regulation AB and the parties shall comply with requests made by the Depositor
for delivery of additional or different information as the Depositor may
determine in good faith is necessary to comply with the provisions of Regulation
AB. Any such supplementation or modification shall be made in accordance with
Section 11.02 without the consent of the Certificateholders, and may result in a
change in the reports filed by the Securities Administrator on behalf of the
Issuing Entity under the Exchange Act.

     Section 3.20 Servicing Rights Owner. At the Servicing Rights Owner's
request, HLS or Wilshire, as applicable, shall resign as Servicer with respect
to those Mortgage Loans it is servicing hereunder upon the selection and
appointment of a successor servicer by the Servicing Rights Owner; provided that
the Servicing Rights Owner delivers to the Master Servicer, the Trustee, the
Securities Administrator and HLS or Wilshire, as applicable, a letter indicating
that such successor servicer designated by the Servicing Rights Owner either (x)
meets the eligibility requirements for a successor servicer, including that such
successor servicer is a Qualified Servicer or (y) is a servicer acceptable to
the Rating Agencies as evidenced by a letter from each Rating Agency that the
appointment of such successor servicer shall not cause a downgrade of any class
of Certificate. No appointment of a successor servicer hereunder shall be
effective until the Master Servicer shall have consented thereto (such consent
not to be unreasonably withheld). Upon such appointment, at the date specified
in such letter such successor servicer will become a servicer pursuant to the
terms of this Agreement. Any successor servicer shall be an institution that is
a Fannie Mae and Freddie Mac approved seller/servicer in good standing, shall be
willing to service the Mortgage Loans and shall accept such delegation and
assignment, and shall service the Mortgage Loans pursuant to a servicing
agreement entered into among the successor servicer, the Depositor and the
Master Servicer, provided that such servicing agreement shall prohibit the
successor servicer from causing any Adverse REMIC Event.

                                   ARTICLE IV
                                    ACCOUNTS

     Section 4.01 Protected Accounts.

     (a) The Master Servicer shall enforce the obligation of each Servicer to
establish and maintain a Protected Account in accordance with the applicable
Servicing Agreement, with records to be kept with respect thereto on a Mortgage
Loan by Mortgage Loan basis, into which accounts shall be deposited within two
Business Days (or as of such other time specified in the related Servicing
Agreement) of receipt all collections of principal and interest on any Mortgage
Loan and with respect to any REO Property received by a Servicer, including
Principal Prepayments, Insurance Proceeds, Liquidation Proceeds, Subsequent
Recoveries and advances made from the Servicer's own funds (less servicing
compensation as permitted by the applicable Servicing Agreement in the case of
the Servicer) and all other amounts to be deposited in the Protected Account.
The Servicer is hereby authorized to make withdrawals from and deposits to the
related Protected Account for purposes required or permitted by this Agreement.
To the extent provided in the related Servicing Agreement, the Protected Account
shall be held in a

                                      -67-

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Designated Depository Institution and segregated on the books of such
institution in the name of the Trustee for the benefit of Certificateholders.

     (b) To the extent provided in the related Servicing Agreement, amounts on
deposit in a Protected Account may be invested in Permitted Investments in the
name of the Trustee for the benefit of Certificateholders and, except as
provided in the preceding paragraph, not commingled with any other funds, such
Permitted Investments to mature, or to be subject to redemption or withdrawal,
no later than the date on which such funds are required to be withdrawn for
deposit in the Master Servicer Collection Account, and shall be held until
required for such deposit. The income earned from Permitted Investments made
pursuant to this Section 4.01 shall be paid to the related Servicer under the
applicable Servicing Agreement, and the risk of loss of moneys required to be
distributed to the Certificateholders resulting from such investments shall be
borne by and be the risk of the related Servicer, as set forth in the applicable
Servicing Agreement. The related Servicer (to the extent provided in the related
Servicing Agreement) shall deposit the amount of any such loss in the Protected
Account within two Business Days of receipt of notification of such loss but not
later than the second Business Day prior to the Distribution Date on which the
moneys so invested are required to be distributed to the Certificateholders.

     (c) To the extent provided in the related Servicing Agreement and subject
to this Article IV, on or before each Servicer Remittance Date, the related
Servicer shall withdraw or shall cause to be withdrawn from the Protected
Accounts and shall immediately deposit or cause to be deposited in the Master
Servicer Collection Account amounts representing the following collections and
payments (other than with respect to principal of or interest on the Mortgage
Loans due on or before the Cut-off Date):

          (i) Monthly Payments on the Mortgage Loans received or any related
     portion thereof advanced by such Servicer pursuant to the related Servicing
     Agreement which were due on or before the related Due Date, net of the
     amount thereof comprising the Servicing Fees;

          (ii) Principal Prepayments in Full and any Liquidation Proceeds
     received by such Servicer with respect to such Mortgage Loans in the
     related Prepayment Period, with interest to the date of prepayment or
     liquidation, net of the amount thereof comprising the Servicing Fees;

          (iii) Curtailments received by such Servicer for such Mortgage Loans
     in the related Prepayment Period; and

          (iv) Any amount to be used as a Monthly Advance.

     (d) Withdrawals by the Master Servicer may be made from an Account only to
make remittances as provided in Section 4.01(c), 4.02 and 4.03; to reimburse the
Master Servicer or a Servicer for Monthly Advances which have been recovered by
subsequent collection from the related Mortgagor; to remove amounts deposited in
error; to remove fees, charges or other such amounts deposited on a temporary
basis; or to clear and terminate the account at the termination of this
Agreement in accordance with Section 10.01. As provided in Sections 4.01(c) and
4.02(b)

                                      -68-

<PAGE>

certain amounts otherwise due to the Servicers may be retained by them as set
forth in the related Servicing Agreements and need not be deposited in the
Master Servicer Collection Account.

     Section 4.02 Master Servicer Collection Account.

     (a) The Master Servicer shall establish and maintain in the name of the
Trustee, for the benefit of the Certificateholders, the Master Servicer
Collection Account as a segregated trust account or accounts. The Master
Servicer Collection Account may be a sub-account of the Distribution Account.
The Master Servicer will deposit in the Master Servicer Collection Account as
identified by the Master Servicer and as received by the Master Servicer, the
following amounts:

          (i) Any amounts withdrawn from a Protected Account or other permitted
     account;

          (ii) Any Monthly Advance and any Compensating Interest Payments;

          (iii) Any Insurance Proceeds, Liquidation Proceeds or Subsequent
     Recoveries received by or on behalf of the Master Servicer or which were
     not deposited in a Protected Account or other permitted account;

          (iv) The repurchase price with respect to any Mortgage Loans
     repurchased and all proceeds of any Mortgage Loans or property acquired in
     connection with the optional termination of the trust;

          (v) Any amounts required to be deposited with respect to losses on
     investments of deposits in an Account; and

          (vi) Any other amounts received by or on behalf of the Master Servicer
     and required to be deposited in the Master Servicer Collection Account
     pursuant to this Agreement.

     (b) All amounts deposited to the Master Servicer Collection Account shall
be held by the Master Servicer in the name of the Trustee in trust for the
benefit of the Certificateholders in accordance with the terms and provisions of
this Agreement. The requirements for crediting the Master Servicer Collection
Account or the Distribution Account shall be exclusive, it being understood and
agreed that, without limiting the generality of the foregoing, payments in the
nature of (i) prepayment or late payment charges or assumption, tax service,
statement account or payoff, substitution, satisfaction, release and other like
fees and charges and (ii) the items enumerated in Sections 4.05(a)(i), (ii),
(iii), (iv), (vi), (vii), (viii), (ix), (xi) and (xii) with respect to the
Securities Administrator, need not be credited by the Master Servicer or the
related Servicer to the Distribution Account or the Master Servicer Collection
Account, as applicable. In the event that the Master Servicer shall deposit or
cause to be deposited to the Distribution Account any amount not required to be
credited thereto, the Securities Administrator, upon receipt of a written
request therefor signed by a Servicing Officer of the Master Servicer, shall
promptly transfer such amount to the Master Servicer from the Distribution
Account, any provision herein to the contrary notwithstanding.

                                      -69-

<PAGE>

     (c) The amount at any time credited to the Master Servicer Collection
Account shall be invested, in the name of the Trustee, or its nominee, for the
benefit of the Certificateholders, in Permitted Investments as directed by
Master Servicer. All Permitted Investments shall mature or be subject to
redemption or withdrawal on or before, and shall be held until, the next
succeeding Distribution Account Deposit Date. Any and all investment earnings on
amounts on deposit in the Master Servicer Collection Account from time to time
shall be for the account of the Master Servicer. The Master Servicer from time
to time shall be permitted to withdraw or receive distribution of any and all
investment earnings from the Master Servicer Collection Account. The risk of
loss of moneys required to be distributed to the Certificateholders resulting
from such investments shall be borne by and be the risk of the Master Servicer.
The Master Servicer shall deposit the amount of any such loss in the Master
Servicer Collection Account within two Business Days of receipt of notification
of such loss but not later than the second Business Day prior to the
Distribution Date on which the moneys so invested are required to be distributed
to the Certificateholders.

     Section 4.03 Permitted Withdrawals and Transfers from the Master Servicer
Collection Account.

     (a) The Master Servicer will, from time to time on demand of the Master
Servicer, the Trustee or the Securities Administrator, make or cause to be made
such withdrawals or transfers from the Master Servicer Collection Account as the
Master Servicer has designated for such transfer or withdrawal pursuant to the
Servicing Agreements. The Master Servicer may clear and terminate the Master
Servicer Collection Account pursuant to Section 10.01 and remove amounts from
time to time deposited in error.

     (b) On an ongoing basis, the Master Servicer shall withdraw from the Master
Servicer Collection Account (i) any expenses recoverable by the Trustee, the
Master Servicer or the Securities Administrator pursuant to this Agreement,
including but not limited to Sections 2.01(b), 3.03, 7.04 and 9.05 and (ii) any
amounts payable to the Master Servicer as set forth in Section 3.14.

     (c) In addition, on or before each Distribution Account Deposit Date, the
Master Servicer shall deposit in the Distribution Account (or remit to the
Securities Administrator for deposit therein) any Monthly Advances required to
be made by the Master Servicer with respect to the Mortgage Loans.

     (d) No later than 3:00 p.m. New York time on each Distribution Account
Deposit Date, the Master Servicer will transfer all Available Funds on deposit
in the Master Servicer Collection Account with respect to the related
Distribution Date to the Securities Administrator for deposit in the
Distribution Account.

                                      -70-
<PAGE>

     Section 4.04 Distribution Account.

     (a) The Securities Administrator shall establish and maintain in the name
of the Trustee, for the benefit of the Certificateholders, the Distribution
Account as a segregated trust account or accounts.

     (b) All amounts deposited to the Distribution Account shall be held by the
Securities Administrator in the name of the Trustee in trust for the benefit of
the Certificateholders in accordance with the terms and provisions of this
Agreement.

     (c) The Distribution Account shall constitute a trust account of the Trust
Fund segregated on the books of the Securities Administrator and held by the
Securities Administrator in trust in its Corporate Trust Office, and the
Distribution Account and the funds deposited therein shall not be subject to,
and shall be protected to the maximum extent permitted by applicable law from,
all claims, liens, and encumbrances of any creditors or depositors of the
Securities Administrator, the Trustee or the Master Servicer (whether made
directly, or indirectly through a liquidator or receiver of the Securities
Administrator, the Trustee or the Master Servicer). The Distribution Account
shall be an Eligible Account. The amount at any time credited to the
Distribution Account shall be (i) fully insured by the FDIC to the maximum
coverage provided thereby or (ii) invested in the name of the Trustee, in such
Permitted Investments selected by the Master Servicer or deposited in demand
deposits with such depository institutions as selected by the Master Servicer,
provided that time deposits of such depository institutions would be a Permitted
Investment. All Permitted Investments shall mature or be subject to redemption
or withdrawal on or before, and shall be held until, the next succeeding
Distribution Date if the obligor for such Permitted Investment is the Master
Servicer or, if such obligor is any other Person, the Business Day preceding
such Distribution Date. All investment earnings on amounts on deposit in the
Distribution Account or benefit from funds uninvested therein from time to time
shall be for the account of the Securities Administrator. The Securities
Administrator shall be permitted to withdraw or receive distribution of any and
all investment earnings from the Distribution Account on each Distribution Date.
If there is any loss on a Permitted Investment or demand deposit, the Securities
Administrator shall deposit such amount in the Distribution Account. With
respect to the Distribution Account and the funds deposited therein, the
Securities Administrator shall take such action as may be necessary to ensure
that the Certificateholders shall be entitled to the priorities afforded to such
a trust account (in addition to a claim against the estate of the Trust) as
provided by 12 U.S.C. Section 92a(e), and applicable regulations pursuant
thereto, if applicable, or any applicable comparable state statute applicable to
state chartered banking corporations.

                                      -71-

<PAGE>

     Section 4.05 Permitted Withdrawals and Transfers from the Distribution
Account.

     (a) The Securities Administrator will, from time to time on demand of the
Master Servicer, make or cause to be made such withdrawals or transfers from the
Distribution Account as the Master Servicer has designated for such transfer or
withdrawal pursuant to the Servicing Agreements for the following purposes
(limited in the case of amounts due the Master Servicer to those not withdrawn
from the Master Servicer Collection Account in accordance with the terms of this
Agreement):

          (i) to reimburse the Master Servicer or any Servicer for any Monthly
     Advance of its own funds or any advance of such Servicer's own funds, the
     right of the Master Servicer or a Servicer to reimbursement pursuant to
     this subclause (i) being limited to amounts received on a particular
     Mortgage Loan (including, for this purpose, the Purchase Price therefor,
     Insurance Proceeds and Liquidation Proceeds) which represent late payments
     or recoveries of the principal of or interest on such Mortgage Loan
     respecting which such Monthly Advance or advance was made;

          (ii) to reimburse the Master Servicer or any Servicer from Insurance
     Proceeds or Liquidation Proceeds relating to a particular Mortgage Loan for
     amounts expended by the Master Servicer or such Servicer in good faith as a
     Servicing Advance in connection with the restoration of the related
     Mortgaged Property which was damaged by an Uninsured Cause or in connection
     with the liquidation of such Mortgage Loan;

          (iii) to reimburse the Master Servicer or any Servicer from Insurance
     Proceeds relating to a particular Mortgage Loan for insured expenses
     incurred with respect to such Mortgage Loan and to reimburse the Master
     Servicer or such Servicer from Liquidation Proceeds from a particular
     Mortgage Loan for Liquidation Expenses incurred with respect to such
     Mortgage Loan; provided that the Master Servicer shall not be entitled to
     reimbursement for Liquidation Expenses with respect to a Mortgage Loan to
     the extent that (i) any amounts with respect to such Mortgage Loan were
     paid as Excess Liquidation Proceeds pursuant to clause (xi) of this Section
     4.05(a) to the Master Servicer; and (ii) such Liquidation Expenses were not
     included in the computation of such Excess Liquidation Proceeds;

          (iv) to pay the Master Servicer or any Servicer, as appropriate, from
     Liquidation Proceeds or Insurance Proceeds received in connection with the
     liquidation of any Mortgage Loan, the amount which it or such Servicer
     would have been entitled to receive under subclause (ix) of this Section
     4.05(a) as servicing compensation on account of each defaulted scheduled
     payment on such Mortgage Loan if paid in a timely manner by the related
     Mortgagor;

          (v) to pay the Master Servicer or any Servicer from the Purchase Price
     for any Mortgage Loan, the amount which it or such Servicer would have been
     entitled to receive under subclause (ix) of this Section 4.05(a) as
     servicing compensation;

          (vi) to reimburse the Master Servicer or any Servicer for advances of
     funds pursuant to Sections, and the right to reimbursement pursuant to this
     subclause being

                                      -72-

<PAGE>

     limited to amounts received on the related Mortgage Loan (including, for
     this purpose, the Purchase Price therefor, Insurance Proceeds and
     Liquidation Proceeds) which represent late recoveries of the payments for
     which such advances were made;

          (vii) to reimburse the Master Servicer or any Servicer for any Monthly
     Advance or advance, after a Realized Loss has been allocated with respect
     to the related Mortgage Loan if the Monthly Advance or advance has not been
     reimbursed pursuant to clauses (i) and (vi);

          (viii) to pay the Master Servicer as set forth in Section 3.14;

          (ix) to reimburse the Master Servicer for expenses, costs and
     liabilities incurred by and reimbursable to it pursuant to this Agreement,
     including but not limited to Sections 3.03, 7.04(c) and (d);

          (x) to pay to the Master Servicer, as additional servicing
     compensation, any Excess Liquidation Proceeds to the extent not retained by
     the related Servicer;

          (xi) to reimburse or pay any Servicer any such amounts as are due
     thereto under the applicable Servicing Agreement and have not been retained
     by or paid to the Servicer, to the extent provided in the related Servicing
     Agreement;

          (xii) to reimburse the Trustee or the Securities Administrator for
     expenses, costs and liabilities incurred by or reimbursable to it pursuant
     to this Agreement;

          (xiii) to remove amounts deposited in error; and

          (xiv) to clear and terminate the Distribution Account pursuant to
     Section 10.01.

     (b) The Master Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of accounting for any
reimbursement from the Distribution Account pursuant to subclauses (i) through
(vi), inclusive, and (viii) or with respect to any such amounts which would have
been covered by such subclauses had the amounts not been retained by the Master
Servicer without being deposited in the Distribution Account under Section
4.02(b).

     (c) On each Distribution Date, the Securities Administrator shall
distribute the Available Funds to the Holders of the Certificates in accordance
with Section 6.01.

                                    ARTICLE V
                                  CERTIFICATES

     Section 5.01 The Certificates. The Certificates shall be executed by manual
or facsimile signature on behalf of the Securities Administrator 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 Securities Administrator shall bind the Issuing Entity,
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

                                      -73-

<PAGE>

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
Securities Administrator 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 Securities Administrator 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 Securities Administrator 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 Securities
Administrator 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 Securities Administrator 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 the Securities Administrator. Whenever any
Certificates are so surrendered for exchange, the Securities Administrator shall
execute, authenticate and deliver the Certificates that the Certificateholder
making the exchange is entitled to receive. Every Certificate presented or
surrendered for registration of Transfer or exchange shall be accompanied by a
written instrument of Transfer in form satisfactory to the Securities
Administrator 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 the Securities Administrator in
accordance with such Securities Administrator's customary procedures.

     (b) No Transfer of an ERISA Restricted Certificate or Class A-R 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 an ERISA Restricted
Certificate or Class A-R Certificate by Merrill Lynch & Co.) each certify to
each Securities Administrator in writing the facts surrounding the Transfer in
substantially the form set forth in Exhibit F-1 (the "Transferor Representation
Letter") and (i)

                                      -74-

<PAGE>

deliver a letter in substantially the form of either Exhibit F-2 (the "Investor
Representation Letter") or Exhibit F-3 (the "Rule 144A Letter") or (ii) there
shall be delivered to the Securities Administrator 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
Securities Administrator. The Depositor shall provide to any Holder of an ERISA
Restricted Certificate or Class A-R 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 Securities
Administrator 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 Securities Administrator
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 an ERISA Restricted Certificate or
Class A-R Certificate desiring to effect such Transfer shall, and does hereby
agree to, indemnify the Depositor and the Securities Administrator 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.

     Notwithstanding the foregoing, no Transfer of a Class P Certificate
(including the initial issuance thereof) shall be registered unless the
prospective transferee certifies to the Securities Administrator that such
transferee is not acquiring the Class P Certificates as a "middleman" as that
term is defined in Treasury Regulation Section 1.671-5(b)(10) in a letter
substantially in the form set forth in Exhibit F-4 ("Middleman Representation
Letter").

     No transfer of an ERISA Restricted Certificate or a Class A-R Certificate
will be registered unless the Securities Administrator has received (A) a
representation to the effect that such transferee is not an employee benefit
plan subject to Title I of ERISA, a plan subject to Section 4975 of the Code or
a plan subject to any state, local, federal, non-U.S. or other law substantively
similar to the foregoing provisions of ERISA or the Code ("Similar Law")
(collectively, a "Plan"), and is not directly or indirectly acquiring such
Certificate for, on behalf of, or with any assets of any such Plan, or (B)
solely in the case of an ERISA Restricted Certificate (I) if the Certificate has
been the subject of an ERISA-Qualifying Underwriting, a representation to the
effect that such transferee is an insurance company that is acquiring the
Certificate with assets contained in an "insurance company general account," as
defined in Section V(e) of Prohibited Transaction Class Exemption ("PTCE")
95-60, and the acquisition and holding of the Certificate are covered and exempt
under Sections I and III of PTCE 95-60, or (II) solely in the case of a
Definitive Certificate, an Opinion of Counsel satisfactory to the Securities
Administrator, and upon which the Securities Administrator shall be entitled to
rely, to the effect that the acquisition and holding of such Certificate will
not constitute or result in a nonexempt prohibited transaction under Title I of
ERISA or Section 4975 of the Code, or a violation of Similar Law, and will not
subject the Securities Administrator, the Master Servicer, the Trustee or the
Depositor to any obligation in addition to those expressly undertaken in this
Agreement, which Opinion of Counsel shall not be an expense of the Securities
Administrator, the Master Servicer, the Trustee or the Depositor.

                                      -75-

<PAGE>

     Except in the case of a Definitive Certificate, the representations set
forth in the immediately preceding paragraph of this Section 5.02(b), other than
clause (B)(II) in the immediately preceding paragraph, shall be deemed to have
been made to the Securities Administrator by the transferee's acceptance of an
ERISA Restricted Certificate or a Class A-R Certificate (or the acceptance by a
Certificate Owner of the beneficial interest in any Class of ERISA Restricted
Certificates or a Class A-R Certificate).

     Notwithstanding any other provision herein to the contrary, any purported
transfer of an ERISA Restricted Certificate or a Class A-R Certificate to or on
behalf of a Plan without the delivery to the Securities Administrator of a
representation or an Opinion of Counsel satisfactory to the Securities
Administrator as described above shall be void and of no effect. The Securities
Administrator shall not be under any liability to any Person for any
registration or transfer of any ERISA Restricted Certificate or Class A-R
Certificate that is in fact not permitted by this Section 5.02(b), nor shall the
Trustee or the Securities Administrator be under any liability for making any
payments due on such Certificate to the Holder thereof or taking any other
action with respect to such Holder under the provisions of this Agreement so
long as the transfer was registered by the Securities Administrator in
accordance with the foregoing requirements. The Trustee or the Securities
Administrator shall be entitled, but not obligated, to recover from any Holder
of any ERISA Restricted Certificate or Class A-R Certificate that was in fact a
Plan and that held such Certificate in violation of this Section 5.02(b) all
payments made on such ERISA Restricted Certificate or a Class A-R Certificate at
and after the time it commenced such holding. Any such payments so recovered
shall be paid and delivered to the last preceding Holder of such Certificate
that is not a Plan.

     (c) Each Person who has or who acquires any Ownership Interest in a Class
A-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 A-R
Certificate are expressly subject to the following provisions:

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

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

                                      -76-

<PAGE>

     Section 5.02(c)(ii) shall not have been satisfied unless the Transferee's
     Letter includes such other form of declaration.

          (iii) Each Person holding or acquiring any Ownership Interest in a
     Class A-R Certificate shall agree (A) to obtain a Transferee's Letter from
     any other Person to whom such Person attempts to Transfer its Ownership
     Interest in a Class A-R Certificate, (B) to obtain a Transferee's Letter
     from any Person for whom such Person is acting as nominee, trustee or agent
     in connection with any Transfer of a Class A-R Certificate and (C) not to
     Transfer its Ownership Interest in a Class A-R Certificate or to cause the
     Transfer of an Ownership Interest in a Class A-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 A-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 Securities
     Administrator with a duly completed and effective Internal Revenue Service
     Form W-8ECI (or any successor thereto) and the Securities Administrator
     consents to such transfer, sale or other disposition in writing.

          (iv) Any attempted or purported Transfer of any Ownership Interest in
     a Class A-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 A-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 A-R Certificate. The Securities Administrator shall
     be under no liability to any Person for any registration of Transfer of a
     Class A-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 Transferee's Letter. The Securities
     Administrator shall be entitled but not obligated to recover from any
     Holder of a Class A-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
     A-R Certificate at and after either such time. Any such payments so
     recovered by the Securities Administrator shall be paid and delivered by
     the Securities Administrator to the last preceding Permitted Transferee of
     such Certificate.

          (v) At the option of the Holder of the Class A-R Certificate, the
     Class LT1-R Interest and the Residual Interest may be severed and
     represented by separate certificates; provided, however, that such separate
     certification may not occur until the Securities Administrator receives a
     REMIC Opinion to the effect that separate certification in the form and
     manner proposed would not result in the imposition of federal tax upon the
     Issuing Entity 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 A-R
     Certificate. If, as evidenced by a REMIC Opinion, it is necessary to
     preserve the REMIC status of any of the REMICs provided for herein,

                                      -77-

<PAGE>

     the Class LT1-R Interest and the Residual Interest shall be severed and
     represented by separate Certificates.

     The restrictions on Transfers of a Class A-R Certificate set forth in this
Section 5.02(c) shall cease to apply (and the applicable portions of the legend
on a Class A-R Certificate may be deleted) with respect to Transfers occurring
after delivery to the Securities Administrator of an Opinion of Counsel, which
Opinion of Counsel shall not be an expense of the Securities Administrator 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 Issuing Entity, any REMIC provided for herein, a Certificateholder or
another Person. Each Person holding or acquiring any Ownership Interest in a
Class A-R Certificate hereby consents to any amendment of this Agreement that,
based on an Opinion of Counsel furnished to the Securities Administrator, is
reasonably necessary (a) to ensure that the record ownership of, or any
beneficial interest in, a Class A-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 A-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 A-R Certificate shall notify the Securities
Administrator in writing upon the transfer of the Class A-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
Issuing Entity, the Depositor or the Securities Administrator.

     Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates. If (a) any
mutilated Certificate is surrendered to the Securities Administrator or the
Securities Administrator 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 Securities Administrator such security or
indemnity as may be required by them to save each of them harmless, then, in the
absence of notice to the Securities Administrator that such Certificate has been
acquired by a bona fide purchaser, the Securities Administrator 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 Securities Administrator may require the payment of
a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Securities Administrator) 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 Securities Administrator under the
terms of this Section 5.03 shall be canceled and destroyed by the Securities
Administrator in accordance with its standard procedures without liability on
its part.

     Section 5.04 Persons Deemed Owners. The Securities Administrator and any
agent of the Securities Administrator may treat the Person in whose name any
Certificate is registered as

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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 Securities Administrator, nor any agent of the Securities Administrator
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 Securities Administrator, (b) state that such Certificateholders desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates, and (c) provide a copy of the
communication that such Certificateholders propose to transmit or if the
Depositor shall request such information in writing from the Securities
Administrator, then the Securities Administrator shall, within ten Business Days
after the receipt of such request, provide the Depositor or such
Certificateholders at such recipients' expense the most recent list of the
Certificateholders of the Trust Fund held by the Securities Administrator, if
any. The Depositor and every Certificateholder, by receiving and holding a
Certificate, agree that the Securities Administrator shall not be held
accountable by reason of the disclosure of any such information as to the list
of the Certificateholders hereunder, regardless of the source from which such
information was derived.

     Section 5.06 Book-Entry Certificates. The Regular Certificates, upon
original issuance, shall be issued in the form of one or more typewritten
Certificates representing the Book-Entry Certificates, to be delivered to the
Depository by or on behalf of the Depositor. The Book-Entry Certificates shall
initially be registered on the Certificate Register in the name of the
Depository or its nominee, and no Certificate Owner of a Book-Entry Certificate
will receive a definitive certificate representing such Certificate Owner's
interest in such Certificates, except as provided in Section 5.08. Unless and
until definitive, fully registered Certificates ("Definitive Certificates") have
been issued to the Certificate Owners of the Book-Entry Certificates pursuant to
Section 5.08:

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

     (b) the Depositor and the Securities Administrator 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 Securities Administrator 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;

                                      -79-

<PAGE>

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

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

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

     Section 5.07 Notices to Depository. Whenever any notice or other
communication is required to be given to Certificateholders of the Class with
respect to which Book-Entry Certificates have been issued, unless and until
Definitive Certificates shall have been issued to the related Certificate
Owners, the Securities Administrator 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 Securities Administrator 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 Securities
Administrator or the Depositor is unable to locate a qualified successor, (b)
the Depositor notifies the Securities Administrator and the Depository of its
intent to terminate the book-entry system through the Depository and, upon
receipt of notice of such intent from the Depository, the Certificate Owners of
the Book-Entry Certificates agree to initiate such termination or (c) after the
occurrence and continuation of an Event of Default, Certificate Owners of such
Book-Entry Certificates having not less than 51% of the Voting Rights evidenced
by any Class of Book-Entry Certificates advise the Securities Administrator 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 Securities Administrator shall
notify all Certificate Owners of such Book-Entry Certificates, through the
Depository, of the occurrence of any such event and of the availability of
Definitive Certificates to Certificate Owners of such Class requesting the same.
The Depositor shall provide the Securities Administrator with an adequate
inventory of certificates to facilitate the issuance and transfer of Definitive
Certificates. Upon surrender to the Securities Administrator of any such
Certificates by the Depository, accompanied by registration instructions from
the Depository for registration, the Securities Administrator shall authenticate
and deliver such Definitive Certificates. Neither the Depositor nor the
Securities Administrator 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 Securities Administrator, to the extent applicable with respect to such
Definitive Certificates and the Securities Administrator shall recognize the
Holders of such Definitive Certificates as Certificateholders hereunder.

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<PAGE>

     Section 5.09 Maintenance of Office or Agency. The Securities Administrator
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 Securities Administrator initially designates its
offices at Sixth Street and Marquette Avenue, Minneapolis, Minnesota 55479,
Attention: Corporate Trust Services - Merrill Lynch Alternative Note Asset
Trust, Series 2007-OAR5 as offices for such purposes. The Securities
Administrator will give prompt written notice to the Certificateholders of any
change in such location of any such office or agency. For the avoidance of
doubt, the Securities Administrator may satisfy the requirements of this Section
5.09 by maintaining a single office or agency.

                                   ARTICLE VI
                         PAYMENTS TO CERTIFICATEHOLDERS

     Section 6.01 Distributions on the Certificates. (a) Interest and principal
on the Certificates will be distributed by the Securities Administrator monthly
on each Distribution Date, commencing in November 2007, as instructed by the
Master Servicer, in an aggregate amount equal to the sum of the Available Funds
for such Distribution Date. On each Distribution Date, the Available Funds shall
be distributed as follows:

          (A) On each Distribution Date, the Available Funds will be distributed
          in the following order of priority among the Certificates except as
          otherwise noted:

               first, to the Class P Certificates, any Prepayment Charges
               collected on the Mortgage Loans and (A) any amounts paid by the
               Seller or the related Servicer in respect of Prepayment Charges
               pursuant to this Agreement or the related Servicing Agreement and
               (B) any amounts received in respect of any indemnification paid
               as a result of a Prepayment Charges being unenforceable in breach
               of the representations and warranties set forth in the Mortgage
               Loan Purchase Agreement received during the related Prepayment
               Period;

               second, to the Senior Certificates, pro rata, the Accrued
               Certificate Interest for such Distribution Date. As described
               below, Accrued Certificate Interest is subject to reduction in
               the event of certain interest shortfalls allocable thereto. Any
               interest shortfalls shall be allocated among the Certificates as
               described below;

               third, to the Senior Certificates, pro rata, any Accrued
               Certificate Interest thereon remaining undistributed from
               previous Distribution Dates (reduced by any Deferred Interest
               previously allocated on each prior Distribution Date), to the
               extent of remaining Available Funds, any shortfall in available
               amounts being allocated to the Certificates in proportion to the
               amount of such Accrued Certificate Interest remaining
               undistributed for each class of Certificates for such
               Distribution Date;

               fourth, concurrently (i) sequentially to the Class A-R
               Certificate until the Certificate Principal Balance of such class
               has been reduced to zero and

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<PAGE>

               then to the Class A-1 and Class A-2 Certificates, pro rata, in
               reduction of their respective Certificate Principal Balances, the
               Senior Principal Distribution Amount for such Distribution Date
               to the extent of remaining Available Funds, until the Certificate
               Principal Balances of such classes have been reduced to zero and
               (ii) to the Class X Certificates, until the Certificate Principal
               Balance of such Class has been reduced to zero;

               fifth, sequentially, in the following order, to the Class M-1,
               Class M-2, Class M-3, Class B-1, Class B-2 and Class B-3
               Certificates, in each case up to an amount equal to and in the
               following order: (a) the Accrued Certificate Interest thereon for
               such Distribution Date (reduced by any Deferred Interest
               allocable thereto), (b) any Accrued Certificate Interest thereon
               remaining undistributed from previous Distribution Dates (reduced
               by any Deferred Interest previously allocated on each prior
               Distribution Date) and (c) such Class's Subordinate Principal
               Distribution Amount for such Distribution Date, in each case to
               the extent of the remaining Available Funds; and

               sixth, any Available Funds remaining after payment of interest
               and principal to the Classes of Certificates entitled thereto, as
               described above, will be distributed to the Class A-R
               Certificates.

     Any interest shortfall resulting from Deferred Interest on the Mortgage
Loans will be allocated first to the Class X Certificates (by increasing the
Class X-PO Component Principal Balance) to the extent of interest otherwise
accrued on such class for such Interest Accrual Period. Thereafter, Deferred
Interest for any Distribution Date will be allocated pro rata based upon the
Accrued Certificate Interest for each class other than the Class X Certificates
for such Distribution Date. The amount of the shortfall in Accrued Certificate
Interest distributable to each class of Certificates attributable to Net
Negative Amortization will be added to the Certificate Principal Balance of that
class. As a result of Net Negative Amortization, a portion of the interest
accrued on the Certificates will be distributed to such Certificates later than
otherwise anticipated.

     In addition to the foregoing distributions, with respect to any Subsequent
Recoveries, the Master Servicer shall deposit such amounts into the Master
Servicer Collection Account pursuant to Section 4.01(a). If, after taking into
account such Subsequent Recoveries, the amount of a Realized Loss is reduced,
the amount of such Subsequent Recoveries will be applied to increase the
Certificate Principal Balance of the Class of Subordinate Certificates with the
highest payment priority to which Realized Losses have been allocated, including
any Class of Subordinate Certificates to which a Realized Loss was previously
allocated and whose Certificate Principal Balance has been reduced to zero, but
not by more than the amount of Realized Losses previously allocated to that
Class of Certificates pursuant to Section 6.02. The amount of any remaining
Subsequent Recoveries will be applied to increase the Certificate Principal
Balance of the Class of Certificates with the next highest payment priority, up
to the amount of such Realized Losses previously allocated to that Class of
Certificates pursuant to Section 6.02, and so on. Holders of such Certificates
will not be entitled to any payment in respect of Accrued Certificate Interest
on the amount of such increases for any Interest Accrual

                                      -82-

<PAGE>

Period preceding the Distribution Date on which such increase occurs. Any such
increases shall be applied to the Certificate Principal Balance of each
Certificate of such Class in accordance with its respective Percentage Interest.

     Section 6.02 Allocation of Losses.

     (a) On or prior to each Determination Date, the Securities Administrator
shall determine the amount of any Realized Loss in respect of each Mortgage Loan
that occurred during the immediately preceding calendar month.

     (b) With respect to any Certificates on any Distribution Date, the
principal portion of each Realized Loss on a Mortgage Loan shall be allocated as
follows:

          first, to the Class B-3 Certificates until the Certificate Principal
     Balance thereof has been reduced to zero;

          second, to the Class B-2 Certificates until the Certificate Principal
     Balance thereof has been reduced to zero;

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

          fourth, to the Class M-3 Certificates until the Certificate Principal
     Balance thereof has been reduced to zero;

          fifth, to the Class M-2 Certificates until the Certificate Principal
     Balance thereof has been reduced to zero;

          sixth, to the Class M-1 Certificates until the Certificate Principal
     Balance thereof has been reduced to zero; and

          seventh, to the Senior Certificates, sequentially: first, to the Class
     X Certificates until the Class X-PO Component Principal Balance has been
     reduced to zero; second, to the Class A-2 Certificates until the
     Certificate Principal Balance thereof has been reduced to zero; and third
     to the Class A-1 Certificates until the Certificate Principal Balance
     thereof has been reduced to zero.

     (c) Notwithstanding the other provisions of Section 6.02, the first $0.01
of Realized Losses shall not be allocated to any Class of Certificates.

     Section 6.03 Payments.

     (a) On each Distribution Date, other than the final Distribution Date, the
Securities Administrator shall distribute to each Certificateholder of record on
the directly preceding Record Date the Certificateholder's pro rata share of its
Class (based on the aggregate Percentage Interest represented by such Holder's
Certificates) of all amounts required to be distributed on such Distribution
Date to such Class, based solely on information provided to the Securities
Administrator by the Master Servicer. The Securities Administrator shall
calculate the amount to be distributed to each Class and, based on such amounts,
the Securities Administrator shall determine the amount to

                                      -83-

<PAGE>

be distributed to each Certificateholder. All of the Securities Administrator's
calculations of payments shall be based solely on information provided to the
Securities Administrator by the Master Servicer or the applicable Servicer. The
Securities Administrator shall not be required to confirm, verify or recompute
any such information but shall be entitled to rely conclusively on such
information.

     (b) Payment of the above amounts to each Certificateholder shall be made
(i) by check mailed to each Certificateholder entitled thereto at the address
appearing in the Certificate Register or (ii) upon receipt by the Securities
Administrator on or before the fifth Business Day preceding the Record Date of
written instructions from a Certificateholder by wire transfer to a United
States dollar account maintained by the payee at any United States depository
institution with appropriate facilities for receiving such a wire transfer;
provided, however, that the final payment in respect of each Class of
Certificates will be made only upon presentation and surrender of such
respective Certificates at the office or agency of the Securities Administrator
specified in the notice to Certificateholders of such final payment.

     Section 6.04 Statements to Certificateholders.

     (a) Concurrently with each distribution to Certificateholders, the
Securities Administrator shall make available to the parties hereto and each
Certificateholder via the Securities Administrator's internet website as set
forth below, the following information (such information the "Monthly
Statement"):

          (i) the amount of the distribution made on such Distribution Date to
     the Holders of each Class of Certificates, separately identified, allocable
     to principal;

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

          (iii) the aggregate amount the Servicing Fee during the related Due
     Period and such other customary information as the Securities Administrator
     deems necessary or desirable, or which a Certificateholder reasonably
     requests, to enable Certificateholders to prepare their tax returns;

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

          (v) the aggregate Stated Principal Balance of the Mortgage Loans at
     the close of business at the end of the related Due Period;

          (vi) the number, weighted average remaining term to maturity and
     weighted average Mortgage Interest Rate of Mortgage Loans as of the related
     Due Date;

          (vii) the number and aggregate principal amounts of Mortgage Loans (A)
     delinquent (exclusive of Mortgage Loans in foreclosure) (1) 30 to 59 days,
     (2) 60 to 89 days, (3) 90 to 119 days, (4) 120 to 149 days, (5) 150 to 179
     days and (6) 180 days or more days, and (B) in foreclosure and delinquent
     (1) 30 to 59 days, (2) 60 to 89 days, (3) 90 to 119 days, (4) 120 to 149
     days, (5) 150 to 179 days and (6) 180 days or more days,

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<PAGE>

     in each case as of the close of business on the last day of the calendar
     month preceding such Distribution Date, with respect to the Mortgage Loans
     and in accordance with the MBA methodology for measuring delinquencies;

          (viii) with respect to any Mortgage Loan that became an REO Property
     during the preceding calendar month, the Stated Principal Balance of such
     Mortgage Loan as of the date it became an REO Property;

          (ix) the book value of any REO Property as of the close of business on
     the last Business Day of the calendar month preceding the Distribution
     Date, and, cumulatively, the total number and cumulative principal balance
     of all REO Properties as of the close of business of the last day of the
     preceding due period;

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

          (xi) the number and amount of Prepayment Charges received during the
     related Prepayment Period in the aggregate;

          (xii) the aggregate amount of Realized Losses incurred during the
     related Due Period, the cumulative amount of Realized Losses and the
     Realized Losses, if any, allocated to each class of Certificates on that
     Distribution Date;

          (xiii) the aggregate amount of Extraordinary Trust Fund Expenses
     withdrawn from the Master Servicer Collection Account for such Distribution
     Date;

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

          (xv) the Class X-IO Component Notional Amount and the Class X-PO
     Component Principal Balance;

          (xvi) the aggregate amount of interest accrued at the related
     Pass-Through Rate with respect to each Class during the related Interest
     Accrual Period and the respective portions thereof, if any, remaining
     unpaid following the distributions made in respect of such Certificates on
     such Distribution Date;

          (xvii) the aggregate amount of any Prepayment Interest Shortfalls for
     such Distribution Date, to the extent not covered by Compensating Interest
     Payments by the related Servicer or the Master Servicer pursuant to the
     related Servicing Agreement or Section 6.06;

          (xviii) the Available Funds;

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

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<PAGE>

          (xx) the aggregate Stated Principal Balance of Mortgage Loans
     purchased by the Seller during the related Due Period and indicating the
     Section of this Agreement requiring or allowing the purchase of each such
     Mortgage Loan;

          (xxi) the amount of Negative Amortization;

          (xxii) the Stated Principal Balance of the Mortgage Loans whose
     Mortgage Rates adjust on the basis of the One-Month MTA index, the
     One-Month LIBOR index, the Six-Month LIBOR index and the One-Year LIBOR
     index at the end of the related Prepayment Period; and

          (xxiii) the Senior Percentage and Subordinate Percentage for the
     following Distribution Date.

     The information set forth above shall be calculated or reported, as the
case may be, by the Securities Administrator, based solely on, and to the extent
of, information provided to the Securities Administrator by the Master Servicer.
The Securities Administrator may conclusively rely on such information and shall
not be required to confirm, verify or recalculate any such information.

     With respect to Mortgage Loans subject to modification by a Servicer made
as part of a loss mitigation strategy, the Master Servicer, such Servicer and
the Seller will reach agreement on the reporting of additional information
concerning loan modifications to be included in the Servicers' monthly
remittance advices and the Monthly Statement.

     The Securities Administrator may make available each month, to any
interested party, the Monthly Statement to Certificateholders via the Securities
Administrator's website initially located at "www.ctslink.com." Assistance in
using the website can be obtained by calling the Securities Administrator's
customer service desk at (866) 846-4526. Parties that are unable to use the
above distribution option are entitled to have a paper copy mailed to them via
first class mail by calling the customer service desk and indicating such. The
Securities Administrator shall have the right to change the way such reports are
distributed in order to make such distribution more convenient and/or more
accessible to the parties, and the Securities Administrator shall provide timely
and adequate notification to all parties regarding any such change.

     (b) By January 30 of each year beginning in 2008, if so requested in
writing, the Securities Administrator will furnish such report to each Holder of
the Certificates of record at any time during the prior calendar year as to the
aggregate of amounts reported pursuant to subclauses (a)(ii) and (a)(v) above
with respect to the Certificates, plus information with respect to the amount of
servicing compensation and such other customary information as the Securities
Administrator may determine to be necessary and/or to be required by the
Internal Revenue Service or by a federal or state law or rules or regulations to
enable such Holders to prepare their tax returns for such calendar year. Such
obligations shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Securities
Administrator pursuant to the requirements of the Code.

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<PAGE>

     Section 6.05 Monthly Advances. If the Monthly Payment on a Mortgage Loan
that was due on a related Due Date and is delinquent other than as a result of
application of the Relief Act and for which the related Servicer was required to
make an advance pursuant to the related Servicing Agreement exceeds the amount
deposited in the Master Servicer Collection Account that will be used for a
Monthly Advance with respect to such Mortgage Loan, the Master Servicer will
deposit in the Master Servicer Collection Account not later than the
Distribution Account Deposit Date immediately preceding the related Distribution
Date an amount equal to such deficiency, net of the Servicing Fee for such
Mortgage Loan, except to the extent the Master Servicer determines any such
Monthly Advance to be nonrecoverable from Liquidation Proceeds, Insurance
Proceeds or future payments on the Mortgage Loan for which such Monthly Advance
was made. If the Master Servicer has not deposited the amount described above as
of the related Distribution Account Deposit Date, the Trustee will, subject to
applicable law and its determination of recoverability, deposit in the Master
Servicer Collection Account not later than the related Distribution Date, an
amount equal to the remaining deficiency as of the Distribution Account Deposit
Date. Subject to the foregoing, the Master Servicer shall continue to make such
Monthly Advances through the date that the related Servicer is required to do so
under its Servicing Agreement. If applicable, on the Distribution Account
Deposit Date, the Master Servicer shall present an Officer's Certificate to the
Securities Administrator (i) stating that the Master Servicer elects not to make
a Monthly Advance in a stated amount and (ii) detailing the reason it deems the
advance to be nonrecoverable.

     Section 6.06 Compensating Interest Payments. The Master Servicer shall
deposit in the Master Servicer Collection Account not later than each
Distribution Account Deposit Date an amount equal to the aggregate amounts
required to be paid by the Servicers under the Servicing Agreements with respect
to subclause (a) of the definition of Prepayment Interest Shortfall with respect
to the Mortgage Loans for the related Distribution Date, and not so paid by the
related Servicers (such amount, the "Compensating Interest Payment"). The Master
Servicer shall not be entitled to any reimbursement of any Compensating Interest
Payment; provided, however, the aggregate Compensating Interest Payments made by
the Master Servicer shall not exceed the Master Servicing Compensation.

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<PAGE>

                                   ARTICLE VII
                      THE MASTER SERVICER AND THE DEPOSITOR

     Section 7.01 Liabilities of the Master Servicer. The Master Servicer shall
be liable in accordance herewith only to the extent of the obligations
specifically imposed upon and undertaken by the Master Servicer, as the case may
be, herein. The Depositor shall be liable in accordance herewith only to the
extent of the obligations specifically imposed upon and undertaken by the
Depositor.

     Section 7.02 Merger or Consolidation of the Master Servicer.

     (a) Each of the Master Servicer and the Depositor will keep in full force
and effect its existence, rights and franchises as a corporation under the laws
of the state of its incorporation, and will obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the Certificates or any of the Mortgage Loans
and to perform its duties under this Agreement.

     (b) Any Person into which the Master Servicer or the Depositor may be
merged or consolidated, or any corporation resulting from any merger or
consolidation to which the Master Servicer shall be a party, or any Person
succeeding to the business of the Master Servicer, shall be the successor of the
Master Servicer hereunder, 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.

     Section 7.03 Indemnification from the Master Servicer and the Depositor.

     (a) The Master Servicer agrees to indemnify the Indemnified Persons for,
and to hold them harmless against, any loss, liability or expense (including
reasonable legal fees and disbursements of counsel) incurred on their part that
may be sustained in connection with, arising out of, or relating to, any claim
or legal action (including any pending or threatened claim or legal action)
relating to this Agreement or the Certificates (i) related to the Master
Servicer's failure to perform its duties in compliance with this Agreement
(except as any such loss, liability or expense shall be otherwise reimbursable
pursuant to this Agreement) or (ii) incurred by reason of the Master Servicer's
willful misfeasance, bad faith or gross negligence in the performance of duties
hereunder or by reason of reckless disregard of obligations and duties
hereunder, provided, in each case, that with respect to any such claim or legal
action (or pending or threatened claim or legal action), the Trustee or the
Securities Administrator shall have given the Master Servicer and the Depositor
written notice of such claim or legal action promptly after the Trustee or the
Securities Administrator shall have received knowledge thereof. This indemnity
shall survive the resignation or removal of the Trustee, Master Servicer or the
Securities Administrator and the termination of this Agreement.

     (b) The Depositor will indemnify any Indemnified Person for any loss,
liability or expense of any Indemnified Person not otherwise referred to in
Subsection (a) above.

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<PAGE>

     Section 7.04 Limitations on Liability of the Master Servicer and Others.
Subject to the obligation of the Master Servicer to indemnify the Indemnified
Persons pursuant to Section 7.03:

     (a) Neither the Master Servicer nor any of the directors, officers,
employees or agents of the Master Servicer shall be under any liability to the
Indemnified Persons, the Depositor, the Issuing Entity or the Certificateholders
for taking any action or for refraining from taking any action in good faith
pursuant to this Agreement, or for errors in judgment; provided, however, that
this provision shall not protect the Master Servicer or any such Person against
any breach of warranties or representations made herein or any liability which
would otherwise be imposed by reason of such Person's willful misfeasance, bad
faith or gross negligence in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder.

     (b) The Master Servicer and any director, officer, employee or agent of the
Master 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.

     (c) The Master Servicer, the Custodian and any director, officer, employee
or agent of the Master Servicer or the Custodian shall be indemnified by the
Issuing Entity and held harmless thereby against any loss, liability or expense
(including reasonable legal fees and disbursements of counsel) incurred on their
part that may be sustained in connection with, arising out of, or related to,
any claim or legal action (including any pending or threatened claim or legal
action) relating to this Agreement, the Certificates or any Servicing Agreement
(except to the extent that the Master Servicer or the Custodian, as the case may
be, is indemnified by a Servicer thereunder), other than (i) any such loss,
liability or expense related to the Master Servicer's failure to perform its
duties in compliance with this Agreement (except as any such loss, liability or
expense shall be otherwise reimbursable pursuant to this Agreement), or to the
Custodian's failure to perform its duties under the Custodial Agreement,
respectively, or (ii) any such loss, liability or expense incurred by reason of
the Master Servicer's or the Custodian's willful misfeasance, bad faith or gross
negligence in the performance of duties hereunder or under the Custodial
Agreement, as applicable, or by reason of reckless disregard of obligations and
duties hereunder or under the Custodial Agreement, as applicable.

     (d) The Master Servicer shall not be under any obligation to appear in,
prosecute or defend any legal action that is not incidental to its duties under
this Agreement and that in its opinion may involve it in any expense or
liability; provided, however, the Master Servicer may in its discretion,
undertake any such action which it may deem necessary or desirable with respect
to this Agreement and the rights and duties of the parties hereto and the
interests of the Certificateholders hereunder. In such event, the legal expenses
and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Issuing Entity, and the Master Servicer
shall be entitled to be reimbursed therefor out of the Master Servicer
Collection Account as provided by Section 4.03. Nothing in this Section 7.04(d)
shall affect the Master Servicer's obligation to supervise, or to take such
actions as are necessary to ensure, the servicing and administration of the
Mortgage Loans pursuant to Section 3.01.

     (e) In taking or recommending any course of action pursuant to this
Agreement, unless specifically required to do so pursuant to this Agreement, the
Master Servicer shall not be required to investigate or make recommendations
concerning potential liabilities which the

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Issuing Entity might incur as a result of such course of action by reason of the
condition of the Mortgaged Properties.

     (f) The Master Servicer shall not be liable for any acts or omissions of
any Servicer, except as otherwise expressly provided herein.

     Section 7.05 Master Servicer Not to Resign. Except as provided in Section
7.07, the Master Servicer shall not resign from the obligations and duties
hereby imposed on it except upon a determination that any such duties hereunder
are no longer permissible under applicable law and such impermissibility cannot
be cured. Any such determination permitting the resignation of the Master
Servicer shall be evidenced by an Opinion of Independent Counsel to such effect
delivered to the Trustee. No such resignation by the Master Servicer shall
become effective until the Depositor or the Trustee or a successor to the Master
Servicer reasonably satisfactory to the Trustee shall have assumed the
responsibilities and obligations of the Master Servicer in accordance with
Section 8.02 hereof. The Trustee shall notify the Rating Agencies of the
resignation of the Master Servicer. If the Master Servicer and the Securities
Administrator are the same entity, then at any time the Master Servicer is
terminated as master servicer, the Securities Administrator shall likewise be
removed as securities administrator.

     Section 7.06 Successor Master Servicer. In connection with the appointment
of any successor Master Servicer or the assumption of the duties of the Master
Servicer, the Depositor or the Trustee may make such arrangements for the
compensation of such successor master servicer out of payments on the Mortgage
Loans as the Depositor or the Trustee and such successor master servicer shall
agree. If the successor master servicer does not agree that such market value is
a fair price, such successor master servicer shall obtain two quotations of
market value from third parties actively engaged in the servicing of
single-family mortgage loans.

          Notwithstanding anything herein to the contrary, in no event shall the
Trustee be liable for any Servicing Fee or master servicing fee or for any
differential in the amount of the Servicing Fee or master servicing fee paid
hereunder and the amount necessary to induce any successor servicer or successor
master servicer to act as successor servicer or successor master servicer, as
applicable, under this Agreement and the transactions set forth or provided for
herein.

     Section 7.07 Sale and Assignment of Master Servicing. The Master Servicer
may sell and assign its rights and delegate its duties and obligations in its
entirety as Master Servicer under this Agreement; provided, however, that: (i)
the purchaser or transferee accepting such assignment and delegation (a) shall
be a Person which shall be qualified to service mortgage loans for Fannie Mae or
Freddie Mac; (b) shall have a net worth of not less than $10,000,000 (unless
otherwise approved by each Rating Agency pursuant to clause (ii) below); (c)
shall be reasonably satisfactory to the Trustee (as evidenced in a writing
signed by the Trustee); and (d) shall execute and deliver to the Trustee an
agreement, in form and substance reasonably satisfactory to the Trustee, which
contains an assumption by such Person of the due and punctual performance and
observance of each covenant and condition to be performed or observed by it as
master servicer under this Agreement, any custodial agreement from and after the
effective date of such agreement; (ii) each Rating Agency shall be given prior
written notice of the identity of the proposed successor to the Master Servicer
and each Rating Agency's rating of the Certificates

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<PAGE>

in effect immediately prior to such assignment, sale and delegation will not be
downgraded, qualified or withdrawn as a result of such assignment, sale and
delegation, as evidenced by a letter to such effect delivered to the Master
Servicer and the Trustee; and (iii) the Master Servicer assigning and selling
the master servicing shall deliver to the Trustee an Officer's Certificate and
an Opinion of Independent Counsel, each stating that all conditions precedent to
such action under this Agreement have been completed and such action is
permitted by and complies with the terms of this Agreement. No such assignment
or delegation shall affect any liability of the Master Servicer arising prior to
the effective date thereof.

                                  ARTICLE VIII
                                     DEFAULT

     Section 8.01 Events of Default. "Event of Default," wherever used herein,
means any one of the following events (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body) and
only with respect to the defaulting Master Servicer:

          (i) The Master Servicer fails to cause to be deposited in the
     Distribution Account any amount so required to be deposited pursuant to
     this Agreement, and such failure continues unremedied for a period of three
     Business Days after the date upon which written notice of such failure,
     requiring the same to be remedied, shall have been given to the Master
     Servicer; or

          (ii) The Master Servicer fails to observe or perform in any material
     respect any other material covenants and agreements set forth in this
     Agreement to be performed by it, which covenants and agreements materially
     affect the rights of Certificateholders, and such failure continues
     unremedied for a period of 60 days after the date on which written notice
     of such failure, properly requiring the same to be remedied, shall have
     been given to the Master Servicer by the Trustee or to the Master Servicer
     and the Trustee by the Holders of Certificates evidencing Percentage
     Interests aggregating not less than 25% of the Trust Fund; or

          (iii) There is entered against the Master Servicer a decree or order
     by a court or agency or supervisory authority having jurisdiction in the
     premises for the appointment of a conservator, 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, and the continuance of any such decree or order is unstayed and in
     effect for a period of 60 consecutive days, or an involuntary case is
     commenced against the Master Servicer under any applicable insolvency or
     reorganization statute and the petition is not dismissed within 60 days
     after the commencement of the case; or

          (iv) The Master Servicer consents to the appointment of a conservator
     or receiver or liquidator in any insolvency, readjustment of debt,
     marshaling of assets and liabilities or similar proceedings of or relating
     to the Master Servicer or substantially all of its property; or the Master
     Servicer admits in writing its inability to pay its debts generally as they
     become due, files a petition to take advantage of any applicable

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<PAGE>

     insolvency or reorganization statute, makes an assignment for the benefit
     of its creditors, or voluntarily suspends payment of its obligations; or

          (v) The Master Servicer assigns or delegates its duties or rights
     under this Agreement in contravention of the provisions permitting such
     assignment or delegation under Sections 7.05 or 7.07.

In each and every such case, so long as such Event of Default with respect to
the Master Servicer shall not have been remedied, either the Trustee or the
Holders of Certificates evidencing Percentage Interests aggregating not less
than 51% of the principal of the Trust Fund, by notice in writing to the Master
Servicer (and to the Trustee if given by such Certificateholders), with a copy
to the Rating Agencies, and with the consent of the Depositor, may terminate all
of the rights and obligations (but not the liabilities) of the Master Servicer
under this Agreement and in and to the Mortgage Loans and/or the REO Property
serviced by the Master Servicer and the proceeds thereof. Upon the receipt by
the Master Servicer of the written notice, all authority and power of the Master
Servicer under this Agreement, whether with respect to the Certificates, the
Mortgage Loans, REO Property or under any other related agreements (but only to
the extent that such other agreements relate to the Mortgage Loans or related
REO Property) shall, subject to Section 8.02, automatically and without further
action pass to and be vested in the Trustee pursuant to this Section 8.01; and,
without limitation, the Trustee is hereby authorized and empowered to execute
and deliver, on behalf of the Master 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. The Master Servicer
agrees to cooperate with the Trustee in effecting the termination of the Master
Servicer's rights and obligations hereunder, including, without limitation, the
transfer to the Trustee of (i) the property and amounts which are then or should
be part of the Issuing Entity or which thereafter become part of the Issuing
Entity; and (ii) originals or copies of all documents of the Master Servicer
reasonably requested by the Trustee to enable it to assume the Master Servicer's
duties thereunder. In addition to any other amounts which are then, or,
notwithstanding the termination of its activities under this Agreement, may
become payable to the Master Servicer under this Agreement, the Master Servicer
shall be entitled to receive, out of any amount received on account of a
Mortgage Loan or related REO Property, that portion of such payments which it
would have received as reimbursement under this Agreement if notice of
termination had not been given. The termination of the rights and obligations of
the Master Servicer shall not affect any obligations incurred by the Master
Servicer prior to such termination.

     Section 8.02 Trustee to Act; Appointment of Successor.

     (a) Upon the receipt by the Master Servicer of a notice of termination
pursuant to Section 8.01 or an Opinion of Independent Counsel pursuant to
Section 7.05 to the effect that the Master Servicer is legally unable to act or
to delegate its duties to a Person which is legally able to act, the Trustee
shall automatically become the successor in all respects to the Master Servicer
in its capacity under this Agreement and the transactions set forth or provided
for herein and shall thereafter be subject to all the responsibilities, duties,
liabilities and limitations on liabilities relating thereto placed on the Master
Servicer by the terms and provisions hereof; provided,

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<PAGE>

however, that the Depositor shall have the right to select a successor master
servicer; provided further, however, that the Trustee shall have no obligation
whatsoever with respect to any liability (other than advances deemed recoverable
and not previously made) incurred by the Master Servicer at or prior to the time
of termination. As compensation therefor, the Trustee shall be entitled to all
funds relating to the Mortgage Loans which the Master Servicer would have been
entitled to retain if the Master Servicer had continued to act hereunder, except
for those amounts due the Master Servicer as reimbursement permitted under this
Agreement for advances previously made or expenses previously incurred.
Notwithstanding the above, or anything herein to the contrary, the Trustee, if
it becomes Master Servicer, shall have no responsibility or obligation (i) to
repurchase or substitute any Mortgage Loan, (ii) for any representation or
warranty of the Master Servicer hereunder, and (iii) for any act or omission of
either a predecessor or successor Master Servicer other than the Trustee. The
Trustee may conduct any activity required of it as Master Servicer hereunder
through an Affiliate or through an agent. Neither the Trustee (as successor
Master Servicer) nor any other successor Master Servicer shall be deemed to be
in default hereunder due to any act or omission of a predecessor Master
Servicer, including but not limited to failure to timely deliver to the Trustee
distribution instructions, any funds required to be deposited to the Trust Fund,
or any breach of its duty to cooperate with a transfer of master servicing.
Neither the Trustee nor any other successor Master 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 solely by the failure of the Master Servicer to deliver or
provide, or any delay in delivering or providing, any cash, information,
documents or records required to be provided to it by the Master Servicer.
Notwithstanding the above, the Trustee may, if it shall be unwilling so to act,
or shall, if it is legally unable so to act, appoint or petition a court of
competent jurisdiction to appoint, any established housing and home finance
institution which is a Fannie Mae- or Freddie Mac-approved servicer, and with
respect to a successor to the Master Servicer only, having a net worth of not
less than $10,000,000 and meeting such other standards for a successor Master
Servicer as are set forth in this Agreement, as the successor to the Master
Servicer hereunder in the assumption of all or any part of the responsibilities,
duties or liabilities of the Master Servicer hereunder. Pending appointment of a
successor to the Master Servicer hereunder, the Trustee shall 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 the Mortgage Loans as it and such successor shall
agree; provided, however, in the event that the provisions of Section 7.06 shall
apply, no such compensation shall be in excess of that permitted the Trustee
under this Section 8.02(a), and that such successor shall undertake and assume
the obligations of the Trustee to pay compensation to any third Person acting as
an agent or independent contractor in the performance of master servicing
responsibilities hereunder. The Trustee and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession. Notwithstanding anything herein to the contrary in no event
shall the Trustee be liable for any Servicing Fee or master servicing fee or for
any differential in the amount of the Servicing Fee or master servicing fee paid
hereunder and the amount necessary to induce any successor servicer or successor
master servicer to act as successor servicer or successor master servicer, as
applicable, under this Agreement and the transactions set forth or provided for
herein.

