Document:

<PAGE>

                     MERRILL LYNCH MORTGAGE INVESTORS, INC.
                                   Depositor,

                          CENDANT MORTGAGE CORPORATION
                                    Servicer,

                                       and

                             WELLS FARGO BANK, N.A.
                                     Trustee

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

                         POOLING AND SERVICING AGREEMENT

                           Dated as of August 1, 2004

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

            MERRILL LYNCH MORTGAGE INVESTORS TRUST SERIES MLCC 2004-D
                       MORTGAGE PASS-THROUGH CERTIFICATES

<PAGE>

                                TABLE OF CONTENTS

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<CAPTION>
                                                                                                              PAGE
                                                                                                              ----
<S>                                                                                                           <C>
ARTICLE I.            DEFINITIONS.......................................................................       7

         Section 1.01.         Definitions..............................................................       7

         Section 1.02.         Calculations Respecting Mortgage Loans...................................      38

ARTICLE II.           DECLARATION OF TRUST;  ISSUANCE OF CERTIFICATES...................................      39

         Section 2.01.         Creation and Declaration of Trust Fund; Conveyance of Mortgage Loans.....      39

         Section 2.02.         Acceptance of Trust Fund by Trustee; Review of Documentation for Trust
                               Fund.....................................................................      40

         Section 2.03.         Representations and Warranties of the Depositor and the Servicer.........      42

         Section 2.04.         Discovery of Breach; Repurchase or Substitution of Mortgage Loans........      47

         Section 2.05.         Grant Clause.............................................................      49

ARTICLE III.          THE CERTIFICATES..................................................................      50

         Section 3.01.         The Certificates.........................................................      50

         Section 3.02.         Registration.............................................................      51

         Section 3.03.         Transfer and Exchange of Certificates....................................      51

         Section 3.04.         Cancellation of Certificates.............................................      55

         Section 3.05.         Replacement of Certificates..............................................      55

         Section 3.06.         Persons Deemed Owners....................................................      55

         Section 3.07.         Temporary Certificates...................................................      55

         Section 3.08.         Appointment of Paying Agent..............................................      56

         Section 3.09.         Book-Entry Certificates..................................................      56

ARTICLE IV.           ADMINISTRATION OF THE TRUST FUND..................................................      57

         Section 4.01.         Custodial Accounts; Distribution Account.................................      57

         Section 4.02.         Reports to Trustee and Certificateholders................................      58

ARTICLE V.            DISTRIBUTIONS TO HOLDERS OF CERTIFICATES..........................................      61

         Section 5.01.         Distributions Generally..................................................      61

         Section 5.02.         Distributions from the Distribution Account..............................      61

         Section 5.03.         Allocation of Losses.....................................................      65

         Section 5.04.         Advances.................................................................      66

ARTICLE VI.           CONCERNING THE TRUSTEE; EVENTS OF DEFAULT.........................................      66

         Section 6.01.         Duties of Trustee........................................................      66

         Section 6.02.         Certain Matters Affecting the Trustee....................................      69
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                               TABLE OF CONTENTS
                                  (Continued)

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         Section 6.03.         Trustee Not Liable for Certificates......................................      70

         Section 6.04.         Trustee May Own Certificates.............................................      70

         Section 6.05.         Eligibility Requirements for Trustee.....................................      70

         Section 6.06.         Resignation and Removal of Trustee.......................................      71

         Section 6.07.         Successor Trustee........................................................      71

         Section 6.08.         Merger or Consolidation of Trustee.......................................      72

         Section 6.09.         Appointment of Co-Trustee, Separate Trustee or Custodian.................      72

         Section 6.10.         Authenticating Agents....................................................      74

         Section 6.11.         Indemnification of Trustee...............................................      74

         Section 6.12.         Fees and Expenses of the Trustee.........................................      75

         Section 6.13.         Collection of Monies.....................................................      75

         Section 6.14.         Events of Default; Trustee To Act; Appointment of Successor..............      75

         Section 6.15.         Additional Remedies of Trustee Upon Event of Default.....................      78

         Section 6.16.         Waiver of Defaults.......................................................      78

         Section 6.17.         Notification to Holders..................................................      78

         Section 6.18.         Directions by Certificateholders and Duties of Trustee During Event of
                               Default..................................................................      78

         Section 6.19.         Preparation of Tax Returns and Other Reports.............................      79

         Section 6.20.         Annual Certificate by Trustee............................................      80

ARTICLE VII.          PURCHASE OF MORTGAGE LOANS AND TERMINATION OF THE TRUST FUND......................      80

         Section 7.01.         Purchase of Mortgage Loans; Termination of Trust Fund Upon Purchase or
                               Liquidation of All Mortgage Loans........................................      80

         Section 7.02.         Procedure Upon Termination of Trust Fund.................................      81

         Section 7.03.         Additional Trust Fund Termination Requirements...........................      82

ARTICLE VIII.         RIGHTS OF CERTIFICATEHOLDERS......................................................      83

         Section 8.01.         Limitation on Rights of Holders..........................................      83

         Section 8.02.         Access to List of Holders................................................      83

         Section 8.03.         Acts of Holders of Certificates..........................................      84

ARTICLE IX.           ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS................................      85

         Section 9.01.         Servicer to Act as Servicer..............................................      85

         Section 9.02.         Title, Management and Disposition of REO Property........................      86
</TABLE>

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                               TABLE OF CONTENTS
                                  (Continued)

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<S>                                                                                                          <C>
         Section 9.03.         Trustee and Depositor's Right to Examine Servicer Records................      87

         Section 9.04.         Legal Proceedings Involving the Servicer and/or the Mortgage Loans.......      88

         Section 9.05.         Material Changes.........................................................      88

         Section 9.06.         Servicer Shall Provide Information as Reasonably Required................      89

         Section 9.07.         Servicer Not to Resign...................................................      89

         Section 9.08.         Custodial Accounts and Escrow Accounts...................................      89

         Section 9.09.         Assumption Processing....................................................      89

         Section 9.10.         Books and Records........................................................      90

         Section 9.11.         Annual Statement as to Compliance........................................      90

         Section 9.12.         Annual Independent Certified Public Accountants' Servicing Reports.......      90

         Section 9.13.         Officer's Certificate....................................................      90

         Section 9.14.         Servicing Compensation...................................................      91

         Section 9.15.         Indemnification..........................................................      91

         Section 9.16.         Non Solicitation.........................................................      92

         Section 9.17.         Successor to the Servicer................................................      92

         Section 9.18.         Statements to the Trustee................................................      93

         Section 9.19.         Limitation on Liability of the Servicer..................................      93

ARTICLE X.            REMIC ADMINISTRATION..............................................................      94

         Section 10.01.        REMIC Administration.....................................................      94

         Section 10.02.        Prohibited Transactions and Activities...................................      97

         Section 10.03.        Indemnification with Respect to Prohibited Transactions or Loss of REMIC
                               Status...................................................................      97

         Section 10.04.        REO Property.............................................................      97

ARTICLE XI.           MISCELLANEOUS PROVISIONS..........................................................      98

         Section 11.01.        Binding Nature of Agreement; Assignment..................................      98

         Section 11.02.        Entire Agreement.........................................................      98

         Section 11.03.        Amendment................................................................      98

         Section 11.04.        Voting Rights............................................................     100

         Section 11.05.        Provision of Information.................................................     100

         Section 11.06.        Governing Law............................................................     100

         Section 11.07.        Notices..................................................................     100
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                                  (Continued)

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         Section 11.08.        Severability of Provisions...............................................     101

         Section 11.09.        Indulgences; No Waivers..................................................     101

         Section 11.10.        Headings Not To Affect Interpretation....................................     101

         Section 11.11.        Benefits of Agreement....................................................     101

         Section 11.12.        Special Notices to the Rating Agencies...................................     101

         Section 11.13.        [RESERVED]...............................................................     102

         Section 11.14.        Counterparts.............................................................     102

         Section 11.15.        No Petitions.............................................................     103
</TABLE>

                                      -iv-

<PAGE>

      This POOLING AND SERVICING AGREEMENT, dated as of August 1, 2004 (the
"Agreement"), by and among MERRILL LYNCH MORTGAGE INVESTORS, INC., a Delaware
corporation, as depositor (the "Depositor"), CENDANT MORTGAGE CORPORATION, a New
Jersey corporation, as servicer (the "Servicer") and WELLS FARGO BANK, N.A., as
Trustee (the "Trustee"), and acknowledged by MERRILL LYNCH CREDIT CORPORATION a
Delaware corporation, as seller (the "Seller"), for purposes of Section 2.04.

                              PRELIMINARY STATEMENT

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

      As provided herein, the Trustee shall elect that the Trust Fund be treated
for federal income tax purposes as comprising three real estate mortgage
investment conduits (each a "REMIC" or, in the alternative, "REMIC 1," "REMIC 2"
and the "Upper Tier REMIC," respectively) in a tiered structure. The
Certificates, other than the Class A-R Certificate, shall represent ownership of
regular interests in the Upper Tier REMIC. For federal income tax purposes, in
addition to representing ownership of a REMIC regular interest, (i) each of the
Class A-1 and Class A-2 Certificates represents the right to receive payments in
respect of Basis Risk Shortfalls and Unpaid Basis Risk Shortfalls, and (ii) each
of the Class B-1, Class B-2 and Class B-3 Certificates represents the right to
receive payments in respect of Basis Risk Shortfalls and Unpaid Basis Risk
Shortfalls as provided in Section 5.02. For federal income tax purposes, (i)
each Class X-A Certificate will represent two REMIC regular interests and the
obligation to make certain non-REMIC payments to the holders of the Class A-1
and Class A-2 Certificates and (ii) each Class X-B Certificate will represent
three REMIC regular interests and the obligation to make certain non-REMIC
payments to the holders of the Class B-1, Class B-2 and Class B-3 Certificates
in respect of Basis Risk Shortfalls and Unpaid Basis Risk Shortfalls. The Class
A-R Certificate represents the sole class of residual interest in each of REMIC
1, REMIC 2 and the Upper Tier REMIC.

      The Upper Tier REMIC shall hold as its assets the several classes of
uncertificated REMIC 2 Regular Interests. REMIC 2 shall hold as its assets the
several uncertificated classes of REMIC 1 Regular Interests. REMIC 1 shall hold
as its assets the property of the Trust Fund other than the REMIC 1 Interests,
the REMIC 2 Interests and the interests in the grantor trusts described herein.

      Each Upper Tier REMIC Regular Interest is hereby designated as a regular
interest in the Upper Tier REMIC for purposes of the REMIC Provisions. Each
REMIC 2 Regular Interest is

<PAGE>

hereby designated as a regular interest in REMIC 2 for purposes of the REMIC
provisions. Each REMIC 1 Regular Interest is hereby designated as a regular
interest in REMIC 1 for purposes of the REMIC Provisions.

