Document:

<PAGE>

                                                                     EXHIBIT 4.1

                     MERRILL LYNCH MORTGAGE INVESTORS, INC.,
                                    Depositor

                            LITTON LOAN SERVICING LP,
                                    Servicer

                                       and

                              JPMORGAN CHASE BANK,
                                     Trustee

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

                         POOLING AND SERVICING AGREEMENT
                           Dated as of October 1, 2004

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

              SPECIALTY UNDERWRITING AND RESIDENTIAL FINANCE TRUST
            MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2004-AA1
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                                TABLE OF CONTENTS

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

ARTICLE II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES..........................................34

         SECTION 2.01               Conveyance of Mortgage Loans.................................................34

         SECTION 2.02               Acceptance by Trustee of the Mortgage Loans..................................36

         SECTION 2.03               Representations, Warranties and Covenants of the Depositor...................37

         SECTION 2.04               Representations and Warranties of the Servicer...............................40

         SECTION 2.05               Substitutions and Repurchases of Mortgage Loans Which Are Not
                                    "Qualified Mortgages". ......................................................41

         SECTION 2.06               Authentication and Delivery of Certificates..................................42

         SECTION 2.07               REMIC Elections..............................................................42

         SECTION 2.08               Covenants of the Servicer....................................................46

         SECTION 2.09               [RESERVED]...................................................................46

         SECTION 2.10               [RESERVED]...................................................................46

         SECTION 2.11               Permitted Activities of the Trust............................................47

         SECTION 2.12               Qualification Special Purpose Entity.........................................47

ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS.......................................................47

         SECTION 3.01               Servicer to Service Mortgage Loans...........................................47

         SECTION 3.02               Servicing and Subservicing; Enforcement of the Obligations of Servicer.......48

         SECTION 3.03               Rights of the Depositor and the Trustee in Respect of the Servicer...........49

         SECTION 3.04               Trustee to Act as Servicer...................................................49

         SECTION 3.05               Collection of Mortgage Loan Payments; Collection Account;
                                    Certificate Account. ........................................................50

         SECTION 3.06               Collection of Taxes, Assessments and Similar Items; Escrow Accounts..........53

         SECTION 3.07               Access to Certain Documentation and Information Regarding the Mortgage Loans.53

         SECTION 3.08               Permitted Withdrawals from the Collection Account and Certificate Account....53

         SECTION 3.09               [RESERVED]...................................................................56
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         SECTION 3.10               Maintenance of Hazard Insurance..............................................56

         SECTION 3.11               Enforcement of Due-On-Sale Clauses; Assumption Agreements....................56

         SECTION 3.12               Realization Upon Defaulted Mortgage Loans; Determination of Excess Proceeds..57

         SECTION 3.13               Trustee to Cooperate; Release of Mortgage Files..............................60

         SECTION 3.14               Documents Records and Funds in Possession of Servicer to be Held for
                                    the Trustee. ................................................................61

         SECTION 3.15               Servicing Compensation.......................................................62

         SECTION 3.16               Access to Certain Documentation..............................................62

         SECTION 3.17               Annual Statement as to Compliance............................................62

         SECTION 3.18               Annual Independent Public Accountants' Servicing Statement;
                                    Financial Statements. .......................................................63

         SECTION 3.19               Reserved.....................................................................63

         SECTION 3.20               Periodic Filings.............................................................63

         SECTION 3.21               Annual Certificate by Trustee................................................64

         SECTION 3.22               Annual Certificate by Servicer...............................................64

         SECTION 3.23               Prepayment Penalty Reporting Requirements....................................65

         SECTION 3.24               Statements to Trustee........................................................65

         SECTION 3.25               Indemnification..............................................................65

         SECTION 3.26               Nonsolicitation..............................................................66

         SECTION 3.27               Existing Servicing Agreement.................................................66

ARTICLE IV DISTRIBUTIONS.........................................................................................66

         SECTION 4.01               Advances.....................................................................66

         SECTION 4.02               Reduction of Servicing Compensation in Connection with Prepayment
                                    Interest Shortfalls. ........................................................67

         SECTION 4.03               Distributions on the REMIC Interests.........................................67

         SECTION 4.04               Distributions................................................................67

         SECTION 4.05               Monthly Statements to Certificateholders.....................................72

         SECTION 4.06               Allocation of Realized Losses................................................74

         SECTION 4.07               Allocation of Certain Interest Shortfalls....................................75

         SECTION 4.08               Subordination.  .............................................................76
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ARTICLE V THE CERTIFICATES.......................................................................................76

         SECTION 5.01               The Certificates.............................................................76

         SECTION 5.02               Certificate Register; Registration of Transfer and Exchange of Certificates..77

         SECTION 5.03               Mutilated, Destroyed, Lost or Stolen Certificates............................80

         SECTION 5.04               Persons Deemed Owners........................................................81

         SECTION 5.05               Access to List of Certificateholders' Names and Addresses....................81

         SECTION 5.06               Book-Entry Certificates......................................................81

         SECTION 5.07               Notices to Depository........................................................82

         SECTION 5.08               Definitive Certificates......................................................82

         SECTION 5.09               Maintenance of Office or Agency..............................................82

ARTICLE VI THE DEPOSITOR AND THE SERVICER........................................................................83

         SECTION 6.01               Respective Liabilities of the Depositor and the Servicer.....................83

         SECTION 6.02               Merger or Consolidation of the Depositor or the Servicer.....................83

         SECTION 6.03               Limitation on Liability of the Depositor, the Servicer and Others............83

         SECTION 6.04               Limitation on Resignation of Servicer........................................84

         SECTION 6.05               Errors and Omissions Insurance; Fidelity Bonds...............................84

ARTICLE VII DEFAULT; TERMINATION OF SERVICER.....................................................................85

         SECTION 7.01               Events of Default............................................................85

         SECTION 7.02               Servicer Trigger Event.......................................................86

         SECTION 7.03               Trustee to Act; Appointment of Successor.....................................87

         SECTION 7.04               Notification to Certificateholders...........................................88

ARTICLE VIII CONCERNING THE TRUSTEE..............................................................................89

         SECTION 8.01               Duties of Trustee............................................................89

         SECTION 8.02               Certain Matters Affecting the Trustee........................................90

         SECTION 8.03               Trustee Not Liable for Mortgage Loans........................................91

         SECTION 8.04               Trustee May Own Certificates.................................................91

         SECTION 8.05               Trustee's Fees...............................................................92

         SECTION 8.06               Indemnification of Trustee; Expenses.........................................92

         SECTION 8.07               Eligibility Requirements for Trustee.........................................93
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         SECTION 8.08               Resignation and Removal of Trustee...........................................93

         SECTION 8.09               Successor Trustee............................................................94

         SECTION 8.10               Merger or Consolidation of Trustee...........................................94

         SECTION 8.11               Appointment of Co-Trustee or Separate Trustee................................94

         SECTION 8.12               Tax Matters..................................................................95

ARTICLE IX TERMINATION...........................................................................................97

         SECTION 9.01               Termination upon Liquidation or Repurchase of all Mortgage Loans.............97

         SECTION 9.02               Final Distribution on the Certificates.......................................99

         SECTION 9.03               Additional Termination Requirements.........................................100

ARTICLE X MISCELLANEOUS PROVISIONS..............................................................................100

         SECTION 10.01              Amendment...................................................................100

         SECTION 10.02              Counterparts................................................................102

         SECTION 10.03              Governing Law...............................................................102

         SECTION 10.04              Intention of Parties........................................................102

         SECTION 10.05              Notices.....................................................................103

         SECTION 10.06              Severability of Provisions..................................................103

         SECTION 10.07              Assignment..................................................................104

         SECTION 10.08              Limitation on Rights of Certificateholders..................................104

         SECTION 10.09              Inspection and Audit Rights.................................................104

         SECTION 10.10              Certificates Nonassessable and Fully Paid...................................105

         SECTION 10.11              Assignment; Sales; Advance Facilities.......................................105
</TABLE>

                                       iv
<PAGE>
EXHIBIT A             FORMS OF OFFERED CERTIFICATES
EXHIBIT B-1           MORTGAGE LOAN SCHEDULE - TOTAL POOL
EXHIBIT B-2           MORTGAGE LOAN SCHEDULE - GROUP ONE MORTGAGE LOANS
EXHIBIT B-3           MORTGAGE LOAN SCHEDULE - GROUP TWO MORTGAGE LOANS
EXHIBIT C             [RESERVED]
EXHIBIT D             FORM OF TRUSTEE CERTIFICATION
EXHIBIT E-1           FORM OF TRANSFEREE'S LETTER AND AFFIDAVIT
EXHIBIT E-2           FORM OF TRANSFEROR'S AFFIDAVIT
EXHIBIT F             RESERVED
EXHIBIT G             FORM OF INVESTMENT LETTER
EXHIBIT H             FORM OF RULE 144A LETTER
EXHIBIT I             REQUEST FOR RELEASE
EXHIBIT J             FORM OF POWER OF ATTORNEY
EXHIBIT K             FORM OF OFFICER'S CERTIFICATE OF TRUSTEE
EXHIBIT L             FORM OF OFFICER'S CERTIFICATE OF SERVICER
EXHIBIT M             RESERVED
EXHIBIT N             FORM OF AUCTION PROCEDURES

                                        v
<PAGE>
         POOLING AND SERVICING AGREEMENT, dated as of October 1, 2004, among
MERRILL LYNCH MORTGAGE INVESTORS, INC., a Delaware corporation, as depositor
(the "Depositor"), LITTON LOAN SERVICING LP, a Delaware limited partnership, as
servicer (the "Servicer") and JPMORGAN CHASE BANK, a New York banking
corporation, as trustee (the "Trustee").

         The Depositor is the owner of the Trust Fund that is hereby conveyed to
the Trustee in return for the Certificates. The Trust Fund for federal income
tax purposes will consist of (i) three real estate mortgage investment conduits
in a tiered structure and (ii) the right to receive payments distributable to
the Servicing Rights Owner pursuant to Section 3.08(a). The Lower Tier REMIC
will consist of all of the assets constituting the Trust Fund (other than the
assets described in clause (ii) above, the Lower Tier REMIC Regular Interests
and the Middle Tier REMIC Regular Interests) and will be evidenced by the Lower
Tier REMIC Regular Interests (which will be uncertificated and will represent
the "regular interests" in the Lower Tier REMIC) and the Class LT-R Interest as
the single "residual interest" in the Lower Tier REMIC. The Trustee will hold
the Lower Tier REMIC Regular Interests. The Middle Tier REMIC will consist of
the Lower Tier REMIC Regular Interests and will be evidenced by the Middle Tier
REMIC Regular Interests (which will represent the "regular interests" in the
Middle Tier REMIC) and the Class MT-R Interest as the single "residual interest"
in the Middle Tier REMIC. The Trustee will hold the Middle Tier REMIC Regular
Interests. The Upper Tier REMIC will consist of the Middle Tier REMIC Regular
Interests and will be evidenced by the Certificates (other than the Class A-R
Certificate) which will represent "regular interests" in the Upper Tier REMIC
and the Class UT-R Interest as the single "residual interest" in the Upper Tier
REMIC. The Class A-R Certificate will represent beneficial ownership of the
Class LT-R Interest, the Class MT-R Interest and the Class UT-R Interest. The
"latest possible maturity date" for federal income tax purposes of all interests
created hereby will be the Final Scheduled Distribution Date.

         All covenants and agreements made by the Seller in the Sale Agreement
and by the Depositor and the Trustee herein with respect to the Mortgage Loans
and the other property constituting the Trust Fund are for the benefit of the
Holders from time to time of the Certificates.

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

                                   ARTICLE I
                                   DEFINITIONS

        Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:

         Accepted Servicing Practices: The Servicer's normal servicing
practices, which will conform to the mortgage servicing practices of prudent
mortgage lending institutions which service for their own account mortgage loans
of the same type as the Mortgages Loans in the jurisdictions in which the
related Mortgaged Properties are located.

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

                                       1
<PAGE>
         Advance Facility: A financing or other facility as described in Section
10.11(a).

         Advance Facility Notice: As defined in Section 10.11(b).

         Advance Financing Person: As defined in Section 10.11(a).

         Advance Reimbursement Amounts: As defined in Section 10.11(a).

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

         Aggregate Class A Interest Accrual Amount: On any Distribution Date, an
amount equal to the sum of the Class I-A-1 Interest Accrual Amount, the Class
II-A-1 Interest Accrual Amount, the Class II -A-2 Interest Accrual Amount, the
Class II-A-3 Interest Accrual Amount, the Class I-IO Interest Accrual Amount,
the Class II-IO Interest Accrual Amount, and the Class A-R Interest Accrual
Amount.

         Aggregate Class A Interest Shortfall: On any Distribution Date, an
amount equal to the sum of the Class I-A-1 Shortfall, the Class II-A-1
Shortfall, the Class II-A-2 Shortfall, the Class II-A-3 Shortfall, the Class
I-IO Shortfall, the Class II-IO Shortfall, and the Class A-R Shortfall.

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

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

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

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

         Auction Termination Amount: The purchase price received by the Trustee
in connection with any purchase of all of the Mortgage Loans pursuant to Section
9.01(a) (i).

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

                                       2
<PAGE>
         Auction Termination Price: In the case of an Auction Termination, as of
the initial Distribution Date on or after the Auction 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),
plus accrued interest thereon at the applicable Mortgage Rate through the Due
Date preceding distribution of the proceeds, the fair market value of any REO
Property, plus accrued interest thereon, (B) any unreimbursed out-of-pocket
costs and expenses owed to the Trustee (including any costs and expenses
incurred in connection with the Auction Termination) or the Servicer and any
unreimbursed Servicing Fees, Advances and Servicing Advances, and (C) any costs
and damages incurred by the Trust Fund (or the Trustee on behalf of the Trust
Fund) in connection with any violation of any anti-predatory or anti-abusive
lending laws.

         Available Distribution Amount: As to either Mortgage Group or, as the
context requires, both Mortgage Groups, on any Distribution Date, an amount
equal to the amount on deposit in the Collection Account with respect to such
Mortgage Group as of the close of business on the Business Day immediately
preceding the related Distribution Date except:

         (a) amounts received on particular Mortgage Loans in such Mortgage
Group as late payments or other recoveries of principal or interest (including
Liquidation Proceeds, Insurance Proceeds and condemnation awards) and respecting
which the Servicer previously made an unreimbursed Advance of such amounts;

         (b) reimbursement for Nonrecoverable Advances and other amounts
permitted to be withdrawn by the Servicer pursuant to Section 3.08 from, or not
required to be deposited in, the Collection Account attributable, in each case,
to Mortgage Loans in such Mortgage Group;

         (c) amounts representing the Servicing Fee attributable in each case to
Mortgage Loans in such Mortgage Group with respect to such Distribution Date;

         (d) amounts representing all or part of a Scheduled Payment with
respect to a Mortgage Loan in such Mortgage Group due (i) after the related Due
Period or (ii) on or prior to the Cut-off Date;

         (e) all Repurchase Proceeds, Principal Prepayments, Liquidation
Proceeds, Insurance Proceeds and condemnation awards with respect to Mortgage
Loans in such Mortgage Group received after the related Prepayment Period, and
all related payments of interest representing interest for any period of time
after the last day of the related Due Period for such Mortgage Loans; and

         (f) all income from Eligible Investments held in the Collection Account
for the account of the Servicer; and

         (g) any prepayment penalties collected by the Servicer during the
related Prepayment Period.

         Bankruptcy Code: Title 11 of the United States Code, as the same may be
amended from time to time.

         Book-Entry Certificates: Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the ownership of which
is reflected on the books of the Depository or on the books of a Person
maintaining an account with the Depository (directly, as a "Depository
Participant", or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 5.06). As of the Closing
Date, each of the Class A and B Certificates constitutes a Class of Book-Entry
Certificates.

                                       3
<PAGE>
         Business Day: Any day other than (1) a Saturday or a Sunday, or (2) a
day on which banking institutions in the State of Texas, State of Delaware, and
in the City of New York, New York are authorized or obligated by law or
executive order to be closed.

         Carry-Over Subordinated Principal Amount: As of any Distribution Date,
with respect to any Class of Class B Certificates, an amount, if any, equal to
the amount of principal distributable to such Class on any prior Distribution
Date that has not been so distributed.

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

         Certificateholder or Holder: The Person in whose name a Certificate is
registered in the Certificate Register (initially, Cede & Co., as nominee for
the Depository) in the case of any Class of Regular Certificates or the Class
A-R Certificate, except that solely for the purpose of giving any consent
pursuant to this Agreement, any Certificate registered in the name of the
Depositor or any Affiliate of the Depositor shall be deemed not to be
Outstanding and the Percentage Interest evidenced thereby shall not be taken
into account in determining whether the requisite amount of Percentage Interests
necessary to effect such consent has been obtained; provided, however, that if
any such Person (including the Depositor) owns 100% of the Percentage Interests
evidenced by a Class of Certificates, such Certificates shall be deemed to be
Outstanding for purposes of any provision hereof that requires the consent of
the Holders of Certificates of a particular Class as a condition to the taking
of any action hereunder. The Trustee is entitled to rely conclusively on a
certification of the Depositor or any Affiliate of the Depositor in determining
which Certificates are registered in the name of an Affiliate of the Depositor.

         Certificate Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.05(f) in the name of the Trustee
for the benefit of the Certificateholders and designated "JPMorgan Chase Bank,
as trustee, in trust for registered holders of Specialty Underwriting and
Residential Finance Trust, Mortgage Loan Asset-Backed Certificates, Series
2004-AA1." Funds in the Certificate Account shall be held in trust for the
Certificateholders for the uses and purposes set forth in this Agreement.

         Certificate Group: Each of (i) the Class I-A Certificates, collectively
and (ii) the Class II-A Certificates, collectively.

         Certificate Owner: With respect to a Book-Entry Certificate, the Person
that is the beneficial owner of such Book-Entry Certificate.

         Certificate Rate: The per annum rate of interest borne by each Class of
Certificates (other than the Class I-PO and Class II-PO Certificates), which
rate shall equal (i) 5.00% with respect to the Class I-A-1 and Class A-R
Certificates and (ii) 5.50% with respect to the Class II-A-1, Class II-A-2 and
Class II-A-3 Certificates on the Outstanding Certificate Principal Balance of
such Class. The Certificate Rate for the Class I-IO Certificates for any
Distribution Date is a rate equal to the weighted average Net Mortgage Rate of
the Non-Discount Mortgage Loans in Mortgage Group One. The Certificate Rate for
the Class II-IO Certificates for any Distribution Date is a rate equal to the
weighted average Net Mortgage Rate of the Non-Discount Mortgage Loans in
Mortgage Group Two. The Certificate Rate on each Class of Class B Certificates
with respect to the first Distribution Date will be 5.4138%. With respect to any
Distribution Date after the first Distribution Date, the Certificate Rate on
each Class of Class B Certificates shall equal the fraction, expressed as a
percentage, the numerator of which shall equal the sum of (i) the product of (x)
5.00% and (y) the Group One Subordinated Amount and (ii) the product of (x)
5.50% and (y) the Group Two Subordinated Amount and the denominator of which
shall equal the sum of the Group One Subordinated Amount and the Group Two
Subordinated Amount. For federal income tax purposes, the

                                       4
<PAGE>
Certificate Rate on each Class of Class B Certificates can be expressed as the
weighted average of the interest rates on the Class MTIA Interest and Class
MTIIA Interest; provided, however, that for purposes of computing such weighted
average, the interest rate on the Class MTIA Interest shall be subject to a cap
and a floor equal to the interest rate on the Class MTIB Interest, and the
interest rate on the Class MTIIA Interest shall be subject to a cap and a floor
equal to the interest rate on the Class MTIIB Interest. Interest with respect to
each Class of Certificates (other than the Class I-PO and Class II-PO
Certificates) at the related Certificate Rate shall be calculated based on a
year of 360 days comprised of twelve 30-day months.

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

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

         Class A Certificate Principal Balance: As of any Distribution Date, (a)
the Class A Certificate Principal Balance for the immediately preceding
Distribution Date less (b) amounts distributed (or deemed distributed) to the
Class A Certificateholders on such preceding Distribution Date allocable to
principal (including the principal portion of Advances of the Servicer made
pursuant to Section 4.01 and Realized Losses allocated to the Class A
Certificates pursuant to Section 4.06); provided that the Class A Certificate
Principal Balance on the first Distribution Date shall be the Original Class A
Certificate Principal Balance.

         Class A Certificates: The Class I-A-1, Class II-A-1, Class II-A-2,
Class II-A-3, Class I-IO, Class II-IO, Class I-PO, Class II-PO and Class A-R
Certificates, referred to collectively.

         Class A or Class B: Pertaining to Class A Certificates or Class B
Certificates, as the case may be.

         Class A-R Certificate: The Class A-R Certificate executed by the
Depositor and authenticated by the Trustee, substantially in the form of the
Class A-R Certificate set forth in Exhibit A hereto.

         Class A-R Interest Accrual Amount: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class A-R Certificates minus (i) any
Non-Supported Interest Shortfall allocated to the Class A-R Certificates on such
Distribution Date pursuant to Section 4.02, (ii) any Realized Loss Interest
Shortfall allocated to the Class A-R Certificates on such Distribution Date
pursuant to Section 4.07(a) and (iii) any interest shortfall resulting from the
Relief Act allocated to the Class A-R Certificates on such Distribution Date
pursuant to Section 4.07(b).

         Class A-R Shortfall: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class A-R Interest Accrual Amount over the
amount actually distributed to the Class A-R Certificateholders on such
Distribution Date pursuant to Section 4.04(b)(i)(G).

         Class I-A Certificates: The Class I-A1, Class I-IO, Class I-PO, and
Class A-R Certificates, referred to collectively.

         Class I-A-1 Certificate: Any one of the Class I-A-1 Certificates,
executed by the Depositor and authenticated by the Trustee, senior in right of
payment to the Class B Certificates, substantially in the form of the Class A
Certificate set forth in Exhibit A hereto.

         Class I-A-1 Interest Accrual Amount: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class I-A-1 Certificates minus (i) any
Non-Supported Interest Shortfall allocated to the Class I-A-1 Certificates on

                                        5
<PAGE>
such Distribution Date pursuant to Section 4.02, (ii) any Realized Loss Interest
Shortfall allocated to the Class I-A-1 Certificates on such Distribution Date
pursuant to Section 4.07(a) and (iii) any interest shortfall resulting from the
Relief Act allocated to the Class I-A-1 Certificates on such Distribution Date
pursuant to Section 4.07(b).

         Class I-A-1 Shortfall: With respect to any Distribution Date, the
amount equal to the excess, if any, of the Class I-A-1 Interest Accrual Amount
over the amount actually distributed to the Class I-A-1 Certificateholders on
such Distribution Date pursuant to Section 4.04(b)(i)(A).

         Class II-A Certificates: The Class II-A1, Class II-A2, Class II-A3,
Class II-IO and Class II-PO Certificates, referred to collectively.

         Class II-A-1 Allocated Amount: For the Class II-A-1 Certificates on any
Distribution Date, an amount equal to the sum of (x) the product of (i) the
Class II-A-1 Pro Rata Percentage for such Distribution Date and (ii) the
scheduled portion of the Non-PO Class II-A Optimal Principal Amount for such
Distribution Date and (y) the product of (i) the Class II-A-1 Pro Rata
Percentage for such Distribution Date, (ii) the prepaid portion of the Non-PO
Class II-A Optimal Principal Amount for such Distribution Date and (iii) the
specified percentage for such Distribution Date set out below; provided that
notwithstanding the foregoing, unless the Certificate Principal Balance of the
Class II-A-2 and Class II-A-3 Certificate have each been reduced to zero, the
Class II-A-1 Allocated Amount shall be zero on any Distribution Date prior to
the Distribution Date in November 2009.

<TABLE>
<CAPTION>
         Distribution Date Occurring in                             Specified %
         ------------------------------                             -----------
<S>                                                                 <C>
        November 2004-October 2009                                          0%
        November 2009 - October 2010                                       30%
        November 2010 - October 2011                                       40%
        November 2011 - October 2012                                       60%
        November 2012 - October 2013                                       80%
        November 2013 and thereafter                                       100%
</TABLE>

         Class II-A-1 Certificate: Any one of the Class II-A-1 Certificates,
executed by the Depositor and authenticated by the Trustee, senior in right of
payment to the Class B Certificates, substantially in the form of the Class A
Certificate set forth in Exhibit A hereto.

         Class II-A-1 Interest Accrual Amount: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class II-A-1 Certificates minus (i) any
Non-Supported Interest Shortfall allocated to the Class II-A-1 Certificates on
such Distribution Date pursuant to Section 4.02, (ii) any Realized Loss Interest
Shortfall allocated to the Class II-A-1 Certificates on such Distribution Date
pursuant to Section 4.07(a) and (iii) any interest shortfall resulting from the
Relief Act allocated to the Class II-A-1 Certificates on such Distribution Date
pursuant to Section 4.07(b).

                                       6
<PAGE>
         Class II-A-1 Pro Rata Percentage: On any Distribution Date, the
percentage obtained by dividing (x) the Outstanding Certificate Principal
Balance of the Class II-A-1 Certificates by (y) the sum of the Outstanding
Certificate Principal Balances of the Class II-A-1, Class II-A-2 and Class
II-A-3 Certificates.

         Class II-A-1 Shortfall: With respect to any Distribution Date, the
amount equal to the excess, if any, of the Class II-A-1 Interest Accrual Amount
over the amount actually distributed to the Class II-A-1 Certificateholders on
such Distribution Date pursuant to Section 4.04(b)(i)(B).

         Class II-A-2 Certificate: Any one of the Class II-A-2 Certificates,
executed by the Depositor and authenticated by the Trustee, senior in right of
payment to the Class B Certificates, substantially in the form of the Class A
Certificate set forth in Exhibit A hereto.

         Class II-A-2 Interest Accrual Amount: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class II-A-2 Certificates minus (i) any
Non-Supported Interest Shortfall allocated to the Class II-A-2 Certificates on
such Distribution Date pursuant to Section 4.02, (ii) any Realized Loss Interest
Shortfall allocated to the Class II-A-2 Certificates on such Distribution Date
pursuant to Section 4.07(a) and (iii) any interest shortfall resulting from the
Relief Act allocated to the Class II-A-2 Certificates on such Distribution Date
pursuant to Section 4.07(b).

         Class II-A-2 Shortfall: With respect to any Distribution Date, the
amount equal to the excess, if any, of the Class II-A-2 Interest Accrual Amount
over the amount actually distributed to the Class II-A-2 Certificateholders on
such Distribution Date pursuant to Section 4.04(b)(i)(C).

         Class II-A-3 Certificate: Any one of the Class II-A-3 Certificates,
executed by the Depositor and authenticated by the Trustee, senior in right of
payment to the Class B Certificates, substantially in the form of the Class A
Certificate set forth in Exhibit A hereto.

         Class II-A-3 Interest Accrual Amount: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class II-A-3 Certificates minus (i) any
Non-Supported Interest Shortfall allocated to the Class II-A-3 Certificates on
such Distribution Date pursuant to Section 4.02, (ii) any Realized Loss Interest
Shortfall allocated to the Class II-A-3 Certificates on such Distribution Date
pursuant to Section 4.07(a) and (iii) any interest shortfall resulting from the
Relief Act allocated to the Class II-A-3 Certificates on such Distribution Date
pursuant to Section 4.07(b).

         Class II-A-3 Shortfall: With respect to any Distribution Date, the
amount equal to the excess, if any, of the Class II-A-3 Interest Accrual Amount
over the amount actually distributed to the Class II-A-3 Certificateholders on
such Distribution Date pursuant to Section 4.04(b)(i)(D).

         Class B Certificates: The Class B-1, Class B-2, Class B-3, Class B-4,
Class B-5 and Class B-6 Certificates, referred to collectively.

         Class B Certificate Principal Balance: As of any Distribution Date, the
excess of the aggregate Stated Principal Balance of the Mortgage Loans as of the
immediately preceding Distribution Date (or, in the case of the first
Distribution Date, as of the Cut-off Date) over the Class A Certificate
Principal Balance.

         Class B-1 Certificate: Any one of the Class B-1 Certificates executed
by the Depositor and authenticated by the Trustee, subordinated in right of
payment to the Class A Certificates, substantially in the form of the Class B
Certificate set forth in Exhibit A hereto.

                                       7
<PAGE>
         Class B-1 Interest Accrual Amount: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class B-1 Certificates minus (i) any
Non-Supported Interest Shortfall allocated to the Class B-1 Certificates on such
Distribution Date pursuant to Section 4.02, (ii) any Realized Loss Interest
Shortfall allocated to the Class B-1 Certificates on such Distribution Date
pursuant to Section 4.07(a) and (iii) any interest shortfall resulting from the
Civil Relief Act allocated to the Class B-1 Certificates on such Distribution
Date pursuant to Section 4.07(b).

         Class B-1 Shortfall: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class B-1 Interest Accrual Amount over the
amount actually distributed to the Class B-1 Certificates on such Distribution
Date pursuant to Section 4.04(c)(1) (A) and (B).

         Class B-2 Certificate: Any one of the Class B-2 Certificates executed
by the Depositor and authenticated by the Trustee, subordinated in right of
payment to the Class A and Class B-1 Certificates, substantially in the form of
the Class B Certificate set forth in Exhibit A hereto.

         Class B-2 Interest Accrual Amount: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class B-2 Certificates minus (i) any
Non-Supported Interest Shortfall allocated to the Class B-2 Certificates on such
Distribution Date pursuant to Section 4.02, (ii) any Realized Loss Interest
Shortfall allocated to the Class B-2 Certificates on such Distribution Date
pursuant to Section 4.07(a) and (iii) any interest shortfall resulting from the
Relief Act allocated to the Class B-2 Certificates on such Distribution Date
pursuant to Section 4.07(b).

         Class B-2 Shortfall: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class B-2 Interest Accrual Amount over the
amount actually distributed to the Class B-2 Certificates on such Distribution
Date pursuant to Section 4.04(c)(2) (A) and (B).

         Class B-3 Certificate: Any one of the Class B-3 Certificates executed
by the Depositor and authenticated by the Trustee, subordinated in right of
payment to the Class A, Class B-1 and Class B-2 Certificates, substantially in
the form of the Class B Certificate set forth in Exhibit A hereto.

         Class B-3 Interest Accrual Amount: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class B-3 Certificates minus (i) any
Non-Supported Interest Shortfall allocated to the Class B-3 Certificates on such
Distribution Date pursuant to Section 4.02, (ii) any Realized Loss Interest
Shortfall allocated to the Class B-3 Certificates on such Distribution Date
pursuant to Section 4.07(a) and (iii) any interest shortfall resulting from the
Relief Act allocated to the Class B-3 Certificates on such Distribution Date
pursuant to Section 4.07(b).

         Class B-3 Shortfall: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class B-3 Interest Accrual Amount over the
amount actually distributed to the Class B-3 Certificates on such Distribution
Date pursuant to Section 4.04(c)(3) (A) and (B).

         Class B-4 Certificate: Any one of the Class B-4 Certificates executed
by the Depositor and authenticated by the Trustee, subordinated in right of
payment to the Class A, Class B-1, Class B-2 and Class B-3 Certificates,
substantially in the form of the Class B Certificate set forth in Exhibit A
hereto.

         Class B-4 Interest Accrual Amount: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class B-4 Certificates minus (i) any
Non-Supported Interest Shortfall allocated to the Class B-4 Certificates on such

                                       8
<PAGE>
Distribution Date pursuant to Section 4.02, (ii) any Realized Loss Interest
Shortfall allocated to the Class B-4 Certificates on such Distribution Date
pursuant to Section 4.07(a) and (iii) any interest shortfall resulting from
Relief Act allocated to the Class B-4 Certificates on such Distribution Date
pursuant to Section 4.07(b).

         Class B-4 Shortfall: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class B-4 Interest Accrual Amount over the
amount actually distributed to the Class B-4 Certificates on such Distribution
Date pursuant to Section 4.04(c)(4) (A) and (B).

         Class B-5 Certificate: Any one of the Class B-5 Certificates executed
by the Depositor and authenticated by the Trustee, subordinated in right of
payment to the Class A, Class B-1, Class B-2, Class B-3 and Class B-4
Certificates, substantially in the form of the Class B Certificate set forth in
Exhibit A hereto.

         Class B-5 Interest Accrual Amount: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class B-5 Certificates minus (i) any
Non-Supported Interest Shortfall allocated to the Class B-5 Certificates on such
Distribution Date pursuant to Section 4.02, (ii) any Realized Loss Interest
Shortfall allocated to the Class B-5 Certificates on such Distribution Date
pursuant to Section 4.07(a) and (iii) any interest shortfall resulting from the
Relief Act allocated to the Class B-5 Certificates on such Distribution Date
pursuant to Section 4.07(b).

         Class B-5 Shortfall: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class B-5 Interest Accrual Amount over the
amount actually distributed to the Class B-5 Certificates on such Distribution
Date pursuant to Section 4.04(c)(5) (A) and (B).

         Class B-6 Certificate: Any one of the Class B-6 Certificates executed
by the Depositor and authenticated by the Trustee, subordinated in right of
payment to the Class A, Class B-1, Class B-2, Class B-3, Class B-4 and Class B-5
Certificates, substantially in the form of the Class B Certificate set forth in
Exhibit A hereto.

         Class B-6 Interest Accrual Amount: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class B-6 Certificates minus (i) any
Non-Supported Interest Shortfall allocated to the Class B-6 Certificates on such
Distribution Date pursuant to Section 4.02, (ii) any Realized Loss Interest
Shortfall allocated to the Class B-6 Certificates on such Distribution Date
pursuant to Section 4.07(a) and (iii) any interest shortfall resulting from the
Relief Act allocated to the Class B-6 Certificates on such Distribution Date
pursuant to Section 4.07(b).

         Class B-6 Shortfall: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class B-6 Interest Accrual Amount over the
amount actually distributed to the Class B-6 Certificates on such Distribution
Date pursuant to Section 4.04(c)(6)(A) and (B).

         Class I-IO Certificate: Any one of the Class I-IO Certificates executed
by the Depositor and authenticated by the Trustee, senior in right of payment to
the Class B Certificates, substantially in the form of the Class I-IO
Certificate set forth in Exhibit A hereto.

         Class I-IO Interest Accrual Amount: With respect to any Distribution
Date, one month's interest at the Class I-IO Certificate Rate on the Class I-IO
Notional Amount minus (i) any Non-Supported Interest Shortfall allocated to
Class I-IO on such Distribution Date pursuant to Section 4.02, (ii) any Realized
Loss Interest Shortfall allocated to Class I-IO Certificates on such
Distribution Date pursuant to

                                       9
<PAGE>
Section 4.07(a) and (iii) any interest shortfall resulting from the Relief Act
allocated to the Class I-IO Certificates on such Distribution Date pursuant to
Section 4.07(b).

         Class I-IO Notional Amount: With respect to any Distribution Date, an
amount equal to the aggregate Stated Principal Balance of the Non-Discount
Mortgage Loans in Mortgage Group One as of the immediately preceding
Distribution Date (or, in the case of the first Distribution Date, as of the
Cut-off Date). The Class I-IO Notional Amount for the first Distribution Date
will be $21,440,532.