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<PAGE>

     (b) If the Trustee shall succeed to any duties of the Master Servicer
respecting the Mortgage Loans as provided herein, it shall do so in a separate
capacity and not in its capacity as Trustee and, accordingly, the provisions of
Article IX (with the exception of the last paragraph of Section 9.01(d)) shall
be inapplicable to the Trustee in its duties as the successor to the Master
Servicer in the servicing of the Mortgage Loans (although such provisions shall
continue to apply to the Trustee in its capacity as Trustee); the provisions of
Article VII, however, shall apply to it in its capacity as successor master
servicer.

     Section 8.03 Notification to Certificateholders. Upon any termination or
appointment of a successor to the Master Servicer, the Trustee shall give prompt
written notice thereof to Certificateholders at their respective addresses
appearing in the Certificate Register and to the Rating Agencies.

     Section 8.04 Waiver of Defaults. The Trustee shall transmit by mail to all
Certificateholders, within 60 days after the occurrence of any Event of Default
known to the Trustee, unless such Event of Default shall have been cured, notice
of each such Event of Default hereunder known to the Trustee. The Holders of
Certificates evidencing Percentage Interests aggregating not less than 51% of
the Trust Fund may, on behalf of all Certificateholders, waive any default by
the Master Servicer in the performance of its obligations hereunder and the
consequences thereof, except a default in the making of or the causing to be
made any required distribution on the Certificates. Upon any such waiver of a
past default, such default shall be deemed to cease to exist, and any Event of
Default arising therefrom shall be deemed to have been timely remedied for every
purpose of this Agreement. No such waiver shall extend to any subsequent or
other default or impair any right consequent thereon except to the extent
expressly so waived. The Trustee shall give notice of any such waiver to the
Rating Agencies.

     Section 8.05 List of Certificateholders. Upon reasonable, prior written
request of three or more Certificateholders of record, for purposes of
communicating with other Certificateholders with respect to their rights under
this Agreement, the Trustee will afford such Certificateholders access during
business hours to the most recent list of Certificateholders held by the
Trustee.

                                   ARTICLE IX
                           CONCERNING THE TRUSTEE AND
                          THE SECURITIES ADMINISTRATOR

     Section 9.01 Duties of Trustee.

     (a) The Trustee, prior to the occurrence of an Event of Default and after
the curing or waiver of all Events of Default which may have occurred, and the
Securities Administrator each undertake to perform such duties and only such
duties as are specifically set forth in this Agreement as duties of the Trustee
and the Securities Administrator, respectively. If an Event of Default has
occurred and has not been cured or waived, the Trustee shall exercise such of
the rights and powers vested in it by this Agreement, and subject to Section
8.02(b) use the same degree of care and skill in their exercise, as a prudent
person would exercise under the circumstances in the conduct of his own affairs.

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<PAGE>

     (b) Upon receipt of all resolutions, certificates, statements, opinions,
reports, documents, orders or other instruments which are specifically required
to be furnished to the Trustee and the Securities Administrator pursuant to any
provision of this Agreement, the Trustee and the Securities Administrator,
respectively, shall examine them to determine whether they are in the form
required by this Agreement; provided, however, that neither the Trustee nor the
Securities Administrator shall be responsible for the accuracy or content of any
resolution, certificate, statement, opinion, report, document, order or other
instrument furnished by the Master Servicer; provided, further, that neither the
Trustee nor the Securities Administrator shall be responsible for the accuracy
or verification of any calculation provided to it pursuant to 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 such action as it deems
appropriate to have the instrument corrected and if the instrument is not
corrected to its satisfaction, the Trustee will provide notice thereof to the
Certificateholders and take such further action as directed by the
Certificateholders.

     (c) On each Distribution Date, the Securities Administrator shall make
monthly distributions and the final distribution to the Certificateholders from
funds in the Distribution Account as provided in Sections 6.01 and 10.02 herein
based solely on the report of the Master Servicer or the Servicers.

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

          (i) Prior to the occurrence of an Event of Default, and after the
     curing or waiver of all such Events of Default which may have occurred, the
     duties and obligations of the Trustee and the Securities Administrator
     shall be determined solely by the express provisions of this Agreement,
     neither the Trustee nor the Securities Administrator shall be liable except
     for the performance of their respective duties and obligations as are
     specifically set forth in this Agreement, no implied covenants or
     obligations shall be read into this Agreement against the Trustee or the
     Securities Administrator and, in the absence of bad faith on the part of
     the Trustee or the Securities Administrator, respectively, the Trustee or
     the Securities Administrator, respectively, may conclusively rely, as to
     the truth of the statements and the correctness of the opinions expressed
     therein, upon any certificates or opinions furnished to the Trustee or the
     Securities Administrator, respectively, and conforming to the requirements
     of this Agreement;

          (ii) Neither the Trustee nor the Securities Administrator shall be
     liable in its individual capacity for an error of judgment made in good
     faith by a Responsible Officer or Responsible Officers of the Trustee or an
     officer of the Securities Administrator, respectively, unless it shall be
     proved that the Trustee or the Securities Administrator, respectively, was
     negligent in ascertaining the pertinent facts;

          (iii) Neither the Trustee nor the Securities Administrator shall be
     liable with respect to any action taken, suffered or omitted to be taken by
     it in good faith in accordance with the directions of the Holders of
     Certificates evidencing Percentage Interests aggregating not less than 25%
     of the Trust Fund, if such action or non-action

                                      -95-

<PAGE>

     relates to the time, method and place of conducting any proceeding for any
     remedy available to the Trustee or the Securities Administrator,
     respectively, or exercising any trust or other power conferred upon the
     Trustee or the Securities Administrator, respectively, under this
     Agreement;

          (iv) The Trustee shall not be required to take notice or be deemed to
     have notice or knowledge of any default or Event of Default unless a
     Responsible Officer of the Trustee's Corporate Trust Office shall have
     actual knowledge thereof. In the absence of such notice, the Trustee may
     conclusively assume there is no such default or Event of Default;

          (v) The Trustee shall not in any way be liable by reason of any
     insufficiency in any Account held by or in the name of Trustee unless it is
     determined by a court of competent jurisdiction that the Trustee's gross
     negligence or willful misconduct was the primary cause of such
     insufficiency (except to the extent that the Trustee is obligor and has
     defaulted thereon);

          (vi) Anything in this Agreement to the contrary notwithstanding, in no
     event shall the Trustee or the Securities Administrator be liable for
     special, indirect or consequential loss or damage of any kind whatsoever
     (including but not limited to lost profits), even if the Trustee or the
     Securities Administrator, respectively, has been advised of the likelihood
     of such loss or damage and regardless of the form of action; and

          (vii) None of the Securities Administrator, the Depositor, the Master
     Servicer, any Servicer or the Trustee shall be responsible for the acts or
     omissions of the other, it being understood that this Agreement shall not
     be construed to render them partners, joint venturers or agents of one
     another.

     Neither the Trustee (regardless of the capacity in which it is acting) nor
the Securities Administrator shall be required to expend or risk its own funds
or otherwise incur financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it, and
none of the provisions contained in this Agreement shall in any event require
the Trustee or the Securities Administrator to perform, or be responsible for
the manner of performance of, any of the obligations of the Master Servicer
hereunder or under the Servicing Agreements, except during such time, if any, as
the Trustee shall be the successor to, and be vested with the rights, duties,
powers and privileges of, the Master Servicer in accordance with the terms of
this Agreement.

     (e) All funds received by the Master Servicer and the Securities
Administrator and required to be deposited in the Master Servicer Collection
Account or Distribution Account pursuant to this Agreement will be promptly so
deposited by the Master Servicer and the Securities Administrator.

     (f) Except for those actions that the Trustee or the Securities
Administrator is required to take hereunder, neither the Trustee nor the
Securities Administrator shall have any

                                      -96-

<PAGE>

obligation or liability to take any action or to refrain from taking any action
hereunder in the absence of written direction as provided hereunder.

     Section 9.02 Certain Matters Affecting the Trustee and the Securities
Administrator. Except as otherwise provided in Section 9.01:

          (i) The Trustee and the Securities Administrator may rely and shall be
     protected in acting or refraining from acting in reliance on any
     resolution, certificate of a Depositor, Master Servicer or Servicer,
     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 and the Securities Administrator may consult with
     counsel and any advice of such counsel or any Opinion of Counsel shall be
     full and complete authorization and protection with respect to any action
     taken or suffered or omitted by it hereunder in good faith and in
     accordance with such advice or Opinion of Counsel;

          (iii) Neither the Trustee nor the Securities Administrator shall be
     under any obligation to exercise any of the trusts or powers vested in it
     by this Agreement, other than its obligation to give notices pursuant to
     this Agreement, or to institute, conduct or defend any litigation hereunder
     or in relation hereto at the request, order or direction of any of the
     Certificateholders pursuant to the provisions of this Agreement, unless
     such Certificateholders shall have offered to the Trustee reasonable
     security or indemnity against the costs, expenses and liabilities which may
     be incurred therein or thereby. Nothing contained herein shall, however,
     relieve the Trustee of the obligation, upon the occurrence of an Event of
     Default of which a Responsible Officer of the Trustee's Corporate Trust
     Office has actual knowledge (which has not been cured or waived), subject
     to Section 8.02(b), to exercise such of the rights and powers vested in it
     by this Agreement, and to use the same degree of care and skill in their
     exercise, as a prudent person would exercise under the circumstances in the
     conduct of his own affairs;

          (iv) Prior to the occurrence of an Event of Default hereunder and
     after the curing or waiver of all Events of Default which may have
     occurred, neither the Trustee nor the Securities Administrator shall be
     liable in its individual capacity for any action taken, suffered or omitted
     by it in good faith and believed by it to be authorized or within the
     discretion or rights or powers conferred upon it by this Agreement;

          (v) Neither the Trustee nor the Securities Administrator shall 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 to do so by Holders of Certificates evidencing
     Percentage Interests aggregating not less than 25% of the Trust Fund and
     provided that the payment within a reasonable time to the Trustee or the
     Securities Administrator, as applicable, of the costs, expenses or
     liabilities likely to be incurred by it in the making of such investigation
     is, in the opinion of the Trustee or the Securities Administrator, as
     applicable, reasonably assured to the Trustee or the Securities

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<PAGE>

     Administrator, as applicable, by the security afforded to it by the terms
     of this Agreement. The Trustee or the Securities Administrator may require
     reasonable indemnity against such expense or liability as a condition to
     taking any such action. The reasonable expense of every such examination
     shall be paid by the Certificateholders requesting the investigation;

          (vi) The Trustee and the Securities Administrator may execute any of
     the trusts or powers hereunder or perform any duties hereunder either
     directly or through Affiliates, agents or attorneys; provided, however,
     that the Trustee may not appoint any agent to perform its custodial
     functions with respect to the Mortgage Files or paying agent functions
     under this Agreement without the express written consent of the Securities
     Administrator, which consent will not be unreasonably withheld. Neither the
     Trustee nor the Securities Administrator shall be liable or responsible for
     the misconduct or negligence of any of the Trustee's or the Securities
     Administrator's agents or attorneys or a custodian or paying agent
     appointed hereunder by the Trustee or the Securities Administrator with due
     care and, when required, with the consent of the Securities Administrator;

          (vii) Should the Trustee or the Securities Administrator deem the
     nature of any action required on its part, other than a payment or transfer
     under Section 4.01(b) or Section 4.02, to be unclear, the Trustee or the
     Securities Administrator, respectively, may require prior to such action
     that it be provided by the Depositor with reasonable further instructions;

          (viii) The right of the Trustee or the Securities Administrator to
     perform any discretionary act enumerated in this Agreement shall not be
     construed as a duty, and neither the Trustee nor the Securities
     Administrator shall be accountable for other than its negligence or willful
     misconduct in the performance of any such act;

          (ix) Neither the Trustee nor the Securities Administrator shall be
     required to give any bond or surety with respect to the execution of the
     trust created hereby or the powers granted hereunder, except as provided in
     Section 9.07; and

          (x) Neither the Trustee nor the Securities Administrator shall have
     any duty to conduct any affirmative investigation (including, but not
     limited to, reviewing any reports delivered to the Trustee in connection
     with the review of Mortgage Files) as to the occurrence of any condition
     requiring the repurchase of any Mortgage Loan by the Seller pursuant to
     this Agreement or the Mortgage Loan Purchase Agreement, as applicable, or
     the eligibility of any Mortgage Loan for purposes of this Agreement.

          (xi) Any permissive right of the Trustee hereunder shall not be
     construed as a duty.

     Section 9.03 Trustee and Securities Administrator Not Liable for
Certificates or Mortgage Loans. The recitals contained herein and in the
Certificates (other than, as to the Securities Administrator, the signature and
countersignature of the Securities Administrator on the Certificates) shall be
taken as the statements of the Depositor, and neither the Trustee nor the

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<PAGE>

Securities Administrator shall have any responsibility for their correctness.
Neither the Trustee nor the Securities Administrator makes any representation as
to the validity or sufficiency of the Certificates (other than the signature and
countersignature of the Securities Administrator on the Certificates) or of any
Mortgage Loan except as expressly provided in Sections 2.02 and 2.05 hereof;
provided, however, that the foregoing shall not relieve the Trustee or the
Custodian of the obligation to review the Mortgage Files pursuant to Sections
2.02 and 2.04. The Securities Administrator's signature and countersignature (or
countersignature of its agent) on the Certificates shall be solely in its
capacity as Securities Administrator of the Trust Fund and shall not constitute
the Certificates an obligation of the Securities Administrator in any other
capacity. Neither the Trustee or the Securities Administrator shall be
accountable for the use or application by the Depositor of any of the
Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Depositor with respect to the Mortgage
Loans. Subject to the provisions of Section 2.05, neither the Trustee nor the
Securities Administrator shall not be responsible for the legality or validity
of this Agreement or any document or instrument relating to this Agreement, the
validity of the execution of this Agreement or of any supplement hereto or
instrument of further assurance, or the validity, priority, perfection or
sufficiency of the security for the Certificates issued hereunder or intended to
be issued hereunder. Neither the Trustee nor the Securities Administrator shall
at any time have any responsibility or liability for or with respect to the
legality, validity and enforceability of any Mortgage or any Mortgage Loan, or
the perfection and priority of any Mortgage or the maintenance of any such
perfection and priority, or for or with respect to the sufficiency of the Trust
Fund or its ability to generate the payments to be distributed to
Certificateholders, under this Agreement. Neither the Trustee nor the Securities
Administrator shall have any responsibility for filing any financing or
continuation statement in any public office at any time or to otherwise perfect
or maintain the perfection of any security interest or lien granted to it
hereunder or to record this Agreement.

     Section 9.04 Trustee and Securities Administrator May Own Certificates. The
Trustee and the Securities Administrator in its individual capacity or in any
capacity other than as Trustee hereunder may become the owner or pledgee of any
Certificates with the same rights it would have if it were not Trustee or the
Securities Administrator, as applicable, and may otherwise deal with the parties
hereto.

     Section 9.05 Trustee's and Securities Administrator's Fees and Expenses.
The fees and expenses of the Trustee and the Securities Administrator shall be
paid by the Master Servicer in accordance with a side letter agreement. In
addition, the Trustee and the Securities Administrator will be entitled to
recover from the Master Servicer Collection Account pursuant to Section 4.03(b)
all reasonable out-of-pocket expenses, disbursements and advances and the
expenses of the Trustee and the Securities Administrator, respectively, in
connection with any Event of Default, any breach of this Agreement or any claim
or legal action (including any pending or threatened claim or legal action)
incurred or made by the Trustee or the Securities Administrator, respectively,
in the administration of the trusts hereunder (including the reasonable
compensation, expenses and disbursements of its counsel) except any such
expense, disbursement or advance as may arise from its negligence or intentional
misconduct or which is the responsibility of the Certificateholders or the Trust
Fund hereunder. If funds in the Master Servicer Collection Account are
insufficient therefor, the Trustee and the Securities Administrator shall
recover such expenses from the Depositor. Such compensation and

                                      -99-

<PAGE>

reimbursement obligation shall not be limited by any provision of law in regard
to the compensation of a trustee of an express trust.

     Section 9.06 Eligibility Requirements for Trustee and Securities
Administrator.

     (a) The Trustee and any successor Trustee and the Securities Administrator
and any successor Securities Administrator shall during the entire duration of
this Agreement be a state bank or trust company or a national banking
association organized and doing business under the laws of such state or the
United States of America, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus and undivided profits of at least
$40,000,000 or, in the case of a successor Trustee, $50,000,000, subject to
supervision or examination by federal or state authority and, in the case of the
Trustee, rated "BBB" or higher by S&P, "Aaa1" or higher by Moody's and "BBB" or
higher by Fitch with respect to their long-term rating and rated "BBB" or higher
by S&P, "Baa1" or higher by Moody's and "BBB" or higher by Fitch with respect to
any outstanding long-term unsecured unsubordinated debt, and, in the case of a
successor Trustee or successor Securities Administrator other than pursuant to
Section 9.10, rated in one of the two highest long-term debt categories of, or
otherwise acceptable to, each of the Rating Agencies. If the Trustee 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 9.06 the combined capital and surplus of such corporation shall be
deemed to be its total equity capital (combined capital and surplus) as set
forth in its most recent report of condition so published. In case at any time
the Trustee or the Securities Administrator shall cease to be eligible in
accordance with the provisions of this Section 9.06, the Trustee or the
Securities Administrator shall resign immediately in the manner and with the
effect specified in Section 9.08.

     (b) In addition, the Securities Administrator (i) may not be an Originator,
Master Servicer, Servicer, the Depositor or an affiliate of the Depositor unless
the Securities Administrator is in an institutional trust department of the
relevant entity, (ii) must be authorized to exercise corporate trust powers
under the laws of its jurisdiction of organization, and (iii) must be rated at
least "A" by S&P, "A" Moody's or "A" Fitch. If no successor Securities
Administrator shall have been appointed and shall have accepted appointment
within 60 days after the Securities Administrator ceases to be the Securities
Administrator pursuant to Section 9.08, then the Trustee shall either (i)
perform the duties of the Securities Administrator pursuant to this Agreement
until such time as a new Securities Administrator is appointed or (ii) petition
a court of competent jurisdiction to appoint a successor securities
administrator. The Trustee shall notify the Rating Agencies of any change of
Securities Administrator.

                                      -100-

<PAGE>

     Section 9.07 Insurance. The Securities Administrator, at its own expense,
shall at all times maintain and keep in full force and effect: (i) fidelity
insurance, (ii) theft of documents insurance and (iii) forgery insurance (which
may be collectively satisfied by a "Financial Institution Bond" and/or a
"Bankers' Blanket Bond"). All such insurance shall be in amounts, with standard
coverage and subject to deductibles, as are customary for insurance typically
maintained by banks or their affiliates which act as custodians for
investor-owned mortgage pools. A certificate of an officer of the Securities
Administrator as to the Securities Administrator's compliance with this Section
9.07 shall be furnished to any Certificateholder upon reasonable written
request.

     Section 9.08 Resignation and Removal of the Trustee and Securities
Administrator.

     (a) The Trustee and the Securities Administrator may at any time resign and
be discharged from the trust hereby created by giving written notice thereof to
the Depositor and the Master Servicer, with a copy to the Rating Agencies. Upon
receiving such notice of resignation, the Depositor shall promptly appoint a
successor Trustee or successor Securities Administrator, as applicable, by
written instrument, in triplicate, one copy of which instrument shall be
delivered to each of the resigning Trustee or Securities Administrator, as
applicable, the successor Trustee or Securities Administrator, as applicable. If
no successor Trustee or Securities Administrator shall have been so appointed
and have accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee or Securities Administrator may petition any
court of competent jurisdiction for the appointment of a successor Trustee or
Securities Administrator. If the Securities Administrator and the Master
Servicer are the same entity, then at any time the Securities Administrator
resigns or is removed as Securities Administrator, the Master Servicer shall
likewise be terminated as Master Servicer.

     (b) If at any time the Trustee or the Securities Administrator shall cease
to be eligible in accordance with the provisions of Section 9.06 and shall fail
to resign after written request therefor by the Depositor or if at any time the
Trustee or the Securities Administrator shall become incapable of acting, or
shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or the
Securities Administrator, as applicable, or of its property shall be appointed,
or any public officer shall take charge or control of the Trustee or the
Securities Administrator, as applicable, or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, then the Depositor shall
promptly remove the Trustee, or shall be entitled to remove the Securities
Administrator, as applicable, and appoint a successor Trustee or Securities
Administrator, as applicable, by written instrument, in triplicate, one copy of
which instrument shall be delivered to each of the Trustee or Securities
Administrator, as applicable, so removed, the successor Trustee or Securities
Administrator, as applicable.

     (c) The Holders of Certificates evidencing Percentage Interests aggregating
not less than 51% of the Trust Fund may at any time remove the Trustee or the
Securities Administrator and appoint a successor Trustee or Securities
Administrator by written instrument or instruments, in quadruplicate, signed by
such Holders or their attorneys-in-fact duly authorized, one complete set of
which instruments shall be delivered to the Depositor, the Trustee, the
Securities Administrator (if the Trustee is removed), the Trustee (if the
Securities Administrator is removed), and the Trustee or Securities
Administrator so removed and the successor so appointed.

                                      -101-

<PAGE>

     (d) No resignation or removal of the Trustee or the Securities
Administrator and appointment of a successor Trustee or Securities Administrator
pursuant to any of the provisions of this Section 9.08 shall become effective
except upon appointment of and acceptance of such appointment by the successor
Trustee or Securities Administrator as provided in Section 9.09.

     Section 9.09 Successor Trustee and Successor Securities Administrator.

     (a) Any successor Trustee or Securities Administrator appointed as provided
in Section 9.08 shall execute, acknowledge and deliver to the Depositor, the
Master Servicer and its predecessor Trustee or Securities Administrator an
instrument accepting such appointment hereunder. The resignation or removal of
the predecessor Trustee or Securities Administrator shall then become effective
and such successor Trustee or Securities Administrator, without any further act,
deed or conveyance, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor hereunder, with like effect as if
originally named as Trustee or Securities Administrator herein. The predecessor
Trustee or Securities Administrator shall after payment of its outstanding fees
and expenses promptly deliver to the successor Trustee or Securities
Administrator, as applicable, all assets and records of the Trust held by it
hereunder, and the Depositor and the predecessor Trustee or Securities
Administrator, as applicable, shall execute and deliver such instruments and do
such other things as may reasonably be required for more fully and certainly
vesting and confirming in the successor Trustee or Securities Administrator, as
applicable, all such rights, powers, duties and obligations.

     (b) No successor Trustee or Securities Administrator shall accept
appointment as provided in this Section 9.09 unless at the time of such
acceptance such successor Trustee or Securities Administrator shall be eligible
under the provisions of Section 9.06.

     (c) Upon acceptance of appointment by a successor Trustee or Securities
Administrator as provided in this Section 9.09, the successor Trustee or
Securities Administrator shall mail notice of the succession of such Trustee or
Securities Administrator hereunder to all Certificateholders at their addresses
as shown in the Certificate Register and to the Rating Agencies. The Depositor
shall pay the cost of any mailing by the successor Trustee or Securities
Administrator.

     Section 9.10 Merger or Consolidation of Trustee or Securities
Administrator. Any state bank or trust company or national banking association
into which the Trustee or the Securities Administrator may be merged or
converted or with which it may be consolidated or any state bank or trust
company or national banking association resulting from any merger, conversion or
consolidation to which the Trustee or the Securities Administrator,
respectively, shall be a party, or any state bank or trust company or national
banking association succeeding to all or substantially all of the corporate
trust business of the Trustee or the Securities Administrator, respectively,
shall be the successor of the Trustee or the Securities Administrator,
respectively, hereunder, provided such state bank or trust company or national
banking association shall be eligible under the provisions of Section 9.06. Such
succession shall be valid without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.

     Section 9.11 Appointment of Co-Trustee or Separate Trustee.

                                      -102-

<PAGE>

     (a) Notwithstanding any other provisions hereof, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust or property constituting the same may at the time be located, the
Depositor 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 Depositor 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, and to vest in such Person or Persons, in such capacity, such title to
the Trust, or any part thereof, and, subject to the other provisions of this
Section 9.11, such powers, duties, obligations, rights and trusts as the
Depositor and the Trustee may consider necessary or desirable.

     (b) If the Depositor shall not have joined in such appointment within 15
days after the receipt by it of a written request so to do, the Trustee shall
have the power to make such appointment without the Depositor.

     (c) No co-Master Servicer or separate trustee hereunder shall be required
to meet the terms of eligibility as a successor trustee under Section 9.06
hereunder and no notice to Certificateholders of the appointment of
co-trustee(s) or separate trustee(s) shall be required under Section 9.08
hereof.

     (d) In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 9.11, all rights, powers, duties and obligations
conferred or imposed upon the Trustee and required to be conferred on such
co-trustee shall be conferred or imposed upon and exercised or performed by the
Trustee and such separate trustee or co-trustee jointly, except to the extent
that under any law of any jurisdiction in which any particular act or acts are
to be performed (whether as Trustee hereunder or as successor to the Master
Servicer hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust or any portion thereof in any such
jurisdiction) shall be exercised and performed by such separate trustee or
co-trustee at the direction of the Trustee.

     (e) 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 IX. 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.

     (f) To the extent not prohibited by law, any separate trustee or co-trustee
may, at any time, request the Trustee, its agent or attorney-in-fact, with full
power and authority, to do any lawful act under or with respect to 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.

                                      -103-

<PAGE>

     (g) No Trustee under this Agreement shall be personally liable by reason of
any act or omission of another Trustee under this Agreement. The Depositor and
the Trustee acting jointly may at any time accept the resignation of or remove
any separate trustee or co-trustee.

     Section 9.12 Federal Information Returns and Reports to Certificateholders;
REMIC Administration.

     (a) REMIC elections as set forth in the Preliminary Statement shall be made
on Forms 1066 or other appropriate federal tax or information return for the
taxable year ending on the last day of the calendar year in which the
Certificates are issued. The regular interests and residual interest in each
REMIC shall be as designated in the Preliminary Statement.

     (b) The Closing Date is hereby designated as the "Startup Day" of each
REMIC within the meaning of section 860G(a)(9) of the Code. The latest possible
maturity date for purposes of Treasury Regulation 1.860G-1(a)(4) will be the
Latest Possible Maturity Date.

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

     (d) The Securities Administrator shall represent the Trust Fund in any
administrative or judicial proceeding relating to an examination or audit by any
governmental taxing authority with respect thereto. The Securities Administrator
shall pay any and all tax-related expenses (not including taxes) of each REMIC,
including but not limited to any professional fees or expenses related to audits
or any administrative or judicial proceedings with respect to such REMIC that
involve the Internal Revenue Service or state tax authorities, but only to the
extent that (i) such expenses are ordinary or routine expenses, including
expenses of a routine audit but not expenses of litigation (except as described
in (ii)); or (ii) such expenses or liabilities (including taxes and penalties)
are attributable to the negligence or willful misconduct of the Securities
Administrator in fulfilling its duties hereunder (including its duties as tax
return preparer). The Securities Administrator shall be entitled to
reimbursement of expenses to the extent provided in clause (i) above from the
Distribution Account, provided, however, the Securities Administrator shall not
be entitled to reimbursement for expenses incurred in connection with the
preparation of tax returns and other reports as required by this Section.

     (e) The Securities Administrator shall prepare and file, and the Trustee
shall sign, all of each REMIC's and the Trust Fund's federal and appropriate
state tax and information returns as such REMIC's direct representative. The
expenses of preparing and filing such returns shall be borne by the Securities
Administrator.

     (f) The Securities Administrator or its designee shall perform on behalf of
each REMIC all reporting and other tax compliance duties that are the
responsibility of such REMIC under the Code, the REMIC Provisions, or other
compliance guidance issued by the Internal Revenue Service or any state or local
taxing authority. Among its other duties, if required by the Code, the REMIC
Provisions, or other such guidance, the Securities Administrator shall provide,
upon receipt of additional reasonable compensation, to the Treasury or other
governmental authority such information as is necessary for the application of
any tax relating to the transfer of

                                      -104-

<PAGE>

a Residual Certificate to any disqualified person or organization pursuant to
Treasury Regulation 1.860E-2(a)(5) and any person designated in Section
860E(e)(3) of the Code.

     (g) The Securities Administrator and the Holders of Certificates shall take
any action or cause any REMIC to take any action necessary to create or maintain
the status of any REMIC as a REMIC under the REMIC Provisions and shall assist
each other as necessary to create or maintain such status. Neither the
Securities Administrator nor the Holder of any Residual Certificate shall
knowingly take any action, cause any REMIC to take any action or fail to take
(or fail to cause to be taken) any action that, under the REMIC Provisions, if
taken or not taken, as the case may be, could (i) endanger the status of any
REMIC as a REMIC or (ii) result in the imposition of a tax upon any REMIC
(including but not limited to the tax on prohibited transactions as defined in
Code Section 860F(a)(2) and the tax on prohibited contributions set forth on
Section 860G(d) of the Code) (either such event, an "Adverse REMIC Event")
unless the Securities Administrator has received a REMIC Opinion (at the expense
of the party seeking to take such action) to the effect that the contemplated
action will not endanger such status or result in the imposition of such a tax.
In addition, prior to taking any action with respect to any REMIC or the assets
therein, or causing any REMIC to take any action, which is not expressly
permitted under the terms of this Agreement, any Holder of a Residual
Certificate will consult with the Securities Administrator, in writing, with
respect to whether such action could cause an Adverse REMIC Event to occur with
respect to any REMIC, and no such Person shall take any such action or cause any
REMIC to take any such action as to which the Securities Administrator has
advised it in writing that an Adverse REMIC Event could occur; provided,
however, that if no Adverse REMIC Event would occur but such action could result
in the imposition of additional taxes on the Residual Certificateholders, no
such Person shall take any such action, or cause any REMIC to take any such
action without the written consent of the Residual Certificateholders.

     (h) Each Holder of a Residual Certificate shall pay when due any and all
taxes imposed on the related REMIC by federal or state governmental authorities.
To the extent that such taxes are not paid by a Residual Certificateholder, the
Securities Administrator shall pay any remaining REMIC taxes out of current or
future amounts otherwise distributable to the Holder of the Residual Certificate
in any such REMIC or, if no such amounts are available, out of other amounts
held in the Distribution Account, and shall reduce amounts otherwise payable to
holders of regular interests in any such REMIC, as the case may be.

     (i) The Securities Administrator shall prepare and file with the Internal
Revenue Service ("IRS"), on behalf of each of REMIC 1 and the Upper Tier REMIC,
an application for an employer identification number on IRS Form SS-4 or by any
other acceptable method. The Securities Administrator shall also file a Form
8811 as required. The Securities Administrator, upon receipt from the IRS of the
Notice of Taxpayer Identification Number Assigned, shall upon request promptly
forward a copy of such notice to the Depositor. The Securities Administrator
shall furnish any other information that is required by the Code and regulations
thereunder to be made available to Certificateholders. The Depositor shall cause
each Servicer to provide the Securities Administrator with such information as
is necessary for the Securities Administrator to prepare such reports.

                                      -105-

<PAGE>

     (j) No additional contributions of assets shall be made to any REMIC,
except as expressly provided in this Agreement.

     (k) The Securities Administrator shall not enter into any arrangement by
which any REMIC will receive a fee or other compensation for services.

     (l) The Class A-R Holder shall act as "tax matters person" with respect to
each REMIC and irrevocably appoints the Securities Administrator to act as its
agent in such roles.

     (m) The Securities Administrator shall prepare or cause to be prepared on
behalf of the Trust Fund, based upon information calculated in accordance with
this Agreement pursuant to instructions given by the Depositor, the Trustee
shall sign, and the Securities Administrator shall file federal tax returns, all
in accordance with Section 9.12 hereof. The Securities Administrator shall
prepare and file, and the Trustee shall sign, such state income tax returns and
such other returns as may be required by applicable law relating to the Trust
Fund, and, if required by state law, and shall file any other documents to the
extent required by applicable state tax law (to the extent such documents are in
the Securities Administrator's possession). The Securities Administrator shall
forward copies to the Depositor of all such returns and Form 1099 supplemental
tax information and such other information within the control of the Securities
Administrator as the Depositor may reasonably request in writing, and shall
distribute to each Certificateholder such forms and furnish such information
within the control of the Securities Administrator as are required by the Code
and the REMIC Provisions to be furnished to them, and will prepare and
distribute to Certificateholders Form 1099 (supplemental tax information) (or
otherwise furnish information within the control of the Securities
Administrator) to the extent required by applicable law.

     (n) None of the Securities Administrator, the Trustee or the Depositor, as
assignees under this Agreement, shall provide any consent pursuant to this
Agreement or knowingly take any action under this Agreement that would conflict
with or violate the provisions of this Section 9.12.

     (o) The parties intend that the portion of the Trust Fund consisting of the
right to receive the payments distributable to the Class P Certificates shall be
treated as a "grantor trust" under the Code, for the benefit of the holders of
the Class P Certificates, and the provisions hereof shall be interpreted
consistently with this intention. In furtherance of such intention, the
Securities Administrator 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, and the Trustee shall sign, Form 1041
(together with any necessary attachments) and such other forms as may be
applicable. The parties intend that such grantor trust shall not be treated as a
WHFIT. The Securities Administrator shall have no obligation hereunder to
monitor whether such grantor trust will be treated as a WHFIT following the
Closing Date, and shall not be required hereunder to report under the WHFIT
Regulations except to the extent it receives written notice that the WHFIT
Regulations are applicable to such grantor trust.

     (p) Notwithstanding any other provision of this Agreement, the Securities
Administrator shall comply with all federal withholding requirements respecting
payments to

                                      -106-

<PAGE>

Certificateholders of interest or original issue discount on the Mortgage Loans
and the Certificates, that the Securities Administrator reasonably believes are
applicable under the Code. The consent of Certificateholders shall not be
required for such withholding. In the event the Securities Administrator
withholds any amount from interest or original issue discount payments or
advances thereof to any Certificateholder pursuant to federal withholding
requirements, the Securities Administrator shall, together with its monthly
report to such Certificateholders, indicate such amount withheld.

     (q) The Trustee and the Securities Administrator agree to indemnify the
Trust Fund and the Depositor for any taxes and costs including, without
limitation, any reasonable attorneys fees imposed on or incurred by the Trust
Fund, the Depositor or the Trustee, as a result of a breach of the Trustee's
covenants and the Securities Administrator's covenants, respectively, set forth
in this Section 9.12; provided, however, such liability and obligation to
indemnify in this paragraph shall not be joint and several and neither the
Trustee nor the Securities Administrator shall be liable or be obligated to
indemnify the Trust Fund for the failure by the other to perform any duty under
this Agreement or the breach by the other of any covenant in this Agreement.

     (r) The Securities Administrator covenants and agrees that it shall act as
agent (and the Securities Administrator is hereby appointed to act as agent) of
the Tax Matters Person on behalf of each of the REMICs provided for herein and
that in such capacity it shall: (a) 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; (b) 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; (c) not knowingly
or intentionally take any action or omit to take any action that would cause the
termination of the grantor trust status under Subpart E, Part I of Subchapter J
of the Code of any of the grantor trusts provided for herein or result in the
imposition of tax upon any such grantor trust; and (d) 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.

     (s) Each of the Depositor, the Master Servicer, the Securities
Administrator and the Trustee agrees not to take or omit to take knowingly or
intentionally, 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.

     (t) The Depositor hereby instructs and authorizes the Securities
Administrator to make an appropriate election to treat each of the Upper Tier
REMIC and REMIC 1 as a REMIC. The Trustee shall sign the returns providing for
such elections and such other tax or information returns which are provided to
it. This Agreement shall be construed so as to carry out the

                                      -107-

<PAGE>

intention of the parties that each of the Upper Tier REMIC and REMIC 1 be
treated as a REMIC at all times prior to the date on which the Trust Fund is
terminated.

     The assets of REMIC 1 shall be all of the assets of the Trust Fund, other
than (i) amounts distributable to the Class P Certificates, (ii) the interests
issued by REMIC 1 and (iii) the grantor trusts described in this Section 9.12.
REMIC 1 shall issue the REMIC 1 Regular Interests, which shall be regular
interests of such REMIC, and shall issue the Class LT1-R Interest, which shall
be the sole class of residual interest in REMIC 1. Each of the REMIC 1 Regular
Interests shall have the characteristics set forth in the Preliminary Statement
and this Section 9.12.

     The assets of the Upper Tier REMIC shall be the REMIC 1 Regular Interests.
The Upper Tier REMIC Regular Interests shall be the regular interests in the
Upper Tier REMIC and the Residual Interest shall be the sole class of residual
interest in the Upper Tier REMIC.

     The beneficial ownership of the Class LT1-R Interest and the Residual
Interest shall be represented by the Class A-R Certificate. The Class LT1-R
Interest shall not have a principal balance or bear interest.

     (u) All payments of principal and interest at the Net Mortgage Rate on each
of the Mortgage Loans (other than amounts distributable to the Class P
Certificates) received by REMIC 1 with respect to the Mortgage Loans shall be
paid to the REMIC 1 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 LT1-R
Interest.

     On each Distribution Date,

          (i) interest shortfalls with respect to the Mortgage Loans (other than
     interest shortfalls attributable to Negative Amortization) shall be
     allocated to the REMIC 1 Regular Interests pro rata based on the interest
     otherwise accrued thereon;

          (ii) the principal balance of each REMIC 1 Regular Interest shall be
     increased by the amount of interest accrued thereon (net of interest
     shortfalls allocated thereto pursuant to the immediately preceding clause
     (i));

          (iii) cash received by the REMIC 1 shall be distributed to, and losses
     with respect to the Mortgage Loans shall be allocated to:

                    first, to each class of REMIC 1 Marker Interest,
               sequentially, beginning with the REMIC 1 Marker Interest the
               Corresponding Certificate of which has the highest Pass-Through
               Rate through the REMIC 1 Marker Interest the Corresponding
               Certificate of which has the lowest Pass-Through Rate, in
               reduction of its principal balance so that its principal balance
               is as close as possible to 50% of the principal balance of its
               Corresponding Certificate; and

                    second, to the Class LT1Z Interest in reduction of its
               principal balance so that its principal balance equals the excess
               of (x) the aggregate

                                      -108-

<PAGE>

               Stated Principal Balance of the Mortgage Loans over (y) the
               aggregate principal balance of the REMIC 1 Marker Interests.

          If on any Distribution Date there is an increase in the Certificate
     Principal Balance of any Certificate due to Subsequent Recoveries pursuant
     to the definition of "Certificate Principal Balance", then there shall be a
     corresponding increase in the principal amount of the REMIC 1 Regular
     Interests allocated as follows:

                    first, to each of the REMIC 1 Regular Interests (other than
               the Class LT1Z) so that the principal balance of each such
               interest is as close as possible to 50% of the principal balances
               of its Corresponding Certificate; and

                    second, to the Class LT1Z Interest so that the principal
               balance of such interest equals the excess of (x) the aggregate
               Stated Principal Balance of the Mortgage Loans over (y) the
               aggregate principal balance of the REMIC 1 Marker Interests.

          The excess, if any, of amounts payable with respect to the REMIC
     regular interests held by the Upper Tier REMIC over the amounts payable
     with respect to the Upper Tier REMIC Regular Interests with respect to each
     Interest Accrual Period shall, solely for purposes of the REMIC Provisions,
     be deemed earned by the Securities Administrator as an additional fee,
     which amount shall be deemed paid by the Securities Administrator to the
     holders of the Class X Certificates. It is intended that the rights of the
     holders of the Class X Certificates to receive such deemed payments ("Class
     X Shortfalls") shall be treated as rights in respect of an interest rate
     cap contract written by the Securities Administrator in favor of the
     holders of the Class X Certificates and shall be accounted for as property
     separate and apart from the REMIC regular interests represented by the
     Class X Certificates. This provision is intended to comply with the
     requirements of Treasury Regulations Section 1.860G-2(i) for the treatment
     of property rights coupled with regular interests to be separately
     respected and shall be interpreted consistently with such regulation. For
     information reporting purposes, it will be assumed that the right to
     receive deemed payments in respect of Class X Shortfalls has no value. The
     Securities Administrator and the beneficial holders of the Class X
     Certificates by their acceptance of such Certificates agree that they will
     take tax reporting positions that allocate no more than a nominal value to
     such right and that they will adopt tax reporting positions consistent with
     the payments deemed made to the Class X Certificates in respect of Class X
     Shortfalls as payments in respect of interest rate cap agreements written
     by the Securities Administrator.

                                      -109-

<PAGE>

                                    ARTICLE X
                                   TERMINATION

     Section 10.01 Termination upon Liquidation or Repurchase of all Mortgage
Loans.

     (a) Subject to Section 10.03, the obligations and responsibilities of the
Depositor, the Master Servicer, the Securities Administrator and the Trustee
created hereby with respect to the Trust Fund shall terminate upon the earlier
of (a) an Optional Termination and (b) the later of (i) the maturity or other
liquidation of the last Mortgage Loan remaining in the Trust Fund (or any
Monthly Advance with respect thereto) and the disposition of all REO Property
and (ii) the distribution to Certificateholders of all amounts required to be
distributed to them pursuant to this Agreement, as applicable. In no event shall
the trusts created hereby continue beyond the earlier of (i) the expiration of
21 years from the death of the last survivor of the descendants of Joseph P.
Kennedy, the late Ambassador of the United States to the Court of St. James's,
living on the date hereof and (ii) the Latest Possible Maturity Date.

     (b) On or before the Determination Date following the Initial Optional
Termination Date, the Securities Administrator shall attempt to terminate the
Trust Fund by conducting an auction of all of the Mortgage Loans and REO
Properties via a solicitation of bids from at least three (3) bidders, each of
which shall be a nationally recognized participant in mortgage finance (the
"Auction"). The Depositor and the Securities Administrator agree to work in good
faith to develop bid procedures in advance of the Initial Optional Termination
Date to govern the operation of the Auction. The Securities Administrator shall
be entitled to retain an investment banking firm and/or other agents in
connection with the Auction, the cost of which shall be included in the Optional
Termination Price (unless an Optional Termination does not occur in which case
such costs shall be an expense of the Issuing Entity). The Securities
Administrator shall accept the highest bid received at the Auction; provided
that the amount of such bid equals or exceeds the Optional Termination Price.
The Securities Administrator shall determine the Optional Termination Price
based upon information provided by (i) the Master Servicer with respect to the
amounts described in clauses (A) and (B) of the definition of "Optional
Termination Price" (other than Securities Administrator's expenses) and (ii) the
Depositor with respect to the information described in clause (C) of the
definition of "Optional Termination Price." The Securities Administrator may
conclusively rely upon the information provided to it in accordance with the
immediately preceding sentence and shall not have any liability for the failure
of any party to provide such information.

     If an Optional Termination does not occur as a result of the Auction's
failure to achieve the Optional Termination Price, the Master Servicer may, on
any Distribution Date following such Auction, at its option, terminate the Trust
Fund by purchasing all of the Mortgage Loans and REO Properties at a price equal
to the Optional Termination Price. In connection with such termination, the
Optional Termination Price shall be delivered to the Securities Administrator no
later than the Business Day immediately preceding the related Distribution Date.
Notwithstanding anything to the contrary herein, the Optional Termination Amount
paid to the Securities Administrator by the winning bidder at the Auction or by
the Master Servicer shall be deposited by the Securities Administrator directly
into the Distribution Account immediately upon receipt. Upon any termination as
a result of an Auction, the Securities Administrator shall, out of the Optional
Termination Amount deposited into the Distribution Account, (x) pay the

                                      -110-
<PAGE>

Securities Administrator its costs and expenses necessary to conduct the Auction
and any other unreimbursed amounts owing to it and (y) pay to the Master
Servicer or Servicer, the aggregate amount of any unreimbursed out-of-pocket
costs and expenses owed to the Master Servicer or Servicer and any unpaid or
unreimbursed Servicing Fees, Monthly Advances and Servicing Advances.

     (c) Notwithstanding anything to the contrary in clause (b) above, in the
event that the Securities Administrator receives the written opinion of a
nationally recognized participant in mortgage finance acceptable to the Seller
that the Mortgage Loans and REO Properties to be included in the Auction will
not be saleable at a price sufficient to achieve the Optional Termination Price,
the Securities Administrator need not conduct the Auction. In such event, the
Master Servicer shall have the option to purchase the Mortgage Loans and REO
Properties at the Optional Termination Price as of the Initial Optional
Termination Date.

     Section 10.02 Final Distribution on the Certificates.

     If on any Determination Date, (i) the Securities Administrator determines
that there are no Outstanding Mortgage Loans and no other funds or assets in the
Trust Fund other than the funds in the Master Servicer Collection Account, the
Securities Administrator shall send a final distribution notice promptly to each
Certificateholder or (ii) the Securities Administrator determines that a Class
of Certificates shall be retired after a final distribution on such Class, the
Securities Administrator 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 Securities Administrator.

     Notice of any termination of the Issuing Entity, 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 Securities Administrator by letter to Certificateholders mailed no later
than the last calendar day of the month immediately preceding the month of such
final distribution (or with respect to an Auction, mailed no later than one
Business Day following completion of such Auction). 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 Securities Administrator will give such notice to
each Rating Agency at the time such notice is given to Certificateholders.

     In the event such notice is given, the Master Servicer shall cause all
funds in the Master Servicer Collection Account to be deposited in the
Distribution 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 Issuing Entity and the
receipt by the Trustee, or its Custodian, of a Request for Release therefor, the
Trustee, or its Custodian, shall

                                      -111-

<PAGE>

promptly release to the Securities Administrator or the Master Servicer, as
applicable, the Mortgage Files for the Mortgage Loans.

     Upon presentation and surrender of the Certificates, the Securities
Administrator shall cause to be distributed to Certificateholders of each Class
the amounts allocable to such Certificates held in the Distribution Account in
the order and priority set forth in Section 6.01 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 Securities Administrator 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 Securities
Administrator may take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the remaining Certificateholders concerning
surrender of their Certificates, and the cost thereof shall be paid out of the
funds and other assets that remain a part of the Issuing Entity. If within one
year after the second notice all Certificates shall not have been surrendered
for cancellation, the Class A-R Certificateholders shall be entitled to all
unclaimed funds and other assets of the Issuing Entity that remain subject
hereto. Upon payment to the Class A-R Certificateholders of such funds and
assets, the Securities Administrator shall have no further duties or obligations
with respect thereto.

     Section 10.03 Additional Termination Requirements.

     (a) In the event the Securities Administrator or the Master Servicer
exercises its purchase option as provided in Section 10.01, the Trust Fund shall
be terminated in accordance with the following additional requirements, unless
the Securities Administrator shall have been furnished with an Opinion of
Counsel to the effect that the failure of the Issuing Entity to comply with the
requirements of this Section will not (i) result in the imposition of taxes on
"prohibited transactions" of the Issuing Entity as defined in Section 860F of
the Code or (ii) cause any REMIC constituting part of the Issuing Entity to fail
to qualify as a REMIC at any time that any Certificates are outstanding:

          (i) Within 90 days prior to the final Distribution Date, the
     Securities Administrator shall adopt and sign a plan of complete
     liquidation of the Issuing Entity as provided to it by the terminating
     purchaser, meeting the requirements of a "qualified liquidation" under
     Section 860F of the Code and any regulations thereunder; and

          (ii) At or after the time of adoption of such a plan of complete
     liquidation and at or prior to the final Distribution Date, the Securities
     Administrator shall sell all of the assets of the Issuing Entity for cash
     pursuant to the terms of the plan of complete liquidation.

     (b) By their acceptance of Certificates, the Holders thereof hereby agree
to appoint the Securities Administrator as their attorney in fact to: (i) adopt
such a plan of complete liquidation (and the Certificateholders hereby appoint
the Securities Administrator as their attorney in fact to sign such plan) as
appropriate and (ii) to take such other action in connection

                                      -112-

<PAGE>

therewith as may be reasonably required to carry out such plan of complete
liquidation all in accordance with the terms hereof.

                                   ARTICLE XI
                            MISCELLANEOUS PROVISIONS

     Section 11.01 Intent of Parties. The parties intend that each REMIC shall
be treated as a REMIC for federal income tax purposes and that the provisions of
this Agreement should be construed in furtherance of this intent.

     Section 11.02 Amendment.

     (a) This Agreement may be amended from time to time by the Depositor, the
Master Servicer, the Securities Administrator and the Trustee, and without the
consent of any of the Certificateholders to:

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

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

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

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

     Notwithstanding the foregoing, without the consent of the
Certificateholders, the Depositor, the Master Servicer, the Securities
Administrator 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 Issuing Entity or any of the REMICs
provided for herein pursuant to the Code that would be a claim against the
Issuing Entity at any time prior to the final redemption of the Certificates,
provided that the Trustee and the Securities Administrator shall have been
provided an Opinion of Counsel addressed to the Trustee and the Securities
Administrator, which opinion shall be an expense of the party requesting such
amendment but in

                                      -113-

<PAGE>

any case shall not be an expense of the Trustee and the Securities
Administrator, 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.

     (b) This Agreement may also be amended from time to time by the Master
Servicer, the Depositor, the Securities Administrator and the Trustee, and the
Countrywide Assignment Agreement may also be amended from time to time by the
Master Servicer and the Trustee, with the consent of the Holders of Certificates
evidencing Percentage Interests aggregating not less than 51% of the Issuing
Entity or of the applicable Class or Classes, if such amendment affects only
such Class or Classes, 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 Certificateholders; provided, however,
that no such amendment shall (i) reduce in any manner the amount of, or delay
the timing of, payments received on Mortgage Loans which are required to be
distributed on any Regular Certificate without the consent of the Holder of such
Regular Certificate, or (ii) reduce the aforesaid percentage of Certificates the
Holders of which are required to consent to any such amendment, without the
consent of the Holders of all Certificates then outstanding. Notwithstanding any
contrary provision of this Agreement, the Trustee shall not consent to any
amendment to this Agreement unless it shall have first received an Opinion of
Counsel addressed to the Trustee, which opinion shall be an expense of the party
requesting such amendment but in any case shall not be an expense of the
Trustee, to the effect that such amendment is permitted hereunder, that all
conditions precedent to the execution of such amendment have been satisfied and
that such amendment will not cause the imposition of any tax on the Issuing
Entity, 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.

     (c) Notwithstanding the foregoing, the Depositor shall not agree to any
modification or amendment of this Agreement that may adversely affect any
Servicer without the written consent of such Servicer.

     (d) Promptly after the execution of any such amendment, the Securities
Administrator shall furnish a copy of such amendment or written notification of
the substance of such amendment to each Certificateholder, with a copy to the
Rating Agencies.

     (e) In the case of an amendment under Section 11.02(b) above, it shall not
be necessary for the Certificateholders to approve the particular form of such
an amendment. Rather, it shall be sufficient if the Certificateholders approve
the substance of the amendment. 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.

     (f) Prior to the execution of any amendment to this Agreement, the Trustee
and the Securities Administrator shall be entitled to receive and rely upon an
Opinion of Counsel stating that the execution of such amendment will not
adversely affect the status of any REMIC created hereunder. The Trustee and the
Securities Administrator may, but shall not be obligated to, enter into any such
amendment which affects the Trustee's or the Securities Administrator's own
respective rights, duties or immunities under this Agreement.

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<PAGE>

     Section 11.03 Recordation of Agreement. To the extent permitted by
applicable law, this Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the Mortgaged Properties are situated, and
in any other appropriate public recording office or elsewhere. The Depositor
shall effect such recordation, at the expense of the Issuing Entity upon the
request in writing of a Certificateholder, but only if such direction is
accompanied by an Opinion of Counsel (provided at the expense of the
Certificateholder requesting recordation) to the effect that such recordation
would materially and beneficially affect the interests of the Certificateholders
or is required by law.

     Section 11.04 Limitation on Rights of Certificateholders.

     (a) The death or incapacity of any Certificateholder shall not terminate
this Agreement or the Issuing Entity, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Issuing Entity, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.

     (b) Except as expressly provided in this Agreement, no Certificateholders
shall have any right to vote or in any manner otherwise control the operation
and management of the Issuing Entity, 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 establish the Certificateholders from time
to time as partners or members of an association; nor shall any
Certificateholders be under any liability to any third Person by reason of any
action taken by the parties to this Agreement pursuant to any provision hereof.

     (c) No Certificateholder shall have any right by virtue of any provision of
this Agreement to institute any suit, action or proceeding in equity or at law
upon, under or with respect to this Agreement against the Depositor, the
Securities Administrator, the Master Servicer or any successor to any such
parties unless (i) such Certificateholder previously shall have given to the
Trustee a written notice of a continuing default, as herein provided, (ii) the
Holders of Certificates evidencing Percentage Interests aggregating not less
than 51% of the Trust Fund shall have made written request upon 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 and expenses and liabilities to be incurred therein or
thereby, and (iii) 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.

     (d) No one or more Certificateholders shall have any right by virtue of any
provision of this Agreement to affect the rights of any other Certificateholders
or to obtain or seek to obtain priority or preference over any other such
Certificateholder, or to enforce any right under this Agreement, except in the
manner herein provided and for the equal, ratable and common benefit of all
Certificateholders. For the protection and enforcement of the provisions of this
Section 11.04, each and every Certificateholder and the Trustee shall be
entitled to such relief as can be given either at law or in equity.

                                      -115-

<PAGE>

     Section 11.05 Acts of Certificateholders.

     (a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Agreement to be given or taken by
Certificateholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Certificateholders in person or by
an agent duly appointed in writing. Except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee and, where it is expressly required, to the
Depositor. Proof of execution of any such instrument or of a writing appointing
any such agent shall be sufficient for any purpose of this Agreement and
conclusive in favor of the Trustee and the Depositor, if made in the manner
provided in this Section 11.05.

     (b) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his or her individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his or her
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the individual executing the same, may also be proved in any
other manner which the Trustee deems sufficient.

     (c) The ownership of Certificates (notwithstanding any notation of
ownership or other writing on such Certificates, except an endorsement in
accordance with Section 5.02 made on a Regular Certificate presented in
accordance with Section 5.04) shall be proved by the Certificate Register, and
neither the Trustee, the Securities Administrator, the Depositor, the Master
Servicer nor any successor to any such parties shall be affected by any notice
to the contrary.

     (d) Any request, demand, authorization, direction, notice, consent, waiver
or other action of the holder of any Regular Certificate shall bind every future
holder of the same Regular Certificate and the holder of every Regular
Certificate issued upon the registration of transfer or exchange thereof, if
applicable, or in lieu thereof with respect to anything done, omitted or
suffered to be done by the Trustee, the Securities Administrator, the Depositor,
the Master Servicer or any successor to any such party in reliance thereon,
whether or not notation of such action is made upon such Certificates.

     (e) In determining whether the Holders of the requisite percentage of
Certificates evidencing Percentage Interests have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Certificates
owned by the Trustee, the Securities Administrator, the Depositor, the Master
Servicer or any Affiliate thereof shall be disregarded, except as otherwise
provided in Section 11.02(b) and except that, in determining whether the
Securities Administrator or the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, only
Certificates which a Responsible Officer of the Trustee knows to be so owned
shall be so disregarded. Certificates which have been pledged in good faith to
the Trustee, the Securities Administrator, the Depositor, the Master Servicer or
any Affiliate thereof may be regarded as outstanding if the pledgor establishes
to the

                                      -116-

<PAGE>

satisfaction of the Securities Administrator the pledgor's right to act with
respect to such Certificates and that the pledgor is not an Affiliate of the
Trustee, the Securities Administrator, the Depositor, or the Master Servicer, as
the case may be.

     Section 11.06 Governing Law. THIS AGREEMENT AND THE CERTIFICATES SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE
TO ITS CONFLICT OF LAWS RULES AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

     Section 11.07 Notices. All demands and notices hereunder shall be in
writing and shall be deemed given when delivered at (including delivery by
facsimile) or mailed by registered mail, return receipt requested, postage
prepaid, or by recognized overnight courier, to (i) in the case of the
Depositor, 250 Vesey Street, 4 World Financial Center, New York, New York 10281,
Attention: Vice President-Servicing, telecopier number: (212) 449-1000, or to
such other address as may hereafter be furnished to the other parties hereto in
writing; (ii) in the case of the Trustee, at its Corporate Trust Office, or such
other address as may hereafter be furnished to the other parties hereto in
writing; (iii) in the case of the Master Servicer or Securities Administrator,
Wells Fargo Bank, N.A., P.O. Box 98, Columbia, Maryland 21046, Attention MANA
Series 2007-OAR5, or, in the case of overnight deliveries, 9062 Old Annapolis
Road, Columbia, Maryland 21045-1951, Attention: MANA Series 2007-OAR5, facsimile
no.: (410) 715-2380, or such other address as may hereafter be furnished to the
other parties hereto in writing; (iv) in the case of the Custodian, Wells Fargo
Bank, N.A., 1015 10th Avenue Southeast, MS 0031, Minneapolis, Minnesota 55414,
Attention: MANA Series 2007-OAR5; or such other address as may hereafter be
furnished to the other parties hereto in writing; or (v) in the case of the
Rating Agencies, Fitch, Inc., One State Street Plaza, New York, New York 10004,
Moody's Investors Service, Inc., 99 Church Street, 4th Floor, New York, New York
10007 and Standard & Poor's, a division of The McGraw-Hill Companies, Inc., 55
Water Street, New York, New York 10041. Any notice delivered to the Depositor,
the Trustee, the Securities Administrator or the Master Servicer under this
Agreement shall be effective only upon receipt. Any notice required or permitted
to be mailed to a Certificateholder, unless otherwise provided herein, shall be
given by first-class mail, postage prepaid, at the address of such
Certificateholder as shown in the Certificate Register. Any notice so mailed
within the time prescribed in this Agreement shall be conclusively presumed to
have been duly given when mailed, whether or not the Certificateholder receives
such notice.

     Section 11.08 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 severed from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the holders thereof.

     Section 11.09 Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the respective successors and
assigns of the parties hereto.

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<PAGE>

     Section 11.10 Article and Section Headings. The article and section
headings herein are for convenience of reference only, and shall not limit or
otherwise affect the meaning hereof.

     Section 11.11 Counterparts. This Agreement may be executed in two or more
counterparts each of which when so executed and delivered shall be an original
but all of which together shall constitute one and the same instrument.

     Section 11.12 Notice to Rating Agencies. The article and section headings
herein are for convenience of reference only, and shall not limited or otherwise
affect the meaning hereof. The Trustee shall promptly provide notice to each
Rating Agency with respect to each of the following of which it has actual
knowledge:

     1. Any material change or amendment to this Agreement or the Servicing
Agreements;

     2. The occurrence of any Event of Default that has not been cured;

     3. The resignation or termination of the Trustee or the Securities
Administrator;

     4. The repurchase or substitution of Mortgage Loans;

     5. The final payment to Certificateholders; and

     6. Any change in the location of the Master Servicer Collection Account or
the Distribution Account.

     Section 11.13 Third Party Rights. The Custodian shall be deemed a third
party beneficiary of this Agreement regarding provisions related to indemnifying
the Custodian so long as the Custodian remains custodian under the Custodial
Agreement.

                                   ARTICLE XII
                              REMIC ADMINISTRATION

     Section 12.01 [Reserved].