      The Class LT1-R Interest is hereby designated as the sole class of
residual interest in REMIC 1 for purposes of the REMIC Provisions. The Class
LT2-R Interest is hereby designated as the sole class of residual interest in
REMIC 2 for purposes of the REMIC provisions. The Class A-R Certificate, other
than the portion thereof representing the right to receive payments in respect
of the Class LT1-R Interest or the Class LT2-R Interest is hereby designated as
the sole class of residual interest in the Upper Tier REMIC for purposes of the
REMIC provisions and will also represent the Class LT1-R Interest and the Class
LT2-R Interest.

THE REMIC 1 INTERESTS

      The following table sets forth (or describes) the class designation,
interest rate, initial principal amount, and related pool of Mortgage Loans for
each class of REMIC 1 Interests:

<TABLE>
<CAPTION>
                                                                  Interest     Related Mortgage Pool
Class Designation               Principal Amount                    Rate             or Pools
-----------------               -----------------                 --------  ---------------------------
<S>                             <C>                               <C>             <C>
LT11A                           $    118,650.5979                   (2)           Pool 1
LT11B                           $  3,889,951.5979                   (3)           Pool 1
LT12A                           $    160,407.8614                   (2)           Pool 2
LT12B                           $  5,259,107.8614                   (4)           Pool 2
LT13A                           $     25,954.1229                   (2)           Pool 3
LT13B                           $    850,954.1229                   (5)           Pool 3
LT1Z                            $989,696,332.0556                   (2)           Pool 1, Pool 2 and Pool 3
LT1-R                                          (1)                  (1)           N/A
</TABLE>

-----------------
(1)   The Class LT1-R Interest represents the sole class of residual interest in
      REMIC 1 and has neither a principal amount nor an interest rate. The Class
      LT1-R Interest shall be represented by the Class A-R Certificate.

(2)   The Class LT11A Interest, the Class LT12A Interest, the Class LT13A
      Interest, and the Class LT1Z Interest shall have an interest rate for each
      Distribution Date (and the related Accrual Period) equal to the Net WAC.

(3)   The Class LT11B Interest shall have an interest rate for any Distribution
      Date (and the related Accrual Period) equal to the Pool 1 Net WAC.

(4)   The Class LT12B Interest shall have an interest rate for any Distribution
      Date (and the related Accrual Period) equal to the Pool 2 Net WAC.

(5)   The Class LT13B Interest shall have an interest rate for any Distribution
      Date (and the related Accrual Period) equal to the Pool 3 Net WAC.

      On each Distribution Date, the Trustee shall first pay or charge as an
expense of REMIC 1 all expenses of the Trust for such Distribution Date.

      Principal distributions shall be deemed to be made on the REMIC 1
Interests first, so as to keep the uncertificated principal balance of each
REMIC 1 Interest ending with the designation "A" equal to 1% of the excess of
(x) the aggregate Principal Balance of the Mortgage Loans in the related
Mortgage Pool over (y) the aggregate class principal amounts of the Certificates
in the Certificate Group related to such Mortgage Pool (except that if 1% of any
such excess is greater

<PAGE>

than the principal amount of the corresponding REMIC 1 Interest ending with the
designation "A", the least amount of principal shall be distributed to such
REMIC 1 Interests such that the REMIC 1 Subordinated Balance Ratio is
maintained); second, to each REMIC 1 Interest ending with the designation "B" so
as to keep the uncertificated principal balance of each such REMIC 1 Interest
equal to 1% of the aggregate Principal Balance of the Mortgage Loans in the
related Mortgage Pool and finally, all remaining principal amounts shall be
distributed in respect of the Class LT1Z Interest. Realized Losses with respect
to principal shall be allocated among the REMIC 1 Interests first, so as to keep
the uncertificated principal balance of each REMIC 1 Interest ending with the
designation "A" equal to 1% of the excess of (x) the aggregate Principal Balance
of the Mortgage Loans in the related Mortgage Pool over (y) the aggregate class
principal amounts of the Certificates in the Certificate Group related to such
Mortgage Pool (except that if 1% of any such excess is greater than the
principal amount of the corresponding REMIC 1 Interest ending with the
designation "A", the least amount of losses shall be allocated to such REMIC 1
Interests such that the REMIC 1 Subordinated Balance Ratio is maintained);
second, to each REMIC 1 Interest ending with the designation "B" so as to keep
the uncertificated principal balance of each such REMIC 1 Interest equal to 1%
of the aggregate Principal Balance of the Mortgage Loans in the related Mortgage
Pool and finally, all remaining Realized Losses with respect to principal shall
be distributed in respect of the Class LT1Z Interest.

      If on any Distribution Date the Certificate Principal Amount of any Class
of Certificates is increased pursuant to the penultimate sentence of the
definition of "Certificate Principal Amount", then there shall be an equivalent
aggregate increase in the principal amounts of the REMIC 1 Regular Interests,
with such increase allocated (before the making of distributions and the
allocation of losses on the REMIC 1 Regular Interests on such Distribution Date)
among the REMIC 1 Regular Interests as follows: (i) first, to each REMIC 1
Interest ending with the designation "B" so as to keep the uncertificated
principal balance of each such REMIC 1 Interest equal to 1% of the aggregate
Principal Balance of the Mortgage Loans in the related Mortgage Pool, (ii)
second, to each REMIC 1 Regular Interest ending with the designation "A", so
that the uncertificated principal balance of each REMIC 1 Regular Interest
ending with the designation "A" is as close as possible to (but does not exceed)
1% of the excess of (x) the aggregate Principal Balance of the Mortgage Loans in
related Mortgage Pool over (y) the aggregate class principal balance of the
Certificates in the Certificate Group related to such Mortgage Pool; provided,
however, that (a) the REMIC 1 Subordinated Balance Ratio is maintained and (b)
amounts allocated to any REMIC 1 Regular Interest pursuant to this clause (ii)
shall not exceed the amount of any previous realized losses allocated to such
REMIC 1 Regular Interest not previously offset by distributions or increases in
the principal amount of such REMIC 1 Regular Interest and (iii) finally, all
remaining amounts to the Class LT1Z Interest.

      All computations with respect to the REMIC 1 Interests shall be computed
to eight decimal places.

THE REMIC 2 INTERESTS

      The following table sets forth (or describes) the class designation,
interest rate, initial principal amount, and corresponding class of certificates
or components for each class of REMIC 2 Interests:

<TABLE>
<CAPTION>
                                                              Interest        Corresponding Class of
Class Designation               Principal Amount                Rate        Certificates or Components
-----------------               ----------------              --------      --------------------------
<S>                             <C>                           <C>           <C>
LT2A1                           $ 377,130,000.00                 (2)        Class A-1, X-A1 Component
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                                              Interest        Corresponding Class of
Class Designation               Principal Amount                Rate        Certificates or Components
-----------------               ----------------              --------      --------------------------
<S>                             <C>                           <C>           <C>
LT2A2                           $ 509,870,000.00                 (3)        Class A-2, X-A2 Component
LT2A3                           $  82,500,000.00                 (4)        Class A-3
LT2B1                           $  10,000,000.00                 (5)        Class B-1, Component XB1
LT2B2                           $   8,000,000.00                 (5)        Class B-2, Component XB2
LT2B3                           $   4,500,000.00                 (5)        Class B-3, Component XB3
LT2B4                           $   2,500,000.00                 (5)        Class B-4
LT2B5                           $   2,000,000.00                 (5)        Class B-5
LT2B6                           $   3,501,258.22                 (5)        Class B-6
LT2AR                           $         100.00                 (6)        Class A-R
LT2-R                                         (1)                (1)        N/A
</TABLE>

----------------
(1)   The Class LT2-R Interest represents the sole class of residual interest in
      REMIC 2 and has neither a principal amount nor an interest rate. The Class
      LT2-R Interest shall be represented by the Class A-R Certificate.

(2)   The Class LT2A1 Interest shall have an interest rate for each Distribution
      Date (and the related Accrual Period) equal to the Pool 1 Net WAC.

(3)   The Class LT2A2 Interest shall have an interest rate for each Distribution
      Date (and the related Accrual Period) equal to the Pool 2 Net WAC.

(4)   The Class LT2A3 Interest shall have an interest rate for each Distribution
      Date (and the related Accrual Period) equal to the Pool 3 Net WAC.

(5)   Each of the Class LT2B1 Interest, the Class LT2B2 Interest, the Class
      LT2B3 Interest, the Class LT2B4 Interest, the Class LT2B5 Interest and the
      Class LT2B6 Interest shall have an interest rate for each Distribution
      Date (and the related Accrual Period) equal to the Subordinate Net WAC
      which is the numerical equivalent of the weighted average of the interest
      rates on the Class LT11A Interest, the Class LT12A Interest and the Class
      LT13A Interest (treating, for purposes of computing this weighted average,
      the Class LT11A Interest as subject to a cap and a floor equal to the
      interest rate on the Class LT11B Interest, the Class LT12A Interest as
      subject to a cap and a floor equal to the interest rate on the Class LT12B
      Interest and the Class LT13A Interest as subject to a cap and a floor
      equal to the interest rate on the Class LT13B Interest).

(6)   The Class LT2AR Interest shall have an interest rate for each Distribution
      Date (and the related Accrual Period) equal to the Pool 1 Net WAC.

      Principal payments shall be deemed made and Realized Losses with respect
to principal shall be allocated among the REMIC 2 Interests in the same manner
as such payments are made or such Realized Losses are allocated among the
Corresponding Classes of Certificates (treating the initial Class Principal
Amount of the Class B-6 Certificates, for purposes of this sentence, as being
$3,501,258.22, treating the first $0.22 of distributions to the Class A-R
Certificate under Section 5.02(a)(vi) from principal payments on the Mortgage
Loans as distributed to the Class B-6 Certificates and disregarding Section
5.03(c)).

      The principal amount of each REMIC 2 Regular Interest shall be increased
on any Distribution Date on which, and in the amount by which, the Certificate
Principal Amount of any Corresponding Class of Certificates is increased
pursuant to the penultimate sentence of "Certificate Principal Amount."

THE CERTIFICATES

      The following table sets forth (or describes) the Class designation,
Certificate Interest Rate, initial Class Principal Amount (or initial Class
Notional Amount), and minimum denomination for each Class of Certificates
comprising interests in the Trust Fund created hereunder.