         Class I-IO Shortfall: With respect to any Distribution Date the amount
equal to the excess, if any, of the Class I-IO Interest Accrual Amount over the
amount actually distributed to the Class I-IO Certificateholders on such
Distribution Date pursuant to Section 4.04(b)(i)(E).

         Class II-IO Certificate: Any one of the Class II-IO Certificates
executed by the Depositor and authenticated by the Trustee, senior in right of
payment to the Class B Certificates, substantially in the form of the Class
II-IO Certificate set forth in Exhibit A hereto.

         Class II-IO Interest Accrual Amount: With respect to any Distribution
Date, one month's interest at the Class II-IO Certificate Rate on the Class
II-IO Notional Amount minus (i) any Non-Supported Interest Shortfall allocated
to Class II-IO Certificates on such Distribution Date pursuant to Section 4.02,
(ii) any Realized Loss Interest Shortfall allocated to Class II-IO Certificates
on such Distribution Date pursuant to Section 4.07(a) and (iii) any interest
shortfall resulting from the Relief Act allocated to the Class II-IO
Certificates on such Distribution Date pursuant to Section 4.07(b).

         Class II-IO Notional Amount: With respect to any Distribution Date, an
amount equal to the aggregate Stated Principal Balance of the Non-Discount
Mortgage Loans in Mortgage Group Two as of the immediately preceding
Distribution Date (or, in the case of the first Distribution Date, as of the
Cut-off Date). The Class II-IO Notional Amount for the first Distribution Date
will be $135,467,953.

         Class II-IO Shortfall: With respect to any Distribution Date the amount
equal to the excess, if any, of the Class II-IO Interest Accrual Amount over the
amount actually distributed to the Class II-IO Certificateholders on such
Distribution Date pursuant to Section 4.04(b)(i)(F).

         Class LT-R Interest: The sole residual interest in the Lower Tier
REMIC.

         Class MT-R Interest: The sole residual interest in the Middle Tier
REMIC.

         Class I-PO Certificate: Any one of the Class I-PO Certificates executed
by the Depositor and authenticated by the Trustee, senior in right of payment to
the Class B Certificates, substantially in the form of the Class I-PO
Certificate set forth in Exhibit A hereto.

         Class I-PO Shortfall Amount: With respect to any Distribution Date
prior to and including the Credit Support Depletion Date, to the extent of
amounts available to pay the Subordinated Optimal Principal Amount (without
regard to clause (b)(2) of the definition of such term), an amount equal to the
sum of (i) the applicable PO Percentage of the principal portion of any Realized
Loss with respect to a Discount Mortgage Loan in the related Mortgage Group and
(ii) the sum of amounts, if any, by which the amounts specified in clause (i)
with respect to each prior Distribution Date exceeded the amount actually
distributed in respect thereof on such prior Distribution Date and not
subsequently distributed to the Class I-PO Certificateholders.

                                       10
<PAGE>
         Class II-PO Certificate: Any one of the Class II-PO Certificates
executed by the Depositor and authenticated by the Trustee, senior in right of
payment to the Class B Certificates, substantially in the form of the Class
II-PO Certificate set forth in Exhibit A hereto.

         Class II-PO Shortfall Amount: With respect to any Distribution Date
prior to and including the Credit Support Depletion Date, to the extent of
amounts available to pay the Subordinated Optimal Principal Amount (without
regard to clause (b)(2) of the definition of such term), an amount equal to the
sum of (i) the applicable PO Percentage of the principal portion of any Realized
Loss with respect to a Discount Mortgage Loan in the related Mortgage Group and
(ii) the sum of amounts, if any, by which the amounts specified in clause (i)
with respect to each prior Distribution Date exceeded the amount actually
distributed in respect thereof on such prior Distribution Date and not
subsequently distributed to the Class II-PO Certificateholders.

         Class UT-R Interest: The sole residual interest in the Upper Tier
REMIC. The Class UT-R Interest shall be entitled to all distributions on the
Class A-R Certificate other than distributions in respect of the Class LT-R
Interest and the Class MT-R Interest.

         Clean Up Call: The termination of the Trust Fund hereunder pursuant to
Section 9.01(a)(ii).

         Clean Up Call Date: The second Distribution Date immediately following
the Auction Termination Date.

         Clean Up Call Price: An amount equal to the sum of (a) the aggregate
Stated Principal Balance of each Mortgage Loan (other than any Mortgage Loan
that is an REO Property), plus accrued interest thereon at the applicable
Mortgage Rate through the Due Date preceding distribution of the proceeds, the
fair market value of any REO Property, plus accrued interest thereon, (b) any
unreimbursed out-of-pocket expenses owed to the Trustee (including the costs and
expenses of conducting the auction described in Section 9.01(a)) or the Servicer
and any unreimbursed Servicing Fees, Advances or Servicing Advances, and (c) any
costs and damages incurred by the Trust Fund (or the Trustee on behalf of the
Trust Fund) in connection with any violation by the affected Mortgage Loan of
any anti-predatory or anti-abusive lending laws.

         Closing Date: October 27, 2004.

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

         Collection Account: The separate Eligible Account created and initially
maintained by the Servicer pursuant to Section 3.05(d) in the name of the
Trustee for the benefit of the Certificateholders and designated "Litton Loan
Servicing LP, in trust for registered holders of Specialty Underwriting and
Residential Finance Trust, Mortgage Loan Asset-Backed Certificates, Series
2004-AA1". Funds in the Collection Account shall be held in trust for the
Certificateholders for the uses and purposes set forth in this Agreement.

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

         Credit Support: With respect to each Class of Class B Certificates
(other than the Class B-6 Certificates), the level of credit support supporting
such Class, expressed as a percentage of the aggregate Outstanding Certificate
Principal Balance of all Classes of Certificates (other than the Class I-PO and
Class II-PO Certificates). With respect to each Distribution Date, Credit
Support for each such Class will

                                       11
<PAGE>
equal in each case the percentage, rounded to two decimal places, obtained by
dividing the aggregate Outstanding Certificate Principal Balances immediately
prior to such Distribution Date of all Classes of Class B Certificates having
higher numerical Class designations than such Class by the aggregate Outstanding
Certificate Principal Balance of all Classes of Certificates (other than the
Class I-PO and II-PO Certificates) immediately prior to such Distribution Date.

         Credit Support Depletion Date: The first Distribution Date on which the
aggregate Outstanding Certificate Principal Balance of the Class B Certificates
has been or will be reduced to zero.

         Cut-off Date: October 1, 2004.

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

         Debt Service Reduction: With respect to any Mortgage Loan, a reduction
in the Scheduled Payment for such Mortgage Loan by a court of competent
jurisdiction in a proceeding under the Bankruptcy Code, other than such a
reduction resulting from a Deficient Valuation.

         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 Stated 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.

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

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

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

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

         Depository: The initial Depository shall be The Depository Trust
Company ("DTC"), the nominee of which is Cede & Co., or any other organization
registered as a "clearing agency" pursuant to Section 17A of the Securities
Exchange Act of 1934, as amended. The Depository shall initially be the
registered Holder of the Book-Entry Certificates. The Depository shall at all
times be a "clearing corporation" as defined in Section 8-102(3) of the Uniform
Commercial Code of the State of New York.

                                       12
<PAGE>
      Depository Agreement: With respect to Classes of Book-Entry Certificates,
the agreement between the Trustee and the initial Depository.

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

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

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

      Discount Mortgage Loan: Any Mortgage Loan having a Net Mortgage Rate less
than the applicable Remittance Rate.

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

      Distressed Mortgage Loan: As of any Determination Date, any Mortgage Loan
that is delinquent in payment for a period of ninety (90) days or more, without
giving effect to any grace period permitted by the related Mortgage Loan, or for
which the Servicer has accepted a deed in lieu of foreclosure.

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

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

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

      Eligible Account: An account that is (i) maintained with a depository
institution the long-term unsecured debt obligations of which are rated by each
Rating Agency in one of its two highest rating categories, or (ii) maintained
with the corporate trust department of a bank which (A) has a rating of at least
Baa3 or P-3 by Moody's and (B) is either the Depositor or the corporate trust
department of a national bank or banking corporation which has a rating of at
least A-1 by S&P or F1 by Fitch, or (iii) an account or accounts the deposits in
which are fully insured by the FDIC, or (iv) an account or accounts, acceptable
to each Rating Agency without reduction or withdrawal of the rating of any Class
of Certificates, as evidenced in writing, by a depository institution in which
such accounts are insured by the FDIC (to the limit established by the FDIC),
the uninsured deposits in which accounts are otherwise secured such that, as
evidenced by an Opinion of Counsel delivered to and acceptable to the Trustee,
and each Rating Agency, the Certificateholders have a claim with respect to the
funds in such account and a

                                       13
<PAGE>
perfected first security interest against any collateral (which shall be limited
to Permitted Investments) securing such funds that is superior to claims of any
other depositors or creditors of the depository institution with which such
account is maintained, or (v) maintained at an eligible institution whose
commercial paper, short-term debt or other short-term deposits are rated at
least A-1+ by S&P and F-1+ by Fitch, or (vi) maintained with a federal or state
chartered depository institution the deposits in which are insured by the FDIC
to the applicable limits and the short-term unsecured debt obligations of which
(or, in the case of a depository institution that is a subsidiary of a holding
company, the short-term unsecured debt obligations of such holding company) are
rated A-1 by S&P or Prime-1 by Moody's at the time any deposits are held on
deposit therein, or (vii) a segregated trust account or accounts maintained with
a federal or state chartered depository institution or trust company acting in
its fiduciary capacity, that is acceptable to the Rating Agencies, or (viii)
otherwise acceptable to each Rating Agency, as evidenced by a letter from each
Rating Agency to the Trustee.

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

      ERISA-Qualifying Underwriter: A best efforts or firm commitment
underwriting or private placement that meets the requirements of an
underwriter's exemption issued by the U.S. Department of Labor.

      ERISA Restricted Certificate: The Class A-R Certificate and any other
Certificate, including the Class B-4, Class B-5, and Class B-6 Certificates,
unless such other Certificate shall have received a rating from a Rating Agency
at the time of a transfer of such other Certificate that is in one of the three
(or in the case of Designated Transactions, four) highest generic rating
categories.

      Event of Default: As defined in Section 7.01 hereof.

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

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

      Existing Servicing Agreement: The Sub-Servicing Agreement between Merrill
Lynch Mortgage Lending, Inc., as Owner and Litton Loan Servicing LP, as
Servicer, dated as of September 1, 2002, as at any time amended and in effect.

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

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

      FIFO: As defined in Section 10.11(e).

      Final Scheduled Distribution Date. With respect to the Class A and Class B
Certificates, the Distribution Date in November 2035, which is the Distribution
Date occurring in the month that is one month following the scheduled maturity
date of the Mortgage Loan in the Trust Fund having the latest scheduled maturity
date as of the Cut-off Date.

                                       14
<PAGE>
      Fitch: Fitch, Inc., or its successor in interest.

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

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

      Group One Class I-PO Amount: With respect to any Distribution Date, the
applicable PO Percentage of (i) all principal received on or in respect of each
Discount Mortgage Loan in Mortgage Group One (exclusive of any amounts in
respect of any Scheduled Payment) during the related Prepayment Period and (ii)
all principal received as part of a Scheduled Payment on or in respect of a
Discount Mortgage Loan in Mortgage Group One during the related Due Period.

      Group One Mortgage Loans: The Mortgage Loans in Mortgage Group One.

      Group One Non-PO Allocated Amount: As of any Distribution Date or as of
the Cut-off Date, the amount derived by (i) multiplying the outstanding Stated
Principal Balance of each Mortgage Loan in Mortgage Group One by the Non-PO
Percentage with respect to such Mortgage Loan and (ii) summing the results.

      Group One Original Subordinated Principal Balance: $1,561,971.39

      Group One Remittance Rate: 5.00% per annum.

      Group One Subordinated Amount: For any Distribution Date, the excess of
the Group One Non-PO Allocated Amount for the immediately preceding Distribution
Date (or, in the case of the first Distribution Date, for the Cut-off Date) over
the aggregate Outstanding Certificate Principal Balance of the Non-PO Class I-A
Certificates (prior to giving effect to distributions to be made on such
Distribution Date and allocation of losses to be made on such Distribution
Date).

      Group Two Class II-PO Amount: With respect to any Distribution Date, the
applicable PO Percentage of (i) all principal received on or in respect of each
Discount Mortgage Loan in Mortgage Group Two (exclusive of any amounts in
respect of any Scheduled Payment) during the related Prepayment Period and (ii)
all principal received as part of a Scheduled Payment on or in respect of a
Discount Mortgage Loan in Mortgage Group Two during the related Due Period.

      Group Two Mortgage Loans: The Mortgage Loans in Mortgage Group Two.

      Group Two Non-PO Allocated Amount: As of any Distribution Date or as of
the Cut-off Date, the amount derived by (i) multiplying the outstanding Stated
Principal Balance of each Mortgage Loan in Mortgage Group Two by the Non-PO
Percentage with respect to such Mortgage Loan and (ii) summing the results.

      Group Two Original Subordinated Principal Balance: $7,502,585.39

      Group Two Remittance Rate: 5.50% per annum.

      Group Two Subordinated Amount: For any Distribution Date, the excess of
the Group Two Non-PO Allocated Amount for the immediately preceding Distribution
Date (or, in the case of the first Distribution Date, for the Cut-off Date) over
the aggregate Outstanding Certificate Principal Balance of

                                       15
<PAGE>
the Non-PO Class II-A Certificates (prior to giving effect to distributions to
be made on such Distribution Date and allocation of losses to be made on such
Distribution Date).

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

      Insurance Policy: With respect to any Mortgage Loan included in the Trust
Fund, any insurance policy, including all riders and endorsements thereto in
effect with respect to such Mortgage Loan, including any replacement policy or
policies for any insurance policies.

      Insurance Proceeds: Proceeds paid in respect of the Mortgage Loans
pursuant to any Insurance Policy or any other insurance policy covering a
Mortgage Loan, to the extent such proceeds are payable to the mortgagee under
the Mortgage, the Servicer or the trustee under the deed of trust and are not
applied to the restoration of the related Mortgaged Property or released to the
Mortgagor in accordance with the procedures that the Servicer would follow in
servicing mortgage loans held for its own account, in each case other than any
amount included in such Insurance Proceeds in respect of Insured Expenses.

      Insured Expenses: Expenses covered by an Insurance Policy or any other
insurance policy with respect to the Mortgage Loans.

      Interest Accrual Period: With respect to any Distribution Date and any
Class of Certificates (other than the Class I-PO and Class II-PO Certificates),
Lower Tier REMIC Interest and Middle Tier REMIC Interest, the calendar month
immediately preceding the month in which the related Distribution Date occurs.

      Late Collections: With respect to any Mortgage Loan, all amounts received
during any Due Period, whether as late payments of Scheduled Payments or as
Liquidation Proceeds, condemnation proceeds, Insurance Proceeds, or with respect
to a disposition of a Mortgaged Property which has been acquired by foreclosure
or deed in lieu of foreclosure or otherwise, which represent late payments or
collections of Scheduled Payments due but delinquent for a previous Due Period
and not previously recovered.

      Lender: As defined in Section 10.11(a).

      Liquidated Loan: With respect to any Distribution Date, a defaulted
Mortgage Loan that has been liquidated through deed-in-lieu of foreclosure,
foreclosure sale, trustee's sale or other realization as provided by applicable
law governing the real property subject to the related Mortgage and any security
agreements and as to which the Servicer has certified (in accordance with
Section 3.12) in the related Prepayment Period that it has received all amounts
it expects to receive in connection with such liquidation.

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

                                       16
<PAGE>
      Loan-to-Value Ratio: With respect to any Mortgage Loan, the fraction,
expressed as a percentage, the numerator of which is the original principal
balance of the related Mortgage Loan and the denominator of which is the lesser
of (x) the Appraised Value of the related Mortgaged Property and (y) the sales
price of the related Mortgaged Property at the time of origination.

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

      Lower Tier REMIC: The Lower Tier REMIC as described in Section 2.07.

      Lower Tier REMIC Interest: Any one of the classes of Lower Tier REMIC
Interests described in Section 2.07.

      Lower Tier REMIC Regular Interest: Any one of the Lower Tier REMIC
Interests other than the Class LT-R Interest.

      Lower Tier REMIC Subordinated Balance Ratio: The ratio among the
uncertificated principal balances of each of the Lower Tier REMIC Regular
Interests ending with the designation "A" that is equal to the ratio among, with
respect to each such Lower Tier REMIC Regular Interest, the Group One
Subordinated Amount for the following Distribution Date and the Group Two
Subordinated Amount for the following Distribution Date.

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

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

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

      Middle Tier REMIC: The Middle Tier REMIC as described in Section 2.07.

      Middle Tier REMIC Interest: Any one of the classes of Middle Tier REMIC
Interests described in Section 2.07.

      Middle Tier REMIC Regular Interest: Any one of the Middle Tier REMIC
Interests other than the Class MT-R Interest.

      Middle Tier REMIC Subordinated Balance Ratio: As of any Distribution Date,
the ratio among the uncertificated principal balances of the Class MTIA Interest
and the Class MTIIA Interest that is equal to the ratio among, with respect to
each such Middle Tier REMIC Regular Interest, the Group One Subordinated Amount
for the following Distribution Date and the Group Two Subordinated Amount for
the following Distribution Date.

      MIN: The loan number for any MERS Loan.

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

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

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

                                       17
<PAGE>
      Mortgage: With respect to a Mortgage Loan, the mortgage, deed of trust or
other instrument creating a first lien or a first priority ownership interest in
an estate in fee simple in real property securing a Mortgage Note.

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

      Mortgage Group: Pertaining to Mortgage Group One or Mortgage Group Two, as
the case may be.

      Mortgage Group One: The Mortgage Loans in the Trust Fund that are
designated in the Mortgage Loan Schedule attached hereto as Exhibit B-2 as
comprising Mortgage Group One.

      Mortgage Group One Subordinated Percentage: As of any Distribution Date,
the difference between 100% and the Non-PO Class I-A Percentage.

      Mortgage Group One Subordinated Prepayment Percentage: As of any
Distribution Date, the difference between 100% and the Non-PO Class I-A
Prepayment Percentage.

      Mortgage Group Two: The Mortgage Loans in the Trust Fund that are
designated in the Mortgage Loan Schedule attached hereto as Exhibit B-3 as
comprising Mortgage Group Two.

      Mortgage Group Two Subordinated Percentage: As of any Distribution Date,
the difference between 100% and the Non-PO Class II-A Percentage.

      Mortgage Group Two Subordinated Prepayment Percentage: As of any
Distribution Date, the difference between 100% and the Non-PO Class II-A
Prepayment Percentage.

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

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

      (i)   the loan number;

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

      (iii) the Mortgage Rate;

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

                                       18
<PAGE>
      (v)    the original principal balance;

      (vi)   the Cut-off Date Principal Balance;

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

      (viii) the Loan-to-Value Ratio at origination with respect to a first lien
             Mortgage Loan;

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

      (x)    a code indicating the property type;

      (xi)   location of the related Mortgaged Property; and

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

      The Mortgage Loan Schedule shall be provided to the Servicer on the
Closing Date.

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

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

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

      Mortgaged Property: The underlying property securing a Mortgage Loan.

      Mortgagor: The obligor on a Mortgage Note.

      Net Mortgage Rate: As to each Mortgage Loan, and at any time, the per
annum rate equal to the then current Mortgage Rate less the Servicing Fee Rate.

      Non-Discount Mortgage Loans: Any Mortgage Loan having a Net Mortgage Rate
in excess of the applicable Remittance Rate.

      Non-PO Class A Certificates: The Class A Certificates exclusive of the
Class I-PO and II-PO Certificates.

      Non-PO Class A Prepayment Percentage: The Non-PO Class I-A Prepayment
Percentage or the Non-PO Class II-A Prepayment Percentage, as applicable.

      Non-PO Class I-A Certificates: The Class I-A-1, Class I-IO and Class A-R
Certificates.

      Non-PO Class I-A Optimal Principal Amount: With respect to any
Distribution Date, the lesser of (a) the Non-PO Class I-A Principal Balance and
(b) the sum of:

            (i) the Non-PO Class I-A Percentage of the applicable Non-PO
      Percentage of the principal portion of all Scheduled Payments, whether or
      not received, which were due during the

                                       19
<PAGE>
      related Due Period on Group One Mortgage Loans which were outstanding
      during such Due Period;

            (ii) the Non-PO Class I-A Prepayment Percentage of the applicable
      Non-PO Percentage of all Principal Prepayments (including Subsequent
      Recoveries as described in Section 4.06(d)) made on any Group One Mortgage
      Loan during the related Prepayment Period;

            (iii) with respect to each Mortgage Loan not described in (iv)
      below, the Non-PO Class I-A Percentage of the applicable Non-PO Percentage
      of the principal portion of all Insurance Proceeds, condemnation awards
      and any other cash proceeds from a source other than the applicable
      Mortgagor, to the extent required to be deposited in the Collection
      Account pursuant to Section 3.05(d) which were received during the related
      Prepayment Period with respect to a Group One Mortgage Loan, net of
      related unreimbursed Servicing Advances and net of any portion thereof
      which, as to any such Mortgage Loan, constitutes Late Collections that
      have been the subject of an Advance on any prior Distribution Date;

            (iv) with respect to each Group One Mortgage Loan which has become a
      Liquidated Mortgage Loan during the related Prepayment Period, the lesser
      of (A) the Non-PO Class I-A Percentage of the applicable Non-PO Percentage
      of an amount equal to the Stated Principal Balance of such Liquidated
      Mortgage Loan as of the Due Date immediately preceding such Prepayment
      Period and (B) the Non-PO Class I-A Prepayment Percentage of the
      applicable Non-PO Percentage of the Net Liquidation Proceeds with respect
      to such liquidated Mortgage Loan (net of any unreimbursed Advances);

            (v) with respect to each Group One Mortgage Loan repurchased during
      the related Prepayment Period pursuant to Section 2.02, 2.03, 3.12 or 9.01
      an amount equal to the Non-PO Class I-A Prepayment Percentage of the
      applicable Non-PO Percentage of the principal portion of the Purchase
      Price (net of amounts with respect to which a distribution of principal
      has previously been made to the Non-PO Class I-A Certificateholders); and

            (vi) on or after the Credit Support Depletion Date, the excess of
      the Non-PO Class I-A Principal Balance (calculated after giving effect to
      reductions thereof on such Distribution Date with respect to the amounts
      described in (i) - (v) above) over the Group One Non-PO Allocated Amount
      for such Distribution Date.

      Non-PO Class I-A Percentage: As of any Distribution Date, a fraction,
expressed as a percentage (which shall never exceed 100%), the numerator of
which is the Non-PO Class I-A Principal Balance and the denominator of which is
the Group One Non-PO Allocated Amount as of the immediately preceding
Distribution Date (or, in the case of the first Distribution Date, as of the
Cut-off Date).

      Non-PO Class I-A Prepayment Percentage: As of any Distribution Date up to
and including the Distribution Date in October 2009, 100%; as of any
Distribution Date in the first year thereafter, the Non-PO Class I-A Percentage
plus 70% of the Mortgage Group One Subordinated Percentage for such Distribution
Date; as of any Distribution Date in the second year thereafter, the Non-PO
Class I-A Percentage plus 60% of the Mortgage Group One Subordinated Percentage
for such Distribution Date; as of any Distribution Date in the third year
thereafter, the Non-PO Class I-A Percentage plus 40% of the Mortgage Group One
Subordinated Percentage for such Distribution Date; as of any Distribution Date
in the fourth year thereafter, the Non-PO Class I-A Percentage plus 20% of the
Mortgage Group One Subordinated Percentage for such Distribution Date; and as of
any Distribution Date after the fourth year thereafter, the Non-PO Class I-A
Percentage; provided that, if the Non-PO Class I-A Percentage as of any such
Distribution Date is greater than the Non-PO Class I-A Percentage on the first
Distribution Date, the Non-PO Class I-A Prepayment Percentage shall be 100%; and
provided further, however, that whenever

                                       20
<PAGE>
the Non-PO Class I-A Percentage equals 0%, the Non-PO Class I-A Prepayment
Percentage shall equal 0%; and provided further that no reduction of the Non-PO
Class I-A Prepayment Percentage below the level in effect for the most recent
period shall occur with respect to any Distribution Date unless, as of the last
day of the month preceding such Distribution Date, (i) the aggregate outstanding
Stated Principal Balance of Mortgage Loans with respect to both Mortgage Groups
as of the immediately preceding Distribution Date, each taken individually,
delinquent 60 days or more (including for this purpose any Mortgage Loans in
foreclosure and Mortgage Loans with respect to which the related Mortgaged
Property has been acquired by the Trust Fund) does not exceed 50% of the
Mortgage Group One Subordinated Percentage of the Stated Principal Balance with
respect to Mortgage Group One as of the immediately preceding Distribution Date
and (ii) cumulative Realized Losses with respect to both Mortgage Groups, each
taken individually, do not exceed (a) 30% of the Group One Original Subordinated
Principal Balance if such Distribution Date occurs between and including
November 2009 and October 2010, (b) 35% of the Group One Original Subordinated
Principal Balance if such Distribution Date occurs between and including
November 2010 and October 2011, (c) 40% of the Group One Original Subordinated
Principal Balance if such Distribution Date occurs between and including
November 2011 and October 2012, (d) 45% of the Group One Original Subordinated
Principal Balance if such Distribution Date occurs between and including
November 2012 and October 2013, and (e) 50% of the Group One Original
Subordinated Principal Balance if such Distribution Date occurs during or after
November 2013.

      Non-PO Class I-A Principal Balance: As of any Distribution Date, (a) the
Non-PO Class I-A Principal Balance for the immediately preceding Distribution
Date less (b) amounts distributed (or deemed distributed) to the Class I-A
Certificateholders on such preceding Distribution Date allocable to principal
(including the principal portion of Advances of the Servicer made pursuant to
Section 4.01 and Realized Losses allocated to the Class I-A Certificates
pursuant to Section 4.06); provided that the Non-PO Class I-A Principal Balance
on the first Distribution Date shall be the Original Non-PO Class I-A Principal
Balance.

      Non-PO Class I-A Principal Payment Rules: With respect to any Distribution
Date, distributions to the Class I-A Certificateholders pursuant to Section
4.04(b)(ii)(A) shall be made sequentially to the Class A-R and Class I-A-1
Certificates until the Outstanding Certificate Principal Balance of each such
Class has been reduced to zero.

      Non-PO Class II-A Certificates: The Class II-A-1, Class II-A-2, Class
II-A-3, and Class II-IO Certificates.

      Non-PO Class II-A Optimal Principal Amount: With respect to any
Distribution Date, the lesser of (a) the Non-PO Class II-A Principal Balance and
(b) the sum of:

            (i) the Non-PO Class II-A Percentage of the applicable Non-PO
      Percentage of the principal portion of all Scheduled Payments, whether or
      not received, which were due during the related Due Period on Group Two
      Mortgage Loans which were outstanding during such Due Period;

            (ii) the Non-PO Class II-A Prepayment Percentage of the applicable
      Non-PO Percentage of all Principal Prepayments (including Subsequent
      Recoveries as described in Section 4.06(d)) made on any Group Two Mortgage
      Loan during the related Prepayment Period;

            (iii) with respect to each Mortgage Loan not described in (iv)
      below, the Non-PO Class II-A Percentage of the applicable Non-PO
      Percentage of the principal portion of all Insurance Proceeds,
      condemnation awards and any other cash proceeds from a source other than
      the applicable Mortgagor, to the extent required to be deposited in the
      Collection Account

                                       21
<PAGE>
      pursuant to Section 3.05(d) which were received during the related
      Prepayment Period with respect to a Group Two Mortgage Loan, net of
      related unreimbursed Servicing Advances and net of any portion thereof
      which, as to any such Mortgage Loan, constitutes Late Collections that
      have been the subject of an Advance on any prior Distribution Date;

            (iv) with respect to each Group Two Mortgage Loan which has become a
      Liquidated Mortgage Loan during the related Prepayment Period, the lesser
      of (A) the Non-PO Class II-A Percentage of the applicable Non-PO
      Percentage of an amount equal to the Stated Principal Balance of such
      Liquidated Mortgage Loan as of the Due Date immediately preceding such
      Prepayment Period and (B) the Non-PO Class II-A Prepayment Percentage of
      the applicable Non-PO Percentage of the Net Liquidation Proceeds with
      respect to such liquidated Mortgage Loan (net of any unreimbursed
      Advances);

            (v) with respect to each Group Two Mortgage Loan repurchased during
      the related Prepayment Period pursuant to Section 2.02, 2.03, 3.12 or 9.01
      an amount equal to the Non-PO Class II-A Prepayment Percentage of the
      applicable Non-PO Percentage of the applicable Non-PO Percentage of the
      principal portion of the Purchase Price (net of amounts with respect to
      which a distribution of principal has previously been made to the Non-PO
      Class II-A Certificateholders); and

            (vi) on or after the Credit Support Depletion Date, the excess of
      the Non-PO Class II-A Principal Balance (calculated after giving effect to
      reductions thereof on such Distribution Date with respect to the amounts
      described in (i) - (v) above) over the Group Two Non-PO Allocated Amount
      for such Distribution Date.

      Non-PO Class II-A Percentage: As of any Distribution Date, a fraction,
expressed as a percentage (which shall never exceed 100%), the numerator of
which is the Non-PO Class II-A Principal Balance and the denominator of which is
the Group Two Non-PO Allocated Amount of the immediately preceding Distribution
Date (or, in the case of the first Distribution Date, as of the Cut-off Date).

      Non-PO Class II-A Prepayment Percentage: As of any Distribution Date up to
and including the Distribution Date in October 2009, 100%; as of any
Distribution Date in the first year thereafter, the Non-PO Class II-A Percentage
plus 70% of the Mortgage Group Two Subordinated Percentage for such Distribution
Date; as of any Distribution Date in the second year thereafter, the applicable
Non-PO Class II-A Percentage plus 60% of the Mortgage Group Two Subordinated
Percentage for such Distribution Date; as of any Distribution Date in the third
year thereafter, the Non-PO Class II-A Percentage plus 40% of the Mortgage Group
Two Subordinated Percentage for such Distribution Date; as of any Distribution
Date in the fourth year thereafter, the applicable Non-PO Class II-A Percentage
plus 20% of the Mortgage Group Two Subordinated Percentage for such Distribution
Date; and as of any Distribution Date after the fourth year thereafter, the
Non-PO Class II-A Percentage; provided that, if the Non-PO Class II-A Percentage
on the first Distribution Date is greater than the Non-PO Class II-A Percentage,
the Non-PO Class II-A Prepayment Percentage shall be 100%; and provided further,
however, that whenever the Non-PO Class II-A Percentage equals 0%, the Non-PO
Class II-A Prepayment Percentage shall equal 0%; and provided further that no
reduction of the Non-PO Class II-A Prepayment Percentage below the level in
effect for the most recent period shall occur with respect to any Distribution
Date unless, as of the last day of the month preceding such Distribution Date,
(i) the aggregate outstanding Stated Principal Balance of Mortgage Loans with
respect to both Mortgage Groups as of the immediately preceding Distribution
Date, each taken individually, delinquent 60 days or more (including for this
purpose any Mortgage Loans in foreclosure and Mortgage Loans with respect to
which the related Mortgaged Property has been acquired by the Trust Fund) does
not exceed 50% of the Mortgage Group Two Subordinated Percentage of the Stated
Principal Balance with respect to Mortgage

                                       22
<PAGE>
Group Two as of the immediately preceding Distribution Date and (ii) cumulative
Realized Losses with respect to both Mortgage Groups, each taken individually,
do not exceed (a) 30% of the Group Two Original Subordinated Principal Balance
if such Distribution Date occurs between and including November 2009 and October
2010, (b) 35% of the Group Two Original Subordinated Principal Balance if such
Distribution Date occurs between and including November 2010 and October 2011,
(c) 40% of the Group Two Original Subordinated Principal Balance if such
Distribution Date occurs between and including November 2011 and October 2012,
(d) 45% of the Group Two Original Subordinated Principal Balance if such
Distribution Date occurs between and including November 2012 and October 2013,
and (e) 50% of the Group Two Original Subordinated Principal Balance if such
Distribution Date occurs during or after November 2013.

      Non-PO Class II-A Principal Balance: As of any Distribution Date, (a) the
Non-PO Class II-A Principal Balance for the immediately preceding Distribution
Date less (b) amounts distributed (or deemed distributed) to the Class II-A
Certificateholders on such preceding Distribution Date allocable to principal
(including the principal portion of Advances of the Servicer made pursuant to
Section 4.01 and Realized Losses allocated to the Class II-A Certificates
pursuant to Section 4.06); provided that the Non-PO Class II-A Principal Balance
on the first Distribution Date shall be the Original Non-PO Class II-A Principal
Balance.

      Non-PO Class II-A Principal Payment Rules:

      (1) With respect to any Distribution Date up to and including the Credit
Support Depletion Date, distributions to the Class II-A Certificateholders
pursuant to Section 4.04(b)(ii)(B) shall be made in the following amounts and
priority:

      first, to the Class II-A-1 Certificates, an amount equal to the Class
II-A-1 Allocated Amount;

      second, to the Class II-A-2 Certificates, until the Outstanding
Certificate Principal Balance of such Class has been reduced to zero;

      third, to the Class II-A-3 Certificates, until the Outstanding Certificate
Principal Balance of such Class has been reduced to zero,

      fourth, to the Class II-A-1 Certificates without regard to the Class
II-A-1 Allocated Amount until the Outstanding Certificate Principal Balance of
such Class has been reduced to zero.

      (2) With respect to any Distribution Date after the Credit Support
Depletion Date, distributions pursuant to Section 4.04(b)(ii)(B) shall be made
pro rata among the outstanding Classes of Non-PO Class II-A Certificates in
relation to the respective Outstanding Certificate Principal Balances of such
outstanding Classes, and not in accordance with the priority of payments among
such Classes set forth in clause (1) above.

      Non PO Percentage: With respect to each Mortgage Loan, the fraction,
expressed as a percentage (but not greater than 100%), the numerator of which
equals the applicable Net Mortgage Rate and the denominator of which equals the
applicable Remittance Rate.

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

                                       23
<PAGE>
      Non-Recoverable Servicing Advance: Any portion of a Servicing Advance
previously made or proposed to be made by the Servicer that, in the good faith
judgment of the Servicer, will not or, in the case of a current Servicing
Advance, would not, be ultimately recoverable by the Servicer from the related
Mortgagor, related Liquidation Proceeds or otherwise with respect to the related
Mortgage Loan.

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

      Offered Certificates: The Class A Certificates.

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

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

      Original Certificate Principal Balance: With respect to any Class of
Certificates, the amount specified for such Class in Section 5.01.

      Original Class A Certificate Principal Balance: $181,757,898.00.

      Original Class B Certificate Principal Balance: $9,064,556.78.

      Original Credit Support: With respect to any Class of Class B Certificates
(other than the Class B-6 Certificates), the level of Credit Support indicated
below:

                     Class A:                 4.75%
                     Class B-1:               2.93%
                     Class B-2:               1.97%
                     Class B-3:               1.36%
                     Class B-4:               0.51%
                     Class B-5                0.20%

      Original Non-PO Class I-A Principal Balance: $30,539,100.