     Section 12.02 Prohibited Transactions and Activities. Neither the Depositor
nor the Securities Administrator shall sell, dispose of, or substitute for any
of the Mortgage Loans, except in a disposition pursuant to (i) the foreclosure
of a Mortgage Loan, (ii) the bankruptcy of the Trust Fund, (iii) the termination
of each REMIC pursuant to Article X of this Agreement, (iv) a substitution
pursuant to Article II of this Agreement or (v) a repurchase of Mortgage Loans
pursuant to Article II of this Agreement, nor acquire any assets for any REMIC,
nor sell or dispose of any investments in the Distribution Account for gain, nor
accept any contributions to any REMIC after the Closing Date, unless it has
received an Opinion of Counsel (at the expense of the party causing such sale,
disposition, or substitution) that such disposition, acquisition, substitution,
or acceptance will not (a) affect adversely the status of any such REMIC as a
REMIC or of the interests therein other than the Residual Certificate as the
regular interests

                                      -118-

<PAGE>

therein, (b) affect the distribution of interest or principal on the
Certificates, (c) result in the encumbrance of the assets transferred or
assigned to the Trust Fund (except pursuant to the provisions of this Agreement)
or (d) cause any such REMIC to be subject to any tax including a tax on
prohibited transactions or prohibited contributions pursuant to the REMIC
Provisions.

     Section 12.03 Indemnification with Respect to Prohibited Transactions or
Loss of REMIC Status. In the event that a REMIC 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 Securities Administrator of
its duties and obligations set forth herein, the Securities Administrator shall
indemnify the Certificateholders of the related Residual Certificate against any
and all losses, claims, damages, liabilities or expenses ("Losses") resulting
from such negligence; provided, however, that the Securities Administrator shall
not be liable for any such Losses attributable to the action or inaction of the
Depositor or the Holder of the Residual Certificate, nor for any such Losses
resulting from misinformation provided by any of the foregoing parties on which
the Securities Administrator has relied. Notwithstanding the foregoing, however,
in no event shall the Trustee or the Securities Administrator 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 or the Mortgage Loan Purchase Agreement, (2) for any
Losses other than arising out of malfeasance, willful misconduct or negligent
performance by the Securities Administrator with respect to its duties and
obligations set forth herein, and (3) for any special or consequential damages
to Certificateholders of the related Residual Certificate (in addition to
payment of principal and interest on the Certificates).

     Section 12.04 REO Property.

     (a) Notwithstanding any other provision of this Agreement, the Securities
Administrator shall not, except to the extent provided in this Agreement for
which the Securities Administrator is obligated to perform, knowingly permit any
Servicer to rent, lease, otherwise earn income or take any other action on
behalf of any REMIC with respect to any REO Property which might cause such REO
Property to fail to qualify as "foreclosure property" within the meaning of
section 860G(a)(8) of the Code or result in the receipt by any REMIC of any
"income from non-permitted assets" within the meaning of section 860F(a)(2) of
the Code or any "net income from foreclosure property" which is subject to tax
under the REMIC Provisions unless the Servicer has provided to the Securities
Administrator an Opinion of Counsel concluding that, under the REMIC Provisions,
such action would not adversely affect the status of any REMIC as a REMIC and
any income generated for any REMIC by the REO Property would not result in the
imposition of a tax upon such REMIC.

     (b) The Depositor shall cause each Servicer (to the extent provided in the
applicable Servicing Agreement) to make reasonable efforts to sell any REO
Property for its fair market value. In any event, however, the Depositor shall,
or shall cause the Servicer (to the extent provided in this Agreement) to,
dispose of any REO Property within three years of its acquisition by the Trust
Fund unless the Depositor or such Servicer (on behalf of the Trust Fund) has
received a grant of extension from the Internal Revenue Service to the effect
that, under the REMIC Provisions and any relevant proposed legislation and under
applicable state law, the REMIC may hold REO Property for a longer period
without adversely affecting the REMIC

                                      -119-

<PAGE>

status of such REMIC or causing the imposition of a Federal or state tax upon
such REMIC. If such an extension has been received, then the Depositor, acting
on behalf of the Trustee hereunder, shall, or shall cause the Servicer to,
continue to attempt to sell the REO Property for its fair market value for such
period longer than three years as such extension permits (the "Extended
Period"). If such an extension has not been received and the Depositor or the
Servicer, acting on behalf of the Trust Fund hereunder, is unable to sell the
REO Property within 33 months after its acquisition by the Trust Fund or if such
an extension has been received and the Depositor or the Servicer is unable to
sell the REO Property within the period ending three months before the close of
the Extended Period, the Depositor shall cause the Servicer, before the end of
the three-year-period or the Extended Period, as applicable, to (i) purchase
such REO Property at a price equal to the REO Property's fair market value or
(ii) auction the REO Property to the highest bidder (which may be the Servicer)
in an auction reasonably designed to produce a fair price prior to the
expiration of the three-year period or the Extended Period, as the case may be.

                                      -120-

<PAGE>

     IN WITNESS WHEREOF, the Depositor, the Trustee, the Master Servicer and the
Securities Administrator 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:
                                        Title:

                                        HSBC BANK USA, NATIONAL ASSOCIATION,
                                        as Trustee

                                        By:
                                            ------------------------------------
                                        Name: Alexander Pabon
                                        Title: Vice President

                                        WELLS FARGO BANK, N.A.,
                                        as Master Servicer

                                        By:
                                            ------------------------------------
                                        Name:
                                        Title:

                                        WELLS FARGO BANK, N.A.,
                                        as Securities Administrator

                                        By:
                                            ------------------------------------
                                        Name:
                                        Title:

<PAGE>

Acknowledged and Agreed, with respect to Sections 2.02, 2.03 and 2.04:

Merrill Lynch Mortgage Lending, Inc.

By:
    ---------------------------------
Name:
Title:

<PAGE>

                                   EXHIBIT A-1

                      FORM OF CLASS [A-_][M-_] CERTIFICATE

SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT", AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED.

THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN THE
DEPOSITOR, THE TRUSTEE, THE MASTER SERVICER OR THE SECURITIES ADMINISTRATOR
REFERRED TO BELOW OR ANY OF THEIR AFFILIATES. NONE OF THIS CERTIFICATE, THE
REMIC REGULAR INTEREST REPRESENTED HEREBY OR THE UNDERLYING MORTGAGE LOANS ARE
GUARANTEED OR INSURED BY THE DEPOSITOR, THE TRUSTEE, THE MASTER SERVICER, THE
SECURITIES ADMINISTRATOR OR BY ANY OF THEIR AFFILIATES OR BY ANY GOVERNMENTAL
AGENCY OR INSTRUMENTALITY.

FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL BALANCE OF
THIS CERTIFICATE MAY BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN BELOW.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE BY
INQUIRY OF THE SECURITIES ADMINISTRATOR.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE &
CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.

IF ANY BOOK-ENTRY CERTIFICATE (OR ANY INTEREST THEREIN) IS ACQUIRED OR HELD IN
VIOLATION OF THE CERTIFICATE TRANSFER RESTRICTIONS IN THE AGREEMENT, THEN THE
LAST PRECEDING TRANSFEREE THAT IS IN COMPLIANCE WITH SUCH PROVISIONS SHALL BE
RESTORED, TO THE EXTENT PERMITTED BY LAW, TO ALL RIGHTS AND OBLIGATIONS AS
CERTIFICATE OWNER THEREOF RETROACTIVE TO THE DATE OF SUCH TRANSFER OF SUCH
CERTIFICATE. NEITHER THE TRUSTEE NOR THE SECURITIES ADMINISTRATOR SHALL BE UNDER
ANY LIABILITY TO ANY PERSON FOR MAKING ANY PAYMENTS DUE ON SUCH CERTIFICATE TO
SUCH PRECEDING TRANSFEREE.

                                      A-1-1

<PAGE>

ANY PURPORTED CERTIFICATE OWNER WHOSE ACQUISITION OR HOLDING OF ANY BOOK-ENTRY
CERTIFICATE (OR INTEREST THEREIN) WAS EFFECTED IN VIOLATION OF THE CERTIFICATE
TRANSFER RESTRICTIONS IN THE AGREEMENT SHALL INDEMNIFY AND HOLD HARMLESS THE
DEPOSITOR, THE TRUSTEE, THE SECURITIES ADMINISTRATOR, THE MASTER SERVICER AND
THE TRUST FUND FROM AND AGAINST ANY AND ALL LIABILITIES, CLAIMS, COSTS OR
EXPENSES INCURRED BY SUCH PARTIES AS A RESULT OF SUCH ACQUISITION OR HOLDING.

[THIS PARAGRAPH IS APPLICABLE SOLELY TO THE CLASS M CERTIFICATES.] NO TRANSFER
OF THIS CERTIFICATE SHALL BE REGISTERED UNLESS THE PROSPECTIVE TRANSFEREE
PROVIDES THE SECURITIES ADMINISTRATOR AND THE DEPOSITOR WITH (A) A
REPRESENTATION THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO
TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO ANY
STATE, LOCAL, FEDERAL, NON-U.S. OR OTHER LAW SUBSTANTIVELY SIMILAR TO THE
FOREGOING PROVISIONS OF ERISA OR THE CODE ("SIMILAR LAW"), AND IS NOT DIRECTLY
OR INDIRECTLY ACQUIRING THIS CERTIFICATE FOR, ON BEHALF OF, OR WITH ANY ASSETS
OF ANY SUCH PLAN, (B) IF THE CERTIFICATE HAS BEEN THE SUBJECT OF AN
ERISA-QUALIFYING UNDERWRITING, A REPRESENTATION THAT SUCH TRANSFEREE IS AN
INSURANCE COMPANY THAT IS ACQUIRING THE CERTIFICATE WITH ASSETS OF AN "INSURANCE
COMPANY GENERAL ACCOUNT" AS DEFINED IN SECTION V(E) OF PROHIBITED TRANSACTION
CLASS EXEMPTION ("PTCE") 95-60 AND THE ACQUISITION AND HOLDING OF THE
CERTIFICATE ARE COVERED AND EXEMPT UNDER SECTIONS I AND III OF PTCE 95-60 OR (C)
SOLELY IN THE CASE OF A DEFINITIVE CERTIFICATE, AN OPINION OF COUNSEL
SATISFACTORY TO THE SECURITIES ADMINISTRATOR, AND UPON WHICH THE SECURITIES
ADMINISTRATOR SHALL BE ENTITLED TO RELY, TO THE EFFECT THAT THE ACQUISITION AND
HOLDING OF SUCH CERTIFICATE BY THE PROSPECTIVE TRANSFEREE WILL NOT CONSTITUTE OR
RESULT IN A NONEXEMPT PROHIBITED TRANSACTION UNDER ERISA OR THE CODE OR A
VIOLATION OF SIMILAR LAW AND WILL NOT SUBJECT THE SECURITIES ADMINISTRATOR, THE
TRUSTEE, THE SERVICERS, THE MASTER SERVICER OR THE DEPOSITOR TO ANY OBLIGATION
IN ADDITION TO THOSE UNDERTAKEN BY SUCH ENTITIES IN THE AGREEMENT, WHICH OPINION
OF COUNSEL SHALL NOT BE AN EXPENSE OF THE SECURITIES ADMINISTRATOR, THE TRUSTEE,
THE SERVICERS, THE MASTER SERVICER OR THE DEPOSITOR.

[THIS PARAGRAPH IS APPLICABLE SOLELY TO THE CLASS M CERTIFICATES.] THIS
CERTIFICATE IS SUBORDINATE TO THE SENIOR CERTIFICATES AND THE RESIDUAL
CERTIFICATES TO THE EXTENT DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.

                                      A-1-2

<PAGE>

<TABLE>
<S>                                       <C>
MANA Series 2007-OAR5, Class [A-_][M-_]   Aggregate Certificate Principal
                                          Balance of the Class [A-_][M-_]
                                          Certificates as of the Issue Date:
                                          $[__________]

Pass-Through Rate: Variable(1)            Initial Certificate Principal Balance
                                          of this Class [A-_][M-_] Certificate
                                          as of the Issue Date: $[__________]

Date of Agreement and Cut-off Date:       Master Servicer and Securities
[_________]                               Administrator:
                                          Wells Fargo Bank, N.A.

First Distribution Date: [__________]     Trustee: HSBC Bank USA, National
                                          Association

No. 07-OAR5-[A-_] [M-_]-1                 Issue Date: [___________]

                                          CUSIP: [____________]
</TABLE>

     DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
     CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
     OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
     THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.

                        MORTGAGE PASS-THROUGH CERTIFICATE
                              MANA SERIES 2007-OAR5

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, adjustable-rate, hybrid option,
alt-A, negative amortization mortgage loans secured by first liens on
one-to-four family residential properties (the "Mortgage Loans") formed and sold
by

                     MERRILL LYNCH MORTGAGE INVESTORS, INC.

     THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN MERRILL
     LYNCH MORTGAGE INVESTORS, INC., THE MASTER SERVICER, THE SECURITIES
     ADMINISTRATOR, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER
     THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
     AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

          This certifies that CEDE & CO. is the registered owner of a Percentage
Interest obtained by dividing the denomination of this Certificate by the
aggregate Certificate Principal

----------
(1)  As described in the Agreement referenced herein.

                                      A-1-3

<PAGE>

Balance of the Class [A-_][M-_] Certificates as of the Issue Date in that
certain beneficial ownership interest evidenced by all the Class [A-_][M-_]
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Merrill Lynch
Mortgage Investors, Inc., as depositor (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), Wells Fargo Bank,
N.A., as master servicer (in such capacity, the "Master Servicer") and
securities administrator (in such capacity, the "Securities Administrator"), and
HSBC Bank USA, National Association, as trustee (the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.

          Interest on this Certificate will accrue during the period specified
in the Agreement on the Certificate Principal Balance hereof at a per annum rate
equal to the variable Pass-Through Rate described in the Agreement.

          Pursuant to the terms of the Agreement, distributions will be made on
each Distribution Date commencing on the First Distribution Date specified
above, to the Person in whose name this Certificate is registered on the Record
Date, in an amount equal to the product of the Percentage Interest evidenced by
this Certificate and the amount required to be distributed to the Holders of
Class [A-_][M-_] Certificates on such Distribution Date pursuant to the
Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Securities Administrator by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Securities
Administrator in writing at least five Business Days prior to the Record Date
immediately prior to such Distribution Date and is the registered owner of Class
A-1 Certificates, or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Securities Administrator
of the pendency of such distribution and only upon the presentation and
surrender of this Certificate at the office or agency appointed by the
Securities Administrator for that purpose as provided in the Agreement.

          If any Book-Entry Certificate (or any interest therein) is acquired or
held in violation of the Certificate transfer restrictions in the Agreement,
then the last preceding Transferee that is in compliance with such provisions
shall be restored, to the extent permitted by law, to all rights and obligations
as Certificate Owner thereof retroactive to the date of such Transfer of such
Certificate. Neither the Trustee nor the Securities Administrator shall be under
any liability to any Person for making any payments due on such Certificate to
such preceding Transferee.

          Any purported Certificate Owner whose acquisition or holding of any
Book-Entry Certificate (or interest therein) was effected in violation of the
Certificate transfer restrictions in the Agreement shall indemnify and hold
harmless the Depositor, the Trustee, the Securities

                                      A-1-4

<PAGE>

Administrator, the Master Servicer and the Trust Fund from and against any and
all liabilities, claims, costs or expenses incurred by such parties as a result
of such acquisition or holding.

          This Certificate is one of a duly authorized issue of Certificates
designated as Mortgage Pass-Through Certificates of the Series specified on the
face hereof (herein called the "Certificates") and representing a Percentage
Interest in the Class of Certificates specified on the face hereof equal to the
denomination specified on the face hereof divided by the aggregate Certificate
Principal Balance of the Class of Certificates specified on the face hereof.

          The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Master Servicer Collection Account and the
Distribution Account may be made from time to time for purposes other than
distributions to Holders of the Certificates, such purposes including
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans.

          The Agreement may be amended pursuant to the terms thereof.

          As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Securities Administrator as
provided in the Agreement, duly endorsed by, or accompanied by an assignment in
the form below or other written instrument of transfer in form satisfactory to
the Securities Administrator duly executed by, the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

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

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

          The Depositor, the Securities Administrator, the Master Servicer and
the Trustee and any agent of the Depositor, the Securities Administrator, the
Master Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Securities Administrator, the Master Servicer, the Trustee nor
any such agent shall be affected by notice to the contrary.

          This certificate shall be governed by and construed in accordance with
the laws of the state of New York.

                                      A-1-5

<PAGE>

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by the Securities Administrator and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the Distribution Date on which the Certificate Principal Balance of each
Class of Certificates has been reduced to zero, (ii) the final payment (or any
advance with respect thereto) on or other liquidation of the last Mortgage Loan
remaining in the Trust Fund and (iii) the Optional Termination of the trust fund
according to the procedures described in the Agreement.

          The recitals contained herein shall be taken as statements of the
Depositor and the Securities Administrator assumes no responsibility for their
correctness.

          Unless the certificate of authentication hereon has been executed by
the Securities Administrator, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      A-1-6

<PAGE>

     IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.

                                        WELLS FARGO BANK, N.A.,
                                        as Securities Administrator

                                        By:
                                            ------------------------------------
                                            AUTHORIZED SIGNATORY

                                        Dated: [___________]

              SECURITIES ADMINISTRATOR'S CERTIFICATE AUTHENTICATION

This is one of the Certificates referred to in the within-mentioned Agreement.

                                        WELLS FARGO BANK, N.A.,
                                        as Authenticating Agent

                                        By:
                                            ------------------------------------
                                            AUTHORIZED SIGNATORY

                                        Dated: [___________]

                                      A-1-7

<PAGE>

                                  ABBREVIATIONS

     The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

<TABLE>
<S>         <C>                              <C>                   <C>
TEN COM -   as tenants in common             UNIF GIFT MIN ACT -          CUSTODIAN

TEN ENT -   as tenants by the entireties                               (Cust) (Minor)

                                                                   under Uniform Gifts to
                                                                         Minors Act

JT TEN -    as joint tenants with right of                             ______________
            survivorship and not as                                        (State)
            tenants in common
</TABLE>

          Additional abbreviations may also be used though not in the above
list.

                                   ASSIGNMENT

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
______________________________________________________________________________ .
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

the Percentage Interest evidenced by the Mortgage Pass-Through Certificate and
hereby authorize(s) the registration of transfer of such interest to assignee on
the Certificate Register of the Trust Fund.

     I (we) further direct the Securities Administrator to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:

________________________________________________________________________________

______________________________________________________________________________ .

Dated: ______________

                                             -----------------------------------
                                             Signature by or on behalf of
                                             assignor

                                             -----------------------------------
                                             Signature Guaranteed

                                      A-1-8

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________,
for the account of ____________________________________________________________,
account number ___________, or, if mailed by check, to ________________________,
Applicable statements should be mailed to _____________________________________,
_______________________________________________________________________________.

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

                                      A-1-9
<PAGE>

                                   EXHIBIT A-2

               FORM OF CLASS [B-_] [RULE 144A] [REG S] CERTIFICATE

SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT", AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED.

THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN THE
DEPOSITOR, THE TRUSTEE, THE MASTER SERVICER OR THE SECURITIES ADMINISTRATOR
REFERRED TO BELOW OR ANY OF THEIR AFFILIATES. NONE OF THIS CERTIFICATE, THE
REMIC REGULAR INTEREST REPRESENTED HEREBY OR THE UNDERLYING MORTGAGE LOANS ARE
GUARANTEED OR INSURED BY THE DEPOSITOR, THE TRUSTEE, THE MASTER SERVICER, THE
SECURITIES ADMINISTRATOR OR BY ANY OF THEIR AFFILIATES OR BY ANY GOVERNMENTAL
AGENCY OR INSTRUMENTALITY.

FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL BALANCE OF
THIS CERTIFICATE MAY BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN BELOW.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE BY
INQUIRY OF THE SECURITIES ADMINISTRATOR.

THIS CERTIFICATE IS SUBORDINATE TO THE SENIOR CERTIFICATES, THE CLASS M
CERTIFICATES AND THE RESIDUAL CERTIFICATES TO THE EXTENT DESCRIBED IN THE
AGREEMENT REFERRED TO HEREIN.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE &
CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.

IF ANY BOOK-ENTRY CERTIFICATE (OR ANY INTEREST THEREIN) IS ACQUIRED OR HELD IN
VIOLATION OF THE CERTIFICATE TRANSFER RESTRICTIONS IN THE AGREEMENT, THEN THE
LAST PRECEDING TRANSFEREE THAT IS IN COMPLIANCE WITH SUCH PROVISIONS SHALL BE
RESTORED, TO THE EXTENT PERMITTED BY LAW, TO ALL RIGHTS AND

                                      A-2-1

<PAGE>

OBLIGATIONS AS CERTIFICATE OWNER THEREOF RETROACTIVE TO THE DATE OF SUCH
TRANSFER OF SUCH CERTIFICATE. NEITHER THE TRUSTEE NOR THE SECURITIES
ADMINISTRATOR SHALL BE UNDER ANY LIABILITY TO ANY PERSON FOR MAKING ANY PAYMENTS
DUE ON SUCH CERTIFICATE TO SUCH PRECEDING TRANSFEREE.

ANY PURPORTED CERTIFICATE OWNER WHOSE ACQUISITION OR HOLDING OF ANY BOOK-ENTRY
CERTIFICATE (OR INTEREST THEREIN) WAS EFFECTED IN VIOLATION OF THE CERTIFICATE
TRANSFER RESTRICTIONS IN THE AGREEMENT SHALL INDEMNIFY AND HOLD HARMLESS THE
DEPOSITOR, THE TRUSTEE, THE SECURITIES ADMINISTRATOR, THE MASTER SERVICER AND
THE TRUST FUND FROM AND AGAINST ANY AND ALL LIABILITIES, CLAIMS, COSTS OR
EXPENSES INCURRED BY SUCH PARTIES AS A RESULT OF SUCH ACQUISITION OR HOLDING.

NO TRANSFER OF THIS CERTIFICATE SHALL BE REGISTERED UNLESS THE PROSPECTIVE
TRANSFEREE PROVIDES THE SECURITIES ADMINISTRATOR WITH (A) A REPRESENTATION THAT
SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR OTHER ARRANGEMENT SUBJECT TO
TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), A PLAN SUBJECT TO SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986,
AS AMENDED (THE "CODE") OR A PLAN SUBJECT TO ANY PROVISION UNDER ANY FEDERAL,
STATE, LOCAL, NON-U.S. OR OTHER LAWS OR REGULATIONS THAT ARE SUBSTANTIVELY
SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE ("SIMILAR LAW")
(COLLECTIVELY, A "PLAN"), AND IS NOT DIRECTLY OR INDIRECTLY ACQUIRING THIS
CERTIFICATE FOR, ON BEHALF OF, OR WITH ANY ASSETS OF ANY SUCH PLAN, (B) IF THIS
CERTIFICATE HAS BEEN THE SUBJECT OF AN ERISA-QUALIFYING UNDERWRITING, A
REPRESENTATION THAT SUCH TRANSFEREE IS AN INSURANCE COMPANY THAT IS ACQUIRING
THIS CERTIFICATE WITH ASSETS OF AN "INSURANCE COMPANY GENERAL ACCOUNT" AS
DEFINED IN SECTION V(E) OF PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 95-60
AND THE ACQUISITION AND HOLDING OF THIS CERTIFICATE ARE COVERED AND EXEMPT UNDER
SECTIONS I AND III OF PTCE 95-60 OR (C) SOLELY IN THE CASE OF A DEFINITIVE
CERTIFICATE, AN OPINION OF COUNSEL SATISFACTORY TO THE SECURITIES ADMINISTRATOR,
AND UPON WHICH THE SECURITIES ADMINISTRATOR SHALL BE ENTITLED TO RELY, TO THE
EFFECT THAT THE ACQUISITION AND HOLDING OF THIS CERTIFICATE BY THE PROSPECTIVE
TRANSFEREE WILL NOT CONSTITUTE OR RESULT IN A NONEXEMPT PROHIBITED TRANSACTION
UNDER ERISA OR THE CODE, OR A VIOLATION OF SIMILAR LAW, AND WILL NOT SUBJECT THE
TRUSTEE, THE SECURITIES ADMINISTRATOR, THE MASTER SERVICER, ANY SERVICER OR THE
DEPOSITOR TO ANY OBLIGATION IN ADDITION TO THOSE UNDERTAKEN BY SUCH ENTITIES IN
THE AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUSTEE,
THE SECURITIES ADMINISTRATOR, THE MASTER SERVICER,

                                      A-2-2

<PAGE>

ANY SERVICER OR THE DEPOSITOR. IF THE CERTIFICATE IS NOT A DEFINITIVE
CERTIFICATE, THE TRANSFEREE IS DEEMED TO HAVE MADE THE REPRESENTATION IN (A) OR
(B) ABOVE.

THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND LAWS OR
IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE EXEMPT FROM REGISTRATION UNDER
SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH
THE CERTIFICATE TRANSFER RESTRICTIONS IN THE AGREEMENT.

                                      A-2-3

<PAGE>

<TABLE>
<S>                                      <C>
MANA Series 2007-OAR5, Class [B-__]      Aggregate Certificate Principal Balance of Class
(RULE 144A)                              [B-__] Certificates as of the Issue Date:
                                         $[______]

Pass Through Rate: Variable(1)           Initial Class Certificate Principal Balance of this
                                         Class [B-__] Certificate as of the Issue Date:
                                         $[______]

Date of Agreement and Cut-off Date:      Master Servicer and Securities Administrator:
[___________]                            Wells Fargo Bank, N.A.

First Distribution Date: [___________]   Trustee: HSBC Bank USA, National Association

No.  07-OAR5-[B-__]-(144A)-1             Issue Date: [______]

                                         CUSIP:  [______]
</TABLE>

     DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
     CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
     OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
     THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.

                        MORTGAGE PASS-THROUGH CERTIFICATE
                              MANA SERIES 2007-OAR5
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, adjustable-rate, hybrid option,
alt-A, negative amortization mortgage loans secured by first liens on
one-to-four family residential properties (the "Mortgage Loans") formed and sold
by

                     MERRILL LYNCH MORTGAGE INVESTORS, INC.

     THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN MERRILL
     LYNCH MORTGAGE INVESTORS, INC., THE MASTER SERVICER, THE SECURITIES
     ADMINISTRATOR, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER
     THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
     AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

----------
(1)  As described in the Agreement referenced herein.

                                      A-2-4

<PAGE>

          This certifies that CEDE & CO. is the registered owner of a Percentage
Interest (obtained by dividing the denomination of this Certificate by the
aggregate Certificate Principal Balance of the Class [B-__] Certificates as of
the Issue Date) in that certain beneficial ownership interest evidenced by all
the Class [B-__] Certificates in the Trust Fund created pursuant to a Pooling
and Servicing Agreement, dated as specified above (the "Agreement"), among
Merrill Lynch Mortgage Investors, Inc., as depositor (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement),
Wells Fargo Bank, N.A., as master servicer (in such capacity, the "Master
Servicer") and securities administrator (in such capacity, the "Securities
Administrator") and HSBC Bank USA, National Association, as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

          Interest on this Certificate will accrue during the period specified
in the Agreement on the Certificate Principal Balance hereof at a per annum rate
equal to the variable Pass-Through Rate described in the Agreement.

          Pursuant to the terms of the Agreement, distributions will be made on
each Distribution Date commencing on the First Distribution Date specified
above, to the Person in whose name this Certificate is registered on the Record
Date, in an amount equal to the product of the Percentage Interest evidenced by
this Certificate and the amount required to be distributed to the Holders of
Class [B-__] Certificates on such Distribution Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Securities Administrator by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Securities
Administrator in writing at least five Business Days prior to the Record Date
immediately prior to such Distribution Date and is the registered owner of Class
[B-__] Certificates, or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Securities Administrator
of the pendency of such distribution and only upon the presentation and
surrender of this Certificate at the office or agency appointed by the
Securities Administrator for that purpose as provided in the Agreement.

          If any Book-Entry Certificate (or any interest therein) is acquired or
held in violation of the Certificate transfer restrictions in the Agreement,
then the last preceding Transferee that is in compliance with such provisions
shall be restored, to the extent permitted by law, to all rights and obligations
as Certificate Owner thereof retroactive to the date of such Transfer of such
Certificate. Neither the Trustee nor the Securities Administrator shall be under
any liability to any Person for making any payments due on such Certificate to
such preceding Transferee.

                                      A-2-5

<PAGE>

          Any purported Certificate Owner whose acquisition or holding of any
Book-Entry Certificate (or interest therein) was effected in violation of the
Certificate transfer restrictions in the Agreement shall indemnify and hold
harmless the Depositor, the Trustee, the Securities Administrator, the Master
Servicer and the Trust Fund from and against any and all liabilities, claims,
costs or expenses incurred by such parties as a result of such acquisition or
holding.

          This Certificate is one of a duly authorized issue of Certificates
designated as Mortgage Pass-Through Certificates of the Series specified on the
face hereof (herein called the "Certificates") and representing a Percentage
Interest in the Class of Certificates specified on the face hereof equal to the
denomination specified on the face hereof divided by the aggregate Certificate
Principal Balance of the Class of Certificates specified on the face hereof.

          The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Master Servicer Collection Account and the
Distribution Account may be made from time to time for purposes other than
distributions to Holders of the Certificates, such purposes including
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans.

          The Agreement may be amended pursuant to the terms thereof.

          As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Securities Administrator as
provided in the Agreement, duly endorsed by, or accompanied by an assignment in
the form below or other written instrument of transfer in form satisfactory to
the Securities Administrator duly executed by, the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

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

          No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and any applicable state securities laws or
is exempt from the registration requirements under the 1933 Act and such state
securities laws. In the event that a transfer is to be made in reliance upon an
exemption from the 1933 Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Securities Administrator in writing the facts surrounding
the transfer in a Transferor Representation Letter as described in the Agreement
and (i) deliver to the Securities

                                      A-2-6

<PAGE>

Administrator an Investor Representation Letter or Rule 144A Letter as described
in the Agreement or (ii) have delivered to the Securities Administrator 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 Securities Administrator. Any Certificateholder desiring to
effect a transfer of this Certificate shall indemnify the Securities
Administrator and the Depositor against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws.

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

          The Depositor, the Securities Administrator, the Master Servicer and
the Trustee and any agent of the Depositor, the Securities Administrator, the
Master Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Securities Administrator, the Master Servicer, the Trustee, nor
any such agent shall be affected by notice to the contrary.

          This certificate shall be governed by and construed in accordance with
the laws of the state of New York.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by the Securities Administrator and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the Distribution Date on which the Certificate Principal Balance of each
Class of Certificates has been reduced to zero, (ii) the final payment (or any
advance with respect thereto) on or other liquidation of the last Mortgage Loan
remaining in the Trust Fund and (iii) the Optional Termination of the trust fund
according to the procedures described in the Agreement.

          The recitals contained herein shall be taken as statements of the
Depositor and the Securities Administrator assumes no responsibility for their
correctness.

          Unless the certificate of authentication hereon has been executed by
the Securities Administrator, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      A-2-7

<PAGE>

     IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.

                                        WELLS FARGO BANK, N.A.,
                                           as Securities Administrator

                                        By:
                                            ------------------------------------
                                            AUTHORIZED SIGNATORY

                                        Dated: [______]

              SECURITIES ADMINISTRATOR'S CERTIFICATE AUTHENTICATION

This is one of the Certificates referred to in the within-mentioned Agreement.

                                        WELLS FARGO BANK, N.A.,
                                           as Authenticating Agent

                                        By:
                                            ------------------------------------
                                            AUTHORIZED SIGNATORY

                                        Dated: [______]

                                      A-2-8

<PAGE>

                                  ABBREVIATIONS

     The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

<TABLE>
<S>         <C>                              <C>                   <C>
TEN COM -   as tenants in common             UNIF GIFT MIN ACT -         CUSTODIAN

TEN ENT -   as tenants by the entireties                               (Cust) (Minor)

                                                                   under Uniform Gifts to
                                                                         Minors Act

JT TEN -    as joint tenants with right of                             ______________
            survivorship and not as                                       (State)
            tenants in common
</TABLE>

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ______________________________________________________________
_______________________________________________________________________________.
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

the Percentage Interest evidenced by the Mortgage Pass-Through Certificate and
hereby authorize(s) the registration of transfer of such interest to assignee on
the Certificate Register of the Trust Fund.

     I (we) further direct the Securities Administrator to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:

________________________________________________________________________________

_______________________________________________________________________________.

Dated: ____________

                                        ----------------------------------------
                                        Signature by or on behalf of assignor

                                        ----------------------------------------
                                        Signature Guaranteed

                                      A-2-9

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________,
for the account of ____________________________________________________________,
account number __________, or, if mailed by check, to _________________________,
Applicable statements should be mailed to _____________________________________,
_______________________________________________________________________________.
This information is provided by _______________________________________________,
the assignee named above, or __________________________________________________,
as its agent.

                                      A-2-10
<PAGE>

                    FORM OF CLASS [B-_] [REG S] CERTIFICATE

SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT", AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED.

THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN THE
DEPOSITOR, THE TRUSTEE, THE MASTER SERVICER OR THE SECURITIES ADMINISTRATOR
REFERRED TO BELOW OR ANY OF THEIR AFFILIATES. NONE OF THIS CERTIFICATE, THE
REMIC REGULAR INTEREST REPRESENTED HEREBY OR THE UNDERLYING MORTGAGE LOANS ARE
GUARANTEED OR INSURED BY THE DEPOSITOR, THE TRUSTEE, THE MASTER SERVICER, THE
SECURITIES ADMINISTRATOR OR BY ANY OF THEIR AFFILIATES OR BY ANY GOVERNMENTAL
AGENCY OR INSTRUMENTALITY.

FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL BALANCE OF
THIS CERTIFICATE MAY BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN BELOW.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE BY
INQUIRY OF THE SECURITIES ADMINISTRATOR.

THIS CERTIFICATE IS SUBORDINATE TO THE SENIOR CERTIFICATES, THE CLASS M
CERTIFICATES AND THE RESIDUAL CERTIFICATES TO THE EXTENT DESCRIBED IN THE
AGREEMENT REFERRED TO HEREIN.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE &
CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.

IF ANY BOOK-ENTRY CERTIFICATE (OR ANY INTEREST THEREIN) IS ACQUIRED OR HELD IN
VIOLATION OF THE CERTIFICATE TRANSFER RESTRICTIONS IN THE AGREEMENT, THEN THE
LAST PRECEDING TRANSFEREE THAT IS IN COMPLIANCE WITH SUCH PROVISIONS SHALL BE
RESTORED, TO THE EXTENT PERMITTED BY LAW, TO ALL RIGHTS AND OBLIGATIONS AS
CERTIFICATE OWNER THEREOF RETROACTIVE TO THE DATE OF SUCH TRANSFER OF SUCH
CERTIFICATE. NEITHER THE TRUSTEE NOR THE SECURITIES ADMINISTRATOR SHALL BE UNDER
ANY LIABILITY TO

                                     A-2-11

<PAGE>

ANY PERSON FOR MAKING ANY PAYMENTS DUE ON SUCH CERTIFICATE TO SUCH PRECEDING
TRANSFEREE.

ANY PURPORTED CERTIFICATE OWNER WHOSE ACQUISITION OR HOLDING OF ANY BOOK-ENTRY
CERTIFICATE (OR INTEREST THEREIN) WAS EFFECTED IN VIOLATION OF THE CERTIFICATE
TRANSFER RESTRICTIONS IN THE AGREEMENT SHALL INDEMNIFY AND HOLD HARMLESS THE
DEPOSITOR, THE TRUSTEE, THE SECURITIES ADMINISTRATOR, THE MASTER SERVICER AND
THE TRUST FUND FROM AND AGAINST ANY AND ALL LIABILITIES, CLAIMS, COSTS OR
EXPENSES INCURRED BY SUCH PARTIES AS A RESULT OF SUCH ACQUISITION OR HOLDING.

NO TRANSFER OF THIS CERTIFICATE SHALL BE REGISTERED UNLESS THE PROSPECTIVE
TRANSFEREE PROVIDES THE SECURITIES ADMINISTRATOR WITH (A) A REPRESENTATION THAT
SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR OTHER ARRANGEMENT SUBJECT TO
TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), A PLAN SUBJECT TO SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986,
AS AMENDED (THE "CODE") OR A PLAN SUBJECT TO ANY PROVISION UNDER ANY FEDERAL,
STATE, LOCAL, NON-U.S. OR OTHER LAWS OR REGULATIONS THAT ARE SUBSTANTIVELY
SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE ("SIMILAR LAW")
(COLLECTIVELY, A "PLAN"), AND IS NOT DIRECTLY OR INDIRECTLY ACQUIRING THIS
CERTIFICATE FOR, ON BEHALF OF, OR WITH ANY ASSETS OF ANY SUCH PLAN, (B) IF THIS
CERTIFICATE HAS BEEN THE SUBJECT OF AN ERISA-QUALIFYING UNDERWRITING, A
REPRESENTATION THAT SUCH TRANSFEREE IS AN INSURANCE COMPANY THAT IS ACQUIRING
THIS CERTIFICATE WITH ASSETS OF AN "INSURANCE COMPANY GENERAL ACCOUNT" AS
DEFINED IN SECTION V(E) OF PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 95-60
AND THE ACQUISITION AND HOLDING OF THIS CERTIFICATE ARE COVERED AND EXEMPT UNDER
SECTIONS I AND III OF PTCE 95-60 OR (C) SOLELY IN THE CASE OF A DEFINITIVE
CERTIFICATE, AN OPINION OF COUNSEL SATISFACTORY TO THE SECURITIES ADMINISTRATOR,
AND UPON WHICH THE SECURITIES ADMINISTRATOR SHALL BE ENTITLED TO RELY, TO THE
EFFECT THAT THE ACQUISITION AND HOLDING OF THIS CERTIFICATE BY THE PROSPECTIVE
TRANSFEREE WILL NOT CONSTITUTE OR RESULT IN A NONEXEMPT PROHIBITED TRANSACTION
UNDER ERISA OR THE CODE, OR A VIOLATION OF SIMILAR LAW, AND WILL NOT SUBJECT THE
TRUSTEE, THE SECURITIES ADMINISTRATOR, THE MASTER SERVICER, ANY SERVICER OR THE
DEPOSITOR TO ANY OBLIGATION IN ADDITION TO THOSE UNDERTAKEN BY SUCH ENTITIES IN
THE AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUSTEE,
THE SECURITIES ADMINISTRATOR, THE MASTER SERVICER, ANY SERVICER OR THE
DEPOSITOR. IF THE CERTIFICATE IS NOT A DEFINITIVE CERTIFICATE, THE TRANSFEREE IS
DEEMED TO HAVE MADE THE REPRESENTATION IN (A) OR (B) ABOVE.

                                     A-2-12

<PAGE>

THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES LAWS OF ANY STATE
AND MAY NOT BE RESOLD OR TRANSFERRED WITHIN THE UNITED STATES (AS DEFINED IN
RULES 901 THROUGH 905 OF THE 1933 ACT ("REGULATION S")) OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, A U. S. PERSON (AS DEFINED IN REGULATION S), UNLESS IT IS
REGISTERED PURSUANT TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN
TRANSACTIONS THAT ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER
APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE CERTIFICATE
TRANSFER RESTRICTIONS IN THE AGREEMENT.

                                     A-2-13

<PAGE>

<TABLE>
<S>                                      <C>
MANA Series 2007-OAR5, Class [B-__]      Aggregate Certificate Principal Balance of Class
(REGULATION S)                           [B-__] Certificates as of the Issue Date:

                                         $[______]

Pass Through Rate: Variable(2)           Initial Class Certificate Principal Balance of this
                                         Class  [B-__] Certificate as of the Issue Date:
                                         $[______]

Date of Agreement and Cut-off Date:      Master Servicer and Securities Administrator:
[___________]                            Wells Fargo Bank, N.A.

First Distribution Date: [___________]   Trustee: HSBC Bank USA, National Association

No. 07-OAR5-[B-__]-Reg S-1               Issue Date: [______]

                                         CUSIP: [______]
</TABLE>

     DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
     CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
     OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
     THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.

                        MORTGAGE PASS-THROUGH CERTIFICATE
                              MANA SERIES 2007-OAR5

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, adjustable-rate, hybrid option,
alt-A, negative amortization mortgage loans secured by first liens on
one-to-four family residential properties (the "Mortgage Loans") formed and sold
by

                     MERRILL LYNCH MORTGAGE INVESTORS, INC.

     THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN MERRILL
     LYNCH MORTGAGE INVESTORS, INC., THE MASTER SERVICER, THE SECURITIES
     ADMINISTRATOR, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER
     THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS

----------
(2)  As described in the Agreement referenced herein.

                                     A-2-14

<PAGE>

     ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

          This certifies that CEDE & CO. is the registered owner of a Percentage
Interest (obtained by dividing the denomination of this Certificate by the
aggregate Certificate Principal Balance of the Class [B-__] Certificates as of
the Issue Date) in that certain beneficial ownership interest evidenced by all
the Class [B-__] Certificates in the Trust Fund created pursuant to a Pooling
and Servicing Agreement, dated as specified above (the "Agreement"), among
Merrill Lynch Mortgage Investors, Inc., as depositor (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement),
Wells Fargo Bank, N.A., as master servicer (in such capacity, the "Master
Servicer") and securities administrator (in such capacity, the "Securities
Administrator"), and HSBC Bank USA, National Association, as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

          Interest on this Certificate will accrue during the period specified
in the Agreement on the Certificate Principal Balance hereof at a per annum rate
equal to the variable Pass-Through Rate described in the Agreement.

          Pursuant to the terms of the Agreement, distributions will be made on
each Distribution Date commencing on the First Distribution Date specified
above, to the Person in whose name this Certificate is registered on the Record
Date, in an amount equal to the product of the Percentage Interest evidenced by
this Certificate and the amount required to be distributed to the Holders of
Class [B-__] Certificates on such Distribution Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Securities Administrator by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Securities
Administrator in writing at least five Business Days prior to the Record Date
immediately prior to such Distribution Date and is the registered owner of Class
[B-__] Certificates, or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Securities Administrator
of the pendency of such distribution and only upon the presentation and
surrender of this Certificate at the office or agency appointed by the
Securities Administrator for that purpose as provided in the Agreement.

          If any Book-Entry Certificate (or any interest therein) is acquired or
held in violation of the Certificate transfer restrictions in the Agreement,
then the last preceding Transferee that is in compliance with such provisions
shall be restored, to the extent permitted by law, to all rights and obligations
as Certificate Owner thereof retroactive to the date of such Transfer of such
Certificate. Neither the Trustee nor the Securities Administrator shall be under

                                     A-2-15

<PAGE>

any liability to any Person for making any payments due on such Certificate to
such preceding Transferee.

          Any purported Certificate Owner whose acquisition or holding of any
Book-Entry Certificate (or interest therein) was effected in violation of the
Certificate transfer restrictions in the Agreement shall indemnify and hold
harmless the Depositor, the Trustee, the Securities Administrator, the Master
Servicer and the Trust Fund from and against any and all liabilities, claims,
costs or expenses incurred by such parties as a result of such acquisition or
holding.

          This Certificate is one of a duly authorized issue of Certificates
designated as Mortgage Pass-Through Certificates of the Series specified on the
face hereof (herein called the "Certificates") and representing a Percentage
Interest in the Class of Certificates specified on the face hereof equal to the
denomination specified on the face hereof divided by the aggregate Certificate
Principal Balance of the Class of Certificates specified on the face hereof.

          The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Master Servicer Collection Account and the
Distribution Account may be made from time to time for purposes other than
distributions to Holders of the Certificates, such purposes including
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans.

          The Agreement may be amended pursuant to the terms thereof.

          As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Securities Administrator as
provided in the Agreement, duly endorsed by, or accompanied by an assignment in
the form below or other written instrument of transfer in form satisfactory to
the Securities Administrator duly executed by, the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

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

          No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and any applicable state securities laws or
is exempt from the registration requirements under the 1933 Act and such state
securities laws. In the event that a transfer is to be made in reliance upon an
exemption from the 1933 Act and such laws, the Certificateholder desiring to

                                     A-2-16

<PAGE>

effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Securities Administrator in writing the facts surrounding
the transfer in a Transferor Representation Letter as described in the Agreement
and (i) deliver to the Securities Administrator an Investor Representation
Letter or Rule 144A Letter as described in the Agreement or (ii) have delivered
to the Securities Administrator 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 Securities Administrator. Any
Certificateholder desiring to effect a transfer of this Certificate shall
indemnify the Securities Administrator and the Depositor against any liability
that may result if the transfer is not so exempt or is not made in accordance
with such federal and state laws.

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

          The Depositor, the Securities Administrator, the Master Servicer and
the Trustee and any agent of the Depositor, the Securities Administrator, the
Master Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Securities Administrator, the Master Servicer, the Trustee nor
any such agent shall be affected by notice to the contrary.

          This certificate shall be governed by and construed in accordance with
the laws of the state of New York.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by the Securities Administrator and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the Distribution Date on which the Certificate Principal Balance of each
Class of Certificates has been reduced to zero, (ii) the final payment (or any
advance with respect thereto) on or other liquidation of the last Mortgage Loan
remaining in the Trust Fund and (iii) the Optional Termination of the trust fund
according to the procedures described in the Agreement.

          The recitals contained herein shall be taken as statements of the
Depositor and the Securities Administrator assumes no responsibility for their
correctness.

          Unless the certificate of authentication hereon has been executed by
the Securities Administrator, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                     A-2-17

<PAGE>

     IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.

                                        WELLS FARGO BANK, N.A.,
                                           as Securities Administrator

                                        By:
                                            ------------------------------------
                                            AUTHORIZED SIGNATORY

                                        Dated:  [______]

              SECURITIES ADMINISTRATOR'S CERTIFICATE AUTHENTICATION

This is one of the Certificates referred to in the within-mentioned Agreement.

                                        WELLS FARGO BANK, N.A.,
                                           as Authenticating Agent

                                        By:
                                            ------------------------------------
                                            AUTHORIZED SIGNATORY

                                        Dated:  [______]

                                     A-2-18

<PAGE>

                                  ABBREVIATIONS

     The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

<TABLE>
<S>         <C>                              <C>                   <C>
TEN COM -   as tenants in common             UNIF GIFT MIN ACT -         CUSTODIAN
TEN ENT -   as tenants by the entireties                               (Cust) (Minor)

                                                                   under Uniform Gifts to
                                                                         Minors Act

JT TEN -    as joint tenants with right of                             ______________
            survivorship and not as                                       (State)
            tenants in common
</TABLE>

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ______________________________________________________________
_______________________________________________________________________________.
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

the Percentage Interest evidenced by the Mortgage Pass-Through Certificate and
hereby authorize(s) the registration of transfer of such interest to assignee on
the Certificate Register of the Trust Fund.

     I (we) further direct the Securities Administrator to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
_______________________________________________________________________________

_______________________________________________________________________________.

Dated: ______________.

                                        ----------------------------------------
                                        Signature by or on behalf of assignor

                                        ----------------------------------------
                                        Signature Guaranteed

                                     A-2-19

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________,
for the account of ____________________________________________________________,
account number___________, or, if mailed by check, to _________________________,
Applicable statements should be mailed to _____________________________________,
_______________________________________________________________________________.
This information is provided by _______________________________________________,
the assignee named above, or __________________________________________________,
as its agent.

                                     A-2-20
<PAGE>

                                   EXHIBIT A-3

                          FORM OF CLASS A-R CERTIFICATE

SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS ONE OR MORE
"RESIDUAL INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT", AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE").

THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN THE
DEPOSITOR, THE TRUSTEE, THE MASTER SERVICER OR THE SECURITIES ADMINISTRATOR
REFERRED TO BELOW OR ANY OF THEIR AFFILIATES. NONE OF THIS CERTIFICATE, THE
REMIC RESIDUAL INTERESTS REPRESENTED HEREBY OR THE UNDERLYING MORTGAGE LOANS ARE
GUARANTEED OR INSURED BY THE DEPOSITOR, THE TRUSTEE, THE MASTER SERVICER, THE
SECURITIES ADMINISTRATOR OR BY ANY OF THEIR AFFILIATES OR BY ANY GOVERNMENTAL
AGENCY OR INSTRUMENTALITY.

FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL BALANCE OF
THIS CERTIFICATE MAY BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN BELOW.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE BY
INQUIRY OF THE SECURITIES ADMINISTRATOR.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND
ANY PAYMENT IS MADE TO MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED, HAS AN INTEREST HEREIN.

IF ANY BOOK-ENTRY CERTIFICATE (OR ANY INTEREST THEREIN) IS ACQUIRED OR HELD IN
VIOLATION OF THE CERTIFICATE TRANSFER RESTRICTIONS IN THE AGREEMENT, THEN THE
LAST PRECEDING TRANSFEREE THAT IS IN COMPLIANCE WITH SUCH PROVISIONS SHALL BE
RESTORED, TO THE EXTENT PERMITTED BY LAW, TO ALL RIGHTS AND OBLIGATIONS AS
CERTIFICATE OWNER THEREOF RETROACTIVE TO THE DATE OF SUCH TRANSFER OF SUCH
CERTIFICATE. NEITHER THE TRUSTEE NOR THE SECURITIES ADMINISTRATOR SHALL BE UNDER
ANY LIABILITY TO ANY PERSON FOR MAKING ANY PAYMENTS DUE ON SUCH CERTIFICATE TO
SUCH PRECEDING TRANSFEREE.

                                      A-3-1

<PAGE>

ANY PURPORTED CERTIFICATE OWNER WHOSE ACQUISITION OR HOLDING OF ANY BOOK-ENTRY
CERTIFICATE (OR INTEREST THEREIN) WAS EFFECTED IN VIOLATION OF THE CERTIFICATE
TRANSFER RESTRICTIONS IN THE AGREEMENT SHALL INDEMNIFY AND HOLD HARMLESS THE
DEPOSITOR, THE TRUSTEE, THE SECURITIES ADMINISTRATOR, THE MASTER SERVICER AND
THE TRUST FUND FROM AND AGAINST ANY AND ALL LIABILITIES, CLAIMS, COSTS OR
EXPENSES INCURRED BY SUCH PARTIES AS A RESULT OF SUCH ACQUISITION OR HOLDING.

NO TRANSFER OF THIS CERTIFICATE SHALL BE REGISTERED UNLESS THE PROSPECTIVE
TRANSFEREE PROVIDES THE SECURITIES ADMINISTRATOR AND THE DEPOSITOR WITH A
REPRESENTATION THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO
TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO ANY
FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAWS OR REGULATIONS THAT ARE
SUBSTANTIVELY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE, AND IS
NOT DIRECTLY OR INDIRECTLY ACQUIRING THIS CERTIFICATE FOR, ON BEHALF OF, OR WITH
ANY ASSETS OF ANY SUCH PLAN. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS
CERTIFICATE MAY BE MADE ONLY IN ACCORDANCE WITH THE CERTIFICATE TRANSFER
RESTRICTIONS IN THE AGREEMENT REFERRED TO HEREIN.

ACQUISITION OF BENEFICIAL OWNERSHIP OF THIS CERTIFICATE BY A DISQUALIFIED
ORGANIZATION WITHIN THE MEANING OF SECTION 860E(e)(5) OF THE CODE IS PROHIBITED.

                                      A-3-2

<PAGE>

<TABLE>
<S>                                      <C>
MANA Series 2007-OAR5, Class A-R         Aggregate Certificate Principal
                                         Balance of the Class A-R Certificates
                                         as of the Issue Date: $[___]

Pass-Through Rate: Variable(1)           Initial Certificate Principal Balance
                                         of this Class A-R Certificate as of the
                                         Issue Date: $[___]

Date of Agreement and Cut-off Date:      Master Servicer and Securities
[___________]                            Administrator:
                                         Wells Fargo Bank, N.A.

First Distribution Date: [___________]   Trustee: HSBC Bank USA, National
                                         Association

No. 07-OAR5-A-R-1                        Issue Date: [___________]

                                         CUSIP: [__________________]
</TABLE>

     DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
     CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
     OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
     THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.

                        MORTGAGE PASS-THROUGH CERTIFICATE
                              MANA SERIES 2007-OAR5
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, adjustable-rate, hybrid option,
alt-A, negative amortization mortgage loans secured by first liens on
one-to-four family residential properties (the "Mortgage Loans") formed and sold
by

                     MERRILL LYNCH MORTGAGE INVESTORS, INC.

     THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN MERRILL
     LYNCH MORTGAGE INVESTORS, INC., THE MASTER SERVICER, THE SECURITIES
     ADMINISTRATOR, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER
     THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
     AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

          This certifies that MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
is the registered owner of a Percentage Interest obtained by dividing the

----------
(1)  As described in the Agreement referenced herein.

                                      A-3-3

<PAGE>

denomination of this Certificate by the aggregate Certificate Principal Balance
of the Class A-R Certificates as of the Issue Date in that certain beneficial
ownership interest evidenced by all the Class A-R Certificates in the Trust Fund
created pursuant to a Pooling and Servicing Agreement, dated as specified above
(the "Agreement"), among Merrill Lynch Mortgage Investors, Inc., as depositor
(hereinafter called the "Depositor," which term includes any successor entity
under the Agreement), Wells Fargo Bank, N.A., as master servicer (in such
capacity, the "Master Servicer") and securities administrator (in such capacity,
the "Securities Administrator"), and HSBC Bank USA, National Association, as
trustee (the "Trustee"), a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

          Interest on this Certificate will accrue during the period specified
in the Agreement on the Certificate Principal Balance hereof at a per annum rate
equal to the variable Pass-Through Rate described in the Agreement.

          Pursuant to the terms of the Agreement, distributions will be made on
each Distribution Date commencing on the First Distribution Date specified
above, to the Person in whose name this Certificate is registered on the Record
Date, in an amount equal to the product of the Percentage Interest evidenced by
this Certificate and the amount required to be distributed to the Holders of
Class A-R Certificates on such Distribution Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Securities Administrator by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Securities
Administrator in writing at least five Business Days prior to the Record Date
immediately prior to such Distribution Date and is the registered owner of Class
A-R Certificates, or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Securities Administrator
of the pendency of such distribution and only upon the presentation and
surrender of this Certificate at the office or agency appointed by the
Securities Administrator for that purpose as provided in the Agreement.

          If any Book-Entry Certificate (or any interest therein) is acquired or
held in violation of the Certificate transfer restrictions in the Agreement,
then the last preceding Transferee that is in compliance with such provisions
shall be restored, to the extent permitted by law, to all rights and obligations
as Certificate Owner thereof retroactive to the date of such Transfer of such
Certificate. Neither the Trustee nor the Securities Administrator shall be under
any liability to any Person for making any payments due on such Certificate to
such preceding Transferee.

          Any purported Certificate Owner whose acquisition or holding of any
Book-Entry Certificate (or interest therein) was effected in violation of the
Certificate transfer restrictions in the Agreement shall indemnify and hold
harmless the Depositor, the Trustee, the Securities

                                      A-3-4

<PAGE>

Administrator, the Master Servicer and the Trust Fund from and against any and
all liabilities, claims, costs or expenses incurred by such parties as a result
of such acquisition or holding.

          This Certificate is one of a duly authorized issue of Certificates
designated as Mortgage Pass-Through Certificates of the Series specified on the
face hereof (herein called the "Certificates") and representing a Percentage
Interest in the Class of Certificates specified on the face hereof equal to the
denomination specified on the face hereof divided by the aggregate Certificate
Principal Balance of the Class of Certificates specified on the face hereof.

          The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Master Servicer Collection Account and the
Distribution Account may be made from time to time for purposes other than
distributions to Holders of the Certificates, such purposes including
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans.

          The Agreement may be amended pursuant to the terms thereof.

          As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Securities Administrator as
provided in the Agreement, duly endorsed by, or accompanied by an assignment in
the form below or other written instrument of transfer in form satisfactory to
the Securities Administrator duly executed by, the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

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

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

          The Depositor, the Securities Administrator, the Master Servicer and
the Trustee and any agent of the Depositor, the Securities Administrator, the
Master Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Securities Administrator, the Master Servicer, the Trustee nor
any such agent shall be affected by notice to the contrary.

          This certificate shall be governed by and construed in accordance with
the laws of the state of New York.

                                      A-3-5

<PAGE>

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by the Securities Administrator and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the Distribution Date on which the Certificate Principal Balance of each
Class of Certificates has been reduced to zero, (ii) the final payment (or any
advance with respect thereto) on or other liquidation of the last Mortgage Loan
remaining in the Trust Fund and (iii) the Optional Termination of the trust fund
according to the procedures described in the Agreement.

          The recitals contained herein shall be taken as statements of the
Depositor and the Securities Administrator assumes no responsibility for their
correctness.

          Unless the certificate of authentication hereon has been executed by
the Securities Administrator, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      A-3-6

<PAGE>

          IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.

                                        WELLS FARGO BANK, N.A.,
                                           as Securities Administrator

                                        By:
                                            ------------------------------------
                                            AUTHORIZED SIGNATORY

                                        Dated: [___________]

              SECURITIES ADMINISTRATOR'S CERTIFICATE AUTHENTICATION

This is one of the Certificates referred to in the within-mentioned Agreement.

                                        WELLS FARGO BANK, N.A.,
                                           as Authenticating Agent

                                        By:
                                            ------------------------------------
                                            AUTHORIZED SIGNATORY

                                        Dated: [___________]

                                      A-3-7

<PAGE>

                                  ABBREVIATIONS

     The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

<TABLE>
<S>         <C>                              <C>                   <C>
TEN COM -   as tenants in common             UNIF GIFT MIN ACT -          CUSTODIAN

TEN ENT -   as tenants by the entireties                               (Cust) (Minor)

                                                                   under Uniform Gifts to
                                                                         Minors Act

JT TEN -    as joint tenants with right of                             ______________
            survivorship and not as                                       (State)
            tenants in common
</TABLE>

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ______________________________________________________________
_______________________________________________________________________________.
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

the Percentage Interest evidenced by the Mortgage Pass-Through Certificate and
hereby authorize(s) the registration of transfer of such interest to assignee on
the Certificate Register of the Trust Fund.

     I (we) further direct the Securities Administrator to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:

_______________________________________________________________________________

_______________________________________________________________________________.

Dated: ________________

                                        ----------------------------------------
                                        Signature by or on behalf of assignor

                                        ----------------------------------------
                                        Signature Guaranteed

                                      A-3-8

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________,
for the account of ____________________________________________________________,
account number___________, or, if mailed by check, to _________________________,
Applicable statements should be mailed to _____________________________________,
______________________________________________________________________________ .

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

                                      A-3-9
<PAGE>

                                   EXHIBIT A-4

                           FORM OF CLASS P CERTIFICATE

THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN THE
DEPOSITOR, THE TRUSTEE, THE MASTER SERVICER OR THE SECURITIES ADMINISTRATOR OR
ANY OF THEIR AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE
LOANS ARE GUARANTEED OR INSURED BY THE DEPOSITOR, THE TRUSTEE, THE MASTER
SERVICER, THE SECURITIES ADMINISTRATOR OR BY ANY OF THEIR AFFILIATES OR BY ANY
GOVERNMENTAL AGENCY OR INSTRUMENTALITY.

THIS CLASS P CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS SOLD OR TRANSFERRED IN TRANSACTIONS
WHICH ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT OR UNDER APPLICABLE STATE LAW
AND IS TRANSFERRED IN ACCORDANCE WITH THE CERTIFICATE REGISTRATION PROVISIONS IN
THE AGREEMENT REFERRED TO HEREIN.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND
ANY PAYMENT IS MADE TO MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED, HAS AN INTEREST HEREIN.

NO TRANSFER OF THIS CERTIFICATE SHALL BE REGISTERED UNLESS THE PROSPECTIVE
TRANSFEREE PROVIDES THE SECURITIES ADMINISTRATOR AND THE DEPOSITOR WITH (A) A
REPRESENTATION THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO
TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO ANY
STATE, LOCAL, FEDERAL, NON-U.S. OR OTHER LAW SUBSTANTIVELY SIMILAR TO THE
FOREGOING PROVISIONS OF ERISA OR THE CODE ("SIMILAR LAW"), AND IS NOT DIRECTLY
OR INDIRECTLY ACQUIRING THIS CERTIFICATE FOR, ON BEHALF OF, OR WITH ANY ASSETS
OF ANY SUCH PLAN, (B) IF THE CERTIFICATE HAS BEEN THE SUBJECT OF AN
ERISA-QUALIFYING UNDERWRITING, A REPRESENTATION THAT SUCH TRANSFEREE IS AN
INSURANCE COMPANY THAT IS ACQUIRING THE CERTIFICATE WITH ASSETS OF AN "INSURANCE
COMPANY GENERAL ACCOUNT" AS DEFINED IN SECTION V(E) OF PROHIBITED TRANSACTION
CLASS EXEMPTION ("PTCE") 95-60 AND THE ACQUISITION AND HOLDING OF THE
CERTIFICATE ARE COVERED AND EXEMPT UNDER SECTIONS I AND III OF PTCE 95-60 OR (C)
SOLELY IN THE CASE OF A DEFINITIVE CERTIFICATE, AN OPINION OF COUNSEL

                                     A-4-1

<PAGE>

SATISFACTORY TO THE SECURITIES ADMINISTRATOR, AND UPON WHICH THE SECURITIES
ADMINISTRATOR SHALL BE ENTITLED TO RELY, TO THE EFFECT THAT THE ACQUISITION AND
HOLDING OF SUCH CERTIFICATE BY THE PROSPECTIVE TRANSFEREE WILL NOT CONSTITUTE OR
RESULT IN A NONEXEMPT PROHIBITED TRANSACTION UNDER ERISA OR THE CODE OR A
VIOLATION OF SIMILAR LAW AND WILL NOT SUBJECT THE TRUSTEE, THE MASTER SERVICER,
THE SECURITIES ADMINISTRATOR OR THE DEPOSITOR TO ANY OBLIGATION IN ADDITION TO
THOSE UNDERTAKEN BY SUCH ENTITIES IN THE AGREEMENT, WHICH OPINION OF COUNSEL
SHALL NOT BE AN EXPENSE OF THE TRUSTEE, THE MASTER SERVICER, THE SECURITIES
ADMINISTRATOR OR THE DEPOSITOR.