<PAGE>

<TABLE>
<CAPTION>
                       Related Class or
                          Classes of                           Initial Class
   Class               interests in the     Certificate     Principal Amount or           Minimum Denominations
Designation            Upper Tier REMIC    Interest Rate   Class Notional Amount          or Percentage Interest
-----------            ----------------    -------------   ---------------------          ----------------------
<S>                   <C>                  <C>             <C>                            <C>
 Class A-1             Upper Tier REMIC         (1)        $         377,130,000          $            25,000.00
                      Class A-1 Interest

 Class A-2             Upper Tier REMIC         (2)        $         509,870,000          $            25,000.00
                      Class A-2 Interest

 Class A-3                Class A-3             (3)        $          82,500,000          $            25,000.00

 Class X-A            X-A1 Component, X         (4)                           (4)         $            25,000.00
                         A2 Component

 Class X-B              Component XB1,          (5)                           (5)         $            25,000.00
                      Component XB2 and
                        Component XB3

 Class A-R                Class A-R             (6)        $                 100                             100%

 Class B-1             Upper Tier REMIC         (7)        $          10,000,000          $            25,000.00
                      Class B-1 Interest

 Class B-2             Upper Tier REMIC         (8)        $           8,000,000          $            25,000.00
                      Class B-2 Interest

 Class B-3             Upper Tier REMIC         (9)        $           4,500,000          $           100,000.00
                      Class B-3 Interest

 Class B-4                Class B-4             (10)       $           2,500,000          $           100,000.00

 Class B-5                Class B-5             (10)       $           2,000,000          $           100,000.00

 Class B-6                Class B-6             (10)       $           3,501,258          $           100,000.00
</TABLE>

(1)   The Certificate Interest Rate with respect to any Distribution Date (and
      the related Accrual Period) for the Class A-1 Certificates will be the
      least of (i) LIBOR plus 0.330%; (ii) the Pool 1 Net WAC and (iii) 11.75%;
      provided, however, if the Mortgage Loans and related property are not
      purchased pursuant to Section 7.01(c) on the Initial Optional Purchase
      Date, then with respect to each subsequent Distribution Date the per annum
      rate calculated pursuant to clause (i) above with respect to the Class A-1
      Certificates will be LIBOR plus 0.660%.

(2)   The Certificate Interest Rate with respect to any Distribution Date (and
      the related Accrual Period) for the Class A-2 Certificates will be the
      least of (i) LIBOR plus 0.360%; (ii) the Pool 2 Net WAC and (iii) 11.75%;
      provided, however, if the Mortgage Loans and related property are not
      purchased pursuant to Section 7.01(c) on the Initial Optional Purchase
      Date, then with respect to the Distribution Date occurring in the month in
      which the next LIBOR Determination Date with respect to the Class A-2
      Certificates occurs on each subsequent Distribution Date the per annum
      rate calculated pursuant to clause (i) above with respect to the Class A-2
      Certificates will be LIBOR plus 0.720%.

(3)   The Certificate Interest Rate with respect to any Distribution Date (and
      the related Accrual Period) for the Class A-3 Certificates will be the
      Pool 3 Net WAC.

(4)   The Class X-A Certificates consist of two components, the X-A1 Component
      and the X-A2 Component. On any Distribution Date, the Class X-A
      Certificate will have a Class Notional Amount equal to the sum of the
      Component Notional Amount of the X-A1 Component and the X-A2 Component.
      The Class X-A Certificates are entitled to receive on each Distribution
      Date the sum of the amount of interest accrued on the X-A1 Component and
      the X-A2 Component.

<PAGE>

(5)   The Class X-B Certificates will represent a 100% interest in each of
      Component XB1, Component XB2 and Component XB3. See the definitions of
      "Component XB1," "Component XB2" and "Component XB3" for the interest rate
      and notional balance of these Components. On any Distribution Date, the
      Class X-B Certificates will have a Class Notional Amount equal to the sum
      of the Component Notional Amount of Component XB1, Component XB2 and
      Component XB3.

(6)   The Certificate Interest Rate with respect to any Distribution Date (and
      the related Accrual Period) for the Class A-R Certificate will equal the
      Pool 1 Net WAC.

(7)   The Certificate Interest Rate with respect to any Distribution Date (and
      the related Accrual Period) for the Class B-1 Certificates will be the
      least of (i) LIBOR plus 0.520%; (ii) the Subordinate Net WAC and (iii)
      11.75%; provided, however, if the Mortgage Loans and related property are
      not purchased pursuant to Section 7.01(c) on the Initial Optional Purchase
      Date, then with respect to each subsequent Distribution Date the per annum
      rate calculated pursuant to clause (i) above with respect to the Class B-1
      Certificates will be LIBOR plus 0.780%.

(8)   The Certificate Interest Rate with respect to any Distribution Date (and
      the related Accrual Period) for the Class B-2 Certificates will be the
      least of (i) LIBOR plus 0.950%; (ii) the Subordinate Net WAC and (iii)
      11.75%; provided, however, if the Mortgage Loans and related property are
      not purchased pursuant to Section 7.01(c) on the Initial Optional Purchase
      Date, then with respect to each subsequent Distribution Date the per annum
      rate calculated pursuant to clause (i) above with respect to the Class B-2
      Certificates will be LIBOR plus 1.425%.

(9)   The Certificate Interest Rate with respect to any Distribution Date (and
      the related Accrual Period) for the Class B-3 Certificates will be the
      least of (i) LIBOR plus 1.600%; (ii) the Subordinate Net WAC and (iii)
      11.75%; provided, however, if the Mortgage Loans and related property are
      not purchased pursuant to Section 7.01(c) on the Initial Optional Purchase
      Date, then with respect to each subsequent Distribution Date the per annum
      rate calculated pursuant to clause (i) above with respect to the Class B-3
      Certificates will be LIBOR plus 2.400%.

(10)  The Certificate Interest Rates with respect to any Distribution Date (and
      the related Accrual Period) for the Class B-4, Class B-5 and Class B-6
      Certificates will be equal to the Subordinate Net WAC.

      As of the Cut-off Date, the Mortgage Loans had an aggregate Scheduled
Principal Balance of $1,000,001,358.22.

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

                                   ARTICLE I.

                                   DEFINITIONS

Section 1.01. Definitions.

      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 Mortgage Loans in the jurisdictions in which the related
Mortgaged Properties are located.

<PAGE>

      Accountant: A Person engaged in the practice of accounting who (except
when this Agreement provides that an Accountant must be Independent) may be
employed by or affiliated with the Depositor or an Affiliate of the Depositor.

      Accrual Period: With respect to any Distribution Date and any Class of
LIBOR Certificates, the period commencing on the 25th day of the month preceding
the month in which the Distribution Date occurs and ending on the 24th day of
the month in which the Distribution Date occurs; provided, however, that the
first Accrual Period with respect to the LIBOR Certificates shall be the period
beginning on the Closing Date and ending on August 24, 2004. The Accrual Period
applicable to the Components, the Class A-3, Class A-R, Class B-4, Class B-5,
Class B-6 Certificates and each Class of Lower Tier REMIC Interests shall be the
calendar month immediately preceding the month in which the related Distribution
Date occurs. Interest shall accrue on all Classes of Certificates, all
Components and on all Lower Tier REMIC Interests on the basis of a 360-day year
consisting of twelve 30-day months.

      Act: The Securities Act of 1933, as amended.

      Additional Collateral: With respect to any Additional Collateral Mortgage
Loan, the meaning assigned thereto in the Mortgage Loan Purchase and Sale
Agreement.

      Additional Collateral Mortgage Loan: Each Mortgage Loan identified as such
in the Mortgage Loan Schedule.

      Adjustment Date: As to any Mortgage Loan, the date on which the related
Mortgage Rate adjusts in accordance with the terms of the related Mortgage Note.

      Advance: With respect to a Mortgage Loan, the payments required to be made
by the Trustee solely in its capacity as successor servicer or by the Servicer
with respect to any Distribution Date pursuant to this Agreement, the amount of
any such payment being equal to the aggregate of the payments of principal and
interest (net of the applicable Servicing Fee and net of any net income in the
case of any REO Property) on the Mortgage Loans that were due on the related Due
Date and not received as of the close of business on the related Determination
Date, less the aggregate amount of any such delinquent payment that either the
Trustee or the Servicer has determined would constitute Nonrecoverable Advances
if advanced.

      Adverse REMIC Event: As defined in Section 10.01(f) hereof.

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

      Aggregate Senior Percentage: As to any Distribution Date, the percentage
equivalent of a fraction, the numerator of which is the aggregate of the Class
Principal Amounts of the Class A-1, Class A-2, Class A-3 and Class A-R
Certificates and the denominator of which is the Aggregate Stated Principal
Balance, but in no event greater than 100%.

      Aggregate Stated Principal Balance: As to any Distribution Date, the
aggregate of the Stated Principal Balances for all Mortgage Loans (and when such
term is used with respect to a

<PAGE>

particular Mortgage Pool, the aggregate of the Stated Principal Balances of the
Mortgage Loans in such Mortgage Pool) which were outstanding on the Due Date in
the month preceding the month of such Distribution Date.

      Aggregate Subordinate Percentage: As to any Distribution Date, the
difference between 100% and the Aggregate Senior Percentage for such
Distribution Date, but in no event less than zero.

      Aggregate Voting Interests: The aggregate of the Voting Interests of all
the Certificates under this Agreement.

      Agreement: This Pooling and Servicing Agreement and all amendments and
supplements hereto.

      Allocable Share: With respect to each Class of Subordinate Certificates
and any Distribution Date, the percentage equivalent of a fraction, the
numerator of which is the Class Principal Amount of such Class and the
denominator of which is the aggregate of the Class Principal Amounts of each
Class of Subordinate Certificates.

      Ancillary Fees: With respect to any Mortgage Loan, (i) all late charges,
(ii) all fees payable pursuant to Cendant's "Speed Pay" program, (iii) all
returned-item charges (e.g. insufficient funds charges) and (iv) modification or
conversion fees.

      Applicable Credit Support Percentage: As to any Class of Subordinate
Certificates and any Distribution Date, the sum of the Class Subordination
Percentages of such Class and the aggregate Class Subordination Percentage of
all other Classes of Subordinate Certificates having higher numerical Class
designations than such Class.

      Apportioned Principal Balance: As to any Distribution Date and each Class
of Subordinate Certificates and any Mortgage Pool, the Class Principal Amount
thereof multiplied by a fraction, the numerator of which is the applicable Pool
Subordinate Amount (i.e., the Pool 1 Subordinate Amount, the Pool 2 Subordinate
Amount or the Pool 3 Subordinate Amount as the case may require), and the
denominator of which is the sum of such Pool Subordinate Amounts on such date.

      Appraised Value: With respect to any Mortgage Loan, the Appraised Value of
the related Mortgaged Property shall be: (i) with respect to a Mortgage Loan
other than a Refinancing Mortgage Loan, the lesser of (a) the value of the
Mortgaged Property based upon the appraisal made at the time of the origination
of such Mortgage Loan and (b) the sales price of the Mortgaged Property at the
time of the origination of such Mortgage Loan; and (ii) with respect to a
Refinancing Mortgage Loan, the value of the Mortgaged Property based upon the
appraisal made at the time of the origination of such Refinancing Mortgage Loan.