      Original Non-PO Class II-A Principal Balance: $149,361,000.

      Original Subordinated Principal Balance: The aggregate Original
Certificate Principal Balance of the Class B Certificates.

      OTS: The Office of Thrift Supervision.

                                       24
<PAGE>
      Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except: (1) Certificates theretofore canceled by the Trustee or
delivered to the Trustee for cancellation; and (2) Certificates in exchange for
which or in lieu of which other Certificates have been executed by the Trustee
and delivered by the Trustee pursuant to this Agreement.

      Outstanding Certificate Group: With respect to any Distribution Date, any
Certificate Group which has not become a Retired Certificate Group on any prior
Distribution Date.

      Outstanding Certificate Principal Balance: With respect to any Class of
Certificates and any Distribution Date, the Original Certificate Principal
Balance of such Class minus the sum of (i) any distributions of principal made
on such Class prior to such Distribution Date and (ii) any Realized Losses
allocated to such Class prior to such Distribution Date; provided, however, that
(I) with respect to the Class of Class B Certificates then outstanding having
the highest numerical Class designation, the Outstanding Certificate Principal
Balance of such Class shall equal the excess of (i) the sum of the Group One
Non-PO Allocated Amount and the Group Two Non-PO Allocated Amount as of the
immediately preceding Distribution Date over (ii) the sum of the Outstanding
Certificate Principal Balances of all Classes of Certificates (other than the
Class I-PO Certificates, the Class II-PO Certificates and the Class of Class B
Certificates then outstanding having the highest numerical Class designation).

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

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

      Percentage Interest: With respect to:

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

                  (ii)  any Certificate, the Percentage Interest evidenced
                        thereby of the related Class shall equal the percentage
                        obtained by dividing the Denomination of such
                        Certificate by the aggregate of the Denominations of all
                        Certificates of such Class.

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

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

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

                                       25
<PAGE>
                  (iii) receiving collections on the Mortgage Loans and making
                        payments on such Certificates and interests in
                        accordance with the terms of this Agreement; and

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

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

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

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

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

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

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

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

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

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

                                       26
<PAGE>
            (ix)  interests in any money market fund (including those managed or
                  advised by the Trustee or its affiliates) which at the date of
                  acquisition of the interests in such fund and throughout the
                  time such interests are held in such fund has the highest
                  applicable long term rating by each such Rating Agency; and

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

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

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

                                       27
<PAGE>
      Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or government, or any agency or political subdivision thereof.

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

      PO Percentage: The PO Percentage with respect to each Mortgage Loan as
identified on the Mortgage Loan Schedule, such percentage being equal to the
fraction, expressed as a percentage (but not less than 0%), the numerator of
which equals the excess of the applicable Remittance Rate over the applicable
Net Mortgage Rate and the denominator of which equals the applicable Remittance
Rate. The PO Percentage will be 0% with respect to Mortgage Loans for which the
Net Mortgage Rate is greater than or equal to the applicable Remittance Rate.

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

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

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

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

      Primary Insurance Policy: Each primary policy mortgage guaranty insurance
or any replacement policy therefor.

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

      Prospectus Supplement: The Prospectus Supplement dated October 25, 2004
relating to the public offering of the Offered Certificates.

      PUD: A Planned Unit Development.

      Purchase Price: With respect to any Mortgage Loan required to be
repurchased by the Seller, pursuant to Section 2.02 or 2.03 hereof, or purchased
by the Servicer pursuant to Section 3.12(c) hereof, an amount equal to the sum
of (i) 100% of the unpaid principal balance of the Mortgage Loan as of the date
of such purchase together with any unreimbursed Servicing Advances, (ii) accrued
interest thereon at

                                       28
<PAGE>
the applicable Mortgage Rate from (a) the date through which interest was last
paid by the Mortgagor to (b) the Due Date in the month in which the Purchase
Price is to be distributed to Certificateholders and (iii) any costs and damages
incurred by the Trust Fund (or the Trustee on behalf of the Trust Fund) in
connection with any violation by the affected Mortgage Loan of any
anti-predatory or anti-abusive lending laws. With respect to any REO Property
purchase by the Servicer pursuant to Section 3.12(c) hereof, an amount equal to
the fair market value of such REO Property, as determined in good faith by the
Servicer.

      Rating Agency: Either of Fitch or S&P . If any such organization or its
successor is no longer in existence, "Rating Agency" shall be a nationally
recognized statistical rating organization, or other comparable Person,
designated by the Depositor, notice of which designation shall be given to the
Trustee. References herein to a given rating category of a Rating Agency shall
mean such rating category without giving effect to any modifiers.

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

      Realized Loss Interest Shortfall: The meaning specified in Section
4.07(a).

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

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

      Relief Act: The Servicemembers Civil Relief Act.

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

      REMIC Pool: Each of the Lower Tier REMIC, the Middle Tier REMIC and the
Upper Tier REMIC.

      REMIC Provisions: Provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at sections 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
proposed, temporary and final regulations and published rulings, notices and
announcements promulgated thereunder, as the foregoing may be in effect from
time to time as well as provisions of applicable state laws.

      REO Property: A Mortgaged Property acquired by the Servicer, on behalf of
the Trustee for the benefit of the Certificateholders, through foreclosure or
deed-in-lieu of foreclosure in connection with a defaulted Mortgage Loan.

      Remittance Rate: The Group One Remittance Rate or the Group Two Remittance
Rate, as applicable.

                                       29
<PAGE>
      Remittance Report: The meaning specified in Section 4.04(f) hereof.

      Replacement Mortgage Loan: A Mortgage Loan substituted by the Depositor
for a Deleted Mortgage Loan, which must, on the date of such substitution, as
confirmed in a Request for Release, substantially in the form of Exhibit I (1)
have a Stated Principal Balance, after deduction of the principal portion of the
Scheduled Payment due in the month of substitution, not in excess of, and not
less than 90% of the Stated Principal Balance of the Deleted Mortgage Loan; (2)
have a Mortgage Rate not less than or no more than 1% per annum higher than the
Mortgage Rate of the Deleted Mortgage Loan; (3) have a similar or higher FICO
score or credit grade than that of the Deleted Mortgage Loan; (4) have a
Loan-to-Value Ratio no higher than that of the Deleted Mortgage Loan; (5) have a
remaining term to maturity no greater than (and not more than one year less
than) that of the Deleted Mortgage Loan; (6) provide for a prepayment charge on
terms substantially similar to those of the prepayment charge, if any, of the
Deleted Mortgage Loan; (7) have the same lien priority as the Deleted Mortgage
Loan; (8) constitute the same occupancy type as the Deleted Mortgage Loan; and
(9) comply with each representation and warranty set forth in Section 2.03
hereof.

      Repurchase Proceeds: All proceeds of any Mortgage Loan or REO Property
repurchased pursuant to Section 2.02, 2.03, 3.12, or 9.01 hereof.

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

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

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

      Retired Certificate Group: With respect to any Distribution Date, any
Certificate Group with respect to which the aggregate Outstanding Certificate
Principal Balance is reduced to zero on or before such Distribution Date.

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

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

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

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

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

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

                                       30
<PAGE>
      Servicer: Litton Loan Servicing LP, a Delaware limited partnership, or its
successor in interest.

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

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

      Servicer Trigger Event: As defined in Section 7.02 hereof.

      Servicer's Assignee: As defined in Section 10.11(a).

      Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in the performance by the Servicer of its
servicing obligations hereunder, including, but not limited to, the cost of (1)
the preservation, restoration and protection of a Mortgaged Property, including
without limitation advances in respect of real estate taxes and assessments, (2)
any collection, enforcement or judicial proceedings, including without
limitation foreclosures, collections and liquidations, (3) the conservation,
management, sale and liquidation of any REO Property and (4) compliance with the
obligations under Section 3.10.

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

      Servicing Fee Rate: 0.250% per annum.

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

      Servicing Rights Owner: The Person owning the servicing rights with
respect to the Mortgage Loans, which as of the Closure Date is the Seller.

      Servicing Rights Pledgee: One or more lenders, selected by the Servicer,
to which the Servicer may pledge and assign all of its right, title and interest
in, to and under this Agreement, including Wachovia Bank, N.A., as the
representative of certain lenders.

      Servicing Transfer Costs: In the event that the Servicer does not
reimburse the Trustee under the this Agreement, all costs associated with the
transfer of servicing from the predecessor Servicer, including, without
limitation, any costs or expenses associated with the termination of the
predecessor Servicer, the appointment of a successor servicer, the complete
transfer of all servicing data and the completion, correction or manipulation of
such servicing data as may be required by the Trustee or any successor servicer
to correct any errors or insufficiencies in the servicing data or otherwise to
enable the Trustee or successor servicer to service the Mortgage Loans property
and effectively.

                                       31
<PAGE>
      SFAS 140: Statement of Financial Accounting Standard No. 140, Accounting
for Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities dated September 2000, published by the Financial Accounting
Standards Board of the Financial Accounting Foundation.

      Single Certificate: A Certificate of any Class that evidences the smallest
permissible original denomination for such Class of Certificates as specified in
Section 5.01.

      Special Servicer: The Person designated by the Seller to assume the
servicing of Distressed Mortgage Loans pursuant to Section 7.04 hereof.

      SPV: As defined in Section 10.11(a).

      Startup Day: As defined in Section 2.07 hereof.

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

      Subordinated Optimal Principal Amount: With respect to any Distribution
Date, the lesser of (a) the aggregate Outstanding Certificate Principal Balance
of the Class B Certificates (before giving effect to any distributions of
principal on such Distribution Date) and (b)(1) the sum of: (i) the applicable
Subordinated Percentage of the applicable Non PO Percentage of the principal
portion of all Scheduled Payments, whether or not received, which were due
during the related Due Period on Mortgage Loans which were outstanding during
such Due Period; (ii) the applicable Subordinated Prepayment Percentage of the
applicable Non PO Percentage of all Principal Prepayments made on any Mortgage
Loan during the related Prepayment Period; (iii) with respect to each Mortgage
Loan not described in (iv) below, the applicable Subordinated Percentage of the
applicable Non PO Percentage of the principal portion of all Insurance Proceeds,
condemnation awards and any other cash proceeds from a source other than the
applicable Mortgagor, to the extent required to be deposited in the Collection
Account pursuant to Section 3.05(d) which were received during the related
Prepayment Period, net of related unreimbursed Servicing Advances and net of any
portion thereof which, as to any such Mortgage Loan, constitutes Late
Collections that have been the subject of an Advance on any prior Distribution
Date; (iv) with respect to each Mortgage Loan which has become a Liquidated
Mortgage Loan during the related Prepayment Period, an amount equal to the
portion (if any) of the Net Liquidation Proceeds with respect to such liquidated
Mortgage Loan (net of any unreimbursed Advances) that was not included in the
Group One Class I-PO Amount, the Group Two Class II-PO Amount, the Non-PO Class
I-A Optimal Principal Amount or Non-PO Class II-A Optimal Principal Amount with
respect to such Distribution Date; and (v) with respect to each Mortgage Loan
repurchased or purchased during the related Prepayment Period pursuant to
Section 2.02, 2.03, 3.12 or 9.01 an amount equal to the applicable Subordinated
Prepayment Percentage of the applicable Non PO Percentage of the principal
portion of the Purchase Price (net of amounts with respect to which a
distribution of principal has previously been made to the Class

                                       32
<PAGE>
B Certificateholders) minus (2) the sum of the Class I-PO Shortfall Amount and
the Class II-PO Shortfall Amount with respect to such Distribution Date.

      Subordinated Percentage: The Mortgage Group One Subordinated Percentage or
the Mortgage Group Two Subordinated Percentage, as the case may be.

      Subordinated Prepayment Percentage: The Mortgage Group One Subordinated
Prepayment Percentage or the Mortgage Group Two Subordinated Prepayment
Percentage, as the case may be.

      Subsequent Recovery: The amount, if any, recovered by the Servicer with
respect to a Liquidated Loan with respect to which a Realized Loss has been
incurred after liquidation and disposition of such Mortgage Loan.

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

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

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

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

      Trust Fund: The corpus of the trust (the "Specialty Underwriting and
Residential Finance Trust, Series 2004-AA1") created hereunder consisting of (i)
the Mortgage Loans and all interest and principal received on or with respect
thereto on and after the Cut-off Date to the extent not applied in computing the
Cut-off Date Principal Balance thereof, exclusive of interest not required to be
deposited in the Collection Account; (ii) the Collection Account and the
Certificate Account and all amounts deposited therein pursuant to the applicable
provisions of this Agreement; (iii) property that secured a Mortgage Loan and
has been acquired by foreclosure, deed in lieu of foreclosure or otherwise; (iv)
the mortgagee's rights under the Insurance Policies with respect to the Mortgage
Loans; and (v) all proceeds of the conversion, voluntary or involuntary, of any
of the foregoing into cash or other liquid property.

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

      Uncertificated Principal Balance: With respect to any Lower Tier REMIC
Regular Interest as of any Distribution Date, the initial principal amount of
such regular interest, reduced by (i) all amounts distributed on previous
Distribution Dates on such regular interest with respect to principal and (ii)
the principal portion of all Realized Losses allocated prior to such
Distribution Date to such regular interest.

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

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

      Voting Rights: The portion of the voting rights of all the Certificates
that is allocated to any of the Certificates for purposes of the voting
provisions hereunder. Voting Rights allocated to each Class of

                                       33
<PAGE>
Certificates shall be allocated among the Certificates in proportion to the
Certificate Principal Balance of each Class relative to the Certificate
Principal Balance of all other Classes. Voting Rights will be allocated among
the Certificates of each such Class in accordance with their respective
Percentage Interests.

                                   ARTICLE II
                CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND
                                   WARRANTIES

      SECTION 2.01 Conveyance of Mortgage Loans.

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

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

      (A) The Original Mortgage Note, together with all riders thereto,
endorsed, "Pay to the order of JPMorgan Chase Bank, as trustee - SURF 2004-AA1,
without recourse" together with all riders thereto. The Mortgage Note shall
include all intervening endorsements showing a complete chain of the title from
the originator to the Seller.

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

      (C) In the case of each Mortgage Loan that is not a MERS Loan, the
original Assignment of each Mortgage, to "JPMorgan Chase Bank, as trustee -
SURF-AA1."

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

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

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

      If in connection with any Mortgage Loan, the Depositor cannot deliver the
Mortgage, Assignments of Mortgage or assumption, consolidation or modification,
as the case may be, with

                                       34
<PAGE>
evidence of recording thereon, if applicable, concurrently with the execution
and delivery of this Agreement solely because of a delay caused by the public
recording office where such Mortgage, Assignments of Mortgage or assumption,
consolidation or modification, as the case may be, has been delivered for
recordation, the Depositor shall deliver or cause to be delivered to the Trustee
written notice stating that such Mortgage or assumption, consolidation or
modification, as the case may be, has been delivered to the appropriate public
recording office for recordation. Thereafter, the Depositor shall deliver or
cause to be delivered to the Trustee such Mortgage, Assignments of Mortgage or
assumption, consolidation or modification, as the case may be, with evidence of
recording indicated thereon, if applicable, upon receipt thereof from the public
recording office. To the extent any required endorsement is not contained on a
Mortgage Note or an Assignment of Mortgage, the Depositor shall make or cause
such endorsement to be made.

      With respect to any Mortgage Loan, none of the Depositor, the Servicer or
the Trustee shall be obligated to cause to be recorded the Assignment of
Mortgage referred to in this Section 2.01. In the event that any Assignment of
Mortgage is not recorded or is improperly recorded, the Servicer shall have no
liability for its failure to receive or act on notices related to such
Assignment of Mortgage.

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

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

      In addition to the conveyance made in the first paragraph of this Section
2.01, the Depositor does hereby convey, assign and set over to the Trustee for
the benefit of the Certificateholders its rights and

                                       35
<PAGE>
interests under the Sale Agreement, including the Depositor's right, title and
interest in the representations and warranties contained in the Sale Agreement
and the benefit of the repurchase obligations and the obligation of the Seller
contained in the Sale Agreement to take, at the request of the Depositor or the
Trustee, all action on its part which is reasonably necessary to ensure the
enforceability of a Mortgage Loan. The Trustee hereby accepts such assignment,
and shall be entitled to exercise all rights of the Depositor under the Sale
Agreement as if, for such purpose, it were the Depositor. The foregoing sale,
transfer, assignment, set-over, deposit and conveyance does not and is not
intended to result in creation or assumption by the Trustee of any obligation of
the Depositor, the Seller, or any other Person in connection with the Mortgage
Loans or any other agreement or instrument relating thereto.

      It is agreed and understood by the parties hereto that it is not intended
that any Mortgage Loan be included in the Trust Fund that is a "High-Cost Home
Loan" as defined in the New Jersey Home Ownership Act, effective November 27,
2003, and the New Mexico Home Loan Protection Act, effective January 1, 2004.

      SECTION 2.02 Acceptance by Trustee of the Mortgage Loans.

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

      The Trustee acknowledges receipt of the Transfer Agreement and the Sale
Agreement.

      The Trustee agrees, for the benefit of Certificateholders to review each
Mortgage File delivered to it within 60 days after the Closing Date to ascertain
and to certify, within 70 days of the Closing Date, to the Depositor and the
Servicer that all documents required by Section 2.01 have been executed and
received, and that such documents relate to the Mortgage Loans identified in
Exhibit B that have been conveyed to it. If the Trustee finds any document or
documents constituting a part of a Mortgage File to be missing or defective
(that is, mutilated, damaged, defaced or unexecuted) in any material respect,
the Trustee shall promptly (and in any event within no more than five Business
Days) after such finding so notify the Servicer, the Seller and the Depositor.
In addition, the Trustee shall also notify the Servicer, the Seller and the
Depositor, if the original Mortgage with evidence of recording thereon with
respect to a Mortgage Loan is not received within 70 days of the Closing Date;
if it has not been received because of a delay caused by the public recording
office where such Mortgage has been delivered for recordation, the Depositor
shall deliver or cause to be delivered to the Trustee written notice stating
that such Mortgage has been delivered to the appropriate public recording
officer for recordation and thereafter the Depositor shall deliver or cause to
be delivered such Mortgage with evidence of recording thereon upon receipt
thereof from the public recording office. The Trustee shall request that the
Seller correct or cure such omission, defect or other irregularity, or
substitute a Mortgage Loan pursuant to the provisions of Section 2.03(c), within
90 days from the date the Seller was notified of such omission or defect and, if
the Seller does not correct or cure such omission or defect within such period,
that the Seller purchase such Mortgage Loan from the Trust Fund within 90 days
from the date the Trustee notified the Seller of such omission, defect or other
irregularity at the Purchase Price of such Mortgage Loan. The Purchase Price for
any Mortgage Loan purchased pursuant to this Section 2.02 shall be paid to the
Servicer and deposited by the Servicer in the Collection Account promptly upon
receipt, and, upon receipt by the Trustee of

                                       36
<PAGE>
written notification of such deposit signed by a Servicing Officer, the Trustee,
upon receipt of a Request for Release, shall promptly release to the Seller the
related Mortgage File and the Trustee shall execute and deliver such instruments
of transfer or assignment, without recourse, representation or warranty, as
shall be necessary to vest in the Seller or its designee, as the case may be,
any Mortgage Loan released pursuant hereto, and the Trustee shall have no
further responsibility with regard to such Mortgage Loan. It is understood and
agreed that the obligation of the Seller to purchase, cure or substitute any
Mortgage Loan as to which a material defect in or omission of a constituent
document exists shall constitute the sole remedy respecting such defect or
omission available to the Trustee on behalf of Certificateholders. The preceding
sentence shall not, however, limit any remedies available to the
Certificateholders, the Depositor or the Trustee pursuant to the Sale Agreement.
The Trustee shall be under no duty or obligation to inspect, review and examine
such documents, instruments, certificates or other papers to determine that they
are genuine, enforceable, recordable or appropriate to the represented purpose,
or that they have actually been recorded, or that they are other than what they
purport to be on their face. The Trustee shall keep confidential the name of
each Mortgagor and the Trustee shall not solicit any such Mortgagor for the
purpose of refinancing the related Mortgage Loan. It is understood and agreed
that all rights and benefits relating to the solicitation of any Mortgagors and
the attendant rights, title and interest in and to the list of Mortgagors and
data relating to their Mortgages shall be retained by the Servicer.

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

      SECTION 2.03 Representations, Warranties and Covenants of the Depositor.

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

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

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

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

                                       37
<PAGE>
      regulatory body, administrative agency or governmental body having
      jurisdiction over the Depositor; and the Depositor is not in breach or
      violation of any material indenture or other material agreement or
      instrument, or in violation of any statute, order or regulation of any
      court, regulatory body, administrative agency or governmental body having
      jurisdiction over it which breach or violation may materially impair the
      Depositor's ability to perform or meet any of its obligations under this
      Agreement.

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

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

      (b) To the extent that any fact, condition or event with respect to a
Mortgage Loan constitutes a breach of a representation or warranty of the Seller
under the Sale Agreement, the only right or remedy of the Trustee or of any
Certificateholder shall be the Trustee's right to enforce the obligations of the
Seller under any applicable representation or warranty made by it. The Trustee
acknowledges that the Depositor shall have no obligation or liability with
respect to any breach of any representation or warranty with respect to the
Mortgage Loans (except as set forth in Section 2.03(a)(v)) under any
circumstances.

      (c) Upon discovery by any of the Depositor, the Servicer or the Trustee of
a breach of any of representations and warranties set forth in the Sale
Agreement that adversely and materially affects the value of the related
Mortgage Loan, prepayment charges or the interests of the Certificateholders,
the party discovering such breach shall give prompt written notice to the other
parties. Within 90 days of the discovery of a breach of any representation or
warranty given to the Trustee by the Depositor, the Seller and assigned to the
Trustee, the Depositor, or the Seller shall either (a) cure such breach in all
material respects, (b) repurchase such Mortgage Loan or any property acquired in
respect thereof from the Trustee at the Purchase Price or (c) within the two
year period following the Closing Date, substitute a Replacement Mortgage Loan
for the affected Mortgage Loan. In the event of discovery of a breach of any
representation and warranty of the Seller or the Depositor, the Trustee shall
enforce its rights under the Sale Agreement or thereunder for the benefit of
Certificateholders. In the event of a breach of the representations and
warranties with respect to the Mortgage Loans set forth in a Sale Agreement, the
Trustee shall enforce the right of the Trust Fund to be indemnified for such
breach of representation and warranty. In the event that such breach relates
solely to the unenforceability of a prepayment charge, amounts received in
respect of such indemnity up to the amount of such prepayment charge shall be
distributed pursuant to Section 4.04(b)(i)(B). As provided in the Sale
Agreement, if the Seller substitutes for a Mortgage Loan for which there is a
breach of any representations and warranties which adversely and materially
affects the value of such Mortgage Loan and such substitute mortgage loan is not
a Replacement Mortgage Loan, under the terms of the Sale Agreement, the Seller
will, in exchange for such substitute Mortgage Loan, (i) provide the applicable
Purchase Price for the affected Mortgage Loan or (ii)

                                       38
<PAGE>
within two years of the Closing Date, substitute such affected Mortgage Loan
with a Replacement Mortgage Loan. Any such substitution shall not be effected
prior to the additional delivery to the Trustee of a Request for Release
substantially in the form of Exhibit I and shall not be effected unless it is
within two years of the Startup Day. As provided in the Sale Agreement, the
Seller indemnifies and holds the Trust Fund, the Trustee, the Depositor, the
Servicer and each Certificateholder harmless against any and all taxes, claims,
losses, penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments, and any other costs, fees and expenses that the Trust Fund, the
Trustee, the Depositor, the Servicer and any Certificateholder may sustain in
connection with any actions of the Seller relating to a repurchase of a Mortgage
Loan other than in compliance with the terms of this Section 2.03 and the Sale
Agreement, to the extent that any such action causes (i) any federal or state
tax to be imposed on the Trust Fund or any REMIC provided for herein, including
without limitation, any federal tax imposed on "prohibited transactions" under
Section 860F(a)(1) of the Code or on "contributions after the startup day" under
Section 860G(d)(1) of the Code, or (ii) any REMIC created hereunder to fail to
qualify as a REMIC at any time that any Certificate is outstanding.

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

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

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

                                       39
<PAGE>
      The Seller shall give or cause to be given written notice to the
Certificateholders that such substitution has taken place, shall amend the
Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage Loan from
the terms of this Agreement and the substitution of the Replacement Mortgage
Loan or Replacement Mortgage Loans and shall deliver a copy of such amended
Mortgage Loan Schedule to the Trustee. Upon such substitution by the Seller,
such Replacement Mortgage Loan or Replacement Mortgage Loans shall constitute
part of the Mortgage Pool and shall be subject in all respects to the terms of
this Agreement and the Sale Agreement, including all applicable representations
and warranties thereof included in the Sale Agreement as of the date of
substitution.

      In addition, the Seller shall obtain at its own expense and deliver to the
Trustee an Opinion of Counsel addressed to the Trustee to the effect that such
substitution will not (a) cause any federal tax to be imposed on the Trust Fund
or any REMIC provided for herein, including without limitation, any federal tax
imposed on "prohibited transactions" under Section 860F(a)(1) of the Code or on
"contributions after the startup day" under Section 860G(d)(1) of the Code or
(b) adversely affect the status of any REMIC provided for herein as a REMIC. If
any such Opinion of Counsel can not be delivered, then such substitution may
only be effected at such time as the required Opinion of Counsel can be given.

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

      SECTION 2.04 Representations and Warranties of the Servicer.

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

            (i) The Servicer is a duly formed limited partnership and is validly
      existing and in good standing under the laws of the state of its formation
      and is duly authorized and qualified to transact any and all business
      contemplated by this Agreement to be conducted by the Servicer in any
      state in which a Mortgaged Property is located or is otherwise not
      required under applicable law to effect such qualification and, in any
      event, is in compliance with the doing business laws of any such state, to
      the extent necessary to ensure its ability to enforce each Mortgage Loan,
      to service the Mortgage Loans in accordance with the terms of this
      Agreement and to perform any of its other obligations under this Agreement
      in accordance with the terms hereof.

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

                                       40
<PAGE>
            (iii) The execution and delivery of this Agreement by the Servicer,
      the servicing of the Mortgage Loans under this Agreement, the consummation
      of any other of the transactions contemplated by this Agreement, and the
      fulfillment of or compliance with the terms hereof are in the ordinary
      course of business of the Servicer and will not (A) result in a material
      breach of any term or provision of the charter or by-laws of the Servicer
      or (B) materially conflict with, result in a material breach, violation or
      acceleration of, or result in a material default under, the terms of any
      other material agreement or instrument to which the Servicer is a party or
      by which it may be bound, or (C) constitute a material violation of any
      statute, order or regulation applicable to the Servicer of any court,
      regulatory body, administrative agency or governmental body having
      jurisdiction over the Servicer; and the Servicer is not in breach or
      violation of any material indenture or other material agreement or
      instrument, or in violation of any statute, order or regulation of any
      court, regulatory body, administrative agency or governmental body having
      jurisdiction over it which breach or violation may materially impair the
      Servicer's ability to perform or meet any of its obligations under this
      Agreement.

            (iv) The Servicer is an approved servicer of mortgage loans for
      Fannie Mae and is an approved seller of seasoned mortgage loans and
      servicer of all types of mortgage loans for Freddie Mac.

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

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

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

      SECTION 2.05 Substitutions and Repurchases of Mortgage Loans Which Are Not
"Qualified Mortgages".

      Upon discovery by the Depositor, the Servicer or the Trustee that any
Mortgage Loan does not constitute a "qualified mortgage" within the meaning of
section 860G(a)(3) of the Code, the party discovering such fact shall promptly
(and in any event within 5 Business Days of discovery) give written notice
thereof to the other parties. In connection therewith, the Depositor shall, at
the Depositor's option, either (1) substitute, if the conditions in Section
2.03(c) with respect to substitutions are satisfied, a Replacement Mortgage Loan
for the affected Mortgage Loan, or (ii) repurchase the affected Mortgage Loan
within 90 days of such discovery in the same manner as it would a Mortgage Loan
for a breach of representation or warranty contained in Section 2.03. The
Trustee shall reconvey to the Depositor the Mortgage Loan to be released
pursuant hereto in the same manner, and on the same terms and conditions, as it
would a Mortgage Loan repurchased for breach of a representation or warranty
contained in Section 2.03.

                                       41
<PAGE>
      SECTION 2.06 Authentication and Delivery of Certificates.

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

      SECTION 2.07 REMIC Elections.

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

      (b) The Preliminary Statement sets forth the designations and "latest
possible maturity date" for federal income tax purposes of all interests created
hereby. The "Startup Day," as defined in Section 860G(a)(9) of the Code, for
purposes of the REMIC Provisions shall be the Closing Date. Each REMIC's fiscal
year shall be the calendar year.

      The Lower Tier REMIC shall hold as assets all property of the Trust Fund
other than amounts distributable to the Servicing Rights Owner pursuant to
Section 3.08(a) hereof, the Lower Tier REMIC Interests and the Middle Tier REMIC
Interests. Each of the Lower Tier REMIC Regular Interests is hereby designated a
"regular interest" (within the meaning of Section 860G(a)(1) of the Code) in the
Lower Tier REMIC. The Middle Tier REMIC shall hold as assets the several classes
of uncertificated Lower Tier REMIC Regular Interests (other than the Class
LTI-IO Interest and the LTII-IO Interest). Each of the Middle Tier REMIC Regular
Interests is hereby designated a "regular interest" (within the meaning of
Section 860G(a)(1) of the Code) in the Middle Tier REMIC. The Upper Tier REMIC
shall hold as assets the several classes of uncertificated Middle Tier REMIC
Regular Interests, the Class LTI-IO Interest and the LTII-IO Interest. Each
Class of the Certificates (other than the Class A-R Certificate) is hereby
designated a "regular interest" (within the meaning of Section 860G(a)(1) of the
Code) in the Upper Tier REMIC. The Class LT-R Interest is hereby designated as
the sole residual interest (within the meaning of Section 860G(a)(2) of the
Code) in the Lower Tier REMIC. The Class MT-R Interest is hereby designated as
the sole residual interest (within the meaning of Section 860G(a)(2) of the
Code) in the Middle Tier REMIC. The Class UT-R Interest is hereby designated as
the sole residual interest (within the meaning of Section 860G(a)(2) of the
Code) in the Upper Tier REMIC. The Class A-R Certificate evidences ownership of
the Class LT-R Interest, the Class MT-R Interest and the Class UT-R Interest.
All interests described in this Section 2.07 shall be designated as such on the
Startup Day.

LOWER TIER REMIC

      The following table specifies the class designation, interest rate and
principal amount for each class of Lower Tier REMIC Interest.

                                       42
<PAGE>
<TABLE>
<CAPTION>
  Lower Tier REMIC                                                 Related Mortgage
      Interest          Initial Balance       Pass-Through Rate         Group
      --------          ---------------       -----------------         -----
<S>                  <C>                      <C>                  <C>
LTI                  $32,101,071.39264299          5.00%           Mortgage Group One
LTI-IO                       (1)                    (1)            Mortgage Group One
LTI-PO                $781,400.29735701             (2)            Mortgage Group One
LTII                 $156,863,585.38574391         5.50%           Mortgage Group Two
LTII-IO                      (3)                    (3)            Mortgage Group Two
LTII-PO              $1,076,398.84425609            (2)            Mortgage Group Two
LT-R                         (4)                    (4)            N/A
</TABLE>

(1)  The Class LTI-IO Interest is an interest only interest, has no principal
balance, is not entitled to payments of principal and will bear interest on its
notional amount. The notional amount of the Class LTI-IO Interest for any
Distribution Date shall equal the Class I-IO Notional Amount for such
Distribution Date. The interest rate for the Class LTI-IO Interest for any
Distribution Date shall equal the Certificate Rate for the Class I-IO
Certificates.

(2)  The Class LTI-PO Interest and Class LTII-PO Interest are principal only
interests and are not entitled to payments of interest.

(3)  The Class LTII-IO Interest is an interest only interest, has no principal
balance, is not entitled to payments of principal and will bear interest on its
notional amount. The notional amount of the Class LTII-IO Interest for any
Distribution Date shall equal the Class II-IO Notional Amount for such
Distribution Date. The interest rate for the Class LTII-IO Interest for any
Distribution Date shall equal the Certificate Rate for the Class II-IO
Certificates.

(4) The Class LT-R Interest shall represent the sole class of residual interest
in the Lower Tier REMIC. The Class LT-R Interest will not have a principal
amount or an interest rate. The Class LT-R Interest shall be represented by the
Class A-R Certificate.

Principal shall be payable to, and shortfalls, losses, prepayments and increases
in principal amounts relating to Subsequent Recoveries are allocable to, the
Class LTI-PO Interest as such amounts are payable or allocable to the Class I-PO
Certificates (determined as though the aggregate original principal amount of
the Class I-PO Certificates was $781,400.29735701).

Interest shall be payable to, and shortfalls and losses are allocable to, the
Class LTI-IO Interest as such amounts are payable or allocable to the Class I-IO
Certificates.

All amounts of principal, interest, shortfalls, losses, prepayments and
increases in principal amounts relating to Subsequent Recoveries relating to
Mortgage Group One not payable or allocable pursuant to the immediately
preceding two paragraphs shall be payable or allocable to the Class LTI
Interest.

Principal shall be payable to, and shortfalls, losses, prepayments and increases
in principal amounts relating to Subsequent Recoveries are allocable to, the
Class LTII-PO Interest as such amounts are payable or allocable to the Class
II-PO Certificates (determined as though the aggregate original principal amount
of the Class II-PO Certificates was $1,076,398.84425609).

Interest shall be payable to, and shortfalls and losses are allocable to, the
Class LTII-IO Interest as such amounts are payable or allocable to the Class
II-IO Certificates.

All amounts of principal, interest, shortfalls, losses, prepayments and
increases in principal amounts relating to Subsequent Recoveries relating to
Mortgage Group Two not payable or allocable pursuant to the immediately
preceding two paragraphs shall be payable or allocable to the Class LTII
Interest.

                                       43
<PAGE>
MIDDLE TIER REMIC

      The following table specifies the class designation, interest rate and
principal amount for each class of Middle Tier REMIC Interest.

<TABLE>
<CAPTION>
 Middle Tier REMIC                                                Related Mortgage
      Interest          Initial Balance      Pass-Through Rate          Group
      --------          ---------------      -----------------          -----
<S>                  <C>                     <C>                 <C>
MTIA                  $15,619.71392643             (1)           Mortgage Group One
MTIB                  $321,010.71392643           5.00%          Mortgage Group One
MTI-PO                $781,400.29735701            (2)           Mortgage Group One
MTIIA                 $75,025.85385744             (1)           Mortgage Group Two
MTIIB                $1,568,635.85385744          5.50%          Mortgage Group Two
MTII-PO              $1,076,398.84425609           (2)           Mortgage Group Two
MT-Z                 $186,984,364.64281916         (1)           N/A
MT-R                         (3)                   (3)           N/A
</TABLE>

(1)  For any Distribution Date, the interest rate for the Class MTIA, Class
MTIIA and Class MT-Z Interests shall be the weighted average of the interest
rates on the Class LTI and Class LTII Interests.

(2)  The Class MTI-PO Interest and Class MTII-PO Interest are principal only
interests and are not entitled to payments of interest.