                                     A-4-2

<PAGE>

                               CLASS P CERTIFICATE

Number: [__________]                    Percentage Interest: 100%

Cut-off Date: [__________]

First Distribution Date: [__________]   CUSIP: [____________]

                                     A-4-3

<PAGE>

                        MORTGAGE PASS-THROUGH CERTIFICATE
                              MANA SERIES 2007-OAR5
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, adjustable-rate, hybrid option,
alt-A, negative amortization mortgage loans secured by first liens on
one-to-four family residential properties (the "Mortgage Loans") formed and sold
by

                     MERRILL LYNCH MORTGAGE INVESTORS, INC.

     THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN MERRILL
     LYNCH MORTGAGE INVESTORS, INC., THE MASTER SERVICER, THE SECURITIES
     ADMINISTRATOR, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER
     THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
     AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

          This certifies that MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
as NOMINEE for MERRILL LYNCH FUNDING CORPORATION is the registered owner of the
Percentage Interest indicated on this Certificate in that certain beneficial
ownership interest evidenced by all the Class P Certificates in the Trust Fund
created pursuant to a Pooling and Servicing Agreement, dated as specified above
(the "Agreement"), among Merrill Lynch Mortgage Investors, Inc., as depositor
(hereinafter called the "Depositor," which term includes any successor entity
under the Agreement), Wells Fargo Bank, N.A., as master servicer (in such
capacity, the "Master Servicer") and securities administrator (in such capacity,
the "Securities Administrator"), and HSBC Bank USA, National Association, as
trustee (the "Trustee"), a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

          Pursuant to the terms of the Agreement, distributions will be made on
each Distribution Date commencing on the First Distribution Date specified
above, to the Person in whose name this Certificate is registered on the Record
Date, in an amount equal to the product of the Percentage Interest evidenced by
this Certificate and the amount required to be distributed to the Holders of
Class P Certificates on such Distribution Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Securities Administrator by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Securities
Administrator in writing at least five Business Days prior to the Record Date
immediately prior to such Distribution Date and is the registered owner of Class
P Certificates, or otherwise by check mailed by first class mail to the address
of the Person entitled thereto, as such name and address shall appear on the
Certificate Register. Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Securities Administrator

                                     A-4-4

<PAGE>

of the pendency of such distribution and only upon the presentation and
surrender of this Certificate at the office or agency appointed by the
Securities Administrator for that purpose as provided in the Agreement.

          If any Book-Entry Certificate (or any interest therein) is acquired or
held in violation of the Certificate transfer restrictions in the Agreement,
then the last preceding Transferee that is in compliance with such provisions
shall be restored, to the extent permitted by law, to all rights and obligations
as Certificate Owner thereof retroactive to the date of such Transfer of such
Certificate. Neither the Trustee nor the Securities Administrator shall be under
any liability to any Person for making any payments due on such Certificate to
such preceding Transferee.

          Any purported Certificate Owner whose acquisition or holding of any
Book-Entry Certificate (or interest therein) was effected in violation of the
certificate transfer restrictions in the Agreement shall indemnify and hold
harmless the Depositor, the Trustee, the Securities Administrator, the Master
Servicer and the Trust Fund from and against any and all liabilities, claims,
costs or expenses incurred by such parties as a result of such acquisition or
holding.

          This Certificate is one of a duly authorized issue of Certificates
designated as Mortgage Pass-Through Certificates of the Series specified on the
face hereof (herein called the "Certificates") and representing the Percentage
Interest in the Class of Certificates specified on the face hereof.

          The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Master Servicer Collection Account and the
Distribution Account may be made from time to time for purposes other than
distributions to Holders of the Certificates, such purposes including
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans.

          The Agreement may be amended pursuant to the terms thereof.

          As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Securities Administrator as
provided in the Agreement, duly endorsed by, or accompanied by an assignment in
the form below or other written instrument of transfer in form satisfactory to
the Securities Administrator duly executed by, the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

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

                                     A-4-5

<PAGE>

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

          The Depositor, the Securities Administrator, the Master Servicer and
the Trustee and any agent of the Depositor, the Securities Administrator, the
Master Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Securities Administrator, the Master Servicer, the Trustee nor
any such agent shall be affected by notice to the contrary.

          This certificate shall be governed by and construed in accordance with
the laws of the state of New York.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by the Securities Administrator and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the Distribution Date on which the Certificate Principal Balance of each
Class of Certificates has been reduced to zero, (ii) the final payment (or any
advance with respect thereto) on or other liquidation of the last Mortgage Loan
remaining in the Trust Fund and (iii) the Optional Termination of the trust fund
according to the procedures described in the Agreement.

          The recitals contained herein shall be taken as statements of the
Depositor and the Securities Administrator assumes no responsibility for their
correctness.

          Unless the certificate of authentication hereon has been executed by
the Securities Administrator, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                     A-4-6

<PAGE>

IN WITNESS WHEREOF, the Securities Administrator has caused this Certificate to
be duly executed.

                                        WELLS FARGO BANK, N.A.,
                                           as Securities Administrator

                                        By:
                                            ------------------------------------
                                            AUTHORIZED SIGNATORY

                                        Dated: [__________]

              SECURITIES ADMINISTRATOR'S CERTIFICATE AUTHENTICATION

This is one of the Certificates referred to in the within-mentioned Agreement.

                                        WELLS FARGO BANK, N.A.,
                                           as Authenticating Agent

                                        By:
                                            ------------------------------------
                                            AUTHORIZED SIGNATORY

                                        Dated: [__________]

                                     A-4-7

<PAGE>

                                  ABBREVIATIONS

     The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

<TABLE>
<S>         <C>                              <C>                   <C>
TEN COM -   as tenants in common             UNIF GIFT MIN ACT -         CUSTODIAN

TEN ENT -   as tenants by the entireties                               (Cust) (Minor)

                                                                   under Uniform Gifts to
                                                                         Minors Act

JT TEN -    as joint tenants with right of
            survivorship and not as                                    _____________
            tenants in common                                             (State)
</TABLE>

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ______________________________________________________________
_______________________________________________________________________________.
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

the Percentage Interest evidenced by the Mortgage Pass-Through Certificate and
hereby authorize(s) the registration of transfer of such interest to assignee on
the Certificate Register of the Trust Fund.

     I (we) further direct the Securities Administrator to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:

________________________________________________________________________________

_______________________________________________________________________________.

Dated: ___________

                                        ----------------------------------------
                                        Signature by or on behalf of assignor

                                        ----------------------------------------
                                        Signature Guaranteed

                                     A-4-8

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________,
for the account of ____________________________________________________________,
account number ___________, or, if mailed by check, to ________________________,
Applicable statements should be mailed to _____________________________________,
_______________________________________________________________________________.

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

                                     A-4-9
<PAGE>

                                   EXHIBIT A-5

                           FORM OF CLASS X CERTIFICATE

SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT", AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED.

INTEREST IS CALCULATED ON THIS CERTIFICATE BASED ON A PRINCIPAL BALANCE AND ON A
NOTIONAL AMOUNT DETERMINED, EACH AS DESCRIBED IN THE AGREEMENT. THE NOTIONAL
AMOUNT OF THIS CERTIFICATE AT ANY TIME MAY BE LESS THAN THE INITIAL NOTIONAL
AMOUNT OF THIS CERTIFICATE AS SET FORTH HEREON.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND
ANY PAYMENT IS MADE TO MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED, HAS AN INTEREST HEREIN.

IF ANY BOOK-ENTRY CERTIFICATE (OR ANY INTEREST THEREIN) IS ACQUIRED OR HELD IN
VIOLATION OF THE CERTIFICATE TRANSFER RESTRICTIONS IN THE AGREEMENT, THEN THE
LAST PRECEDING TRANSFEREE THAT IS IN COMPLIANCE WITH SUCH PROVISIONS SHALL BE
RESTORED, TO THE EXTENT PERMITTED BY LAW, TO ALL RIGHTS AND OBLIGATIONS AS
CERTIFICATE OWNER THEREOF RETROACTIVE TO THE DATE OF SUCH TRANSFER OF SUCH
CERTIFICATE. NEITHER THE TRUSTEE NOR THE SECURITIES ADMINISTRATOR SHALL BE UNDER
ANY LIABILITY TO ANY PERSON FOR MAKING ANY PAYMENTS DUE ON SUCH CERTIFICATE TO
SUCH PRECEDING TRANSFEREE.

ANY PURPORTED CERTIFICATE OWNER WHOSE ACQUISITION OR HOLDING OF ANY BOOK-ENTRY
CERTIFICATE (OR INTEREST THEREIN) WAS EFFECTED IN VIOLATION OF THE CERTIFICATE
TRANSFER RESTRICTIONS IN THE AGREEMENT SHALL INDEMNIFY AND HOLD HARMLESS THE
DEPOSITOR, THE TRUSTEE, THE SECURITIES ADMINISTRATOR, THE MASTER SERVICER AND
THE TRUST FUND FROM AND AGAINST ANY AND ALL LIABILITIES, CLAIMS, COSTS OR
EXPENSES INCURRED BY SUCH PARTIES AS A RESULT OF SUCH ACQUISITION OR HOLDING.

                                     A-5-1

<PAGE>

<TABLE>
<S>                                        <C>
MANA Series 2007-OAR5, Class X             Aggregate Notional  Amount of the
                                           Class X Certificates as of the Issue
                                           Date: $[_____________]

                                           Aggregate Certificate Principal
                                           Balance of the Class X Certificate as
                                           of the Issue Date: $[___]

Pass-Through Rate: Variable(1)             Initial Notional Amount of this Class
                                           X Certificate as of the Issue Date:
                                           $[_____________]

                                           Initial Certificate Principal Balance
                                           of the Class X Certificate as of the
                                           Issue Date: $[___]

Date of Agreement and Cut-off Date:        Master Servicer and Securities
[______________]                           Administrator:
                                           Wells Fargo Bank, N.A.

First Distribution Date: [_____________]   Trustee: HSBC Bank USA, National
                                           Association

No. 07-OAR5-X-1                            Issue Date: [_____________]

                                           CUSIP:  [_____________]
                                           ISIN:  [______________]
</TABLE>

     DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
     CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
     OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
     THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.

                       MORTGAGE PASS-THROUGH CERTIFICATES
                         MANA SERIES 2007-OAR5, CLASS X

          evidencing a beneficial ownership interest in a Trust Fund (the "Trust
Fund") consisting primarily of a pool of conventional, adjustable-rate, hybrid
option, alt-A, negative amortization mortgage loans secured by first liens on
one-to-four family residential properties (the "Mortgage Loans") formed and sold
by

                     MERRILL LYNCH MORTGAGE INVESTORS, INC.

     THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN MERRILL
     LYNCH MORTGAGE INVESTORS, INC., THE MASTER SERVICER, THE SECURITIES
     ADMINISTRATOR, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER

----------
(1)  As described in the Pooling and Servicing Agreement referenced herein.

                                     A-5-2

<PAGE>

     THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
     AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

          This certifies that CEDE & CO. is the registered owner of a Percentage
Interest obtained by dividing the denomination of this Certificate by the
aggregate Certificate Principal Balance of the Class X Certificates as of the
Issue Date in that certain beneficial ownership interest evidenced by all the
Class X Certificates in the Trust Fund created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Merrill
Lynch Mortgage Investors, Inc., as depositor (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement),
Wells Fargo Bank, N.A., as master servicer (in such capacity, the "Master
Servicer") and securities administrator (in such capacity, the "Securities
Administrator") and HSBC Bank USA, National Association, as trustee (the
"Trustee"). A summary of certain of the pertinent provisions of the Agreement is
set forth hereafter. To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

          Interest on this Certificate will accrue during the period specified
in the Agreement on the Certificate Principal Balance and the Notional Amount
hereof at a per annum rate equal to the variable Pass-Through Rate described in
the Agreement.

          Pursuant to the terms of the Agreement, distributions will be made on
each Distribution Date commencing on the First Distribution Date specified
above, to the Person in whose name this Certificate is registered on the Record
Date, in an amount equal to the product of the Percentage Interest evidenced by
this Certificate and the amount required to be distributed to the Holders of
Class X Certificates on such Distribution Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Securities Administrator by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Securities
Administrator in writing at least five Business Days prior to the Record Date
immediately prior to such Distribution Date and is the registered owner of Class
X Certificates, or otherwise by check mailed by first class mail to the address
of the Person entitled thereto, as such name and address shall appear on the
Certificate Register. Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Securities Administrator of the
pendency of such distribution and only upon the presentation and surrender of
this Certificate at the office or agency appointed by the Securities
Administrator for that purpose as provided in the Agreement.

          If any Book-Entry Certificate (or any interest therein) is acquired or
held in violation of the Certificate transfer restrictions in the Agreement,
then the last preceding Transferee that is in compliance with such provisions
shall be restored, to the extent permitted by law, to all rights and obligations
as Certificate Owner thereof retroactive to the date of such Transfer of such
Certificate. Neither the Trustee nor the Securities Administrator shall be under

                                     A-5-3

<PAGE>

any liability to any Person for making any payments due on such Certificate to
such preceding Transferee.

          Any purported Certificate Owner whose acquisition or holding of any
Book-Entry Certificate (or interest therein) was effected in violation of the
Certificate transfer restrictions in the Agreement shall indemnify and hold
harmless the Depositor, the Trustee, the Securities Administrator, the Master
Servicer and the Trust Fund from and against any and all liabilities, claims,
costs or expenses incurred by such parties as a result of such acquisition or
holding.

          This Certificate is one of a duly authorized issue of Certificates
designated as Mortgage Pass-Through Certificates of the Series specified on the
face hereof (herein called the "Certificates") and representing a Percentage
Interest in the Class of Certificates specified on the face hereof equal to the
denomination specified on the face hereof divided by the aggregate Certificate
Principal Balance of the Class of Certificates specified on the face hereof.

          The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Master Servicer Collection Account and the
Distribution Account may be made from time to time for purposes other than
distributions to Holders of the Certificates, such purposes including
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans.

          The Agreement may be amended from time to time in the manner specified
in the Agreement.

          As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Securities Administrator as
provided in the Agreement, duly endorsed by, or accompanied by an assignment in
the form below or other written instrument of transfer in form satisfactory to
the Securities Administrator duly executed by, the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

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

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

          The Depositor, the Securities Administrator, the Master Servicer and
the Trustee and any agent of the Depositor, the Securities Administrator, the
Master Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all

                                     A-5-4

<PAGE>

purposes, and none of the Depositor, the Securities Administrator, the Master
Servicer, the Trustee nor any such agent shall be affected by notice to the
contrary.

          This certificate shall be governed by and construed in accordance with
the laws of the state of New York.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by the Securities Administrator and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the Distribution Date on which the Certificate Principal Balance of each
Class of Certificates has been reduced to zero, (ii) the final payment (or any
advance with respect thereto) on or other liquidation of the last Mortgage Loan
remaining in the Trust Fund and (iii) the Optional Termination of the trust fund
according to the procedures described in the Agreement.

          The recitals contained herein shall be taken as statements of the
Depositor and the Securities Administrator assumes no responsibility for their
correctness.

          Unless the certificate of authentication hereon has been executed by
the Securities Administrator, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                     A-5-5

<PAGE>

IN WITNESS WHEREOF, the Securities Administrator has caused this Certificate to
be duly executed.

                                           WELLS FARGO BANK, N.A.,
                                           as Securities Administrator

                                           By:
                                               ---------------------------------
                                               AUTHORIZED SIGNATORY

                                           Dated: [____________]

              SECURITIES ADMINISTRATOR'S CERTIFICATE AUTHENTICATION

This is one of the Certificates referred to in the within-mentioned Pooling and
Servicing Agreement.

                                           WELLS FARGO BANK, N.A.,
                                           as Authenticating Agent

                                           By:
                                               ---------------------------------
                                               AUTHORIZED SIGNATORY

                                           Dated: [_____________]

                                     A-5-6

<PAGE>

                                  ABBREVIATIONS

     The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

<TABLE>
<S>         <C>                              <C>                   <C>
TEN COM -   as tenants in common             UNIF GIFT MIN ACT -          CUSTODIAN

TEN ENT -   as tenants by the entireties                               (Cust) (Minor)

                                                                   under Uniform Gifts to
                                                                         Minors Act

JT TEN -    as joint tenants with right of                             ______________
            survivorship and not as                                        (State)
            tenants in common
</TABLE>

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ______________________________________________________________
_______________________________________________________________________________.
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

the Percentage Interest evidenced by the Mortgage Pass-Through Certificate and
hereby authorize(s) the registration of transfer of such interest to assignee on
the Certificate Register of the Trust Fund.

     I (we) further direct the Securities Administrator to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
_
______________________________________________________________________________

_______________________________________________________________________________.

Dated: ____________

                                        ----------------------------------------
                                        Signature by or on behalf of assignor

                                        ----------------------------------------
                                        Signature Guaranteed

                                     A-5-7

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to __________________________________________________________,
for the account of __________________________________________________________,
account number ___________, or, if mailed by check, to ______________________,
Applicable statements should be mailed to ___________________________________,
_____________________________________________________________________________.

This information is provided by _____________________________________________,
the assignee named above, or ________________________________________________,
as its agent.

                                     A-5-8

<PAGE>

                                    EXHIBIT B
                             MORTGAGE LOAN SCHEDULE

                             [INTENTIONALLY OMITTED]

                                      B-1
<PAGE>

                                    EXHIBIT C
                                   [RESERVED]

                                       C-1

<PAGE>

                                    EXHIBIT D

                        REQUEST FOR RELEASE OF DOCUMENTS

To: Wells Fargo Bank, N.A.
    1015 10th Avenue S.E.
    Minneapolis Minnesota 55414
    Attn: ______________________

    Re: Custodial Agreement dated as of October 1, 2007 among HSBC Bank USA,
        National Association, Merrill Lynch Mortgage Investors, Inc. and Wells
        Fargo Bank, N.A.

     In connection with the administration of the Mortgage Loans held by you as
Custodian for the Owner pursuant to the above-captioned Custodial Agreement, we
request the release, and hereby acknowledge receipt, of the Custodian's 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                   Reason: _______________________

                                        By:
                                            ------------------------------------
                                            (authorized signer)
                                        Issuer:
                                                --------------------------------
                                        Address:
                                                 -------------------------------

                                                 -------------------------------
                                        Date:
                                              ----------------------------------

                                      D-1

<PAGE>

Custodian

Wells Fargo Bank, N.A.

Please acknowledge the execution of the above request by your signature and date
below:

Please acknowledge the execution of the above request by your signature and date
below:

-------------------------------------   -------------------------
Signature                               Date

Documents returned to Custodian:

-------------------------------------   -------------------------
Custodian                               Date

                                      D-2

<PAGE>

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

                                     [DATE]

Wells Fargo Bank, N.A.
9062 Old Annapolis Road
Columbia, Maryland 21045
Attention: Corporate Trust Services - Merrill Lynch Alternative Note Asset
Trust, Series 2007-OAR5

Ladies and Gentlemen:

We propose to purchase Merrill Lynch Alternative Note Asset Trust, Series
2007-OAR5 Mortgage Pass-Through Certificates, Class A-R, described in the
Prospectus Supplement, dated October 30, 2007, and the Prospectus, dated May 15,
2007. Capitalized terms used but not defined herein shall have the meanings
assigned to them in the Pooling and Servicing Agreement dated October 1, 2007
relating to this issuance of the Merrill Lynch Alternative Note Asset Trust,
Series 2007-OAR5 Mortgage Pass-Through Certificates (the "Pooling and servicing
Agreement").

1. We certify that (a) we are not a disqualified organization and (b) we are not
purchasing such Class A-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 and covenant 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 A-R Certificate, we may incur tax liabilities in
excess of any cash flows generated by the Class A-R Certificate, (d) we intend
to pay any taxes associated with holding the Class A-R Certificate as they
become due and (e) we will not cause income from the Class A-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.

                                     E-1-1

<PAGE>

3. We acknowledge that we will be the beneficial owner of the Class A-R
Certificate and:(1)

          __________ The Class A-R Certificate will be registered in our name.

          __________ The Class A-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"), a plan
subject to Section 4975 of the Code or a plan subject to federal, state, local,
non-U.S. or other law substantively similar to the foregoing provisions of ERISA
or the Code (each, a "Plan"), and are not directly or indirectly acquiring the
Class A-R Certificate on behalf of or with any assets of a Plan.

5. We certify that (i) we are a U.S. person or (ii) we will hold the Class A-R
Certificate in connection with the conduct of a trade or business within the
United States and have furnished the transferor and the Securities Administrator
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 A-R
Certificate to us absolutely null and void and shall cause no rights in the
Class A-R Certificate to vest in us.

6. We covenant and agree that in the event that at some future time we wish to
transfer any interest in the Class A-R Certificate, (a) we will transfer such
interest in the Class A-R Certificate only to a transferee that (i) is not a
disqualified organization and is not purchasing such interest in the Class A-R
Certificate on behalf of a disqualified organization, (ii) is a U.S. person or
will hold the Class A-R Certificate in connection with the conduct of a trade or
business within the United States and will furnish us and the Securities
Administrator 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 Securities Administrator a letter in the form of this
letter (including the affidavit appended hereto) and (b) we will provide the
Securities Administrator a written statement substantially in the form of
Exhibit E-2 to the Pooling and Servicing Agreement.

7. We hereby designate _______________________ as our fiduciary to act as the
tax matters person for each of the REMICs provided for in the Pooling and
Servicing Agreement in which the Class A-R Certificate represents the residual
interest.

----------
(1)  Check appropriate box and if necessary fill in the name of the Transferee's
     nominee.

                                     E-1-2

<PAGE>

8. [TO BE INSERTED IF ASSET TEST IS RELIED ON FOR TRANSFER TO INVESTOR (SECOND
PARAGRAPH 11 IN AFFIDAVIT)] We covenant and agree that any subsequent transfer
of the Class A-R Certificate (i) 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 (ii) 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.

                                        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
                    "Investor"),

               2.   the Investor's Employer Identification number is __________,

               3.   the Investor 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 Alternative Note Asset Trust,
                    Series 2007-OAR5 Mortgage Pass-Through Certificates, Class
                    A-R Certificate on behalf of a disqualified organization or
                    any other entity,

               4.   unless Merrill Lynch Mortgage Investors, Inc. ("MLMI") has
                    consented to the transfer to the Investor, the Investor 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 Investor has historically paid its debts as they became
                    due,

               7.   the Investor intends, and believes that it will be able, to
                    continue to pay its debts as they become due in the future,

               8.   the Investor understands that, as beneficial owner of the
                    Class A-R Certificate, it may incur tax liabilities in
                    excess of any cash flows generated by the Class A-R
                    Certificate,

               9.   the Investor intends to pay any taxes associated with
                    holding the Class A-R Certificate as they become due,

               10.  the Investor 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 A-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 A-R Certificate to a foreign permanent establishment
                    or fixed base (within the meaning of an applicable income
                    tax treaty) of the Investor, and as to each of the residual
                    interests represented by the Class A-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 Investor
                    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 Investor 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 Investor 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
          Investor;]

[(11)     (A)  at the time of the transfer, and at the close of each of the
               Investor's two fiscal years preceding the Investor's fiscal year
               of transfer, the Investor's gross assets for financial reporting
               purposes exceed $100 million and its net assets for financial
               reporting purposes exceed $10 million; and

          (B)  the Investor 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 A-R Certificate (i)
               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
               (ii) 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 Investor 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 Investor to make this
declaration or to satisfy the requirements of Treasury regulation Section
1.860E-1(c)(5)(i).]

(12) The Investor has agreed in writing that it will not cause income from the
Class A-R Certificate to be attributable to a foreign permanent establishment or
fixed base (within the meaning of an applicable income tax treaty) of the
Investor 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).

                                     E-1-6

<PAGE>

IN WITNESS WHEREOF, the Investor has caused this instrument to be executed on
its behalf, pursuant to authority of its Board of Directors, by its
_____________ this ___ day of ______________, 20__.

                                        [INVESTOR]

                                        By:
                                            ------------------------------------
                                        Name:
                                        Title:

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 ______________, 20__.

NOTARY PUBLIC

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

COUNTY OF
          ---------------------------
STATE OF
         ----------------------------
My commission expires the _____ day of __________ 20__.

                                     E-1-7
<PAGE>

                                   EXHIBIT E-2
                         FORM OF TRANSFEROR CERTIFICATE

                                     [DATE]

Wells Fargo Bank, N.A.
9062 Old Annapolis Road
Columbia, MD 21045
Attention: Corporate Trust Services - Merrill Lynch Alternative Note Asset
Trust, Series 2007-OAR5

Re:  Merrill Lynch Alternative Note Asset Trust, Series 2007-OAR5

_______________________ (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 A-R Certificate referred to in the attached affidavit. In addition, the
Transferor has conducted a reasonable investigation at the time of the transfer
and has found that the Transferee has historically paid its debts as they have
come due and has found no significant evidence to indicate that the Transferee
will not continue to pay its debts as they become due.

                                        Very truly yours,

                                        [Transferor]

                                        By:
                                            ------------------------------------
                                        Name:
                                        Title:

                                      E-2-1

<PAGE>

                                   EXHIBIT F-1
                    FORM OF TRANSFEROR REPRESENTATION LETTER

                                                          ______________, 200___

Merrill Lynch Mortgage Investors, Inc.
4 World Financial Center
New York, New York 10281

Wells Fargo Bank, N.A.
9062 Old Annapolis Road
Columbia, MD 21045

     Re:  Merrill Lynch Alternative Note Asset Trust, Series 2007-OAR5
          Mortgage Pass-Through Certificates, Class [_____]

Ladies and Gentlemen:

     In connection with the sale by ___________ (the "Seller") to ________ (the
"Purchaser") of $_________ Initial Certificate Principal Balance of Mortgage
Pass-Through Certificates, Series 2007-OAR5, Class _____ (the "Certificates"),
issued pursuant to the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated as of October 1, 2007 among Merrill Lynch Mortgage
Investors, Inc., as depositor (the "Depositor"), Wells Fargo Bank, N.A. as
master servicer (in such capacity, the "Master Servicer") and securities
administrator (in such capacity, the "Securities Administrator"), and HSBC Bank
USA, National Association, as trustee (the "Trustee"). The Seller hereby
certifies, represents and warrants to, and covenants with, the Depositor and the
Securities Administrator that:

     Neither the Seller nor anyone acting on its behalf has (a) offered,
pledged, sold, disposed of or otherwise transferred any Certificate, any
interest in any Certificate or any other similar security to any person in any
manner, (b) has solicited 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) has otherwise approached or
negotiated with respect to any Certificate, any interest in any Certificate or
any other similar security with any person in any manner, (d) has made any
general solicitation by means of general advertising or in any other manner, or
(e) has taken any other action, that (as to any of (a) through (e) above) would
constitute a distribution of the Certificates under the Securities Act of 1933
(the "Act"), that would render the disposition of any Certificate a violation of
Section 5 of the Act or any state securities law, or that would require
registration or qualification pursuant thereto. The Seller will not act in any
manner set forth in the foregoing sentence with respect to any Certificate. The
Seller has not and will not sell or otherwise transfer any of the Certificates,
except in compliance with the provisions of the Pooling and Servicing Agreement.

                                      F-1-1

<PAGE>

                                        Very truly yours,

                                        ----------------------------------------
                                        (Seller)

                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                      F-1-2

<PAGE>

                                   EXHIBIT F-2
             FORM OF INVESTOR REPRESENTATION LETTER (NON-RULE 144A)

                                                               __________, 200__

Merrill Lynch Mortgage Investors, Inc.
4 World Financial Center
New York, New York 10281

Wells Fargo Bank, N.A.
9062 Old Annapolis Road
Columbia, MD 21045

          Re: Merrill Lynch Alternative Note Asset Trust, Series 2007-OAR5
              Mortgage Pass-Through Certificates, Class [ ]

Ladies and Gentlemen:

     In connection with our acquisition of the above Certificates we certify
that (a) we understand that the Certificates are not being registered under the
Securities Act of 1933, as amended (The "Act"), or any state securities laws and
are being transferred to us in a transaction that is exempt from the
registration requirements of the Act and any such laws, (b) we are an
institutional "accredited investor," as defined in Regulation D under the Act,
and have such knowledge and experience in financial and business matters that we
are capable of evaluating the merits and risks of investments in the
Certificates, (c) we have had the opportunity to ask questions of and receive
answers from the Depositor concerning the purchase of the Certificates and all
matters relating thereto or any additional information deemed necessary to our
decision to purchase the Certificates, (d) solely in the case of an ERISA
Restricted Certificate, we (i) are not an employee benefit plan or arrangement
subject to Title I of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), a plan subject to Section 4975 of the Internal Revenue Code
of 1986, as amended (the "Code") or a plan subject to any provisions under any
federal, state, local, non-U.S. or other laws or regulations that are
substantively similar to foregoing provisions of ERISA or the Code ("Similar
Law") (collectively, a "Plan"), and are not directly or indirectly acquiring
this Certificate for, on behalf of or with any assets of any such Plan, (ii) if
the Certificate has been the subject of an ERISA-Qualifying Underwriting, are an
insurance company that is acquiring the Certificate with assets of an "insurance
company general account" as defined in Section V(E) of Prohibited Transaction
Class Exemption ("PTCE") 95-60, and the acquisition and holding of the
Certificate are covered and exempt under Sections I and III of PTCE 95-60, or
(iii) solely in the case of a Definitive Certificate, shall deliver herewith an
Opinion of Counsel satisfactory to the Securities Administrator, and upon which
the Securities Administrator shall be entitled to rely, to the effect that the
acquisition and holding of this certificate by the transferee will not result in
a nonexempt prohibited transaction under ERISA or the Code, or a violation of
Similar Law, and will not subject the Depositor, the Master Servicer, the
Securities Administrator or the Trustee to any obligation in addition to those
undertaken by such entities in the Pooling and Servicing Agreement, which
Opinion of Counsel shall not be an expense of the Depositor, the Master
Servicer, the Securities Administrator or the Trustee, (e) we are acquiring the
Certificates for investment for our own account and not with a

                                      F-2-1

<PAGE>

view to any distribution of such Certificates (but without prejudice to our
right at all times to sell or otherwise dispose of the Certificates in
accordance with clause (g) below), (f) we have not offered or sold any
Certificates to, or solicited offers to buy any Certificates from, any person,
or otherwise approached or negotiated with any person with respect thereto, or
taken any other action which would result in a violation of Section 5 of the
Act, and (g) we will not sell, transfer or otherwise dispose of any Certificates
unless (1) such sale, transfer or other disposition is made pursuant to an
effective registration statement under the Act or is exempt from such
registration requirements, and if requested, we will at our expense provide an
opinion of counsel satisfactory to the addressees of this Certificate that such
sale, transfer or other disposition may be made pursuant to an exemption from
the Act, (2) The purchaser or transferee of such Certificate has executed and
delivered to you a certificate to substantially the same effect as this
certificate, and (3) The purchaser or transferee has otherwise complied with any
conditions for transfer set forth in the Pooling and Servicing Agreement.

                                        Very truly yours,

                                        ----------------------------------------
                                        Print Name of Transferee

                                        By:
                                            ------------------------------------
                                            Authorized Officer

                                      F-2-2

<PAGE>

                                   EXHIBIT F-3
                            FORM OF RULE 144A LETTER

                                                              ____________, 2007

Merrill Lynch Mortgage Investors, Inc.
4 World Financial Center
New York, New York 10281

Wells Fargo Bank, N.A.
9062 Old Annapolis Road
Columbia, MD 21045

          Re:  Merrill Lynch Alternative Note Asset Trust, Series 2007-OAR5
               Mortgage Pass-Through Certificates, Class [_____]

Ladies and Gentlemen:

     In connection with our acquisition of the above Certificates we certify
that (a) we understand that the Certificates are not being registered under the
Securities Act of 1933, as amended (The "Act"), or any state securities laws and
are being transferred to us in a transaction that is exempt from the
registration requirements of the Act and any such laws, (b) we have such
knowledge and experience in financial and business matters that we are capable
of evaluating the merits and risks of investments in the Certificates, (c) we
have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) solely in the case of an ERISA Restricted
Certificate, we (i) are not an employee benefit plan or arrangement subject to
Title I of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), a plan subject to Section 4975 of the Internal Revenue Code of 1986,
as amended (the "Code") or a plan subject to any provisions under any federal,
state, local, non-U.S. or other laws or regulations that are substantively
similar to foregoing provisions of ERISA or the Code ("Similar Law")
(collectively, a "Plan"), and are not directly or indirectly acquiring this
Certificate for, on behalf of or with any assets of any such Plan, (ii) if the
Certificate has been the subject of an ERISA-Qualifying Underwriting, are an
insurance company that is acquiring the Certificate with assets of an "insurance
company general account" as defined in Section V(E) of Prohibited Transaction
Class Exemption ("PTCE") 95-60, and the acquisition and holding of the
Certificate are covered and exempt under Sections I and III of PTCE 95-60, or
(iii) solely in the case of a Definitive Certificate, shall deliver herewith an
Opinion of Counsel satisfactory to the Securities Administrator, and upon which
the Securities Administrator shall be entitled to rely, to the effect that the
acquisition and holding of this certificate by the transferee will not result in
a nonexempt prohibited transaction under ERISA or the Code, or a violation of
Similar Law, and will not subject the Depositor, the Master Servicer, the
Securities Administrator or the Trustee to any obligation in addition to those
undertaken by such entities in the Pooling and Servicing Agreement, which
Opinion of Counsel shall not be an expense of the Depositor, the Master
Servicer, the Securities Administrator 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

                                      F-3-1

<PAGE>

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 Act or that would
render the disposition of the Certificates a violation of Section 5 of the 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 Act ("Rule 144A") and have completed either of
the forms of certification to that effect attached hereto as Annex 1 or Annex 2,
(g) we are aware that the sale to us is being made in reliance on Rule 144A, and
(h) we are acquiring the Certificates for our own account or for resale pursuant
to Rule 144A and further, understand that such Certificates may be resold,
pledged or transferred only (A) to a person reasonably believed to be a
qualified institutional buyer that purchases for its own account or for the
account of a qualified institutional buyer to whom notice is given that the
resale, pledge or transfer is being made in reliance on Rule 144A, or (B)
pursuant to another exemption from registration under the Act.

                                        Very truly yours,

                                        ----------------------------------------
                                        Print Name of Transferee

                                        By:
                                            ------------------------------------
                                            Authorized Officer

                                      F-3-2

<PAGE>

                                                          ANNEX I TO EXHIBIT F-3

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

[For Transferees Other Than Registered Investment Companies]

     The undersigned (The "Buyer") hereby certifies as follows to the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates with respect to the Certificates described therein:

     1. As indicated below, The undersigned is the President, Chief Financial
Officer, Senior Vice President or other executive officer of the Buyer.

     2. In connection with purchases by the Buyer, The Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A") because (i) The Buyer owned and/or
invested on a discretionary basis $___________(1) in securities (except for the
1 excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule 144A
and (ii) The Buyer satisfies the criteria in the category marked below.

     ___ Corporation, etc. The Buyer is a corporation (other than a bank,
savings and loan association or similar institution), Massachusetts or similar
business trust, partnership, or charitable organization described in Section
501(c)(3) of the Internal Revenue Code of 1986, as amended.

     ___ Bank. The Buyer (a) is a national bank or banking institution organized
under the laws of any State, territory or the District of Columbia, The business
of which is substantially confined to banking and is supervised by the State or
territorial banking commission or similar official or is a foreign bank or
equivalent institution, and (b) has an audited net worth of at least $25,000,000
as demonstrated in its latest annual financial statements, a copy of which is
attached hereto.

     ___ Savings and Loan. The Buyer (a) is a savings and loan association,
building and loan association, cooperative bank, homestead association or
similar institution, which is supervised and examined by a State or Federal
authority having supervision over any such institutions or is a foreign savings
and loan association or equivalent institution and (b) has an audited net worth
of at least $25,000,000 as demonstrated in its latest annual financial
statements, a copy of which is attached hereto.

     ___ Broker-dealer. The Buyer is a dealer registered pursuant to Section 15
of the Securities Exchange Act of 1934.

     ___ 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

----------
(1)  Buyer must own and/or invest on a discretionary basis at least $100,000,000
     in securities unless Buyer is a dealer, and, in that case, Buyer must own
     and/or invest on a discretionary basis at least $10,000,000 in securities.

                                      F-3-3

<PAGE>

by insurance companies and which is subject to supervision by the insurance
commissioner or a similar official or agency of a State, territory or the
District of Columbia.

     ___ State or Local Plan. The Buyer is a plan established and maintained by
a State, its political subdivisions, or any agency or instrumentality of the
State or its political subdivisions, for the benefit of its employees.

     ___ ERISA Plan. The Buyer is an employee benefit plan within the meaning of
Title I of the Employee Retirement Income Security Act of 1974.

     ___ Investment Advisor. The Buyer is an investment advisor registered under
the Investment Advisors Act of 1940.

     ___ Small Business Investment Company. Buyer is a small business investment
company licensed by the U.S. Small Business Administration under Section 301(c)
or (d) of the Small Business Investment Act of 1958.

     ___ Business Development Company. Buyer is a business development company
as defined in Section 202(a)(22) of the Investment Advisors Act of 1940.

     3. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer, (ii) securities that are part of an
unsold allotment to or subscription by the Buyer, if the Buyer is a dealer,
(iii) securities issued or guaranteed by the U.S. or any instrumentality
thereof, (iv) bank deposit notes and certificates of deposit, (v) loan
participations, (vi) repurchase agreements, (vii) securities owned but subject
to a repurchase agreement and (viii) currency, interest rate and commodity
swaps.

     4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, The Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
The securities may be valued at market. Further, in determining such aggregate
amount, The Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.

     5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.

                                      F-3-4

<PAGE>

     6. Until the date of purchase of the Rule 144A Securities, The Buyer will
notify each of the parties to which this certification is made of any changes in
the information and conclusions herein. Until such notice is given, The Buyer's
purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, The Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.

                                        ----------------------------------------
                                        Print Name of Buyer

                                        By:
                                            ------------------------------------
                                        Name:
                                        Title:

                                        Date:
                                              ----------------------------------

                                      F-3-5

<PAGE>

                                                         ANNEX II TO EXHIBIT F-3

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
           [For Transferees That are Registered Investment Companies]

     The undersigned (The "Buyer") hereby certifies as follows to the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates with respect to the Certificates described therein:

1. As indicated below, The undersigned is the President, Chief Financial Officer
or Senior Vice President of the Buyer or, if the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A") because Buyer is part of a Family of
Investment Companies (as defined below), is such an officer of the Adviser.

2. In connection with purchases by Buyer, The Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) The Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, The Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, The cost of such securities
was used, except (i) where the Buyer or the 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.

                                      F-3-6

<PAGE>

5. The Buyer is familiar with Rule 144A and understands that the parties listed
in the Rule 144A Transferee Certificate to which this certification relates are
relying and will continue to rely on the statements made herein because one or
more sales to the Buyer will be in reliance on Rule 144A. In addition, The Buyer
will only purchase for the Buyer's own account.

6. Until the date of purchase of the Certificates, The undersigned will notify
the parties listed in the Rule 144A Transferee Certificate to which this
certification relates of any changes in the information and conclusions herein.
Until such notice is given, The Buyer's purchase of the Certificates will
constitute a reaffirmation of this certification by the undersigned as of the
date of such purchase.

                                        ----------------------------------------
                                        Print Name of Buyer or Adviser

                                        By:
                                            ------------------------------------
                                        Name:
                                        Title:

                                        IF AN ADVISER:

                                        ----------------------------------------
                                        Print Name of Buyer

                                        Date:
                                              ----------------------------------

                                      F-3-7

<PAGE>

                                   EXHIBIT F-4
                     FORM OF MIDDLEMAN REPRESENTATION LETTER

Merrill Lynch Mortgage Investors, Inc.
4 World Financial Center
New York, New York 10281

Wells Fargo Bank, N.A.
9062 Old Annapolis Road
Columbia, MD 21045

     Re: Merrill Lynch Alternative Note Asset Trust, Series 2007-OAR5
         Mortgage Pass-Through Certificates, Class P

Ladies and Gentlemen:

     In connection with our acquisition of the above Certificates we certify
that we are not acquiring the Class P Certificates as a "middleman" as that term
is defined in Treasury Regulation Section 1.671-5(b)(10).

                                        Very truly yours,

                                        ----------------------------------------
                                        Print Name of Transferee

                                        By:
                                             -----------------------------------
                                             Authorized Officer

                                      F-4-1

<PAGE>

                                    EXHIBIT G
                           FORM OF CUSTODIAL AGREEMENT

                               CUSTODIAL AGREEMENT

          THIS CUSTODIAL AGREEMENT (as amended and supplemented from time to
time, the "Agreement"), dated as of [_____________], by and among HSBC BANK USA,
NATIONAL ASSOCIATION, as trustee (including its successors under the Pooling and
Servicing Agreement defined below, the "Trustee"), MERRILL LYNCH MORTGAGE
INVESTORS, INC., as company (together with any successor in interest, the
"Company"), WELLS FARGO BANK, N.A., as securities administrator and master
servicer (together with any successor in interest or successor under the Pooling
and Servicing Agreement referred to below, the "Master Servicer") and WELLS
FARGO BANK, N.A., as custodian (together with any successor in interest or any
successor appointed hereunder, the "Custodian").

                                WITNESSETH THAT:

          WHEREAS, the Company, the Master Servicer and the Trustee have entered
into a Pooling and Servicing Agreement, dated as of [_________], relating to the
issuance of Merrill Lynch Alternative Note Asset Trust, Series 2007-OAR5
Mortgage Pass-Through Certificates (as amended and supplemented from time to
time, the "Pooling and Servicing Agreement"); and

          WHEREAS, the Custodian has agreed to act as agent for the Trustee for
the purposes of receiving and holding certain documents and other instruments
delivered by the Company or the Master Servicer under the Pooling and Servicing
Agreement and the Servicers under the their respective Servicing Agreements, all
upon the terms and conditions and subject to the limitations hereinafter set
forth;

          NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, the Trustee, the Company, the
Master Servicer and the Custodian hereby agree as follows:

                                       G-1

<PAGE>

                                    ARTICLE I
                                   DEFINITIONS

          Capitalized terms used in this Agreement and not defined herein shall
have the meanings assigned in the Pooling and Servicing Agreement, unless
otherwise required by the context herein.

                                   ARTICLE II
                          CUSTODY OF MORTGAGE DOCUMENTS

          Section 2.01 Custodian to Act as Agent: Acceptance of Mortgage Files,
Attestations and Assessments of Compliance.

          (a) The Custodian, as the duly appointed agent of the Trustee for
these purposes, acknowledges (subject to any exceptions noted in the Initial
Certification referred to in Section 2.3(a)) receipt of the Mortgage Files
relating to the Mortgage Loans identified on the schedule attached hereto (the
"Mortgage Files") and declares that it holds and will hold such Mortgage Files
as agent for the Trustee, in trust, for the use and benefit of all present and
future Certificateholders.

          (b) On or before March 1st of each calendar year, beginning with March
1, 2008, the Custodian shall, at its own expense, cause a firm of independent
public accountants (who may also render other services to Custodian), which is a
member of the American Institute of Certified Public Accountants, to furnish to
the Company and the Master Servicer a report to the effect that such firm
attests to, and reports on, the assessment made by such asserting party pursuant
to Section 2.1(c) below, which report shall be made in accordance with standards
for attestation engagements issued or adopted by the Public Company Accounting
Oversight Board.

          (c) On or before March 1st of each calendar year, beginning with March
1, 2008, the Custodian shall deliver to the Company and the Master Servicer a
report regarding its assessment of compliance with the servicing criteria
identified in Exhibit Three attached hereto, as of and for the period ending the
end of the fiscal year ending no later than December 31 of the year prior to the
year of delivery of the report, with respect to asset-backed security
transactions taken as a whole in which the Custodian is performing any of the
servicing criteria specified in Exhibit Three and that are backed by the same
asset type backing such asset-backed securities. Each such report shall include
(a) a statement of the party's responsibility for assessing compliance with the
servicing criteria applicable to such party, (b) a statement that such party
used the criteria identified in Item 1122(d) of Regulation AB (Section
229.1122(d)) to assess the compliance with the applicable servicing criteria,
(c) disclosure of any material instance of noncompliance identified by such
party, and (d) a statement that a registered public accounting firm has issued
an attestation report on such party's assessment of compliance with the
applicable servicing criteria, which report shall be delivered by the Custodian
as provided in this Section 2.1(c). However, the Custodian's obligation to
provide a report on assessment of compliance or an attestation with respect to
itself and with respect to any Subcontractor shall be suspended in any year in
which the Issuing Entity's reporting obligations under the Exchange Act are
suspended.

                                       G-2

<PAGE>

          (d) The Custodian has not and shall not engage any Subcontractor which
is "participating in the servicing function" within the meaning of Item 1122 of
Regulation AB, unless such Subcontractor agrees to provide in any year in which
a Form 10-K will be filed by the Trust, no later than March 1st of such year, an
assessment and a statement of registered public accounting firm certifying its
compliance with the applicable servicing criteria in Item 1122(d) of Regulation
AB as of and for the period ending the end of the fiscal year ending no later
than December 31 of the year prior to the year of delivery of the report.
"Subcontractor" as used herein means any vendor, subcontractor or other Person
that is not responsible for the overall servicing (as "servicing" is commonly
understood by participants in the mortgage-backed securities market) of the
Mortgage Loans but performs one or more discrete functions identified in Item
1122(d) of Regulation AB with respect to the Mortgage Loans under the direction
or authority of the Custodian.

          (e) The Custodian agrees to indemnify the Company, the Master
Servicer, the Trustee, the Trust Fund and each of their respective directors,
officers, employees and agents and hold each of them harmless from and against
any losses, damages, penalties, fines, forfeitures, legal fees and expenses and
related costs, judgments, and any other costs, fees and expenses that any of
them may sustain arising out of or based upon the engagement of any
Subcontractor in violation of Section 2.1(d) or any failure by the Custodian to
deliver any information, report, certification, accountants' letter or other
material when and as required under this Agreement, including any report under
Sections 2.1(b) or 2.1(c).

          Section 2.02 Reserved.

          Section 2.03 Review of Mortgage Files.

          (a) On or prior to the Closing Date, the Custodian agrees, for the
benefit of Certificateholders, to review, in accordance with the provisions of
Section 2.02 of the Pooling and Servicing Agreement, each such document, and
shall deliver to the Company and the Trustee an Initial Certification in the
form annexed hereto as Exhibit One evidencing receipt (subject to any exceptions
noted therein) of a Mortgage File for each of the Mortgage Loans listed on the
Schedule attached as Exhibit B to the Pooling and Servicing Agreement (the
"Mortgage Loan Schedule") and certifying that all such documents have been
executed and received and that such documents relate to the Mortgage Loans
identified on the Mortgage Loan Schedule, except for any exceptions listed on
Schedule A attached to such Initial Certification. The Custodian shall be under
no duty or obligation to inspect, review or examine said documents, instruments,
certificates or other papers to determine that the same are genuine,
enforceable, or appropriate for the represented purpose or that they have
actually been recorded or that they are other than what they purport to be on
their face.

          (b) Not later than 180 days after the Closing Date, the Custodian
shall review the Mortgage Files as provided in Section 2.02 of the Pooling and
Servicing Agreement and deliver to the Company and the Trustee a Final
Certification in the form annexed hereto as Exhibit Two evidencing the
completeness of the Mortgage Files (subject to any exceptions noted therein).

                                       G-3

<PAGE>

          (c) In reviewing the Mortgage Files as provided herein and in the
Pooling and Servicing Agreement, the Custodian shall make no representation as
to and shall not be responsible to verify (i) the validity, legality,
enforceability, due authorization, recordability, sufficiency or genuineness of
any of the documents included in any Mortgage File or (ii) the collectibility,
insurability, effectiveness or suitability of any of the documents in any
Mortgage File.

          Upon receipt of written request from the Trustee, the Custodian shall
as soon as practicable supply the Trustee with a list of all of the documents
relating to the Mortgage Loans then contained in the Mortgage Files.

          Section 2.04 Notification of Breaches of Representations and
Warranties. Upon discovery by the Custodian of a breach of any representation or
warranty made by the Company as set forth in the Pooling and Servicing Agreement
with respect to a Mortgage Loan relating to a Mortgage File, the Custodian shall
give prompt written notice to the Company, the related Servicer and the Trustee.

          Section 2.05 Custodian to Cooperate: Release of Mortgage Files. Upon
receipt of written notice from the Master Servicer that the Mortgage Loan Seller
has repurchased a Mortgage Loan pursuant to Article II of the Pooling and
Servicing Agreement, and that the purchase price therefor has been deposited in
the Master Servicer Collection Account or the Distribution Account, then the
Custodian agrees to promptly release to the Mortgage Loan Seller the related
Mortgage File.

          Upon the Custodian's receipt of a request for release (a "Request for
Release") substantially in the form of Exhibit D to the Pooling and Servicing
Agreement signed by a Servicing Officer of the related Servicer stating that it
has received payment in full of a Mortgage Loan or that payment in full will be
escrowed in a manner customary for such purposes, the Custodian agrees promptly
to release to such Servicer the related Mortgage File. The Company shall deliver
to the Custodian and the Custodian agrees to accept the Mortgage Note and other
documents constituting the Mortgage File with respect to any Substitute Mortgage
Loan.

          From time to time as is appropriate for the servicing or foreclosure
of any Mortgage Loan, including, for this purpose, collection under any Primary
Mortgage Insurance Policy, the related Servicer shall deliver to the Custodian a
Request for Release signed by a Servicing Officer requesting that possession of
all of the Mortgage File be released to such Servicer and certifying as to the
reason for such release and that such release will not invalidate any insurance
coverage provided in respect of the Mortgage Loan under any of the Insurance
Policies. Upon receipt of the foregoing, the Custodian shall deliver the
Mortgage File to such Servicer. The related Servicer shall cause each Mortgage
File or any document therein so released to be returned to the Custodian when
the need therefore by such Servicer no longer exists, unless (i) the Mortgage
Loan has been liquidated and the Liquidation Proceeds relating to the Mortgage
Loan have been deposited in the Master Servicer Collection Account or the
Distribution Account or (ii) the Mortgage File or such document has been
delivered to an attorney, or to a public trustee or other public official as
required by law, for purposes of initiating or pursuing legal action or other
proceedings for the foreclosure of the Mortgaged

                                       G-4

<PAGE>

Property either judicially or non-judicially, and the related Servicer has
delivered to the Custodian a certificate of a Servicing Officer certifying as to
the name and address of the Person to which such Mortgage File or such document
was delivered and the purpose or purposes of such delivery.

          At any time that a Servicer is required to deliver to the Custodian a
Request for Release, such Servicer shall deliver two copies of the Request for
Release if delivered in hard copy or such Servicer may furnish such Request for
Release electronically to the Custodian, in which event the Servicing Officer
transmitting the same shall be deemed to have signed the Request for Release. In
connection with any Request for Release of a Mortgage File because of a
repurchase of a Mortgage Loan, the related Servicer shall send to the Trustee an
assignment of mortgage, without recourse, representation or warranty from the
Trustee to the Mortgage Loan Seller and the related Mortgage Note which shall be
endorsed without recourse, representation or warranty by the Trustee and the
Trustee shall forward such documents to the Mortgage Loan Seller. In connection
with any Request for Release of a Mortgage File because of the payment in full
of a Mortgage Loan, the related Servicer shall send to the Trustee a certificate
of satisfaction or other similar instrument to be executed by or on behalf of
the Trustee and returned to such Servicer.

          Section 2.06 Assumption Agreements. In the event that any assumption
agreement or substitution of liability agreement is entered into with respect to
any Mortgage Loan subject to this Agreement in accordance with the terms and
provisions of the Pooling and Servicing Agreement, the Master Servicer, to the
extent provided in the related Servicing Agreement, shall cause the related
Servicer to notify the Custodian that such assumption or substitution agreement
has been completed by forwarding to the Custodian the original of such
assumption or substitution agreement, which shall be added to the related
Mortgage File and, for all purposes, shall be considered a part of such Mortgage
File to the same extent as all other documents and instruments constituting
parts thereof.

                                   ARTICLE III
                            CONCERNING THE CUSTODIAN

          Section 3.01 Custodian a Bailee and Agent of the Trustee. With respect
to each Mortgage Note, Mortgage and other documents constituting each Mortgage
File which are delivered to the Custodian, the Custodian is exclusively the
bailee and agent of the Trustee and has no instructions to hold any Mortgage
Note or Mortgage for the benefit of any person other than the Trustee and the
Certificateholders and undertakes to perform such duties and only such duties as
are specifically set forth in this Agreement. Except upon compliance with the
provisions of Section 2.5 of this Agreement, no Mortgage Note, Mortgage or
Mortgage File shall be delivered by the Custodian to the Company, the Servicer
or the Master Servicer or otherwise released from the possession of the
Custodian.

          Section 3.02 Reserved.

          Section 3.03 Custodian May Own Certificates. The Custodian in its
individual or any other capacity may become the owner or pledgee of Certificates
with the same rights it would have if it were not Custodian.

                                       G-5

<PAGE>

          Section 3.04 Master Servicer to Pay Custodian's Fees and Expenses. The
Master Servicer covenants and agrees to pay to the Custodian from time to time,
and the Custodian shall be entitled to, reasonable compensation for all services
rendered by it in the exercise and performance of any of the powers and duties
hereunder of the Custodian, and the Master Servicer will pay or reimburse the
Custodian upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Custodian in accordance with any of the
provisions of this Agreement (including the reasonable compensation and the
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 or to the extent that such cost or expense is
indemnified by the Company pursuant to the Pooling and Servicing Agreement.

          Section 3.05 Custodian May Resign; Trustee May Remove Custodian. The
Custodian may resign from the obligations and duties hereby imposed upon it as
such obligations and duties relate to its acting as Custodian of the Mortgage
Loans. Upon receiving such notice of resignation, the Trustee shall either take
custody of the Mortgage Files itself and give prompt notice thereof to the
Company, the Master Servicer and the Custodian, or promptly appoint a successor
Custodian by written instrument, in duplicate, one copy of which instrument
shall be delivered to the resigning Custodian and one copy to the successor
Custodian. If the Trustee shall not have taken custody of the Mortgage Files and
no successor Custodian shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Custodian may petition any court of competent jurisdiction for the
appointment of a successor Custodian.

          The Trustee may remove the Custodian at any time with the consent of
the Master Servicer. In such event, the Trustee shall appoint, or petition a
court of competent jurisdiction to appoint, a successor Custodian hereunder. Any
successor Custodian shall be a depository institution subject to supervision or
examination by federal or state authority, shall be able to satisfy the other
requirements contained in Section 3.7 and shall be unaffiliated with the
Servicer or the Company.

          Any resignation or removal of the Custodian and appointment of a
successor Custodian pursuant to any of the provisions of this Section 3.5 shall
become effective upon acceptance of appointment by the successor Custodian. The
Trustee shall give prompt notice to the Company and the Master Servicer of the
appointment of any successor Custodian. No successor Custodian shall be
appointed by the Trustee without the prior approval of the Company and the
Master Servicer.

          Section 3.06 Merger or Consolidation of Custodian. Any Person into
which the Custodian may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Custodian shall be a party, or any Person succeeding
to the business of the Custodian, shall be the successor of the Custodian
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.

          Section 3.07 Representations of the Custodian. The Custodian hereby
represents that it is a depository institution subject to supervision or
examination by a federal or

                                       G-6

<PAGE>

state authority, has a combined capital and surplus of at least $15,000,000 and
is qualified to do business in the jurisdictions in which it will hold any
Mortgage File.

                                   ARTICLE IV
                            MISCELLANEOUS PROVISIONS

          Section 4.01 Notices. All notices, requests, consents, demands and
other communications required under this Agreement or pursuant to any other
instrument or document delivered hereunder shall be in writing and, unless
otherwise specifically provided, may be delivered personally, by telegram or
telex, or by registered or certified mail, postage prepaid, return receipt
requested, at the addresses specified on the signature page hereof (unless
changed by the particular party whose address is stated herein by similar notice
in writing), in which case the notice will be deemed delivered when received.

          Section 4.02 Amendments. No modification or amendment of or supplement
to this Agreement shall be valid or effective unless the same is in writing and
signed by all parties hereto, and neither the Company, the Master Servicer nor
the Trustee shall enter into any amendment hereof except as permitted by the
Pooling and Servicing Agreement. The Trustee shall give prompt notice to the
Custodian of any amendment or supplement to the Pooling and Servicing Agreement
and furnish the Custodian with written copies thereof.

          Section 4.03 GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED A CONTRACT
MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

          Section 4.04 Recordation of Agreement. To the extent permitted by
applicable law, this Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the properties subject to the Mortgages are
situated, and in any other appropriate public recording office or elsewhere,
such recordation to be effected by the Company and at the Trust's expense on
direction by the Trustee, but only upon direction accompanied by an Opinion of
Counsel (which shall be at the expense of the party requesting such recordation
and in no event at the expense of the Trustee) reasonably satisfactory to the
Company to the effect that the failure to effect such recordation is likely to
materially and adversely affect the interests of the Certificateholders.

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

          Section 4.05 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.

                                       G-7

<PAGE>

          IN WITNESS WHEREOF, this Agreement is executed as of the date first
above written.

                                        HSBC BANK USA, NATIONAL ASSOCIATION, as
                                        Trustee

                                        By:
                                            ------------------------------------
                                        Name:
                                        Title:

                                        MERRILL LYNCH MORTGAGE INVESTORS, INC.

                                        By:
                                            ------------------------------------
                                        Name:
                                        Title:

                                        WELLS FARGO BANK, N.A.,
                                        as Master Servicer

                                        By:
                                            ------------------------------------
                                        Name:
                                        Title:

                                        WELLS FARGO BANK, N.A.,
                                        as Custodian

                                        By:
                                            ------------------------------------
                                        Name:
                                        Title:

                                       G-8

<PAGE>

                     EXHIBIT ONE TO THE CUSTODIAL AGREEMENT

                     FORM OF CUSTODIAN INITIAL CERTIFICATION
                                October __, 2007

Merrill Lynch Mortgage Investors, Inc.
250 Vesey Street
4 World Financial Center, 10th Floor
New York, New York 10080

HSBC Bank USA, National Association
452 Fifth Avenue
New York, NY 10018

     Re: Pooling and Servicing Agreement, dated as of October 1, 2007, among
         Merrill Lynch Mortgage Investors, Inc., as depositor, Wells Fargo
         Bank, N.A., as master servicer and securities administrator, and HSBC
         Bank USA, National Association, as trustee, relating to the Merrill
         Lynch Alternative Note Asset Trust, Series 2007-OAR5 Mortgage
         Pass-Through Certificates

Ladies and Gentlemen:

     Attached is the Custodian's preliminary exception report delivered in
accordance with Section 2.02 of the referenced Pooling and Servicing Agreement
(the "Pooling and Servicing Agreement"). Capitalized terms used but not
otherwise defined herein shall have the meanings set forth in the Pooling and
Servicing Agreement.

     The Custodian has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Custodian makes no representations as to
(i) the validity, legality, sufficiency, enforceability or genuineness of any of
the documents contained in the Mortgage File pertaining to the Mortgage Loans
identified on the Mortgage Loan Schedule, (ii) the collectability, insurability,
effectiveness or suitability of any such Mortgage Loan or (iii) the existence of
any assumption, modification, written assurance, or substitution agreement, with
respect to any Mortgage File if no such documents appear in the Mortgage File
delivered to the Custodian.