      Assignment of Mortgage: An assignment of the Mortgage, notice of transfer
or equivalent instrument, in recordable form, sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to reflect the
sale of the Mortgage to the Trustee, which assignment, notice of transfer or
equivalent instrument may be in the form of one or more blanket assignments
covering the Mortgage Loans secured by Mortgaged Properties located in the same
jurisdiction, if permitted by law; provided, however, that the Trustee shall not
be responsible for determining whether any such assignment is in recordable
form.

<PAGE>

      Authenticating Agent: The Trustee or any authenticating agent appointed by
the Trustee pursuant to Section 6.10 until any successor authenticating agent
for the Certificates is named, and thereafter "Authenticating Agent" shall mean
any such successor.

      Authorized Officer: Any Person who may execute an Officer's Certificate on
behalf of the Depositor.

      Available Distribution Amount: With respect to any Distribution Date and
each Mortgage Pool, the total amount of all cash received by the Trustee on the
Mortgage Loans in such Mortgage Pool from the Servicer or otherwise through the
Distribution Account Deposit Date for deposit into the Distribution Account in
respect of such Distribution Date, including (1) all scheduled installments of
interest (net of the Servicing Fee) and principal collected on the related
Mortgage Loans and due during the Due Period related to such Distribution Date,
together with any Advances in respect thereof, (2) all Insurance Proceeds,
Liquidation Proceeds, Subsequent Recoveries and the proceeds of any Additional
Collateral from the related Mortgage Loans, in each case for such Distribution
Date, (3) all partial or full Principal Prepayments, together with any accrued
interest thereon, identified as having been received from the related Mortgage
Loans during the related Prepayment Period, (4) any amounts received from the
Servicer in respect of Prepayment Interest Shortfalls with respect to the
related Mortgage Loans; and (5) the aggregate Purchase Price of all Defective
Mortgage Loans and Converted Mortgage Loans (if any) in such Mortgage Pool
purchased from the Trust Fund during the related Prepayment Period, minus:

      (A)   all related fees, charges and amounts payable or reimbursable to the
Trustee under this Agreement, to the extent that, if paid by the Trust Fund,
such fees, charges or other amounts would constitute "unanticipated expenses"
(within the meaning of Treasury Regulations Section 1.860G-1(b)(3)(ii)) of any
of the REMICs provided for herein and up to an aggregate maximum amount equal to
$300,000 annually; provided, such annual aggregate maximum amount shall exclude
(i) any Servicing Transfer Costs, or amounts reimbursable to the Servicer under
this Agreement and (ii) any costs, damages or expenses incurred by the Trustee
in connection with any "high cost" home loans or any predatory or abusive
lending laws, which amounts shall in no case be subject to any such limitation;

      (B)   in the case of (2), (3), (4) and (5) above, any related unreimbursed
expenses incurred by the Servicer in connection with a liquidation or
foreclosure and any unreimbursed Advances or Servicing Advances due to the
Servicer (or, pursuant to Section 5.04, the Trustee);

      (C)   any related unreimbursed Nonrecoverable Advances due to the Servicer
(or, pursuant to Section 5.04, the Trustee); and

      (D)   in the case of (1) through (4) above, any related amounts collected
which are determined to be attributable to a subsequent Due Period or Prepayment
Period.

      Bankruptcy: As to any Person, the making of an assignment for the benefit
of creditors, the filing of a voluntary petition in bankruptcy, adjudication as
a bankrupt or insolvent, the entry of an order for relief in a bankruptcy or
insolvency proceeding, the seeking of reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief, or seeking, consenting
to or acquiescing in the appointment of a trustee, receiver or liquidator,
dissolution, or termination, as the case may be, of such Person pursuant to the
provisions of either the Bankruptcy Code or any other similar state laws.

<PAGE>

      Bankruptcy Code: The United States Bankruptcy Code of 1986, as amended.

      Basis Risk Shortfall: With respect to any Distribution Date and any Class
of LIBOR Certificates, the excess, if any, of (i) the amount of Current Interest
that would have been payable on such Class for such Distribution Date if the
Certificate Interest Rate for such Class as set forth in the Preliminary
Statement hereto were determined without regard to clause (ii) in the definition
thereof, over (ii) the actual Current Interest payable on such Class for such
Distribution Date.

      BBA: The British Banker's Association.

      Book-Entry Certificates: Beneficial interests in Certificates designated
as "Book-Entry Certificates" in this Agreement, ownership and transfers of which
shall be evidenced or made through book entries by a Clearing Agency as
described in Section 3.09; provided, that after the occurrence of a Book-Entry
Termination whereupon book-entry registration and transfer are no longer
permitted and Definitive Certificates are to be issued to Certificate Owners,
such Book-Entry Certificates shall no longer be "Book-Entry Certificates." As of
the Closing Date, the following Classes of Certificates constitute Book-Entry
Certificates: the Class A-1, Class A-2, Class A-3, Class X-A, Class B-1, Class
B-2, Class B-3, Class B-4, Class B-5, Class B-6 and Class X-B.

      Book-Entry Termination: The occurrence of any of the following events: (i)
the Clearing Agency is no longer willing or able to properly discharge its
responsibilities with respect to the Book Entry Certificates, and the Depositor
is unable to locate a qualified successor; or (ii) the Depositor at its option
advises the Trustee and the Certificate Registrar in writing that it elects to
terminate the book-entry system through the Clearing Agency.

      Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a day
on which banking institutions in New York, New York or, if other than New York,
any city in which the Corporate Trust Office of the Trustee is located, or the
States of Maryland or Minnesota, are authorized or obligated by law or executive
order to be closed.

      Cendant: Cendant Mortgage Corporation or its successors in interest.

      Certificate: Any one of the certificates signed by the Trustee and
authenticated by the Authenticating Agent in substantially the forms attached
hereto as Exhibit A.

      Certificate Group: Each of the Group 1 Certificates, the Group 2
Certificates and the Group 3 Certificates.

      Certificate Interest Rate: With respect to each Class of Certificates and
any Distribution Date, the applicable per annum rate described in the
Preliminary Statement hereto.

      Certificate Owner: With respect to a Book-Entry Certificate, the Person
who is the owner of such Book-Entry Certificate, as reflected on the books of
the Clearing Agency, or on the books of a Person maintaining an account with
such Clearing Agency (directly or as an indirect participant, in accordance with
the rules of such Clearing Agency).

      Certificate Principal Amount: With respect to any Certificate (other than
a Class X Certificate), at the time of determination, the maximum specified
dollar amount of principal to which the Holder thereof is then entitled
hereunder, such amount being equal to the initial principal amount set forth on
the face of such Certificate, less (i) the amount of all principal

<PAGE>

distributions previously made with respect to such Certificate; (ii) all
Realized Losses allocated to such Certificate; and (iii) in the case of a
Subordinate Certificate, any Subordinate Certificate Writedown Amount allocated
to such Certificates. Notwithstanding the foregoing, on any Distribution Date
relating to a Due Period in which a Subsequent Recovery has been received by the
Servicer, the Certificate Principal Amount of any Class of Certificates then
outstanding for which any Realized Loss or any Subordinate Certificate Writedown
Amount has been applied will be increased, in order of seniority, by an amount
equal to the lesser of (i) the amount such Class of Certificates has been
written down in respect of Realized Losses or Subordinate Certificate Writedown
Amounts, to the extent not previously offset by increases in Certificate
Principal Amount pursuant to this sentence and (ii) the total of any Subsequent
Recovery distributed on such date to the Certificateholders (reduced (x) by the
amount of the increase in the Certificate Principal Amount of any more senior
Class of Certificates pursuant to this sentence on such Distribution Date and
(y) to reflect a proportionate amount of the increase in the Certificate
Principal Amount of any pari passu Class of Certificates on such Distribution
Date pursuant to this sentence). For purposes of Article V hereof, unless
specifically provided to the contrary, Certificate Principal Amounts shall be
determined as of the close of business of the immediately preceding Distribution
Date, after giving effect to all distributions made on such date.

      Certificate Register and Certificate Registrar: The register maintained
and the registrar appointed pursuant to Section 3.02.

      Certificateholder: The meaning provided in the definition of "Holder."

      Civil Relief Act: The Servicemembers Civil Relief Act as amended.

      Class: Collectively, Certificates bearing the same class designation. In
the case of the REMIC 1, REMIC 2 and the Upper Tier REMIC, the term "Class"
refers to all REMIC Interests having the same alphanumeric designation.

      Class A-1 Excess Interest Amount: The product of (i) the initial Class
Principal Amount of the Class A-1 Certificates, (ii) the initial Certificate
Interest Rate of the Class A-1 Certificates and (iii) a fraction, the numerator
of which is the excess of 30 over the number of days in the initial Accrual
Period for the Class A-1 Certificates and the denominator of which is 360.

      Class A-2 Excess Interest Amount: The product of (i) the initial Class
Principal Amount of the Class A-2 Certificates, (ii) the initial Certificate
Interest Rate of the Class A-2 Certificates and (iii) a fraction, the numerator
of which is the excess of 30 over the number of days in the initial Accrual
Period for the Class A-2 Certificates and the denominator of which is 360.

      Class A-R Certificate: The Class A-R Certificate executed by the Trustee,
and authenticated and delivered by the Authenticating Agent, substantially in
the form annexed hereto as Exhibit A, and evidencing the ownership of the Class
LT1-R Interest, the Class LT2-R Interest and the residual interest in the Upper
Tier REMIC.

      Class B-1 Excess Interest Amount: The product of (i) the initial Class
Principal Amount of the Class B-1 Certificates, (ii) the initial Certificate
Interest Rate of the Class B-1 Certificates and (iii) a fraction, the numerator
of which is the excess of 30 over the number of days in the initial Accrual
Period for the Class B-1 Certificates and the denominator of which is 360.

      Class B-2 Excess Interest Amount: The product of (i) the initial Class
Principal Amount of the Class B-2 Certificates, (ii) the initial Certificate
Interest Rate of the Class B-2 Certificates

<PAGE>

and (iii) a fraction, the numerator of which is the excess of 30 over the number
of days in the initial Accrual Period for the Class B-2 Certificates and the
denominator of which is 360.

      Class B-3 Excess Interest Amount: The product of (i) the initial Class
Principal Amount of the Class B-3 Certificates, (ii) the initial Certificate
Interest Rate of the Class B-3 Certificates and (iii) a fraction, the numerator
of which is the excess of 30 over the number of days in the initial Accrual
Period for the Class B-3 Certificates and the denominator of which is 360.

      Class Notional Amount: With respect to the Class X-A and Class X-B
Certificates, the class notional amount calculated as provided in the
Preliminary Statement hereto.

      Class Principal Amount: With respect to each Class of Certificates (other
than a Class X Certificate) the aggregate of the Certificate Principal Amounts
of all Certificates of such Class at the date of determination.

      Class X Certificates: Any of the Class X-A or Class X-B Certificates.