(3)  The Class MT-R Interest shall represent the sole class of residual interest
in the Middle Tier REMIC. The Class MT-R Interest will not have a principal
amount or an interest rate. The Class MT-R Interest shall be represented by the
Class A-R Certificate.

Principal shall be payable to, and shortfalls, losses, prepayments and increases
in principal amounts relating to Subsequent Recoveries are allocable to, the
Class MTI-PO Interest as such amounts are payable or allocable to the Class I-PO
Certificates (determined as though the aggregate original principal amount of
the Class I-PO Certificates was $781,400.29735701).

Principal shall be payable to, and shortfalls, losses, prepayments and increases
in principal amounts relating to Subsequent Recoveries are allocable to, the
Class MTII-PO Interest as such amounts are payable or allocable to the Class
II-PO Certificates (determined as though the aggregate original principal amount
of the Class II-PO Certificates was $1,076,398.84425609).

Principal received with respect to the Mortgage Loans not distributed pursuant
to the immediately preceding two paragraphs, shall be deemed distributed to the
Middle Tier REMIC Regular Interests first, so as to keep the uncertificated
principal balance of each Middle Tier REMIC Regular Interest ending with the
designation "B" equal to 1% of the excess of the aggregate Stated Principal
Balance of the Mortgage Loans in the related Mortgage Group over the
uncertificated principal balance of the Lower Tier REMIC Regular Interest ending
with the designation "PO" which is related to such Mortgage Group; second, to
each Middle Tier REMIC Regular Interest ending with the designation "A" so that
the uncertificated principal balance of each such Middle Tier REMIC Regular
Interest is equal to 1% of the excess of (x) the aggregate Stated Principal
Balance of the Mortgage Loans in the related Mortgage Group over (y) the sum of
(i) the aggregate Class Principal Amounts of the Certificate Group (excluding
the Class I-PO and Class II-PO Certificates) related to such Mortgage Group and
(ii) the uncertificated principal balance of the Lower Tier REMIC Regular
Interest ending with the designation "PO" which is related to such Mortgage
Group (except that if 1% of any such excess is greater than the principal amount
of the corresponding Middle Tier REMIC Regular Interest ending with the
designation "A", the least

                                       44
<PAGE>
amount of principal shall be distributed to such Middle Tier REMIC Regular
Interests such that the Middle Tier REMIC Subordinated Balance Ratio is
maintained); and finally, any remaining principal to the Class MT-Z Interest.

Realized losses not allocated pursuant to the second and third preceding
paragraphs shall be applied after all distributions have been made on each
Distribution Date first, so as to keep the uncertificated principal balance of
each Middle Tier REMIC Regular Interest ending with the designation "B" equal to
1% of the excess of the aggregate Stated Principal Balance of the Mortgage Loans
in the related Mortgage Group over the uncertificated principal balance of the
Lower Tier REMIC Regular Interest ending with the designation "PO" which is
related to such Mortgage Group; second, to each Middle Tier REMIC Regular
Interest ending with the designation "A" so that the uncertificated principal
balance of each such Middle Tier REMIC Regular Interest is equal to 1% of the
excess of (x) the aggregate Stated Principal Balance of the Mortgage Loans in
the related Mortgage Group over (y) the sum of (i) the aggregate Class Principal
Amounts of the Certificate Group (excluding the Class I-PO and Class II-PO
Certificates) related to such Mortgage Group and (ii) the uncertificated
principal balance of the Lower Tier REMIC Regular Interest ending with the
designation "PO" which is related to such Mortgage Group (except that if 1% of
any such excess is greater than the principal amount of the corresponding Middle
Tier REMIC Regular Interest ending with the designation "A", the least amount of
realized losses shall be allocated to such Middle Tier REMIC Regular Interests
such that the Middle Tier REMIC Subordinated Balance Ratio is maintained); and
finally, any remaining realized losses to the Class MT-Z Interest.

If on any Distribution Date there is an increase in the principal amount of any
Class of Certificates (other than the Class I-PO and Class II-PO Certificates)
as a result of Subsequent Recoveries, then, prior to distributions of principal
and allocations of losses on such Distribution Date with respect to the Middle
Tier REMIC, there shall be a corresponding increase in the principal amount of
the Middle Tier REMIC Regular Interests, with such increase allocated among the
Middle Tier REMIC Regular Interests as follows: (i) first, so as to keep the
uncertificated principal balance of each Middle Tier REMIC Regular Interest
ending with the designation "B" equal to 1% of the excess of the aggregate
Stated Principal Balance of the Mortgage Loans in the related Mortgage Group
over the uncertificated principal balance of the Lower Tier REMIC Regular
Interest ending with the designation "PO" which is related to such Mortgage
Group; second, to each Middle Tier REMIC Regular Interest ending with the
designation "A" so that the uncertificated principal balance of each such Middle
Tier REMIC Regular Interest is as close as possible to (but does not exceed) 1%
of the excess of (x) the aggregate Stated Principal Balance of the Mortgage
Loans in the related Mortgage Group over (y) the sum of (i) the aggregate Class
Principal Amounts of the Certificate Group (excluding the Class I-PO and Class
II-PO Certificates) related to such Mortgage Group and (ii) the uncertificated
principal balance of the Lower Tier REMIC Regular Interest ending with the
designation "PO" which is related to such Mortgage Group; provided, however,
that (a) the Middle Tier REMIC Subordinated Balance Ratio is maintained and (b)
amounts allocated to any Middle Tier REMIC Regular Interest pursuant to this
clause (ii) shall not exceed the amount of any previous realized losses
allocated to such Middle Tier REMIC Regular Interest not previously offset by
distributions or increases in the principal amount of such Middle Tier REMIC
Regular Interest and (iii) finally, all remaining increases are allocated to the
Class MT-Z Interest.

All computations with respect to any Middle Tier REMIC Regular Interest shall be
taken out to eight decimal places.

      (c) The "tax matters person" with respect to each REMIC for purposes of
the REMIC Provisions shall be the beneficial owner of the Class A-R Certificate;
provided, however, that the Holder of a Class A-R Certificate, by its acceptance
thereof, irrevocably appoints the Trustee as its agent and attorney-in-fact to
act as "tax matters person" with respect to each such REMIC for purposes of the
REMIC Provisions. If there is more than one beneficial owner of the Class A-R
Certificate, the "tax

                                       45
<PAGE>
matters person" shall be the Person with the greatest percentage interest in the
Class A-R Certificate and, if there is more than one such Person, shall be
determined under Treasury regulation Section 1.860F-4(d) and Treasury regulation
Section 301.6231(a)(7)-1.

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

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

      SECTION 2.08 Covenants of the Servicer.

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

      (a) the Servicer shall comply in the performance of its obligations under
this Agreement with all reasonable rules and requirements of the insurer under
each Required Insurance Policy;

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

      SECTION 2.09 [RESERVED].

      SECTION 2.10 [RESERVED].

                                       46
<PAGE>
      SECTION 2.11 Permitted Activities of the Trust. The Trust is created for
the object and purpose of engaging in the Permitted Activities. In furtherance
of the foregoing, the Trustee is hereby authorized and directed to execute and
deliver on behalf of the Trust, and any other agreement or instrument related
thereto, in each case in such form as the Depositor shall direct or shall
approve, the execution and delivery of any such agreement by the Depositor to be
conclusive evidence of its approval thereof.

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

                                   ARTICLE III
                 ADMINISTRATION AND SERVICING OF MORTGAGE LOANS

      SECTION 3.01 Servicer to Service Mortgage Loans.

      For and on behalf of the Certificateholders, the Servicer shall service
and administer the Mortgage Loans in accordance with Accepted Servicing
Practices. In connection with such servicing and administration, the Servicer
shall have full power and authority, acting alone and/or through subservicers as
provided in Section 3.02 hereof, to do or cause to be done any and all things
that it may deem necessary or desirable in connection with such servicing and
administration, including but not limited to, the power and authority, subject
to the terms hereof (i) to execute and deliver, on behalf of the
Certificateholders and the Trustee, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages (but only
in the manner provided in this Agreement), (iii) to collect any Insurance
Proceeds and other Liquidation Proceeds and (iv) subject to Section 3.12(a), to
effectuate foreclosure or other conversion of the ownership of the Mortgaged
Property securing any Mortgage Loan; provided that, subject to Section 6.03, the
Servicer shall not take any action that is inconsistent with or prejudices the
interests of the Trust Fund or the Certificateholders in any Mortgage Loan
serviced by it under this Agreement or the rights and interests of the other
parties to this Agreement except as otherwise required by this Agreement or by
law. The Servicer shall represent and protect the interest of the Trust Fund in
the same manner as it currently protects its own interest in mortgage loans in
its own portfolio in any claim, proceeding or litigation regarding a Mortgage
Loan, but in any case not in any manner that is a lesser standard than that
provided in the first sentence of this Section 3.01. Notwithstanding anything in
this Agreement to the contrary, the Servicer shall not make or permit any
modification, waiver or amendment of any term of any Mortgage Loan which would
cause any of the REMICs provided for herein to fail to qualify as a REMIC or
result in the imposition of any tax under Section 860G(a) or 860G(d) of the
Code. Without limiting the generality of the foregoing, the Servicer, in its own
name or in the name of the Depositor and the Trustee, is hereby authorized and
empowered by the Depositor and the Trustee, when the Servicer believes it
appropriate in its reasonable judgment, to execute and deliver, on behalf of the
Trustee, the Depositor, the Certificateholders or any of them, any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge and all other comparable instruments, with respect to the Mortgage
Loans, and with respect to the Mortgaged Properties held for the benefit of the
Certificateholders. The Servicer shall prepare and deliver to the Depositor
and/or the Trustee such documents requiring execution and delivery by any or all
of them as are necessary or appropriate to enable the Servicer to service and
administer the Mortgage Loans. If reasonably required by the Servicer, the
Trustee shall furnish the Servicer with a power of attorney in the form attached
hereto as Exhibit J and execute such other documents delivered to it by the
Servicer that are necessary or appropriate to enable the Servicer to carry out
its servicing and administrative duties under this Agreement. Upon receipt of
such documents, the Depositor and/or the Trustee shall execute such documents
and deliver them to the

                                       47
<PAGE>
Servicer. The Trustee shall have no liability with respect to any misuse of such
power of attorney and shall be indemnified by the Servicer for any costs,
liabilities or expenses incurred by the Trustee in connection therewith.

      In accordance with the standards of the preceding paragraph, the Servicer
shall advance or cause to be advanced funds as necessary for the purpose of
effecting the payment of taxes and assessments on the Mortgaged Properties,
which advances shall be reimbursable in the first instance from related
collections from the Mortgagors pursuant to Section 3.06, and further as
provided in Section 3.08. To the extent that a Mortgage does not provide for
escrow payments, (i) the Servicer shall determine whether any such payments are
made by the Mortgagor in a manner and at a time that is necessary to avoid the
loss of the Mortgaged Property due to a tax sale or the foreclosure as a result
of a tax lien and (ii) the Servicer shall ensure that all insurance required to
be maintained on the Mortgaged Property pursuant to this Agreement is
maintained. If any such payment has not been made and the Servicer receives
notice of a tax lien with respect to the Mortgage Loan being imposed, the
Servicer will, to the extent required to avoid loss of the Mortgaged Property,
advance or cause to be advanced funds necessary to discharge such lien on the
Mortgaged Property. All costs incurred by the Servicer, if any, in effecting the
timely payments of taxes and assessments on the Mortgaged Properties and related
insurance premiums shall not, for the purpose of calculating monthly
distributions to the Certificateholders, be added to the Stated Principal
Balance under the related Mortgage Loans, notwithstanding that the terms of such
Mortgage Loans so permit.

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

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

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

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

                                       48
<PAGE>
      (b) For purposes of this Agreement, the Servicer shall be deemed to have
received any collections, recoveries or payments with respect to the Mortgage
Loans that are received by a subservicer regardless of whether such payments are
remitted by the subservicer to the Servicer.

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

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

      SECTION 3.04 Trustee to Act as Servicer.

      In the event that the Servicer shall for any reason no longer be the
Servicer hereunder (including by reason of an Event of Default), the Trustee or
its designee shall, within a period of time not to exceed ninety (90) days from
the date of notice of termination or resignation, thereupon assume all of the
rights and obligations of the Servicer hereunder arising thereafter except that
the Trustee shall not be (i) liable for losses of the Servicer pursuant to
Section 3.10 hereof or any acts or omissions of such predecessor Servicer
hereunder, (ii) obligated to make Advances or Servicing Advances if it is
prohibited from doing so by applicable law, (iii) obligated to effectuate
repurchases or substitutions of Mortgage Loans hereunder, including pursuant to
Section 2.02 or 2.03 hereof, (iv) responsible for any expenses of the Servicer
pursuant to Section 2.03 or (v) deemed to have made any representations and
warranties hereunder, including pursuant to Section 2.04 or the first paragraph
of Section 6.02 hereof; provided, however that the Trustee (subject to clause
(ii) above) or its designee, in its capacity as the successor servicer, shall
immediately assume the terminated or resigning Servicer's obligation to make
Advances and Servicing Advances. No such termination shall affect any obligation
of the Servicer to pay amounts owed under this Agreement and to perform its
duties under this Agreement until its successor assumes all of its rights and
obligations hereunder. If the Servicer shall for any reason no longer be the
Servicer (including by reason of any Event of Default), the Trustee (or any
other successor servicer) may, at its option, succeed to any rights and
obligations of the Servicer under any subservicing agreement in accordance with
the terms thereof; provided, however, that the Trustee (or any other successor
servicer) shall not incur any liability or have any obligations in its capacity
as servicer under a subservicing agreement arising prior to the date of such
succession unless it expressly elects to assume such obligations of the Servicer
thereunder; and the Servicer shall not thereby be relieved of any liability or
obligations under the subservicing agreement arising prior to the date of such
succession. To the extent any costs or expenses, including without limitation
Servicing Transfer Costs incurred by the Trustee in connection with this Section
3.04 are not paid by the Servicer pursuant to this Agreement within 30 days of
the date of the Trustee's invoice therefor, such amounts shall be payable out of
the Certificate Account; provided that the terminated Servicer shall reimburse
the Trust Fund for any such expense incurred by the Trust Fund upon receipt of a
reasonably detailed invoice evidencing such expenses. If the Trustee is
unwilling or unable to act as servicer, the Trustee shall seek to appoint a
successor servicer that is eligible in accordance with the criteria specified
this Agreement.

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

      In the event that the Servicer shall for any reason no longer be the
Servicer hereunder (including by reason of any Event of Default),
notwithstanding anything to the contrary above, the Trustee and the Depositor
hereby agree that within 10 Business Days or delivery to the Trustee by the
Servicing Rights Pledgee of a letter signed by the Servicer whereby the Servicer
shall resign as Servicer under this

                                       49
<PAGE>
Agreement, the Servicing Rights Pledgee or its designee shall be appointed as
successor servicer (provided that at the time of such appointment the Servicing
Rights Pledgee or such designee meets the requirements of a successor servicer
set forth above) and the Servicing Rights Pledgee agrees to be subject to the
terms of this Agreement.

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

      (a) The Servicer shall make reasonable efforts in accordance with Accepted
Servicing Practices to collect all payments called for under the terms and
provisions of the Mortgage Loans to the extent such procedures shall be
consistent with this Agreement and the terms and provisions of any related
Required Insurance Policy. Consistent with the foregoing and subject to Section
3.01 hereof, the Servicer may in its discretion (i) waive any late payment
charge or, if applicable, any penalty interest, or (ii) extend the due dates for
payments due on a Mortgage Note for a period not greater than 180 days;
provided, however, that any extension pursuant to clause (ii) above shall not
affect the amortization schedule of any Mortgage Loan for purposes of any
computation hereunder, except as provided below. In the event of any such
arrangement pursuant to clause (ii) above, subject to Section 4.01, the Servicer
shall make any Advances on the related Mortgage Loan during the scheduled period
in accordance with the amortization schedule of such Mortgage Loan without
modification thereof by reason of such arrangements. Notwithstanding the
foregoing, in the event that any Mortgage Loan is in default or, in the judgment
of the Servicer, such default is reasonably foreseeable, the Servicer,
consistent with the standards set forth in Section 3.01, may also waive, modify
or vary any term of such Mortgage Loan (including modifications that would
change the Mortgage Rate, forgive the payment of principal or interest or extend
the final maturity date of such Mortgage Loan), accept payment from the related
Mortgagor of an amount less than the Stated Principal Balance in final
satisfaction of such Mortgage Loan, or consent to the postponement of strict
compliance with any such term or otherwise grant indulgence to any Mortgagor
(any and all such waivers, modifications, variances, forgiveness of principal or
interest, postponements, or indulgences collectively referred to herein as
"forbearance"), provided, however, that in no event shall the Servicer grant any
such forbearance (other than as permitted by the second sentence of this
Section) with respect to any one Mortgage Loan more than once in any 12 month
period or more than three times over the life of such Mortgage Loan, and
provided, further, that in determining which course of action permitted by this
sentence it shall pursue, the Servicer shall adhere to the standards of Section
3.01. The Servicer's analysis supporting any forbearance and the conclusion that
any forbearance meets the standards of Section 3.01 shall be reflected in
writing in the Mortgage File.

      (b) The Servicer will not waive any prepayment penalty or portion thereof
unless, (i) the enforceability thereof shall have been limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditors' rights generally or is otherwise prohibited by law, or (ii) the
collectability thereof shall have been limited due to acceleration in connection
with a foreclosure or other involuntary payment, or (iii) the prepayment of the
Mortgage Loan is made in connection with the voluntary sale of the related
Mortgaged Property, or (iv) in the Servicer's reasonable judgment as described
in Section 3.01 hereof, (x) such waiver relates to a default or a reasonably
foreseeable default, (y) such waiver would maximize recovery of total proceeds
taking into account the value of such prepayment penalty and related Mortgage
Loan and (z) doing so is standard and customary in servicing similar Mortgage
Loans (including any waiver of a prepayment penalty in connection with a
refinancing of a Mortgage Loan that is related to a default or a reasonably
foreseeable default), or (iv) if sufficient information is not made available to
enable it to collect the prepayment penalty. Except as provided in the preceding
sentence, in no event will the Servicer waive a prepayment penalty in connection
with a refinancing of a Mortgage Loan that is not related to a default or a
reasonably foreseeable default. If the Servicer waives or does not collect all
or a portion of a prepayment penalty relating to a Principal Prepayment in full
or in part due to any action or omission of the Servicer, other than as provided
above,

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<PAGE>
the Servicer shall deposit the amount of such prepayment penalty (or such
portion thereof as had been waived for deposit) into the Collection Account for
distribution in accordance with the terms of this Agreement.

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

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

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

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

            (iii) all Liquidation Proceeds, other than proceeds to be applied to
      the restoration or repair of the Mortgaged Property or released to the
      Mortgagor in accordance with the Servicer's normal servicing procedures;

            (iv) all Compensating Interest;

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

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

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

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

            (ix)  all prepayment penalties; and

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

      The foregoing requirements for remittance by the Servicer into the
Collection Account shall be exclusive, it being understood and agreed that,
without limiting the generality of the foregoing, late payment charges,
insufficient funds charges and payments in the nature of assumption fees (i.e.
fees related to the assumption of a Mortgage Loan upon the purchase of the
related Mortgaged Property) and other similar ancillary fees (other than
prepayment penalties) if collected, need not be remitted by the Servicer. In the
event that the Servicer shall remit any amount not required to be remitted and
not otherwise subject to withdrawal pursuant to Section 3.08 hereof, it may at
any time withdraw or direct the Trustee, or such other institution maintaining
the Collection Account, to withdraw such amount from the

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Collection Account, any provision herein to the contrary notwithstanding. The
Servicer shall maintain adequate records with respect to all withdrawals made
pursuant to this Section. All funds deposited in the Collection Account shall be
held in trust for the Certificateholders until withdrawn in accordance with
Section 3.08. In no event shall the Trustee incur liability for withdrawals from
the Collection Account at the direction of the Servicer.

      (e) [RESERVED].

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

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

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

            (iii) the Auction Termination Amount or Clean Up Call Price payable
      pursuant to Section 9.01.

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

      (g) Each institution that maintains the Collection Account or the
Certificate Account shall invest the funds in each such account, as directed by
the Servicer or the Trustee, as applicable, in writing, in Permitted
Investments, which shall mature not later than (i) in the case of the Collection
Account the Business Day preceding the related Servicer Remittance Date (except
that if such Permitted Investment is an obligation of the institution that
maintains such Collection Account or is otherwise immediately available, then
such Permitted Investment shall mature not later than the Servicer Remittance
Date) and (ii) in the case of the Certificate Account, the Business Day
immediately preceding the first Distribution Date that follows the date of such
investment (except that if such Permitted Investment is an obligation of the
institution that maintains such Certificate Account or a fund for which such
institution serves as custodian or is otherwise immediately available, then such
Permitted Investment shall mature not later than such Distribution Date) and, in
each case, shall not be sold or disposed of prior to its maturity. All such
Permitted Investments shall be made in the name of the Servicer or the Trustee,
as applicable, for the benefit of the Certificateholders. All income and gain
net of any losses realized from amounts on deposit in the Collection Account
shall be for the benefit of the Servicer as servicing compensation and shall be
remitted to it monthly as provided herein. The amount of any losses incurred in
the Collection Account in respect of any such investments shall be deposited by
the Servicer in the Collection Account out of the Servicer's own funds
immediately as realized. All income and gain net of any losses realized from
amounts on deposit in the Certificate Account shall be for the benefit of the
Trustee and shall be remitted

                                       52
<PAGE>
to or withdrawn by it monthly as provided herein. The amount of any losses
incurred in the Certificate Account in respect of any such investments shall be
deposited by the Trustee, in the Certificate Account out of the Trustee's own
funds immediately as realized.

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

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

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

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

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

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

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

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

            (ii) to reimburse the Servicer for Advances and Servicing Advances
      (to the extent such Servicing Advances would constitute "unanticipated
      expenses" within the meaning of Treasury Regulation Section
      1.860G-1(b)(3)(ii) if paid by one of the REMICs provided for herein)
      occurring after the Cut-off Date made by it with respect to the Mortgage
      Loans, such right of reimbursement pursuant to this subclause (ii) being
      limited to amounts received on particular Mortgage Loan(s) (including, for
      this purpose, Condemnation Proceeds, Insurance Proceeds or

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<PAGE>
      Liquidation Proceeds) that represent late recoveries of payments of
      principal and/or interest on such particular Mortgage Loan(s) in respect
      of which any such Advance was made;

            (iii) to reimburse the Servicer for any Non-Recoverable Advance
      previously made and, to the extent that such Non-Recoverable Servicing
      Advances would constitute "unanticipated expenses" within the meaning of
      Treasury Regulation Section 1.860G-1(b)(3)(ii) if paid by one of the
      REMICs provided for herein, any Non-Recoverable Servicing Advance;

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

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

            (vi) pay the Servicer any unpaid Servicing Fees and to reimburse it
      for any unreimbursed Servicing Advances (to the extent that reimbursement
      for Servicing Advances would constitute "unanticipated expenses" within
      the meaning of Treasury Regulation Section 1.860G-1(b)(3)(ii)), the
      Servicer's right to reimbursement of Servicing Advances pursuant to this
      subclause (vi) with respect to any Mortgage Loan being limited to amounts
      received on particular Mortgage Loan(s) (including, for this purpose,
      Liquidation Proceeds and purchase and repurchase proceeds) that represent
      late recoveries of the payments for which such advances were made pursuant
      to Section 3.01 or Section 3.06;

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

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

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

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

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

            (xii) to pay to the Servicing Rights Owner on each Servicer
      Remittance Date (as provided below), all prepayment penalties on deposit
      therein; and

            (xiii) to reimburse itself for Advances or Servicing Advances from
      amounts in the Collection Account held for future distributions that were
      not included in Available Funds for the

                                       54
<PAGE>
      preceding Distribution Date. An amount equal to the amount withdrawn from
      the Collection Account pursuant to this subclause (xiii) shall be
      deposited in the Collection Account by the Servicer on the next succeeding
      Distribution Date that funds are to be distributed to Certificateholders.

      In addition, no later than 1:00 p.m. Eastern Time on the Servicer
Remittance Date, the Servicer shall cause to be withdrawn from the Collection
Account the amount on deposit therein after making any of the above-described
withdrawals and such amount shall be deposited in the Certificate Account;
provided, however if the Trustee does not receive such amount by 2:00 p.m.
Eastern Time, such amount shall be deposited in the Certificate Account on the
next Business Day.

      On each Servicer Remittance Date, the Servicer shall distribute to the
Servicing Rights Owner all prepayment penalties on deposit in the Collection
Account on such date by wire transfer to an account designated by the Servicing
Rights Owner.

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

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

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

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

            (i) to withdraw any amount deposited in the Certificate Account and
      not required to be deposited therein;

            (ii) to pay the Trustee any indemnification amounts owed it and to
      clear and terminate the Certificate Account upon termination of the
      Agreement pursuant to Section 9.01 hereof (including paying all amounts
      necessary to the Trustee or the Servicer in connection with any such
      termination);

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

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

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<PAGE>
      SECTION 3.09 [RESERVED].

      SECTION 3.10 Maintenance of Hazard Insurance.

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

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

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

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

                                       56
<PAGE>
under any Required Insurance Policy; provided, however, that the Servicer shall
not exercise any such right if the due-on-sale clause, in the reasonable belief
of the Servicer, is not enforceable under applicable law. An opinion of counsel,
which shall be reimbursable as a Servicing Advance, delivered to the Trustee and
the Depositor to the foregoing shall conclusively establish the reasonableness
of such belief to the extent permitted under applicable law. Notwithstanding the
foregoing, the Servicer is not required to exercise such rights with respect to
a Mortgage Loan if the Person to whom the related Mortgaged Property has been
conveyed or is proposed to be conveyed satisfies the terms and conditions
contained in the Mortgage Note and Mortgage related thereto and the consent of
the mortgagee under such Mortgage Note or Mortgage is not otherwise so required
under such Mortgage Note or Mortgage as a condition to such transfer. In the
event that the Servicer is prohibited by law from enforcing any such due-on-sale
clause, or if coverage under any Required Insurance Policy would be adversely
affected, or if nonenforcement is otherwise permitted hereunder, the Servicer is
authorized, subject to Section 3.11(b), to take or enter into an assumption and
modification agreement from or with the Person to whom such property has been or
is about to be conveyed, pursuant to which such Person becomes liable under the
Mortgage Note and, unless prohibited by applicable state law, the Mortgagor
remains liable thereon, provided that the Mortgage Loan shall continue to be
covered (if so covered before the Servicer enters such agreement) by the
applicable Required Insurance Policies. The Servicer, subject to Section
3.11(b), is also authorized with the prior approval of the insurers under any
Required Insurance Policies to enter into a substitution of liability agreement
with such Person, pursuant to which the original Mortgagor is released from
liability and such Person is substituted as Mortgagor and becomes liable under
the Mortgage Note. Notwithstanding the foregoing, the Servicer shall not be
deemed to be in default under this Section 3.11(a) by reason of any transfer or
assumption that the Servicer reasonably believes it is restricted by law from
preventing.

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

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

      (a) The Servicer shall use reasonable efforts consistent with the
servicing standard set forth in Section 3.01 to foreclose upon or otherwise
comparably convert the ownership of properties securing

                                       57
<PAGE>
such of the Mortgage Loans as come into and continue in default and as to which
no satisfactory arrangements can be made for collection of Delinquent payments.
In connection with such foreclosure or other conversion, the Servicer shall
follow such practices and procedures as it shall deem necessary or advisable and
as shall be normal and usual in its general mortgage servicing activities and
the requirements of the insurer under any Required Insurance Policy; provided,
however, that the Servicer shall not be required to expend its own funds in
connection with the restoration of any property that shall have suffered damage
due to an uninsured cause unless it shall determine (i) that such restoration
will increase the proceeds of liquidation of the Mortgage Loan after
reimbursement to itself of such expenses and (ii) that such expenses will be
recoverable to it through Liquidation Proceeds (respecting which it shall have
priority for purposes of withdrawals from the Collection Account pursuant to
Section 3.08 hereof). The Servicer shall be responsible for all other costs and
expenses incurred by it in any such proceedings; provided, however, that it
shall be entitled to reimbursement thereof from the proceeds of liquidation of
the related Mortgaged Property, as contemplated in Section 3.08 hereof. If the
Servicer has knowledge that a Mortgaged Property that the Servicer is
contemplating acquiring in foreclosure or by deed-in-lieu of foreclosure is
located within a one-mile radius of any site with environmental or hazardous
waste risks known to the Servicer, the Servicer will, prior to acquiring the
Mortgaged Property, consider such risks and only take action in accordance with
Accepted Servicing Practices.

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

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

                                       58
<PAGE>
fail to qualify as "foreclosure property" within the meaning of section
860G(a)(8) of the Code or (ii) subject the Trust Fund or any REMIC provided for
herein to the imposition of any federal, state or local income taxes on the
income earned from such Mortgaged Property under section 860G(c) of the Code or
otherwise, unless the Servicer or the Depositor has agreed to indemnify and hold
harmless the Trust Fund with respect to the imposition of any such taxes.

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

      The Liquidation Proceeds from any liquidation of a Mortgage Loan, net of
any payment to the Servicer as provided above, shall be deposited in the
Collection Account on the next succeeding Determination Date following receipt
thereof for distribution on the related Distribution Date.

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

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

      (c) The Servicer, in its sole discretion, shall have the right to elect
(by written notice sent to the Trustee) to purchase for its own account from the
Trust Fund any Mortgage Loan that is 91 days or more Delinquent or REO Property
for which the Servicer has accepted a deed-in-lieu of foreclosure at a price
equal to the Purchase Price. The Purchase Price for any Mortgage Loan or REO
Property purchased hereunder shall be delivered to the Trustee for deposit in
the Collection Account and the Trustee, upon receipt of such deposit and a
Request for Release from the Depositor in the form of Exhibit I hereto, shall
release or cause to be released to the Servicer the related Mortgage File and
shall execute and deliver such instruments of transfer or assignment prepared by
the Servicer, in each case without recourse, representation or warranty, as
shall be necessary to vest in the Servicer any Mortgage Loan or REO Property
released pursuant hereto and the Servicer shall succeed to all the Trustee's
right, title and interest in and to such Mortgage Loan and all security and
documents related thereto. Such assignment shall be an assignment outright and
not for security. The Servicer shall thereupon own such Mortgage Loan or REO
Property, and all security and documents, free of any further obligation to the
Trustee or the

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Certificateholders with respect thereto. The Servicer shall not use any
procedure in selecting Mortgage Loans to be repurchased which is materially
adverse to the interests of the Certificateholders.

      In the event that the Servicer is acting as the servicer and the Servicer
(or an affiliate of the Servicer) is the owner of more than 50% of the Class of
Certificates which is then currently in a first loss position and such party is
deemed to be the "Primary Beneficiary" as defined in FIN 40, the provisions of
the preceding paragraph shall not apply and the Servicer (or an affiliate of the
Servicer), in its sole discretion, shall have the right to elect to purchase for
its own account from the Trust Fund any Mortgage Loan that is 120 days or more
Delinquent or REO Property for which the Servicer has accepted a deed-in-lieu of
foreclosure, during the period commencing on the first day of the calendar
quarter succeeding the calendar quarter in which the Initial Delinquency Date
(as defined below) occurred with respect to such Mortgage Loan and ending on the
last Business Day of such calendar quarter. If the Servicer (or an affiliate of
the Servicer) does not exercise its purchase right with respect to a Mortgage
Loan during the period specified in the preceding sentence, such Mortgage Loan
shall thereafter again become eligible for purchase pursuant to the preceding
sentence only after the Mortgage Loan ceases to be 120 days or more Delinquent
and thereafter becomes 120 days Delinquent again. The "Initial Delinquency Date"
of a Mortgage Loan shall mean the date on which the Mortgage Loan first became
120 days Delinquent. Prior to repurchase pursuant to this Section 3.12, the
Servicer shall be required to continue to make monthly advances pursuant to
Section 4.01. The Servicer shall not use any procedure in selecting Mortgage
Loans to be repurchased which is materially adverse to the interests of the
Certificateholders. The Servicer purchase any Mortgage Loan or REO Property
pursuant to this paragraph at a price equal to the Purchase Price. The Purchase
Price for any Mortgage Loan or REO Property purchased hereunder shall be
delivered to the Trustee for deposit in the Collection Account and the Trustee,
upon receipt of such deposit and a Request for Release from the Depositor in the
form of Exhibit I hereto, shall release or cause to be released to the Servicer
the related Mortgage File and shall execute and deliver such instruments of
transfer or assignment prepared by the Servicer, in each case without recourse,
representation or warranty, as shall be necessary to vest in the Servicer any
Mortgage Loan or REO Property released pursuant hereto and the Servicer shall
succeed to all the Trustee's right, title and interest in and to such Mortgage
Loan and all security and documents related thereto. The provisions in this
paragraph shall only apply if Litton Loan Servicing LP is the servicer.

      SECTION 3.13 Trustee to Cooperate; Release of Mortgage Files.

      Upon the payment in full of any Mortgage Loan, or the receipt by the
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Servicer will promptly notify the Trustee or
its designee by delivering a Request for Release substantially in the form of
Exhibit I. Upon receipt of such request, the Trustee or its designee shall
promptly release the related Mortgage File to the Servicer, and the Trustee or
its designee shall at the Servicer's written direction execute and deliver to
the Servicer the request for reconveyance, deed of reconveyance or release or
satisfaction of mortgage or such instrument releasing the lien of the Mortgage
in each case provided by the Servicer, together with the Mortgage Note with
written evidence of cancellation thereon. No expenses incurred in connection
with any instrument of satisfaction or deed of reconveyance shall be chargeable
to the Collection Account, the Certificate Account or the related subservicing
account. From time to time and as shall be appropriate for the servicing or
foreclosure of any Mortgage Loan, including for such purpose, collection under
any policy of flood insurance, any fidelity bond or errors or omissions policy,
or for the purposes of effecting a partial release of any Mortgaged Property
from the lien of the Mortgage or the making of any corrections to the Mortgage
Note or the Mortgage or any of the other documents included in the Mortgage
File, the Trustee or its designee shall, upon delivery to the Trustee or its
designee of a Request for Release in the form of Exhibit I signed by a Servicing
Officer, release the Mortgage File to the Servicer. Subject to the further
limitations set forth below, the Servicer shall cause the Mortgage File or
documents so released to be returned to the Trustee or its designee when the
need

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therefor by the Servicer no longer exists, unless the Mortgage Loan is
liquidated and the proceeds thereof are deposited in the Collection Account, in
which case the Trustee or its designee shall deliver the Request for Release to
the Servicer.