                                        WELLS FARGO BANK, N.A.,
                                        as Custodian

                                        By:
                                            ------------------------------------
                                        Name:
                                        Title:

                                       G-9

<PAGE>

                     EXHIBIT TWO TO THE CUSTODIAL AGREEMENT

                      FORM OF CUSTODIAN FINAL CERTIFICATION

                                                            ____________, 200[_]

Merrill Lynch Mortgage Investors, Inc.
250 Vesey Street
4 World Financial Center, 10th Floor
New York, New York 10080
Attention: ____________________

HSBC Bank USA, National Association
452 Fifth Avenue
New York, NY 10018

     Re:  Pooling and Servicing Agreement, dated as of October 1, 2007, among
          Merrill Lynch Mortgage Investors, Inc., as depositor, Wells Fargo
          Bank, N.A., as master servicer and securities administrator and HSBC
          Bank USA, National Association, as trustee, relating to the Merrill
          Lynch Alternative Note Asset Trust, Series 2007-OAR5 Mortgage
          Pass-Through Certificates

Ladies and Gentlemen:

     In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, hereby certifies that, except as noted on
the Schedule of Exceptions attached hereto, for each Mortgage Loan listed on the
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or listed on
the attachment hereto), it has received a complete Mortgage File which includes
the documents required to be included in the Mortgage File as set forth in the
Pooling and Servicing Agreement.

     The undersigned has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The undersigned makes no
representation as to: (i) the validity, legality, sufficiency, enforceability or
genuineness of any documents contained in any Mortgage File for any of the
Mortgage Loans listed on the Mortgage Loan Schedule to the Pooling and Servicing
Agreement, (ii) the collectability, insurability, effectiveness or suitability
of any such Mortgage Loan or (iii) whether any Mortgage File should include any
flood insurance policy, any rider, addends, surety or guaranty agreement, power
of attorney, buy down agreement, assumption agreement, modification agreement,
written assurance or substitution agreement.

                                      G-10

<PAGE>

     Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.

                                        WELLS FARGO BANK, N.A.,
                                        as Custodian

                                        By:
                                            ------------------------------------
                                        Name:

                                      G-11
<PAGE>

                    EXHIBIT THREE TO THE CUSTODIAL AGREEMENT

      FORM OF CERTIFICATION REGARDING SERVICING CRITERIA TO BE ADDRESSED IN
                         REPORT ON ASSESSMENT COMPLIANCE

     The assessment of compliance to be delivered by Wells Fargo Bank shall
       address, at a minimum, the criteria identified below as "Applicable
                              Servicing Criteria":

<TABLE>
<CAPTION>
                               SERVICING CRITERIA
--------------------------------------------------------------------------------   APPLICABLE SERVICING
REFERENCE                                    CRITERIA                                    CRITERIA
---------         --------------------------------------------------------------   --------------------
<S>               <C>                                                              <C>
                                 GENERAL SERVICING CONSIDERATIONS

1122(d)(1)(i)     Policies and procedures are instituted to monitor any
                  performance or other triggers and events of default in
                  accordance with the transaction agreements.

1122(d)(1)(ii)    If any material servicing activities are outsourced to third
                  parties, policies and procedures are instituted to monitor the
                  third party's performance and compliance with such servicing
                  activities.

1122(d)(1)(iii)   Any requirements in the transaction agreements to maintain a
                  back-up servicer for the mortgage loans are maintained.

1122(d)(1)(iv)    A fidelity bond and errors and omissions policy is in effect
                  on the party participating in the servicing function
                  throughout the reporting period in the amount of coverage
                  required by and otherwise in accordance with the terms of the
                  transaction agreements.

                                CASH COLLECTION AND ADMINISTRATION

1122(d)(2)(i)     Payments on mortgage loans are deposited into the appropriate
                  custodial bank accounts and related bank clearing accounts no
                  more than two business days following receipt, or such other
                  number of days specified in the transaction agreements.

1122(d)(2)(ii)    Disbursements made via wire transfer on behalf of an obligor
                  or to an investor are made only by authorized personnel.

1122(d)(2)(iii)   Advances of funds or guarantees regarding collections, cash
                  flows or distributions, and any interest or other fees charged
                  for such advances, are made, reviewed and approved as
                  specified in the transaction agreements.

1122(d)(2)(iv)    The related accounts for the transaction, such as cash
                  reserve accounts or accounts established as a form of
                  overcollateralization, are separately maintained (e.g., with
                  respect to commingling of cash) as set forth in the
                  transaction agreements.

1122(d)(2)(v)     Each custodial account is maintained at a federally insured
                  depository institution as set forth in the transaction
                  agreements. For purposes of this criterion, "federally insured
                  depository institution" with respect to a foreign financial
                  institution means a foreign financial institution that meets
                  the requirements of Rule 13k-1(b)(1) of the Securities
                  Exchange Act.

1122(d)(2)(vi)    Unissued checks are safeguarded so as to prevent unauthorized
                  access.

1122(d)(2)(vii)   Reconciliations are prepared on a monthly basis for all
                  asset-backed securities related bank accounts, including
                  custodial accounts and related bank clearing accounts. These
                  reconciliations are (A) mathematically accurate; (B) prepared
                  within 30 calendar days after the bank statement cutoff date,
                  or such other number of days specified in the transaction
                  agreements; (C) reviewed and approved by someone other than
                  the person who prepared the reconciliation; and (D) contain
                  explanations for reconciling items. These reconciling items
                  are resolved within 90 calendar days of their original
                  identification, or such other number of days specified in the
                  transaction agreements.
</TABLE>

                                      G-12

<PAGE>

<TABLE>
<CAPTION>
                               SERVICING CRITERIA
--------------------------------------------------------------------------------   APPLICABLE SERVICING
REFERENCE                                    CRITERIA                                    CRITERIA
---------         --------------------------------------------------------------   --------------------
<S>               <C>                                                              <C>
                                INVESTOR REMITTANCES AND REPORTING

1122(d)(3)(i)     Reports to investors, including those to be filed with the
                  Commission, are maintained in accordance with the transaction
                  agreements and applicable Commission requirements.
                  Specifically, such reports (A) are prepared in accordance with
                  timeframes and other terms set forth in the transaction
                  agreements; (B) provide information calculated in accordance
                  with the terms specified in the transaction agreements; (C)
                  are filed with the Commission as required by its rules and
                  regulations; and (D) agree with investors' or the trustee's
                  records as to the total unpaid principal balance and number of
                  mortgage loans serviced by the Servicer.

1122(d)(3)(ii)    Amounts due to investors are allocated and remitted in
                  accordance with timeframes, distribution priority and other
                  terms set forth in the transaction agreements.

1122(d)(3)(iii)   Disbursements made to an investor are posted within two
                  business days to the Servicer's investor records, or such
                  other number of days specified in the transaction agreements.

1122(d)(3)(iv)    Amounts remitted to investors per the investor reports agree
                  with cancelled checks, or other form of payment, or custodial
                  bank statements.

                                     POOL ASSET ADMINISTRATION

1122(d)(4)(i)     Collateral or security on mortgage loans is maintained as
                  required by the transaction agreements or related mortgage
                  loan documents.                                                               X

1122(d)(4)(ii)    Mortgage loan and related documents are safeguarded as
                  required by the transaction agreements.                                        X

1122(d)(4)(iii)   Any additions, removals or substitutions to the asset pool are
                  made, reviewed and approved in accordance with any conditions
                  or requirements in the transaction agreements.

1122(d)(4)(iv)    Payments on mortgage loans, including any payoffs, made in
                  accordance with the related mortgage loan documents are posted
                  to the Servicer's obligor records maintained no more than two
                  business days after receipt, or such other number of days
                  specified in the transaction agreements, and allocated to
                  principal, interest or other items (e.g., escrow) in
                  accordance with the related mortgage loan documents.

1122(d)(4)(v)     The Servicer's records regarding the mortgage loans agree with
                  the Servicer's records with respect to an obligor's unpaid
                  principal balance.

1122(d)(4)(vi)    Changes with respect to the terms or status of an obligor's
                  mortgage loans (e.g., loan modifications or re-agings) are
                  made, reviewed and approved by authorized personnel in
                  accordance with the transaction agreements and related pool
                  asset documents.

1122(d)(4)(vii)   Loss mitigation or recovery actions (e.g., forbearance plans,
                  modifications and deeds in lieu of foreclosure, foreclosures
                  and repossessions, as applicable) are initiated, conducted and
                  concluded in accordance with the timeframes or other
                  requirements established by the transaction agreements.

1122(d)(4)(viii)  Records documenting collection efforts are maintained during
                  the period a mortgage loan is delinquent in accordance with
                  the transaction agreements. Such records are maintained on at
                  least a monthly basis, or such other period specified in the
                  transaction agreements, and describe the entity's activities
                  in monitoring delinquent mortgage loans including, for
                  example, phone calls, letters and payment rescheduling plans
                  in cases where delinquency is deemed temporary (e.g., illness
                  or unemployment).

1122(d)(4)(ix)    Adjustments to interest rates or rates of return for mortgage
                  loans with variable rates are computed based on the related
                  mortgage loan documents.
</TABLE>

                                      G-13

<PAGE>

<TABLE>
<CAPTION>
                               SERVICING CRITERIA
--------------------------------------------------------------------------------   APPLICABLE SERVICING
REFERENCE                                    CRITERIA                                    CRITERIA
---------         --------------------------------------------------------------   --------------------
<S>               <C>                                                              <C>
1122(d)(4)(x)     Regarding any funds held in trust for an obligor (such as
                  escrow accounts): (A) such funds are analyzed, in accordance
                  with the obligor's mortgage loan documents, on at least an
                  annual basis, or such other period specified in the
                  transaction agreements; (B) interest on such funds is paid, or
                  credited, to obligors in accordance with applicable mortgage
                  loan documents and state laws; and (C) such funds are returned
                  to the obligor within 30 calendar days of full repayment of
                  the related mortgage loans, or such other number of days
                  specified in the transaction agreements.

1122(d)(4)(xi)    Payments made on behalf of an obligor (such as tax or
                  insurance payments) are made on or before the related penalty
                  or expiration dates, as indicated on the appropriate bills or
                  notices for such payments, provided that such support has been
                  received by the servicer at least 30 calendar days prior to
                  these dates, or such other number of days specified in the
                  transaction agreements.

1122(d)(4)(xii)   Any late payment penalties in connection with any payment to
                  be made on behalf of an obligor are paid from the servicer's
                  funds and not charged to the obligor, unless the late payment
                  was due to the obligor's error or omission.

1122(d)(4)(xiii)  Disbursements made on behalf of an obligor are posted within
                  two business days to the obligor's records maintained by the
                  servicer, or such other number of days specified in the
                  transaction agreements.

1122(d)(4)(xiv)   Delinquencies, charge-offs and uncollectible accounts are
                  recognized and recorded in accordance with the transaction
                  agreements.

1122(d)(4)(xv)    Any external enhancement or other support, identified in Item
                  1114(a)(1) through (3) or Item 1115 of Regulation AB, is
                  maintained as set forth in the transaction agreements.
</TABLE>

                                      G-14
<PAGE>

                                    EXHIBIT H

                                   [RESERVED]

                                       H-1

<PAGE>

                                    EXHIBIT I
                ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
                      COUNTRYWIDE HOME LOANS SERVICING LP.

                               [SEE EXHIBIT 99.3]

                                       I-1

<PAGE>

                                    EXHIBIT J
                    FORM OF MORTGAGE LOAN PURCHASE AGREEMENT

                               [SEE EXHIBIT 99.1]

                                       J-1

<PAGE>

                                    EXHIBIT K

                       SERVICING CRITERIA TO BE ADDRESSED
                           IN ASSESSMENT OF COMPLIANCE
                          (RMBS UNLESS OTHERWISE NOTED)

     KEY: X - obligation

WHERE THERE ARE MULTIPLE CHECKS FOR CRITERIA THE ATTESTING PARTY WILL IDENTIFY
IN ITS MANAGEMENT ASSERTION THAT IT IS ATTESTING ONLY TO THE PORTION OF THE
DISTRIBUTION CHAIN IT IS RESPONSIBLE FOR IN THE RELATED TRANSACTION AGREEMENTS.
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,
2007, AMONG MERRILL LYNCH MORTGAGE INVESTORS, INC., AS DEPOSITOR, WELLS FARGO
BANK, N.A., AS MASTER SERVICER AND SECURITIES ADMINISTRATOR, AND HSBC BANK USA,
NATIONAL ASSOCIATION, AS TRUSTEE.

<TABLE>
<CAPTION>
                                                                    SECURITIES     MASTER
REG AB REFERENCE                SERVICING CRITERIA                ADMINISTRATOR   SERVICER
----------------   --------------------------------------------   -------------   --------
<S>                <C>                                            <C>             <C>
                        GENERAL SERVICING CONSIDERATIONS

1122(d)(1)(i)      Policies and procedures are instituted to            X            X
                   monitor any performance or other triggers
                   and events of default in accordance with the
                   transaction agreements.

1122(d)(1)(ii)     If any material servicing activities are             X            X
                   outsourced to third parties, policies and
                   procedures are instituted to monitor the
                   third party's performance and compliance
                   with such servicing activities.

1122(d)(1)(iii)    Any requirements in the transaction                  N/A          N/A
                   agreements to maintain a back-up servicer
                   for the Pool Assets are maintained.

1122(d)(1)(iv)     A fidelity bond and errors and omissions                          X
                   policy is in effect on the party
                   participating in the servicing function
                   throughout the reporting period in the
                   amount of coverage required by and otherwise
                   in accordance with the terms of the
                   transaction agreements.

                       CASH COLLECTION AND ADMINISTRATION

1122(d)(2)(i)      Payments on pool assets are deposited into           X            X
                   the appropriate custodial bank accounts and
                   related bank clearing accounts no more than
                   two business days following receipt, or such
                   other number of days specified in the
                   transaction agreements.

1122(d)(2)(ii)     Disbursements made via wire transfer on              X            X
                   behalf of an obligor or to an investor are
                   made only by authorized personnel.

1122(d)(2)(iii)    Advances of funds or guarantees regarding                         X
                   collections, cash flows or distributions,
                   and any interest or other fees charged for
                   such advances, are made, reviewed and
                   approved as specified in the transaction
                   agreements.

1122(d)(2)(iv)     The related accounts for the transaction,            X            X
                   such as cash reserve accounts or accounts
                   established as a form of over
                   collateralization, are separately maintained
                   (e.g., with respect to commingling of cash)
                   as set forth in the transaction agreements.
</TABLE>

                                       K-1

<PAGE>

<TABLE>
<CAPTION>
                                                                    SECURITIES     MASTER
REG AB REFERENCE                SERVICING CRITERIA                ADMINISTRATOR   SERVICER
----------------   --------------------------------------------   -------------   --------
<S>                <C>                                            <C>             <C>
1122(d)(2)(v)      Each custodial account is maintained at a            X            X
                   federally insured depository institution as
                   set forth in the transaction agreements. For
                   purposes of this criterion, "federally
                   insured depository institution" with respect
                   to a foreign financial institution means a
                   foreign financial institution that meets the
                   requirements of Rule 13k-1(b)(1) of the
                   Securities Exchange Act.

1122(d)(2)(vi)     Unissued checks are safeguarded so as to
                   prevent unauthorized access.

1122(d)(2)(vii)    Reconciliations are prepared on a monthly            X            X
                   basis for all asset-backed securities
                   related bank accounts, including custodial
                   accounts and related bank clearing accounts.
                   These reconciliations are (A) mathematically
                   accurate; (B) prepared within 30 calendar
                   days after the bank statement cutoff date,
                   or such other number of days specified in
                   the transaction agreements; (C) reviewed and
                   approved by someone other than the person
                   who prepared the reconciliation; and (D)
                   contain explanations for reconciling items.
                   These reconciling items are resolved within
                   90 calendar days of their original
                   identification, or such other number of days
                   specified in the transaction agreements.

                       INVESTOR REMITTANCES AND REPORTING

1122(d)(3)(i)      Reports to investors, including those to be          X            X
                   filed with the Commission, are maintained in
                   accordance with the transaction agreements
                   and applicable Commission requirements.
                   Specifically, such reports (A) are prepared
                   in accordance with timeframes and other
                   terms set forth in the transaction
                   agreements; (B) provide information
                   calculated in accordance with the terms
                   specified in the transaction agreements; (C)
                   are filed with the Commission as required by
                   its rules and regulations; and (D) agree
                   with investors' or the trustee's records as
                   to the total unpaid principal balance and
                   number of Pool Assets serviced by the
                   Servicer.

1122(d)(3)(ii)     Amounts due to investors are allocated and           X            X
                   remitted in accordance with timeframes,
                   distribution priority and other terms set
                   forth in the transaction agreements.

1122(d)(3)(iii)    Disbursements made to an investor are posted         X            X
                   within two business days to the Servicer's
                   investor records, or such other number of
                   days specified in the transaction
                   agreements.

1122(d)(3)(iv)     Amounts remitted to investors per the                X            X
                   investor reports agree with cancelled
                   checks, or other form of payment, or
                   custodial bank statements.

                            POOL ASSET ADMINISTRATION

1122(d)(4)(i)      Collateral or security on pool assets is
                   maintained as required by the transaction
                   agreements or related pool asset documents.

1122(d)(4)(ii)     Pool assets and related documents are
                   safeguarded as required by the transaction
                   agreements

1122(d)(4)(iii)    Any additions, removals or substitutions to
                   the asset pool are made, reviewed and
                   approved in accordance with any conditions
                   or requirements in the transaction
                   agreements.
</TABLE>

                                       K-2

<PAGE>

<TABLE>
<CAPTION>
                                                                    SECURITIES     MASTER
REG AB REFERENCE                SERVICING CRITERIA                ADMINISTRATOR   SERVICER
----------------   --------------------------------------------   -------------   --------
<S>                <C>                                            <C>             <C>
1122(d)(4)(iv)     Payments on pool assets, including any
                   payoffs, made in accordance with the related
                   pool asset documents are posted to the
                   Servicer's obligor records maintained no
                   more than two business days after receipt,
                   or such other number of days specified in
                   the transaction agreements, and allocated to
                   principal, interest or other items (e.g.,
                   escrow) in accordance with the related pool
                   asset documents.

1122(d)(4)(v)      The Servicer's records regarding the pool
                   assets agree with the Servicer's records
                   with respect to an obligor's unpaid
                   principal balance.

1122(d)(4)(vi)     Changes with respect to the terms or status
                   of an obligor's pool assets (e.g., loan
                   modifications or re-agings) are made,
                   reviewed and approved by authorized
                   personnel in accordance with the transaction
                   agreements and related pool asset documents.

1122(d)(4)(vii)    Loss mitigation or recovery actions (e.g.,
                   forbearance plans, modifications and deeds
                   in lieu of foreclosure, foreclosures and
                   repossessions, as applicable) are initiated,
                   conducted and concluded in accordance with
                   the timeframes or other requirements
                   established by the transaction agreements.

1122(d)(4)(viii)   Records documenting collection efforts are
                   maintained during the period a pool asset is
                   delinquent in accordance with the
                   transaction agreements. Such records are
                   maintained on at least a monthly basis, or
                   such other period specified in the
                   transaction agreements, and describe the
                   entity's activities in monitoring delinquent
                   pool assets including, for example, phone
                   calls, letters and payment rescheduling
                   plans in cases where delinquency is deemed
                   temporary (e.g., illness or unemployment).

1122(d)(4)(ix)     Adjustments to interest rates or rates of
                   return for pool assets with variable rates
                   are computed based on the related pool asset
                   documents.

1122(d)(4)(x)      Regarding any funds held in trust for an
                   obligor (such as escrow accounts): (A) such
                   funds are analyzed, in accordance with the
                   obligor's pool asset documents, on at least
                   an annual basis, or such other period
                   specified in the transaction agreements; (B)
                   interest on such funds is paid, or credited,
                   to obligors in accordance with applicable
                   pool asset documents and state laws; and (C)
                   such funds are returned to the obligor
                   within 30 calendar days of full repayment of
                   the related pool assets, or such other
                   number of days specified in the transaction
                   agreements.

1122(d)(4)(xi)     Payments made on behalf of an obligor (such
                   as tax or insurance payments) are made on or
                   before the related penalty or expiration
                   dates, as indicated on the appropriate bills
                   or notices for such payments, provided that
                   such support has been received by the
                   servicer at least 30 calendar days prior to
                   these dates, or such other number of days
                   specified in the transaction agreements.

1122(d)(4)(xii)    Any late payment penalties in connection
                   with any payment to be made on behalf of an
                   obligor are paid from the Servicer's funds
                   and not charged to the obligor, unless the
                   late payment was due to the obligor's error
                   or omission.
</TABLE>

                                       K-3

<PAGE>

<TABLE>
<CAPTION>
                                                                    SECURITIES     MASTER
REG AB REFERENCE                SERVICING CRITERIA                ADMINISTRATOR   SERVICER
----------------   --------------------------------------------   -------------   --------
<S>                <C>                                            <C>             <C>
1122(d)(4)(xiii)   Disbursements made on behalf of an obligor
                   are posted within two business days to the
                   obligor's records maintained by the
                   servicer, or such other number of days
                   specified in the transaction agreements.

1122(d)(4)(xiv)    Delinquencies, charge-offs and uncollectible                      X
                   accounts are recognized and recorded in
                   accordance with the transaction agreements.

1122(d)(4)(xv)     Any external enhancement or other support,
                   identified in Item 1114(a)(1) through (3) or
                   Item 1115 of Regulation AB, is maintained as
                   set forth in the transaction agreements.
</TABLE>

                                       K-4
<PAGE>

                                    EXHIBIT L

                      FORM OF SARBANES-OXLEY CERTIFICATION

                                     [DATE]

Merrill Lynch Mortgage Investors, Inc.
250 Vesey Street
4 World Financial Center, 10th Floor
New York, New York 10080

Wells Fargo Bank, N.A.
9062 Old Annapolis Road
Columbia, MD 21045

Re: Merrill Lynch Alternative Note Asset Trust, Series 2007-OAR5

I, [identify the certifying individual], certify that:

1. I have reviewed the report on Form 10-K and all reports on Form 10-D required
to be filed in respect of the period covered by this report on Form 10-K of
Merrill Lynch Alternative Note Asset Trust, Series 2007-OAR5 (the "Exchange Act
periodic reports");

2. Based on my knowledge, the Exchange Act periodic reports, taken as a whole,
do 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 with respect
to the period covered by this report;

3. Based on my knowledge, all of the distribution, servicing and other
information required to be provided under Form 10-D for the period covered by
this report is included in the Exchange Act periodic reports;

4. [I am responsible for reviewing the activities performed by the servicer(s)
and based on my knowledge and the compliance review(s) conducted in preparing
the servicer compliance statement(s) required in this report under Item 1123 of
Regulation AB, and except as disclosed in the Exchange Act periodic reports, the
servicer(s) [has/have] fulfilled [its/their] obligations under the servicing
agreement(s) in all material respects; and]

5. All of the reports on assessment of compliance with servicing criteria for
ABS and their related attestation reports on assessment of compliance with
servicing criteria for asset-backed securities required to be included in this
report in accordance with Item 1122 of Regulation AB and Exchange Act Rules
13a-18 and 15d-18 have been included as an exhibit to this report, except as
otherwise disclosed in this report. Any material instances of noncompliance
described in such reports have been disclosed in this report on Form 10-K.

                                       L-1

<PAGE>

[In giving the certifications above, I have reasonably relied on information
provided to me by the following unaffiliated parties [name of servicer,
sub-servicer, co-servicer, depositor or trustee].]

Date:
      ------------

                                        ----------------------------------------
                                        [Signature]
                                        [Title]

                                       L-2

<PAGE>

                                    EXHIBIT M

                  FORM OF BACK-UP SARBANES-OXLEY CERTIFICATION

Merrill Lynch Mortgage Investors, Inc.
250 Vesey Street
4 World Financial Center, 10th Floor
New York, New York 10080

Wells Fargo Bank, N.A.
9062 Old Annapolis Road
Columbia, MD 21045

Re: Merrill Lynch Alternative Note Asset Trust, Series 2007-OAR5

[_______], the [_______] of [_______] (the "Company") hereby certifies to the
Depositor, the Master Servicer and the Securities Administrator, and each of
their officers, directors and affiliates that:

(1) I have reviewed [the servicer compliance statement of the Company provided
in accordance with Item 1123 of Regulation AB (the "Compliance Statement"),] the
report on assessment of the Company's compliance with the Servicing Criteria set
forth in Item 1122(d) of Regulation AB (the "Servicing Criteria"), provided in
accordance with Rules 13a-18 and 15d-18 under the Securities Exchange Act of
1934, as amended (the "Exchange Act") and Item 1122 of Regulation AB (the
"Servicing Assessment"), the registered public accounting firm's attestation
report provided in accordance with Rules 13a-18 and 15d-18 under the Exchange
Act and Section 1122(b) of Regulation AB (the "Attestation Report"), and all
servicing reports, officer's certificates and other information relating to the
servicing of the Mortgage Loans by the Company during 200[_] that were delivered
by the Company to any of the Depositor, the Master Servicer and the Trustee
pursuant to the Agreement (collectively, the "Company Servicing Information");

(2) Based on my knowledge, the Company Servicing Information, 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 the light of the
circumstances under which such statements were made, not misleading with respect
to the period of time covered by the Company Servicing Information;

(3) Based on my knowledge, all of the Company Servicing Information required to
be provided by the Company under the Agreement has been provided to the
Depositor, the Master Servicer and the Securities Administrator;

(4) I am responsible for reviewing the activities performed by [_______] as
[_______] under the [_______] (the "Agreement"), and based on my knowledge [and
the compliance review conducted in preparing the Compliance Statement] and
except as disclosed in [the Compliance Statement,] the Servicing Assessment or
the Attestation Report, the Company has fulfilled its obligations under the
Agreement in all material respects; and

                                       M-1

<PAGE>

(5) [The Compliance Statement required to be delivered by the Company pursuant
to the Agreement, and] [The] [the] Servicing Assessment and Attestation Report
required to be provided by the Company and [by any Subservicer or Subcontractor]
pursuant to the Agreement, have been provided to the Depositor, the Master
Servicer and the Securities Administrator. Any material instances of
noncompliance described in such reports have been disclosed to the Depositor,
the Master Servicer and the Securities Administrator. Any material instance of
noncompliance with the Servicing Criteria has been disclosed in such reports.

Capitalized terms used but not defined herein have the meanings ascribed to them
in the Pooling and Servicing Agreement, dated as of October 1, 2007, among
Merrill Lynch Mortgage Investors, Inc., as depositor (the "Depositor"), Wells
Fargo Bank, N.A., as master servicer (in such capacity, the "Master Servicer")
and securities administrator (in such capacity, the "Securities Administrator")
and HSBC Bank USA, National Association, as trustee (the "Trustee").

                                        [_________]
                                        as [________]

                                        By:
                                        Name:
                                        Title:
                                        Date:

                                       M-2

<PAGE>

                                   EXHIBIT N-1

                             CMC SERVICING AGREEMENT

                             [INTENTIONALLY OMITTED]

                                      N-1-1

<PAGE>

                                   EXHIBIT N-2

                         COUNTRYWIDE SERVICING AGREEMENT

                               [SEE EXHIBIT 99.2]

                                      N-2-1

<PAGE>

                                   EXHIBIT N-3

                             HLS SERVICING AGREEMENT

                             [INTENTIONALLY OMITTED]

                                      N-3-1

<PAGE>

                                   EXHIBIT N-4

                          WILSHIRE SERVICING AGREEMENT

                             [INTENTIONALLY OMITTED]

                                      N-4-1

<PAGE>

                                    EXHIBIT O

                       ADDITIONAL DISCLOSURE NOTIFICATION

Merrill Lynch Mortgage Investors, Inc.
250 Vesey Street
4 World Financial Center, 10th Floor
New York, New York 10080

Wells Fargo Bank, N.A.
9062 Old Annapolis Road
Columbia, MD 21045

RE: Merrill Lynch Alternative Note Asset Trust, Series 2007-OAR5
    **Additional Form [10-D][10-K][8-K] Disclosure** Required

Ladies and Gentlemen:

In accordance with Section 3.18(b) of the Pooling and Servicing Agreement, dated
as of October 1, 2007, among Merrill Lynch Mortgage Investors, Inc., as
depositor, Wells Fargo Bank, N.A., as master servicer and securities
administrator and HSBC Bank USA, National Association, as trustee, the
undersigned, as [__________], hereby notifies you that certain events have come
to our attention that [will] [may] need to be disclosed on Form
[10-D][10-K][8-K].

Description of Additional Form [10-D][10-K][8-K] Disclosure:

List of any Attachments hereto to be included in the Additional Form
[10-D][10-K][8-K] Disclosure:

     Any inquiries related to this notification should be directed to
[__________], phone number: [__________]; email address: [____________________].

                                        [NAME OF PARTY],
                                        as [role]

                                        By:
                                            ------------------------------------
                                        Name:
                                        Title:

                                       O-1

<PAGE>

                                    EXHIBIT P

                   FORM OF ITEM 1123 CERTIFICATION OF SERVICER

                                     [DATE]

Merrill Lynch Mortgage Investors, Inc.
250 Vesey Street
4 World Financial Center, 10th Floor
New York, New York 10080

Wells Fargo Bank, N.A.
9062 Old Annapolis Road
Columbia, MD 21045

Re: Merrill Lynch Alternative Note Asset Trust, Series 2007-OAR5 Mortgage
    Pass-Through Certificates

I, [identify name of certifying individual], [title of certifying individual] of
[name of servicing company] (the "Servicer"), hereby certify that:

(1) A review of the activities of the Servicer during the preceding calendar
year and of the performance of the Servicer under the [related servicing
agreement] (the "Servicing Agreement") has been made under my supervision; and

(2) To the best of my knowledge, based on such review, the Servicer has
fulfilled all its obligations under the related Servicing Agreement in all
material respects throughout such year or a portion thereof[, or, if there has
been a failure to fulfill any such obligation in any material respect, I have
specified below each such failure known to me and the nature and status
thereof].

Date:
      -----------

                                        [Servicer]

                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                       P-1
<PAGE>

                                   EXHIBIT Q-1

                         ADDITIONAL FORM 10-D DISCLOSURE

<TABLE>
<CAPTION>
                         ADDITIONAL FORM 10-D DISCLOSURE
--------------------------------------------------------------------------------
          ITEM ON FORM 10-D                         PARTY RESPONSIBLE
-------------------------------------   ----------------------------------------
<S>                                     <C>
    ITEM 1: DISTRIBUTION AND POOL
       PERFORMANCE INFORMATION

Information included in the [Monthly                 Master Servicer
Statement]                                              Servicer
                                                Securities Administrator

Any information required by 1121                        Depositor
which is NOT included on the [Monthly
Statement]

      ITEM 2: LEGAL PROCEEDINGS

Any legal proceeding pending against
the following entities or their
respective property, that is material
to Certificateholders, including any
proceeding known to be contemplated
by governmental authorities:

-    Issuing Entity (Trust Fund)          Trustee, Master Servicer, Securities
                                               Administrator and Depositor

-    Sponsor (Seller)                     Seller (if a party to the Pooling and
                                            Servicing Agreement) or Depositor
-    Depositor                                          Depositor

-    Trustee                                             Trustee

-    Securities Administrator                   Securities Administrator

-    Master Servicer                                 Master Servicer

-    Custodian                                          Custodian

-    1110(b) Originator                                 Depositor

-    Any 1108(a)(2) Servicer (other                     Servicer
     than the Master Servicer or
     Securities Administrator)

-    Any other party contemplated by                    Depositor
     1100(d)(1)

      ITEM 3: SALE OF SECURITIES                        Depositor
         AND USE OF PROCEEDS

Information from Item 2(a) of Part II
of Form 10-Q:

With respect to any sale of
securities by the sponsor, depositor
or issuing entity, that are backed by
the same asset pool or are otherwise
issued by the issuing entity, whether
or not registered, provide the sales
and use of proceeds information in
Item 701 of Regulation S-K. Pricing
information can be omitted if
securities were not registered.
</TABLE>

                                      Q-1-1

<PAGE>

<TABLE>
<CAPTION>
                         ADDITIONAL FORM 10-D DISCLOSURE
--------------------------------------------------------------------------------
          ITEM ON FORM 10-D                         PARTY RESPONSIBLE
-------------------------------------   ----------------------------------------
<S>                                     <C>
     ITEM 4: DEFAULTS UPON SENIOR               Securities Administrator
              SECURITIES                                 Trustee

Information from Item 3 of Part II of
Form 10-Q:

Report the occurrence of any Event of
Default (after expiration of any
grace period and provision of any
required notice)

 ITEM 5: SUBMISSION OF MATTERS TO A             Securities Administrator
       VOTE OF SECURITY HOLDERS                          Trustee

Information from Item 4 of Part II of
Form 10-Q

   ITEM 6: SIGNIFICANT OBLIGORS OF                      Depositor
             POOL ASSETS

Item 1112(b) - Significant Obligor
Financial Information*

*    This information need only be
     reported on the Form 10-D for
     the distribution period in which
     updated information is required
     pursuant to the Item.

   ITEM 7: SIGNIFICANT ENHANCEMENT
         PROVIDER INFORMATION

Item 1114(b)(2) - Credit Enhancement
Provider Financial Information*

-    Determining applicable                             Depositor
     disclosure threshold

-    Requesting required financial                      Depositor
     information (including any
     required accountants' consent to
     the use thereof) or effecting
     incorporation by reference

Item 1115(b) - Derivative
Counterparty Financial Information*

-    Determining current maximum                        Depositor
     probable exposure

-    Determining current significance                   Depositor
     percentage

-    Requesting required financial                      Depositor
     information (including any
     required accountants' consent to
     the use thereof) or effecting
     incorporation by reference

*    This information need only be
     reported on the Form 10-D for
     the distribution period in which
     updated information is required
     pursuant to the Items.
</TABLE>

                                      Q-1-2

<PAGE>

<TABLE>
<CAPTION>
                         ADDITIONAL FORM 10-D DISCLOSURE
--------------------------------------------------------------------------------
          ITEM ON FORM 10-D                         PARTY RESPONSIBLE
-------------------------------------   ----------------------------------------
<S>                                     <C>
      ITEM 8: OTHER INFORMATION         Any party responsible for the applicable
                                                Form 8-K Disclosure item

Disclose any information required to
be reported on Form 8-K during the
period covered by the Form 10-D but
not reported

           ITEM 9: EXHIBITS

Monthly Statement to                            Securities Administrator
Certificateholders

Exhibits required by Item 601 of                        Depositor
Regulation S-K, such as material
agreements
</TABLE>

                                      Q-1-3

<PAGE>

                                   EXHIBIT Q-2

                         ADDITIONAL FORM 10-K DISCLOSURE

<TABLE>
<CAPTION>
                         ADDITIONAL FORM 10-K DISCLOSURE
--------------------------------------------------------------------------------
          ITEM ON FORM 10-K                         PARTY RESPONSIBLE
-------------------------------------   ----------------------------------------
<S>                                     <C>
  ITEM 1B: UNRESOLVED STAFF COMMENTS                    Depositor

      ITEM 9B: OTHER INFORMATION          Any party responsible for disclosure
                                                    items on Form 8-K
Disclose any information required to
be reported on Form 8-K during the
fourth quarter covered by the Form
10-K but not reported

     ITEM 15: EXHIBITS, FINANCIAL               Securities Administrator
         STATEMENT SCHEDULES                            Depositor

REG AB ITEM 1112(B): SIGNIFICANT
OBLIGORS OF POOL ASSETS

Significant Obligor Financial                           Depositor
Information*

*    This information need only be
     reported on the Form 10-K if
     updated information is required
     pursuant to the Item.

    REG AB ITEM 1114(B)(2): CREDIT
ENHANCEMENT PROVIDER FINANCIAL
             INFORMATION

-    Determining applicable                             Depositor
     disclosure threshold

-    Requesting required financial                      Depositor
     information (including any
     required accountants' consent to
     the use thereof) or effecting
     incorporation by reference

*    This information need only be
     reported on the Form 10-K if
     updated information is required
     pursuant to the Item.

   REG AB ITEM 1115(B): DERIVATIVE
 COUNTERPARTY FINANCIAL INFORMATION

-    Determining current maximum                        Depositor
     probable exposure

-    Determining current significance                   Depositor
     percentage

-    Requesting required financial                      Depositor
     information (including any
     required accountants' consent to
     the use thereof) or effecting
     incorporation by reference

*    This information need only be
     reported on the Form 10-K if
     updated information is required
     pursuant to the Item.

 REG AB ITEM 1117: LEGAL PROCEEDINGS

Any legal proceeding pending against
the following entities or their
respective property, that is material
to Certificateholders, including any
proceeding known to be contemplated
by
</TABLE>

                                      Q-2-1

<PAGE>

<TABLE>
<CAPTION>
                         ADDITIONAL FORM 10-K DISCLOSURE
--------------------------------------------------------------------------------
          ITEM ON FORM 10-K                         PARTY RESPONSIBLE
-------------------------------------   ----------------------------------------
<S>                                     <C>
governmental authorities:

-    Issuing Entity (Trust Fund)          Trustee, Master Servicer, Securities
                                               Administrator and Depositor

-    Sponsor (Seller)                     Seller (if a party to the Pooling and
                                            Servicing Agreement) or Depositor
-    Depositor                                          Depositor

-    Trustee                                             Trustee

-    Securities Administrator                   Securities Administrator

-    Master Servicer                                 Master Servicer

-    Custodian                                          Custodian

-    1110(b) Originator                                 Depositor

-    Any 1108(a)(2) Servicer (other                     Servicer
     than the Master Servicer or
     Securities Administrator)

-    Any other party contemplated by                    Depositor
     1100(d)(1)

REG AB ITEM 1119: AFFILIATIONS AND
RELATIONSHIPS

Whether (a) the Sponsor (Seller),                  Depositor as to (a)
Depositor or Issuing Entity is an               Sponsor/Seller as to (a)
affiliate of the following parties,
and (b) to the extent known and
material, any of the following
parties are affiliated with one
another:

-    Master Servicer                                 Master Servicer

-    Securities Administrator                   Securities Administrator

-    Trustee                                             Trustee

-    Any other 1108(a)(3) servicer                      Servicer

-    Any 1110 Originator                            Depositor/Sponsor

-    Any 1112(b) Significant Obligor                Depositor/Sponsor

-    Any 1114 Credit Enhancement                    Depositor/Sponsor
     Provider

-    Any 1115 Derivate Counterparty                 Depositor/Sponsor
     Provider

-    Any other 1101(d)(1) material                  Depositor/Sponsor
     party

Whether there are any "outside the                 Depositor as to (a)
ordinary course business                        Sponsor/Seller as to (a)
arrangements" other than would be
obtained in an arm's length
transaction between (a) the Sponsor
(Seller), Depositor or Issuing Entity
on the one hand, and (b) any of the
following parties (or their
affiliates) on the other hand, that
exist currently or within the past
two years and that are material to a
Certificateholder's understanding of
the Certificates:

-    Master Servicer                                 Master Servicer

-    Securities Administrator                   Securities Administrator

-    Trustee                                            Depositor

-    Any other 1108(a)(3) servicer                      Servicer

-    Any 1110 Originator                            Depositor/Sponsor

-    Any 1112(b) Significant Obligor                Depositor/Sponsor
</TABLE>

                                      Q-2-2

<PAGE>

<TABLE>
<CAPTION>
                         ADDITIONAL FORM 10-K DISCLOSURE
--------------------------------------------------------------------------------
          ITEM ON FORM 10-K                         PARTY RESPONSIBLE
-------------------------------------   ----------------------------------------
<S>                                     <C>
-    Any 1114 Credit Enhancement                    Depositor/Sponsor
     Provider

-    Any 1115 Derivate Counterparty                 Depositor/Sponsor
     Provider

-    Any other 1101(d)(1) material                  Depositor/Sponsor
     party

Whether there are any specific                     Depositor as to (a)
relationships involving the                     Sponsor/Seller as to (a)
transaction or the pool assets
between (a) the Sponsor (Seller),
Depositor or Issuing Entity on the
one hand, and (b) any of the
following parties (or their
affiliates) on the other hand, that
exist currently or within the past
two years and that are material:

-    Master Servicer                                 Master Servicer

-    Securities Administrator                   Securities Administrator

-    Trustee                                            Depositor

-    Any other 1108(a)(3) servicer                      Servicer

-    Any 1110 Originator                            Depositor/Sponsor

-    Any 1112(b) Significant Obligor                Depositor/Sponsor

-    Any 1114 Credit Enhancement                    Depositor/Sponsor
     Provider

-    Any 1115 Derivate Counterparty                 Depositor/Sponsor
     Provider

-    Any other 1101(d)(1) material                  Depositor/Sponsor
     party
</TABLE>

                                      Q-2-3

<PAGE>

                                  EXHIBIT Q-3

                        FORM 8-K DISCLOSURE INFORMATION

<TABLE>
<CAPTION>
                        FORM 8-K DISCLOSURE INFORMATION
--------------------------------------------------------------------------------
           ITEM ON FORM 8-K                         PARTY RESPONSIBLE
-------------------------------------   ----------------------------------------
<S>                                     <C>
   ITEM 1.01- ENTRY INTO A MATERIAL                    All parties
         DEFINITIVE AGREEMENT

Disclosure is required regarding
entry into or amendment of any
definitive agreement that is material
to the securitization, even if
depositor is not a party.

Examples: servicing agreement,
custodial agreement.

Note: disclosure not required as to
definitive agreements that are fully
disclosed in the prospectus

ITEM 1.02- TERMINATION OF A MATERIAL                  All parties
         DEFINITIVE AGREEMENT

Disclosure is required regarding
termination of any definitive
agreement that is material to the
securitization (other than expiration
in accordance with its terms), even
if depositor is not a party.

Examples: servicing agreement,
custodial agreement.

       ITEM 1.03- BANKRUPTCY OR                         Depositor
             RECEIVERSHIP

Disclosure is required regarding the
bankruptcy or receivership, with
respect to any of the following:

-    Sponsor (Seller)                          Depositor/Sponsor (Seller)

-    Depositor                                          Depositor

-    Master Servicer                                 Master Servicer

-    Affiliated Servicer                                Servicer

-    Other Servicer servicing 20% or                    Servicer
     more of the pool assets at the
     time of the report

-    Other material servicers                           Servicer

-    Trustee                                             Trustee

-    Securities Administrator                   Securities Administrator

-    Significant Obligor                                Depositor

-    Credit Enhancer (10% or more)                      Depositor

-    Derivative Counterparty                            Depositor
</TABLE>

                                      Q-3-1

<PAGE>

<TABLE>
<CAPTION>
                        FORM 8-K DISCLOSURE INFORMATION
--------------------------------------------------------------------------------
           ITEM ON FORM 8-K                         PARTY RESPONSIBLE
-------------------------------------   ----------------------------------------
<S>                                     <C>
-    Custodian                                          Custodian

  ITEM 2.04- TRIGGERING EVENTS THAT                     Depositor
   ACCELERATE OR INCREASE A DIRECT                   Master Servicer
FINANCIAL OBLIGATION OR AN OBLIGATION           Securities Administrator
     UNDER AN OFF-BALANCE SHEET
             ARRANGEMENT

Includes an early amortization,
performance trigger or other event,
including event of default, that
would materially alter the payment
priority/distribution of cash
flows/amortization schedule.

Disclosure will be made of events
other than waterfall triggers which
are disclosed in the monthly
statements to the certificateholders.

 ITEM 3.03- MATERIAL MODIFICATION TO            Securities Administrator
      RIGHTS OF SECURITY HOLDERS                         Trustee
                                                        Depositor

Disclosure is required of any
material modification to documents
defining the rights of
Certificateholders, including the
Pooling and Servicing Agreement.

 ITEM 5.03- AMENDMENTS OF ARTICLES OF                   Depositor
INCORPORATION OR BYLAWS; CHANGE OF
             FISCAL YEAR

Disclosure is required of any
amendment "to the governing documents
of the issuing entity".

   ITEM 6.01- ABS INFORMATIONAL AND                     Depositor
        COMPUTATIONAL MATERIAL

   ITEM 6.02- CHANGE OF SERVICER OR     Master Servicer/Securities Administrator
       SECURITIES ADMINISTRATOR                /Depositor/Servicer/Trustee

Requires disclosure of any removal,
replacement, substitution or addition
of any master servicer, affiliated
servicer, other servicer servicing
10% or more of pool assets at time of
report, other material servicers or
trustee.

Reg AB disclosure about any new            Servicer/Master Servicer/Depositor
servicer or master servicer is also
required.

Reg AB disclosure about any new                          Trustee
Trustee is also required.

     ITEM 6.03- CHANGE IN CREDIT           Depositor/Securities Administrator
   ENHANCEMENT OR EXTERNAL SUPPORT

Covers termination of any enhancement
in manner other than by its terms,
the addition of an enhancement, or a
material change in the
</TABLE>

                                      Q-3-2

<PAGE>

<TABLE>
<CAPTION>
                        FORM 8-K DISCLOSURE INFORMATION
--------------------------------------------------------------------------------
           ITEM ON FORM 8-K                         PARTY RESPONSIBLE
-------------------------------------   ----------------------------------------
<S>                                     <C>
enhancement provided. Applies to
external credit enhancements as well
as derivatives.

Reg AB disclosure about any new                         Depositor
enhancement provider is also
required.

     ITEM 6.04- FAILURE TO MAKE A               Securities Administrator
        REQUIRED DISTRIBUTION                            Trustee

  ITEM 6.05- SECURITIES ACT UPDATING                    Depositor
              DISCLOSURE

If any material pool characteristic
differs by 5% or more at the time of
issuance of the securities from the
description in the final prospectus,
provide updated Reg AB disclosure
about the actual asset pool.

If there are any new servicers or                       Depositor
originators required to be disclosed
under Regulation AB as a result of
the foregoing, provide the
information called for in Items 1108
and 1110 respectively.

     ITEM 7.01- REG FD DISCLOSURE                      All parties

       ITEM 8.01- OTHER EVENTS                          Depositor

Any event, with respect to which
information is not otherwise called
for in Form 8-K, that the registrant
deems of importance to
certificateholders.

   ITEM 9.01- FINANCIAL STATEMENTS          Responsible party for reporting/
             AND EXHIBITS                 disclosing the financial statement or
                                                         exhibit
</TABLE>

                                      Q-3-3

<PAGE>

                                   SCHEDULE I

                        Prepayment Charge Mortgage Loans

                             [INTENTIONALLY OMITTED]EX-10.1

 

EXHIBIT 10.1

 

SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

 

BANK OF AMERICA, N.A.

As Lender

And

AEROPOSTALE, INC.

The Borrower

 

November 13, 2007

v

 

TABLE OF CONTENTS

	 	 	 	 	 
	Article 1 - Definitions:	 	 - 1 - 
	Article 2 - The Revolving Credit:	 	- 6 -
	2-1.
	 	Establishment of  Revolving Credit	 	- 6 -
	 
	 	 	 	 
	2-2.
	 	Intentionally Omitted	 	- 6 -
	 
	 	 	 	 
	2-3.
	 	Intentionally Omitted	 	- 6 -
	 
	 	 	 	 
	2-4.
	 	Risks of Value of Collateral	 	- 6 -
	 
	 	 	 	 
	2-5.
	 	Loan Requests	 	- 6 -
	 
	 	 	 	 
	2-6.
	 	Making of Loans Under Revolving Credit	 	- 6 -
	 
	 	 	 	 
	2-7.
	 	The Loan Account	 	- 6 -
	 
	 	 	 	 
	2-8.
	 	The Revolving Credit Notes	 	- 6 -
	 
	 	 	 	 
	2-9.
	 	Payment of The Loan Account	 	- 6 -
	 
	 	 	 	 
	2-10.
	 	Interest Rates	 	- 6 -
	 
	 	 	 	 
	2-11.
	 	Additional Fees	 	- 6 -
	 
	 	 	 	 
	2-12.
	 	Intentionally Omitted	 	- 6 -
	 
	 	 	 	 
	2-13.
	 	Line (Unused Fee)	 	- 6 -
	 
	 	 	 	 
	2-14.
	 	Intentionally Omitted	 	- 6 -
	 
	 	 	 	 
	2-15.
	 	Concerning Fees	 	- 6 -
	 
	 	 	 	 
	2-16.
	 	Lender’s Discretion	 	- 6 -
	 
	 	 	 	 
	2-17.
	 	Procedures For Issuance of L/C’s	 	- 6 -
	 
	 	 	 	 
	2-18.
	 	Fees For L/C’s	 	- 6 -
	 
	 	 	 	 
	2-19.
	 	Cash Collateralization of L/Cs	 	- 6 -
	 
	 	 	 	 
	2-20.
	 	Concerning L/C’s	 	- 6 -
	 
	 	 	 	 
	2-21.
	 	Changed Circumstances.	 	- 6 -
	 
	 	 	 	 
	2-22.
	 	Increased Costs	 	- 6 -
	 
	 	 	 	 
	2-23.
	 	Lender’s Commitments	 	- 6 -
	 
	 	 	 	 
	Article 3 - Conditions Precedent:	 	- 6 -
	3-2.
	 	Corporate Due Diligence	 	- 6 -
	 
	 	 	 	 
	3-3.
	 	Opinion	 	- 6 -

vi

 

	 	 	 	 	 
	 
	 	 	 	 
	3-4.
	 	Additional Documents	 	- 6 -
	 
	 	 	 	 
	3-5.
	 	Officers’ Certificates	 	- 6 -
	 
	 	 	 	 
	3-6.
	 	Representations and Warranties	 	- 6 -
	 
	 	 	 	 
	3-7.
	 	Borrowing Base Certificate	 	- 6 -
	 
	 	 	 	 
	3-8.
	 	All Fees and Expenses Paid	 	- 6 -
	 
	 	 	 	 
	3-9.
	 	Financial Projections	 	- 6 -
	 
	 	 	 	 
	3-10.
	 	Borrower’s Assets	 	- 6 -
	 
	 	 	 	 
	3-11.
	 	Lien Search	 	- 6 -
	 
	 	 	 	 
	3-12.
	 	Perfection of Collateral	 	- 6 -
	 
	 	 	 	 
	3-13.
	 	Insurance	 	- 6 -
	 
	 	 	 	 
	3-14.
	 	No Suspension Event	 	- 6 -
	 
	 	 	 	 
	3-15.
	 	No Adverse Change	 	- 6 -
	 
	 	 	 	 
	3-16.
	 	Execution and Delivery of Agreement	 	- 6 -
	 
	 	 	 	 
	Article 4 - General Representations, Covenants and Warranties:	 	- 6 -
	 
	 	 	 	 
	4-1.
	 	Payment and Performance of Liabilities	 	- 6 -
	 
	 	 	 	 
	4-2.
	 	Due Organization - Corporate Authorization - No Conflicts	 	- 6 -
	 
	 	 	 	 
	4-3.
	 	Trade Names	 	- 6 -
	 
	 	 	 	 
	4-4.
	 	Intellectual Property	 	- 6 -
	 
	 	 	 	 
	4-5.
	 	Locations	 	- 6 -
	 
	 	 	 	 
	4-6.
	 	Title to Assets	 	- 6 -
	 
	 	 	 	 
	4-7.
	 	Indebtedness	 	- 6 -
	 
	 	 	 	 
	4-8.
	 	Insurance Policies	 	- 6 -
	 
	 	 	 	 
	4-9.
	 	Licenses	 	- 6 -
	 
	 	 	 	 
	4-10.
	 	Leases	 	- 6 -
	 
	 	 	 	 
	4-11.
	 	Requirements of Law	 	- 6 -
	 
	 	 	 	 
	4-12.
	 	Maintain Properties	 	- 6 -
	 
	 	 	 	 
	4-13.
	 	Pay Taxes/Tax Shelter Regulations	 	- 6 -
	 
	 	 	 	 
	4-14.
	 	No Margin Stock	 	- 6 -

vii

 

	 	 	 	 	 
	4-15.
	 	ERISA	 	- 6 -
	 
	 	 	 	 
	4-16.
	 	Hazardous Materials	 	- 6 -
	 
	 	 	 	 
	4-17.
	 	Litigation	 	- 6 -
	 
	 	 	 	 
	4-18.
	 	Dividends or Investments	 	- 6 -
	 
	 	 	 	 
	4-19.
	 	Loans	 	- 6 -
	 
	 	 	 	 
	4-20.
	 	Protection of Assets	 	- 6 -
	 
	 	 	 	 
	4-21.
	 	Line of Business	 	- 6 -
	 
	 	 	 	 
	4-22.
	 	Affiliate Transactions	 	- 6 -
	 
	 	 	 	 
	4-23.
	 	Additional Assurances	 	- 6 -
	 
	 	 	 	 
	4-24.
	 	Adequacy of Disclosure	 	- 6 -
	 
	 	 	 	 
	4-25.
	 	Investments	 	- 6 -
	 
	 	 	 	 
	4-26.
	 	Prepayments of Indebtedness	 	- 6 -
	 
	 	 	 	 
	4-27.
	 	Other Covenants	 	- 6 -
	 
	 	 	 	 
	Article 5 - Financial Reporting and Performance Covenants:	 	- 6 -
	5-1.
	 	Maintain Records	 	- 6 -
	 
	 	 	 	 
	5-2.
	 	Access to Records	 	- 6 -
	 
	 	 	 	 
	5-3.
	 	Prompt Notice to Lender	 	- 6 -
	 
	 	 	 	 
	5-4.
	 	Intentionally Omitted	 	- 6 -
	 
	 	 	 	 
	5-5.
	 	Borrowing Base Certificates	 	- 6 -
	 
	 	 	 	 
	5-6.
	 	Monthly Reports	 	- 6 -
	 
	 	 	 	 
	5-7.
	 	Quarterly Reports	 	- 6 -
	 
	 	 	 	 
	5-8.
	 	Annual Reports	 	- 6 -
	 
	 	 	 	 
	5-9.
	 	Intentionally Omitted	 	- 6 -
	 
	 	 	 	 
	5-10.
	 	Inventories, Appraisals, and Audits	 	- 6 -
	 
	 	 	 	 
	5-11.
	 	Additional Financial Information	 	- 6 -
	 
	 	 	 	 
	5-12.
	 	Intentionally Omitted	 	- 6 -
	 
	 	 	 	 
	Article 6 - Use and Collection of Collateral:	 	- 6 -
	6-1.
	 	Use of Inventory Collateral	 	- 6 -
	 
	 	 	 	 
	6-2.
	 	Adjustments and Allowances	 	- 6 -

viii

 

	 	 	 	 	 
	6-3.
	 	Validity of Accounts	 	- 6 -
	 
	 	 	 	 
	6-4.
	 	Notification to Account Debtors	 	- 6 -
	 
	 	 	 	 
	Article 7 - Cash Management. Payment of Liabilities:	 	- 6 -
	7-1.
	 	Depository Accounts	 	- 6 -
	 
	 	 	 	 
	7-2.
	 	Credit Card Receipts	 	- 6 -
	 
	 	 	 	 
	7-3.
	 	The Concentration, Blocked, and Operating Accounts	 	- 6 -
	 
	 	 	 	 
	7-4.
	 	Proceeds and Collection of Accounts	 	- 6 -
	 
	 	 	 	 
	7-5.
	 	Payment of Liabilities	 	- 6 -
	 
	 	 	 	 
	7-6.
	 	The Operating Account	 	- 6 -
	 
	 	 	 	 
	Article 8 - Grant of Security Interest:	 	- 6 -
	8-1.
	 	Grant of Security Interest	 	- 6 -
	 
	 	 	 	 
	8-2.
	 	Extent and Duration of Security Interest	 	- 6 -
	 
	Article 9 - Lender As Borrower’s Attorney-In-Fact:	 	- 6 -
	9-1.
	 	Appointment as Attorney-In-Fact	 	- 6 -
	 
	 	 	 	 
	9-2.
	 	No Obligation to Act	 	- 6 -
	 
	 	 	 	 
	Article 10 - Events of Default:	 	- 6 -
	10-1.
	 	Failure to Pay Revolving Credit	 	- 6 -
	 
	 	 	 	 
	10-2.
	 	Failure To Make Other Payments	 	- 6 -
	 
	 	 	 	 
	10-3.
	 	Failure to Perform Covenant or
Liability (No Grace Period) 	 	- 6 -
	 
	 	 	 	 
	10-4.
	 	Failure to Perform Covenant or Liability (Limited Grace Period)	 	- 6 -
	 
	 	 	 	 
	10-5.
	 	Failure to Perform Covenant or Liability (Grace Period)	 	- 6 -
	 
	 	 	 	 
	10-6.
	 	Misrepresentation	 	- 6 -
	 
	 	 	 	 
	10-7.
	 	Default of Other Debt	 	- 6 -
	 
	 	 	 	 
	10-8.
	 	Default of Leases	 	- 6 -
	 
	 	 	 	 
	10-9.
	 	Uninsured Casualty Loss	 	- 6 -
	 
	 	 	 	 
	10-10.
	 	Judgment.  Restraint of Business	 	- 6 -
	 
	 	 	 	 
	10-11.
	 	Business Failure	 	- 6 -
	 
	 	 	 	 
	10-12.
	 	Bankruptcy	 	- 6 -
	 
	 	 	 	 
	10-13.
	 	Indictment - Forfeiture	 	- 6 -
	 
	 	 	 	 
	10-14.
	 	Default by Guarantor or Subsidiary	 	- 6 -

ix

 

	 	 	 	 	 
	10-15.
	 	Termination of Guaranty	 	- 6 -
	 
	 	 	 	 
	10-16.
	 	Challenge to Loan Documents	 	- 6 -
	 
	 	 	 	 
	10-17.
	 	Intentionally Omitted	 	- 6 -
	 
	 	 	 	 
	10-18.
	 	Change in Control	 	- 6 -
	 
	 	 	 	 
	Article 11 - Rights and Remedies Upon Default:	 	- 6 -
	11-1.
	 	Rights of Enforcement	 	- 6 -
	 
	 	 	 	 
	11-2.
	 	Sale of Collateral	 	- 6 -
	 
	 	 	 	 
	11-3.
	 	Occupation of Business Location	 	- 6 -
	 
	 	 	 	 
	11-4.
	 	Grant of Nonexclusive License	 	- 6 -
	 
	 	 	 	 
	11-5.
	 	Assembly of Collateral	 	- 6 -
	 
	 	 	 	 
	11-6.
	 	Rights and Remedies	 	- 6 -
	 
	 	 	 	 
	Article 12 - Notices:	 	- 6 -
	12-1.
	 	Notice Addresses	 	- 6 -
	 
	 	 	 	 
	12-2.
	 	Notice Given	 	- 6 -
	 
	 	 	 	 
	Article 13 - Term:	 	- 6 -
	 
	 	 	 	 
	13-1.
	 	Termination of Revolving Credit	 	- 6 -
	 
	 	 	 	 
	13-2.
	 	Effect of Termination	 	- 6 -
	 
	 	 	 	 
	Article 14 - General:	 	- 6 -
	14-1.
	 	Protection of Collateral	 	- 6 -
	 
	 	 	 	 
	14-2.
	 	Successors and Assigns	 	- 6 -
	 
	 	 	 	 
	14-3.
	 	Severability	 	- 6 -
	 
	 	 	 	 
	14-4.
	 	Amendments.  Course of Dealing	 	- 6 -
	 
	 	 	 	 
	14-5.
	 	Power of Attorney	 	- 6 -
	 
	 	 	 	 
	14-6.
	 	Application of Proceeds	 	- 6 -
	 
	 	 	 	 
	14-7.
	 	Costs and Expenses of Lender	 	- 6 -
	 
	 	 	 	 
	14-8.
	 	Copies and Facsimiles	 	- 6 -
	 
	 	 	 	 
	14-9.
	 	Massachusetts Law	 	- 6 -
	 
	 	 	 	 
	14-10.
	 	Consent to Jurisdiction	 	- 6 -
	 
	 	 	 	 
	14-11.
	 	Indemnification	 	- 6 -
	 
	 	 	 	 
	14-12.
	 	Rules of Construction	 	- 6 -

x

 

	 	 	 	 	 
	14-13.
	 	Intent	 	- 6 -
	 
	 	 	 	 
	14-14.
	 	Right of Set-Off	 	- 6 -
	 
	 	 	 	 
	14-15.
	 	Maximum Interest Rate	 	- 6 -
	 
	 	 	 	 
	14-16.
	 	Waivers	 	- 6 -
	 
	 	 	 	 
	14-17.
	 	Confidentiality	 	- 6 -
	 
	 	 	 	 
	14-18.
	 	Press Releases	 	- 6 -
	 
	 	 	 	 
	14-19.
	 	No Advisory or Fiduciary Responsibility	 	- 6 -
	 
	 	 	 	 
	14-20.
	 	USA PATRIOT Act Notice	 	- 6 -
	 
	 	 	 	 
	14-21.
	 	Existing Loan Agreement Amended and Restated	 	- 6 -
	 
	 	 	 	 

xi

 

EXHIBITS

	 	 	 	 	 	 	 
	2-8

	 	 	 	:
	 	Revolving Credit Note
	4-2

	 	 	 	:
	 	Related Entities
	4-3

	 	 	 	:
	 	Trade Names
	4-5

	 	 	 	:
	 	Locations, Leases, and Landlords
	4-6

	 	 	 	:
	 	Encumbrances
	4-7

	 	 	 	:
	 	Indebtedness
	4-8

	 	 	 	:
	 	Insurance Policies
	4-10

	 	 	 	:
	 	Capital Leases
	 

	 	 	 	:
	 	Taxes
	4-17

	 	 	 	:
	 	Litigation
	4-22

	 	:
	 	:
	 	Permitted Management Fees and Other Affiliated Transactions
	4-23

	 	:
	 	:
	 	Excluded Assets
	5-5

	 	:
	 	:
	 	Form of Borrowing Base Certificate
	6-3

	 	:
	 	:
	 	Bonds and Deposits
	7-1

	 	 	 	:
	 	DDAs
	 

	 	 	 	:
	 	Credit Card Arrangements

xii

 

SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

November 13, 2007

     THIS SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this “Agreement”) is made
between

     Bank of America, N.A. (the “Lender”), a national banking association
with offices at 100 Federal Street, Boston, Massachusetts 02110

          and

     Aeropostale, Inc., (hereinafter, the “Borrower”), a Delaware
corporation with its principal executive offices at 1372 Broadway, New
York, New York 10020

in consideration of the mutual covenants contained herein and benefits to be derived herefrom,

WITNESSETH:

     WHEREAS, Aeropostale, Inc., f/k/a MSS-Delaware, Inc. entered into an Amended and Restated Loan
and Security Agreement dated as of October 7, 2003 with Fleet Retail Finance Inc, as agent for the
lenders party thereto and such lenders (as amended and in effect, the “Existing Loan Agreement”);
and

     WHEREAS, Fleet Retail Finance, Inc. has assigned all of its right, title and interest under
the Existing Loan Agreement to Bank of America, N.A.;

     WHEREAS, Aeropostale, Inc., is the successor in interest by merger to MSS-Delaware, Inc. and

     WHEREAS, the Borrower desires to amend and restate the Existing Loan Agreement in order (a) to
increase the amount of the Loan Ceiling (as hereinafter defined) to $150,000,000, and (b) to make
certain other amendments to the terms and conditions of the Existing Loan Agreement; and

     NOW, THEREFORE, the parties hereto agree that the Existing Loan Agreement shall be amended and
restated in its entirety to read as follows:

1. — Definitions:

     As herein used, the following terms have the following meanings or are defined in the section
of this Agreement so indicated:

“Acceptable Blank Stock Inventory”: Inventory of the Loan Parties which consists of blank
t-shirts and other items of apparel which are in the possession of third Persons for
processing, which Inventory otherwise would be deemed Acceptable

 

 

Inventory and as to which the Lender has received an agreement from such processor
in form and substance reasonably acceptable to the Lender.