      Class Subordination Percentage: With respect to each Class of Subordinate
Certificates, for each Distribution Date, the percentage obtained by dividing
the Class Principal Amount of such Class immediately prior to such Distribution
Date by the sum of the Class Principal Amounts of all Classes of Certificates
immediately prior to such Distribution Date.

      Clearing Agency: An organization registered as a "clearing agency"
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended. As
of the Closing Date, the Clearing Agency shall be The Depository Trust Company.

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

      Closing Date: August 26, 2004.

      Code: The Internal Revenue Code of 1986, as amended, and as it may be
further amended from time to time, any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto in
temporary or final form.

      Compensating Interest Payment: As to any Distribution Date, the lesser of
(1) the Servicing Fee for such date and (2) any Prepayment Interest Shortfall
for such date.

      Component Interest Rate: With respect to the X-A1 Component and any
Distribution Date, the interest rate specified in the definition of X-A1
Component. With respect to the X-A2 Component and any Distribution Date, the
interest rate specified in the definition of X-A2 Component. With respect to
Component XB1 and any Distribution Date, the interest rate specified in the
definition of Component XB1. With respect to Component XB2 and any Distribution
Date, the interest rate specified in the definition of Component XB2. With
respect to Component XB3 and any Distribution Date, the interest rate specified
in the definition of Component XB3.

<PAGE>

      Component Notional Amount: With respect to X-A1 Component and any
Distribution Date, the notional amount specified in the definition of X-A1
Component. With respect to X-A2 Component and any Distribution Date, the
notional amount specified in the definition of X-A2 Component. With respect to
Component XB1 and any Distribution Date, the notional amount specified in the
definition of Component XB1. With respect to Component XB2 and any Distribution
Date, the notional amount specified in the definition of Component XB2. With
respect to Component XB3 and any Distribution Date, the notional amount
specified in the definition of Component XB3.

      Component XB1: A regular interest in the Upper Tier REMIC having a
notional amount for any Distribution Date equal to the Class Principal Amount of
the Class B-1 Certificates immediately before such Distribution Date and having
an interest rate with respect to any Distribution Date (and the related Accrual
Period) equal to the excess, if any, of (x) the Subordinate Net WAC for such
Distribution Date over (y) the Certificate Interest Rate on the Class B-1
Certificates for such Distribution Date.

      Component XB2: A regular interest in the Upper Tier REMIC having a
notional amount for any Distribution Date equal to the Class Principal Amount of
the Class B-2 Certificates immediately before such Distribution Date and having
an interest rate with respect to any Distribution Date (and the related Accrual
Period) equal to the excess, if any, of (x) the Subordinate Net WAC for such
Distribution Date over (y) the Certificate Interest Rate on the Class B-2
Certificates for such Distribution Date.

      Component XB3: A regular interest in the Upper Tier REMIC having a
notional amount for any Distribution Date equal to the Class Principal Amount of
the Class B-3 Certificates immediately before such Distribution Date and having
an interest rate with respect to any Distribution Date (and the related Accrual
Period) equal to the excess, if any, of (x) the Subordinate Net WAC for such
Distribution Date over (y) the Certificate Interest Rate on the Class B-3
Certificates for such Distribution Date.

      Components: Each of the X-A1 Component, X-A2 Component, Component XB1,
Component XB2 and Component XB3.

      Cooperative Corporation: The entity that holds title (fee or an acceptable
leasehold estate) to the real property and improvements constituting the
Cooperative Property and which governs the Cooperative Property, which
Cooperative Corporation must qualify as a Cooperative Housing Corporation under
Section 216 of the Code.

      Cooperative Loan: Any Mortgage Loan secured by Cooperative Shares and a
Proprietary Lease.

      Cooperative Property: The real property and improvements owned by the
Cooperative Corporation, that includes the allocation of individual dwelling
units to the holders of the shares of the Cooperative Corporation.

      Cooperative Shares: Shares issued by a Cooperative Corporation.

      Corporate Trust Office: With respect to the presentment of Certificates
for registration of transfer, exchange or final payment, Wells Fargo Bank, N.A.,
Sixth Street and Marquette Avenue, Minneapolis, Minnesota 55479, Attention:
Corporate Trust Services - MLMI Series MLCC 2004-D and for all other purposes,
Wells Fargo Bank, N.A., 9062 Old Annapolis Road,

<PAGE>

Columbia, Maryland 21045, Attention: Corporate Trust Services - MLMI Series MLCC
2004-D, or such other address as the Trustee may designate from time to time by
notice to the Certificateholders.

      Corresponding Classes of Certificates or Components: With respect to each
Lower Tier REMIC Interest, the Class or Classes of Certificates or Components
appearing opposite such Lower Tier REMIC Interest as described in the
Preliminary Statement hereto.

      Credit Support Depletion Date: The first Distribution Date, if any, on
which the aggregate Certificate Principal Amounts of the Subordinate
Certificates have been reduced to zero.

      Current Interest: With respect to each Class of Certificates and each
Component on each Distribution Date, the aggregate amount of interest accrued at
the applicable Certificate Interest Rate or Component Interest Rate during the
related Accrual Period on the Class Principal Amount or Component Notional
Amount of such Class or Component; provided, however, that with respect to the
first Distribution Date only, (i) the aggregate Current Interest for the X-A1
Component will be increased by the Class A-1 Excess Interest Amount, (ii) the
aggregate Current Interest for the X-A2 Component will be increased by the Class
A-2 Excess Interest Amount, (iii) the aggregate Current Interest for Component
XB1 will be increased by the Class B-1 Excess Interest Amount, (iv) the
aggregate Current Interest for Component XB2 will be increased by the Class B-2
Excess Interest Amount and (v) the aggregate Current Interest for Component XB3
will be increased by the Class B-3 Excess Interest Amount.

      Custodial Account: The separate trust account or accounts created and
maintained by the Servicer pursuant to the Fannie Mae Servicing Guide which
shall be entitled "Wells Fargo Bank, N.A., in trust for the registered holders
for Merrill Lynch Mortgage Investors Trust Series MLCC 2004-D Mortgage
Pass-Through Certificates." The Custodial Account shall be an Eligible Account.

      Custodial Agreement: The Custodial Agreement, dated as of December 15,
2000, between Merrill Lynch Credit Corporation and Wells Fargo Bank Minnesota,
N.A., as custodian, as amended by Amendment No. 1, dated as of January 16, 2002
a copy of which (excluding all exhibits thereto) is attached hereto as Exhibit
O.

      Custodian: Wells Fargo Bank, N.A., any successor in interest or any
successor custodian appointed pursuant to the Custodial Agreement.

      Cut-off Date: August 1, 2004.

      Cut-off Date Balance: With respect to the Mortgage Loans in the Trust Fund
on the Closing Date, the Aggregate Stated Principal Balance as of the Cut-off
Date.

      Debt Service Reduction: With respect to any Mortgage Loan, a reduction by
a court of competent jurisdiction in a proceeding under the Bankruptcy Code in
the Scheduled Payment for such Mortgage Loan which became final and
non-appealable, except such a reduction resulting from a Deficient Valuation or
any reduction that results in a permanent forgiveness of principal.

      Defective Mortgage Loan: The meaning specified in Section 2.04(a).

<PAGE>

      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 indebtedness under the Mortgage Loan, or any
reduction in the amount of principal to be paid in connection with any Scheduled
Payment that results in a permanent forgiveness of principal, which valuation or
reduction results from an order of such court which is final and non-appealable
in a proceeding under the Bankruptcy Code.

      Definitive Certificate: A Certificate of any Class issued in definitive,
fully registered, certificated form.

      Deleted Mortgage Loan: As defined in Section 2.04(a).

      Delinquent: Any Mortgage Loan with respect to which the Scheduled Payment
due on a Due Date is not received.

      Depositor: Merrill Lynch Mortgage Investors, Inc., a Delaware corporation,
having its principal place of business at 250 Vesey Street, 4 World Financial
Center, 10th Floor, New York, New York 10080, or its successors in interest.

      Determination Date: With respect to each Distribution Date, the 15th day
of the month in which such Distribution Date occurs, or, if such 15th day is not
a Business Day, the next succeeding Business Day.

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

      Distribution Account: The separate Eligible Account created and maintained
by the Trustee pursuant to Section 4.01 in the name of the Trustee for the
benefit of the Certificateholders and designated "Wells Fargo Bank, N.A., in
trust for registered holders of Merrill Lynch Mortgage Investors Trust Series
MLCC 2004-D, Mortgage Pass-Through Certificates." Funds in the Distribution
Account (exclusive of any earnings on investments made with funds deposited in
the Distribution Account) shall be held in trust for the Trustee and the
Certificateholders for the uses and purposes set forth in this Agreement.

      Distribution Account Deposit Date: The 18th day of each calendar month
after the initial issuance of the Certificates or, if such 18th day is not a
Business Day, the immediately preceding Business Day, commencing in September
2004.

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

      Due Date: With respect to any Mortgage Loan, the date on which a Scheduled
Payment is due under the related Mortgage Note as indicated in the Mortgage
Note, which is the first day of the calendar month.

      Due Period: As to any Distribution Date, the period beginning on the
second day of the month preceding the month of such Distribution Date, and
ending on the first day of the month of such Distribution Date.

      EDP: The electronic data processing system used by the Seller and the
Servicer, which are licensees of ALLTEL Information Services, Inc.

<PAGE>

      Effective Loan-to-Value Ratio: A fraction, expressed as a percentage, the
numerator of which is the original Stated Principal Balance of the Mortgage
Loan, less the amount of Additional Collateral required to secure such Mortgage
Loan at the time of origination, if any, and the denominator of which is the
Appraised Value of the related Mortgage Property at such date.

      Eligible Account: Any of (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company the
short-term unsecured debt obligations of which (or, in the case of a depository
institution or trust company that is the principal subsidiary of a holding
company, the debt obligations of such holding company) have the highest
short-term ratings of each Rating Agency at the time any amounts are held on
deposit therein, or (ii) an account or accounts in a depository institution or
trust company in which such accounts are insured by the FDIC or the SAIF (to the
limits established by the FDIC or the SAIF) and the uninsured deposits in which
accounts are otherwise secured such that, as evidenced by an Opinion of Counsel
delivered to the Trustee and to each Rating Agency, the Certificateholders have
a claim with respect to the funds in such account or a perfected first priority
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 or trust company in which
such account is maintained, or (iii) a trust account or accounts maintained with
the trust department of a federal or state chartered depository institution or
trust company, acting in its fiduciary capacity or (iv) any other account
acceptable to each Rating Agency. Eligible Accounts may bear interest, and may
include, if otherwise qualified under this definition, accounts maintained with
the Trustee, any Paying Agent, or the Servicer.

      ERISA: The Employee Retirement Income Security Act of 1974, as amended,
and as it may be further amended from time to time, any successor statutes
thereto, and applicable U.S. Department of Labor regulations issued pursuant
thereto in temporary or final form.