      Each Request for Release may be delivered to the Trustee or its designee
(i) via mail or courier, (ii) via facsimile or (iii) by such other means,
including, without limitation, electronic or computer readable medium, as the
Servicer and the Trustee or its designee shall mutually agree. The Trustee or
its designee shall promptly release the related Mortgage File(s) within five (5)
Business Days of receipt of a properly completed Request for Release pursuant to
clauses (i), (ii) or (iii) above. Receipt of a properly completed Request for
Release shall be authorization to the Trustee or its designee to release such
Mortgage Files, provided the Trustee or its designee has determined that such
Request for Release has been executed, with respect to clauses (i) or (ii)
above, or approved, with respect to clause (iii) above, by an authorized
Servicing Officer of the Servicer, and so long as the Trustee or its designee
complies with its duties and obligations under the agreement. If the Trustee or
its designee is unable to release the Mortgage Files within the period
previously specified, the Trustee or its designee shall immediately notify the
Servicer indicating the reason for such delay. If the Servicer is required to
pay penalties or damages due to the Trustee or its designee's negligent failure
to release the related Mortgage File or the Trustee or its designee's negligent
failure to execute and release documents in a timely manner, the Trustee or its
designee, shall be liable for such penalties or damages directly caused by it
and shall have no liability for penalties or damages attributable to the
Servicer's actions or inactions.

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

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

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

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or right of set off against any Mortgage File or any funds collected on, or in
connection with, a Mortgage Loan, except, however, that the Servicer shall be
entitled to set off against and deduct from any such funds any amounts that are
properly due and payable to the Servicer under this Agreement.

      SECTION 3.15 Servicing Compensation.

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

      Additional servicing compensation in the form of any Excess Proceeds, late
payment fees, customary real estate referral fees, assumption fees (i.e. fees
related to the assumption of a Mortgage Loan upon the purchase of the related
Mortgaged Property) and similar fees payable by the Mortgagor (other than
prepayment penalties), and all income and gain net of any losses realized from
Permitted Investments in the Collection Account shall be retained by the
Servicer to the extent not required to be deposited in the Collection Account
pursuant to Section 3.05 or 3.12(a) hereof. The Servicer shall be required to
pay all expenses incurred by it in connection with its servicing activities
hereunder (including payment of any premiums for hazard insurance, as required
by Section 3.10 hereof and maintenance of the other forms of insurance coverage
required by Section 3.10 hereof) and shall not be entitled to reimbursement
therefor except as specifically provided in Sections 3.08 and 3.12 hereof.

      SECTION 3.16 Access to Certain Documentation.

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

      SECTION 3.17 Annual Statement as to Compliance.

      Pursuant to this Agreement, the Servicer shall deliver to the Depositor
and the Trustee on or before March 15 beginning in 2005 or such other date that
the Depositor gives the Servicer at least 30 days prior notice of in order to
remain in compliance with the Section 302 Requirements, an Officer's Certificate
stating, as to each signatory thereof, that (i) a review of the activities of
the Servicer during the preceding calendar year and of performance under this
Agreement has been made under such officer's supervision, and (ii) to the best
of such officers' knowledge, based on such review, the Servicer has fulfilled
all of its obligations under this Agreement throughout such year, or, if there
has been a default in the fulfillment of any such obligation, specifying each
such default known to such officers and the nature and status thereof. The
Trustee shall forward a copy of each such statement received by it to each
Rating Agency. Copies of such statement shall be provided by the Trustee to any
Certificateholder upon written request at the Certificateholder's expense,
provided such statement has been delivered by the Servicer to the Trustee.

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

      On or before March 15 of each year, beginning in 2005 or such other date
in order to remain in compliance with the Section 302 Requirements, the Servicer
at its expense shall cause a nationally recognized firm of independent public
accountants (who may also render other services to the Servicer or any Affiliate
thereof) that is a member of the American Institute of Certified Public
Accountants to furnish a USAP Report to the Trustee, and the Depositor. Copies
of the USAP Report shall be provided by the Trustee to any Certificateholder
upon request at the Certificateholder's expense, provided such report has been
delivered by the Servicer to the Trustee.

      SECTION 3.19 Reserved.

      SECTION 3.20 Periodic Filings.

      (a) Promptly upon receipt of (i) any report of the independent public
accountants required pursuant to Section 3.18, and (ii) the Officer's
Certificate delivered by the Servicer pursuant to Section 3.17 relating to the
Servicer's performance of its obligations under this Agreement, the Trustee
shall include such report and such certificate as part of the Form 10-K required
to be filed pursuant to the terms of this Agreement.

      (b) The Trustee shall prepare for filing, and execute (other than the Form
10-Ks and the Certification), on behalf of the Trust Fund, and file with the
Securities and Exchange Commission, (i) within 15 days after each Distribution
Date in each month, each Monthly Statement on Form 8-K under the Exchange Act
executed by the Trustee, (ii) on or before March 31 of each year beginning in
2005 or such other date in order to remain in compliance with the Section 302
Requirements, a Form 10-K under the Exchange Act executed by the Depositor,
including any certification (the "Certification") required by the Section 302
Requirements, and (iii) any and all reports, statements and information
respecting the Trust Fund and/or the Certificates required to be filed on behalf
of the Trust Fund under the Exchange Act executed by the Trustee. The
Certification shall be executed by a senior officer of the Depositor. Upon such
filing with the Securities and Exchange Commission, the Trustee shall promptly
deliver to the Depositor a copy of any such executed report, statement or
information. Prior to making any such filings and certifications, the Trustee
shall comply with the provisions set forth in this Section. If permitted by
applicable law and unless the Depositor otherwise directs, the Trustee shall
file a Form 15 under the Exchange Act on or before January 30, 2005 or as soon
as it is able to do so pursuant to applicable law. The Depositor hereby grants
to the Trustee a limited power of attorney to execute (other than the Form 10-Ks
and the Certification) and file each such document on behalf of the Depositor.
Such power of attorney shall continue until either the earlier of (i) receipt by
the Trustee from the Depositor of written termination of such power of attorney
and (ii) the termination of the Trust Fund. The Depositor agrees to promptly
furnish to the Trustee, from time to time upon request, such further
information, reports, and financial statements within its control related to
this Agreement and the Mortgage Loans as the Trustee reasonably deems
appropriate to prepare and file all necessary reports with the Commission. The
Trustee shall have no responsibility to file any items other than those
specified in this section.

      (c) [RESERVED].

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

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with the fiscal year in which the Form 15 is filed (other than the obligations
in paragraphs (a) and (b) of this Section to be performed in such fiscal year
that relate back to the prior fiscal year).

      SECTION 3.21 Annual Certificate by Trustee.

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

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

      SECTION 3.22 Annual Certificate by Servicer.

      (a) By February 28 beginning in 2005 or such other date specified in a
written notice within 15 days prior to the date on which a Form 8-K is required
to be filed with a Certification by the Depositor, the Servicer shall execute
and deliver an Officer's Certificate in the form of Exhibit L attached hereto,
signed by the senior officer in charge of servicing of the Servicer or any
officer to whom that officer reports, to the Trustee and Depositor for the
benefit of the Trustee and Depositor and their respective officers, directors
and affiliates, certifying as to the following matters:

            (i) The Servicer has reviewed the information required to be
      delivered to the Trustee pursuant to the Pooling and Servicing Agreement
      (the "Servicing Information").

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

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

            (iv) Based upon the review required under this Agreement, and except
      as disclosed in the Annual Statement of Compliance, the Annual Independent
      Certified Public Accountant's Servicing Report and all servicing reports,
      officer's certificates and other information relating to the servicing of
      the Mortgage Loans submitted to the Trustee by the Servicer, the Servicer
      has, as

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      of the last day of the period covered by the Annual Statement of
      Compliance fulfilled its obligations under this Agreement.

      (b) The Servicer shall indemnify and hold harmless the Depositor and their
respective officers, directors, agents and affiliates from and against (i) any
losses, damages, penalties, fines, forfeitures, reasonable legal fees and
related costs, judgments and other costs and expenses arising out of or based
upon a breach by the Servicer or any of its officers, directors, agents or
affiliates of its obligations under this Section 3.22, (ii) any allegation that
the Officer's Certificate required under this Section contains a misstatement of
a material fact or omits or omitted to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading or (iii) the negligence, bad faith or willful
misconduct of the Servicer in connection therewith. If the indemnification
provided for herein is unavailable or insufficient to hold harmless the
Depositor, then the Servicer agrees that it shall contribute to the amount paid
or payable by the Trustee and the Depositor as a result of the losses, claims,
damages or liabilities of the Depositor in such proportion as is appropriate to
reflect the relative fault of the Depositor on the one hand and the Servicer on
the other in connection with a breach of the Servicer's obligations under this
Section 3.22, any alleged material misstatement or omission in the Officer's
Certificate required under this Section or the Servicer's negligence, bad faith
or willful misconduct in connection therewith.

      SECTION 3.23 Prepayment Penalty Reporting Requirements.

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

            (i)   loan number;

            (ii)  current Mortgage Rate;

            (iii) current principal balance;

            (iv)  original principal balance;

            (v)   prepayment penalty amount due;

            (vi)  prepayment penalty amount collected; and

            (vii) reason why full prepayment penalty amount was not
      collected, if applicable.

      SECTION 3.24 Statements to Trustee. Not later than the tenth calendar day
of each month, the Servicer shall furnish to the Trustee an electronic file
providing loan level accounting data for the period ending on the last Business
Day of the preceding month in the format mutually agreed upon between the
Servicer and the Trustee, including but not limited to information described in
Section 4.05(a).

      SECTION 3.25 Indemnification.

      The Servicer shall indemnify the Seller, the Trust Fund, Trustee and the
Depositor and hold each of them harmless against any and all claims, losses,
damages, penalties, fines, forfeitures, reasonable and necessary legal fees and
related costs, judgments, and any other costs, fees and expenses that any of
such parties may sustain in any way related to the failure of the Servicer to
perform its duties and service the Mortgage Loans in compliance with the terms
of this Agreement. The Servicer immediately shall notify

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the Seller, the Trustee and the Depositor or any other relevant party if a claim
is made by a third party with respect to this Agreement or the Mortgage Loans,
assume (with the prior written consent of the indemnified party, which consent
shall not be unreasonably withheld or delayed) the defense of any such claim and
pay all expenses in connection therewith, including counsel fees, and promptly
pay, discharge and satisfy any judgment or decree which may be entered against
it or any of such parties in respect of such claim. The Servicer shall follow
any written instructions received from the Trustee in connection with such
claim. The Servicer shall provide the Trustee and the Depositor with a written
report of all expenses and advances incurred by the Servicer pursuant to this
Section 3.25, and the Servicer from the assets of the Trust Fund in the
Collection Account promptly shall reimburse itself for all amounts advanced by
it pursuant to the preceding sentence except when the claim in any way relates
to the failure of the Servicer to service and administer the Mortgage Loans in
material compliance with the terms of this Agreement or the gross negligence,
bad faith or willful misconduct of the Servicer. The provisions of this
paragraph shall survive the termination of this Agreement and the payment of the
outstanding Certificates.

      SECTION 3.26 Nonsolicitation.

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

      SECTION 3.27 Existing Servicing Agreement.

      The Servicer acknowledges the transfer on the Closing Date of the
servicing of the Mortgage Loans from the Existing Servicing Agreement to this
Agreement pursuant to Section 10.01 of the Existing Servicing Agreement.

                                   ARTICLE IV
                                  DISTRIBUTIONS

      SECTION 4.01 Advances.

      Subject to the conditions of this Article IV, the Servicer, as required
below, shall make an Advance and deposit such Advance in the Collection Account.
Each such Advance shall be remitted to the Collection Account no later than 1:00
p.m. New York City time on the Servicer Advance Date in immediately available
funds. The Servicer shall be obligated to make any such Advance only to the
extent that such advance would not be a Non-Recoverable Advance. If the Servicer
shall have determined that it has made a Non-Recoverable Advance or that a
proposed Advance or a lesser portion of such Advance would constitute a
Non-Recoverable Advance, the Servicer shall deliver (i) to the Trustee for the
benefit of the Certificateholders funds constituting the remaining portion of
such Advance, if applicable, and (ii) to the Depositor each Rating Agency and
the Trustee an Officer's Certificate setting forth the basis for such
determination.

      In lieu of making all or a portion of such Advance from its own funds, the
Servicer may (i) cause to be made an appropriate entry in its records relating
to the Collection Account that any amount held for future distribution has been
used by the Servicer in discharge of its obligation to make any such Advance and
(ii) transfer such funds from the Collection Account to the Certificate Account.
In addition, the Servicer shall have the right to reimburse itself for any such
Advance from amounts held from time to

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time in the Collection Account to the extent such amounts are not then required
to be distributed. Any funds so applied and transferred pursuant to the previous
two sentences shall be replaced by the Servicer by deposit in the Collection
Account no later than the close of business on the Servicer Advance Date on
which such funds are required to be distributed pursuant to this Agreement. The
Servicer shall be entitled to be reimbursed from the Collection Account for all
Advances of its own funds made pursuant to this Section as provided in Section
3.08. The obligation to make Advances with respect to any Mortgage Loan shall
continue until such Mortgage Loan is paid in full or the related Mortgaged
Property or related REO Property has been liquidated or until the purchase or
repurchase thereof (or substitution therefor) from the Trust Fund pursuant to
any applicable provision of this Agreement, except as otherwise provided in this
Section 4.01.

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

      In the event that any Mortgage Loan is the subject of a Prepayment
Interest Shortfall, the Servicer shall, from amounts in respect of the Servicing
Fee for such Distribution Date, deposit into the Collection Account, as a
reduction of the Servicing Fee for such Distribution Date, no later than the
Servicer Advance Date immediately preceding such Distribution Date, an amount up
to the Prepayment Interest Shortfall; provided that the amount so deposited with
respect to any Distribution Date shall be limited to the product of (x)
one-twelfth of 0.125% and (y) the aggregate Stated Principal Balance of the
Mortgage Loans. In case of such deposit, the Servicer shall not be entitled to
any recovery or reimbursement from the Depositor, the Trustee, the Trust Fund or
the Certificateholders. With respect to any Distribution Date, to the extent
that the Prepayment Interest Shortfall exceeds Compensating Interest (such
excess, a "Non-Supported Interest Shortfall"), such Non-Supported Interest
Shortfall shall reduce the Current Interest with respect to each Class of
Certificates, pro rata based upon the amount of interest each such Class would
otherwise be entitled to receive on such Distribution Date. Notwithstanding the
foregoing, there shall be no reduction of the Servicing Fee in connection with
Prepayment Interest Shortfalls related to the Relief Act and the Servicer shall
not be obligated to pay Compensating Interest with respect to Prepayment
Interest Shortfalls related to the Relief Act.

      SECTION 4.03 Distributions on the REMIC Interests.

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

      SECTION 4.04 Distributions.

      (a) On each Distribution Date, the Trustee shall apply an amount on
deposit in the Certificate Account equal to the Available Distribution Amount in
the following order of priority:

            (i) concurrently (A) solely from the Available Distribution Amount
      with respect to Mortgage Group One, to the Class I-A Certificateholders
      (other than the Class I-PO Certificates) all amounts distributable
      pursuant to paragraphs (b)(i)(A), (E) and (G) and (B) solely from the
      Available Distribution Amount with respect to Mortgage Group Two, to the
      Class II-A Certificateholders (other than the Class II-PO Certificates)
      all amounts distributable pursuant to paragraphs (b)(i)(B) through (D) and
      (F);

            (ii) the balance, if any, of the Available Distribution Amount shall
      be distributed first, (A) solely from the Available Distribution Amount
      with respect to Mortgage Group One to

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<PAGE>
      the Non-PO Class I-A Certificateholders (other than the Class I-IO
      Certificateholders) and Class A-R Certificateholders in the amounts
      distributable pursuant to (b)(ii)(A) below, up to the Non-PO Class I-A
      Optimal Principal Amount and (b)(iii) below, up to the amounts payable
      thereunder and to the Class I-PO Certificates, the Group One Class I-PO
      Amount pursuant to (b)(ii)(A) below and (B) concurrently, solely from the
      Available Distribution Amount with respect to Mortgage Group Two to the
      Non-PO Class II-A Certificateholders (other than the Class II-IO
      Certificateholders) in the amounts distributable pursuant to (b)(ii)(B)
      below, up to the Non-PO Class II-A Optimal Principal Amount and (b)(iv)
      below, up to the amounts payable thereunder and to the Class II-PO
      Certificates, the Group Two Class II-PO Amount pursuant to (b)(ii)(B)
      below, and second, to the Class I-PO Certificates, the Class I-PO
      Shortfall Amount and to the Class II-PO Certificates the Class II-PO
      Shortfall Amount, in accordance with paragraph (b)(v) below;

            (iii) subject to paragraph (b) below, to the Class B
      Certificateholders, the balance, if any, of the Available Distribution
      Amount after making the distributions provided for in paragraphs (i) and
      (ii) above, in accordance with, and up to the amounts calculated pursuant
      to, Section 6.01(c) below; and

            (iv) to the Class A-R Certificateholders the balance, if any, of the
      Available Distribution Amount remaining after the distributions provided
      for in paragraphs (i) through (iii) above.

      (b) Amounts payable to the Class A Certificateholders on any Distribution
Date shall be distributed as follows:

            (i) to the extent the amounts available for distribution pursuant to
      paragraph (a)(i)(A) or (a)(i)(B) above, as applicable, are sufficient:

                  (A) to the Class I-A-1 Certificateholders, (1) the Class I-A-1
            Interest Accrual Amount plus (2) the Class I-A-1 Shortfall from the
            preceding Distribution Date;

                  (B) to the Class II-A-1 Certificateholders (1) the Class
            II-A-1 Interest Accrual Amount plus (2) the Class II-A-1 Shortfall
            from the preceding Distribution Date;

                  (C) to the Class II-A-2 Certificateholders, (1) the Class
            II-A-2 Interest Accrual Amount plus (2) the Class II-A-2 Shortfall
            from the preceding Distribution Date;

                  (D) to the Class II-A-3 Certificateholders, (1) the Class
            II-A-3 Interest Accrual Amount plus (2) the Class II-A-3 Shortfall
            from the preceding Distribution Date; and;

                  (E) to the Class I-IO Certificateholders, (1) the Class I-IO
            Interest Accrual Amount plus (2) the Class I-IO Shortfall from the
            preceding Distribution Date;

                  (F) to the Class II-IO Certificateholders, (1) the Class II-IO
            Interest Accrual Amount plus (2) the Class II-IO Shortfall from the
            preceding Distribution Date.

                  (G) to the Class A-R Certificateholders, (1) the Class A-R
            Interest Accrual Amount plus (2) the Class A-R Shortfall from the
            preceding Distribution Date;

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            (ii) concurrently, (A) to the Non-PO Class I-A Certificateholders
      (other than the Class I-IO Certificateholders), solely from the Available
      Distribution Amount with respect to Mortgage Group One up to the Non-PO
      Class I-A Optimal Principal Amount, allocated among the Non-PO Class I-A
      Certificates (other than the Class I-IO Certificates) in accordance with
      the Non-PO Class I-A Principal Payment Rules, and to the Class I-PO
      Certificates, the Group One Class I-PO Amount and (B) to the Non-PO Class
      II-A Certificateholders (other than the Class II-IO Certificateholders),
      solely from the Available Distribution Amount with respect to Mortgage
      Group Two up to the Non-PO Class II-A Optimal Principal Amount, allocated
      among the Non-PO Class II-A Certificates (other than the Class II-IO
      Certificates) in accordance with the Non-PO Class II-A Principal Payment
      Rules, and to the Class II-PO Certificates, the Group Two Class II-PO
      Amount;

            (iii) to the extent that the Available Distribution Amount with
      respect to Mortgage Group One is insufficient to make distributions
      pursuant to paragraphs (b)(i)(A), (E) and (G) or the portion of the
      Available Distribution Amount with respect to Mortgage Group One remaining
      after giving effect to the distributions in (b)(i) above is insufficient
      to distribute in full to the Class I-A Certificateholders amounts
      described in (b)(ii)(A) above (such shortfall, the "Class I-A Deficiency
      Amount") and the Available Distribution Amount with respect to Mortgage
      Group Two remaining after giving effect to the distributions in (b)(i)
      above exceeds the amount required to distribute in full to the Class II-A
      Certificateholders the amounts described in (b)(ii)(B) above, such excess
      shall be distributed in reduction of the Class I-A Deficiency Amount in
      application first to amounts payable pursuant to Section (b)(i) and second
      to amounts payable pursuant to Section (b)(ii);

            (iv) to the extent that the Available Distribution Amount with
      respect to Mortgage Group Two is insufficient to make distributions
      pursuant to paragraphs (b)(i)(B) through (D) and (F), or the portion of
      the Available Distribution Amount with respect to Mortgage Group Two
      remaining after giving effect to the distributions in (b)(i) above is
      insufficient to distribute in full to the Class II-A Certificateholders
      amounts described in (b)(ii)(B) above (such shortfall, the "Class II-A
      Deficiency Amount") and the Available Distribution Amount with respect to
      Mortgage Group One remaining after giving effect to the distributions in
      (b)(i) above exceeds the amount required to distribute in full to the
      Class I-A Certificateholders the amounts described in (b)(ii)(A) above,
      such excess shall be distributed in reduction of the Class II-A Deficiency
      Amount in application first to amounts payable pursuant to Section (b)(i)
      and second to amounts payable pursuant to Section (b)(ii);

            (v) to the Class I-PO Certificates, the Class I-PO Shortfall Amount
      and to the Class II-PO Certificates, the Class II-PO Shortfall Amount;
      provided, however, that any amount distributed pursuant to this Section
      4.04(b)(v) shall not cause a further reduction in the principal balance of
      the Class I-PO or Class II-PO Certificates, as applicable;

            (vi) If the Available Distribution Amount with respect to Mortgage
      Group One is insufficient to make the distributions set forth in
      paragraphs (b)(i)(A), (E) and (G) above, the Trustee shall distribute the
      Available Distribution Amount with respect to Mortgage Group One to the
      Non-PO Class I-A Certificateholders pro rata in accordance with the
      amounts otherwise distributable to them pursuant to paragraphs (b)(i)(A),
      (E) and (G) above. If the Available Distribution Amount with respect to
      Mortgage Group Two is insufficient to make the distributions set forth in
      paragraphs (b)(i) (B) through (D) and (F), above, the Trustee shall
      distribute the Available Distribution Amount with respect to Mortgage
      Group Two to the Non-PO Class II-A Certificateholders pro rata in
      accordance with the amounts otherwise distributable to them pursuant to
      paragraphs (b)(i)(B) through (D) and (F), above; and

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            (vii) In addition to the foregoing distributions, the Non-PO Class
      I-A Certificates (other than the Class I-IO Certificates) or Non-PO Class
      II-A Certificates (other than the Class II-IO Certificates) may receive
      additional principal distributions on any Distribution Date prior to the
      Credit Support Depletion Date under the circumstances specified in (A) and
      (B) below:

                  (A) On any Distribution Date on or after the date on which the
            aggregate Outstanding Certificate Principal Balance of the Non-PO
            Class I-A Certificates or the Outstanding Certificate Principal
            Balance of the Non-PO Class II-A Certificates has been reduced to
            zero, all principal (other than the applicable PO Percentage of any
            principal received on or in respect of each Discount Mortgage Loan
            and limited to amounts in excess of that needed to reduce the
            aggregate Outstanding Certificate Principal Balance of the Non-PO
            Class I-A Certificates or the Outstanding Certificate Principal
            Balance of the Non-PO Class II-A Certificates to zero) on the
            Mortgage Loans in the Mortgage Group relating to such Class A
            Certificates that are no longer outstanding will be distributed as
            principal to the remaining Class A Certificates (other than the
            Class I-IO, Class II-IO, Class I-PO and Class II-PO Certificates)
            (pro rata) in accordance with Section 4.04(b)(ii)(A) or
            4.04(b)(ii)(B), as applicable, in reduction of the Outstanding
            Certificate Principal Balances thereof, provided that on such
            Distribution Date either (a) the Aggregate Subordinated Percentage
            for such Distribution Date is less than 200% of the initial
            Aggregate Subordinate Percentage, or (b) the average outstanding
            Stated Principal Balance of the Mortgage Loans in either Mortgage
            Group delinquent 60 days or more over the prior six months, as a
            percentage of the corresponding Group One or Group Two Subordinated
            Amount, is greater than or equal to 50%. For purposes of the
            foregoing, the "Aggregate Subordinated Percentage" for any
            Distribution Date is equal to the aggregate Outstanding Certificate
            Principal Balance of the Class B Certificates immediately prior to
            such Distribution Date divided by the aggregate Stated Principal
            Balance of all of the Mortgage Loans for the immediately preceding
            Distribution Date.

                  (B) If on any Distribution Date on which the aggregate
            Outstanding Certificate Principal Balance of the Non-PO Class I-A
            Certificates or the Non-PO Class II-A Certificates would be greater
            than the Group One Non-PO Allocated Amount or the Group Two Non-PO
            Allocated Amount, as the case may be, (the "Undercollateralized
            Group"), after giving effect to distributions to be made on such
            Distribution Date, the portion of the Available Distribution Amount
            in respect of principal on the Mortgage Loans in the other Mortgage
            Group (the "Overcollateralized Group") otherwise allocable to the
            Class B Certificates will be distributed to the Classes of Class A
            Certificates (other than the Class I-IO, Class II-IO Class I-PO and
            Class II-PO Certificates) relating to the Undercollateralized Group
            (in accordance with the priorities set forth in Section
            4.04(b)(ii)), in reduction of the principal balances thereof, until
            the aggregate principal balance of the Certificates (other than the
            Class I-PO and Class II-PO Certificates as applicable) included in
            the Undercollateralized Group is equal to the Group One Non-PO
            Allocated Amount or the Group Two Non-PO Allocated Amount, as the
            case may be. Moreover, the Available Distribution Amount with
            respect to the Overcollateralized Group will be further reduced
            (after distributions of interest to the Class A Certificates
            included in the Overcollateralized Group) in an amount equal to one
            month's interest on the amount by which the Undercollateralized
            Group is undercollateralized at 5.00% per annum (if Mortgage Group
            One is the Undercollateralized Group) or 5.50% per annum (if
            Mortgage Group Two is the Undercollateralized Group), plus any
            shortfall of such amounts from prior Distribution Dates; provided,
            however, that in no event shall the Available Distribution Amount
            with respect to the Overcollateralized Group on any Distribution
            Date be reduced by more

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            than the sum of (i) the overcollateralized amount with respect to
            the Overcollateralized Group and (ii) interest thereon at the
            applicable Remittance Rate. Such amounts will be distributed to the
            applicable Classes of Certificates in the priority of interest
            payable on such Distribution Date.

      (c) Amounts payable on any Distribution Date to the Class B
Certificateholders pursuant to Section 4.04(a)(iii) shall be distributed in the
following priority:

            (1) first, to the Class B-1 Certificateholders, up to an amount
      equal to (A) the Class B-1 Interest Accrual Amount plus (B) the Class B-1
      Shortfall from the preceding Distribution Date plus (C) the pro rata
      portion, if any, of the Subordinated Optimal Principal Amount allocable to
      the Class B-1 Certificates in accordance with Section 4.04(d) plus (D) any
      Carry-over Subordinated Principal Amounts with respect to the Class B-1
      Certificates;

            (2) second, to the Class B-2 Certificateholders, up to an amount
      equal to (A) the Class B-2 Interest Accrual Amount plus (B) the Class B-2
      Shortfall from the preceding Distribution Date plus (C) the pro rata
      portion, if any, of the Subordinated Optimal Principal Amount allocable to
      the Class B-2 Certificates in accordance with Section 4.04(d) plus (D) any
      Carry-over Subordinated Principal Amounts with respect to the Class B-2
      Certificates plus (E) any portion of the Subordinated Optimal Principal
      Amount allocated to the Class B-1 Certificates in excess of the
      Outstanding Certificate Principal Balance of such Class;

            (3) third, to the Class B-3 Certificateholders, up to an amount
      equal to (A) the Class B-3 Interest Accrual Amount plus (B) the Class B-3
      Shortfall from the preceding Distribution Date plus (C) the pro rata
      portion, if any, of the Subordinated Optimal Principal Amount allocable to
      the Class B-3 Certificates in accordance with Section 4.04(d) plus (D) any
      Carry-over Subordinated Principal Amounts with respect to the Class B-3
      Certificates plus (E) any portion of the Subordinated Optimal Principal
      Amount allocated to the Class B-2 Certificates in excess of the
      Outstanding Certificate Principal Balance of such Class;

            (4) fourth, to the Class B-4 Certificateholders, up to an amount
      equal to (A) the Class B-4 Interest Accrual Amount plus (B) the Class B-4
      Shortfall from the preceding Distribution Date plus (C) the pro rata
      portion, if any, of the Subordinated Optimal Principal Amount allocable to
      the Class B-4 Certificates in accordance with Section 4.04(d) plus (D) any
      Carry-over Subordinated Principal Amounts with respect to the Class B-4
      Certificates plus (E) any portion of the Subordinated Optimal Principal
      Amount allocated to the Class B-3 Certificates in excess of the
      Outstanding Certificate Principal Balance of such Class;

            (5) fifth, to the Class B-5 Certificateholders, up to an amount
      equal to (A) the Class B-5 Interest Accrual Amount plus (B) the Class B-5
      Shortfall from the preceding Distribution Date plus (C) the pro rata
      portion, if any, of the Subordinated Optimal Principal Amount allocable to
      the Class B-5 Certificates in accordance with Section 4.04(d) plus (D) any
      Carry-over Subordinated Principal Amounts with respect to the Class B-5
      Certificates plus (E) any portion of the Subordinated Optimal Principal
      Amount allocated to the Class B-4 Certificates in excess of the
      Outstanding Certificate Principal Balance of such Class.

            (6) sixth, to the Class B-6 Certificateholders, up to an amount
      equal to (A) the Class B-6 Interest Accrual Amount plus (B) the Class B-6
      Shortfall from the preceding Distribution Date plus (C) the pro rata
      portion, if any, of the Subordinated Optimal Principal Amount allocable to
      the Class B-6 Certificates in accordance with Section 4.04(d) plus (D) any
      Carry-over Subordinated Principal Amounts with respect to the Class B-6
      Certificates plus (E)

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      any portion of the Subordinated Optimal Principal Amount allocated to the
      Class B-5 Certificates in excess of the Outstanding Certificate Principal
      Balance of such Class.

      (d) On each Distribution Date, the Subordinated Optimal Principal Amount
shall be allocated among the Classes of Class B Certificates entitled, pursuant
to the next succeeding sentence, to an allocation of principal on such
Distribution Date, pro rata based upon the Outstanding Certificate Principal
Balances of all such Classes so entitled. With respect to the Class B
Certificates, on each Distribution Date, principal shall be distributable to (1)
any Class of Class B Certificates which has current Credit Support (before
giving effect to any distribution of principal and any Realized Losses allocable
on such Distribution Date) greater than or equal to the Original Credit Support
for such Class; (2) the Class having the lowest numerical class designation of
any outstanding Class of Class B Certificates which does not meet the criteria
in (1) above; and (3) the Class B-6 Certificates if all other outstanding
Classes of Class B Certificates meet the criteria in (1) above or if no other
Class of Class B Certificates is outstanding; provided, however, that no Class
of Class B Certificates shall receive any distributions of principal if any
Class of Class B Certificates having a lower numerical class designation than
such Class fails to meet the criteria in (1) above.

      (e) Based upon the information received from the Servicer, the Trustee
shall make all calculations necessary to make the distributions described in
this Section 4.04. All distributions made to Certificateholders of any Class on
each Distribution Date will be made to the Certificateholders of the respective
Class of record on the next preceding Record Date, except that the final
distribution with respect to each Class shall be made as provided in the forms
of Certificates. All distributions made to Certificateholders shall be based on
the Percentage Interest of the Class represented by their respective
Certificates, and shall be made either by transfer in immediately available
funds to the account of such Holder at a bank or other financial or depository
institution having appropriate facilities therefor, if such Holder has so
notified the Trustee, in writing at least five (5) Business Days prior to the
first Distribution Date for which distribution by wire transfer is to be made
and such Holder's Certificates of such Class in the aggregate evidence an
original denomination of not less than $5,000,000 or such Holder holds a 100%
Percentage Interest of such Class or, if not, by check mailed to the address of
the Person entitled thereto as it appears on the Certificate Register, except
that the final distribution in retirement of the Certificates will be made only
upon presentation and surrender of the Certificates at the office specified in
the final Distribution Notice.

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

      SECTION 4.05 Monthly Statements to Certificateholders.

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

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

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<PAGE>
            (ii) the amount of such distribution to Holders of each Class
      allocable to interest, together with any Interest Shortfalls allocated to
      each Class;

            (iii) the Outstanding Certificate Principal Balance of each Class
      after giving effect to all distributions allocable to principal on such
      Distribution Date;

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

            (v) the related amount of the Servicing Fee paid to or retained by
      the Servicer and the amount of investment income earned on funds on
      deposit in the Certificate Account for the related Due Period;

            (vi) the Certificate Rate for each Class of Certificates for such
      Distribution Date;

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

            (viii) the amount of Realized Losses with respect to such
      Distribution Date, in the aggregate and with respect to the Group One
      Mortgage Loans and Group Two Mortgage Loans;

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

            (x) with respect to any Mortgage Loan that became an REO Property
      during the preceding calendar month, the loan number and Stated Principal
      Balance of such Mortgage Loan as of the close of business on the last day
      of the calendar month preceding such Distribution Date and the date of
      acquisition thereof, in the aggregate and with respect to the Group One
      Mortgage Loans and Group Two Mortgage Loans;

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

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

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

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

            (xv) the amount and purpose of any withdrawal from the Collection
      Account pursuant to Section 3.08(a)(iv).

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      (b) Reserved.

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

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

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

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

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

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

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

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

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

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

      SECTION 4.06 Allocation of Realized Losses.

      (a) Prior to each Determination Date, the Servicer shall determine (i) the
total amount of Realized Losses, if any, incurred during the related Prepayment
Period; and (ii) the respective portions of such Realized Losses allocable to
interest and to principal.

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<PAGE>
      (b) The principal portion of any Realized Losses shall be allocated as
follows: first, to the Class B-6 Certificates until the Outstanding Certificate
Principal Balance of the Class B-6 Certificates has been reduced to zero;
second, to the Class B-5 Certificates until the Outstanding Certificate
Principal Balance of the Class B-5 Certificates has been reduced to zero; third,
to Class B-4 Certificates until the Outstanding Certificate Principal Balance of
the Class B-4 Certificates has been reduced to zero; fourth, to the Class B-3
Certificates until the Outstanding Certificate Principal Balance of the Class
B-3 Certificates has been reduced to zero; fifth, to the Class B-2 Certificates
until the Outstanding Certificate Principal Balance of the Class B-2
Certificates has been reduced to zero; sixth, to the Class B-1 Certificates
until the Outstanding Certificate Principal Balance of the Class B-1
Certificates has been reduced to zero; and seventh, (X) if the Realized Loss has
occurred with respect to a Group One Mortgage Loan, first to the Non-PO Class
I-A Certificates (other than the Class I-IO Certificates) on a pro rata basis
until the Outstanding Certificate Principal Balance of such Certificates has
been reduced to zero, and second to the Non-PO Class II-A Certificates (other
than the Class II-IO Certificates) on a pro rata basis until the Outstanding
Certificate Principal Balance of such Certificates has been reduced to zero or
(Y) if the Realized Loss has occurred with respect to a Group Two Mortgage Loan,
first to the Non-PO Class II-A Certificates (other than the Class II-IO
Certificates) on a pro rata basis until the Outstanding Certificate Principal
Balance of such Certificates has been reduced to zero, and second to the Non-PO
Class I-A Certificates (other than the Class I-IO Certificates) on a pro rata
basis until the Outstanding Certificate Principal Balance of such Certificates
has been reduced to zero; provided, however, that if a Realized Loss occurs with
respect to a Discount Mortgage Loan (a) the amount of such Realized Loss equal
to the product of (i) the amount of such Realized Loss and (ii) the PO
Percentage with respect to such Discount Mortgage Loan will be allocated to
Class I-PO Certificates (if the Realized Loss occurred with respect to a Group
One Mortgage Loan), or to Class II-PO Certificates (if the Realized Loss
occurred with respect to the Group Two Mortgage Loan) and (b) the remainder of
such Realized Loss will be allocated as described above. Notwithstanding the
preceding sentence, (i) the first $0.30 of the PO Percentage of the principal
portion of a Realized Loss on Discount Mortgage Loans in Mortgage Group One
shall not be allocated to any Certificate and (ii) the first $0.84 of the PO
Percentage of the principal portion of a Realized Loss on Discount Mortgage
Loans in Mortgage Group Two shall not be allocated to any Certificate.