“Acceptable L/C Inventory”: Inventory which is the subject of a Documentary L/C in favor of
a foreign manufacturer or vendor of such Inventory, which Inventory is to be
manufactured for, or delivered to, the Loan Parties and will become Acceptable
In-Transit Inventory within seventy-five (75) days after the date of issuance of the
Documentary L/C.

“Acceptable In-Transit Inventory”: Inventory-in-transit to a Loan Party, title to which has
passed to the Loan Party which Inventory has been placed with a carrier (f.o.b.) for
shipment to the Loan Parties , and which Inventory is scheduled to be received within
fifty (50) days at a Loan Party’s distribution center, as to which Inventory the Lender
has a perfected security interest which is prior and superior to all security
interests, claims, and all Encumbrances other than Permitted Encumbrances (it being
understood, however, that the Lender will not require possession of the Documents of
Title or any foreign filings to be deemed “perfected”); provided that such
Inventory shall be deemed to be Acceptable In-Transit Inventory only if the Lender has
received an agreement (to the extent relevant to such Inventory) with (i) each sourcing
agent under any of the Loan Party’s sourcing agreements, and (ii) each Loan Party’s
custom brokers, each satisfactory in form and substance to the Lender. Notwithstanding
the foregoing, the Lender, periodically (but in no event in months other than July
through October of any year), may, in its reasonable discretion, include Inventory
which otherwise satisfies the requirements of this definition but for the fact that
title has not yet passed to a Loan Party as Acceptable In-Transit Inventory, but only
if the Lender has received written confirmation from the applicable sourcing agent that
title to such Inventory will pass to a Loan Party upon receipt of payment of a sum
certain and the Borrower has requested the Lender to make, and has Availability for, a
Revolving Credit Loan to pay such sourcing agent in such amount.

“Acceptable Inventory”: Such of the Loan Parties Inventory, at such locations, and of such
types, character, qualities and quantities, as the Lender in its sole discretion from
time to time determines to be acceptable for borrowing, including, without limitation,
Acceptable In-Transit Inventory and Acceptable L/C Inventory (but excluding Acceptable
Blank Stock Inventory), as to which Inventory, the Lender has a perfected security
interest which is prior and superior to all security interests, claims, and all
Encumbrances other than Permitted Encumbrances. Without limiting the generality of the
foregoing, Acceptable Inventory shall in no event include Inventory that is not
salable, non-merchandise categories (such as labels, bags and packaging), Inventory not
located in the United States (other than Acceptable In-Transit Inventory and Acceptable
L/C Inventory), samples, damaged goods, return-to-vendor merchandise, and packaway
Inventory.

“Accounts” and “Accounts Receivable” include, without limitation, “accounts” as defined in
the UCC, and also all: accounts, accounts receivable, credit card receivables, notes,
drafts, acceptances, and other forms of obligations and

2

 

receivables and rights to payment for credit extended and for goods sold or leased,
or services rendered, whether or not yet earned by performance; all “contract
rights” as formerly defined in the UCC; all Inventory which gave rise thereto, and
all rights associated with such Inventory, including the right of stoppage in
transit; and all reclaimed, returned, rejected or repossessed Inventory (if any) the
sale of which gave rise to any Account.

“ACH”: Automated clearing house.

“Account Debtor”: Has the meaning given that term in the UCC and includes all credit card
processors of the Borrower.

“Adjusted Eurodollar Rate”: With respect to any Eurodollar Loan for any Interest Period, an
interest rate per annum (rounded upwards, if necessary, to the next 1/16 of one
percent) equal to (a) the Eurodollar Rate for such Interest Period multiplied
by (b) the Statutory Reserve Rate.

“AGC”: Aero GC Management LLC, a Virginia Limited Liability Company with an address of 112
West 34th Street., New York, New York 10120, a single member managed LLC, where
Borrower is the sole member.

“Aeropostale Canada”: Aeropostale Canada, Inc., an Ontario Canada corporation with a United
States address of 112 West 34th Street., New York, New York 10120, a wholly owned
Subsidiary of the Borrower.

“Affiliate”: With respect to any two Persons, a relationship in which (a) one holds,
directly or indirectly, not less than twenty-five percent (25%) of the capital stock,
beneficial interests, partnership interests, or other equity interests of the other; or
(b) one has, directly or indirectly, the right, under ordinary circumstances, to vote
for the election of a majority of the directors (or other body or Person who has those
powers customarily vested in a board of directors of a corporation); or (c) not less
than twenty- five percent (25%) of their respective ownership is directly or indirectly
held by the same third Person.

“Aggregate Outstandings”: At any time of determination, the sum of (a) the Revolving Credit
Loans outstanding, plus (b) the Stated Amount of L/Cs outstanding.

“Applicable Margin”: Shall mean the following percentages based upon the following
performance criteria:

3

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Average	 	Eurodollar Loans	 	Prime Rate	 	Line (Unused)
	Level	 	Outstandings	 	Margin	 	Margin	 	Fee
	I
	 	Less than	 	 	0.75	%	 	 	0	%	 	 	0.125	%
	 
	 	$50,000,000	 	 	 	 	 	 	 	 	 	 	 	 
	II
	 	Greater than or	 	 	1.00	%	 	 	0	%	 	 	0.125	%
	 
	 	equal to	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	$50,000,000 and	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	less than	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	$100,000,000	 	 	 	 	 	 	 	 	 	 	 	 
	III
	 	Greater than or	 	 	1.25	%	 	 	0	%	 	 	0.15	%
	 
	 	equal to	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	$100,000,000	 	 	 	 	 	 	 	 	 	 	 	 

The Applicable Margin shall be adjusted quarterly as of the first day of each
February, May, August, and November, commencing February 1, 2008, based upon the
Borrower’s Average Outstandings calculated for the most recent quarter then ended.
Upon the occurrence of an Event of Default, at the option of the Lender, interest
shall be determined in the manner set forth in Section 2-10(f).

“Appraised Value”: The net appraised liquidation value of the Loan Parties’ Inventory as set
forth in the Loan Parties’ stock ledger (expressed as a percentage of the Cost of such
Inventory), each as reasonably determined from time to time by the Lender in accordance
with its customary procedures and based upon the most recent appraisal conducted
hereunder by an independent appraiser reasonably satisfactory to the Lender.

“Availability”: The lesser of the Loan Ceiling or the Borrowing Base;

Minus

(a) The then unpaid principal balance of the Loan Account.

Minus

(b) The then Stated Amount of all L/C’s.

Minus

(c) Unreimbursed L/C Obligations.

“Average Outstandings”: For any three month period, the sum of (a) the average Revolving
Credit Loans outstanding during such period, plus (b) the average Stated Amount of L/Cs
outstanding during such period.

“AWI”: Aeropostale West, Inc., a Delaware corporation with an address of 201 Willowbrook
Blvd., Wayne, New Jersey 07470, a wholly owned Subsidiary of the Borrower.

“Bank Products”: Any services or facilities provided to a Loan Party by the Lender
or any of its Affiliates (but excluding Cash Management Services), including without
limitation, on account of leasing, swap and other hedging contracts.

4

 

“Bank Product Reserves”: Such reserves as the Lender from time to time determine in
its discretion as being appropriate to reflect the liabilities and obligations of the
Loan Parties with respect to Bank Products then provided or outstanding.

“Bankruptcy Code”: Title 11, U.S.C., as amended from time to time.

“Base Rate Loan”: Each Revolving Credit Loan while bearing interest at the Prime
Rate.

“Blocked Account”: Is defined in Section 7-3.

“Borrower”:

Is defined in the Preamble.

“Borrowing Base”: The amounts calculated to the following formulae, as applicable:

	 	(a)	 	If the outstanding amount of Revolving Credit Loans and the Stated Amount of
L/Cs is less than or equal to $75,000,000 in the aggregate, the result of the
following:

     (i) 95% of the book value (as determined in accordance with GAAP) of Acceptable
Inventory,

     plus

     (ii) 85% of the face amount of Eligible Credit Card Receivable;

     minus

     (iii) Reserves.

	 	(b)	 	If the outstanding amount of Revolving Credit Loans and the Stated Amount of
L/Cs is greater than $75,000,000 in the aggregate, the result of the following:

     (i) 85% of the most recent Appraised Value of Acceptable Inventory multiplied
by the Cost of Acceptable Inventory,

     plus

     (ii)85% of the face amount of Eligible Credit Card Receivable;

     minus

     (iii)Reserves.

“Borrowing Base Certificate”: Is defined in Section 5-5.

“Business Day”: Any day other than (a) a Saturday or Sunday; (b) any day on which banks in
Boston, Massachusetts or New York, New York, generally are not open to the general
public for the purpose of conducting commercial banking

5

 

business; or (c) a day on which the Lender is not open to the general public to
conduct business, and, if such day relates to any Eurodollar Loan, means any such
day on which dealings in dollar deposits are conducted by and between banks in the
London interbank market.

“Business Plan”: The Borrower’s then current business plan and any revision, amendment, or
update of such business plan to which the Lender has provided its written sign-off.

“Capital Expenditures”: The expenditure of funds or the incurrence of liabilities which are
capitalized in accordance with GAAP, provided that for purposes of this
Agreement, capital expenditures funded by the proceeds from the incurrence of
Indebtedness permitted hereunder, by the proceeds received from the sale of assets
permitted pursuant to §4-12(d) hereof, by casualty insurance proceeds or condemnation
proceeds shall, to the extent of such proceeds, not be deemed Capital Expenditures.

“Capital Lease”: Any lease which is capitalized in accordance with GAAP.

“Cash Dominion Event”: Either (i) the occurrence and continuance of any Event of
Default, or (ii) the failure of the Borrowers to maintain Availability in an amount
greater than 15% of the then Borrowing Base. For purposes of this Agreement, the
occurrence of a Cash Dominion Event shall be deemed continuing (i) so long as such
Event of Default has not been waived, and/or (ii) if the Cash Dominion Event arises as
a result of the Borrowers’ failure to achieve Availability as required hereunder, until
Availability has exceeded 15% of the then Borrowing Base for 30 consecutive Business
Days, in which case a Cash Dominion Event shall no longer be deemed to be continuing
for purposes of this Agreement; provided that a Cash Dominion Event shall be deemed
continuing (even if an Event of Default is no longer continuing and/or Availability
exceeds the required amount for 30 consecutive Business Days) at all times after a Cash
Dominion Event has occurred and been discontinued on two (2) occasion(s) during any
calendar year.

“Cash Equivalents” shall mean, as to any Person, (i) securities issued or directly
and fully guaranteed or insured by the United States or any agency or instrumentality
thereof (provided that the full faith and credit of the United States is pledged in
support thereof) having maturities of not more than twelve (12) months from the date of
acquisition by such Person, (ii) time deposits and certificates of deposit of any
commercial bank incorporated in the United States of recognized standing having capital
and surplus in excess of $100,000,000 with maturities of not more than twelve (12)
months from the date of acquisition by such Person, (iii) repurchase obligations with a
term of not more than seven (7) days for underlying securities of the types described
in clause (i) above, provided that there shall be no restriction on the
maturities of such underlying securities pursuant to this clause (iii) entered into
with a bank meeting the qualifications specified in clause (ii) above, (iv) commercial
paper issued by the parent corporation of any

6

 

commercial bank (provided that the parent corporation and the bank are both
incorporated in the United States) of recognized standing having capital and surplus
in excess of $500,000,000 and commercial paper issued by any Person incorporated in
the United States rated at least A-1 or the equivalent thereof by Standard & Poor’s
Ratings Group or at least P-1 or the equivalent thereof by Moody’s Investors
Service, Inc. and in each case maturing not more than twelve (12) months after the
date of acquisition by such Person, and (v) investments in money market funds
substantially all of whose assets are comprised of securities of the types described
in clauses (i) through (v) above.

“Cash Management Reserves ”: Such reserves as the Lender, from time to time,
determines in its discretion as being appropriate to reflect the reasonably anticipated
liabilities and obligations of the Loan Parties with respect to Cash Management
Services then provided or outstanding.

“Cash Management Services”: Any one or more of the following types or services or
facilities provided to a Loan Party by the Lender or any of its Affiliates: (a)
automated clearinghouse transactions, (b) cash management services, including, without
limitation, controlled disbursement services, treasury, depository, overdraft, and
electronic funds transfer services, (c) foreign exchange facilities, (d) credit or
debit cards, and (e) merchant card services.

“Change in Control”: The occurrence of any of the following:

     (a) The acquisition, by any group of persons (within the meaning of the
Securities Exchange Act of 1934, as amended) or by any Person, of beneficial
ownership (within the meaning of Rule 13d-3 of the Securities and Exchange
Commission) of 30% or more of the issued and outstanding capital stock of
the Borrower (on a fully diluted basis) having the right, under ordinary
circumstances, to vote for the election of directors of the Borrower.

     (b) Persons (“Continuing Directors”) who (i) were directors of the
Borrower on the first day of any period consisting of twelve (12)
consecutive calendar months (the first of which twelve (12) month periods
commencing with the first day of the month during which this Agreement was
executed), or (ii) subsequently became directors of the Borrower and whose
initial election or initial nomination for election subsequent to that date
was approved by a majority of the Continuing Directors then on the board of
directors of the Borrower cease, for any reason other than death or
disability or replacement (in the ordinary course of business and not as a
result of any change in the equity ownership of the Borrower), to constitute
a majority of the directors of the Borrower.

  “Chattel
Paper”: Has the meaning given that term in the UCC.

  “Collateral”: Is defined in Section 8-1.

7

 

  “Commercial Tort Claim”: Has the meaning given that term in the UCC.

  “Commitment”: Subject to the provisions of Section 2-23, as of the Second Amendment
Effective Date, as follows:

	 	 	 	 	 	 	 	 	 
	 	 	DOLLAR	 	COMMITMENT
	LENDER	 	COMMITMENT	 	PERCENTAGE
	Bank of America, N.A.
	 	$	150,000,000.00	 	 	 	100	%

“Commitment Percentage”: As provided in the Definition of “Commitment”, above.

“Concentration Account”: Is defined in Section 7-3.

“Consolidated": With reference to any term defined herein, shall mean that term as applied
to the accounts of the Borrower and its Subsidiaries, consolidated in accordance with
GAAP.

“Cost”: The lower of

     (a) the calculated cost of purchases, as determined from invoices
received by the Borrower, the Borrower’s purchase journal or stock ledger,
based upon the Borrower’s accounting practices, known to the Lender, which
practices are in effect on the date on which this Agreement was executed; or

     (b) the cost equivalent of the lowest ticketed or promoted price at
which the subject inventory is offered to the public, after all mark-downs
(whether or not such price is then reflected on the Borrower’s accounting
system), which cost equivalent is determined in accordance with the retail
method of accounting, reflecting the Borrower’s historic business practices.

“Cost” does not include inventory capitalization costs or other non-purchase price
charges (such as freight) used in the Borrower’s calculation of cost of goods sold.

“Cost Factor”: The result of 1 minus the Borrower’s then cumulative markup percent
derived from the Borrower’s purchase journal on a rolling 12-month basis.

“Costs of Collection”: Includes, without limitation, all reasonable attorneys’ fees and
reasonable out-of-pocket expenses incurred by the Lender’s attorneys, and all
reasonable costs incurred by the Lender in the administration of the Liabilities and/or
the Loan Documents, including, without limitation, reasonable costs and expenses
associated with travel on behalf of the Lender, which costs and expenses are directly
or indirectly related to or in respect of the Lender’s: administration and management
of the Liabilities (other than customary overhead expenses); negotiation,
documentation, and amendment of any Loan Document; or efforts to

8

 

preserve, protect, collect, or enforce the Collateral, the Liabilities, and/or the
Lender’s Rights and Remedies and/or any of the Lender’s rights and remedies against
or in respect of any guarantor or other person liable in respect of the Liabilities
(whether or not suit is instituted in connection with such efforts). The Costs of
Collection are Liabilities, and at the Lender’s option may bear interest at the
highest post-default rate which the Lender may charge the Borrower hereunder as if
such had been lent, advanced, and credited by the Lender to, or for the benefit of,
the Borrower. Notwithstanding the foregoing, the entitlement of any Lender to “Costs
of Collection” is limited to the extent provided in §14-7 hereof.

“DDA”: Any checking or other demand daily depository account maintained by a Loan Party.

“Default Interest Event”: The occurrence of any of the following:

     (a) The acceleration of the time for payment of the Liabilities upon
the occurrence of an Event of Default.

     (b) The occurrence of any Event of Default under Sections 10-1, 10-2,
10-11, or 10-12 hereof.

     (c) The failure of the Borrower to comply with the provisions of
Section 5-5(which failure continues for five Business Days), or Sections 5-6
or 5-7(which failures continue for fifteen (15) Business Days), or Article
7.

“Deposit
Account”: Has the meaning given that term in the UCC.

“Documents”:
Has the meaning given that term in the UCC.

“Documents of Title”: Has the meaning given that term in the UCC.

“Dollar Commitment”: As provided in the Definition of “Commitment”, above.

     “Eligible Credit Card Receivables”: As of any date of determination, Accounts due to a Loan
Party from VISA, MasterCard, American Express, Diners Club, Discovercard, and other major credit
card processors reasonably acceptable to the Lender, in its reasonable discretion, as arise in the
ordinary course of business, and which have been earned by performance and are deemed by the Lender
in its discretion to be eligible for inclusion in the calculation of the Borrowing Base. None of
the following shall be deemed to be Eligible Credit Card Receivables:

     (a) Accounts that have been outstanding for more than five (5) Business Days from the
date of sale;

     (b) Accounts with respect to which a Loan Party does not have good, valid and
marketable title thereto, free and clear of any Lien (other than Liens granted to the
Lender);

     (c) Accounts that are not subject to a first priority security interest in favor of the
Lender;

9

 

     (d) Accounts which are disputed, are with recourse, or with respect to which a claim,
counterclaim, offset or chargeback has been asserted by the related credit card processor
(but only to the extent of such dispute, counterclaim, offset or chargeback);

     (e) Accounts as to which the credit card processor has the right under certain
circumstances to require a Loan Party to repurchase the Accounts from such credit card
processor;

     (f) Accounts arising from the use of a private label credit card of a Loan Party; or

     (g) Accounts (other than VISA, Master Card, American Express, Diners Club and
Discovercard) which the Lender determines in its reasonable commercial discretion acting in
good faith to be unlikely to be collected.

“Employee
Benefit Plan”: As defined in Section 3(2) of ERISA.

“Encumbrance”: Each of the following:

     (a) Any security interest, mortgage, pledge, hypothecation, lien,
attachment, or charge of any kind (including any agreement to give any of
the foregoing); the interest of a lessor under a Capital Lease; conditional
sale or other title retention agreement; sale (to the extent of recourse) of
accounts receivable or chattel paper; or other arrangement pursuant to which
any Person is entitled to any preference or priority with respect to the
property or assets of another Person or the income or profits of such other
Person or which constitutes an interest in property to secure an obligation;
each of the foregoing whether consensual or non-consensual and whether
arising by way of agreement, operation of law, legal process or otherwise.

     (b) The filing of any financing statement under the UCC or comparable
law of any jurisdiction.

“End Date”: The date upon which both (a) all Liabilities (other than indemnities,
not then due and payable, which survive repayment of the Revolving Credit Loans and
L/Cs and termination of the Commitments) have been paid in full and (b) all obligations
of any Lender to make loans and advances and to provide other financial accommodations
to the Borrower hereunder shall have been irrevocably terminated.

“Environmental Laws”: All of the following:

     (a) Any and all federal, state, local or municipal laws, rules, orders,
regulations, statutes, ordinances, codes, decrees or requirements which
regulate or relate to, or impose any standard of conduct or liability on
account of or in respect to environmental protection matters, including,
without limitation, Hazardous Materials, as are now or hereafter in effect.

     (b) The common law relating to damage to Persons or property from
Hazardous Materials.

10

 

“Equipment”: Includes, without limitation, “equipment” as defined in the UCC, and also all
motor vehicles, rolling stock, machinery, office equipment, plant equipment, tools,
dies, molds, store fixtures, furniture, and other goods, property, and assets which are
used and/or were purchased for use in the operation or furtherance of the Borrower’s
business, and any and all accessions or additions thereto, and substitutions therefor.

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

“ERISA Affiliate”: Any Person which is under common control with the Borrower within the
meaning of Section 4001 of ERISA or is part of a group which includes the Borrower and
which would be treated as a single employer under Section 414 of the Internal Revenue
Code of 1986, as amended.

“Eurodollar Business Day”: Any day which is both a Business Day and a day on which the
principal Eurodollar market in which Bank of America, N.A. participates is open for
dealings in United States Dollar deposits.

“Eurodollar Loan”: Any Revolving Credit Loan which bears interest at the Adjusted Eurodollar
Rate.

Eurodollar Rate”: For any Interest Period with respect to a Eurodollar Loan, (a) the rate
per annum equal to the rate determined by the Lender to be the offered rate that
appears on the page of the Telerate screen (or any successor thereto) that displays an
average British Bankers Association Interest Settlement Rate for deposits in dollars
(for delivery on the first day of such Interest Period) with a term equivalent to such
Interest Period, determined as of approximately 11:00 a.m. (London time) two Business
Days prior to the first day of such Interest Period, or (b) if the rate referenced in
the preceding clause (a) does not appear on such page or service or such page or
service shall not be available, the rate per annum equal to the rate determined by the
Lender to be the offered rate on such other page or other service that displays an
average British Bankers Association Interest Settlement Rate for deposits in dollars
(for delivery on the first day of such Interest Period) with a term equivalent to such
Interest Period, determined as of approximately 11:00 a.m. (London time) two Business
Days prior to the first day of such Interest Period, or (c) if the rates referenced in
the preceding clauses (a) and (b) are not available, the rate per annum determined by
the Lender as the rate of interest at which deposits in dollars for delivery on the
first day of such Interest Period in same day funds in the approximate amount of the
Eurodollar Loan being made, continued or converted by Bank of America, N.A. and with a
term equivalent to such Interest Period would be offered by Bank of America’s London
Branch to major banks in the London interbank eurodollar market at their request at
approximately 4:00 p.m. (London time) two Business Days prior to the first day of such
Interest Period.

“Events of Default”: Is defined in Article 10.

11

 

“Existing Loan Agreement”: Has the meaning set forth in the Recitals hereto.

“Federal
Funds Effective Rate”: For any day, the rate per annum equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such day;
provided that (a) if such day is not a Business Day, the Federal Funds Rate for
such day shall be such rate on such transactions on the next preceding Business Day as
so published on the next succeeding Business Day, and (b) if no such rate is so
published on such next succeeding Business Day, the Federal Funds Rate for such day
shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100
of 1%) charged to Bank of America on such day on such transactions.

“Fee Letter”: The letter agreement, dated November 13, 2007, between the Borrower
and the Lender with respect to certain fees payable to the Lender in connection with
this Agreement..

“Fixtures”: Has the meaning given that term in the UCC.

“GAAP”: Principles which are consistent with those promulgated or adopted by the Financial
Accounting Standards Board and its predecessors (or successors) in effect and
applicable to that accounting period in respect of which reference to GAAP is being
made, provided, however, in the event of a Material Accounting Change, then unless
otherwise specifically agreed to by the Lender, the Borrower shall include, with its
monthly, quarterly, and annual financial statements a schedule, certified by the
Borrower’s chief financial officer, on which the effect of such Material Accounting
Change to the statement with which provided shall be described.

“General Intangibles”: Includes, without limitation, “general intangibles” as defined in the
UCC; and also all: rights to payment for credit extended; deposits; amounts due to a
Loan Party; credit memoranda in favor of a Loan Party; warranty claims; tax refunds and
abatements; insurance refunds and premium rebates; all means and vehicles of investment
or hedging, including, without limitation, options, warrants, and futures contracts;
records; customer lists; telephone numbers; goodwill; causes of action; judgments;
payments under any settlement or other agreement; literary rights; rights to
performance; royalties; license and/or franchise fees; rights of admission; licenses;
franchises; license agreements, including all rights of a Loan Party to enforce same;
permits, certificates of convenience and necessity, and similar rights granted by any
governmental authority; patents, patent applications, patents pending, and other
intellectual property; internet addresses and domain names; developmental ideas and
concepts; proprietary processes; blueprints, drawings, designs, diagrams, plans,
reports, and charts; catalogs; manuals; technical data; computer software programs
(including the source and object codes therefor), computer records, computer software,
rights of access to computer record service bureaus, service

12

 

bureau computer contracts, and computer data; tapes, disks, semi-conductors chips
and printouts; trade secrets rights, copyrights, mask work rights and interests, and
derivative works and interests; user, technical reference, and other manuals and
materials; trade names, trademarks, service marks, and all goodwill relating
thereto; applications for registration of the foregoing; and all other general
intangible property of the Loan Parties in the nature of intellectual property;
proposals; cost estimates, and reproductions on paper, or otherwise, of any and all
concepts or ideas, and any matter related to, or connected with, the design,
development, manufacture, sale, marketing, leasing, or use of any or all property
produced, sold or leased, by a Loan Party or credit extended or services performed,
by a Loan Party, whether intended for an individual customer or the general business
of a Loan Party, or used or useful in connection with research by a Loan Party.

“Goods”: Has the meaning given that term in the UCC.

“Guarantor” and “Guarantors”: means individually and collectively AWI, Jimmy’Z, AGC and any
other subsidiary of the Borrower which executes and delivers a Guarantor Agreement.

“Guarantor Agreement”: Each instrument and document executed by a Guarantor of the
Liabilities to evidence or secure the Guarantor’s guaranty thereof.

“Hazardous Materials”: Any (a) hazardous materials, hazardous waste, hazardous or toxic
substances, petroleum products, which (as to any of the foregoing) are defined or
regulated as a hazardous material in or under any Environmental Law and (b) oil in any
physical state.

“Indebtedness”: All indebtedness and obligations of or assumed by any Person on account of
or in respect to any of the following:

     (a) In respect of money borrowed (including any indebtedness which is
non-recourse to the credit of such Person but which is secured by an
Encumbrance on any asset of such Person) whether or not evidenced by a
promissory note, bond, debenture or other written obligation to pay money.

     (b) In connection with any letter of credit or acceptance transaction
(including, without limitation, the face amount of all letters of credit and
acceptances issued for the account of such Person or reimbursement on
account of which such Person would be obligated).

     (c) In connection with the sale or discount of accounts receivable or
chattel paper of such Person other than the sale of retail Accounts to
credit card processors.

     (d) On account of deposits or advances.

     (e) As lessee under Capital Leases.

13

 

     (f) On account of net obligations under any swap or hedging contract.

     (g) With respect to obligations to purchase, redeem, retire, defease or
otherwise make any payment in respect of any equity interest in such Person
or any other Person, or any warrant, right or option to acquire such equity
interest, valued, in the case of a redeemable preferred interest, at the
greater of its voluntary or involuntary liquidation preference plus
accrued and unpaid dividends.

     “Indebtedness” also includes:

     (x) Indebtedness of others secured by an Encumbrance on any asset of
such Person, whether or not such Indebtedness is assumed by such Person.

     (y) Any guaranty, endorsement, suretyship or other undertaking pursuant
to which that Person may be liable on account of any Indebtedness of any
third party, other than endorsements of negotiable instruments for
collection in the ordinary course of business.

     (z) The Indebtedness of a partnership or joint venture in which such
Person is a general partner or joint venturer to the extent that the holder
of such Indebtedness has recourse to such Person.

“Indemnified Claim”: Is defined in Section 14-11.

“Indemnified Person”: Is defined in Section 14-11.

“Instruments”:
Has the meaning given that term in the UCC.

“Interest Payment Date”: With reference to:

     Each Eurodollar Loan: The last day of the Interest Period relating
thereto and, in addition, if such Eurodollar Loan has an Interest Period of
greater than three months, the last day of the third month of such Interest
Period; the Termination Date; and the End Date.

     Each Base Rate Loan: the first day of each month; the Termination Date;
and the End Date.

“Interest Period”: (a) With respect to each Eurodollar Loan: Subject to Subsection (c),
below, the period commencing on the date of the making or continuation of, or
conversion to, the subject Eurodollar Loan and ending one, two, three or six months
thereafter, as the Borrower may elect by notice (pursuant to Section 2-5(a)) to the
Lender.

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     (b) With respect to each Base Rate Loan: Subject to Subsection (c), below, the
period commencing on the date of the making or continuation of or conversion to such
Base Rate Loan and ending on that date (i) as of which the subject Base Rate Loan is
converted to a Eurodollar Loan, as the Borrower may elect by notice (pursuant to
Section 2-5(a)) to the Lender, or (ii) on which the subject Base Rate Loan is paid
by the Borrower.

     (c) The setting of Interest Periods is in all instances subject to the
following:

     (i) Any Interest Period for a Base Rate Loan which would otherwise end
on a day which is not a Business Day shall be extended to the next
succeeding Business Day.

     (ii) Any Interest Period for a Eurodollar Loan which would otherwise
end on a day that is not a Business Day shall be extended to the next
succeeding Business Day, unless that succeeding Business Day is in the next
calendar month, in which event such Interest Period shall end on the last
Business Day of the month during which the Interest Period ends.

     (iii) Subject to Subsection (iv), below, any Interest Period applicable
to a Eurodollar Loan, which Interest Period begins on a day for which there
is no numerically corresponding day in the calendar month during which such
Interest Period ends, shall end on the last Business Day of the month during
which that Interest Period ends.

     (iv) Any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.

     (v) The number of Interest Periods in effect at any one time is subject
to Section 2-10(d) hereof.

“Inventory”: Includes, without limitation, “inventory” as defined in the UCC and also all:
packaging, advertising, and shipping materials related to any of the foregoing, and all
names or marks affixed or to be affixed thereto for identifying or selling the same;
Goods held for sale or lease or furnished or to be furnished under a contract or
contracts of sale or service by the Borrower, or used or consumed or to be used or
consumed in the Borrower’s business; Goods of said description in transit: returned,
repossessed and rejected Goods of said description; and all documents (whether or not
negotiable) which represent any of the foregoing.

“Investment Property”: Has the meaning given that term in the UCC.

“ISP”: With respect to any L/C, the “International Standby Practices 1998” published by the
Institute of International Banking Law & Practice (or such later version thereof as may
be in effect at the time of issuance).

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“Issuer”: Bank of America, N.A.

“Jimmy’Z”: Jimmy’Z Surf Co., Inc., a Delaware corporation with an address of 112 West 34th
Street, New York, New York 10120, a wholly owned Subsidiary of the Borrower.

“L/C”: Any letter of credit, the issuance of which is procured by the Lender for the account
of the Borrower and any banker’s acceptance made on account of such letter of credit.

“Lease”: Any lease or other agreement, no matter how styled or structured, pursuant to which
the Borrower is entitled to the use or occupancy of any space.

“Lender”:
Defined in the Preamble to this Agreement.
“Lender’s Rights and Remedies”: Is defined in Section 11-6.

“Letter
of Credit Rights”: Has the meaning given that term in the UCC and also shall refer
to any right to payment or performance under a letter of credit, whether or not the
beneficiary has demanded or at the time is entitled to demand payment or performance.

“Liabilities” (in the singular, “Liability”): Includes, without limitation, all and each of
the following, whether now existing or hereafter arising:

     (a) Any and all direct and indirect liabilities, debts, and obligations
of the Borrower to the Lender, each of every kind, nature, and description
under the Loan Documents.

     (b) Each obligation to repay any loan, advance, indebtedness, note,
obligation, overdraft, or amount now or hereafter owing by the Borrower to
the Lender under the Loan Documents (including all future advances whether
or not made pursuant to a commitment by the Lender), whether or not any of
such are liquidated, unliquidated, primary, secondary, secured, unsecured,
direct, indirect, absolute, contingent, or of any other type, nature, or
description, or by reason of any cause of action which the Lender may hold
against the Borrower under the Loan Documents.

     (c) All notes and other obligations of the Borrower now or hereafter
assigned to or held by the Lender with respect to the Loan Documents, each
of every kind, nature, and description.

     (d) All interest, fees, and charges and other amounts which may be
charged by the Lender to the Borrower under the Loan Documents and/or which
may be due from the Borrower to the Lender under the Loan Documents from
time to time.

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     (e) All costs and expenses incurred or paid by the Lender in respect of
any of the Loan Documents (including, without limitation, Costs of
Collection, reasonable attorneys’ fees, and all court and litigation costs
and expenses).

     (f) Any and all covenants of the Borrower to or with the Lender and
any and all obligations of the Borrower to act or to refrain from acting in
accordance with under Loan Documents.

     (f) All obligations on account of Bank Products and Cash Management
Services.

     (g) Each of the foregoing as if each reference to the “Lender “ therein
were to each Affiliate of the Lender.

“Line (Unused) Fee”: Is defined in Section 2-13.

“Liquidity Requirement”: With respect to any acquisition or payment, (i) no Suspension Event
or Event of Default then exists or would arise from the consummation of the specified
transaction and the making of any payments with respect thereto, (ii) the Borrower has
furnished the Lender with a pro forma balance sheet, income statement and cash flow
statement (including, without limitation, a projection of Availability) for the
subsequent 12 month period, after giving effect to the consummation of the specified
transaction and the making of any payments with respect thereto; and (iii) the Lender
is reasonably satisfied that Availability, after giving effect to such specified
transaction and the making of any payments with respect thereto, will be at least equal
to 20% of the Borrowing Base for the 12 months following such specified transaction and
the making of such payments; and (iv) the Lender is reasonably satisfied that, after
giving effect to such specified transaction and the making of any payments with respect
thereto, the Borrower will be solvent.

“Loan Account”: Is defined in Section 2-7.

“Loan Ceiling”: $150,000,000.00.

“Loan Documents”: This Agreement, each instrument and document executed and/or
delivered as contemplated by Article 3, below, and each other instrument or document
from time to time executed and/or delivered in connection with the arrangements
contemplated hereby or in connection with any transaction which arises out of any
depository, letter of credit, interest rate protection, foreign exchange or other
hedging agreement, or equipment leasing services provided by the Lender or any
Affiliate of the Lender, as each may be amended from time to time.

“Loan Party” or “Loan Parties”: individually and collectively the Borrower and each
Guarantor.

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“Material Accounting Change”: Any change in GAAP applicable to accounting periods subsequent
to the Borrower’s fiscal year most recently completed prior to the execution of this
Agreement, which change has a material effect on the Borrower’s financial condition or
operating results, as reflected on financial statements and reports prepared by or for
the Borrower, when compared with such condition or results as if such change had not
taken place.

“Material Adverse Effect”: A material adverse effect upon (i) the Loan Parties business,
properties, operations or financial affairs, taken as a whole, or (ii) the Collateral,
taken as a whole, or (iii) the ability of the Loan Parties to perform their respective
obligations under this Agreement and the other Loan Documents, taken as a whole, or
(iv) the validity, enforceability, perfection or priority of this Agreement or the
other Loan Documents or of the rights and remedies of the Lender under any Loan
Document, taken as a whole.

“Maturity Date”: November 13, 2012.

“Operating Account”: Is defined in Section 7-3.

“Participant”: Is defined in Section 14-14, hereof.

“Payment Intangibles”: Has the meaning given that term in the UCC and shall also refer to
any General Intangible under which the Account Debtor’s primary obligation is a
monetary obligation.

“Permitted Acquisition”: The investment in, the purchase of stock of, or the purchase of all
or a substantial part of the assets or properties of any Person, or the entering into
of any transaction, merger (with the Borrower as the surviving entity), consolidation
or exchange of securities with any Person, in which each of the following conditions
are satisfied:

     (a) The type of business of such Person is generally the same type of
business (or is included in the types of business) in which the Borrower is
engaged or a business reasonably related thereto.

     (b) Immediately after giving effect to the transaction, the Liquidity
Requirement is satisfied.

     (c) Prior to and immediately after giving effect to the transaction, no
Suspension Event exists or will arise.

     (d) The aggregate consideration (exclusive of the value of any common
equity of the Borrower issued or delivered in connection with such
transaction) however classified, whether cash, property or assumption of
Indebtedness, in connection with all such transactions shall not exceed
$100,000,000.00 in any fiscal year.

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     (e) All action required to be undertaken pursuant to Section 4-18(f) by
any Subsidiary created in connection with such transaction has been
completed to the reasonable satisfaction of the Lender.

“Permitted Encumbrances”: Those Encumbrances permitted as provided in Section 4-6(a) hereof.

“Person”: Any natural person, and any corporation, limited liability company, trust,
partnership, joint venture, or other enterprise or entity.

“Prime Rate”: For any day, the higher of: (a) the variable annual rate of interest then most
recently announced by Bank of America, N.A. at its head office in Charlotte, North
Carolina as its “Prime Rate”; and (b) the Federal Funds Effective Rate in effect on
such day plus 1/2 of 1% (0.50%) per annum. The Prime Rate is a reference rate and does
not necessarily represent the lowest or best rate being charged to any customer. If
for any reason the Lender shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the Federal Funds
Effective Rate for any reason, including the inability or failure of the Lender to
obtain sufficient quotations thereof in accordance with the terms hereof, the Prime
Rate shall be determined without regard to clause (b) of the first sentence of this
definition, until the circumstances giving rise to such inability no longer exist. Any
change in the Prime Rate due to a change in Bank of America’s Prime Rate or the Federal
Funds Effective Rate shall be effective on the effective date of such change in Bank of
America’s Prime Rate or the Federal Funds Effective Rate, respectively.

“Proceeds”: Includes, without limitation, “Proceeds” as defined in the UCC (defined below),
and each type of property described in Section 8-1 hereof.

“Receipts”: All cash, cash equivalents, checks, and credit card slips and receipts as arise
out of the sale of the Collateral.

“Receivables Collateral”: That portion of the Collateral which consists of the Loan Parties’
Accounts, Accounts Receivable, General Intangibles for the payment of money, Chattel
Paper, Instruments, Investment Property, letters of credit for the benefit of a Loan
Party, and bankers’ acceptances held by a Loan Party, and any rights to payment.

“Related Entity”: (a) Any corporation, limited liability company, trust, partnership, joint
venture, or other enterprise which: is a parent, brother-sister, Subsidiary, or
Affiliate, of the Borrower; could have such enterprise’s tax returns or financial
statements consolidated with the Borrower’s; could be a member of the same controlled
group of corporations (within the meaning of Section 1563(a)(1), (2) and (3) of the
Internal Revenue Code of 1986, as amended from time to time) of which the Borrower is a
member; controls or is controlled by the Borrower or by any Affiliate of the Borrower.

     (b) Any Affiliate.

19

 

“Requirement of Law”: As to any Person:

     (a) (i) All statutes, rules, regulations, orders, or other requirements having
the force of law and (ii) all court orders and injunctions, arbitrator’s decisions,
and/or similar rulings, in each instance ((i) and (ii)) of or by any federal, state,
municipal, and other governmental authority, or court, tribunal, governmental panel,
or other governmental body which has jurisdiction over such Person, or any property
of such Person.

     (b) That Person’s charter, certificate of incorporation, articles of
organization, and/or other organizational documents, as applicable; and

     (c) that Person’s by-laws and/or other instruments which deal with corporate or
similar governance, as applicable.

“Reserves”: Without duplication of any other reserves or items that are otherwise addressed
or excluded either through eligibility criteria or in the most recent appraisal
conducted hereunder by an independent appraiser reasonably satisfactory to the Lender,
such reserves as the Lender from time to time determines in its reasonable discretion
exercised in good faith as being necessary or appropriate (a) to reflect the
impediments to the Lender’s ability to realize upon the Collateral, (b) to reflect
costs, expenses and other amounts that the Lender may incur or be required to pay to
realize upon the Collateral, including, without limitation, on account of rent, customs
and duties and Permitted Encumbrances, (c) to reflect changes in the determination of
the saleability, at retail, of Acceptable Inventory, (d) to reflect such other factors
as negatively affect the market value of the Acceptable Inventory, (e) on account of
gift cards, gift certificates, merchandise credits and customer deposits, (f) Cash
Management Reserves, and (g) Bank Product Reserves.

“Responsible Officer”: means the chief executive officer, chief operating officer,
president, chief financial officer, general counsel, chief accounting officer,
treasurer, controller, vice president of finance of a Loan Party or any of the other
individuals designated in writing to the Lender by an existing Responsible Officer of a
Loan Party as an authorized signatory of any certificate or other document to be
delivered hereunder. Any document delivered hereunder that is signed by a Responsible
Officer of a Loan Party shall be conclusively presumed to have been authorized by all
necessary corporate, partnership and/or other action on the part of such Loan Party and
such Responsible Officer shall be conclusively presumed to have acted on behalf of such
Loan Party.

“Revolving
Credit”: Is defined in Section 2-1.

“Revolving Credit Note”: Is defined in Section 2-8.

“Revolving Credit Loan”: A term of convenience which refers to so much of the unpaid
principal balance of the Loan Account as bears the same rate of interest for the same
Interest Period.

20

 

“Second Amendment Effective Date”: The date upon which the conditions precedent set forth
in Article 3 hereof have been satisfied or waived and this Agreement has become
effective.

“Secured L/Cs”: L/Cs which have been secured in the manner provided pursuant to Section 2-19
hereof.

“Seller”: Federated Specialty Stores, Inc., an Ohio corporation.

“Statutory Reserve Rate”: A fraction (expressed as a decimal), the numerator of which is the
number one and the denominator of which is the number one minus the aggregate of the
maximum reserve percentages (including any marginal, special, emergency or supplemental
reserves) expressed as a decimal established by the Federal Reserve Board to which the
Lender is subject with respect to the Adjusted Eurodollar Rate, for Eurocurrency
funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the
Federal Reserve Board). Such reserve percentages shall include those imposed pursuant
to such Regulation D. Eurodollar Loans shall be deemed to constitute Eurocurrency
funding and to be subject to such reserve requirements without benefit of or credit for
proration, exemptions or offsets that may be available from time to time to the Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate shall
be adjusted automatically on and as of the effective date of any change in any reserve
percentage.

“Stated Amount”: The maximum amount for which an L/C may be honored.

“Subordinated Indebtedness”: Indebtedness the payment of principal and interest of which is
expressly subordinated in right of payment to the Liabilities, in such form and on such
terms (which may include the payment of current interest until the occurrence, and
during the continuance, of a Suspension Event) as are reasonably acceptable to the
Lender.

“Subsidiary”: As to any Person, any corporation, association, partnership, limited liability
company, joint venture or other business entity of which at least fifty percent (50%)
or more of the ordinary voting power (or equivalent interests) for the election of a
majority of the board of directors (or other equivalent governing body) of such entity
is held or controlled by such Person, or by one or more Subsidiaries of such Person, or
by such Person and one or more Subsidiaries of such Person; or which is otherwise
controlled by such Person, or by one or more Subsidiaries of such Person, or by such
Person and one or more Subsidiaries of such Person through the exercise of voting power
or otherwise.

“Supporting Obligation”: Has the meaning given that term in the UCC and shall also refer to
a Letter of Credit Right or secondary obligation that supports the payment or
performance of an Account, Chattel Paper, a Document, a General Intangible, an
Instrument or Investment Property.

21

 

“Suspension Event”: Any occurrence, circumstance, or state of facts which (a) is an Event of
Default, which is continuing; or (b) would become an Event of Default if any requisite
notice were given and/or any requisite period of time were to run and such occurrence,
circumstance, or state of facts were not absolutely cured within any applicable grace
period.

“Termination Date”: The earliest of (a) the Maturity Date; or (b) the occurrence of any
event described in Section hereof; or (c) date set by notice by the Lender to the
Borrower, which notice sets the Termination Date on account of the occurrence of any
Event of Default other than as described in Section hereof.

“Trust Deposit Accounts”: Depository accounts established by the Loan Parties the proceeds
of which are to be utilized solely for the payment of sales taxes, ad valorem taxes,
withholding taxes and other similar taxes, and other depository accounts established by
the Loan Parties for which such Loan Party is a trustee or other fiduciary for any
other Persons.

“UCC”: The Uniform Commercial Code as presently in effect in Massachusetts,
provided, however, that if a term is defined in Article 9 of the
Uniform Commercial Code differently than in another Article thereof, the term shall
have the meaning set forth in Article 9; provided further that, if by
reason of mandatory provisions of law, perfection, or the effect of perfection or
non-perfection, of a security interest in any Collateral or the availability of any
remedy hereunder is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than Massachusetts, “Uniform Commercial Code” means the Uniform
Commercial Code as in effect in such other jurisdiction for purposes of the provisions
hereof relating to such perfection or effect of perfection or non-perfection or
availability of such remedy, as the case may be.

“Unreimbursed L/C Obligations”: The then unpaid reimbursement obligations in respect of L/Cs
which have been drawn, but which have not been repaid either by an advance under the
Revolving Credit in accordance with the provisions of Section 2-17(e) hereof or
otherwise.

2. — The Revolving Credit:

     (a) Establishment of Revolving Credit.

          (i) The Lender hereby establishes a revolving line of credit (the “Revolving Credit”) in the
Borrower’s favor pursuant to which the Lender, subject to, and in accordance with, this Agreement,
shall make loans and advances and otherwise provide financial accommodations to and for the account
of the Borrower as provided herein, up to the maximum amount of the Lender’s Dollar Commitment;
provided that the outstanding amount of Revolving Credit Loans and the Stated Amount of L/Cs shall
not at any time in the aggregate exceed the lesser of (A) the Loan Ceiling, or (B) the Borrowing
Base.

          (ii) The proceeds of borrowings under the Revolving Credit shall be used solely for working
capital and general corporate purposes of the Borrower, including, without limitation, the
repurchase of the Borrower’s capital stock, and for its Capital Expenditures, all solely to the
extent permitted by this Agreement.

     (b) Intentionally Omitted.

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     (c) Intentionally Omitted.

     (d) Risks of Value of Collateral. The Lender’s reference to a given asset in connection with
the making of loans, credits, and advances and the providing of financial accommodations under the
Revolving Credit and/or the monitoring of compliance with the provisions hereof shall not be deemed
a determination by the Lender relative to the actual value of the asset in question. All risks
concerning the collectability of the Borrower’s Accounts and the saleability of the Borrower’s
Inventory are and remain upon the Borrower. All Collateral secures the prompt, punctual, and
faithful performance of the Liabilities whether or not relied upon by the Lender in connection with
the making of loans, credits, and advances and the providing of financial accommodations under the
Revolving Credit.

     (e) Loan Requests.

          (i) Subject to the provisions of this Agreement, a loan or advance under the Revolving Credit
duly and timely requested by the Borrower shall be made pursuant hereto, provided that:

          (A) Availability will not be exceeded;

          (B) If Aggregate Outstandings exceed $75,000,000, no loans, advances or other financial
accommodations shall be made if as a result thereof the Aggregate Outstandings would exceed
$100,000,000 until such time as the Lender has completed, and received the results of a
commercial finance audit and inventory appraisal in accordance with the provisions of
Section 5-10 hereof.

          (C) The Revolving Credit has not been suspended as provided in Section 2-5(h).

          (ii) Requests for loans and advances under the Revolving Credit may be requested by the
Borrower in such manner as may from time to time be reasonably acceptable to the Lender.

          (iii) Subject to the provisions of this Agreement, the Borrower may request a Revolving Credit
Loan and elect an interest rate and Interest Period to be applicable to that Revolving Credit Loan
by giving the Lender notice no later than the following:

          (A) If such Revolving Credit Loan is or is to be converted to a Base Rate Loan: By 1:00
PM on the Business Day on which the subject Revolving Credit Loan is to be made or is to be
so converted. Base Rate Loans requested by the Borrower, other than those resulting from
the conversion of a Eurodollar Loan, shall not be less than $10,000.00 (or the then
Availability if less than $10,000.00).

          (B) If such Revolving Credit Loan is, or is to be continued as, or converted to, a
Eurodollar Loan: By 1:00 PM two (2) Eurodollar Business Days before the end of the then
applicable Interest Period. Eurodollar Loans and conversions to Eurodollar Loans shall each
be not less than $1,000,000.00 and in increments of $1,000,000.00 in excess of such minimum.

          (C) Any Eurodollar Loan which matures while a Suspension Event is extant shall be
converted, at the option of the Lender to a Base Rate Loan notwithstanding any notice from
the Borrower that such Loan is to be continued as a Eurodollar Loan.

          (iv) Any request for a Revolving Credit Loan or for the conversion of a Revolving Credit Loan
which is made after the applicable deadline therefor, as set forth above, shall be deemed to have
been made at the opening of business on the then next Business Day or Eurodollar Business Day, as
applicable. Each request for
a Revolving Credit Loan or for the conversion of a Revolving Credit Loan shall be made in such
manner as may from time to time be reasonably acceptable to the Lender

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          (v) The Borrower may request that the Lender cause the issuance of L/C’s for the account of
the Borrower as provided in Section 2-17.

          (vi) The Lender may rely on any request for a loan or advance, or other financial
accommodation under the Revolving Credit which the Lender, in good faith, reasonably believes to
have been made by a Person duly authorized to act on behalf of the Borrower and may decline to make
any such requested loan or advance, or issuance, or to provide any such financial accommodation
pending the Lender’s being furnished with such documentation concerning that Person’s authority to
act as may be reasonably satisfactory to the Lender.

          (vii) A request by the Borrower for loan or advance, or other financial accommodation under
the Revolving Credit shall be irrevocable and shall constitute certification by the Borrower that
as of the date of such request, each of the following is true and correct:

          (A) There has been no material adverse change in the Borrower’s financial condition
from the most recent financial information furnished to the Lender pursuant to this
Agreement.

          (B) All or a portion of any loan or advance so requested will be set aside by the
Borrower to cover all of the Borrower’s obligations for sales tax on account of sales since
the then most recent borrowing pursuant to the Revolving Credit.

          (C) Each representation which is made herein or in any of the Loan Documents (defined
below) is then true and complete in all material respects as of and as if made on the date
of such request (other than those which are as of a specific date, in which case such
representation was true and complete in all material respects as of such date).

          (D) No Suspension Event is then extant.

          (viii) Upon the occurrence, and during the continuance, from time to time of any Suspension
Event:

          (A) The Lender may suspend the Revolving Credit immediately.

          (B) The Lender shall not be obligated, during such suspension, to make any loans or
advance, or to provide any financial accommodation hereunder or to seek the issuance of any
L/C.

          (C) The Lender may suspend the right of the Borrower to request any Eurodollar Loan or
to convert any Base Rate Loan to a Eurodollar Loan.

     (f) Making of Loans Under Revolving Credit.

          (i) A loan or advance under the Revolving Credit shall be made by the transfer of the
proceeds of such loan or advance to the Operating Account or as otherwise instructed by the
Borrower.

          (ii) A loan or advance shall be deemed to have been made under the Revolving Credit (and the
Borrower shall be indebted to the Lender for the amount thereof immediately) at the following:

          (A) The Lender’s initiation of the transfer of the proceeds of such loan or advance in
accordance with the Borrower’s instructions (if such loan or advance is of funds requested
by the Borrower).

          (B) The charging of the amount of such loan to the Loan Account (in all other
circumstances).

          (iii) There shall not be any recourse to or liability of the Lender, on account of:

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          (A) Any delay in the making of any loan or advance requested under the Revolving Credit
unless due to the Lender’s gross negligence or willful misconduct.

          (B) Any delay in the proceeds of any such loan or advance constituting collected funds.

          (C) Any delay in the receipt, and/or any loss, of funds which constitute a loan or
advance under the Revolving Credit, the wire transfer of which was properly initiated by the
Lender in accordance with wire instructions provided to the Lender by the Borrower.

     (g) The Loan Account.

          (i) An account (“Loan Account”) shall be opened on the books of the Lender. A record may be
kept in the Loan Account of all loans made under or pursuant to this Agreement and of all payments
thereon.

          (ii) The Lender may also keep a record (either in the Loan Account or elsewhere, as the Lender
may from time to time elect) of all interest, fees, service charges, costs, expenses, and other
debits owed the Lender on account of the Liabilities and of all credits against such amounts so
owed.

          (iii) All credits against the Liabilities shall be conditional upon final payment to the
Lender of the items giving rise to such credits. The amount of any item credited against the
Liabilities which is charged back against the Lender for any reason or is not so paid shall be a
Liability and shall be added to the Loan Account, whether or not the item so charged back or not so
paid is returned.

          (iv) Except as otherwise provided herein, all fees, service charges, costs, and expenses for
which the Borrower is obligated hereunder are payable on demand.

          (v) The Lender, without the request of the Borrower, may advance under the Revolving Credit
any interest, fee, service charge, or other payment to which the Lender is entitled from the
Borrower pursuant hereto and may charge the same to the Loan Account notwithstanding that such
amount so advanced may result in Availability’s being exceeded. Such action on the part of the
Lender shall not constitute a waiver of the Lender’s rights and Borrower’s obligations under
Section 2-9(b). Any amount which is added to the principal balance of the Loan Account as provided
in this Section shall bear interest, subject to Section 2-10(f), at the Prime Rate.

          (vi) Absent manifest error, any statement rendered by the Lender to the Borrower concerning
the Liabilities shall be considered correct and accepted by the Borrower and shall be conclusively
binding upon the Borrower unless the Borrower provides the Lender with written objection thereto
within sixty (60) days from the receipt of such statement, which written objection shall indicate,
with particularity, the reason for such objection. The Loan Account and the Lender’s books and
records concerning the loan arrangement contemplated herein and the Liabilities shall be prima
facie evidence and proof of the items described therein.

     (h) The Revolving Credit Notes. The obligation to repay loans and advances under the
Revolving Credit, with interest as provided herein, shall be evidenced by a promissory note (a
“Revolving Credit Note”) in the form of EXHIBIT 2-8, annexed hereto, executed by the Borrower.
Neither the original nor a copy of the Revolving Credit Note shall be required, however, to
establish or prove any Liability. In the event that the Revolving Credit Note is ever lost,
mutilated, or destroyed, upon receipt of an indemnification with respect to the lost Revolving
Credit Note from the Lender in form and substance reasonably satisfactory to the Borrower and the
Lender, the Borrower shall execute a replacement thereof and deliver such replacement to the
Lender.

25

 

     (i) Payment of The Loan Account.

          (i) The Borrower may repay all or any portion of the principal balance of the Loan Account
from time to time until the Termination Date. Such payments shall be applied first to Base Rate
Loans and only then to Eurodollar Loans.

          (ii) The Borrower, without notice or demand from the Lender, shall pay the Lender that amount,
from time to time, which is necessary so that the unpaid balance of the Loan Account does not
exceed Availability. Such payments shall be applied first to Base Rate Loans and only then to
Eurodollar Loans.

          (iii) Subject to the provisions of Section 7-5(c) hereof, the Lender shall endeavor to cause
those applications of payments (if any), pursuant to Sections 2-9(a) and 2-9(b) against Eurodollar
Loans then outstanding in such manner as results in the least cost to the Borrower, but shall not
have any affirmative obligation to do so nor liability on account of the Lender’s failure to have
done so. In no event shall action or inaction taken by the Lender excuse the Borrower from any
indemnification obligation under Section 2-9(e).

          (iv) The Borrower shall repay the then entire unpaid balance of the Loan Account and all other
Liabilities on the Termination Date.

          (v) The Borrower shall indemnify the Lender and hold the Lender harmless from and against any
loss, cost or expense (excluding loss of anticipated profits) which the Lender may sustain or incur
(including, without limitation, by virtue of acceleration after the occurrence of any Event of
Default) as a consequence of the following:

          (A) Default by the Borrower in payment of the principal amount of or any interest on
any Eurodollar Loan as and when due and payable, including any such loss or expense arising
from interest or fees payable by the Lender to lenders of funds obtained by it in order to
maintain its Eurodollar Loans.

          (B) Default by the Borrower in making a borrowing or conversion after the Borrower has
given (or is deemed to have given) a request for a Revolving Credit Loan or a request to
convert a Revolving Credit Loan from one applicable interest rate to another.

          (C) The making of any payment on a Eurodollar Loan or the making of any conversion of
any such Loan to a Base Rate Loan on a day that is not the last day of the applicable
Interest Period with respect thereto, including interest or fees payable by the Lender to
lenders of funds obtained by it in order to maintain any such Loans as “breakage fees”
(so-called).

     (j) Interest Rates.

          (i) Each Revolving Credit Loan shall bear interest at the Prime Rate plus the Applicable
Margin for Base Rate Loans unless timely notice is given (as provided in Section 2-5(a)) that the
subject Revolving Credit Loan (or a portion thereof) is, or is to be converted to, a Eurodollar
Loan.

          (ii) Each Revolving Credit Loan which consists of a Eurodollar Loan shall bear interest at the
Adjusted Eurodollar Rate plus the Applicable Margin for Eurodollar Loans.

          (iii) Subject to the provisions hereof, the Borrower, by notice to the Lender, may cause all
or a part of the unpaid principal balance of the Loan Account to bear interest at the Prime Rate or
the Adjusted Eurodollar Rate as specified from time to time by the Borrower.

          (iv) The Borrower shall not select, renew, or convert any interest rate for a Revolving Credit
Loan such that, in addition to interest at the Prime Rate, there are more than six (6) Interest
Periods for Eurodollar Loans applicable to the Revolving Credit Loans at any one time.

26

 

          (v) The Borrower shall pay accrued and unpaid interest on each Revolving Credit Loan in
arrears as follows:

          (A) On the applicable Interest Payment Date for that Revolving Credit Loan.

          (B) On the Termination Date and on the End Date.

          (C) Following the occurrence, and during the continuance, of any Event of Default, with
such frequency as may be determined by the Lender.

          (vi) Following the occurrence, and during the continuance, of any Default Interest Event (and
whether or not the Lender exercises the Lender’s rights on account thereof), all Revolving Credit
Loans shall bear interest, at the option of the Lender, at a rate which is the aggregate of the
interest rate then in effect plus two percent (2%) per annum.