      ERISA-Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that meets the requirements of an
Underwriter's Exemption.

      ERISA-Restricted Certificate: The Class A-R, Class B-4, Class B-5 or Class
B-6 Certificates.

      Escrow Account: The separate trust account or accounts created and
maintained by the Servicer pursuant to the Fannie Mae Servicing Guide which
shall be entitled "Wells Fargo Bank, N.A., in trust for the registered holders
for Merrill Lynch Mortgage Investors Trust Series MLCC 2004-D Mortgage
Pass-Through Certificates." The Escrow Account shall be an Eligible Account.

      Event of Default: As defined in Section 6.14.

      Fannie Mae: The entity formerly known as the Federal National Mortgage
Association, 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.

      FHA: The Federal Housing Administration or any successor thereto.

<PAGE>

      FHLMC: The Federal Home Loan Mortgage Corporation, 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.

      Final Certification: As referred to in Section 2.02(c), the form of which
is set forth at Exhibit L.

      Fitch Ratings: Fitch, Inc., or any successor in interest.

      GNMA: The Government National Mortgage Association, or any successor
thereto.

      Global Securities: The global certificates representing the Book-Entry
Certificates.

      Group 1: All of the Group 1 Certificates.

      Group 1 Certificate: Any Class A-1 or Class A-R Certificate.

      Group 2: All of the Group 2 Certificates.

      Group 2 Certificate: Any Class A-2 Certificate.

      Group 3: All of the Group 3 Certificates.

      Group 3 Certificate: Any Class A-3 Certificate.

      Holder or Certificateholder: The registered owner of any Certificate as
recorded on the books of the Certificate Registrar except that, solely for the
purposes of taking any action or giving any consent pursuant to this Agreement,
any Certificate registered in the name of the Depositor, the Trustee or the
Servicer, or any Affiliate thereof shall be deemed not to be outstanding in
determining whether the requisite percentage necessary to effect any such
consent has been obtained, except that, in determining whether the Trustee shall
be protected in relying upon any such consent, only Certificates which a
Responsible Officer of the Trustee knows to be so owned shall be disregarded.
The Trustee may request and conclusively rely on certifications by the Depositor
and the Servicer in determining whether any Certificates are registered to an
Affiliate of the Depositor or the Servicer.

      HUD: The United States Department of Housing and Urban Development, or any
successor thereto.

      Indemnified Parties: As defined in Section 9.15.

      Independent: When used with respect to any Accountants, a Person who is
"independent" within the meaning of Rule 2-01(b) of the Securities and Exchange
Commission's Regulation S-X. When used with respect to any other Person, a
Person who (a) is in fact independent of another specified Person and any
Affiliate of such other Person, (b) does not have any material direct financial
interest in such other Person or any Affiliate of such other Person, and (c) is
not connected with such other Person or any Affiliate of such other Person as an
officer, employee, promoter, underwriter, trustee, partner, director or Person
performing similar functions.

<PAGE>

      Index: As to each Mortgage Loan, the index from time to time in effect for
adjustment of the Mortgage Rate as set forth as such on the related Mortgage
Note.

      Initial Certification: As referred to in Section 2.02(a), the form of
which is set forth at Exhibit K.

      Initial LIBOR Rate: 1.625% with respect to the Class A-1, Class B-1, Class
B-2 and Class B-3 Certificates and 1.980% with respect to the Class A-2
Certificates.

      Initial Optional Purchase Date: The first Distribution Date following the
date on which the Aggregate Stated Principal Balance is less than 10.00% of the
Cut-off Date Balance.

      Insurance Policy: With respect to any Mortgage Loan, any insurance policy,
including all names and endorsements thereto in effect, including any
replacement policy or policies for any Insurance Policies.

      Insurance Proceeds: Proceeds paid by any Insurance Policy (excluding
proceeds required to be applied to the restoration and repair of the related
Mortgaged Property or released to the Mortgagor), in each case other than any
amount included in such Insurance Proceeds in respect of Insured Expenses and
the proceeds from any Limited Purpose Surety Bond.

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

      Interest Distribution Amount: For each Class of Certificates or Component,
on any Distribution Date, the Current Interest for such Class or Component, as
reduced by such Class's or Component's share of Net Prepayment Interest
Shortfalls and Relief Act Reductions. Any such shortfalls and reductions shall
be allocated among (i) all Classes of Certificates (other than the Interest Only
Certificates) of the related Certificate Group from such Mortgage Pool, (ii) the
X-A1 Component (in the case of Net Prepayment Interest Shortfalls or Relief Act
Reductions related to Pool 1) or the X-A2 Component (in the case of Net
Prepayment Interest Shortfalls or Relief Act Reductions related to Pool 2), and
(iii) the Subordinate Certificates proportionately on the basis of (1) in the
case of the Senior Certificates (other than the Class X Certificates), Current
Interest otherwise distributable thereon on such Distribution Date; (2) in the
case of the X-A1 Component and X-A2 Component, if applicable, the Current
Interest otherwise distributable thereon on such Distribution Date and (3) in
the case of Subordinate Certificates, interest accrued at the Net WAC of the
applicable Mortgage Pool on their Apportioned Principal Balance before taking
into account any reductions in such amounts from Net Interest Shortfalls for
that Distribution Date. Amounts so allocated to the Class B-1, Class B-2 or
Class B-3 Certificates will be allocated between the Class B-1 Certificates and
Component XB1 or between the Class B-2 Certificates and Component XB2 or between
the Class B-3 Certificates and Component XB3, as the case may be,
proportionately, based on the Current Interest otherwise distributable in
respect thereof on such Distribution Date.

      Interest-Only Certificates: Any of the Class X-A and Class X-B
Certificates.

      Interest Shortfall: As to any Class of Certificates or Component and any
Distribution Date, (i) the amount by which the Interest Distribution Amount
(exclusive of any payments to such Class in respect of Basis Risk Shortfalls or
Unpaid Basis Risk Shortfalls) for such Class or Component on such Distribution
Date and all prior Distribution Dates exceeds (ii) amounts distributed in
respect thereof to such Class or Component on prior Distribution Dates (as

<PAGE>

determined without reduction for amounts not paid to such Class or in respect of
such Component as a result of the provisos set forth in Sections 5.02(a)(i) and
5.02(b) hereof.

      Interest Transfer Amount: For any Distribution Date and for any
Undercollateralized Group, an amount equal to one month's interest on the
applicable Principal Transfer Amount at the related Mortgage Pool's Net WAC,
plus any shortfall of interest on the Senior Certificates related to such
Undercollateralized Group remaining unpaid from prior Distribution Dates.

      Intervening Assignments: The original intervening assignments of the
Mortgage, notices of transfer or equivalent instrument.

      Latest Possible Maturity Date: The Distribution Date in August 2029.

      LIBOR: With respect to the first Accrual Period, the Initial LIBOR Rate.
With respect to each subsequent Accrual Period, a per annum rate determined on
the LIBOR Determination Date in the following manner by the Trustee on the basis
of the "Interest Settlement Rate" set by the BBA for one-month (or six-month
with respect to the Class A-2 Certificates) United States dollar deposits, as
such rates appear on the Telerate Page 3750, as of 11:00 a.m. (London time) on
such LIBOR Determination Date.

      (a)   If on such a LIBOR Determination Date, the BBA's Interest Settlement
Rate does not appear on the Telerate Page 3750 as of 11:00 a.m. (London time),
or if the Telerate Page 3750 is not available on such date, the Trustee will
obtain such rate from Reuters' "page LIBOR 01" or Bloomberg's page "BBAM." If
such rate is not published for such LIBOR Determination Date, LIBOR for such
date will be the most recently published Interest Settlement Rate. In the event
that the BBA no longer sets an Interest Settlement Rate, the Trustee will
designate an alternative index that has performed, or that the Trustee expects
to perform, in a manner substantially similar to the BBA's Interest Settlement
Rate. The Trustee will select a particular index as the alternative index only
if it receives an Opinion of Counsel, which opinion shall be an expense
reimbursed from the Distribution Account, that the selection of such index will
not cause any of the REMICs to lose their classification as REMICs for federal
income tax purposes.

      (b)   The establishment of LIBOR by the Trustee and the Trustee's
subsequent calculation of the Certificate Interest Rate applicable to the LIBOR
Certificates for the relevant Accrual Period, in the absence of manifest error,
will be final and binding.

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

      LIBOR Certificate: Any Class A-1, Class A-2, Class B-1, Class B-2 and
Class B-3 Certificate.

      LIBOR Determination Date: With respect to any LIBOR Certificates other
than the Class A-2 Certificates, the second LIBOR Business Day immediately
preceding the commencement of each Accrual Period and with respect to the Class
A-2 Certificates, the second LIBOR Business Day immediately preceding every
sixth Accrual Period beginning with the Accrual Period commencing during August
2004.

      Limited Purpose Surety Bond: Any Limited Purpose Surety Bond listed in
Exhibit F.

<PAGE>

      Liquidated Mortgage Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan (including any REO Property) which was liquidated in the
calendar month preceding the month of such Distribution Date and as to which the
Servicer has certified (in accordance with this Agreement) that it has received
all amounts it expects to receive in connection with the liquidation of such
Mortgage Loan including the final disposition of an REO Property.

      Liquidation Proceeds: Amounts, including Insurance Proceeds, received in
connection with the partial or complete liquidation of defaulted Mortgage Loans,
whether through trustee's sale, foreclosure sale or otherwise 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.

      Loan-To-Value Ratio: With respect to any Mortgage Loan and as to any date
of determination, the fraction (expressed as a percentage) the numerator of
which is the principal balance of the related Mortgage Loan at such date of
determination and the denominator of which is the Appraised Value of the related
Mortgaged Property.

      Loss: With respect to any indemnification arising under Section 9.15 of
this Agreement, any and all losses, claims, damages, penalties, liabilities,
obligations, judgments, settlements, awards, demands, offsets, defenses,
counterclaims, actions or proceedings, reasonable out-of-pocket costs, expenses
and attorneys' fees of an Indemnified Party (including but not limited to, (a)
any reasonable costs, expenses and attorneys' fees incurred by such Indemnified
Party in enforcing such right of indemnification against any Indemnifying Party
or with respect to any appeal, and (b) interest on any amount for which an
Indemnified Party is entitled to be indemnified from the date such Indemnified
Party notifies the Servicer of the expenditure or such amounts until such
amounts are paid by the Servicer; provided, however, that in no event shall a
"Loss" include a claim for consequential damages, indirect damages or lost
profits except when the Loss results from the gross negligence, fraud or willful
misconduct of the Servicer.

      Lower Tier REMIC Interests: Any of the REMIC 1 Interests or the REMIC 2
Interests.

      Lower Tier Regular Interests: Any of the REMIC 1 Regular Interests or the
REMIC 2 Regular Interests.

      Margin: As to each Mortgage Loan, the percentage amount set forth on the
related Mortgage Note added to the Index in calculating the Mortgage Rate
thereon.