      (c) As used herein, an allocation of a Realized Loss on a "pro rata basis"
among two or more specified Classes of Certificates means an allocation on a pro
rata basis, among the various Classes so specified, to each such Class of
Certificates on the basis of their Outstanding Certificate Principal Balances
prior to giving effect to distributions to be made on such Distribution Date.
All Realized Losses and all other losses allocated to a Class of Certificates
hereunder will be allocated among the Certificates of such Class in proportion
to the Percentage Interests evidenced thereby.

      (d) In the event that a Subsequent Recovery is made with respect to any
Realized Loss, the amount of such Subsequent Recovery shall be treated as a
Principal Prepayment and deposited into the Collection Account. The most senior
Class of Certificates which has been allocated unreimbursed Realized Losses will
be written up to the extent of such Subsequent Recovery up to the amount
previously written down and not subsequently written up.

      SECTION 4.07 Allocation of Certain Interest Shortfalls.

      (a) On any Distribution Date, the interest portion of any Realized Losses
("Realized Loss Interest Shortfall") shall be allocated to the Class of Class B
Certificates then outstanding having the highest numerical class designation or,
if no Class of Class B Certificates is then outstanding, to the Non-PO Class A
Certificates pro rata among the outstanding Classes of Class A Certificates
(other than the Class I-PO or Class II-PO Certificates) based on the amount of
interest to which each such Class would otherwise be entitled on such
Distribution Date had there been no such Realized Loss Interest Shortfall.

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      (b) Any interest shortfall resulting from the Relief Act or any similar
state legislation, as amended shall be allocated pro rata among the outstanding
Classes of Certificates based upon the amount of interest to which each such
Class would otherwise be paid on such Distribution Date.

      SECTION 4.08 Subordination. The rights of the Class B Certificateholders
to receive distributions in respect of the Class B Certificates on any
Distribution Date shall be subordinated to the rights of the Class A
Certificateholders to receive distributions in respect of the Class A
Certificates. Each Class of Class B Certificates is subordinated to the Class A
Certificates and each Class of Class B Certificates having a lower numerical
class designation than such Class of Class B Certificates. The rights of the
Servicer, as servicer, to receive funds from the Collection Account, on account
of the Servicing Fee (except as provided in Section 4.02) in respect of each
Mortgage Loan, assumption fees, late payment charges and other mortgagor
charges, reimbursement of Advances and expenses or otherwise, shall not be
subordinated to the rights of the Class A or Class B Certificateholders. Amounts
held by the Servicer or the Trustee for future distribution to the Class B
Certificateholders, including, without limitation, in the Collection Account,
shall not be distributed in respect of the Class B Certificates except in
accordance with the terms of this Agreement. The Class B Certificateholders are
deemed to have granted a security interest in such amounts to the Class A
Certificateholders to secure the rights of the Class A Certificateholders to
receive distributions in priority over the Class B Certificateholders.

                                    ARTICLE V
                                THE CERTIFICATES

      SECTION 5.01 The Certificates.

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

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<PAGE>
<TABLE>
<CAPTION>
                              Integral Multiples    Original Certificate
                Minimum               in             Principal Balance
  Class       Denomination     Excess of Minimum     or Notional Amount
  -----       ------------     -----------------     ------------------
<S>           <C>             <C>                   <C>
I-A-1          $25,000.00             $1.00              $30,539,000
II-A-1         $25,000.00             $1.00              $15,106,000
II-A-2         $25,000.00             $1.00             $129,255,000
II-A-3         $25,000.00             $1.00               $5,000,000
I-IO           $25,000.00             $1.00              $21,440,532
II-IO          $25,000.00             $1.00             $135,467,953
I-PO           $25,000.00             $1.00                 $781,400
II-PO          $25,000.00             $1.00               $1,076,398
B-1            $25,000.00             $1.00               $3,530,000
B-2            $25,000.00             $1.00               $1,812,000
B-3            $25,000.00             $1.00               $1,144,000
B-4            $25,000.00             $1.00               $1,621,000
B-5            $25,000.00             $1.00                 $572,000
B-6            $25,000.00             $1.00                 $385,556
A-R               $100.00               N/A                     $100
</TABLE>

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

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

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

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

                                       77
<PAGE>
written instrument of Transfer in form satisfactory to a Trustee duly executed
by the holder thereof or his attorney duly authorized in writing.

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

      (b) No transfer of an ERISA Restricted Certificate that is a Class A-R
Certificate may be made to any Person that is 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, or non-U.S. law substantively similar to
the foregoing provisions of ERISA or the Code ("Similar Law"), or to any Person
directly or indirectly acting on behalf of or using any assets of any such plan
(collectively, "Plan"). Each Person to whom a Class A-R Certificate is to be
transferred shall be required or deemed to represent that it is not a Plan.

            No transfer of an ERISA Restricted Certificate, other than a Class
A-R Certificate, may be made to any Person unless that Person either (A)(i) is
not a Plan or a Person directly or indirectly acting on behalf of or using any
assets of a Plan, or (ii) if the Certificate has been the subject of an
ERISA-Qualifying Underwriting, is an insurance company that is acquiring the
Certificate with funds 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 (B) solely in the event the
Certificate is a Definitive Certificate, simultaneously delivers an Opinion of
Counsel satisfactory to the Trustee, and upon which the Trustee shall be
entitled to rely, to the effect that the acquisition and holding of the
Certificate will not constitute or result in a nonexempt prohibited transaction
under ERISA or the Code, or a violation of Similar Law, and will not subject the
Trustee to any obligation in addition to those expressly undertaken in the
Pooling and Servicing Agreement, which Opinion of Counsel shall not be an
expense of the Trustee. Each such transferee shall be required or deemed to
represent and warrant the foregoing.

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

                                       78
<PAGE>
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 Trustee 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 Trustee shall not register the Transfer of any Class
      A-R Certificate unless, in addition to the certificates required to be
      delivered to the Trustee under subparagraph (b) above, the Trustee shall
      have been furnished with an affidavit (a "Transfer Affidavit") of the
      initial owner or the proposed transferee in the form attached hereto as
      Exhibit E-1 and an affidavit of the proposed transferor in the form
      attached hereto as Exhibit E-2. In the absence of a contrary instruction
      from the transferor of a Class A-R Certificate, declaration (11) in
      Appendix A of the Transfer Affidavit may be left blank. If the transferor
      requests by written notice to the Trustee prior to the date of the
      proposed transfer that one of the two other forms of declaration (11) in
      Appendix A of the Transfer Affidavit be used, then the requirements of
      this Section 5.02(c)(ii) shall not have been satisfied unless the Transfer
      Affidavit includes such other form of declaration.

            (iii) Each Person holding or acquiring any Ownership Interest in a
      Class A-R Certificate shall agree (A) to obtain a Transfer Affidavit from
      any other Person to whom such Person attempts to Transfer its Ownership
      Interest in a Class A-R Certificate, (B) to obtain a Transfer Affidavit
      from any Person for whom such Person is acting as nominee, trustee or
      agent in connection with any Transfer of a Class 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 Trustee with a duly
      completed and effective Internal Revenue Service Form W-8ECI (or any
      successor thereto) and the Trustee consents to such transfer, sale or
      other disposition in writing.

            (iv) Any attempted or purported Transfer of any Ownership Interest
      in a Class 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 Trustee 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 Transfer Affidavit. The Trustee
      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 Trustee
      shall be paid and delivered by the Trustee to the last preceding Permitted
      Transferee of such Certificate.

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<PAGE>
            (v) At the option of the Holder of the Class A-R Certificate, the
      Class LT-R Interest, the Class MT-R Interest and the Class UT-R Interest
      may be severed and represented by separate certificates; provided,
      however, that such separate certification may not occur until the Trustee
      receives an Opinion of Counsel addressed to the Trustee to the effect that
      separate certification in the form and manner proposed would not result in
      the imposition of federal tax upon the Trust Fund or any of the REMICs
      provided for herein or cause any of the REMICs provided for herein to fail
      to qualify as a REMIC; and provided further, that the provisions of
      Sections 5.02(b) and (c) will apply to each such separate certificate as
      if the separate certificate were a Class A-R Certificate. If, as evidenced
      by an Opinion of Counsel, it is necessary to preserve the REMIC status of
      any of the REMICs provided for herein, the Class LT-R Interest, the Class
      MT-R Interest and the Class UT-R 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 Trustee of an Opinion of Counsel addressed to the Trustee,
which Opinion of Counsel shall not be an expense of the Trustee or the
Depositor, to the effect that the elimination of such restrictions will not
cause any of the REMICs provided for herein to fail to qualify as a REMIC at any
time that the Certificates are outstanding or result in the imposition of any
tax on the Trust Fund, any REMIC provided for herein, a Certificateholder or
another Person. Each Person holding or acquiring any Ownership Interest in a
Class A-R Certificate hereby consents to any amendment of this Agreement that,
based on an Opinion of Counsel addressed to and furnished to the Trustee, 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 Trustee
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
Trust Fund, the Depositor or the Trustee.

      SECTION 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.

      If (a) any mutilated Certificate is surrendered to the Trustee or the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Certificate and of the ownership thereof and (b) there is delivered to
the Trustee such security or indemnity as may be required by them to save each
of them harmless, then, in the absence of notice to the Trustee that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute, authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
Class, tenor and Percentage Interest. In connection with the issuance of any new
Certificate under this Section 5.03, the Trustee may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other expenses (including the fees and expenses of
the Trustee) connected therewith. Any replacement Certificate issued pursuant to
this Section 5.03 shall constitute complete and indefeasible evidence of
ownership in the Trust Fund, as if originally issued, whether or not the lost,
stolen or destroyed Certificate shall be found at any time. All Certificates
surrendered to the Trustee under the terms of this Section 5.03 shall be
canceled and destroyed by the Trustee in accordance with its standard procedures
without liability on its part.

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<PAGE>

      SECTION 5.04 Persons Deemed Owners.

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

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

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

      SECTION 5.06 Book-Entry Certificates.

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

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

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

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

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

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

                                       81
<PAGE>
      (f) the Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants; and

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

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

      SECTION 5.07 Notices to Depository.

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

      SECTION 5.08 Definitive Certificates.

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

      SECTION 5.09 Maintenance of Office or Agency.

      The Trustee will maintain or cause to be maintained at its expense an
office or offices or agency or agencies where Certificates may be surrendered
for registration of transfer or exchange. The Trustee initially designates its
office at 2001 Bryan Street, 8th Floor, Dallas, Texas 75201, Attention:
Institutional Trust Services/Transfer Department as offices for such purposes.
The Trustee will give

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<PAGE>
prompt written notice to the Certificateholders of any change in such location
of any such office or agency.

                                   ARTICLE VI
                         THE DEPOSITOR AND THE SERVICER

      SECTION 6.01 Respective Liabilities of the Depositor and the Servicer.

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

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

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

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

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

      None of the Depositor, the Servicer nor any of the directors, officers,
employees or agents of the Depositor or the Servicer shall be under any
liability to the Trust Fund or the Certificateholders for any action taken or
for refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Depositor, the Servicer or any such Person against any
breach of representations or warranties made by it herein or protect the
Depositor, the Servicer or any such Person from any liability that would
otherwise be imposed by reasons of willful misfeasance, bad faith or negligence
in the performance of duties or by reason of reckless disregard of obligations
and duties hereunder. The Depositor, the Servicer and any director, officer,
employee or agent of the Depositor or the Servicer may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder. The Depositor, the Servicer and any
director, officer, employee or agent of the Depositor or the Servicer shall be
indemnified by the Trust Fund and held harmless against any loss, liability or
expense, incurred in connection with the performance of their duties under this
agreement or incurred in connection with any audit, controversy or judicial
proceeding relating to a governmental taxing authority or any legal action
relating to this Agreement or the Certificates, other than (i) any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder or (ii) which does not constitute
an "unanticipated expense" within the meaning of Treasury Regulation Section
1.860G-1(b)(3)(ii). None of the Depositor nor the Servicer shall be under any
obligation to appear in, prosecute or defend any legal action that is not
incidental to its respective duties hereunder and that in its opinion may
involve it in any

                                       83
<PAGE>
expense or liability; provided, however, that any of the Depositor or the
Servicer may, in its discretion undertake any such action that it may deem
necessary or desirable in respect of this Agreement and the rights and duties of
the parties hereto and interests of the Servicer and the Certificateholders
hereunder. In such event, the legal expenses and costs of such action and any
liability resulting therefrom shall be, expenses, costs and liabilities of the
Trust Fund, and the Depositor and the Servicer shall be entitled to be
reimbursed therefor out of the Collection Account as provided by Section 3.08
hereof.

      SECTION 6.04 Limitation on Resignation of Servicer.

      The Servicer shall not resign from the obligations and duties hereby
imposed on it except upon determination that its duties hereunder are no longer
permissible under applicable law. Any such determination permitting the
resignation of the Servicer shall be evidenced by an Opinion of Counsel to such
effect delivered to the Trustee. No such resignation shall become effective
until the Trustee or a successor servicer reasonably acceptable to the Trustee
is appointed and has assumed the Servicer's responsibilities, duties,
liabilities and obligations hereunder. Any such resignation shall not relieve
the Servicer of any of the obligations specified in Sections 7.01, 7.02 and 7.03
as obligations that survive the resignation or termination of the Servicer.

      The Trustee and the Depositor hereby specifically (i) consent to the
pledge and assignment by the Servicer of all the Servicer's right, title and
interest in, to and under this Agreement to the Servicing Rights Pledgee, for
the benefit of certain lenders, and (ii) provided that no Event of Default
exists, agree that upon delivery to the Trustee by the Servicing Rights Pledgee
of a letter signed by the Servicer whereby the Servicer shall resign as Servicer
under this Agreement, the Trustee shall appoint the Servicing Rights Pledgee or
its designee as successor servicer but only if such successor servicer meets the
requirements of a successor servicer under this Agreement and agrees to be
subject to the terms of this Agreement. If, pursuant to any provision hereof,
the duties of the Servicer are transferred to a successor servicer, the entire
amount of the Servicing Fee and other compensation payable to the Servicer
pursuant hereto shall thereafter be payable to such successor servicer.

      SECTION 6.05 Errors and Omissions Insurance; Fidelity Bonds.

      The Servicer shall, for so long as it acts as servicer under this
Agreement, obtain and maintain in force (a) a policy or policies of insurance
covering errors and omissions in the performance of its obligations as servicer
hereunder, and (b) a fidelity bond in respect of its officers, employees and
agents. Each such policy and bond shall, together, meet the requirements of
Fannie Mae or Freddie Mac, unless the Servicer has obtained a waiver of such
requirements from the Seller. The Servicer shall provide the Trustee, upon
request with reasonable notice, with copies of such policies and fidelity bond
or a certification from the insurance provider evidencing such policies and
fidelity bond. The Servicer may be deemed to have complied with this provision
if an Affiliate of the Servicer has such errors and omissions and fidelity bond
coverage and, by the terms of such insurance policy or fidelity bond, the
coverage afforded thereunder extends to the Servicer. In the event that any such
policy or bond ceases to be in effect, the Servicer shall use its reasonable
best efforts to obtain a comparable replacement policy or bond from an insurer
or issuer meeting the requirements set forth above as of the date of such
replacement. Any such policy or fidelity bond shall by its terms not be
cancelable without thirty days' prior written notice to the Trustee.

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<PAGE>
                                  ARTICLE VII
                        DEFAULT; TERMINATION OF SERVICER

      SECTION 7.01 Events of Default.

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

            (i) any failure by the Servicer to make any Advance to deposit in
      the Collection Account or the Certificate Account or remit to the Trustee
      any payment (excluding a payment required to be made under Section 4.01
      hereof) required to be made under the terms of this Agreement, which
      failure shall continue unremedied for three Business Days and, with
      respect to a payment required to be made under Section 4.01 hereof, for
      one Business Day, after the date on which written notice of such failure
      shall have been given to the Servicer by the Trustee or the Depositor, or
      to the Trustee and the Servicer by the Holders of Certificates evidencing
      not less than 50% of the Voting Rights evidenced by the Certificates; or

            (ii) any failure by the Servicer to observe or perform in any
      material respect any other of the covenants or agreements on the part of
      the Servicer contained in this Agreement or any representation or warranty
      shall prove to be untrue, which failure or breach shall continue
      unremedied for a period of 60 days after the date on which written notice
      of such failure shall have been given to the Servicer by the Trustee or
      the Depositor, or to the Trustee by the Holders of Certificates evidencing
      not less than 50% of the Voting Rights evidenced by the Certificates; or

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

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

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

      If an Event of Default shall occur with respect to the Servicer, then, and
in each and every such case, so long as such Event of Default shall not have
been remedied within the applicable grace period, or solely with respect to
clause (i) above by 5:00 p.m. on the Servicer Remittance Date, the Trustee may,
or at the direction of the Holders of Certificates evidencing not less than 50%
of the Voting Rights evidenced by the Certificates shall, by notice in writing
to the Servicer (with a copy to each Rating Agency), terminate all of the rights
and obligations of the Servicer under this Agreement and in and to the Mortgage
Loans and the proceeds thereof, other than its rights as a Certificateholder
hereunder. On or after the receipt by the Servicer of such written notice, all
authority and power of the Servicer hereunder, subject to and in accordance with
Section 6.04 hereof, whether with respect to the Mortgage Loans or otherwise,
shall pass to and be vested in the Trustee as successor servicer. To the extent
the Event of Default resulted from the failure of the Servicer to make a
required Advance, the Trustee, in its capacity as successor servicer, shall
thereupon make any Advance described in Section 4.01 hereof subject to

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Section 3.04 hereof. The Trustee is hereby authorized and empowered to execute
and deliver, on behalf of the Servicer, as attorney-in-fact or otherwise, any
and all documents and other instruments, and to do or accomplish all other acts
or things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment of
the Mortgage Loans and related documents, or otherwise. Unless expressly
provided in such written notice, no such termination shall affect any obligation
of the Servicer to pay amounts owed pursuant to Article VIII. The Servicer
agrees to cooperate with the Trustee in effecting the termination of the
Servicer's responsibilities and rights hereunder, including, without limitation,
the transfer to the Trustee of all cash amounts which shall at the time be
credited to the Collection Account, or thereafter be received with respect to
the Mortgage Loans. The Servicer and the Trustee shall promptly notify the
Rating Agencies of the occurrence of an Event of Default or an event that, with
notice, passage of time, other action or any combination of the foregoing would
be an Event of Default, such notice to be provided in any event within two
Business Days of such occurrence.

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

SECTION 7.02      Servicer Trigger Event

         A "Servicer Trigger Event," shall be deemed to have occurred on any
Distribution Date where the aggregate amount of cumulative Realized Losses
incurred since the Cut-off Date through the last day of the related Interest
Accrual Period divided by the Pool Balance as of the Cut-off Date exceeds the
applicable percentages set forth below with respect to such Distribution Date:

<TABLE>
<CAPTION>
DISTRIBUTION DATE OCCURRING IN                      PERCENTAGE
------------------------------                      ----------
<S>                                                 <C>
November 2007 through October 2008                    4.25%
November 2008 through October 2009                    5.60%
November 2009 through October 2010                    7.50%
November 2010 and thereafter                          8.00%
</TABLE>

         Upon discovery by the Trustee that a Servicer Trigger Event has
occurred, the Trustee shall promptly (and in any event within 5 Business Days of
discovery) give written notice thereof to the Certificateholders. If a Servicer
Trigger Event shall occur, then the Holders of Certificates evidencing not less
than 51% of the Voting Rights evidenced by the Certificates may, by notice in
writing to the Servicer (with a copy to each Rating Agency), terminate all of
the rights and obligations of the Servicer under this Agreement and in and to
the Mortgage Loans and the proceeds thereof, other than its rights as a
Certificateholder hereunder. On or after the receipt by the Servicer of such
written notice, all authority and power of the Servicer hereunder, subject to
and in accordance with Section 6.04 hereof, whether with respect to the Mortgage
Loans or otherwise, shall pass to and be vested in the Trustee as successor
servicer. The Trustee is hereby authorized and empowered as successor servicer
to execute and deliver, on behalf of the Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or accomplish
all other acts or things necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and endorsement or
assignment of the Mortgage

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<PAGE>
Loans and related documents, or otherwise. Unless expressly provided in such
written notice, no such termination shall affect any obligation of the Servicer
to pay amounts owed pursuant to Article VIII. The Servicer agrees to cooperate
with the Trustee as successor servicer in effecting the termination of the
Servicer's responsibilities and rights hereunder, including, without limitation,
the transfer to the Trustee as successor servicer of all cash amounts which
shall at the time be credited to the Collection Account, or thereafter be
received with respect to the Mortgage Loans. The Servicer and the Trustee shall
promptly notify the Rating Agencies of the occurrence of a Servicer Trigger
Event, such notice to be provided in any event within two Business Days of such
occurrence.

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

      SECTION 7.03 Trustee to Act; Appointment of Successor.

      (a) On and after the time the Servicer receives a notice of termination
pursuant to Section 7.01 or 7.02 hereof, the Trustee shall, to the extent
provided in Section 3.04, be the successor to the Servicer in its capacity as
servicer under this Agreement and the transactions set forth or provided for
herein and shall be subject to all the responsibilities, duties and liabilities
relating thereto placed on the Servicer by the terms and provisions hereof and
applicable law including the obligation to make advances pursuant to Section
4.01. As compensation therefor, subject to the last paragraph of Section 7.01 or
7.02, as applicable, the Trustee shall be entitled to all compensation and
reimbursement for costs and expenses that the Servicer would have been entitled
to hereunder if the Servicer had continued to act hereunder. Notwithstanding the
foregoing, if the Trustee has become the successor to the Servicer in accordance
with Section 7.01 or 7.02 hereof, the Trustee may, if it shall be unwilling to
so act, or shall, if it is prohibited by applicable law from making Advances
pursuant to Section 4.01 hereof or if it is otherwise unable to so act, appoint,
or petition a court of competent jurisdiction to appoint, any established
mortgage loan servicing institution the appointment of which successor does not
adversely affect the then current rating of the Certificates by each Rating
Agency as the successor to the Servicer hereunder in the assumption of all or
any part of the responsibilities, duties or liabilities of the Servicer
hereunder.

      (b) Any successor servicer shall be an institution that is a Fannie Mae
and Freddie Mac approved seller/servicer in good standing, that has a net worth
of at least $15,000,000, and that is willing to service the Mortgage Loans and
executes and delivers to the Depositor and the Trustee an agreement accepting
such delegation and assignment, that contains an assumption by such Person of
the rights, powers, duties, responsibilities, obligations and liabilities of the
Servicer (other than liabilities of the Servicer under Section 6.03 hereof
incurred prior to the assumption by such successor servicer of the rights,
powers, duties, responsibilities, obligations and liabilities of the Servicer),
with like effect as if originally named as a party to this Agreement; and
provided further that each Rating Agency acknowledges that its rating of the
Certificates in effect immediately prior to such assignment and delegation will
not be qualified or reduced as a result of such assignment and delegation. No
appointment of a successor to the Servicer hereunder shall be effective until
written notice of such proposed appointment shall have been provided by the
Trustee to each Certificateholder.

      (c) In the event the Trustee becomes servicer hereunder pursuant to clause
(a) above, the Trustee shall not resign as servicer until a successor servicer
has been appointed and has accepted such

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<PAGE>
appointment. Pending appointment of a successor to the Servicer hereunder, the
Trustee, unless the Trustee is prohibited by law from so acting, shall, subject
to Section 3.04 hereof, act in such capacity as hereinabove provided. In
connection with such appointment and assumption, the Trustee may make such
arrangements for the compensation of such successor out of payments on Mortgage
Loans as it and such successor shall agree; provided, however, that no such
compensation shall be in excess of that permitted the Servicer hereunder. The
Trustee and such successor shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession. Neither the
Trustee nor any other successor servicer shall be deemed to be in default
hereunder by reason of any failure to make, or any delay in making, any
distribution hereunder or any portion thereof or any failure to perform, or any
delay in performing, any duties or responsibilities hereunder, in either case
caused by the failure of the Servicer to deliver or provide, or any delay in
delivering or providing, any cash, information, documents or records to it.

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

      SECTION 7.04 Termination for Distressed Loans.

      (a) Subject to the requirements set forth in this Section 7.04, the Seller
may terminate this Agreement with respect to the servicing of those Mortgage
Loans that are determined to be Distressed Mortgage Loans and in such event
servicing of such Mortgage Loans shall be transferred to a Special Servicer. The
appointment of a Special Servicer by the Seller and the execution of a special
servicing agreement between the Seller and the Special Servicer shall be subject
to the receipt of confirmation from the Rating Agencies that the transfer of
servicing to the Special Servicer shall not result in a reduction of any rating
previously given by such Rating Agency to any Certificate. Any monthly fee paid
to the Special Servicer in connection with any Mortgage Loan serviced by such
Special Servicer shall not exceed the Servicing Fee Rate. All unpaid Servicing
Fees and any unreimbursed Advances and Servicing Advances owing to the Servicer
relating to such Distressed Mortgage Loans shall be reimbursed and paid to the
Servicer by the successor Special Servicer upon such transfer to the Special
Servicer.

      SECTION 7.05 Termination Without Cause By Servicing Rights Owner.

      Notwithstanding anything in this Agreement to the contrary, as long as the
Seller remains the Servicing Rights Owner, the Seller may, at any time upon
sixty (60) days written notice to the Servicer, the Trustee and the Rating
Agencies, terminate the Servicer with respect to some or all of the Mortgage
Loans by transferring servicing to one or more successor servicers subject to
the conditions set forth in Section 7.03(b) hereof.

      SECTION 7.06 Notification to Certificateholders.

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

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

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<PAGE>
                                  ARTICLE VIII
                             CONCERNING THE TRUSTEE

      SECTION 8.01 Duties of Trustee.

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

      The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee that are specifically required to be furnished pursuant to any provision
of this Agreement shall examine them to determine whether they conform on their
face, to the requirements of this Agreement. If any such instrument is found not
to conform, on its face, to the requirements of this Agreement in a material
manner, the Trustee shall notify the person providing such Agreement of such
non-conformance, and if the instrument is not corrected to the Trustee's
satisfaction, the Trustee will provide notice thereof to the Certificateholders
and take such further action as directed by the Certificateholders.

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

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

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

            (iii) the Trustee shall not be liable, individually or as Trustee,
      with respect to any action taken, suffered or omitted to be taken by it in
      good faith in accordance with the direction of

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<PAGE>
      the Holders of each Class of Certificates evidencing not less than 50% of
      the Voting Rights of such Class A-Relating to the time, method and place
      of conducting any proceeding for any remedy available to the Trustee, or
      exercising any trust or power conferred upon the Trustee under this
      Agreement; and

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

      The Trustee shall have no duty hereunder with respect to any complaint,
claim, demand, notice or other document it may receive or which may be alleged
to have been delivered to or served upon it by the parties as a consequence of
the assignment of any Mortgage Loan hereunder; provided, however, that the
Trustee shall promptly remit to the Servicer upon receipt any such complaint,
claim, demand, notice or other document (i) which is delivered to the Trustee,
(ii) of which a Responsible Officer has actual knowledge and (iii) which
contains information sufficient to permit the Trustee to make a determination
that the real property to which such document related to is a Mortgaged
Property.

      SECTION 8.02 Certain Matters Affecting the Trustee.

      (a) Except as otherwise provided in Section 8.01:

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

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

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

            (iv) prior to the occurrence of an Event of Default hereunder and
      after the curing of all Events of Default that may have occurred, the
      Trustee shall not be bound to make any investigation into the facts or
      matters stated in any resolution, certificate, statement, instrument,
      opinion, report, notice, request, consent, order, approval, bond or other
      paper or document, unless requested in writing so to do by the Holders of
      each Class of Certificates evidencing not less than 50% of the Voting
      Rights of such Class;

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

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

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

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

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

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

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

      SECTION 8.03 Trustee Not Liable for Mortgage Loans.

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

      SECTION 8.04 Trustee May Own Certificates.

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

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<PAGE>
      SECTION 8.05 Trustee's Fees.

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

      SECTION 8.06 Indemnification of Trustee; Expenses.

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

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

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

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

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

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

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

      (c) The Trustee's right to indemnification and reimbursement shall be
subject to a cap of $300,000, excluding any Servicing Transfer Costs and any
auction expenses incurred by the Trustee in connection with Section 9.01(a)(i),
in the aggregate in any calendar year.

      (d) The Trustee and its respective directors, officers, employees and
agents shall be indemnified by the Trust Fund for any loss, liability, cost or
expense incurred by it in connection with the provisions of the last paragraph
of Section 2.01 hereof. Notwithstanding the provisions of clause (c)

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<PAGE>
above or anything to the contrary herein, the Trustee's right to indemnification
and reimbursement pursuant to this clause (d) is not subject to any dollar limit
or cap.

      SECTION 8.07 Eligibility Requirements for Trustee.

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

      SECTION 8.08 Resignation and Removal of Trustee.

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

      If at any time (i) the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.07 hereof and shall fail to resign after
written request thereto by the Depositor, (ii) the Trustee shall become
incapable of acting, or shall be adjudged as bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, or
(iii)(A) a tax is imposed with respect to the Trust Fund by any state in which
the Trustee or the Trust Fund is located, (B) the imposition of such tax would
be avoided by the appointment of a different trustee and (C) the Trustee fails
to indemnify the Trust Fund against such tax, then the Depositor may remove the
Trustee and the Depositor shall promptly appoint a successor trustee by written
instrument, in triplicate, one copy of which instrument shall be delivered to
the Trustee, one copy of which shall be delivered to the Servicer and one copy
of which shall be delivered to the successor trustee.

      The Holders evidencing at least 51% of the Voting Rights of all Classes of
Certificates, hereunder may at any time remove the Trustee and the Depositor
shall appoint a successor trustee by written instrument or instruments, in
triplicate, signed by such Holders or their attorneys-in-fact duly authorized
one complete set of which instruments shall be delivered by the successor
Trustee to the Servicer, one

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<PAGE>
complete set to the Trustee so removed and one complete set to the successor so
appointed. Notice of any removal of the Trustee shall be given to each Rating
Agency by the Successor Trustee.

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

      SECTION 8.09 Successor Trustee.

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

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

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

      SECTION 8.10 Merger or Consolidation of Trustee.

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

      SECTION 8.11 Appointment of Co-Trustee or Separate Trustee.

      Notwithstanding any other provisions of this Agreement, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust Fund or property securing any Mortgage Note may at the time be
located, the Servicer and the Trustee acting jointly shall have the power and
shall execute and deliver all instruments to appoint one or more Persons
approved by the Trustee to act as co-trustee or co-trustees jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust Fund or any part
thereof, whichever is applicable, and, subject to the other provisions of this
Section 8.11, such powers, duties, obligations, rights and trusts as the
Servicer and the Trustee may consider necessary or desirable. Any such
co-trustee or separate trustee shall be subject to the written approval of the
Servicer. The Trustee shall not be liable for the actions of any co-trustee
appointed at the request of the Trustee provided that such co-trustee has been
appointed with due care. If the Servicer shall not have joined in such
appointment within 15 days after the receipt by it of a request to do so, or in
the case an Event of Default shall have occurred and be

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continuing, the Trustee alone shall have the power to make such appointment. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 8.07 and no notice to
Certificateholders of the appointment of any co-trustee or separate trustee
shall be required under Section 8.09.

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

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

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

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

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

         Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.

      SECTION 8.12 Tax Matters.

      It is intended that each of the REMICs provided for herein shall
constitute, and that the affairs of the Trust Fund shall be conducted so as to
allow each such REMIC to qualify as, a "real estate mortgage investment conduit"
as defined in and in accordance with the REMIC Provisions. In furtherance of
such intention, the Trustee covenants and agrees that it shall act as agent (and
the Trustee is hereby appointed to act as agent) on behalf of each of the REMICs
provided for herein and that in such capacity it shall: (a) prepare and file, or
cause to be prepared and filed, in a timely manner, a U.S. Real Estate Mortgage

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

      In order to enable the Trustee to perform its duties as set forth herein,
the Depositor shall provide, or cause to be provided, to the Trustee within 10
days after the Closing Date all information or data that the Trustee requests in
writing and determines to be relevant for tax purposes to the valuations and
offering prices of the Certificates, including, without limitation, the price,
yield, prepayment assumption and projected cash flows of the Certificates and
the Mortgage Loans. Thereafter, the Depositor shall

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provide to the Trustee promptly upon written request therefor, any such
additional information or data that the Trustee may, from time to time, request
in order to enable the Trustee to perform its duties as set forth herein. The
Depositor hereby agrees to indemnify the Trustee for any losses, liabilities,
damages, claims or expenses of the Trustee arising from any errors or
miscalculations of the Trustee that result from any failure of the Depositor to
provide, or to cause to be provided, accurate information or data to the Trustee
on a timely basis.

      In the event that any tax is imposed on "prohibited transactions" of any
of the REMICs provided for herein as defined in Section 860F(a)(2) of the Code,
on the "net income from foreclosure property" of any of such REMICs as defined
in Section 860G(c) of the Code, on any contribution to the Trust Fund after the
Startup Day pursuant to Section 860G(d) of the Code, or any other tax is
imposed, if not paid as otherwise provided for herein, such tax shall be paid by
(i) the Trustee, if any such other tax arises out of or results from a breach by
the Trustee of any of its obligations under this Agreement or as a result of the
location of the Trustee, (ii) any party hereto (other than the Trustee) to the
extent any such other tax arises out of or results from a breach by such other
party of any of its obligations under this Agreement or as a result of the
location of such other party or (iii) in all other cases, or in the event that
any liable party here fails to honor its obligations under the preceding clauses
(i) or (ii), any such tax will be paid first with amounts otherwise to be
distributed to the Class A-R Certificateholders (pro rata) pursuant to Section
4.04, and second with amounts otherwise to be distributed to all other
Certificateholders in the following order of priority: first, to the Class B-6
Certificates (pro rata), second, to the Class B-5 Certificates (pro rata),
third, to the Class B-4 Certificates (pro rata), fourth to the Class B-3
Certificates (pro rata), fifth, to the Class B-2 Certificates (pro rata), sixth,
to the Class B-1 Certificates (pro rata), and seventh, to the Class A
Certificates (pro rata). Notwithstanding anything to the contrary contained
herein, to the extent that such tax is payable by the Class A-R Certificate, the
Trustee is hereby authorized pursuant to such instruction to retain on any
Distribution Date, from the Holders of the Class A-R Certificate (and, if
necessary, from the Holders of all other Certificates in the priority specified
in the preceding sentence), funds otherwise distributable to such Holders in an
amount sufficient to pay such tax. The Trustee agrees to promptly notify in
writing the party liable for any such tax of the amount thereof and the due date
for the payment thereof.