          (vii) All computations of interest for Base Rate Loans shall be made on the basis of a year of
365 or 366 days, as the case may be, and actual days elapsed. All other computations of fees and
interest shall be made on the basis of a 360-day year and actual days elapsed (which results in
more fees or interest, as applicable, being paid than if computed on the basis of a 365-day year).

     (k) Additional Fees.

     In addition to any other fee paid by Borrower on account of the Revolving Credit, the Borrower
shall pay the Lender a Line (Unused) Fee (so referred to herein) in arrears, on the first day of
each month, commencing with the first month immediately following the Second Amendment Effective
Date (and on the Termination Date). The Line (Unused) Fee shall be equal to Applicable Margin for
Line (Unused) Fee per annum multiplied by the difference during the month just ended (or relevant
period with respect to the payment being made on the Termination Date) between Loan Ceiling and the
Average Outstandings.

     (l) Intentionally Omitted.

     (m) Line (Unused Fee).

     In addition to any other fee paid by Borrower on account of the Revolving Credit, the Borrower
shall pay the Lender a Line (Unused) Fee (so referred to herein) in arrears, on the first day of
each month, commencing with the first month immediately following the Second Amendment Effective
Date (and on the Termination Date). The Line (Unused) Fee shall be equal to Applicable Margin for
Line (Unused) Fee per annum multiplied by the difference during the month just ended (or relevant
period with respect to the payment being made on the Termination Date) between Loan Ceiling and the
Average Outstandings.

     (n) Intentionally Omitted

     (o) Concerning Fees.

     The Borrower shall not be entitled to any credit, rebate or repayment of the Commitment Fee,
Line (Unused) Fee or other fee previously earned by the Lender pursuant to this Agreement
notwithstanding any termination of this Agreement or suspension or termination of the Lender’s
obligation to make loans and advances hereunder.

     (p) Lender’s Discretion.

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     Each reference in the Loan Documents to the exercise of discretion or the like by the Lender
shall be to its exercise of its reasonable judgement, in good faith, based upon the Lender’s
consideration of any such factor as the Lender reasonably deems appropriate.

     (q) Procedures For Issuance of L/C’s.

          (i) The Borrower may request that the Lender cause the issuance of L/C’s for the account of
the Borrower. Each such request shall be in such manner as may from time to time be acceptable to
the Lender.

          (ii) Subject to the provisions of Section 2.5(a)(ii), the Lender will endeavor to cause the
issuance of any L/C so requested by the Borrower, provided that, at the time that the request is
made, the Revolving Credit has not been suspended as provided in Section 2-5(h) and if so issued:

          (A) The aggregate Stated Amount of all L/C’s then outstanding, does not exceed Forty
Million Dollars and No Cents ($40,000,000.00).

          (B) The expiry of the L/C is not later than the Maturity Date.

          (C) Availability would not be exceeded.

          (D) Intentionally Omitted.

          (iii) The Borrower shall execute such documentation to apply for and support the issuance of
an L/C as may be reasonably required by the Issuer.

          (iv) There shall not be any recourse to, nor liability of, the Lender on account of

          (A) Any delay by an Issuer to issue an L/C;

          (B) Any action or inaction of an Issuer on account of or in respect to, any L/C.

          (v) The Borrower shall reimburse the Issuer for the amount of any drawing under an L/C on the
same Business Day of such drawing. The Lender, without the request of the Borrower, may advance
under the Revolving Credit (and charge to the Loan Account) the amount of any honoring of any L/C
and other amount for which the Borrower, the Issuer, or the Lenders become obligated on account of,
or in respect to, any L/C. Such advance shall be made whether or not a Suspension Event is then
extant or such advance would result in Availability’s being exceeded. Such action shall not
constitute a waiver of the Lender’s rights under Section 2-9(b) hereof.

     (r) Fees For L/C’s.

          (i) The Borrower shall pay to the Lender a fee, on account of L/C’s, the issuance of which had
been procured by the Lender, monthly in arrears, and on the Termination Date and on the End Date,
equal to the following per annum percentages of the average face amount of the following categories
of Letters of Credit outstanding during the three month period then ended:

          (A) Standby Letters of Credit: At a per annum rate equal to the then Applicable Margin
for Eurodollar Loans;

          (B) Commercial Letters of Credit: At a per annum rate equal to fifty percent (50%) of
the then Applicable Margin for Eurodollar Loans.

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          (C) After the occurrence and during the continuance of an Event of Default, effective
upon written notice from the Lender, the L/C fees shall be increased by an amount equal to
two percent (2%) per annum.

          (ii) In addition to the fee to be paid as provided in Subsection 2-18(a), above, the Borrower
shall pay to the Lender (or to the Issuer, if so requested by Lender), on demand, all issuance,
processing, negotiation, amendment, and administrative fees and other amounts charged by the Issuer
on account of, or in respect to, any L/C.

     (s) Cash Collateralization of L/Cs.

          (i) With respect to L/Cs with a scheduled expiry after the Maturity Date, thirty (30) days
prior to the Maturity Date, and

          (b) with respect to all L/Cs, upon the Lender’s request after the occurrence, and during the
continuance, of any Event of Default hereunder,

the Borrower shall deposit in an account with the Lender, an amount in cash equal to 103% of the
then Stated Amount of all outstanding L/Cs. Such deposit shall be held by the Lender as collateral
for the payment and performance of the Liabilities. The Lender shall have the exclusive dominion
and control over such account. Such deposits shall not bear interest. Monies in such account
shall be automatically applied by the Lender to reimburse the Issuer for any honoring of any L/Cs,
together with any other amounts owed to the Issuer, and after all L/Cs have been so reimbursed or
otherwise expired, any remaining balance shall be applied in reduction of the Liabilities. In lieu
of depositing such cash with the Lender the Borrower may furnish the Lender, with a so-called
“back-to-back” letter of credit in form and substance and issued by a bank reasonably satisfactory
to the Lender in its sole and absolute discretion, in an amount equal to 103% of the then Stated
Amount of all outstanding L/Cs. Drawings under such “back-to-back” letters of credit shall be
applied by the Lender to the Liabilities in the manner set forth above with respect to the cash
collateral account. If no Event of Default then exists, the cash collateral deposited with the
Lender and/or the amount of the “back-to-back” letters of credit may be reduced by an amount equal
to any reduction from time to time in the Stated Amount of all outstanding L/Cs (other than on
account of drawings thereunder).

     (t) Concerning L/C’s.

          (i) None of the Issuer, the Issuer’s correspondents, or any advising, negotiating, or paying
bank with respect to any L/C shall be responsible in any way for:

          (A) The performance by any beneficiary under any L/C of that beneficiary’s obligations
to the Borrower.

          (B) The form, sufficiency, correctness, genuineness, authority of any person signing;
falsification; or the legal effect of; any documents called for under any L/C if (with
respect to the foregoing) such documents on their face appear to be in order, except to the
extent that such Issuer, Issuer’s correspondents, or advising, negotiating, or paying bank
has actual knowledge of any of the foregoing.

          (ii) The Issuer may honor, as complying with the terms of any L/C and of any drawing
thereunder, any drafts or other documents otherwise in order, but signed or issued by an
administrator, executor, conservator, trustee in bankruptcy, debtor in possession, assignee for the
benefit of creditors, liquidator, receiver, or other legal representative of the party authorized
under such L/C to draw or issue such drafts or other documents.

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          (iii) Unless otherwise agreed to, in the particular instance, the Borrower hereby authorizes
any Issuer to:

          (A) Select an advising bank, if any.

          (B) Select a paying bank, if any.

          (C) Select a negotiating bank.

          (iv) All directions, correspondence, and funds transfers relating to any L/C are at the risk
of the Borrower. The Issuer shall have discharged the Issuer’s obligations under any L/C which, or
the drawing under which, includes payment instructions, by the initiation of the method of payment
called for in, and in accordance with, such instructions (or by any other commercially reasonable
and comparable method). Neither the Lender nor the Issuer shall have any responsibility for any
inaccuracy, interruption, error, or delay in transmission or delivery by post, telegraph or cable,
or for any inaccuracy of translation, except for their gross negligence or willful misconduct.

          (v) The Lender’s, and the Issuer’s rights, powers, privileges and immunities specified in or
arising under this Agreement are in addition to any heretofore or at any time hereafter otherwise
created or arising, whether by statute or rule of law or contract.

          (vi) Except to the extent otherwise expressly provided hereunder or agreed to in writing by
the Issuer and the Borrower, (i) the rules of the ISP shall apply to each standby L/C, and (ii) the
rules of the Uniform Customs and Practice for Documentary Credits, as most recently published by
the International Chamber of Commerce at the time of issuance shall apply to each commercial L/C.

          (vii) If any change in any law, executive order or regulation, or any directive of any
administrative or governmental authority (whether or not having the force of law), or in the
interpretation thereof by any court or administrative or governmental authority charged with the
administration thereof, shall either:

          (A) impose, modify or deem applicable any reserve, special deposit or similar
requirements against letters of credit heretofore or hereafter issued by any Issuer or with
respect to which the Lender, any or any Issuer has an obligation to lend to fund drawings
under any L/C; or

          (B) impose on any Issuer any other condition or requirements relating to any such
letters of credit;

and the result of any event referred to in Section 2-20(g)(i) or 2-20(g)(ii), above, shall be to
increase the cost to any Issuer of issuing or maintaining any L/C (which increase in cost shall be
the result of such Issuer’s reasonable allocation among that Issuer’s letter of credit customers of
the aggregate of such cost increases resulting from such events), then, upon demand by the Lender
and delivery by the Lender to the Borrower of a certificate of an officer of the subject Issuer
describing such change in law, executive order, regulation, directive, or interpretation thereof,
its effect on such Issuer, and the basis for determining such increased costs and their allocation,
the Borrower shall immediately pay to the Lender, from time to time as specified by the Lender,
such amounts as shall be sufficient to compensate such Issuer for such increased cost;
provided that the Borrower shall not be obligated to make payment of such amounts which
arise from transactions which occurred more than ninety (90) Business Days prior to the Lender’s
furnishing notice hereunder. Any Issuer’s determination of costs incurred under Section
2-20(g)(i) or 2-20(g)(ii), above, and the allocation, if any, of such costs among the Borrower and
other letter of credit customers of such Issuer, if done in good faith and made on

30

 

an equitable basis and in accordance with such officer’s certificate, shall be conclusive and
binding on the Borrower, absent manifest error.

          (viii) The obligations of the Borrower under this Agreement with respect to L/C’s are
absolute, unconditional, and irrevocable and shall be performed strictly in accordance with the
terms hereof under all circumstances, whatsoever including, without limitation, the following:

          (A) Any lack of validity or enforceability or restriction, restraint, or stay in the
enforcement of this Agreement, any L/C, or any other agreement or instrument relating
thereto.

          (B) Any amendment or waiver of, or consent to the departure from, any L/C.

          (C) The existence of any claim, set-off, defense, or other right which the Borrower may
have at any time against the beneficiary of any L/C.

     (u) Changed Circumstances.

     (i) The Lender may give the Borrower notice of the occurrence of the following:

          (A) The Lender shall have determined in good faith (which determination shall be final
and conclusive) on any day on which the rate for a Eurodollar Loan would otherwise be set,
that adequate and fair means do not exist for ascertaining such rate.

          (B) The Lender shall have determined in good faith (which determination shall be final
and conclusive) that:

          (1) The continuation of or conversion of any Revolving Credit Loan to a
Eurodollar Loan has been made impracticable or unlawful by the occurrence of a
contingency that materially and adversely affects the applicable market or
compliance by the Lender in good faith with any applicable law or governmental
regulation, guideline or order or interpretation or change thereof by any
governmental authority charged with the interpretation or administration thereof or
with any request or directive of any such governmental authority (whether or not
having the force of law).

          (2) The indices on which the interest rates for Eurodollar Loans are based
shall no longer represent the effective cost to the Lender for U.S. dollar deposits
in the interbank market for deposits in which it regularly participates.

          (ii) In the event that the Lender gives the Borrower notice of an occurrence described in
Section 2-21(a), then, until the Lender notifies the Borrower that the circumstances giving rise to
such notice no longer apply:

          (A) The obligation of the Lender to make Eurodollar Loans of the type affected by such
changed circumstances or to permit the Borrower to select the affected interest rate as
otherwise applicable to any Revolving Credit Loans shall be suspended.

          (B) Any notice which the Borrower had given the Lender with respect to any Eurodollar
Loan, the time for action with respect to which has not occurred prior to the Lender’s
having given notice pursuant to Section 2-21(a), shall be deemed to be a request for a Base
Rate Loan.

          (iii) Notwithstanding the foregoing, the Lender agrees to use its reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions and so long as such
efforts would not be disadvantageous to it, in its reasonable discretion, in any legal, economic or
regulatory manner) to designate a different lending office if the making of such designation would
allow the Lender or its lending office to continue to make Eurodollar Loans.

31

 

          (v) Increased Costs. If there is adopted after the date hereof any requirement of law, or if
there is any new interpretation or application of any law after the date hereof by any court or by
any governmental or other authority or entity charged with the administration thereof, whether or
not having the force of law, which:

     I. subjects the Lender to any taxes or changes the basis of taxation, or increases any
existing taxes, on payments of principal, interest or other amounts payable by the Borrower
to the Lender under this Agreement (except for taxes on the Lender’s overall net income or
capital imposed by the jurisdiction in which the Lender’s principal or lending offices are
located or in which the Lender is organized);

     II. imposes, modifies or deems applicable any reserve, cash margin, special deposit or
similar requirements against assets held by, or deposits in or for the account of or loans
by or any other acquisition of funds by the relevant funding office of the Lender;

     III. imposes on the Lender any other condition with respect to any Loan Document; or

     IV. imposes on the Lender a requirement to maintain or allocate capital in relation to
the Liabilities;

and the result of any of the foregoing, in the Lender’s reasonable opinion, is to increase the cost
to the Lender of making or maintaining any loan, advance or financial accommodation or to reduce
the income receivable by the Lender in respect of any loan, advance or financial accommodation by
an amount which the Lender deems to be material, then upon the Lender’s giving written notice
thereof to the Borrower (such notice to set out in reasonable detail the facts giving rise to and a
summary calculation of such increased cost or reduced income), the Borrower shall forthwith pay to
the Lender, upon receipt of such notice, that amount which shall compensate the Lender for such
additional cost or reduction in income, provided that the Borrower shall not be obligated
to make payment of such amounts which arise from transactions which occurred more than ninety (90)
Business Days prior to the Lender’s furnishing notice hereunder.

     Notwithstanding the foregoing, the Lender agrees to use its reasonable efforts (consistent
with its internal policy and legal and regulatory restrictions and so long as such efforts would
not be disadvantageous to it, in its reasonable discretion, in any legal, economic or regulatory
manner) to designate a different lending office if the making of such designation would allow the
Lender or its lending office to avoid the imposition of such increased costs.

     (w) Lender’s Commitments.

          (i) The Dollar Commitments, Commitment Percentages, and identities of the Lenders (but not the
overall Commitment) may be changed, from time to time by the assignment of Dollar Commitments and
Commitment Percentages with other Persons who determine to become “Lenders”, provided, however,
that

          (A) Unless an Event of Default has occurred and is continuing (in which event, no
consent of the Borrower is required) any assignment (other than an assignment to a then
Lender) shall be subject to the prior consent of the Borrower (not to be unreasonably
withheld), which consent will be deemed given unless the Borrower provides the Lender with
written objection, not more than five (5) Business Days after the Lender shall have given
the Borrower written notice of a proposed assignment).

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          (B) Any such assignment or reallocation shall be on a pro-rata basis such that each
reallocated or assigned Dollar Commitment to any Person remains the same percentage of the
overall Commitment (in terms of dollars) as the reallocated Commitment Percentage is to such
Person.

          (C) No such assignment shall be in an amount less than Ten Million Dollars
($10,000,000.00), or, if less, the total Dollar Commitment of such assigning Lender.

          (ii) Upon written notice given the Borrower from time to time by the Lender, of any assignment
or allocation referenced in Section 2-23(a):

          (A) The Borrower shall execute replacement one or more Revolving Credit Notes to
reflect such changed Dollar Commitments, Commitment Percentages, and identities and shall
deliver such replacement Revolving Credit Notes to the Lender (which promptly thereafter
shall deliver to the Borrower the Revolving Credit Notes so replaced) provided however, in
the event that a Revolving Credit Note is to be exchanged following its acceleration or the
entry of an order for relief under the Bankruptcy Code with respect to the Borrower, the
Lender, in lieu of causing the Borrower to execute one or more new Revolving Credit Notes,
may issue the Lender’s Certificate confirming the resulting Commitments and Commitment
Percentages.

          (B) Such change shall be effective from the effective date specified in such written
notice and any Person added as a Lender shall have all rights and privileges of a Lender
hereunder thereafter as if such Person had been a signatory to this Agreement and any other
Loan Document to which a Lender is a signatory and any person removed as a Lender shall be
relieved of any obligations or responsibilities of a Lender hereunder thereafter.

          (C) The Borrower shall maintain a register identifying the Lenders from time to time.

          (iii) Intentionally Omitted.

3. — Conditions Precedent:

     (a) As a condition to the effectiveness of this Agreement, the establishment of the Revolving
Credit, and the making of the first loan under the Revolving Credit, each of the documents
respectively described in Sections 3-2 through and including 3-5, (each in form and substance
reasonably satisfactory to the Lender) shall have been delivered to the Lender, and the conditions
respectively described in Sections 3-6 through and including 3-15, shall have been satisfied:

     (b) Corporate Due Diligence.

          (i) A Certificate of corporate good standing issued by the Secretary of State of each State in
which a Loan Party is organized.

          (ii) Certificates of due qualification, in good standing, issued by the Secretary(ies) of
State of each State in which the nature of a Loan Party’s business conducted or assets owned would
reasonably be expected to require such qualification.

          (iii) A Certificate of each Loan Party’s Secretary of the due adoption, continued
effectiveness, and setting forth the texts of, each corporate resolution adopted in connection with
the establishment of the loan arrangement contemplated by the Loan Documents and attesting to the
true signatures of each Person authorized as a signatory to any of the Loan Documents.

     (c) Opinion. An opinion of counsel to the Loan Parties in form and substance reasonably satisfactory to the
Lender.

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     (d) Additional
Documents. Such additional instruments and documents as the Lender or its counsel
reasonably may require or request.

     (e) Officers’ Certificates. Certificates executed by the President and the Chief Financial
Officer of the Borrower and stating that the representations and warranties made by the Loan
Parties to the Lender in the Loan Documents are true and complete in all material respects as of
the date of such Certificate, and that no event has occurred which is or which, solely with the
giving of notice or passage of time (or both) would be an Event of Default.

     (f) Representations and Warranties. Each of the representations made by or on behalf of the
Loan Parties in this Agreement or in any of the other Loan Documents or in any other report,
statement, document, or paper provided by or on behalf of a Loan Party shall be true and complete
in all material respects as of the date as of which such representation or warranty was made.

     (g) Borrowing Base Certificate. The Lender shall have received a Borrowing Base Certificate
dated the Closing Date, relating to the month ended on October 31, 2007, and executed by a
Responsible Officer of the Borrower.

     (h) All Fees and Expenses Paid. All fees due at or immediately after the first funding under
the Revolving Credit and all costs and expenses reasonably incurred by the Lender in connection
with the establishment of the credit facility contemplated hereby (including the reasonable fees
and expenses of counsel to the Lender) shall have been paid (to the extent then invoiced).

     (i) Financial Projections. The Lender shall have received and be satisfied with a detailed
forecast for the period commencing on the Closing Date through the fiscal year ending on or about
January 31, 2009, which shall include an Availability model, Consolidated income statement, balance
sheet, and statement of cash flow, by quarter, each prepared in conformity with GAAP and consistent
with the Borrower’s current practices.

     (j) Borrower’s Assets. The Lender shall have received a copy of the results of the Loan
Parties’ most recent physical inventory and such results shall be reasonably satisfactory to the
Lender. In addition, the Lender shall be reasonably satisfied that the inventory of each Loan
Party is located at such places or is in transit to such Loan Party and is in the amounts and of the quality and value
previously represented by the Borrower to the Lender and the Lender shall have received such
reports, material and other information concerning the inventory and the Loan Parties’ suppliers as
shall reasonably satisfy the Lender in its sole discretion.

     (k) Lien Search. The Lender shall have received results of searches or other evidence
satisfactory to the Lender (in each case dated as of a date reasonably satisfactory to the Lender)
indicating the absence of liens on the assets of the Loan Parties, except for Permitted
Encumbrances and liens for which termination statements and releases reasonably satisfactory to the
Lender are being tendered concurrently with the establishment of the Revolving Credit.

     (l) Perfection of Collateral. The Lender shall have filed all such financing statements and
given all such notices as may be necessary for the Lender to perfect its security interest in

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such
of the Collateral as to which the Lender determines to perfect its security interests and to assure
its first priority status (subject only to Permitted Encumbrances).

     (m) Insurance. The Lender shall be reasonably satisfied with the Loan Parties’ insurance
arrangements and shall have received all documentation requested in connection with such insurance
including, documentation naming the Lender as “loss payee” under each policy.

     (n) No Suspension Event. No Suspension Event shall then exist.

     (o) No Adverse Change. No event shall have occurred or failed to occur, which occurrence or
failure reasonably would be expected to have a Material Adverse Effect.

     (p) Execution and Delivery of Agreement. This Agreement shall have been duly executed and
delivered by the parties hereto, and shall be in full force and effect and shall be in form and
substance satisfactory to the Lender.

No document shall be deemed delivered to the Lender until received and accepted by the Lender at
its head offices in Boston, Massachusetts. Under no circumstances will this Agreement take effect
until executed and accepted by the Lender at said head office.

4. — General Representations, Covenants and Warranties:

     To induce the Lender to establish the loan arrangement contemplated herein and to make loans
and advances and to provide financial accommodations under the Revolving Credit (each of which
loans shall be deemed to have been made in reliance thereupon), the Borrower, in addition to all
other representations, warranties, and covenants made by the Borrower in any
other Loan Document, makes those representations, warranties, and covenants included in this
Agreement.

     (a) Payment and Performance of Liabilities. The Borrower shall pay each Liability when due
(or when demanded if payable on demand) and shall promptly, punctually, and faithfully perform each
other Liability.

     (b) Due Organization — Corporate Authorization — No Conflicts.

          (i) Each Loan Party presently is and shall hereafter remain in good standing in its State of
organization and each is and shall hereafter remain duly qualified and in good standing in every
other State in which, by reason of the nature or location of the Loan Parties’ assets or operation
of the Loan Parties’ business, such qualification is necessary, except where the failure to so
qualify would not have a Material Adverse Effect.

          (ii) Each Related Entity as of the date hereof is listed on EXHIBIT 4-2, annexed hereto. Each
Subsidiary is and shall hereafter remain in good standing in the State in which incorporated and is
and shall hereafter remain duly qualified in which other State in which, by reason of that entity’s
assets or the operation of such entity’s business, such qualification may be necessary, except
where the failure to so qualify would not reasonably be expected to have a Material Adverse Effect.
The Borrower shall provide the Lender with prior written notice of any entity’s becoming or
ceasing to be a Related Entity.

          (iii) No Loan Party shall change its State of incorporation or its taxpayer identification
number.

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          (iv) Each Loan Party has all requisite corporate power and authority to execute and deliver
all Loan Documents to which such Loan Party is a party and has and will hereafter retain all
requisite corporate power to perform all Liabilities.

          (v) The execution and delivery by the Loan Parties of each Loan Document to which it is a
party; the Loan Parties’ consummation of the transactions contemplated by such Loan Documents
(including, without limitation, the creation of security interests by the Loan Parties as
contemplated hereby); each Loan Party’s performance under those of the Loan Documents to which it
is a party; the borrowings hereunder; and the use of the proceeds thereof:

          (A) Have been duly authorized by all necessary corporate action.

          (B) Do not, and will not, contravene in any material respect any provision of any
Requirement of Law or obligation of such Loan Party.

          (C) Will not result in the creation or imposition of, or the obligation to create or
impose, any Encumbrance upon any assets of a Loan Party pursuant to any Requirement of Law
or obligation, except pursuant to the Loan Documents.

          (vi) The Loan Documents have been duly executed and delivered by each Loan Party and are the
legal, valid and binding obligations of the Loan Parties enforceable against the Loan Parties in
accordance with their respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws of general application relating
to or affecting the rights and remedies of creditors generally and except as the remedy of specific
performance or injunctive relief is subject to the discretion of the court before which any
proceeding therefor may be brought.

     (c) Trade Names.

          (i) EXHIBIT 4-3, annexed hereto, is a listing of:

          (A) All names under which the Loan Parties conducted their business within the past
five (5) years.

          (B) All entities and/or persons with whom the Loan Parties consolidated or merged
within the past five (5) years, or from whom the Loan Parties, within the past five (5)
years, acquired in a single transaction or in a series of related transactions substantially
all of such entity’s or person’s assets.

          (ii) No Loan Party will change its name or conduct its business under any name not listed on
EXHIBIT 4-3 except (i) upon not less than twenty-one (21) days prior written notice (with
reasonable particularity) to the Lender and (ii) in compliance with all other provisions of this
Agreement.

     (d) Intellectual Property.

          (i) The Loan Parties each owns and possesses, or has the right to use (and will hereafter own,
possess, or have such right to use) all patents, industrial designs, trademarks, trade names, trade
styles, brand names, service marks, logos, copyrights, trade secrets, know-how, confidential
information, and other intellectual or proprietary property of any third Person necessary for the
Loan Parties’ conduct of their respective business.

          (ii) The conduct by the Loan Parties of their respective business does not presently infringe
in any manner which could reasonably be expected to have a Material Adverse Effect (nor will the
Loan Parties conduct their businesses in the future so as to infringe in any manner which could
reasonably be expected to have a Material Adverse Effect) the patents, industrial designs,
trademarks, trade names, trade styles, brand names, service marks, logos, copyrights, trade
secrets, know-how, confidential information, or other intellectual or proprietary property of any
third Person.

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     (e) Locations.

          (i) The Collateral, and the books, records, and papers of Loan Parties pertaining thereto, are
kept and maintained solely at, or in transit to and from, the Loan Parties’ chief executive offices
at

          (A) 112 West 34th Street, New York, New York 10120

          (B) 201 Willowbrook Blvd., Wayne, New Jersey 07470

          (C) those locations which are listed on EXHIBIT 4-5 annexed hereto, as such EXHIBIT may
be amended from time to time, which EXHIBIT includes, with respect to each such location,
the name and address of the landlord on the Lease which covers such location (or an
indication that a Loan Party owns the subject location) and of all service bureaus with
which any such records are maintained.

          (ii) No Loan Party shall remove any of the Collateral from said chief executive office or
those locations listed on EXHIBIT 4-5 except:

          (A) to accomplish sales of Inventory in the ordinary course of business; or

          (B) to move Inventory, Equipment and other assets from one such location to another
such location; or

          (C) to utilize such of the Collateral as is removed from such locations in the ordinary
course of business (such as motor vehicles).

          (D) to accomplish other dispositions permitted pursuant to Section 4-12(d) hereof.

          (E) otherwise upon thirty (30) days prior written notice to the Lender.

          (iii) Except (i) with respect to Inventory delivered to a processor for finishing, (ii) with
respect to Inventory in transit, and (iii) as otherwise disclosed pursuant to, or permitted by,
this Section 4-5, no tangible personal property of a Loan Party is in the care or custody of any
third party or stored or entrusted with a bailee or other third party and none shall hereafter be
placed under such care, custody, storage, or entrustment.

     (f) Title to Assets.

          (i) Each of the Loan Parties is, and shall hereafter remain, the owner of, or holder of
subsisting license or leasehold rights in and to, the Collateral free and clear of all Encumbrances
with the exceptions of the following (the “Permitted Encumbrances”):

          (A) Encumbrances in favor of the Lender.

          (B) Those Encumbrances (if any) listed on EXHIBIT 4-6, annexed hereto.

          (C) Purchase money security interests in Equipment to secure Indebtedness otherwise
permitted hereby.

          (D) Encumbrances for taxes, governmental assessments or charges in the nature of taxes
not yet due or which are being contested in good faith by appropriate proceedings as to
which adequate reserves are maintained on the books of the Loan Parties in accordance with
GAAP.

          (E) Encumbrances in respect of property or assets of the Loan Parties imposed by law,
which were incurred in the ordinary course of business, such as carriers’, warehousemen’s,
customs broker’s, materialmen’s, repairmen’s, and mechanics’ liens and other similar
Encumbrances, in each case

37

 

in respect of obligations not overdue for a period of more than
thirty (30) days or which are being contested in good faith by appropriate proceedings.

          (F) Utility deposits and pledges or deposits in connection with worker’s compensation,
unemployment insurance and other social security legislation.

          (G) Encumbrances arising under Capital Leases.

          (H) Encumbrances resulting from the sale, transfer and assignment of retail Accounts to
credit card processors.

          (I) Deposits to secure the performance of bids, tenders, trade contracts (other than
for borrowed money), leases, statutory obligations, surety and appeal bonds, performance
bonds and other obligations of a like nature incurred in the ordinary course of business,
all to the extent such obligations are otherwise permitted hereunder.

          (J) Encumbrances on Equipment of a Person which becomes a Subsidiary after the date
hereof pursuant to, and Equipment acquired in connection with, a Permitted Acquisition,
provided that (A) such Encumbrances existed at the time such Person became a
Subsidiary or such Equipment was acquired and were not created in anticipation of the
acquisition, and (B) any such Encumbrance does not cover any other assets of such Person
after it became a Subsidiary or any other assets of the Loan Parties after such Equipment
was acquired, and (C) such Encumbrance does not secure any Indebtedness other than
Indebtedness existing immediately prior to the time such Person became a Subsidiary or the
time of such acquisition.

          (K) Encumbrances consisting of the right of setoff of a customary nature or bankers’
liens on amounts on deposit incurred in the ordinary course of business.

          (L) Encumbrances on goods in favor of customs and revenue authorities which secure the
payment of customs duties in connection with the importation of such goods, which
obligations are not overdue.

          (M) Encumbrances constituting precautionary filings by lessors and bailees with respect
to assets which are leased or entrusted to a Loan Party but in which assets such Loan Party
has mere possessory rights.

          (N) Encumbrances arising from judgments which do not result in an Event of Default
under Section 10-10 hereof.

          (ii) No Loan Party has or shall have possession of any property on consignment.

          (iii) No Loan Party shall acquire or obtain the right to use any Equipment, the acquisition or
right to use of which Equipment is otherwise permitted by this Agreement, in which Equipment any
third party has an interest, except for:

          (A) Equipment which is merely incidental to the conduct of a Loan Party’s business.

          (B) Equipment, the acquisition or right to use of which has been consented to by the
Lender, which consent may be conditioned upon the Lender’s receipt of such agreement with
the third party which has an interest in such Equipment as is satisfactory to the Lender.

          (C) Equipment, the acquisition of which is permitted pursuant to Section 4-7(c) hereof
or which is the subject of an operating lease (but not Capital Leases).

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(g) Indebtedness. No Loan Party has or shall hereafter have any Indebtedness with the
exceptions of:

     I. Any Indebtedness to the Lenders.

     II. The Indebtedness (if any) listed on EXHIBIT 4-7, annexed hereto.

     III. Capital Lease obligations and purchase money Indebtedness not to exceed the
aggregate principal amount outstanding in excess of $25,000,000.00, and extensions, renewals
and refinancings thereof on terms no less favorable in any material respect to the Loan
Parties than the Indebtedness or Capital Lease being refinanced.

     IV. Subordinated Indebtedness.

     V. Other Indebtedness not to exceed $50,000,000.00 outstanding at any time.

     (h) Insurance Policies.

          (i) EXHIBIT 4-8, annexed hereto, is a schedule of all material insurance policies owned by the
Loan Parties or under which the Loan Parties are the named insured as of the date hereof . Each of
such policies is in full force and effect. None of the issuers (to the Borrower’s knowledge) of
any such policy, have provided notice that the Loan Parties are in default or violation of any such
policy.

          (ii) The Loan Parties shall have and maintain at all times insurance covering such risks, in
such amounts, containing such terms, in such form, for such periods, and written by such companies
as may be reasonably satisfactory to the Lender . The coverage reflected on EXHIBIT 4-8 presently
satisfies the foregoing requirements, it being recognized by the Loan Parties, however, that such
requirements may change hereafter to reflect changing circumstances. All insurance carried by the
Loan Parties shall provide for a minimum of fourteen (14) days’ written notice of cancellation to the Lender and all such insurance which covers
the Collateral shall include an endorsement in favor of the Lender, as loss payee and additional
insured, which endorsement shall provide that the insurance, to the extent of the Lender’s interest
therein, shall not be impaired or invalidated, in whole or in part, by reason of any act or neglect
of the Loan Parties or by the failure of the Loan Parties to comply with any warranty or condition
of the policy. In the event of the failure by the Loan Parties to maintain insurance as required
herein, the Lender , at its option, may obtain such insurance, provided, however, the Lender’s
obtaining of such insurance shall not constitute a cure or waiver of any Event of Default
occasioned by the Loan Parties’ failure to have maintained such insurance. The Loan Parties shall
furnish to the Lender certificates or other evidence satisfactory to the Lender regarding
compliance by the Loan Parties with the foregoing insurance provisions.

          (iii) After the occurrence, and during the continuance, of an Event of Default, the Loan
Parties shall each advise the Lender of each claim made by a Loan Party under any policy of
insurance which covers the Collateral and will permit the Lender, at the Lender’s option in each
instance, to the exclusion of the Loan Parties, to conduct the adjustment of each such claim. The
Loan Parties each hereby appoint the Lender as such Loan Party’s attorney in fact, exercisable
after the occurrence, and during the continuance, of an Event of Default, to obtain, adjust,
settle, and cancel any insurance described in this section and to endorse in favor of the Lender
any and all drafts and other instruments with respect to such insurance. This appointment, being
coupled with an interest, is irrevocable until this Agreement is terminated by a written instrument
executed by a duly authorized officer of the Lender. The Lender shall not be liable on account of
any exercise pursuant to said power except for any exercise in actual willful misconduct and bad
faith. The Lender may apply any proceeds of such insurance against the Liabilities, whether or not
such have matured, in such order of application as the Lender may determine.

     (i) Licenses. Each material license, distributorship, franchise, and similar agreement issued
to, or to which a Loan Party is a party is in full force and effect. To the Borrower’s knowledge,
no party to any such license or agreement is in default or violation thereof. No Loan Party has
received any notice or threat of cancellation of any such license or agreement.

39

 

     (j) Leases. EXHIBIT 4-10, annexed hereto, is a schedule of all presently effective Capital
Leases (other than Capital Leases the total obligations under which do not aggregate more than
$100,000). EXHIBIT 4-5 includes a list of all other presently effective Leases. Each of such
Leases and Capital Leases presently is in full force and effect. As of the date hereof, no party
to any such Lease or Capital Lease is in default or violation in any material respect of any such
Lease or Capital Lease (for which the Loan Party has not received an indemnification from the
Seller) and no Loan Party has received any notice or threat of cancellation of any such Lease or
Capital Lease. Each Loan Party hereby authorizes the Lender at any time and from time to time
after the occurrence, and during the continuance, of an Event of Default to contact any of the Loan
Party’s landlords in order to confirm the Loan Party’s continued compliance with the terms and
conditions of the Lease(s) between such Loan Party and that landlord and to discuss such issues,
concerning the Loan Party’s occupancy under such Lease(s), as the Lender may determine.

     (k) Requirements of Law. Each Loan Party is in compliance with, and shall hereafter comply
with and use its respective assets in compliance with, all Requirements of Law, except to the
extent that such non-compliance would not reasonably be expected to have a Material Adverse Effect.
No Loan Party has received any notice of any material violation of any Requirement of Law, which
violation has not been cured or otherwise remedied.

     (l) Maintain Properties. The Loan Parties each shall:

     I. Keep the Collateral in good order and repair (ordinary reasonable wear and tear and
insured casualty excepted).

     II. Not suffer or cause the waste or destruction of any material part of the Collateral.

     III. Not use any of the Collateral in violation of any policy of insurance thereon.

     IV. Not sell, lease, or otherwise dispose of any of the Collateral, other than the following:

     A. The sale of Inventory in compliance with this Agreement.

     B. as long as no Event of Default exists or would arise as a result thereof,
the disposal of Equipment which is obsolete, worn out, or damaged beyond repair,
which Equipment is replaced to the extent necessary to preserve or improve the
operating efficiency of the Loan Parties .

     C. The surrender, disposition, or expiration of Collateral (such as trademarks
and copyrights) no longer used or useful for the conduct of the Loan Parties’
businesses in the ordinary course.

     D. The turning over to the Lender of all Receipts as provided herein.

     E. The transfer , sale and assignment of retail Accounts to credit card
processors.

     (m) Pay Taxes/Tax Shelter Regulations.

          (i) Except as disclosed on EXHIBIT , (i) all tax returns (federal, state, local or foreign)
that relate to or include any Loan Party and that are due on or before the date hereof, taking into
account any extensions for the filing thereof, have been or will be prepared and timely filed in
accordance in all material respects with

40

 

applicable Requirements of Law, (ii) all such tax returns
are or will be correct and complete insofar as they relate to the Loan Parties, and (iii) all taxes
(federal, state, local or foreign) for which a Loan Party may be liable that are due (whether or
not shown on any tax return) have been or will be paid in full.

          (ii) Each Loan Party has, and hereafter shall: pay, as they become due and payable, all taxes
and unemployment contributions and other charges of any kind or nature levied, assessed or claimed
against such Loan Party, or the Collateral by any person or entity whose claim could result in an
Encumbrance upon any asset of any Loan Party or by any governmental authority, except to the extent
such taxes are being contested by a Loan Party in good faith, and adequate reserves are being
maintained therefor on Loan Parties books in accordance with GAAP; properly exercise any trust
responsibilities imposed upon a Loan Party by reason of withholding from employees’ pay or by
reason of a Loan Party’s receipt of sales tax or other funds for the account of any third party;
timely make all contributions and other payments as may be required pursuant to any Employee
Benefit Plan now or hereafter established by the Loan Parties; and timely file all tax and other
returns and other reports with each governmental authority to whom a Loan Party is obligated to so
file, in each case, taking into account any applicable extension periods.

          (iii) At its option, after the occurrence, and during the continuance, of a Suspension Event,
the Lender may, but shall not be obligated to, pay any taxes, unemployment contributions, and any
and all other charges levied or assessed upon a Loan Party, or the Collateral by any person or
entity or governmental authority, and make any contributions or other payments on account of a Loan Party’s Employee Benefit Plan as the
Lender, in the Lender’s discretion, may deem necessary or desirable, to protect, maintain,
preserve, collect, or realize upon any or all of the Collateral or the value thereof or any right
or remedy pertaining thereto, provided, however, the Lender’s making of any such payment shall not
constitute a cure or waiver of any Event of Default occasioned by a Loan Party’s failure to have
made such payment.

          (iv) The Borrower does not intend to treat the Revolving Credit and the L/Cs and the
transactions related thereto as being “reportable transactions” (within the meaning of Treasury
Regulation Section 1.6011-4). In the event the Borrower determines to take any action inconsistent
with such intention, it will promptly notify the Lender thereof. If the Borrower so notifies the
Lender, the Borrower acknowledges that the Lender may treat the Revolving Credit and/or its
interest in the L/Cs as part of a transaction that is subject to Treasury Regulation Section
301.6112-1, and the Lender, will maintain the lists and other records required by such Treasury
Regulation.

     (n) No Margin Stock. No Loan Party is engaged in the business of extending credit for the
purpose of purchasing or carrying any margin stock (within the meaning of Regulations U,T, and X of
the Board of Governors of the Federal Reserve System of the United States). No part of the
proceeds of any borrowing hereunder will be used at any time to purchase or carry any such margin
stock or to extend credit to others for the purpose of purchasing or carrying any such margin
stock.

     (o) ERISA. From and after the date hereof, none of the Loan Parties nor any ERISA Affiliate
shall, in any manner which could reasonably be expected to have a Material Adverse Effect:

     I. Fail to comply in all material respects with any Employee Benefit Plan.

     II. Fail timely to file all reports and filings required by ERISA to be filed by a Loan
Party.

     III. Engage in any non-exempt “prohibited transactions” (as described in ERISA).

     IV. Engage in, or commit, any act such that a tax or penalty could be imposed upon the
Loan Parties on account thereof pursuant to ERISA.

41

 

     V. Accumulate any material funding deficiency within the meaning of Section 302 of
ERISA.

     VI. Terminate any Employee Benefit Plan such that a lien could be asserted against any
assets of the Loan Parties on account thereof pursuant to ERISA.

     VII. Be a member of, contribute to, or have any obligation under any Employee Benefit
Plan which is a multiemployer plan within the meaning of Section 4001(a)(3) of ERISA.

     (p) Hazardous Materials.

          (i) Other than matters that could not reasonably be expected to have a Material Adverse
Effect, no Loan Party has ever:

          (A) Been legally responsible for any release or threat of release of any Hazardous
Material.

          (B) Received notification of any release or threat of release of any Hazardous Material
from any site or vessel occupied or operated by a Loan Party and/or of the incurrence of any
expense or loss in connection with the assessment, containment, or removal of any release or
threat of release of any Hazardous Material from any such site or vessel.

     (ii) The Loan Parties each shall:

          (A) Dispose of any Hazardous Material only in compliance with all Environmental Laws,
except for dispositions which could not reasonably be expected to have a Material Adverse
Effect.

          (B) Not store on any site or vessel occupied or operated by a Loan Party and not
transport or arrange for the transport of any Hazardous Material, except if such storage or
transport is in the ordinary course of the Loan Parties’ business and is in compliance with
all Environmental Laws or could not reasonably be expected to have a Material Adverse
Effect.

          (iii) The Loan Parties shall provide the Lender with written notice upon such Loan Party
obtaining knowledge of any incurrence of any expense or loss by any governmental authority or other
Person in connection with the assessment, containment, or removal of any Hazardous Material, for
which expense or loss a Loan Party may be liable, other than expense or loss that could not
reasonably be expected to have a Material Adverse Effect.

     (q) Litigation. Except as described in EXHIBIT 4-17, annexed hereto, there is not presently
pending or threatened by or against the Loan Parties any suit, action, proceeding, or investigation
which, if determined adversely to the Loan Parties, would have a material adverse effect upon the
Loan Parties ‘s financial condition or ability to conduct its business as such business is
presently conducted or is contemplated to be conducted in the foreseeable future.

     (r) Dividends or Investments. No Loan Party shall:

     I. Pay any dividend or make any other distribution (whether in cash, securities or
other property) with respect to any class of its capital stock, or make any payment (whether
in cash, securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancellation or termination of
any or its capital stock or any option, warrant or other right to acquire such capital stock
except by a Guarantor to the Borrower or unless the Liquidity Requirements are satisfied.

     II. Intentionally Omitted.

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     III. Except as provided in Section 4-25 or with respect to Permitted Acquisitions,
invest in or purchase any stock or securities or rights to purchase any such stock or
securities, of any corporation or other entity.

     IV. Merge or consolidate or be merged or consolidated with or into any other
corporation or other entity, other than (i) the merger of any of the Borrower’s Subsidiaries
with and into the Borrower, and (ii) in connection with any Permitted Acquisitions.

     V. Consolidate any of a Loan Party’s operations with those of any other corporation or
other entity, except in connection with any Permitted Acquisition.

     VI. Organize or create any Subsidiary, other than in connection with a Permitted
Acquisition and only if (i) such Subsidiary guarantees the repayment of the Liabilities and
(ii) such Subsidiary grants the Lender a first priority Encumbrance (subject to Permitted
Encumbrances) on all of its assets, all of the foregoing satisfactory in form and substance
to the Lender.

     VII. Subordinate any debts or obligations owed to a Loan Party by any third party to
any other debts owed by such third party to any other Person.

     VIII. Acquire any assets other than Permitted Acquisitions, by the making of Capital
Expenditures to the extent permitted hereunder, and other than in the ordinary course and
conduct of the Loan Parties business permitted under Section 4-21 hereof.

     (s) Loans. No Loan Party shall make any loans or advances to, nor acquire the Indebtedness
of, any Person, provided, however, the foregoing does not prohibit any of the following:

     I. Advance payments made to the Loan Parties’ suppliers in the ordinary course.

     II. Advances to a Loan Party’s officers, employees, and salespersons with respect to
reasonable expenses to be incurred by such officers, employees, and salespersons for the
benefit of such Loan Party in the ordinary course of business, which expenses are properly
substantiated by the person seeking such advance and properly reimbursable by such Loan
Party.

     III. Advances on account of sales of Inventory in the ordinary course of business made
on credit and all Accounts arising therefrom.

     IV. Provided that the Liquidity Requirements have been satisfied, loans and/or
Investment in or to Aeropostale Canada.

     V. Loans and/or Investments by one Loan Party to another in the ordinary course of
business.

     (t) Protection of Assets. The Lender, in the Lender’s reasonable discretion, and from time to
time, may discharge any tax or Encumbrance on any of the Collateral, or take any other action that
the Lender may deem necessary to repair, insure, maintain, preserve, collect, or realize upon any
of the Collateral. The Lender shall not have any obligation to undertake any of the foregoing and
shall have no liability on account of any action so undertaken except where there is a specific
finding in a judicial proceeding (in which the Lender has had an opportunity to be heard), from
which finding no further appeal is available, that the Lender had acted in actual bad faith or in a
grossly negligent manner. The Borrower shall pay to the Lender, on demand, or the Lender, in its
reasonable discretion, may add to the Loan Account, all amounts paid or

43

 

incurred by the Lender
pursuant to this section. The obligation of the Borrower to pay such amounts is a Liability.

     (u) Line
of Business. No Loan Party shall engage in any business other than the business in
which it is currently engaged (which is agreed to be the design, sourcing, marketing, distribution
and sale of apparel products and accessories and the licensing of trade names, trademarks and intellectual
property to third Persons in connection with the foregoing), any business reasonably related
thereto or any business or activity that is reasonably similar or complementary thereto or a
reasonable extension, development or expansion thereof or ancillary thereto.

     (v) Affiliate Transactions. No Loan Party shall make any payment, nor give any value to any
Related Entity except for goods and services actually purchased by such Loan Party from, or sold by
such Loan Party to, such Related Entity for a price and on terms which shall not be less favorable
to the Loan Party from those which would have been charged in an arms length transaction, except:

          (i) until the occurrence, and during the continuance, of an Event of Default, the Loan Parties
may (a) pay management fees at the times and in the amounts, and (b) may maintain and make payments
with respect to those transactions, in each case as set forth in EXHIBIT 4-22 hereof;

          (ii) transactions in the ordinary course of business among the Loan Parties;

          (iii) provided that the Liquidity Requirements have been satisfied, loans to, payments to, or
Investments in Aeropostale Canada.

     (w) Additional Assurances.

          (i) Except as set forth on EXHIBIT 4-23, no Loan Party is the owner of, nor has it any
interest in, any property or asset which, immediately upon the satisfaction of the conditions
precedent to the effectiveness of the credit facility contemplated hereby (Article 3) will not be
subject to a perfected security or other collateral interest in favor of the Lender (subject only
to Permitted Encumbrances) to secure the Liabilities.

          (ii) Except as set forth on EXHIBIT 4-23, no Loan Parties will hereafter acquire any asset or
any interest in property which is not, immediately upon such acquisition, subject to such a
perfected security or other collateral interest in favor of the Lender to secure the Liabilities
(subject only to Permitted Encumbrances).

          (iii) The Loan Parties shall each execute and deliver to the Lender such instruments,
documents, and papers, and shall do all such things from time to time hereafter as the Lender may
reasonably request to carry into effect the provisions and intent of this Agreement; to protect and
perfect the Lender’s security interests in the Collateral; and to comply in all material respects
with all applicable statutes and laws, and facilitate the collection of the Receivables Collateral.
The Loan Parties shall each execute all such instruments as may be reasonably required by the
Lender with respect to the recordation and/or perfection of the security interests created herein.

          (iv) Each Loan Party hereby designates the Lender as and for such Loan Party’s true and lawful
attorney, with full power of substitution, to sign and file any financing statements in order to
perfect or protect the Lender’s security and other collateral interests in the Collateral.

          (v) To the full extent permitted by applicable law, a carbon, photographic, or other
reproduction of this Agreement or of any financing statement or other instrument executed pursuant
to this Section 4-23 shall be sufficient for filing to perfect the security interests granted
herein.

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          (vi) On or before January 30, 2008 the Borrower shall cause Aeropostale Canada to execute such
documents and take such steps as the Lender reasonably request in order for Aeropostale Canada to
become a Guarantor hereunder and to have its assets included in the Borrowing Base.

     (x) Adequacy of Disclosure.

          (i) All financial statements for periods after the date hereof which are furnished to the
Lender by the Loan Parties shall be prepared in accordance with GAAP consistently applied and
present fairly, in all material respects, the condition of the Loan Parties at the date(s) thereof
and the results of operations and cash flows for the period(s) covered.

          (ii) Intentionally Omitted

          (iii) As of the Second Amendment Effective Date, no Loan Party has any contingent obligations
or obligation under any Lease or Capital Lease which is not noted in the Loan Party’s financial
statements furnished to the Lender prior to the execution of this Agreement.

          (iv) No document, instrument, agreement, or paper now or hereafter given the Lender by or on
behalf of a Loan Party in connection with the execution of this Agreement by the Lender contains or
will contain any untrue statement of a material fact or omits or will omit to state a material fact
necessary in order to make the statements therein not misleading. There is no fact known to a Loan
Party which has, or which, in the foreseeable future would reasonably be expected to have, a
material adverse effect on the financial condition of the Loan Parties which has not been disclosed
in writing to the Lender.

     (y) Investments. As long as no Cash Dominion Event exists, the Loan Parties may make
investments consisting of Cash Equivalents maintained at such bank(s) as the Borrower may select.

     (z) Prepayments of Indebtedness.

          No Loan Party will make or agree to pay or make, directly or indirectly, any payment or other
distribution (whether in cash securities or other property) of or in respect of principal of or
interest on any Indebtedness, including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of any Indebtedness,
except:

          (i) as long as no Event of Default has occurred and is continuing or would result therefrom,
mandatory payments and prepayments of interest and principal as and when due in respect of any
Indebtedness permitted hereunder, excluding any Subordinated Indebtedness;

          (ii) payments on account of Subordinated Indebtedness to the extent permitted under any
subordination agreement or provisions governing such Indebtedness;

          (iii) voluntary prepayments of Indebtedness permitted hereunder (other than Subordinated
Indebtedness) as long as the Liquidity Requirement is satisfied; and

          (iv) refinancings of Indebtedness to the extent permitted under this Agreement.

     (aa) Other
Covenants. No Loan Party shall indirectly do or cause to be done any act which, if
done directly by a Loan Party, would breach any covenant contained in this Agreement.

5. — Financial Reporting and Performance Covenants:

     (a) Maintain Records. The Borrower shall, and shall cause each Guarantor to:

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     I. At all times, keep proper books of account, in which full, true, and accurate
entries shall be made of all of the Loan Parties’ transactions, all in accordance with GAAP,
applied consistently with all prior periods, to fairly reflect, in all material respects,
the financial condition of the Loan Parties at the close of, and its results of operations
for, the periods in question.

     II. Timely provide the Lender with those financial reports, statements, and schedules
required by this Article 5 or otherwise, each of which reports, statements and schedules
shall be prepared, to the extent applicable, in accordance with GAAP (but for the absence of
footnotes and year end adjustments), applied consistently with all prior periods, to fairly
reflect, in all material respects, the financial condition of the Loan Parties at the close
of, and their results of operations for, the period(s) covered therein.

     III. At all times, keep accurate (in all material respects) and current records of the
Collateral including, without limitation, accurate current stock, cost, and sales records of
its respective Inventory, accurately and sufficiently itemizing and describing the kinds,
types, and quantities of Inventory and the cost and selling prices thereof.

     IV. At all times, retain independent certified public accountants who are reasonably
satisfactory to the Lender and instruct such accountants to fully cooperate with, and be
available to, the Lender to discuss a Loan Party’s financial performance, financial
condition, operating results, controls, and such other matters, within the scope of the
retention of such accountants, as may be raised by the Lender.

     V. Not change a Loan Party’s fiscal year for book accounting purposes, except in
connection with an initial public offering of the Borrower’s capital stock.

     (b) Access to Records.

          (i) The Borrower shall, and shall cause each Guarantor to, afford the Lender and the Lender’s
representatives with access from time to time, during normal business hours and, unless an Event of
Default exists, upon reasonable notice, as the Lender and such representatives may require to all
properties owned by or over which a Loan Party has control. The Lender and the Lender’s
representatives shall have the right, and the Borrower will, and will cause each Guarantor to,
permit the Lender and such representatives from time to time as the Lender and such representatives
may request, during normal business hours and, unless an Event of Default exists, upon reasonable
notice, to examine, inspect, copy, and make extracts from any and all of the Loan Parties’ books,
records, electronically stored data, papers, and files pertaining to its business operations,
financial information or the Collateral. The Borrower shall, and shall cause the Guarantor to,
make copying facilities reasonably available to the Lender.

          (ii) The Borrower for itself, and as the sole shareholder or member, as applicable, of each
Guarantor , hereby authorizes the Lender and the Lender’s representatives to:

          (A) Inspect, copy, duplicate, review, cause to be reduced to hard copy, run off, draw
off, and otherwise use any and all computer or electronically stored information or data
which relates to the Loan Parties, whether in the possession of a Loan Party or in the
possession of any service bureau, contractor, accountant, or other person, (and the Loan
Parties each directs any such service bureau, contractor, accountant, or other person fully
to cooperate with the Lender and the Lender’s representatives with respect thereto),
provided that, except as set forth in Section 5-10 hereof, such inspections and
reviews shall not be undertaken by the Lender as long as no Event of Default then exists and
is continuing.

          (B) Verify at any time the Collateral or any portion thereof, including verification
with Account Debtors, and/or with each Loan Party’s computer billing companies, collection
agencies, and accountants and to sign the name of the Loan Party on any notice to such Loan
Party’s Account Debtors or verification of the Collateral, provided that, as long as
no Event of Default exists and is continuing, the form and content of any such verification
letters shall be subject to the prior approval of the Borrower (whose consent shall not be
unreasonably withheld or delayed).

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(c) Prompt Notice to Lender.

          (i) The Borrower shall, and shall cause each Guarantor to, provide the Lender with written
notice promptly upon the occurrence of any of the following events, which written notice shall be
with reasonable particularity as to the facts and circumstances in respect of which such notice is
being given:

          (A) Any change in a Loan Party’s executive officers.

          (B) The completion of any physical count of a Loan Party’s Inventory (together with a
copy of the certified results thereof).

          (C) Any ceasing of any Loan Party making of payment, in the ordinary course, to a
material portion (in amount or number) of its creditors.

          (D) Any failure by a Loan Party to pay rent at any of the locations, which failure
continues for more than twenty (20) Business Days following the day on which such rent first
came due, except for Leases for such locations which have been terminated or abandoned by a
Loan Party.

          (E) Any material change in the business, operations, or financial affairs of a Loan
Party.

          (F) The occurrence of any Suspension Event, that has not been cured by the Loan Parties
or waived by the Lender.

          (G) Any decision on the part of a Loan Party to discharge a Loan Party’s present
independent accountants or any withdrawal or resignation by such independent accountants
from their acting in such capacity (as to which, see Subsection 5-1(d)).

          (H) Any litigation which, if determined adversely to a Loan Party, would reasonably be
expected to have a material adverse effect on the financial condition of such Loan Party.

          (I) The acquisition by a Loan Party of any Commercial Tort Claim.

          (J) The intention by Borrower to treat the Revolving Credit and/or the L/Cs and related
transactions as being a “reportable transaction” (within the meaning of Treasury Regulation
Section 1.6011-4), by delivering a duly completed copy of IRS Form 8886 or any successor
form.

          (ii) The Borrower shall, and shall cause each Guarantor to, provide the Lender, when received
by the Borrower or Guarantor, with a copy of any management letter or similar communications from
any accountant of the Borrower or Guarantor.

     (d) Intentionally Omitted.

     (e) Borrowing Base Certificates. Monthly, within seven (7) days after the end of the
Borrower’s prior fiscal month, the Borrower shall provide the Lender with a certificate in the form
of Exhibit 5-5 (a “Borrowing Base Certificate”) showing the Borrowing Base as of the close of
business on the last day of the Borrower’s immediately preceding fiscal month, each such
Certificate to be certified as complete and correct on behalf of the Borrower by a Responsible
Officer of the Borrower.

     (f) Monthly Reports. Only if a Cash Dominion Event exists, within twenty (20) days following the end of each of
the Borrower’s fiscal months, the Borrower shall provide the Lender with original counterparts of
an internally prepared financial statement of the Loan Parties’

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financial condition and the results
of their respective operations for, the period ending with the end of the subject month, which
financial statement shall include, at a minimum, a balance sheet, income statement (on a
“consolidated” basis), cash flow and comparison of same store sales for the corresponding quarter
of the then immediately previous year, as well as to the Business Plan, and management’s analysis
and discussion of the operating results reflected therein.

     (g) Quarterly Reports. Within forty-five (45) days following the end of each of the
Borrower’s fiscal quarters, the Borrower shall provide the Lender with original counterparts of an
internally prepared financial statement of the Loan Parties’ financial condition and the results of
their respective operations for, the period ending with the end of the subject quarter, which
financial statement shall include, at a minimum, a balance sheet, income statement (on a
“consolidated” basis), cash flow and comparison of same store sales for the corresponding quarter
of the then immediately previous year, as well as to the Business Plan, and management’s analysis
and discussion of the operating results reflected therein. The delivery either electronically or
in paper to the Lender of the Borrower’s Form 10Q or Form 10K, as the case may be, which is filed
with the Securities and Exchange Commission shall satisfy the Borrower’s obligations under this
Section 5-7.

     (h) Annual Reports.

          (i) Annually, within ninety (90) days following the end of the Borrower’s fiscal year, the
Borrower shall furnish the Lender with an original signed counterpart of the Borrower’s
consolidated annual financial statement, which statement shall have been prepared by, and bear the
unqualified opinion of, the Borrower’s independent certified public accountants (i.e. said
statement shall be “certified” by such accountants). Such annual statement shall include, at a
minimum (with comparative information for the then prior fiscal year) a balance sheet, income
statement, statement of changes in shareholders’ equity, and cash flows. The delivery either
electronically or in paper to the Lender of the Borrower’s Form 10K which is filed with the
Securities and Exchange Commission shall satisfy the Borrower’s obligations under this Section
5-8(a).

          (ii) No later than the earlier of fifteen (15) days prior to the end of each of the Borrower’s
fiscal years or the date on which such accountants commence their work on the preparation of the
Borrower’s annual financial statement, the Borrower shall give written notice to such accountants
(with a copy of such notice, when sent, to the Lender) that:

          (A) Such annual financial statement will be delivered by the Borrower to the Lender.

          (B) It is an intention of the Loan Parties, in their engagement of such accountants, to
satisfy the financial reporting requirements set forth in this Article 5.

          (C) The Loan Parties have been advised that the Lender will rely thereon with respect
to the administration of, and transactions under, the credit facility contemplated by this
Agreement.

          (iii) Each annual statement shall be accompanied by such accountant’s Certificate indicating
that, in the preparation of such annual statement, such accountants did not conclude that any
Suspension Event had occurred during the subject fiscal year (or if one or more had occurred, the
facts and circumstances thereof).

     (i) Intentionally Omitted.

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     (j) Inventories, Appraisals, and Audits.

          (i) The Lender, at the expense of the Borrower, may observe each physical count and/or
inventory of so much of the Collateral as consists of Inventory which is undertaken on behalf of,
and at the request of, a Loan Party.

          (ii) The Loan Parties, at their own expense, shall cause not less than one (1) physical
inventory to be undertaken in each twelve (12) month period during which this Agreement is in
effect to be conducted by a national third party inventory taker.

          (A) The Loan Parties shall provide the Lender with a copy of the final results of each
such inventory (as well as of any other physical inventory undertaken by a Loan Party)
within fourteen (14) days following the completion of such inventory.

          (B) The Borrower shall provide the Lender with a reconciliation of the results of each
such inventory (as well as of any other physical inventory undertaken by a Loan Party) to
the Loan Party’s books and records within forty-five (45) days following completion of such
inventory.

          (C) The Lender, in its discretion, following the occurrence, and during the
continuance, of a Suspension Event, may cause such additional inventories to be taken as the
Lender determines (each, at the expense of the Borrower).