      Material Defect: As defined in Section 2.02(b).

      Maximum Rate: As to any Mortgage Loan, the maximum rate set forth on the
related Mortgage Note at which interest can accrue on such Mortgage Loan.

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

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

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

<PAGE>

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

      Monthly Statement: The statement delivered to the Certificateholders
pursuant to Section 4.02.

      Mortgage: A mortgage, deed of trust or other instrument encumbering a fee
simple interest in real property securing a Mortgage Note, together with
improvements thereto.

      Mortgage Documents: With respect to each Mortgage Loan, the mortgage
documents required to be delivered to the Trustee pursuant to this Agreement.

      Mortgage Loan: A Mortgage and the related notes or other evidences of
indebtedness secured by each such Mortgage conveyed, transferred, sold, assigned
to or deposited with the Trustee pursuant to Section 2.01 (including any
Replacement Loan and REO Property), including without limitation, each Mortgage
Loan listed on the Mortgage Loan Schedule, as amended from time to time.

      Mortgage Loan Purchase and Sale Agreement: The Mortgage Loan Purchase and
Sale Agreement, dated as of August 1, 2004, between the Seller and the Depositor
with respect to the sale and purchase of the Mortgage Loans.

      Mortgage Loan Schedule: The schedule attached hereto as Schedule A, which
shall identify each Mortgage Loan, as such schedule may be amended by the
Depositor or the Servicer from time to time to reflect the addition of
Replacement Mortgage Loans to, or the deletion of Deleted Mortgage Loans from,
the Trust Fund. Such schedule shall, among other things (1) identify the
designated Mortgage Pool in which such Mortgage Loan is included and (2)
separately identify One-Month LIBOR Loans, Six-Month LIBOR Loans and Additional
Collateral Mortgage Loans.

      Mortgage Note: The original executed note or other evidence of the
indebtedness of a Mortgagor secured by a Mortgage under a Mortgage Loan.

      Mortgage Pools: Any of Pool 1, Pool 2 and Pool 3.

      Mortgage Rate: As to any Mortgage Loan, the annual rate of interest borne
by the related Mortgage Notes.

      Mortgaged Property: The underlying property, including any Additional
Collateral, securing a Mortgage Loan which, with respect to a Cooperative Loan,
is the related Cooperative Shares and Property Lease.

      Mortgagor: The obligor on a Mortgage Note.

      Net Liquidation Proceeds: With respect to any Liquidated Mortgage Loan or
any other disposition of related Mortgaged Property, the related Liquidation
Proceeds net of Advances, Servicer Advances, related Servicing Fees and any
other accrued and unpaid fees received and retained in connection with the
liquidation of such Mortgage Loan or Mortgaged Property.

      Net Interest Shortfalls: With respect to any Distribution Date, any Net
Prepayment Interest Shortfalls for that Distribution Date and the amount of
interest that would otherwise have been received with respect to any Mortgage
Loan which was subject to (i) a Relief Act Reduction

<PAGE>

or (ii) the interest portion of any Debt Service Reduction or Deficient
Valuation, after exhaustion of the respective amounts of coverage provided by
the Subordinate Certificates for those type of losses.

      Net Mortgage Rate: With respect to any Mortgage Loan and any Distribution
Date, the related Mortgage Rate as of the Due Date in the month preceding the
month of such Distribution Date reduced by the Servicing Fee Rate for such
Mortgage Loan.

      Net Prepayment Interest Shortfall: With respect to any Mortgage Loan and
any Distribution Date, the amount by which any Prepayment Interest Shortfall for
such date exceeds the amount payable by the Servicer in respect of such
shortfall.

      Net WAC: As to any Distribution Date, the weighted average of the Net
Mortgage Rates of the Mortgage Loans as of the first day of the calendar month
immediately preceding the calendar month of such Distribution Date, weighted on
the basis of their outstanding Stated Principal Balances at such time. When the
term "Net WAC" is used herein with reference to only the One-Month LIBOR Loans
or only the Six-Month LIBOR Loans, such weighted average shall be computed with
reference solely to the Mortgage Loans in the relevant group.

      Non-Book-Entry Certificate: Any Certificate other than a Book-Entry
Certificate.

      Non-permitted Foreign Holder: As defined in Section 3.03(f).

      Nonrecoverable Advance: Any portion of an Advance or Servicer Advance
previously made or proposed to be made by the Servicer (as certified in an
Officer's Certificate of the Servicer) or by the Trustee pursuant to Section
5.04, which in the good faith judgment of such party, shall not be ultimately
recoverable by such party from the related Mortgagor, related Liquidation
Proceeds or otherwise.

      Non-U.S. Person: Any person other than a "United States person" within the
meaning of Section 7701(a)(30) of the Code.

      Offering Document: The Prospectus.

      Officer's Certificate: A certificate 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 (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) of the Depositor or the Trustee, as the case may be, and
delivered to the Depositor or the Trustee, as the case may be, as required by
this Agreement.

      Officer's Certificate of the Servicer: A certificate (i) signed by the
Chairman of the Board, the Vice Chairman of the Board, the President, a Managing
Director, a Vice President (however denominated), an Assistant Vice President,
the Treasurer, the Secretary, or one of the Assistant Treasurers or Assistant
Secretaries of the Servicer, or (ii) if provided for herein, signed by a
Servicing Officer, as the case may be, and delivered to the Trustee or the
Depositor, as the case may be.

<PAGE>

      One-Month LIBOR Loan: Each Mortgage Loan bearing a Mortgage Rate that
adjusts in accordance with LIBOR for one-month U.S. dollar deposits.

      Opinion of Counsel: A written opinion of counsel, who may be an employee
of the Depositor or the Servicer, that is reasonably acceptable to each
addressee of such opinion; provided that any Opinion of Counsel relating to (a)
qualification of the Mortgage Loans in a REMIC or (b) compliance with the REMIC
Provisions, must be an opinion of counsel reasonably acceptable to each
addressee of such opinion, who (i) is in fact independent of the Servicer and
the Depositor, (ii) does not have any material direct or indirect financial
interest in the Servicer or the Depositor or in an affiliate of either and (iii)
is not connected with the Servicer or the Depositor as an officer, employee,
director or person performing similar functions.

      Optional Termination Price: An amount equal to the sum of (i) 100% of the
Stated Principal Balance of the Mortgage Loans (other than any Mortgage Loan
that has become an REO Property) plus accrued interest thereon at the applicable
Mortgage Rate through the Due Date in the month in which the Optional
Termination Price is to be distributed to the Certificateholders and the fair
market value of any REO Property plus accrued interest thereon; (ii) any
unreimbursed costs and damages incurred by the Trust Fund (or the Trustee on
behalf of the Trust Fund) in connection with the violation of any anti-predatory
or anti-abusive lending laws; and (iii) the payment of all amounts (including,
without limitation, all previously unreimbursed Advances and Servicing Advances
and accrued and unpaid Servicing Fees) payable or reimbursable to the Servicer
or Trustee.

      Original Applicable Credit Support Percentage: With respect to each Class
of Subordinate Certificates, the corresponding percentage set forth opposite its
Class designation: Class B-1 - 3.05%; Class B-2 - 2.05%; Class B-3 - 1.25%;
Class B-4 - 0.80%; Class B-5 - 0.55%; and Class B-6 - 0.35%.

      Original Subordinate Principal Amount: The aggregate of the initial Class
Principal Amounts of the Classes of Subordinated Certificates.

      Originator: With respect to any Mortgage Loan, the entity that (i) took
the Mortgagor's loan application, (ii) processed the Mortgagor's loan
application, and (iii) closed and/or funded the Mortgagor's Mortgage Loan.

      Overcollateralized Group: On any Distribution Date, any Certificate Group
which is not an Undercollateralized Group.

      Parent Power(R) Guaranty and Security Agreement: With respect to any
Additional Collateral Loan, as defined in the Mortgage Loan Purchase and Sale
Agreement.

      Paying Agent: Any paying agent appointed by the Trustee pursuant to
Section 3.08.

      Percentage Interest: With respect to any Certificate, its percentage
interest in the undivided beneficial ownership interest in the Trust Fund
evidenced by all Certificates of the same Class as such Certificate. With
respect to any Certificate other than a Class X-A Certificate, a Class X-B
Certificate or the Class A-R Certificate, the Percentage Interest evidenced
thereby shall equal the initial Certificate Principal Amount thereof divided by
the initial Class Principal Amount of all Certificates of the same Class. With
respect to the Class A-R Certificate, the Percentage Interest evidenced thereby
shall be as specified on the face thereof, or otherwise, be equal to 100%. With
respect to any Class X-A Certificate, the Percentage Interest evidenced
<PAGE>

thereby shall equal its initial Class Notional Amount as set forth on the face
thereof divided by the initial Class Notional Amount of such Class. With respect
to any Class X-B Certificate, the Percentage Interest represented thereby shall
equal the initial Class Notional Amount thereof divided by the initial Class
Notional Amount of all of the Certificates of the same class.

      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 that 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, or such lower
            rating as shall not result in the downgrading or withdrawal of the
            ratings then assigned to the Certificates by the Rating Agencies, as
            evidenced by a signed writing delivered by each Rating Agency;

                  (iii) commercial or finance company paper which is then
            receiving the highest commercial or finance company paper rating of
            each Rating Agency rating such paper, or such lower rating as shall
            not result in the downgrading or withdrawal of the ratings then
            assigned to the Certificates by the Rating Agencies, as evidenced by
            a signed writing delivered by each Rating Agency;

                  (iv)  certificates of deposit, demand or time deposits, or
            bankers' acceptances 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 (or in the case of the principal
            depository institution in a holding company system, the commercial
            paper or long-term unsecured debt obligations of such holding
            company, but only if Moody's is not the applicable Rating Agency)
            are then rated one of the two highest long-term and the highest
            short-term ratings of each Rating Agency for such securities, or
            such lower ratings as shall not result in the downgrading or
            withdrawal of the ratings then assigned to the Certificates by the
            Rating Agencies, as evidenced by a signed writing delivered by each
            Rating Agency;

                  (v)   guaranteed reinvestment agreements issued by any bank,
            insurance company or other corporation acceptable to the Rating
            Agencies at the time of the issuance of such agreements, as
            evidenced by a signed writing delivered by each Rating Agency;

                  (vi)  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 (iv) above;

                  (vii) 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 incorporated under the laws of the United States
            or any state thereof which, at the

<PAGE>

            time of such investment, have one of the two highest ratings of each
            Rating Agency (except if the Rating Agency is Moody's, such rating
            shall be the highest commercial paper rating of Moody's for any such
            series), or such lower rating as shall not result in the downgrading
            or withdrawal of the ratings then assigned to the Certificates by
            the Rating Agencies, as evidenced by a signed writing delivered by
            each Rating Agency;

                  (viii) interests in any money market fund 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
            rating by each Rating Agency rating such fund or such lower rating
            as shall not result in a change in the rating then assigned to the
            Certificates by each Rating Agency including funds for which the
            Trustee or any of its Affiliates is investment manager or adviser;

                  (ix)  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 which on the date of
            acquisition has been rated by each applicable Rating Agency in their
            respective highest applicable rating category or such lower rating
            as shall not result in a change in the rating then specified stated
            maturity and bearing interest or sold at a discount acceptable to
            each Rating Agency as shall not result in the downgrading or
            withdrawal of the ratings then assigned to the Certificates by the
            Rating Agencies; and

                  (x)   such other investments having a specified stated
            maturity and bearing interest or sold at a discount acceptable to
            the Rating Agencies as shall not result in the downgrading or
            withdrawal of the ratings then assigned to the Certificates by the
            Rating Agencies;

      provided, that no such instrument shall be a Permitted Investment if (i)
such instrument evidences the right to receive interest only payments with
respect to the obligations underlying such instrument, (ii) such instrument
would require the Depositor to register as an investment company under the
Investment Company Act of 1940, as amended, or (iii) such instrument would not
be a "permitted investment" within the meaning of such term as provided for in
Section 860G(a)(5) of the Code and the Treasury Regulations thereunder.