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

                                   ARTICLE IX

                                   TERMINATION

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

      (a) Subject to Section 9.03, the obligations and responsibilities of the
Depositor, the Servicer and the Trustee created hereby with respect to the Trust
Fund shall terminate upon the earliest of (i) the successful completion of the
auction referred to in Section 9.01(b), (ii) the exercise by the Servicer of the
Clean Up Call on any Distribution Date on or after the Clean Up Call Date and
(iii) the later of (x) the maturity or other liquidation (or any Advance with
respect thereto) of the last Mortgage Loan remaining in the Trust Fund and the
disposition of all REO Property and (y) 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 Final
Scheduled Distribution Date.

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      (b) (i) Any termination pursuant to Section 9.01(a)(i) shall be effected
by the auction by the Trustee of all of the Mortgage Loans and REO Properties
via a solicitation of bids in accordance with the auction procedures set forth
in Exhibit N. The Trustee shall accept the highest such bid, provided that such
bid equals or exceeds the amount described in the definition of "Auction
Termination Price." Any sale pursuant to such auction process must occur no
earlier than the second day of the calendar month that includes the Distribution
Date on which the proceeds of such sale will be distributed to the
Certificateholders.

            (ii) If no sale under Section 9.01(a)(i) occurs, the Servicer (as
      provided in clause (e) below) may, at its option, terminate the Trust Fund
      on any Distribution Date by purchasing all of the Mortgage Loans and REO
      Properties at the price equal to the Clean Up Call Price.

Notwithstanding anything to the contrary herein, the Auction Termination Amount
received by the Trustee or the Clean Up Call Price paid by the Servicer shall be
deposited by the Trustee directly into the Certificate Account promptly upon
receipt of such amount by the Trustee. Any Clean Up Call Price to be paid by the
Servicer shall be paid by the Servicer to the Trustee for deposit into the
Certificate Account.

      (c) If the Trustee receives a bid meeting the conditions specified in
Section 9.01(b)(i) or there is a Clean Up Call pursuant to Section 9.01(b)(ii),
then the Trustee's written acceptance of such bid shall constitute a plan of
complete liquidation within the meaning of Section 860F of the Code, and the
Trustee shall release to the winning bidder of the auction or the purchaser
pursuant to the Clean Up Call, upon the Trustee's receipt of the Auction
Termination Price or the Clean Up Call Price and the distribution by the Trustee
of such amounts in accordance with Section 4.04 hereof, the Mortgage Files
pertaining to the Mortgage Loans being purchased and take such other actions as
the winning bidder or such purchaser may reasonably request to effect the
transfer of the Mortgage Loans to the winning bidder or such purchaser.

      In connection with any such purchase pursuant to the preceding paragraph,
the Servicer shall deposit in the Certificate Account all amounts then on
deposit in the Collection Account (less amounts permitted to be withdrawn by the
Servicer pursuant to Section 3.08), which deposit shall be deemed to have
occurred immediately preceding such purchase.

      Any purchase shall be accomplished by deposit into the Certificate Account
of the amount paid by the winning bidder if an Auction Termination has occurred
or the amount described in the definition of "Clean Up Call Price" and only
following the delivery of an Opinion of Counsel in form and substance acceptable
to the Trustee that such termination is a "Qualified Liquidation" under Section
860F of the Code.

      (d) The right of the Depositor to direct the Trustee to effect an Auction
Termination or of the Servicer to effect a Clean Up Call pursuant to clause
(a)(i) or (a)(ii) above shall be conditioned upon the aggregate Stated Principal
Balance of the Mortgage Loans, at the time of any such repurchase, aggregating
ten percent (10%) or less of the Stated Principal Balance of the Mortgage Loans
as of the Cut-off Date.

      (e) In the event that the Trustee is unable to complete a sale at the
Auction Termination the Servicer may terminate the Trust Fund by purchasing all
the Mortgage Loans, and REO Properties at a price equal to the Clean Up Call
Price on any Distribution Date on or after the Clean Up Call Date, by exercising
a Clean Up Call.

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      SECTION 9.02 Final Distribution on the Certificates.

      If on any Determination Date, (i) the Trustee determines that there are no
Outstanding Mortgage Loans and no other funds or assets in the Trust Fund other
than the funds in the Collection Account, the Trustee shall send a final
distribution notice promptly to each Certificateholder or (ii) the Trustee
determines that a Class of Certificates shall be retired after a final
distribution on such Class, the Trustee shall notify the Certificateholders
within seven (7) Business Days after such Determination Date that the final
distribution in retirement of such Class of Certificates is scheduled to be made
on the immediately following Distribution Date. Any final distribution made
pursuant to the immediately preceding sentence will be made only upon
presentation and surrender of the Certificates at the office of the Trustee
specified in such notice. If the Trustee is able to terminate the Trust Fund
pursuant to Section 9.01(a)(i), or if the Servicer conducts a Clean Up Call and
terminates the Trust Fund pursuant to Section 9.01(a)(ii) or 9.01(e), at least
10 days prior to the date notice is to be mailed to the affected
Certificateholders, the Trustee shall notify the Depositor and the Servicer of
the date such electing party intends to terminate the Trust Fund and of the
applicable repurchase price of the Mortgage Loans and REO Properties.

      Notice of any termination of the Trust Fund, specifying the Distribution
Date on which Certificateholders may surrender their Certificates for payment of
the final distribution and cancellation, shall be given promptly by the Trustee
by letter to Certificateholders mailed not earlier than the 10th day and no
later than the 15th day of the month immediately preceding the month of such
final distribution. Any such notice shall specify (a) the Distribution Date upon
which final distribution on the Certificates will be made upon presentation and
surrender of Certificates at the office therein designated, (b) the location of
the office or agency at which such presentation and surrender must be made, and
(c) that the Record Date otherwise applicable to such Distribution Date is not
applicable, distributions being made only upon presentation and surrender of the
Certificates at the office therein specified. The Trustee will give such notice
to each Rating Agency at the time such notice is given to Certificateholders.

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

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

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

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      SECTION 9.03 Additional Termination Requirements.

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

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

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

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

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

      (c) The Trustee as agent for each REMIC hereby agrees to adopt and sign a
plan of complete liquidation prepared and delivered to it by the Depositor upon
the written request of the Depositor, and the receipt of Opinion of Counsel
referred to in Section 9.03(a)(i) and to take such other action in connection
therewith as may be reasonably requested by the Depositor.

                                   ARTICLE X

                            MISCELLANEOUS PROVISIONS

      SECTION 10.01 Amendment.

      This Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee, 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 therein which
      may be inconsistent with any other provision herein,

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

            (iv) To modify, alter, amend, add to or rescind any of the terms or
      provisions contained in this Agreement, provided, however, that, in the
      case of clauses (iii) and (iv), such amendment will not, as evidenced by
      an Opinion of Counsel addressed to the Trustee to such effect, adversely
      effect in any material respect the interests of any Holder; provided,
      further, however, that such amendment will be deemed to not adversely
      affect in any material respect the interest of any 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 Servicer and the Trustee may at any time
and from time to time amend this Agreement to modify, eliminate or add to any of
its provisions to such extent as shall be necessary or appropriate to maintain
the qualification of any of the REMICs provided for herein as REMICs under the
Code or to avoid or minimize the risk of the imposition of any tax on the Trust
Fund or any of the REMICs provided for herein pursuant to the Code that would be
a claim against the Trust Fund at any time prior to the final redemption of the
Certificates, provided that the Trustee has been provided an Opinion of Counsel
addressed to the Trustee, which opinion shall be an expense of the party
requesting such amendment but in any case shall not be an expense of the
Trustee, to the effect that such action is necessary or appropriate to maintain
such qualification or to avoid or minimize the risk of the imposition of such a
tax.

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

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

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

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

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

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

      SECTION 10.02       Counterparts.

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

      SECTION 10.03       Governing Law.

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

      SECTION 10.04       Intention of Parties.

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

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

                                      102
<PAGE>
statements in connection with any security interest granted or assigned to the
Trustee for the benefit of the Certificateholders.

      SECTION 10.05       Notices.

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

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

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

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

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

            (v) The final payment to Certificateholders; and

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

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

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

            (ii) Each annual statement as to compliance described in Section
      3.17; and

            (iii) Each annual independent public accountants' servicing report
      described in Section 3.18.

      (b) All directions, demands and notices hereunder shall be in writing and
shall be deemed to have been duly given when delivered to (a) in the case of the
Depositor, Merrill Lynch Mortgage Investors, Inc., 250 Vesey Street, 4 World
Financial Center, 10th Floor, New York, New York 10080, Attention: Asset-Backed
Finance; (b) in the case of the Trustee, JPMorgan Chase Bank, 4 New York Plaza,
6th Floor, New York, New York 10004, Attention: Institutional Trust
Services/Structured Finance Services, SURF Series 2004-AA1; (c) in the case of
the Rating Agencies, (i) Standard and Poor's Ratings Services, a division of the
McGraw Hill Companies, Inc., 55 Water Street, New York, New York 10041, (ii)
Fitch, Inc., One State Street Plaza, New York, New York 10004; (d) in the case
of the Servicer, Litton Loan Servicing LP, 4282 Loop Central Drive, Houston,
Texas 77018-2226, Attention: Larry Litton, Sr.; and (e) in the case of any of
the foregoing persons, such other addresses as may hereafter be furnished by any
such persons to the other parties to this Agreement. Notices to
Certificateholders shall be deemed given when mailed, first class postage
prepaid, to their respective addresses appearing in the Certificate Register.

      SECTION 10.06       Severability of Provisions.

      If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and

                                      103
<PAGE>
shall in no way affect the validity or enforceability of the other provisions of
this Agreement or of the Certificates or the rights of the Holders thereof.

      SECTION 10.07       Assignment.

      Notwithstanding anything to the contrary contained herein, except as
provided pursuant to Section 6.02, this Agreement may not be assigned by the
Servicer without the prior written consent of the Trustee and Depositor.

      SECTION 10.08       Limitation on Rights of Certificateholders.

      The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition or winding up of the Trust
Fund, or otherwise affect the rights, obligations and liabilities of the parties
hereto or any of them.

      No Certificateholder shall have any right to vote (except as provided
herein) or in any manner otherwise control the operation and management of the
Trust Fund, or the obligations of the parties hereto, nor shall anything herein
set forth or contained in the terms of the Certificates be construed so as to
constitute the Certificateholders from time to time as partners or members of an
association; nor shall any Certificateholder be under any liability to any third
party by reason of any action taken by the parties to this Agreement pursuant to
any provision hereof.

      No Certificateholder shall have any right by virtue or by availing itself
of any provisions of this Agreement to institute any suit, action or proceeding
in equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of an Event
of Default and of the continuance thereof, as hereinbefore provided, the Holders
of Certificates evidencing not less than 25% of the Voting Rights evidenced by
the Certificates shall also have made written request to the Trustee to
institute such action, suit or proceeding in its own name as Trustee hereunder
and shall have offered to the Trustee such reasonable indemnity as it may
require against the costs, expenses, and liabilities to be incurred therein or
thereby, and the Trustee, for 60 days after its receipt of such notice, request
and offer of indemnity shall have neglected or refused to institute any such
action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder or to enforce any
right under this Agreement, except in the manner herein provided and for the
common benefit of all Certificateholders. For the protection and enforcement of
the provisions of this Section 10.08, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.

      SECTION 10.09       Inspection and Audit Rights.

      The Servicer agrees that, on reasonable prior notice, it will permit any
representative of the Depositor or the Trustee during the Servicer's normal
business hours, to examine all the books of account, records, reports and other
papers of the Servicer relating to the Mortgage Loans, to make copies and
extracts therefrom, to cause such books to be audited by independent certified
public accountants selected by the Depositor or the Trustee and to discuss its
affairs, finances and accounts relating to the Mortgage Loans with its officers,
employees, agents, counsel and independent public accountants (and by this
provision the Servicer hereby authorizes such accountants to discuss with such
representative such affairs,

                                      104
<PAGE>
finances and accounts), all at such reasonable times and as often as may be
reasonably requested. Any out-of-pocket expense incident to the exercise by the
Depositor or the Trustee of any right under this Section 10.09 shall be borne by
the party requesting such inspection; all other such expenses shall be borne by
the Servicer.

      SECTION 10.10       Certificates Nonassessable and Fully Paid.

      It is the intention of the Depositor that Certificateholders shall not be
personally liable for obligations of the Trust Fund, that the interests in the
Trust Fund represented by the Certificates shall be nonassessable for any reason
whatsoever, and that the Certificates, upon due authentication thereof by the
Trustee pursuant to this Agreement, are and shall be deemed fully paid.

      SECTION 10.11       Assignment; Sales; Advance Facilities.

      (a) The Servicer is hereby authorized to enter into a financing or other
facility (any such arrangement, an "Advance Facility"), the documentation for
which complies with Section 10.11(e) below, under which (1) the Servicer assigns
or pledges its rights under this Agreement to be reimbursed for any or all
Advances and/or Servicing Advances to (i) a Person, which may be a
special-purpose bankruptcy-remote entity (an "SPV"), (ii) a Person, which may
simultaneously assign or pledge such rights to an SPV or (iii) a lender (a
"Lender"), which, in the case of any Person or SPV of the type described in
either of the preceding clauses (i) or (ii), may directly or through other
assignees and/or pledgees, assign or pledge such rights to a Person, which may
include a trustee acting on behalf of holders of debt instruments (any such
Person or any such Lender, an "Advance Financing Person"), and/or (2) an Advance
Financing Person agrees to fund all the Advances and/or Servicing Advances
required to be made by the Servicer pursuant to this Agreement. No consent of
the Trustee, Certificateholders or any other party shall be required before the
Servicer may enter into an Advance Facility nor shall the Trustee or the
Certificateholders be a third party beneficiary of any obligation of an Advance
Financing Person to the Servicer. Notwithstanding the existence of any Advance
Facility under which an Advance Financing Person agrees to fund Advances and/or
Servicing Advances, (A) the Servicer (i) shall remain obligated pursuant to this
Agreement to make Advances and/or Servicing Advances pursuant to and as required
by this Agreement and (ii) shall not be relieved of such obligations by virtue
of such Advance Facility and (B) neither the Advance Financing Person nor any
Servicer's Assignee (as hereinafter defined) shall have any right to proceed
against or otherwise contact any Mortgagor for the purpose of collecting any
payment that may be due with respect to any related Mortgage Loan or enforcing
any covenant of such Mortgagor under the related Mortgage Loan documents.

      (b) If the Servicer enters into an Advance Facility, the Servicer and the
related Advance Financing Person shall deliver to the Trustee at the address set
forth in Section 10.05 hereof a written notice (an "Advance Facility Notice"),
stating (a) the identity of the Advance Financing Person and (b) the identity of
the Person (the "Servicer's Assignee") that will, subject to Section 10.11(c)
hereof, have the right to make withdrawals from the Collection Account pursuant
to Section 3.08(a) hereof to reimburse previously unreimbursed Advances and/or
Servicing Advances ("Advance Reimbursement Amounts"). Advance Reimbursement
Amounts (i) shall consist solely of amounts in respect of Advances and/or
Servicing Advances for which the Servicer would be permitted to reimburse itself
in accordance with Section 3.08 hereof, assuming the Servicer had made the
related Advance(s) and/or Servicing Advance(s) and (ii) shall not consist of
amounts payable to a successor servicer in accordance with Section 3.05 hereof
to the extent permitted under Section 10.11(e) below.

      (c) Notwithstanding the existence of an Advance Facility, the Servicer, on
behalf of the Advance Financing Person and the Servicer's Assignee, shall be
entitled to receive reimbursements of Advances and/or Servicing Advances in
accordance with Section 4.01 hereof, which entitlement may be

                                      105
<PAGE>
terminated by the Advance Financing Person pursuant to a written notice to the
Trustee in the manner set forth in Section 10.05 hereof. Upon receipt of such
written notice, the Servicer shall no longer be entitled to receive
reimbursement for any Advance Reimbursement Amounts and the Servicer's Assignee
shall immediately have the right to receive from the Collection Account all
Advance Reimbursement Amounts. Notwithstanding the foregoing, and for the
avoidance of doubt, (i) the Servicer and/or the Servicer's Assignee shall only
be entitled to reimbursement of Advance Reimbursement Amounts hereunder from
withdrawals from the Collection Account pursuant to Section 4.01 of this
Agreement and shall not otherwise be entitled to make withdrawals or receive
amounts that shall be deposited in the Distribution Account pursuant to Section
4.01 hereof, and (ii) none of the Trustee or the Certificateholders shall have
any right to, or otherwise be entitled to, receive any Advance Reimbursement
Amounts to which the Servicer or Servicer's Assignee, as applicable, shall be
entitled pursuant to Section 4.01 hereof. An Advance Facility may be terminated
by the joint written direction of the Servicer and the related Advance Financing
Person. Written notice of such termination shall be delivered to the Trustee in
the manner set forth in Section 10.05 hereof. None of the Depositor or the
Trustee shall, as a result of the existence of any Advance Facility, have any
additional duty or liability with respect to the calculation or payment of any
Advance Reimbursement Amount, nor, as a result of the existence of any Advance
Facility, shall the Depositor or the Trustee have any additional responsibility
to track or monitor the administration of the Advance Facility or the payment of
Advance Reimbursement Amounts to the Servicer's Assignee. The Servicer shall
indemnify the Depositor, the Trustee, any successor servicer and the Trust Fund
for any claim, loss, liability or damage resulting from any claim by the related
Advance Financing Person, except to the extent that such claim, loss, liability
or damage resulted from or arose out of negligence, recklessness or willful
misconduct on the part of the Depositor, the Trustee or any successor servicer,
as the case may be, or failure by the successor servicer or the Trustee, as the
case may be, to remit funds as required by this Agreement or the commission of
an act or omission to act by the successor servicer or the Trustee, as the case
may be, and the passage of any applicable cure or grace period, such that an
Event of Default under this Agreement occurs or such entity is subject to
termination for cause under this Agreement. The Servicer shall maintain and
provide to any successor servicer and, upon request, the Trustee a detailed
accounting on a loan-by-loan basis as to amounts advanced by, pledged or
assigned to, and reimbursed to any Advance Financing Person. The successor
servicer shall be entitled to rely on any such information provided by the
predecessor Servicer, and the successor servicer shall not be liable for any
errors in such information.

      (d) [RESERVED]

      (e) As between a predecessor Servicer and its Advance Financing Person, on
the one hand, and a successor servicer and its Advance Financing Person, if any,
on the other hand, Advance Reimbursement Amounts on a loan-by-loan basis with
respect to each Mortgage Loan as to which an Advance and/or Servicing Advance
shall have been made and be outstanding shall be allocated on a "first-in, first
out" basis. In the event the Servicer's Assignee shall have received some or all
of an Advance Reimbursement Amount related to Advances and/or Servicing Advances
that were made by a Person other than such predecessor Servicer or its related
Advance Financing Person in error, then such Servicer's Assignee shall be
required to remit any portion of such Advance Reimbursement Amount to each
Person entitled to such portion of such Advance Reimbursement Amount. Without
limiting the generality of the foregoing, the Servicer shall remain entitled to
be reimbursed by the Advance Financing Person for all Advances and/or Servicing
Advances funded by the Servicer to the extent the related Advance Reimbursement
Amounts have not been assigned or pledged to such Advance Financing Person or
Servicer's Assignee.

      (f) For purposes of any Officer's Certificate of the Servicer made
pursuant to Section 4.01, any Non-Recoverable Advance or Non-Recoverable
Servicing Advance referred to therein may have been made by such Servicer or any
predecessor Servicer. In making its determination that any Advance or

                                      106
<PAGE>
Servicing Advance theretofore made has become a Non-Recoverable Advance or
Non-Recoverable Servicing Advance, the Servicer shall apply the same criteria in
making such determination regardless of whether such Advance or Servicing
Advance shall have been made by the Servicer or any predecessor Servicer.

      (g) Any amendment to this Section 10.11 or to any other provision of this
Agreement that may be necessary or appropriate to effect the terms of an Advance
Facility as described generally in this Section 10.11, including amendments to
add provisions relating to a successor servicer, may be entered into by the
Trustee, the Depositor and the Servicer without the consent of any
Certificateholder, provided such amendment complies with Section 10.01 hereof.
All reasonable costs and expenses (including attorneys' fees) of each party
hereto of any such amendment shall be borne solely by the Servicer. The parties
hereto hereby acknowledge and agree that: (a) the Advances and/or Servicing
Advances financed by and/or pledged to an Advance Financing Person under any
Advance Facility are obligations owed to the Servicer payable only from the cash
flows and proceeds received under this Agreement for reimbursement of Advances
and/or Servicing Advances only to the extent provided herein, and the Trustee
and the Trust are not, as a result of the existence of any Advance Facility,
obligated or liable to repay any Advances and/or Servicing Advances financed by
the Advance Financing Person; (b) the Servicer will be responsible for remitting
to the Advance Financing Person the applicable amounts collected by it as
reimbursement for Advances and/or Servicing Advances funded by the Advance
Financing Person, subject to the provisions of this Agreement; and (c) the
Trustee shall not have any responsibility to track or monitor the administration
of the financing arrangement between the Servicer and any Advance Financing
Person.

                                      107
<PAGE>
      IN WITNESS WHEREOF, the Depositor, the Servicer and the Trustee have
caused their names to be signed hereto by their respective officers thereunto
duly authorized as of the day and year first above written.

                                 MERRILL LYNCH MORTGAGE INVESTORS, INC., as
                                       Depositor

                                 By:    /s/ Matthew Whalen
                                        ------------------------------------
                                 Name:  Matthew Whalen
                                 Title: President

                                 LITTON LOAN SERVICING LP,
                                       as Servicer

                                 By:    /s/ Janice McClure
                                        ------------------------------------
                                 Name:  Janice McClure
                                 Title: Senior Vice President

                                 JPMORGAN CHASE BANK
                                    not in its individual capacity, but
                                       solely as Trustee

                                 By:    /s/ Andrew M. Cooper
                                        ------------------------------------
                                 Name:  Andrew M. Cooper
                                 Title: Assistant Vice President
<PAGE>
                                    EXHIBIT A

                          FORMS OF OFFERED CERTIFICATES

                             [Intentionally Omitted]

                                       A-1
<PAGE>
                                   EXHIBIT B-1

                  MORTGAGE LOAN SCHEDULE - TOTAL MORTGAGE POOL

                             [Intentionally Omitted]

                                       B-1
<PAGE>
                                   EXHIBIT B-2

                MORTGAGE LOAN SCHEDULE - GROUP ONE MORTGAGE LOANS

                             [Intentionally Omitted]

                                      B-2
<PAGE>
                                   EXHIBIT B-3

                MORTGAGE LOAN SCHEDULE - GROUP TWO MORTGAGE LOANS

                             [Intentionally Omitted]

                                       B-3
<PAGE>
                                    EXHIBIT C

                                   [RESERVED]

                                      C-1
<PAGE>
                                    EXHIBIT D

                          FORM OF TRUSTEE CERTIFICATION

                                     [DATE]

Merrill Lynch Mortgage Investors, Inc.
250 Vesey Street
4 World Financial Center, 10th Floor
New York, New York  10080

Litton Loan Servicing LP
4282 Loop Central Drive
Houston, Texas 77018-2226
Attention:  Larry Litton, Sr.;

Re:     Pooling and Servicing Agreement dated as of October 1, 2004 among
        Merrill Lynch Mortgage Investors, Inc., as depositor, Litton Loan
        Servicing LP, as servicer and JPMorgan Chase Bank, as trustee, relating
        to Specialty Underwriting and Residential Finance Trust, Mortgage Loan
        Asset-Backed Certificates, Series 2004-AA1

Ladies and Gentlemen:

      In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that [,
except as set forth in Schedule A hereto,] as to each Mortgage Loan listed in
the Mortgage Loan Schedule attached hereto (other than any Mortgage Loan paid in
full or listed on the attachment hereto) it has reviewed the Mortgage File and
the Mortgage Loan Schedule and has determined that:

      (i) All documents in the Mortgage File required to be delivered to the
Trustee pursuant to Section 2.01 of the Pooling and Servicing Agreement are in
its possession;

      (ii) In connection with each Mortgage Loan as to which documentary
evidence of recording was not received on the Closing Date, it has received
evidence of such recording; and

      (iii) Such documents have been reviewed by it and such documents do not
contain any material omissions or defects within the meaning of Section 2.01 or
2.02.

      The Trustee has made no independent examination of any documents contained
in each Mortgage File beyond confirming (i) that the Mortgage Loan number and
the name of the Mortgagor in each Mortgage File conform to the respective
Mortgage Loan number and name listed on the Mortgage Loan Schedule and (ii) the
existence in each Mortgage File of each of the documents listed in subparagraphs
(i)(A) through (E), inclusive, of Section 2.01 in the Agreement and documents
listed in clause (F) to the extent the Trustee has received written notice of
the existence of such documents from the Depositor or the Seller. The Trustee
makes no representations or warranties as to the validity, legality,
recordability, sufficiency, recordability, enforceability or genuineness of any
of the documents contained in each Mortgage Loan or the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan.

                                       D-1
<PAGE>
      Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.

                                   JPMORGAN CHASE BANK, as
                                   Trustee

                                   By:  ______________________________________
                                   Name:  ____________________________________
                                   Title:  ___________________________________

                                       D-2
<PAGE>
                                    EXHIBIT E

                           FORM OF TRANSFEREE'S LETTER
              SPECIALTY UNDERWRITING AND RESIDENTIAL FINANCE TRUST,
            MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2004-AA1

                                     [DATE]

JPMorgan Chase Bank
2001 Bryan Street
8th Floor
Dallas, Texas 75201
Attention:  Institutional Trust Services-Transfer Department - SURF 2004-AA1

Ladies and Gentlemen:

      We propose to purchase the Specialty Underwriting and Residential Finance
Trust, Mortgage Loan Asset-Backed Certificates, Series 2004-AA1, Class A-R
Certificate, described in the Prospectus Supplement, dated October 25, 2004, and
Prospectus, dated October 25, 2004.

      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 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, and (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.

      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.

--------

(1)   Check appropriate box and if necessary fill in the name of the
      Transferee's nominee.

                                     E-1-1
<PAGE>
      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 state, local,
federal, or non-U.S. law substantively similar to the foregoing provisions of
ERISA or the Code (each, a "Plan"), and are not directly or indirectly
purchasing the Class A-R Certificate on behalf of, or with any assets of a Plan,
including but not limited to the assets of any insurance company separate
account or general account containing any "plan assets" of any 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, the Trustee and the Trustee
with a duly completed and effective Internal Revenue Service Form W-8ECI or
successor form at the time and in the manner required by the Code; for this
purpose the term "U.S. person" means a citizen or resident of the United States,
a corporation, or partnership (unless, in the case of a partnership, Treasury
regulations are adopted that provide otherwise) created or organized in or under
the laws of the United States, any State thereof or the District of Columbia,
including an entity treated as a corporation or partnership for federal income
tax purposes, an estate whose income is subject to United States federal income
tax regardless of the source of its income, or a trust if a court within the
United States is able to exercise primary supervision over the administration of
the trust and one or more such U.S. persons have the authority to control all
substantial decisions of the trust (or, to the extent provided in applicable
Treasury regulations, certain trusts in existence on August 20, 1996 which are
eligible to elect to be treated as U.S. Persons. We agree that any breach by us
of this certification shall render the transfer of any interest in the Class 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 agree that in the event that at some future time we wish to transfer
any interest in the Class A-R Certificate, we will transfer such interest in the
Class A-R Certificate only (a) 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, the Trustee and the Trustee with a
duly completed and effective Internal Revenue Service Form W-8ECI or successor
form at the time and in the manner required by the Code and (iii) has delivered
to the Trustee and the Trustee a letter in the form of this letter (including
the affidavit appended hereto) and, we will provide the Trustee and the Trustee
a written statement substantially in the form of Exhibit E-2 to the Agreement.

                                     E-1-2
<PAGE>
      7. We hereby designate ___________________ as our fiduciary to act as the
tax matters person for each of the REMICs provided for in the Agreement.

                                          Very truly yours,

                                          [PURCHASER]

                                          By:___________________________
                                             Name:
                                             Title:
Accepted as of _________ __, 200_.

MERRILL LYNCH MORTGAGE INVESTORS, INC.

By:___________________________
   Name:
   Title:

                                     E-1-3
<PAGE>
                                   APPENDIX A

                                    Affidavit pursuant to (i) Section 860E(e)(4)
                                    of the Internal Revenue Code of 1986, as
                                    amended, and (ii) certain provisions of the
                                    Pooling and Servicing Agreement

Under penalties of perjury, the undersigned declares that the following is true:

(1)   He or she is an officer of                       (the "Transferee"),

(2)   the Transferee's Employer Identification number is                ,

(3)   the Transferee is not a "disqualified organization" (as defined below),
      has no plan or intention of becoming a disqualified organization, and is
      not acquiring any of its interest in the Specialty Underwriting and
      Residential Finance Trust, Mortgage Loan Asset-Backed Certificates, Series
      2004-AA1, 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 Transferee by executing the form of Consent affixed as
      Appendix B to the Transferee's Letter to which this Certificate is affixed
      as Appendix A, the Transferee is a "U.S. person" (as defined below),

(5)   that no purpose of the transfer is to avoid or impede the assessment or
      collection of tax,

(6)   the Transferee has historically paid its debts as they became due,

(7)   the Transferee intends, and believes that it will be able, to continue to
      pay its debts as they become due in the future,

(8)   the Transferee understands that, as beneficial owner of the Class A-R
      Certificate, it may incur tax liabilities in excess of any cash flows
      generated by the Class A-R Certificate,

(9)   the Transferee intends to pay any taxes associated with holding the Class
      A-R Certificate as they become due,

(10)  the Transferee consents to any amendment of the Pooling and Servicing
      Agreement that shall be deemed necessary by MLMI (upon advice of counsel)
      to constitute a reasonable arrangement to ensure that the Class 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 Transferee, 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:

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

      (B)   the present value of the expected future distributions on such
            residual interest; and

      (C)   the present value of the anticipated tax savings associated with
            holding such residual interest as the related REMIC generates
            losses.

                                     E-1-4
<PAGE>
      For purposes of this declaration, (i) the Transferee is assumed to pay tax
      at a rate equal to the highest rate of tax specified in Section I l(b)(1)
      of the Code, but the tax rate specified in Section 55(b)(1)(B) of the Code
      may be used in lieu of the highest rate specified in Section 11(b)(1) of
      the Code if the Transferee has been subject to the alternative minimum tax
      under Section 55 of the Code in the preceding two years and will compute
      its taxable income in the current taxable year using the alternative
      minimum tax rate, and (ii) present values are computed using a discount
      rate equal to the Federal short-term rate prescribed by Section 1274(d) of
      the Code for the month of the transfer and the compounding period used by
      the Transferee;]

[(11) (A)   at the time of the transfer, and at the close of each of the
            Transferee's two fiscal years preceding the Transferee's fiscal year
            of transfer, the Transferee's gross assets for financial reporting
            purposes exceed $100 million and its net assets for financial
            reporting purposes exceed $10 million; and

      (B)   the Transferee is an eligible corporation as defined in Treasury
            regulations Section 1.860E-1(c)(6)(i) and has agreed in writing
            that any subsequent transfer of the Class A-R Certificate will be
            to another eligible corporation in a transaction that satisfies
            Treasury regulation Sections 1.860E-1(c)(4)(i),
            1.860E-1(c)(4)(ii), 1.860E-1(c)(4)(iii) and 1.860E1(c)(5) and
            such transfer will not be a direct or indirect transfer to a
            foreign permanent establishment (within the meaning of an
            applicable income tax treaty) of a domestic corporation.

For purposes of this declaration, the gross and net assets of the Transferee do
not include any obligation of any related person as defined in Treasury
regulation Section 1.860E-1(c)(6)(ii) or any other asset if a principal purpose
for holding or acquiring the other asset is to permit the Transferee to make
this declaration or to satisfy the requirements of Treasury regulation Section
1.860E-1(c)(5)(i).]

(12)  The Transferee will not cause income from the Class 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 Transferee or
      another U.S. taxpayer.

                                     E-1-5
<PAGE>
For purpose of this affidavit, the term "disqualified organization" means the
United States, any state or political subdivision thereof, any foreign
government, any international organization, any agency or instrumentality of any
of the foregoing (except any entity treated as other than an instrumentality of
the foregoing for purposes of Section 168(h)(2)(D) of the Internal Revenue Code
of 1986, as amended (the "Code")), any organization (other than a cooperative
described in Section 521 of the Code) that is exempt from taxation under the
Code (unless such organization is subject to tax on excess inclusions) and any
organization that is described in Section 1381(a)(2)(C) of the Code and the term
"U.S. Person" means a citizen or resident of the United States, a corporation or
partnership (unless, in the case of a partnership, Treasury regulations are
adopted that provide otherwise) created or organized in or under the laws of the
United States, any state thereof or the District of Columbia, including an
entity treated as a corporation or partnership for federal income tax purposes,
an estate whose income is subject to Unites States federal income tax regardless
of its source, or a trust if a court within the United States is able to
exercise primary supervision over the administration of such trust, and one or
more such U.S. Persons have the authority to control all substantial decisions
of such trust, (or, to the extent provided in applicable Treasury regulations,
certain trusts in existence on August 20, 1996 which are eligible to elect to be
treated as U.S. Persons).

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

By:
    --------------------------------

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

      Address of Investor for receipt of distribution:

      Address of Investor for receipt of tax information:

      (Corporate Seal)

      Attest:

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

      --------------------------------, Secretary

                                     E-1-6
<PAGE>
Personally appeared before me the above-named ____________, known or proved to
me to be the same person who executed the foregoing instrument and to be the
____________ of the Investor, and acknowledged to me that he executed the same
as his free act and deed and the free act and deed of the Investor.

Subscribed and sworn before me this ____ day of _______, 200_.

____________________________________
      Notary Public

      County of ____________________
      State of _____________________

      My commission expires the __________ day of ______

                                             By: _____________________

                                             Name: ___________________

                                             Title: __________________

Dated: _____________________________

                                     E-1-7
<PAGE>
                                   EXHIBIT E-2

                         FORM OF TRANSFEROR'S AFFIDAVIT

              SPECIALTY UNDERWRITING AND RESIDENTIAL FINANCE TRUST
            MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2004-AA1

                                     [DATE]

JPMorgan Chase Bank
2001 Bryan Street
8th Floor
Dallas, Texas  75201
Attention:  Institutional Trust Services-Transfer Department - SURF 2004-AA1

Re:   Specialty Underwriting and Residential Finance Trust,
      Mortgage Loan Asset-Backed Certificates, Series 2004-AA1

            __________________ (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 found that the Transferee had historically paid its debts as they came due
and found no significant evidence to indicate that the Transferee will not
continue to pay its debts as they become due.