          (iii) Upon the Lender’s request from time to time, the Borrower shall, and shall cause each
Guarantor to, permit the Lender to obtain appraisals conducted by such appraisers as are
satisfactory to the Lender and using a methodology similar in scope and nature as was undertaken on
behalf of the Lender prior to the effectiveness of this Agreement. Without limiting the foregoing,
the Lender may obtain periodic Inventory liquidation analyses performed by Hilco/Great American
Group or another liquidation analysis firm selected by the Lender; provided that the
expense for any such appraisals shall be borne by the Lender (except as provided in the final two
sentences of this clause), unless and until the Aggregate Outstandings exceed, or are anticipated
to exceed, $75,000,000. At any time after the Aggregate Outstandings exceed, or are anticipated to
exceed, $75,000,000, the Lender shall have the right to undertake two appraisals, at the Loan
Parties’ expense, in each twelve month period. After the occurrence and during the continuance of
an Event of Default, all such appraisals shall be undertaken at the Loan Parties’ expense.

          (iv) Upon the Lender’s request from time to time, the Borrower shall, and shall cause each
Guarantor to, permit the Lender to conduct commercial finance audits of the Borrower’s and
Guarantor’s books and records using a methodology similar in scope and nature as was undertaken on
behalf of the Lender prior to the effectiveness of this Agreement, provided that the
expense for any such audits shall be borne by the Lender (except as provided in the final two
sentences of this clause), unless and until the Aggregate Outstandings exceed, or are anticipated
to exceed, $75,000,000. At any time after the Aggregate Outstandings exceed, or are anticipated to
exceed, $75,000,000, the Lender shall have the right to undertake two audits, at the Loan Parties’
expense, in each twelve month period. After the occurrence and during the continuance of an Event
of Default, all such audits shall be undertaken at the Loan Parties’ expense.

          (v) Intentionally Omitted.

     (k) Additional Financial Information.

          (i) In addition to all other information required to be provided pursuant to this Article 5,
the Borrower promptly shall provide the Lender (and shall cause each Guarantor and any other
guarantor of the Liabilities to also provide the Lender), with such other and additional
information concerning the Borrower or Guarantor, the Collateral, the operation of the Borrower’s
or Guarantor’s business, and the Borrower’s or Guarantor’s) financial condition, including original
counterparts of financial reports and statements, as the Lender may from time to time reasonably
request from the Borrower.

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          (ii) The Borrower may provide the Lender, at the Lender’s discretion, from time to time
hereafter, with updated projections of the Loan Parties’ anticipated performance and operating
results.

          (iii) In all events, the Borrower, no sooner than ninety (90) nor later than thirty (30) days
prior to the end of each of the Borrower’s fiscal years, shall furnish the Lender with an updated
and extended balance sheet, income statement, cash flow statement (including an Availability
model), prepared on a monthly basis and which shall go out at least through the end of the then
next fiscal year. Together with such updated and extended projections, the Borrower shall deliver
to the Lender a description of the methodology and assumptions upon which the projections were
prepared.

          (iv) The Loan Parties each recognizes that all appraisals, inventories, analysis, financial
information, and other materials which the Lender may obtain, develop, or receive with respect to
the Loan Parties is confidential to the Lender and that, except as otherwise provided herein, no
Loan Party is entitled to receipt of any of such appraisals, inventories, analysis, financial
information, and other materials, nor copies or extracts thereof or therefrom.

     (l) Intentionally Omitted.

6. — Use and Collection of Collateral:

     (a) Use of Inventory Collateral.

          (i) The Borrower shall not, and shall cause each Guarantor not to engage in any sale of the
Inventory other than for fair consideration in the conduct of the Borrower’s or Guarantor’s
business in the ordinary course (other than promotions, markdowns, and discounts in the ordinary
course of business) nor shall either engage in sales or other dispositions to creditors in
reduction or satisfaction of such creditors’ claims; sales or other dispositions in bulk; or any
use of any of the Inventory in breach of any provision of this Agreement. Notwithstanding the
foregoing, the Loan Parties may “job-out” end of season and slow-moving Inventory, provided that
the Inventory so disposed of does not exceed five percent (5%) of the Loan Parties’ aggregate
retail receipts in any fiscal year.

          (ii) No sale of Inventory shall be on consignment, approval, or under any other circumstances
such that, with the exception of the Loan Parties’ customary return policy applicable to the return
of inventory purchased by the Loan Parties’ retail customers in the ordinary course, such Inventory
may be returned to the Loan Parties without the consent of the Lender.

     (b) Adjustments and Allowances. A Loan Party may grant such allowances or other adjustments
to the such Loan Party’s Account Debtors as the Loan Party, respectively, may reasonably deem to
accord with sound business practice, provided, however, the authority granted the Loan Parties
pursuant to this Section 6-2 may be limited or terminated by the Lender at any time after the
occurrence, and during the continuance, of an Event of Default in the Lender’s discretion.

     (c) Validity of Accounts.

          (i) The amount of each Account shown on the books, records, and invoices of the Loan Parties
represented as owing by each Account Debtor is and will be the correct amount actually owing by
such Account Debtor (subject to adjustments for returned Inventory in the ordinary course of
business) and shall have been fully earned by performance by such Loan Party.

          (ii) The Lender, from time to time (at the expense of the Borrower in each instance), may
verify the validity, amount, and all other matters with respect to the Receivables Collateral
directly with Account Debtors (including without limitation, by forwarding balance verification
requests to each Loan Party’s Account Debtors), and with each Loan Party’s accountants, collection agents, and computer service
bureaus (each of which is

50

 

hereby authorized and directed to cooperate in full with the Lender and
to provide the Lender with such information and materials as the Lender may request), provided
that, as long as no Event of Default exists and is continuing, the form and content of any such
verification letters shall be subject to the prior approval of the Borrower (whose consent shall
not be unreasonably withheld or delayed).

          (iii) No Loan Party has knowledge of any impairment of the validity or collectibility of any
of the Accounts (other than customary adjustments and chargebacks in the ordinary course of
business) and shall notify the Lender of any such fact immediately after a Loan Party becomes aware
of any such impairment.

          (iv) Except as set forth in EXHIBIT 6-3, no Loan Party shall post any bond to secure a Loan
Party’s performance under any agreement to which a Loan Party is a party nor cause any surety,
guarantor, or other third party obligee to become liable to perform any obligation of a Loan Party
(other than to the Lender) in the event of Loan Party’s failure so to perform.

     (d) Notification to Account Debtors. The Lender shall have the right at any time after the
occurrence, and during the continuance, of an Event of Default, to notify any of a Loan Party’s
Account Debtors to make payment directly to the Lender and to collect all amounts due on account of
the Collateral.

7. — Cash Management. Payment of Liabilities:

     (a) Depository Accounts.

          (i) Annexed hereto as EXHIBIT 7-1 is a Schedule of all present DDAs, which Schedule includes,
with respect to each depository (i) the name and address of that depository; (ii) the account
number(s) of the account(s) maintained with such depository; and (iii) a contact person at such
depository.

          (ii) To the extent not previously delivered to the Lender, the Borrower shall, and shall cause
each Guarantor to, deliver to the Lender, as a condition to the effectiveness of this Agreement:

          (A) Notification, executed on behalf of the Borrower or Guarantor, as applicable, to
each depository institution with which any DDA is maintained (other than the Operating
Account), in form reasonably satisfactory to the Lender, of the Lender’s interest in such
DDA.

          (B) An agreement (generally referred to as a “Blocked Account Agreement”), in form
reasonably satisfactory to the Lender, with any depository institution at which a Blocked
Account is maintained.

          (C) An agreement, in form reasonably satisfactory to the Lender, with any depository
institution at which the Operating Account is maintained.

          (iii) No Loan Party will establish any DDA hereafter unless, contemporaneous with such
establishment, such Loan Party, delivers to the Lender an agreement (in form satisfactory to the
Lender) executed on behalf of the depository with which such DDA is being established.

     (b) Credit Card Receipts.

          (i) Annexed hereto as EXHIBIT is a Schedule which describes all arrangements to which each
Loan Party is a party with respect to the payment to such Loan Party, of the proceeds of all credit
card charges for sales by the Loan Party.

          (ii) To the extent not previously delivered to the Lender, the Borrower shall, and shall cause
each Guarantor to, deliver to the Lender, as a condition to the effectiveness of this Agreement,
notifications, executed on behalf of the Borrower or such Guarantor, as applicable, to each of the Borrower’s
and Guarantor’s

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credit card clearinghouses and processors of notice (in form satisfactory to the
Lender), which notice provides that payment of all credit card charges submitted by the Borrower or
Guarantor to that clearinghouse or other processor and any other amount payable to the Borrower or
Guarantor by such clearinghouse or other processor shall be directed to the Concentration Account
or as otherwise designated from time to time by the Lender. Neither the Borrower nor any Guarantor
shall change such direction or designation except upon and with the prior written consent of the
Lender.

     (c) The Concentration, Blocked, and Operating Accounts.

          (i) The following checking accounts have been or will be established (and are so referred to
herein):

          (A) The Concentration Account: Established by the Lender with Bank of America, N.A.

          (B) The Blocked Account: Established by the Borrower with Bank of America, N.A.

          (C) The Operating Account: Established by the Borrower with Bank of America, N.A.

          (ii) The contents of each DDA, of the Operating Account, and of the Blocked Account
constitutes Collateral and Proceeds of Collateral. The contents of the Concentration Account
constitutes the Lender’s property.

          (iii) The Loan Parties:

          (A) To the extent not previously delivered to the Lender, contemporaneously with the
execution of this Agreement, shall provide the Lender with such agreement (generally
referred to as a “Blocked Account Agreement”) of the depository with which the Blocked
Account is maintained as may be reasonably satisfactory to the Lender;

          (B) To the extent not previously delivered to the Lender, contemporaneously with the
execution of this Agreement, shall provide the Lender with such agreement of the depository
with which the Operating Account is maintained as may be reasonably satisfactory to the
Lender; and

          (C) Shall not establish any Blocked Account or Operating Account hereafter except upon
not less than thirty (30) days prior written notice to the Lender and the delivery to the
Lender of a similar such agreement.

          (iv) The Loan Parties shall pay all fees and charges of, and maintain such impressed balances
as may be required by the Lender or by any bank in which any account is opened as required hereby
(even if such account is opened by and/or is the property of the Lender).

     (d) Proceeds and Collection of Accounts.

          (i) All Receipts constitute Collateral and proceeds of Collateral and, after the occurrence
and during the continuance of a Cash Dominion Event, shall be held in trust by the Loan Parties for
the Lender; shall not be commingled with any of a Loan Party’s other funds; and shall be deposited
and/or transferred only to the Blocked Account.

          (ii) After the occurrence and during the continuance of a Cash Dominion Event, the Borrower
shall cause the, and shall cause each Guarantor to, ACH or wire transfer to the Blocked Account, no
less frequently than daily (and whether or not there is then an outstanding balance in the Loan
Account) of

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          (A) the then current contents of each DDA (other than the Operating Account), each such
transfer to be net of any minimum balance, not to exceed $5,000.00, as may be required to be
maintained in the subject DDA by the bank at which such DDA is maintained); and

          (B) the proceeds of all credit card charges not otherwise provided for pursuant hereto.

Telephone advice (confirmed by written notice) shall be provided to the Lender on each Business Day
on which any such transfer is made.

          (iii) After the occurrence and during the continuance of a Cash Dominion Event, whether or not
any Liabilities are then outstanding, the Loan Parties shall cause the ACH or wire transfer to the
Concentration Account, no less frequently than daily, of then entire ledger balance of the Blocked
Account, net of such minimum balance, not to exceed $5,000.00, as may be required to be maintained
in the Blocked Account by the bank at which the Blocked Account is maintained.

          (iv) After the occurrence and during the continuance of a Cash Dominion Event, in the event
that, notwithstanding the provisions of this Section 7-4, a Loan Party receives or otherwise has
dominion and control of any Receipts, or any proceeds or collections of any Collateral, such
Receipts, proceeds, and collections shall be held in trust by such Loan Party for the Lender and
shall not be commingled with any of the Loan Party’s other funds or deposited in any account of the
Loan Party other than as instructed by the Lender.

     (e) Payment of Liabilities.

          (i) On each Business Day, the Lender shall apply, towards the Liabilities, the then collected
balance of the Concentration Account (net of fees charged, and of such impressed balances as may be
required by the bank at which the Concentration Account is maintained).

          (ii) The following rules shall apply to deposits and payments under and pursuant to this
Agreement:

          (A) Funds shall be deemed to have been deposited to the Concentration Account on the
Business Day on which deposited, provided that notice of such deposit is available to the
Lender by 2:00 PM on that Business Day.

          (B) Funds paid to the Lender, other than by deposit to the Concentration Account, shall
be deemed to have been received on the Business Day when they are good and collected funds,
provided that notice of such payment is available to the Lender by 2:00PM on that Business
Day.

          (C) If notice of a deposit to the Concentration Account (Section 7-5(b)(i)) or payment
(Section 7-5(b)(ii)) is not available to the Lender until after 2:00PM on a Business Day,
such deposit or payment shall be deemed to have been made at 9:00 AM on the then next
Business Day.

          (D) All deposits to the Concentration Account and other payments to the Lender are
subject to clearance and collection.

          (iii) All payments shall be applied First to pay Liabilities other than the principal
balance of the Loan Account; Second in reduction of Base Rate Loans until paid in full, and
Third in reduction of Eurodollar Loans until paid in full, together with any amounts which
become due as a result of such payment pursuant to Section 2-7(e) hereof; provided
that at the Borrower’s option, as long as no Event of Default then exists, the Borrower
shall have the right, in lieu of making a prepayment on account of the Eurodollar Loans, to cause
any amounts in excess of the sums required to pay the Liabilities described in clauses
First and Second, above, to be deposited with the Lender and held as collateral for
the Liabilities and applied to the payment of the applicable Eurodollar Loans at the end of the
current Interest Periods applicable thereto, in order of maturity of such Interest

53

 

Periods (or upon the occurrence, and during the continuance, of an Event of Default, to the
Liabilities in such order and manner as the Lender, in its discretion, shall determine).

          (iv) The Lender shall transfer to the Operating Account any surplus in the Concentration
Account remaining after the application towards the Liabilities referred to in Section 7-5(a),
above (less those amount which are to be netted out, as provided therein) provided, however, in the
event that both (i) a Suspension Event has occurred and is continuing, and (ii) one or more L/C’s
are then outstanding, the Lender may establish a funded reserve of up to 103% of the aggregate
Stated Amounts of such L/C’s.

     (f) The Operating Account. Except as otherwise specifically provided in, or permitted by, this
Agreement, all checks shall be drawn by the Loan Parties upon, and other disbursements shall be
made by the Loan Parties solely from, the Operating Account. Until the occurrence, and during the
continuance, of an Event of Default, as provided in the agreement with the depository with which
the Operating Account has been established, the Lender shall not be entitled to exercise any
dominion or control over the funds in the Operating Account.

8. — Grant of Security Interest:

     (a) Grant of Security Interest. To secure the Borrower’s prompt, punctual, and faithful
performance of all and each of the Liabilities, the Borrower hereby grants to the Lender a
continuing security interest in and to, and assigns to the Lender, (and ratifies and confirms the
Borrower’s prior grant of a security interest to the Lender pursuant to the Existing Loan
Agreement, in and to) the following, and each item thereof, whether now owned or now due, or in
which the Borrower has an interest, or hereafter acquired, arising, or to become due, or in which
the Borrower obtains an interest, and all products, Proceeds, substitutions, and accessions of or
to any of the following (all of which, together with any other property in which the Lender may in
the future be granted a security interest, is referred to herein as the “Collateral”):

     I. All Accounts and Accounts Receivable.

     II. All Inventory.

     III. All General Intangibles, including, without limitation, all Payment Intangibles.

     IV. All Equipment.

     V. All Goods.

     VI. All Fixtures.

     VII. All Chattel Paper.

     VIII. All books, records, and information relating to the Collateral and/or to the
operation of the Borrower’s business, and all rights of access to such books, records, and
information, and all property in which such books, records, and information are stored,
recorded, and maintained.

     IX. All Investment Property, Instruments, Documents, Deposit Accounts, policies and
certificates of insurance, deposits, impressed accounts, compensating balances, money, cash,
or other property.

     X. All Letter of Credit Rights and Supporting Obligations.

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     XI. All Commercial Tort Claims.

     XII. All insurance proceeds, refunds, and premium rebates, including, without
limitation, proceeds of fire and credit insurance, whether any of such proceeds, refunds,
and premium rebates arise out of any of the foregoing( through 8-1(k)) or otherwise.

     XIII. All liens, guaranties, rights, remedies, and privileges pertaining to any of the
foregoing ( through 8-1(l)), including the right of stoppage in transit.

provided that, the Collateral shall not include leases or licenses and rights thereunder to
the extent of enforceable anti-assignment provisions therein contained which have not been waived,
provided, however, that in no event shall the foregoing be construed to exclude from the security
interest created by this Agreement, proceeds or products of any such leases or licenses or any
accounts receivable or the right to payments due or to become due the Borrower under any such lease
or license.

     (b) Extent and Duration of Security Interest. This grant of a security interest is in
addition to, and supplemental of, any security interest previously granted by the Borrower to the
Lender and shall continue in full force and effect applicable to all Liabilities, until all
Liabilities have been paid and/or satisfied in full (other than indemnities not then due and
payable, which survive repayment of the Revolving Credit Loans and the L/Cs and termination of the
Commitments) and the security interest granted herein is specifically terminated in writing by a
duly authorized officer of the Lender (which the Lender agrees to do upon payment and satisfaction
of all such Liabilities).

9. — Lender As Borrower’s Attorney-In-Fact:

     (a) Appointment as Attorney-In-Fact. The Borrower hereby irrevocably constitutes and appoints
the Lender as the Borrower’s true and lawful attorney, with full power of substitution, exercisable
only after the occurrence, and during the continuance, of an Event of Default, to convert the
Collateral into cash at the sole risk, cost, and expense of the Borrower, but for the sole benefit
of the Lender. The rights and powers granted the Lender by this appointment include but are not
limited to the right and power to:

     I. Prosecute, defend, compromise, or release any action relating to the Collateral.

     II. Sign change of address forms to change the address to which the Borrower’s mail is
to be sent to such address as the Lender shall designate; receive and open the Borrower’s
mail; remove any Receivables Collateral and Proceeds of Collateral therefrom and turn over
the balance of such mail either to the Borrower or to any trustee in bankruptcy, receiver,
assignee for the benefit of creditors of the Borrower, or other legal representative of the
Borrower whom the Lender determines to be the appropriate person to whom to so turn over
such mail.

     III. Endorse the name of the Borrower in favor of the Lender upon any and all checks,
drafts, notes, acceptances, or other items or instruments; sign and endorse the name of the
Borrower on, and receive as secured party, any of the Collateral, any invoices, schedules of
Collateral, freight or express receipts, or bills of lading, storage receipts, warehouse
receipts, or other documents of title respectively relating to the Collateral.

     IV. Sign the name of the Borrower on any notice to the Borrower’s Account Debtors or
verification of the Receivables Collateral; sign the Borrower’s name on any Proof of Claim
in Bankruptcy

55

 

against Account Debtors, and on notices of lien, claims of mechanic’s liens,
or assignments or releases of mechanic’s liens securing the Accounts.

     V. Take all such action as may be necessary to obtain the payment of any letter of
credit and/or banker’s acceptance of which the Borrower is a beneficiary.

     VI. Repair, manufacture, assemble, complete, package, deliver, alter or supply goods,
if any, necessary to fulfill in whole or in part the purchase order of any customer of the
Borrower.

     VII. Use, license or transfer any or all General Intangibles of the Borrower.

     (b) No Obligation to Act. The Lender shall not be obligated to do any of the acts or to
exercise any of the powers authorized by Section 9-1 herein, but if the Lender elects to do any
such act or to exercise any of such powers, it shall not be accountable for more than it actually
receives as a result of such exercise of power, provided that, if the Lender elects to use or
license any General Intangibles of the Borrower consisting of trademarks, copyrights or similar
property, the Lender shall use reasonable efforts to preserve and maintain any such trademark,
copyright or similar property (but nothing contained herein shall obligate the Lender to undertake
(or refrain from undertaking) any specific action with respect thereto). The Lender shall not be
responsible to the Borrower for any act or omission to act pursuant to Section 9-1, except to the
extent that the subject act or omission to act had been grossly negligent or in actual bad faith.

10. — Events of Default:

     The occurrence of any event described in this Article 10 shall constitute an “Event of
Default” herein. Upon the occurrence of any Event of Default described in Section 10-12, any and
all Liabilities shall become due and payable without any further act on the part of the Lender.
Upon the occurrence, and during the continuance, of any other Event of Default, any and all
Liabilities shall become immediately due and payable, at the option of the Lender and without
notice or demand. The occurrence and continuance of any Event of Default shall also constitute,
without notice or demand, a default under all other Loan Documents, whether such Loan Documents now
exist or hereafter arise.

     (a) Failure to Pay Revolving Credit. The failure by the Borrower to pay any principal amount
when due under the Revolving Credit.

     (b) Failure To Make Other Payments. The failure by the Borrower to pay when due (or upon demand, if payable on demand) any payment
Liability within three (3) days of the date when due other than the principal amount under the
Revolving Credit.

     (c) Failure to Perform Covenant or Liability (No Grace Period). The failure by the Borrower
to promptly, punctually, faithfully and timely perform, discharge, or comply with any covenant or
Liability not otherwise described in Section 10-1 or Section 10-2 hereof, and included in any of
the following provisions hereof:

	 	 	 
	Section 
	                   	Relates
to             :	
	4-5	 	Location of Collateral
	
	4-6	 	Title to Assets
	
	4-7	 	Indebtedness
	
	4-8(b)	 	Insurance Policies

	6	 	Use of Collateral

	Article 7	 	Cash Management

56

 

     (d) Failure to Perform Covenant or Liability (Limited Grace Period). The failure by the
Borrower, upon three (3) days written notice by the Lender, to cure the Borrower’s failure to
promptly, punctually and faithfully perform, discharge, or comply with any covenant under Sections
4-13, 4-22, 4-23, and Article 5 hereof.

     (e) Failure to Perform Covenant or Liability (Grace Period). The failure by the Borrower,
upon fifteen (15) days written notice by the Lender, to cure the Borrower’s failure to promptly,
punctually and faithfully perform, discharge, or comply with any covenant hereunder or under any
other Loan Document or with any Liability not described in any of Sections 10-1, 10-2, 10-3 or 10-4
hereof.

     (f) Misrepresentation. Any representation or warranty at any time made by the Borrower to the
Lender is not true or complete in all material respects when given.

     (g) Default of Other Debt. The occurrence of any event such that any Indebtedness of the
Borrower to any creditor in excess of $10,000,000.00, other than the Lender, could then be
accelerated (whether or not the subject creditor takes any action on account of such occurrence),
provided that if such event is waived in writing by the holder of the Indebtedness prior to the
exercise of remedies by the Lender hereunder, the occurrence of such event shall not constitute an
Event of Default hereunder.

     (h) Default of Leases. The occurrence of any event such that any Lease or Leases of the
Borrower could then be terminated (whether or not any or all of the subject lessors take any action
on account of such occurrence) and such termination (individually or together with all other such terminations)
could reasonably likely have a Material Adverse Effect, provided that if such event is
waived in writing by the subject lessors prior to the exercise of remedies by the Lender hereunder,
the occurrence of such event shall not constitute an Event of Default hereunder.

     (i) Uninsured Casualty Loss. The occurrence of any uninsured loss, theft, damage, or
destruction of or to any material portion of the Collateral, having an aggregate value in excess of
$1,500,000.00.

     (j) Judgment. Restraint of Business.

          (i) The entry of any uninsured judgment against the Borrower, in excess of $5,000,000.00,
individually or in the aggregate, which judgment is not satisfied (if a money judgment) or appealed
from (with execution or similar process stayed) within thirty (30) days of its entry.

          (ii) The entry of any order or the imposition of any other process having the force of law, in
either case applicable specifically to the Borrower, the effect of which is to restrain in any
material adverse way the conduct by the Borrower of its business in the ordinary course, which
order is not dissolved within ten (10) days of its imposition.

57

 

     (k) Business Failure. Any act by, against, or relating to the Borrower, or its property or
assets, which act constitutes the application for, consent to, or sufferance of the appointment of
a receiver, trustee, or other person, pursuant to court action or otherwise, over all, or any
material part of the Borrower’s property; the granting of any trust mortgage or execution of an
assignment for the benefit of the creditors of the Borrower generally; the offering by or entering
into by the Borrower of any composition, extension, or any other arrangement seeking relief
generally from or extension of the debts of the Borrower; or the initiation of any judicial or
non-judicial proceeding or agreement by, against, or including the Borrower which seeks or intends
to accomplish a reorganization or arrangement with creditors, provided that, if such
proceeding is initiated against the Borrower, an Event of Default shall not arise hereunder unless
such proceeding is not timely contested in good faith by the Borrower by appropriate proceedings
or, if so contested, is not dismissed within sixty (60) days of when initiated; and/or the
initiation by or on behalf of the Borrower of the liquidation or winding up of all or any material
part of the Borrower’s business or operations.

     (l) Bankruptcy. The failure by the Borrower to generally pay the debts of the Borrower as they
mature; adjudication of bankruptcy or insolvency relative to the Borrower; the entry of an order
for relief or similar order with respect to the Borrower in any proceeding pursuant to the
Bankruptcy Code or any other federal bankruptcy law; the filing of any complaint, application, or
petition by the Borrower initiating any matter in which the Borrower is or may be granted any
relief from its debts generally pursuant to the Bankruptcy Code or any other insolvency statute or
procedure of general application; the filing of any complaint, application, or petition against the
Borrower initiating any matter in which the Borrower is or may be granted any relief from its debts
generally pursuant to the Bankruptcy Code or any other insolvency statute or procedure of
general application, which complaint, application, or petition is not timely contested in good
faith by the Borrower by appropriate proceedings or, if so contested, is not dismissed within sixty
(60) days of when filed.

     (m) Indictment
- Forfeiture. The indictment of, or institution of any legal process or proceeding
against, the Borrower, under any federal, state, municipal, and other civil or criminal statute,
rule, regulation, order, or other requirement having the force of law where the relief, penalties,
or remedies sought or available include the forfeiture of any property of the Borrower and/or the
imposition of any stay or other order, the effect of which would reasonably be expected to restrain
in any material way the conduct by the Borrower of its business in the ordinary course.

     (n) Default by Guarantor or Subsidiary. The occurrence of any of the foregoing Events of Default
with respect to any Guarantor of the Liabilities, or the occurrence of any of the foregoing Events
of Default with respect to any Subsidiary of the Borrower, as if such guarantor or Subsidiary were
the “Borrower” described therein.

     (o) Termination of Guaranty. The termination or attempted termination of any Guaranty Agreement
by any Guarantor of the Liabilities (other than in accordance with its terms or as permitted by the
Lenders).

58

 

     (p) Challenge to Loan Documents.

          (i) Any challenge by or on behalf of the Borrower or any guarantor of the Liabilities to the
validity of any Loan Document or the applicability or enforceability of any Loan Document strictly
in accordance with the subject Loan Document’s terms or which seeks to void, avoid, limit, or
otherwise adversely affect any security interest created by or in any Loan Document or any payment
made pursuant thereto.

          (ii) Any determination by any court or any other judicial or government authority that the
Loan Documents, taken as a whole, are not enforceable strictly in accordance with their terms or
which voids, avoids, limits, or otherwise adversely affects any security interest created by any
Loan Document or any payment made pursuant thereto.

     (q) Intentionally Omitted.

     (r) Change in Control. Any Change in Control.

11. - Rights and Remedies Upon Default:

     In addition to all of the rights, remedies, powers, privileges, and discretions which the
Lender is provided prior to the occurrence of an Event of Default, the Lender shall have the
following rights and remedies upon the occurrence, and during the continuance, of any Event of
Default.

     (a) Rights of Enforcement. The Lender shall have all of the rights and remedies of a secured party upon default under
the UCC, in addition to which the Lender shall have all and each of the following rights and
remedies:

     I. To collect the Receivables Collateral with or without the taking of possession of
any of the Collateral.

     II. To take possession of all or any portion of the Collateral.

     III. To sell, lease, or otherwise dispose of any or all of the Collateral, in its then
condition or following such preparation or processing as the Lender deems advisable and with
or without the taking of possession of any of the Collateral.

     IV. To conduct one or more going out of business sales which include the sale or other
disposition of the Collateral.

     V. To apply the Receivables Collateral or the Proceeds of the Collateral towards (but
not necessarily in complete satisfaction of) the Liabilities.

     VI. To exercise all or any of the rights, remedies, powers, privileges, and discretions
under all or any of the Loan Documents.

     (b) Sale of Collateral.

          (i) Any sale or other disposition of the Collateral may be at public or private sale upon such
terms and in such manner as the Lender deems advisable, having due regard to compliance with any
statute or regulation which might affect, limit, or apply to the Lender’s disposition of the
Collateral.

          (ii) The Lender, in the exercise of the Lender’s rights and remedies upon default, may conduct
one or more going out of business sales, in the Lender’s own right or by one or more agents and
contractors. Such sale(s) may be conducted upon any premises owned, leased, or occupied by the
Borrower. The Lender and

59

 

any such agent or contractor, in conjunction with any such sale, may
augment the Inventory with other goods (all of which other goods shall remain the sole property of
the Lender or such agent or contractor). Any amounts realized from the sale of such goods which
constitute augmentations to the Inventory (net of an allocable share of the costs and expenses
incurred in their disposition) shall be the sole property of the Lender or such agent or contractor
and neither the Borrower nor any Person claiming under or in right of the Borrower shall have any
interest therein.

          (iii) Unless the Collateral is perishable or threatens to decline speedily in value, or is of
a type customarily sold on a recognized market (in which event the Lender shall provide the
Borrower with such notice as may be practicable under the circumstances), the Lender shall give the
Borrower at least ten (10) days prior written notice of the date, time, and place of any proposed
public sale, and of the date after which any private sale or other disposition of the Collateral
may be made. The Borrower agrees that such written notice shall satisfy all requirements for
notice to the Borrower which are imposed under the UCC or other applicable law with respect to the
exercise of the Lender’s rights and remedies upon default.

          (iv) The Lender may purchase the Collateral, or any portion of it at any sale held under this
Article (to the extent permitted by applicable law).

          (v) The Lender shall apply the proceeds of any exercise of the Lender’s Rights and Remedies
under this Article 11 towards the Liabilities in the following order:

	 	 	 	 	 
	 

	 	First:
	 	To all costs and expenses incurred by the Lender under this Agreement, or any other
Loan Document, including all Costs of Collection.
	 
	 	 	 	 
	 

	 	Second:
	 	To accrued and unpaid interest on the Revolving Credit Loans until all accrued and
unpaid interest on the Revolving Credit Loans has been paid in full.
	 
	 	 	 	 
	 

	 	Third:
	 	To the principal balance of the Revolving Credit Loans, until the unpaid principal
balance of the Revolving Credit Loans has been paid in full.
	 
	 	 	 	 
	 

	 	Fourth:
	 	To all fees due under this Agreement or any other Loan Document, until the remaining
balance of all fees (including L/C Fees, Line (Unused Fees)) have been paid in full.
	 
	 	 	 	 
	 

	 	Fifth:
	 	To all other Liabilities, including without limitation, on account of Bank Products
and Cash Management Services, until such Liabilities have been paid in full.
	 
	 	 	 	 
	 

	 	Sixth:
	 	As provided under applicable law, to each Person then entitled thereto.

     (c) Occupation of Business Location. In connection with the Lender’s exercise of the Lender’s
rights under this Article 11, the Lender may enter upon, occupy, and use any premises owned or
occupied by the Borrower, and may exclude the Borrower from such premises or portion thereof as may
have been so entered upon, occupied, or used by the Lender. The Lender shall not be required to
remove any of the Collateral from any such premises upon the Lender’s taking possession thereof,
and may render any Collateral unusable to the Borrower. In no event shall the Lender be liable to
the Borrower for use or occupancy by the Lender of any premises pursuant to this Article 11, nor
for any charge (such as wages for the Borrower’s employees and utilities) incurred in connection
with the Lender’s exercise of the Lender’s Rights and Remedies,

60

 

except for such charges which are
incurred as a result of the Lender’s gross negligence or willful misconduct.

     (d) Grant of Nonexclusive License. The Borrower hereby grants to the Lender a royalty free
nonexclusive irrevocable license, exercisable upon the occurrence, and during the continuance, of
an Event of Default, to use, apply, and affix any trademark, trade name, logo, or the like in which
the Borrower now or hereafter has rights, such license being with respect to the Lender’s exercise
of the rights hereunder including, without limitation, in connection with any completion of the
manufacture of Inventory or sale or other disposition of Inventory. In exercising its rights under
such license, the Lender shall use reasonable efforts to preserve and maintain any such trademark,
trade name, or logo, but nothing contained herein shall obligate the Lender to undertake (or
refrain from undertaking) any specific action and the Lender shall, under no circumstances, have
any liability to the Borrower, except for such which are a result of the Lender’s gross negligence
or willful misconduct.

     (e) Assembly of Collateral. The Lender may require the Borrower to assemble the Collateral and make it available to the
Lender at the Borrower’s sole risk and expense at a place or places which are reasonably convenient
to both the Lender and Borrower.

     (f) Rights and Remedies. The rights, remedies, powers, privileges, and discretions of the Lender
hereunder (herein, the “ Lender’s Rights and Remedies”) shall be cumulative and not exclusive of
any rights or remedies which it would otherwise have. No delay or omission by the Lender in
exercising or enforcing any of the Lender’s Rights and Remedies shall operate as, or constitute, a
waiver thereof. No waiver by the Lender of any Event of Default or of any default under any other
agreement shall operate as a waiver of any other default hereunder or under any other agreement.
No single or partial exercise of any of the Lender’s Rights or Remedies, and no express or implied
agreement or transaction of whatever nature entered into between the Lender and any person, at any
time, shall preclude the other or further exercise of the Lender’s Rights and Remedies. No waiver
by the Lender of any of the Lender’s Rights and Remedies on any one occasion shall be deemed a
waiver on any subsequent occasion, nor shall it be deemed a continuing waiver. All of the Lender’s
Rights and Remedies and all of the Lender’s rights, remedies, powers, privileges, and discretions
under any other agreement or transaction are cumulative, and not alternative or exclusive, and may
be exercised by the Lender at such time or times and in such order of preference as the Lender in
its sole discretion may determine. The Lender’s Rights and Remedies may be exercised without
resort or regard to any other source of satisfaction of the Liabilities.

12. - Notices:

     (a) Notice Addresses. All notices, demands, and other communications made in respect of this
Agreement (other than a request for a loan or advance or other financial accommodation under the
Revolving Credit) shall be made to the following addresses, each of which may be changed upon seven
(7) days written notice to all others given by certified mail, return receipt requested:

61

 

	 	 	 
	If to the Lender:    
	 	 
	 
	 	 
	 

	 	Bank of America, N.A.
	 

	 	100 Federal Street, 9th Floor
	 

	 	Boston, Massachusetts 02110
	 

	 	Attention: Christine Hutchinson

                 Vice President
	 

	 	Fax: (617) 790-1234
	 

	 	Email: christine.hutchinson@bankofamerica.com
	 
	 	 
	With a copy to:
	 	 
	 
	 	 
	 

	 	Riemer & Braunstein LLP
	 

	 	Three Center Plaza
	 

	 	Boston, Massachusetts 02108
	 

	 	Attention: David S. Berman, Esquire
	 

	 	Fax : (617) 880-3456
	 

	 	Email: dberman@riemerlaw.com
	 
	 	 
	If to the Borrower:
	 	 
	 
	 	 
	 

	 	Aeropostale, Inc.
	 

	 	201 Willowbrook Blvd.
	 

	 	Wayne, New Jersey 07470
	 

	 	Attention: Joseph Pachella, VP and Treasurer
	 

	 	Fax: (201) 581-0399
	 

	 	Email: jpachella@aeropostale.com
	 
	 	 
	With a Copy to:
	 	 
	 
	 	 
	 

	 	Edward M. Slezak, Esquire
	 

	 	General Counsel
	 

	 	Aeropostale, Inc.
	 

	 	112 West 34th Street, 22nd Floor
	 

	 	New York, New York 10120
	 

	 	Fax: (646) 619-4873
	 

	 	Email: eslezak@aeropostale.com

     (b) Notice Given.

          (i) Except as otherwise specifically provided herein, notices shall be deemed made and
correspondence received, as follows (all times being local to the place of delivery or receipt):

          (A) By mail: the sooner of when actually received or three (3) days following deposit
in the United States mail, postage prepaid.

          (B) By recognized overnight express delivery: the Business Day following the day when
sent.

62

 

          (C) By Hand: If delivered on a Business Day after 9:00 AM and no later than three (3)
hours prior to the close of customary business hours of the recipient, when delivered.
Otherwise, at the opening of the then next Business Day.

          (D) By Facsimile or electronic transmission (which must include a header on which the
party sending such transmission is indicated): If sent on a Business Day after 9:00 AM and
no later than three (3) hours prior to the close of customary business hours of the
recipient, one (1) hour after being sent. Otherwise, at the opening of the then next
Business Day.

          (ii) Rejection or refusal to accept delivery and inability to deliver because of a changed
address or Facsimile Number for which no due notice was given shall each be deemed receipt of the
notice sent.

13. - Term:

     (a) Termination of Revolving Credit. The Revolving Credit shall remain in effect (subject to
suspension as provided in Section 2-5(h) hereof) until the Termination Date.

     (b) Effect of Termination. On the Termination Date, the Borrower shall pay the Lender (whether or
not then due), in immediately available funds, all then Liabilities (other than indemnities, not
then due and payable, which survive repayment of the Revolving Credit Loans and L/Cs and
termination of the Commitments), including, without limitation: the entire balance of the Loan
Account; any accrued and unpaid Line (Unused) Fee; any payments due on account of the
indemnification obligations included in Section 2-9(e); and all unreimbursed costs and expenses of
the Lender for which the Borrower is responsible; and shall make such arrangements concerning any
L/C’s then outstanding are reasonably satisfactory to the Lender. Until such payment, all
provisions of this Agreement, other than those contained in Article 2 which place an obligation on
the Lender to make any loans or advances or to provide financial accommodations under the Revolving
Credit or otherwise, shall remain in full force and effect until all Liabilities (other than
indemnities, not then due and payable, which survive repayment of the Revolving Credit Loans and
L/Cs and termination of the Commitments) shall have been paid in full. The release by the Lender
of the security and other collateral interests granted the Lender by the Borrower hereunder may be
upon such conditions and indemnifications as the Lender may reasonably require to protect the
Lender against and chargebacks, credits, returned items and any other reversal of payments which
had been received by the Lender and applied toward such Liabilities.

14. - General:

     (a) Protection of Collateral. The Lender has no duty as to the collection or protection of the
Collateral beyond the safe custody of such of the Collateral as may come into the possession of the
Lender and shall have no duty as to the preservation of rights against prior parties or any other
rights pertaining thereto. With the Borrower’s prior approval (which shall not be unreasonably
delayed or withheld), the Lender may include reference to the Borrower (and may utilize any logo or
other distinctive symbol associated with the Borrower) in connection with any advertising,
promotion, or marketing undertaken by the Lender.

     (b) Successors and Assigns. This Agreement shall be binding upon the Borrower and the Borrower’s
representatives, successors, and assigns and shall inure to the benefit of the Lender and its
successors and assigns, provided, however, no trustee or other fiduciary appointed with

63

 

respect to the Borrower shall have any rights hereunder. In the event that the Lender, in accordance with the
provisions of Section 2-23 hereof, assigns or transfers its rights under this Agreement, the
assignee shall thereupon succeed to and become vested with all rights, powers, privileges, and
duties of such assignor hereunder and such assignor shall thereupon be discharged and relieved from
its duties and obligations hereunder.

     (c) Severability. Any determination that any provision of this Agreement or any application
thereof is invalid, illegal, or unenforceable in any respect in any instance shall not affect the
validity, legality, or enforceability of such provision in any other instance, or the validity,
legality, or enforceability of any other provision of this Agreement.

     (d) Amendments. Course of Dealing.

          (i) This Agreement and the other Loan Documents incorporate all discussions and negotiations
between the Borrower and the Lender, either express or implied, concerning the matters included
herein and in such other instruments, any custom, usage, or course of dealings to the contrary
notwithstanding. No such discussions, negotiations, custom, usage, or course of dealings shall
limit, modify, or otherwise affect the provisions thereof. No failure by the Lender to give notice
to the Borrower of the Borrower’s having failed to observe and comply with any warranty or covenant
included in any Loan Document shall constitute a waiver of such warranty or covenant or the
amendment of the subject Loan Document.

          (ii) The Borrower may undertake any action otherwise prohibited hereby, and may omit to take
any action otherwise required hereby, upon and with the express prior written consent of the
Lender. No consent, modification, amendment, or waiver of any provision of any Loan Document shall
be effective unless executed in writing by or on behalf of the party to be charged with such
modification, amendment, or waiver (and if such party is the Lender, then by a duly authorized
officer thereof). Any modification, amendment, or waiver provided by the Lender shall be in
reliance upon all representations and warranties theretofore made to the Lender by or on behalf of
the Borrower (and any guarantor, endorser, or surety of the Liabilities) and consequently may be
rescinded in the event that any of such representations or warranties was not true and complete in
all material respects when given.

     (e) Power of Attorney. In connection with all powers of attorney included in this Agreement, the
Borrower hereby grants unto the Lender full power to do any and all things necessary or appropriate
in connection with the exercise of such powers as fully and effectually as the Borrower might or
could do, hereby ratifying all that said attorney shall do or cause to be done by virtue of this
Agreement. No power of attorney set forth in this Agreement shall be affected by any disability or
incapacity suffered by the Borrower and each shall survive the same. All powers conferred upon the
Lender by this Agreement, being coupled with an interest, shall be irrevocable until this Agreement
is terminated by a written instrument executed by a duly authorized officer of the Lender.

     (f) Application of Proceeds. Except as otherwise provided in Section 11-2(e) hereof, the proceeds
of any collection, sale, or disposition of the Collateral, or of any other payments received
hereunder, shall be applied towards the Liabilities in such order and manner as the Lender
determines in its sole discretion. The Borrower shall remain liable for any deficiency remaining
following such application.

     (g) Costs and Expenses of Lender.

          (i) The Borrower shall pay on demand all Costs of Collection and all reasonable expenses of
the Lender in connection with the preparation, execution, and delivery of this Agreement and of any
other Loan

64

 

Documents, whether now existing or hereafter arising, and all other reasonable expenses
which may be incurred by the Lender in preparing or amending this Agreement and all other agreements, instruments, and
documents related thereto, or otherwise incurred with respect to the Liabilities, and all other
costs and expenses of the Lender which relate to the credit facility contemplated hereby.

          (ii) The Borrower shall pay on demand all costs and expenses (including reasonable attorneys’
fees) incurred, following the occurrence, and during the continuance, of any Event of Default, by
the Lender in connection with the enforcement, attempted enforcement, or preservation of any rights
and remedies under this, or any other Loan Document, as well as any such costs and expenses in
connection with any “workout”, forbearance, or restructuring of the credit facility contemplated
hereby.

          (iii) The Borrower authorizes the Lender to pay all such fees and expenses and in the Lender’s
discretion, to add such fees and expenses to the Loan Account.

          (iv) The undertaking on the part of the Borrower in this Section 14-7 shall survive payment of
the Liabilities and/or any termination, release, or discharge executed by the Lender in favor of
the Borrower, other than a termination, release, or discharge which makes specific reference to
this Section 14-7.

     (h) Copies and Facsimiles. This Agreement and all documents which relate thereto, which have been
or may be hereinafter furnished the Lender may be reproduced by the Lender by any photographic,
microfilm, xerographic, digital imaging, or other process, and the Lender may destroy any document
so reproduced. Any such reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in existence and whether or
not such reproduction was made in the regular course of business). Any facsimile which bears proof
of transmission shall be binding on the party which or on whose behalf such transmission was
initiated and likewise shall be so admissible in evidence as if the original of such facsimile had
been delivered to the party which or on whose behalf such transmission was received.

     (i) Massachusetts Law. This Agreement and all rights and obligations hereunder, including matters
of construction, validity, and performance, shall be governed by the laws of The Commonwealth of
Massachusetts.

     (j) Consent to Jurisdiction.

          (i) The Borrower agrees that any legal action, proceeding, case, or controversy against the
Borrower with respect to any Loan Document may be brought in the Superior Court of Suffolk County
Massachusetts or in the United States District Court, District of Massachusetts, sitting in Boston,
Massachusetts, as the Lender may elect in the Lender’s sole discretion. By execution and delivery
of this Agreement, the Borrower, for itself and in respect of its property, accepts, submits, and
consents generally and unconditionally, to the non-exclusive jurisdiction of the aforesaid courts.

          (ii) The Borrower WAIVES personal service of any and all process upon it, and irrevocably
consents to the service of process out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by certified mail, postage prepaid, to the Borrower at
the Borrower’s address for notices as specified herein, such service to become effective ten (10)
Business Days after such mailing.

          (iii) The Borrower WAIVES any objection based on forum non conveniens and any objection to
venue of any action or proceeding instituted in the aforesaid courts under any of the Loan
Documents.

          (iv) Nothing herein shall affect the right of the Lender to bring legal actions or proceedings
in any other competent jurisdiction.

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          (v) The Borrower agrees that any action commenced by the Borrower asserting any claim or
counterclaim arising under or in connection with this Agreement or any other Loan Document shall be
brought solely in the Superior Court of Suffolk County Massachusetts or in the United States
District Court, District of Massachusetts, sitting in Boston, Massachusetts, and that such Courts
shall have exclusive jurisdiction with respect to any such action.

     (k) Indemnification. The Borrower shall indemnify, defend, and hold the Lender and any employee,
officer, or agent of the Lender (each, an “Indemnified Person”) harmless of and from any claim
brought or threatened against any Indemnified Person by the Borrower, any guarantor or endorser of
the Liabilities, or any other Person (as well as from reasonable attorneys’ fees and expenses in
connection therewith) on account of the relationship of the Borrower or of any other guarantor or
endorser of the Liabilities with the Lender (each, an “Indemnified Claim”) other than any claim
resulting from the gross negligence or willful misconduct of such Indemnified Person. Each
Indemnified Claim may be defended, compromised, settled, or pursued by the Indemnified Person with
counsel of the Lender’s selection (and if such Indemnified Claim is brought by a Person other than
the Borrower, any guarantor or endorser of the Liabilities or any Affiliate of the Borrower, after
consultation with (but not approval of) the Borrower regarding the selection of such counsel), but
at the expense of the Borrower, provided that any Indemnified Claim may not be settled without the
consent of the Borrower (which shall not be unreasonably withheld or delayed) if as the result of
any such settlement the Borrower will be obligated to make any payment (other than reimbursement of
the reasonable costs and expenses of the Indemnified Person). This indemnification shall survive
payment of the Liabilities and/or any termination, release, or discharge executed by the Lender in
favor of the Borrower, other than a termination, release, or discharge which makes specific
reference to this Section 14-11.

     (l) Rules of Construction. The following rules of construction shall be applied in the
interpretation, construction, and enforcement of this Agreement and of the other Loan Documents:

     I. Words in the singular include the plural and words in the plural include the
singular.

     II. Titles, headings (indicated by being underlined or shown in SMALL
CAPITALS) and any Table of Contents are solely for convenience of reference; do not
constitute a part of the instrument in which included; and do not affect such instrument’s
meaning, construction, or effect.

     III. The words “includes” and “including” are not limiting.

     IV. Text which follows the words “including, without limitation” (or similar words) is
illustrative and not limitational.

     V. Except where the context otherwise requires or where the relevant subsections are
joined by “or”, compliance with any Section or provision of any Loan Document which
constitutes a warranty or covenant requires compliance with all subsections (if any) of that
Section or provision. Except where the context otherwise requires, compliance with any
warranty or covenant of any Loan Document which includes subsections which are joined by “or” may be accomplished by compliance with
any of such subsections.

     VI. Text which is shown in italics, shown in bold, shown IN ALL CAPITAL LETTERS, or in
any combination of the foregoing, shall be deemed to be conspicuous.

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     VII. The words “may not” are prohibitive and not permissive.

     VIII. The word “or” is not exclusive.

     IX. Terms which are defined in one section of any Loan Document are used with such
definition throughout the instrument in which so defined.

     X. The symbol “$” refers to United States Dollars.

     XI. Unless limited by reference to a particular Section or provision, any reference to
“herein”, “hereof”, or “within” is to the entire Loan Document in which such reference is
made.

     XII. References to “this Agreement” or to any other Loan Document is to the subject
instrument as amended to the date on which application of such reference is being made.

     XIII. Except as otherwise specifically provided, all references to time are to Boston
time.

     XIV. In the determination of any notice, grace, or other period of time prescribed or
allowed hereunder:

     A. Unless otherwise provided (A) the day of the act, event, or default from
which the designated period of time begins to run shall not be included and the last
day of the period so computed shall be included unless such last day is not a
Business Day, in which event the last day of the relevant period shall be the then
next Business Day and (B) the period so computed shall end at 5:00 PM on the
relevant Business Day.

     B. The word “from” means “from and including”.

     C. The words “to” and “until” each mean “to, but excluding”.

     D. The word “through” means “to and including”.

     XV. References to “presently”, “currently”, “Second Amendment Effective Date of this
Agreement”, and other similar expressions mean the date of this Agreement.

     XVI. The term “upon the occurrence, and during the continuance, of an Event of
Default”, “upon the occurrence, and during the continuance, of Default Interest Event” and
any other similar term means the occurrence of an Event of Default or a Default Interest
Event which has not been (i) waived by the Lender, or (ii) resolved to the reasonable
satisfaction of the Lender. For purposes hereof, an Event of Default shall be deemed
“resolved to the reasonable satisfaction of the Lender” if (A) the Lender has not
theretofore exercised any of its rights and remedies on account of the existence of such
Event of Default, and (B) the matter giving rise to such Event of Default has been fully
remediated by the Borrower, provided, however, that (1) nothing contained herein shall
furnish the Borrower with any additional cure periods beyond those set forth in Article 10,
if any, prior to an event constituting an “Event of Default”, (2) notwithstanding the
foregoing, any Event of Default under Article 7, or Sections 10-1, 10-2, 10-11, or 10-12
hereof may only be waived by the Lender and shall not ever be deemed “resolved to the
reasonable satisfaction of the Lender”, and (3) the Borrower may not resolve any occurrences
which constitute Events of Default to the reasonable satisfaction of the Lender on more than
four (4) occasions in any fiscal year.

     XVII. The Loan Documents shall be construed and interpreted in a harmonious manner and
in keeping with the intentions set forth in Section 14-13 hereof, provided, however, in the
event of any inconsistency between the provisions of this Agreement and any other Loan
Document, the provisions of this Agreement shall govern and control.

     (m) Intent. It is intended that:

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     I. This Agreement take effect as a sealed instrument.

     II. The scope of the security interests created by this Agreement be broadly construed
in favor of the Lender.

     III. The security interests created by this Agreement secure all Liabilities, whether
now existing or hereafter arising.

     IV. All reasonable costs and expenses (other than overhead costs) incurred by the
Lender in connection with its relationship with the Borrower shall be borne by the Borrower.

     V. Unless otherwise explicitly provided herein, the Lender’s consent to any action of
the Borrower which is prohibited unless such consent is given may be given or refused by the
Lender in its reasonable discretion and without reference to Section 2-16 hereof.

     (n) Right of Set-Off. Any and all deposits (other than Trust Deposit Accounts) or other sums at
any time credited by or due to the Borrower from the Lender, or any participant (a “Participant”)
in the credit facility contemplated hereby or any from any Affiliate of the Lender, or any
Participant and any cash, securities, instruments or other property of the Borrower in the
possession of the Lender, any Participant or any such Affiliate, whether for safekeeping or
otherwise (regardless of the reason such Person had received the same) shall at all times
constitute security for all Liabilities and for any and all obligations of the Borrower to the
Lender or any Participant or any such Affiliate and may be applied or set off against the
Liabilities and against such obligations at any time, whether or not such are then due and whether
or not other collateral is then available to the Lender or any Participant or any such Affiliate.

     (o) Maximum Interest Rate. Notwithstanding anything to the contrary contained in any Loan
Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the
maximum rate of non-usurious interest permitted by applicable Law (the “Maximum Rate”). If
the Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest
shall be applied to the principal of the Revolving Loans or, if it exceeds such unpaid principal,
refunded to the Borrower. In determining whether the interest contracted for, charged, or received
by the Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable law,
(a) characterize any payment that is not principal as an expense, fee, or premium rather than
interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate,
allocate, and spread in equal or unequal parts the total amount of interest throughout the
contemplated term of the Liabilities hereunder.

     (p) Waivers.

          (i) The Borrower (and all guarantors, endorsers, and sureties of the Liabilities) make each of
the waivers included in Section 14-16(b), below, knowingly, voluntarily, and intentionally, and
understands that the Lender, in entering into the financial arrangements contemplated hereby and in
providing loans and other financial accommodations to or for the account of the Borrower as
provided herein, whether not or in the future, is relying on such waivers.

          (ii) THE BORROWER, AND EACH SUCH GUARANTOR, ENDORSER, AND SURETY RESPECTIVELY WAIVES THE
FOLLOWING:

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          (A) Except as otherwise specifically required hereby, and to the extent permissible
under applicable law, notice of non-payment, demand, presentment, protest and all forms of
demand and notice, both with respect to the Liabilities and the Collateral.

          (B) Except as otherwise specifically required hereby, and to the extent permissible
under applicable law, the right to notice and/or hearing prior to the Lender’s exercising
of the Lender’s rights upon default.

          (C) THE RIGHT TO A JURY IN ANY TRIAL OF ANY CASE OR CONTROVERSY IN WHICH THE LENDER IS
OR BECOMES A PARTY (WHETHER SUCH CASE OR CONTROVERSY IS INITIATED BY OR AGAINST THE LENDER
OR IN WHICH THE LENDER IS JOINED AS A PARTY LITIGANT), WHICH CASE OR CONTROVERSY ARISES OUT
OF OR IS IN RESPECT OF, ANY RELATIONSHIP AMONGST OR BETWEEN THE BORROWER OR ANY OTHER PERSON
AND THE LENDER (AND THE LENDER LIKEWISE WAIVES THE RIGHT TO A JURY IN ANY TRIAL OF ANY SUCH
CASE OR CONTROVERSY).

          (D) Except to the extent that such may not be waived under applicable law, the benefits
or availability of any stay, limitation, hindrance, delay, or restriction with respect to
any action which the Lender may or may become entitled to take hereunder.

          (E) Any defense, counterclaim, set-off, recoupment, or other basis on which the amount
of any Liability, as stated on the books and records of the Lender, could be reduced or
claimed to be paid otherwise than in accordance with the tenor of and written terms of such
Liability.

          (F) Any claim against the Lender to consequential, special, or punitive damages.

     (q) Confidentiality. The Lender shall keep, and shall cause its officers, directors, employees,
affiliates and attorneys to keep, all financial statements, reports and other proprietary
information furnished to it by the Borrower, the Guarantor or their respective Affiliates
(hereinafter collectively, the “Information”) confidential and shall not disclose such Information,
or cause such Information to be disclosed, to any Person, provided, however, that (i) the
Information may be disclosed to the Lender’s officers, directors, employees, affiliates, attorneys
and other advisors as need to know the Information in connection with the Lender’s administration
of the Liabilities; (ii) the Information may be disclosed to any regulatory or other governmental
authorities having jurisdiction over the Lender as required in connection with the exercise of
their regulatory activity; (iii) the Information may be disclosed to any prospective assignee or
participant, who has agreed to be bound by the provisions of this Section 14-17; (iv) the
Information may be disclosed in connection with the enforcement of the Liabilities by the Lender to
the extent required in connection therewith; and (v) the Information may otherwise be disclosed to
the extent required by law. Notwithstanding anything herein to the contrary, “Information” shall
not include, and Lender (and each employee, representative, or other agent of the Lender) may
disclose to any and all Persons without limitation of any kind, any information with respect to the
“tax treatment” and “tax structure” (in each case, within the meaning of Treasury Regulation
Section 1.6011-4) of the transactions contemplated hereby and all materials of any kind (including
options or other tax analyses) that are provided to the Lender (and each employee, representative,
or other agent of the Lender) relating to such tax treatment and tax structure; provided, that with
respect to any document or similar item that in either case contains information concerning the tax
treatment or tax structure of the transaction as well as other information, this sentence shall
only apply to such portions of the document or similar item that relate to the tax treatment or tax
structure of the Revolving Credit, the L/Cs and other transactions contemplated hereby.

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     (r) Press Releases. Once the Borrower has filed this Agreement with the Securities and Exchange
Commission and disseminated a corresponding Press Release regarding this Agreement, then Borrower
consents to the publication by the Lender of advertising material relating to the financing
transactions contemplated by this Agreement using the Borrower’s name, product photographs, logo or
trademark. The Lender shall provide a draft reasonably in advance of any advertising material to
the Borrower for review and comment prior to the publication thereof. Subject to the conditions
contained in this Section 14-18, the Lender reserves the right to provide to industry trade
organizations information necessary and customary for inclusion in league table measurements.

     (s) No Advisory or Fiduciary Responsibility. In connection with all aspects of each transaction
contemplated hereby, the Loan Parties acknowledge and agree that: (i) the credit facility provided
for hereunder and any related arranging or other services in connection therewith (including in
connection with any amendment, waiver or other modification hereof or of any other Loan Document)
are an arm’s-length commercial transaction between the Loan Party, on the one hand, and the Lender,
on the other hand, and each of the Loan Parties is capable of evaluating and understanding and
understands and accepts the terms, risks and conditions of the transactions contemplated hereby and
by the other Loan Documents (including any amendment, waiver or other modification hereof or
thereof); (ii) in connection with the process leading to such transaction, the Lender is and has
been acting solely as a principal and is not the financial advisor, agent or fiduciary, for the
Loan Parties or any of their respective Affiliates, stockholders, creditors or employees or any
other Person; (iii) the Lender has not assumed and will not assume an advisory, agency or fiduciary
responsibility in favor of the Loan Parties with respect to any of the transactions contemplated
hereby or the process leading thereto, including with respect to any amendment, waiver or other
modification hereof or of any other Loan Document (irrespective of whether the Lender has advised
or is currently advising the Loan Parties or any of their respective Affiliates on other matters)
and the Lender has no any obligation to the Loan Parties or any of their respective Affiliates with
respect to the transactions contemplated hereby except those obligations expressly set forth herein
and in the other Loan Documents; (iv) the Lender and its Affiliates may be engaged in a broad range
of transactions that involve interests that differ from those of the Loan Parties and their
respective Affiliates, and the Lender has no obligation to
disclose any of such interests by virtue of any advisory, agency or fiduciary relationship;
and (v) the Lender has not provided and will not provide any legal, accounting, regulatory or tax
advice with respect to any of the transactions contemplated hereby (including any amendment, waiver
or other modification hereof or of any other Loan Document) and each of the Loan Parties has
consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed
appropriate. Each of the Loan Parties hereby waives and releases, to the fullest extent permitted
by law, any claims that it may have against the Lender with respect to any breach or alleged breach
of agency or fiduciary duty.

     (t) USA PATRIOT Act Notice. The Lender hereby notifies the Loan Parties that pursuant to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Act”), it is required to obtain, verify and record information that identifies the
Loan Parties, which information includes the name and address of each such Person and other
information that will allow the Lender to identify the Loan Parties in accordance with the Act.
Each of the Loan Parties is in compliance, in all material respects, with the Patriot Act. No part
of the proceeds of the Revolving Loans will be used by the Loan Parties, directly or indirectly,

70

 

for any payments to any governmental official or employee, political party, official of a political
party, candidate for political office, or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage, in violation of the United
States Foreign Corrupt Practices Act of 1977, as amended.

     (u) Existing Loan Agreement Amended and Restated. This Agreement shall amend and restate the
Existing Loan Agreement in its entirety. On the Second Amendment Effective Date, the rights and
obligations of the parties under the Existing Loan Agreement shall be subsumed within and be
governed by this Agreement; provided, however, that each of the “Revolving Credit Loans” (as such
term is defined in the Existing Loan Agreement) outstanding under the Existing Loan Agreement on
the Second Amendment Effective Date shall, for purposes of this Agreement, be included as
Revolving Credit Loans hereunder and each of the “L/Cs” (as defined in the Existing Loan Agreement)
outstanding under the Existing Loan Agreement on the Second Amendment Effective Date shall be L/Cs
hereunder.

[signature pages follow]

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EXECUTION COPY

     IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date above
first written. This Agreement shall take effect as a sealed instrument.

	 	 	 	 	 	 	 
	 	 	AEROPOSTALE, INC.	 	 
	 

	 	 	 	(“Borrower”)	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A.	 	 
	 

	 	 	 	(“Lender”)	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:

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