                                          Very truly yours,

                                          ___________________________

                                          Name:

                                          Title:

                                       E-1

<PAGE>

                                    EXHIBIT G

                            FORM OF INVESTMENT LETTER
                              (ACCREDITED INVESTOR)

                                     [DATE]

JPMorgan Chase Bank
2001 Bryan Street
8th Floor
Dallas, Texas  75201
Attention:  Institutional Trust Services-Transfer Department - SURF 2004-AA1

Re:   Specialty Underwriting and Residential Finance Trust,
      Mortgage Loan Asset-Backed Certificates, Series 2004-AA1 [CLASS B]

Ladies and Gentlemen:

      _________________(the "Purchaser") intends to purchase from __________
(the "Transferor") $ ________ by original principal balance (the "Transferred
Certificates") of Mortgage Loan Asset-Backed Certificates, Series 2004-AA1,
[CLASS B] (the "Certificates"), issued pursuant to a Pooling and Servicing
Agreement, dated as of October 1, 2004 (the "Pooling and Servicing Agreement"),
among Merrill Lynch Mortgage Investors, Inc., as depositor (the "Depositor"),
Litton Loan Servicing LP, as servicer (the "Servicer") and JPMorgan Chase Bank,
as trustee (the "Trustee"). [THE PURCHASER INTENDS TO REGISTER THE TRANSFERRED
CERTIFICATE IN THE NAME OF _______________, AS NOMINEE FOR _______________.] All
terms used and not otherwise defined herein shall have the meanings set forth in
the Pooling and Servicing Agreement.

      For good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the Purchaser certifies, represents and warrants to, and
covenants with, the Depositor and the Trustee that:

      1. The Purchaser understands that (a) the Certificates have not been
registered or qualified under the Securities Act of 1933, as amended (the
"Securities Act"), or the securities laws of any state, (b) neither the
Depositor nor the Trustee is required, and neither of them intends, to so
register or qualify the Certificates, (c) the Certificates cannot be resold
unless (1) they are registered and qualified under the Securities Act and the
applicable state securities laws or (ii) an exemption from registration and
qualification is available and (d) the Pooling and Servicing Agreement contains
restrictions regarding the transfer of the Certificates.

      2. The Certificates will bear a legend to the following effect:

      THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE
"1940 ACT") OR ANY STATE SECURITIES OR "BLUE SKY" LAWS, AND MAY NOT, DIRECTLY OR
INDIRECTLY, BE SOLD OR OTHERWISE TRANSFERRED, OR OFFERED FOR SALE, UNLESS SUCH
TRANSFER IS NOT SUBJECT TO REGISTRATION UNDER THE ACT, THE 1940 ACT AND ANY
APPLICABLE STATE SECURITIES LAWS AND SUCH TRANSFER ALSO COMPLIES WITH THE OTHER
PROVISIONS OF SECTION 5.02 OF THE POOLING AND SERVICING TRANSFER OF THIS
CERTIFICATE SHALL BE MADE UNLESS THE TRUSTEE

                                      G-1
<PAGE>
SHALL HAVE RECEIVED, IN FORM AND SUBSTANCE SATISFACTORY TO THE SERVICER (A) AN
INVESTMENT LETTER FROM THE PROSPECTIVE INVESTOR; AND (B) REPRESENTATIONS FROM
THE TRANSFEROR REGARDING THE OFFERING AND SALE OF THE CERTIFICATES.

NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE TRUSTEE SHALL HAVE
RECEIVED EITHER (A) A REPRESENTATION FROM THE TRANSFEREE EITHER (I) THAT SUCH
TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF ERISA, A PLAN
SUBJECT TO SECTION 4975 OF THE CODE, A PLAN SUBJECT TO ANY STATE, LOCAL,
FEDERAL, OR NON-U.S. LAW SUBSTANTIVELY SIMILAR TO THE FOREGOING PROVISIONS OF
ERISA OR THE CODE ("SIMILAR LAW"), OR A PERSON DIRECTLY OR INDIRECTLY ACTING ON
BEHALF OF OR USING ANY ASSETS OF ANY SUCH PLAN, OR (II) IF THE CERTIFICATE HAS
BEEN THE SUBJECT OF AN ERISA-QUALIFYING UNDERWRITING, THAT SUCH TRANSFEREE IS AN
INSURANCE COMPANY THAT IS ACQUIRING THE CERTIFICATE WITH FUNDS 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 (B) SOLELY IN THE EVENT THE CERTIFICATE IS A DEFINITIVE CERTIFICATE, AN
OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE, AND UPON WHICH THE TRUSTEE SHALL
BE ENTITLED TO RELY, TO THE EFFECT THAT THE ACQUISITION AND HOLDING OF THE
CERTIFICATE WILL NOT CONSTITUTE OR RESULT IN A NONEXEMPT PROHIBITED TRANSACTION
UNDER ERISA OR THE CODE, OR A VIOLATION OF SIMILAR LAW, AND WILL NOT SUBJECT THE
TRUSTEE TO ANY OBLIGATION IN ADDITION TO THOSE EXPRESSLY UNDERTAKEN IN THE
POOLING AND SERVICING AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE AN
EXPENSE OF THE TRUSTEE. IF THE CERTIFICATE IS NOT A DEFINITIVE CERTIFICATE, THE
TRANSFEREE IS DEEMED TO HAVE MADE THE REPRESENTATION IN (A)(I) OR (A)(II) ABOVE.

      3. The Purchaser is acquiring the Transferred Certificates for its own
account [FOR INVESTMENT ONLY]**/ and not with a view to or for sale or other
transfer in connection with any distribution of the Transferred Certificates in
any manner that would violate the Securities Act or any applicable state
securities laws, subject, nevertheless, to the understanding that disposition of
the Purchaser's property shall at all times be and remain within its control.

      4. The Purchaser (a) is a substantial, sophisticated institutional
investor having such knowledge and experience in financial and business matters,
and in particular in such matters related to securities similar to the
Certificates, such that it is capable of evaluating the merits and risks of
investment in the Certificates, (b) is able to bear the economic risks of such
an investment and (c) is an "accredited investor" within the meaning of Rule 501
(a) promulgated pursuant to the Securities Act.

      5. The Purchaser will not nor has it authorized nor will it authorize any
person to (a) offer, pledge, sell, dispose of or otherwise transfer any
Certificate, any interest in any Certificate or any other similar security to
any person in any manner, (b) solicit any offer to buy or to accept a pledge,
disposition

----------
**/ Not required of a broker/dealer purchaser.

                                      G-2
<PAGE>
or other transfer of any Certificate, any interest in any Certificate or any
other similar security from any person in any manner, (c) otherwise approach or
negotiate with respect to any Certificate, any interest in any Certificate or
any other similar security with any person in any manner, (d) make any general
solicitation by means of general advertising or in any other manner, or (e) take
any other action, that would constitute a distribution of any Certificate under
the Securities Act or the Investment Company Act of 1940, as amended (the "1940
Act"), that would render the disposition of any Certificate a violation of
Section 5 of the Securities Act or any state securities law, or that would
require registration or qualification pursuant thereto. Neither the Purchaser
nor anyone acting on its behalf has offered the Certificates for sale or made
any general solicitation by means of general advertising or in any other manner
with respect to the Certificates. The Purchaser will not sell or otherwise
transfer any of the Certificates, except in compliance with the provisions of
the Pooling and Servicing Agreement.

      6. The Purchaser either (A) (i) is not an employee benefit plan subject to
Title I of ERISA, a plan subject to Section 4975 of the Code, a plan subject to
any state, local, federal, or non-U.S. law substantively similar to the
foregoing provisions of ERISA or the Code ("Similar Law"), or a Person directly
or indirectly acting on behalf of or using any assets of any such plan, or (ii)
if the Certificate has been the subject of an ERISA-Qualifying Underwriting, is
an insurance company that is acquiring the Certificate with funds 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 (B) solely in the event the Certificate is a Definitive Certificate, herewith
delivers an Opinion of Counsel satisfactory to the Trustee, and upon which the
Trustee shall be entitled to rely, to the effect that the acquisition and
holding of the Certificate will not constitute or result in a nonexempt
prohibited transaction under ERISA or the Code, or a violation of Similar Law,
and will not subject the Trustee to any obligation in addition to those
expressly undertaken in the Pooling and Servicing Agreement, which Opinion of
Counsel shall not be an expense of the Trustee.

      7. Prior to the sale or transfer by the Purchaser of any of the
Certificates, the Purchaser will obtain from any subsequent purchaser
substantially the same certifications, representations, warranties and covenants
contained in the foregoing paragraphs and in this letter or a letter
substantially in the form of Exhibit [H] to the Pooling and Servicing Agreement.

                                      G-3
<PAGE>
      8. The Purchaser agrees to indemnify the Trustee, the Servicer and the
Depositor against any liability that may result from any misrepresentation made
herein.

                                    Very truly yours,

                                   [PURCHASER]

                                    By:
                                        ----------------------------
                                        Name:
                                        Title:

                                       G-4
<PAGE>
                                    EXHIBIT H

                       FORM OF RULE 144A INVESTMENT LETTER
                         (QUALIFIED INSTITUTIONAL BUYER)

                                     [DATE]

JP Morgan Chase Bank
2001 Bryan Street
8th Floor
Dallas, Texas  75201
Attention:  Institutional Trust Services-Transfer Department - SURF 2004-AA1

Re:   Specialty Underwriting and Residential Finance Trust,
      Mortgage Loan Asset-Backed Certificates, Series 2004-AA1

Ladies and Gentlemen:

      ____________________(the "Purchaser") intends to purchase from
______________ (the "Transferor") $_______ by original principal balance (the
"Transferred Certificates") of Mortgage Loan Asset-Backed Certificates, Series
2004-AA1, (the "Certificates"), issued pursuant to a Pooling and Servicing
Agreement, dated as of October 1, 2004 (the "Pooling and Servicing Agreement'),
among Merrill Lynch Mortgage Investors, Inc., as depositor (the "Depositor"),
Litton Loan Servicing LP, as servicer (the "Servicer"), and JPMorgan Chase Bank,
as trustee (the "Trustee"). [THE PURCHASER INTENDS TO REGISTER THE TRANSFERRED
CERTIFICATE IN THE NAME OF __________________ AS NOMINEE FOR ________________.]
All terms used and not otherwise defined herein shall have the meanings set
forth in the Pooling and Servicing Agreement.

      For good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the Purchaser certifies, represents and warrants to, and
covenants with, the Depositor and the Trustee that:

      In connection with our acquisition of the above Transferred Certificates
we certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act'), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we have
such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the Certificates,
(c) we have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Transferred Certificates and all
matters relating thereto or any additional information deemed necessary to our
decision to purchase the Transferred Certificates, (d) we either (A) (i) are not
an employee benefit plan subject to Title I of ERISA, a plan subject to Section
4975 of the Code, a plan subject to any state, local, federal, or non-U.S. law
substantively similar to the foregoing provisions of ERISA or the Code ("Similar
Law"), or Persons directly or indirectly acting on behalf of or using any assets
of any such plan, or (ii) if the Certificate has been the subject of an
ERISA-Qualifying Underwriting, are an insurance company that is acquiring the
Certificate with funds 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 (B) solely in the event the
Certificate is a Definitive Certificate, herewith deliver an Opinion of Counsel
satisfactory to the Trustee, and upon which the Trustee shall be entitled to
rely, to the effect that the acquisition and holding of the Certificate will not

                                      H-1
<PAGE>
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 to any
obligation in addition to those expressly undertaken in the Pooling and
Servicing Agreement, which Opinion of Counsel shall not be an expense of the
Trustee, (e) we have not, nor has anyone acting on our behalf offered,
transferred, pledged, sold or otherwise disposed of the Certificates, any
interest in the Certificates or any other similar security to, or solicited any
offer to buy or accept a transfer, pledge or other disposition of the
Certificates, any interest in the Certificates or any other similar security
from, or otherwise approached or negotiated with respect to the Certificates,
any interest in the Certificates or any other similar security with, any person
in any manner, or made any general solicitation by means of general advertising
or in any other manner, or taken any other action, that would constitute a
distribution of the Certificates under the Securities Act or that would render
the disposition of the Certificates a violation of Section 5 of the Securities
Act or require registration pursuant thereto, nor will act, nor has authorized
or will authorize any person to act, in such manner with respect to the
Certificates, (f) we are a "qualified institutional buyer" as that term is
defined in Rule 144A under the Securities Act and have completed one of the
forms of certification to that effect attached hereto as Annex 1 or Annex 2. We
are aware that the sale of the Transferred Certificates to us is being made in
reliance on Rule 144A. We are acquiring the Transferred Certificates for our own
account or for resale pursuant to Rule 144A and further understand that such
Certificates may be resold, pledged or transferred only (i) to a person
reasonably believed by us, based upon certifications of such purchaser or
information we have in our possession, to be a qualified institutional buyer
that purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that the resale, pledge or transfer
is being made in reliance on Rule 144A, or (ii) pursuant to another exemption
from registration under the Securities Act.

      We agree to indemnify the Trustee, the Servicer and the Depositor against
any liability that may result from any misrepresentation made herein.

                                    Very truly yours,

                                    [PURCHASER]

                                    By:
                                        -----------------------------
                                        Name:
                                        Title:

                                      H-2
<PAGE>
                                                                         ANNEX 1

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

          [FOR TRANSFEREES OTHER THAN REGISTERED INVESTMENT COMPANIES]

      The undersigned (the "Buyer") hereby certifies as follows to the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates with respect to the Certificates described therein:

      1. As indicated below, the undersigned is the President, Chief Financial
Officer, Senior Vice President or other executive officer of the Buyer.

      2. In connection with the purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned
and/or invested on a discretionary basis $____________* in securities (except
for the excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule 144A)
and (ii) the Buyer satisfies the criteria in the category marked below.

            -     Corporation, etc. The Buyer is a corporation (other than a
                  bank, savings and loan association or similar institution),
                  Massachusetts or similar business trust, partnership, or
                  charitable organization described in Section 501(c)(3) of the
                  Internal Revenue Code of 1986, as amended.

            -     Bank. The Buyer (a) is a national bank or banking institution
                  organized under the laws of any State, territory or the
                  District of Columbia, the business of which is substantially
                  confined to banking and is supervised by Federal, State or
                  territorial banking commission or similar official or is a
                  foreign bank or equivalent institution, and (b) has an audited
                  net worth of at least $25,000,000 as demonstrated in its
                  latest annual financial statements, a copy of which is
                  attached hereto.

            -     Savings and Loan. The Buyer (a) is a savings and loan
                  association, building and loan association, cooperative bank,
                  homestead association or similar institution, which is
                  supervised and examined by a State or Federal authority having
                  supervision over such institution or is a foreign savings and
                  loan association or equivalent institution and (b) has an
                  audited net worth of at least $25,000,000 as demonstrated in
                  its latest annual financial statements, a copy of which is
                  attached hereto.

            -     Broker-dealer. The Buyer is a dealer registered pursuant to
                  Section 15 of the Securities Exchange Act of 1934, as amended.

            -     Insurance Company. The Buyer is an insurance company whose
                  primary and predominant business activity is the writing of
                  insurance or the reinsuring of risks underwritten by insurance
                  companies and which is

----------
*  Buyer must own and/or invest on a discretionary basis at least $100,000,000
   in securities unless Buyer is a dealer, and, in that case, Buyer must own
   and/or invest on a discretionary basis at least $10,000,000 in securities.

                                      H-3
<PAGE>
                  subject to supervision by the insurance commissioner or a
                  similar official or agency of the State, territory or the
                  District of Columbia.

            -     State or Local Plan. The Buyer is a plan established and
                  maintained by a State, its political subdivisions, or any
                  agency or instrumentality of the State or its political
                  subdivisions, for the benefit of its employees.

            -     ERISA Plan. The Buyer is an employee benefit plan subject to
                  Title I of the Employee Retirement Income Security Act of
                  1974, as amended.

            -     Investment Advisor. The Buyer is an investment advisor
                  registered under the Investment Advisors Act of 1940, as
                  amended.

            -     Small Business Investment Company. Buyer is a small business
                  investment company licensed by the U.S. Small Business
                  Administration under Section 301 (c) or (d) of the Small
                  Business Investment Act of 1958, as amended.

            -     Business Development Company. Buyer is a business development
                  company as defined in Section 202(a)(22) of the Investment
                  Advisors Act of 1940, as amended.

      3. The term "securities" as used for purposes of the calculation of the
dollar amount in paragraph 2 excludes: (i) securities of issuers that are
affiliated with the Buyer, (ii) securities that are part of an unsold allotment
to or subscription by the Buyer, if the Buyer is a dealer, (iii) securities
issued or guaranteed by the U.S. or any instrumentality thereof, (iv) bank
deposit notes and certificates of deposit, (v) loan participations, (vi)
repurchase agreements, (vii) securities owned but subject to a repurchase
agreement and (viii) currency, interest rate and commodity swaps.

      4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.

      5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.

                                      H-4
<PAGE>
      6. Until the date of purchase of the Rule 144A Securities, the Buyer will
notify each of the parties to which this certification is made of any changes in
the information and conclusions herein. Until such notice is given, the Buyer's
purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan as provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.

                                       By:
                                           --------------------------------
                                           Name:
                                           Title:

                                      H-5
<PAGE>
                                                                         ANNEX 2

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

           [FOR TRANSFEREES THAT ARE REGISTERED INVESTMENT COMPANIES]

      The undersigned (the "Buyer") hereby certifies as follows to the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates with respect to the Certificates described therein:

      1. As indicated below, the undersigned is the President, Chief Financial
Officer or Senior Vice President of the Buyer or, if the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A"), because Buyer is part of a Family of
Investment Companies (as defined below), is such an officer of the Adviser.

      2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (1) 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 $_______ securities (other than the excluded
                  securities referred to below) as of the end of the Buyer's
                  most recent fiscal year (such amount being calculated in
                  accordance with Rule 144A).

            -     The Buyer is part of a Family of Investment Companies which
                  owned in the aggregate $_______ in securities (other than the
                  excluded securities referred to below) as of the end of the
                  Buyer's most recent fiscal year (such amount being calculated
                  in accordance with Rule 144A).

      3. The term "Family of Investment Companies" as used herein means two or
more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).

      4. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer or are part of the Buyer's Family of
Investment Companies, (ii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iii) bank deposit notes and certificates of deposit,
(iv) loan participations, (v) repurchase agreements, (vi) securities owned but
subject to a repurchase agreement and (vii) currency, interest rate and
commodity swaps.

      5. The Buyer is familiar with Rule 144A and understands that the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates are relying and will continue to rely on the statements made herein
because one or more sales to the Buyer will be in reliance on Rule 144A. In
addition, the Buyer will only purchase for the Buyer's own account.

                                      H-6
<PAGE>
      6. Until the date of purchase of the Certificates, the undersigned will
notify the parties listed in the Rule 144A Transferee Certificate to which this
certification relates of any changes in the information and conclusions herein.
Until such notice is given, the Buyer's purchase of the Certificates will
constitute a reaffirmation of this certification by the undersigned as of the
date of such purchase.

                                       By:
                                           -------------------------------
                                           Name:
                                           Title:

                                       IF AN ADVISER:

                                       -----------------------------------
                                       Print Name of Buyer

                                       Date:
                                            ------------------------------

                                      H-7
<PAGE>
                                    EXHIBIT I

                        REQUEST FOR RELEASE OF DOCUMENTS

To:   JPMorgan Chase Bank
      2001 Bryan Street
      8th Floor
      Dallas, Texas  75201

      Attention:  Institutional Trust Services-Transfer Department - SURF
      2004-AA1

Re:   Pooling and Servicing Agreement dated as of October 1, 2004 among Merrill
      Lynch Mortgage Investors, Inc., as depositor, Litton Loan Servicing LP, as
      servicer and JPMorgan Chase Bank, as trustee, relating to Specialty
      Underwriting and Residential Finance Trust,
      Mortgage Loan Asset-Backed Certificates, Series 2004-AA1

      In connection with the administration of the Mortgage Loans held by you,
as Trustee, pursuant to the above-captioned Pooling and Servicing Agreement, we
request the release, and hereby acknowledge receipt, of the Mortgage File for
the Mortgage Loan described below, for the reason indicated.

Mortgage Loan Number:

Mortgagor Name, Address & Zip Code:

Reason for Requesting Documents (check one):

_______1.   Mortgage Paid in Full

_______2.   Foreclosure

_______3.   Substitution

_______4.   Other Liquidation (Repurchases, etc.)

_______5.   Nonliquidation

_______6.   Other Reason:_____________________

Address to which the Trustee should deliver the Mortgage File:

                                             By:
                                                -------------------------
                                                   (authorized signer)

                                             Address:
                                                     --------------------

                                             Date:
                                                  ----------------------

                                      I-1
<PAGE>
If box 1 or 2 above is checked, and if all or part of the Mortgage File was
previously released to us, please release to us our previous receipt on file
with you, as well as any additional documents in your possession relating to the
above specified Mortgage Loan.

If box 3, 4, 5 or 6 above is checked, upon our return of all of the above
documents to you as Trustee, please acknowledge your receipt by signing in the
space indicated below, and returning this form.

Trustee

JPMorgan Chase Bank
Please acknowledge the execution of the above request by your signature and date
below:

---------------------------------          ---------------------------------
Signature                                  Date
Documents returned to Trustee:

---------------------------------          ---------------------------------
Trustee                                    Date

                                      I-2
<PAGE>
                                    EXHIBIT J

                            FORM OF POWER OF ATTORNEY

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO
LITTON LOAN SERVICING LP
4828 Loop Central Drive
Houston, Texas 77081
Attn: _________________________________

                            LIMITED POWER OF ATTORNEY

      KNOW ALL MEN BY THESE PRESENTS, that JPMorgan Chase Bank, having its
principal place of business at Four New York Plaza, 6th Floor, New York, New
York 10004, as Trustee (the "Trustee") pursuant to that Pooling and Servicing
Agreement among Merrill Lynch Mortgage Investors, Inc. (the "Depositor"), Litton
Loan Servicing LP (the "Servicer"), and the Trustee, dated as of October 1, 2004
(the "Pooling and Servicing Agreement"), hereby constitutes and appoints the
Servicer, by and through the Servicer's officers, the Trustee's true and lawful
Attorney-in-Fact, in the Trustee's name, place and stead and for the Trustee's
benefit, in connection with all mortgage loans serviced by the Servicer pursuant
to the Pooling and Servicing Agreement for the purpose of performing all acts
and executing all documents in the name of the Trustee as may be customarily and
reasonably necessary and appropriate to effectuate the following enumerated
transactions in respect of any of the mortgages or deeds of trust (the
"Mortgages" and the "Deeds of Trust", respectively) and promissory notes secured
thereby (the "Mortgage Notes") for which the undersigned is acting as Trustee
for various certificateholders (whether the undersigned is named therein as
mortgagee or beneficiary or has become mortgagee by virtue of endorsement of the
Mortgage Note secured by any such Mortgage or Deed of Trust) and for which the
Servicer is acting as servicer, all subject to the terms of the Pooling and
Servicing Agreement.

This appointment shall apply to the following enumerated transactions only:

The modification or re-recording of a Mortgage or Deed of Trust, where said
modification or re-recordings is for the purpose of correcting the Mortgage or
Deed of Trust to conform same to the original intent of the parties thereto or
to correct title errors discovered after such title insurance was issued and
said modification or re-recording, in either instance, does not adversely affect
the lien of the Mortgage or Deed of Trust as insured.

The subordination of the lien of a Mortgage or Deed of Trust to an easement in
favor of a public utility company of a government agency or unit with powers of
eminent domain; this section shall include, without limitation, the execution of
partial satisfactions/releases, partial reconveyances or the execution or
requests to trustees to accomplish same.

The conveyance of the properties to the mortgage insurer, or the closing of the
title to the property to be acquired as real estate owned, or conveyance of
title to real estate owned.

The completion of loan assumption agreements.

The full satisfaction/release of a Mortgage or Deed of Trust or full conveyance
upon payment and discharge of all sums secured thereby, including, without
limitation, cancellation of the related Mortgage Note.

                                      J-1
<PAGE>
The assignment of any Mortgage or Deed of Trust and the related Mortgage Note,
in connection with the repurchase of the mortgage loan secured and evidenced
thereby.

The full assignment of a Mortgage or Deed of Trust upon payment and discharge of
all sums secured thereby in conjunction with the refinancing thereof, including,
without limitation, the assignment of the related Mortgage Note. With respect to
a Mortgage or Deed of Trust, the foreclosure, the taking of a deed in lieu of
foreclosure, or the completion of judicial or non-judicial foreclosure or
termination, cancellation or rescission of any such foreclosure, including,
without limitation, any and all of the following acts:

the substitution of trustee(s) serving under a Deed of Trust, in accordance with
state law and the Deed of Trust;

the preparation and issuance of statements of breach or non-performance;

the preparation and filing of notices of default and/or notices of sale;

the cancellation/rescission of notices of default and/or notices of sale;

the taking of a deed in lieu of foreclosure; and

the preparation and execution of such other documents and performance of such
other actions as may be necessary under the terms of the Mortgage, Deed of Trust
or state law to expeditiously complete said transactions in paragraphs 8(a)
through 8(e), above.

The undersigned gives said Attorney-in-Fact full power and authority to execute
such instruments and to do and perform all and every act and thing necessary and
proper to carry into effect the power or powers granted by or under this Limited
Power of Attorney as fully as the undersigned might or could do, and hereby does
ratify and confirm to all that said Attorney-in-Fact shall lawfully do or cause
to be done by authority hereof.

Third parties without actual notice may rely upon the exercise of the power
granted under this Limited Power of attorney; and may be satisfied that this
Limited Power of Attorney shall continue in full force and effect and has not
been revoked unless an instrument of revocation has been made in writing by the
undersigned.

                                      J-2
<PAGE>
      IN WITNESS WHEREOF, JPMorgan Chase Bank as Trustee pursuant to that
Pooling and Servicing Agreement among the Depositor, the Servicer, and the
Trustee, dated as of October 1, 2004 (Specialty Underwriting and Residential
Finance Trust, Mortgage Loan Asset-Backed Certificates, Series 2004-AA1), has
caused its corporate seal to be hereto affixed and these presents to be signed
and acknowledged in its name and behalf by _________________ its duly elected
and authorized _____________________ this ____ day of _______________ , 200__.

                                          JPMORGAN CHASE BANK,
                                          as Trustee for Specialty Underwriting
                                          and Residential Finance Trust,
                                          Mortgage Loan Asset-Backed
                                          Certificates, Series 2004-AA1

                                          By
                                             ---------------------------------
                                              Name:
                                              Title:

STATE OF______

COUNTY OF______

      On ________________ _____, 200__, before me, the undersigned, a Notary
Public in and for said state, personally appeared ______________________,
_______________ of JPMorgan Chase Bank as Trustee for Specialty Underwriting and
Residential Finance Trust, Mortgage Loan Asset-Backed Certificates, Series
2004-AA1, personally known to me to be the person whose name is subscribed to
the within instrument and acknowledged to me that he/she executed that same in
his/her authorized capacity, and that by his/her signature on the instrument the
entity upon behalf of which the person acted and executed the instrument.

WITNESS my hand and official seal.
      (SEAL)

------------------------------------
Notary Public

My Commission Expires
                      -------------------------

                                      J-3
<PAGE>

                                    EXHIBIT K

                        OFFICER'S CERTIFICATE OF TRUSTEE

Merrill Lynch Mortgage Investors, Inc.
250 Vesey Street
4 World Financial Center, 10th Floor
New York, New York  10080

Re:   Pooling and Servicing Agreement (the "Agreement") dated as of October 1,
      2004 among Merrill Lynch Mortgage Investors, Inc., as depositor, Litton
      Loan Servicing LP, as servicer and JPMorgan Chase Bank, as trustee,
      relating to Specialty Underwriting and Residential Finance Trust, Mortgage
      Loan Asset-Backed Certificates, Series 2004-AA1

The Trustee hereby certifies to the Depositor, and its officers, directors and
affiliates, and with the knowledge and intent that they will rely upon this
certification, that:

1.    The Trustee has reviewed the Monthly Statements delivered pursuant to the
      Agreement since the last Officer's Certificate executed pursuant to
      Section 4.02 of the Agreement [or in the case of the first certification,
      since the Cut-off Date] (the "Trustee Information");

2.    Based on the Trustee's knowledge, the information in the Monthly
      Statement, taken as a whole, does not contain any untrue statement of a
      material fact or omit to state a material fact required by the Agreement
      to be included therein and necessary to make the statements made, in light
      of the circumstances under which such statements were made, not misleading
      as of the date hereof; and

3.    Based on the Trustee's knowledge, the Monthly Statements required to be
      prepared by the Trustee under the Agreement has been prepared and provided
      in accordance with the Agreement.

Date:

                                 JPMorgan Chase Bank, as Trustee

                                 By:
                                       -------------------------------
                                 Name:
                                       -------------------------------
                                 Title:
                                       -------------------------------

                                      K-1
<PAGE>
                                    EXHIBIT L

                        OFFICER'S CERTIFICATE OF SERVICER

Merrill Lynch Mortgage Investors, Inc.
250 Vesey Street
4 World Financial Center, 10th Floor
New York, New York  10080

JPMorgan Chase Bank
2001 Bryan Street
8th Floor
Dallas, Texas 75201

Attention:  Institutional Trust Services-Transfer Department - SURF 2004-AA1

Re:        Specialty Underwriting and Residential Finance Trust, Mortgage Loan
            Asset-Backed Certificates, Series 2004-AA1

Reference is made to the Pooling and Servicing Agreement, dated as of October 1,
2004 (the "Agreement"), by and among Merrill Lynch Mortgage Investors, Inc., as
depositor, Litton Loan Servicing LP, as servicer (the "Servicer") and JPMorgan
Chase Bank, as trustee. The Servicer hereby certifies to the Trustee and the
Depositor, and its officers, directors and affiliates, and with the knowledge
and intent that they will rely upon this certification, that:

1.    The Servicer has reviewed the information required to be delivered to the
      Trustee pursuant to the Agreement (the "Servicing Information").

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

3.    Based on the Servicer's knowledge, the Servicing Information required to
      be provided to the Trustee by the Servicer under this Agreement has been
      provided to the Trustee; and

                                       L-1
<PAGE>
4.    Based upon the review required under this Agreement, and except as
      disclosed in the Annual Statement of Compliance, the Annual Independent
      Certified Public Accountant's Servicing Report and all servicing reports,
      officer's certificates and other information relating to the servicing of
      the Mortgage Loans submitted to the Trustee by the Servicer, the Servicer
      has, as of the last day of the period covered by the Annual Statement of
      Compliance fulfilled its obligations under this Agreement.

Date:
                                        Litton Loan Servicing LP, as Servicer

                                        By:  ___________________________________

                                        Name:  _________________________________

                                        Title:  ________________________________

                                       L-2
<PAGE>
                                    EXHIBIT M

                                    RESERVED

                                       M-3
<PAGE>
                                    EXHIBIT N

                               AUCTION PROCEDURES

         The following sets forth the auction procedures to be followed in
connection with Pooling and Servicing Agreement (the "Agreement") among Merrill
Lynch Mortgage Investors, Inc., JPMorgan Chase Bank, as trustee and Litton Loan
Servicing, LP, dated October 1, 2004. Capitalized terms used herein that are not
otherwise defined shall have the meanings described thereto in the Agreement.

1.    Upon notice to the Servicer by the Trustee of the initiation of the
      auction, the Servicer will initiate the general auction procedures
      consisting of the following: (i) prepare a general solicitation package
      along with a confidentiality agreement; (ii) derive a list of a minimum of
      three (3) bidders, each of whom shall be a nationally recognized
      participant in mortgage finance, (iii) initiate contact with all bidders,
      (iv) send a confidentiality agreement to all bidders, and (v) upon receipt
      of a signed confidentiality agreement, send bid solicitation package to
      all bidders.

2.    The general solicitation package will include (i) the Agreement; (ii) a
      copy of all monthly trustee reports or electronic access thereto; (iii) a
      form of a Mortgage Loan Purchase Agreement acceptable to the Trustee and
      Servicer (the Mortgage Loans and other property included in the Trust Fund
      will be offered and sold on an "as is, where is basis, without any
      representation or warranty, expressed or implied, of any kind and without
      recourse to, or guaranty by, the Trustee); (iv) a description of the
      minimum price as set forth in the Agreement; (v) a formal bidsheet as
      determined by the Servicer and accepted by the Trustee; (vi) a detailed
      timetable (which shall include, but not be limited to, the provisions and
      dates preliminary bids, due diligence and final bids); and (vii) a data
      tape of the Mortgage Loans as of the related Remittance Period reflecting
      substantially the same data attributes used in the Prospectus Supplement
      dated October 25, 2004.

3.    A detailed timetable will be determined approximately ten (10) days prior
      to each auction sale and shall be determined by the Servicer with the
      consent of the Trustee, which consent shall not be unreasonably withheld,
      within reasonable market conditions at the time of the auction sale.

4.    All bids will be submitted directly to the Trustee. Upon acceptance of a
      bid which meets or exceeds the conditions set forth in Section 9.01, the
      Trustee will distribute the proceeds from the auction to the holders of
      the Certificates on the next succeeding Distribution Date as set forth in
      the Agreement. In the event the Trustee receives two (2) or more bids from
      bidders above the Auction Termination Price and at equal bids (a "Tie
      Event"), the Trustee shall notify such bidders to resubmit a bid to break
      the Tie Event.

5.    Upon determination that the minimum price was not met, the Trustee shall
      cancel such auction sale and notify the Servicer and Depositor
      immediately.

6.    The Trustee, the Servicer and the Depositor may mutually agree to revise
      or supplement these provisions as necessary, provided that the purchase
      price is at all times required to be at least the Auction Termination
      Price.

                                      N-4<PAGE>

                                                                    Exhibit 10.1
                                                                    ------------

                                   ADVO, Inc.
                       AMENDMENT TO EMPLOYMENT AGREEMENT

Effective as of October 15, 2004, ADVO, Inc. (the "Company") and S. Scott
Harding ("Harding") agree to amend the "Air Travel" provision of Harding's
Employment Agreement to reflect a change in the valuation of the air travel to
better comport with the Company's valuation procedures:

Air Travel       The Company will make its corporate aircraft available
                 to you for personal use to a maximum annual value of such use
                 during this Agreement of $150,000 (prorated from the Effective
                 Date for 2004), with that balance to be reduced using the
                 aggregate incremental cost to the Company for your personal use
                 of the aircraft, as determined using methods the Committee
                 approves. You acknowledge that the use of the plane will, in
                 some instances, be taxable to you.

Except as set forth above, the Employment Agreement between Harding and the
Company bearing an Effective Date of October 15, 2004 (the "Employment
Agreement") remains in full force and effect.

IN WITNESS WHEREOF, the parties have executed this Amendment on November 5,
2004.

                                   ADVO, Inc.

                          By:      /s/ DONALD  SCHNEIDER
                                   ------------------------------------
                                   Name:  Donald Schneider
                                   Title: Executive Vice President,
                                          Chief Human Resources Officer

                                   /s/ S. SCOTT HARDING
                                   -------------------------------------
                                   S. Scott Harding

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