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

      Pool Net WAC: The Pool 1 Net WAC, Pool 2 Net WAC, or Pool 3 Net WAC, as
the context may require.

      Pool 1: The aggregate of Mortgage Loans identified on the Mortgage Loan
Schedule as being included in Pool 1.

      Pool 1 Mortgage Loans: Any Mortgage Loan in Pool 1.

      Pool 1 Net WAC: With respect to any Distribution Date, the weighted
average of the Net Mortgage Rates of the Pool 1 Mortgage Loans as of the first
day of the calendar month immediately preceding the calendar month of such
Distribution Date, weighted on the basis of their Stated Principal Balances at
such time.

<PAGE>

      Pool 1 Subordinate Amount: For any Distribution Date, the excess of (a)
the Aggregate Stated Principal Balance of the Pool 1 Mortgage Loans as of the
first day of the month preceding the month in which such Distribution Date
occurs over (b) the sum of the Class Principal Amounts of the Class A-1 and
Class A-R Certificates immediately before such Distribution Date.

      Pool 2: The aggregate of Mortgage Loans identified on the Mortgage Loan
Schedule as being included in Pool 2.

      Pool 2 Mortgage Loans: Any Mortgage Loan in Pool 2.

      Pool 2 Net WAC: With respect to any Distribution Date, the weighted
average of the Net Mortgage Rates of the Pool 2 Mortgage Loans as of the first
day of the calendar month immediately preceding the calendar month of such
Distribution Date, weighted on the basis of their Stated Principal Balances at
such time.

      Pool 2 Subordinate Amount: For any Distribution Date, the excess of (a)
the Aggregate Stated Principal Balance of the Pool 2 Mortgage Loans as of the
first day of the month preceding the month in which such Distribution Date
occurs over (b) the Class Principal Amount of the Class A-2 Certificates
immediately before such Distribution Date.

      Pool 3: The aggregate of Mortgage Loans identified on the Mortgage Loan
Schedule as being included in Pool 3.

      Pool 3 Mortgage Loans: Any Mortgage Loan in Pool 3.

      Pool 3 Net WAC: With respect to any Distribution Date, the weighted
average of the Net Mortgage Rates of the Pool 3 Mortgage Loans as of the first
day of the calendar month immediately preceding the calendar month of such
Distribution Date, weighted on the basis of their Stated Principal Balances at
such time.

      Pool 3 Subordinate Amount: For any Distribution Date, the excess of (a)
the Aggregate Stated Principal Balance of the Pool 3 Mortgage Loans as of the
first day of the month preceding the month in which such Distribution Date
occurs over (b) the Class Principal Amount of the Class A-3 Certificates
immediately before such Distribution Date.

      Pool Percentage: With respect to each Mortgage Pool and any Distribution
Date, a fraction, expressed as a percentage, the numerator of which is the
Aggregate Stated Principal Balance of such Mortgage Pool and the denominator of
which is the Aggregate Stated Principal Balance as of such Due Date.

      Pool Subordinate Amount: Any of the Pool 1 Subordinate Amount, Pool 2
Subordinate Amount or the Pool 3 Subordinate Amount.

      Prepayment Interest Shortfall: With respect to any full or partial
Principal Prepayment of a Mortgage Loan, the excess, if any, of (i) one full
month's interest at the applicable Mortgage Rate on the outstanding principal
balance of such Mortgage Loan immediately prior to such Principal Prepayment
over (ii) the amount of interest actually received with respect to such Mortgage
Loan in connection with such Principal Prepayment.

      Prepayment Period: With respect to each Distribution Date, the calendar
month immediately preceding the month in which the Distribution Date occurs.

<PAGE>

      Primary Mortgage Insurance Policy: Each policy of primary mortgage
guaranty insurance or any replacement policy therefor with respect to any
Mortgage Loan.

      Principal Distribution Amount: With respect to any Mortgage Pool and any
Distribution Date, the sum of (a) each Scheduled Payment of principal collected
or advanced on the related Mortgage Loans (before taking into account any
Deficient Valuations or Debt Service Reductions) and due during the related Due
Period, (b) that portion of the Purchase Price representing principal of any
Mortgage Loans in such Mortgage Pool purchased in accordance with Section 2.04
hereof and received during the related Prepayment Period, (c) the principal
portion of any related Substitution Amount received during the related
Prepayment Period, (d) the principal portion of all Insurance Proceeds received
during the related Prepayment Period with respect to Mortgage Loans in such
Mortgage Pool that are not yet Liquidated Mortgage Loans, (e) the principal
portion of all Net Liquidation Proceeds received during the related Prepayment
Period with respect to Liquidated Mortgage Loans in such Mortgage Pool, (f) all
Subsequent Recoveries received during the related Prepayment Period with respect
to Liquidated Mortgage Loans in such Mortgage Pool, (g) the principal portion of
the proceeds of any Additional Collateral with respect to the Mortgage Loans in
such Mortgage Pool, (h) the principal portion of all partial and full principal
prepayments of Mortgage Loans in such Mortgage Pool applied by the Servicer
during the related Prepayment Period and (i) on the Distribution Date on which
the Trust Fund is to be terminated pursuant to Article VII hereof, that portion
of the Optional Termination Price in respect of principal for such Mortgage
Pool.

      Principal Prepayment: Any Mortgagor payment of principal or other recovery
of principal on a Mortgage Loan that is recognized as having been received or
recovered in advance of its scheduled Due Date and applied to reduce the
principal balance of the Mortgage Loan in accordance with the terms of the
Mortgage Note or this Agreement.

      Principal Prepayment In Full: Any Principal Prepayment of the entire
principal balance of the Mortgage Loans.

      Principal Transfer Amount: For any Distribution Date and for any
Undercollateralized Group, the excess, if any, of the aggregate Class Principal
Amount of such Undercollateralized Group immediately prior to such Distribution
Date over the Aggregate Stated Principal Balance of the related Mortgage Pool
immediately prior to such Distribution Date.

      Proceeding: Any suit in equity, action at law or other judicial or
administrative proceeding.

      Proprietary Lease: With respect to any Cooperative Property, a lease or
occupancy agreement between a Cooperative Corporation and a holder of related
Cooperative Shares.

      Pro Rata Senior Percentage: With respect to each Distribution Date and
each Mortgage Pool, the percentage equivalent of a fraction the numerator of
which is the aggregate Class Principal Amount of the Class or Classes of the
Related Certificate Group immediately prior to such Distribution Date and the
denominator of which is the Aggregate Stated Principal Balance of the related
Mortgage Pool for such Distribution Date.

      Prospectus: The prospectus supplement dated August 24, 2004, together with
the accompanying prospectus dated June 18, 2004, relating to the initial sale of
the Class A-1, Class A-2, Class A-3, Class A-R, Class X-A, Class B-1, Class B-2
and Class B-3 Certificates.

<PAGE>

      Purchase Date: Any Distribution Date on which Certificates may be
repurchased pursuant to Section 7.01(c).

      Purchase Price: With respect to any Mortgage Loan required or permitted to
be purchased by the Depositor pursuant to this Agreement, by the Servicer
pursuant to this Agreement, or by the Seller pursuant to the Mortgage Loan
Purchase Agreement, an amount equal to the sum of (i) 100% of the unpaid
principal balance of the Mortgage Loan on the date of such purchase, (ii)
accrued interest thereon at the applicable Net Mortgage Rate from the date
through which interest was last paid by the Mortgagor to the Due Date in the
month in which the Purchase Price is to be distributed to Certificateholders and
(iii) any unreimbursed costs, penalties and/or damages incurred by the Trust
Fund in connection with any violation relating to such Mortgage Loan of any
predatory or abusive lending law.

      Rapid Prepayment Conditions: As to any Distribution Date either of the
following conditions: if (1) the Aggregate Subordinate Percentage on such date
is less than 200% of the Aggregate Subordinate Percentage on the Closing Date or
(2) the outstanding Stated Principal Balance of the Mortgage Loans in any
Mortgage Pool delinquent 60 days or months, as a percentage of such Mortgage
Pool's Pool Subordinate Amount, is greater than or equal to 50%.

      Rating Agency: Each of Moody's, S&P and Fitch Ratings.

      Realized Loss: With respect to each Liquidated Mortgage Loan, an amount
(not less than zero or more than the Stated Principal Balance of the Mortgage
Loan) as of the date of such liquidation, equal to (i) the Stated Principal
Balance of the Liquidated Mortgage Loan as of the date of such liquidation, plus
(ii) interest at the Net Mortgage Rate from the Due Date as to which interest
was last paid or advanced (and not reimbursed) to Certificateholders up to the
Due Date in the month in which Liquidation Proceeds are required to be
distributed on the Stated Principal Balance of such Liquidated Mortgage Loan
from time to time, minus (iii) the Net Liquidation Proceeds and the proceeds of
any Additional Collateral, if any, received during the month in which such
liquidation occurred, to the extent applied as recoveries of interest at the Net
Mortgage Rate and to principal of the Liquidated Mortgage Loan. With respect to
each Mortgage Loan which has become the subject of a Deficient Valuation, if the
principal amount due under the related Mortgage Note has been reduced, the
difference between the principal balance of the Mortgage Loan outstanding
immediately prior to such Deficient Valuation and the principal balance of the
Mortgage Loan as reduced by the Deficient Valuation.

      Record Date: As to any Distribution Date (i) with respect to the LIBOR
Certificates, the last Business Day preceding such Distribution Date (or the
Closing Date, in the case of the first Distribution Date) unless such
Certificates shall no longer be Book-Entry Certificates, in which case the
Record Date shall be the last Business Day of the month preceding the month of
such Distribution Date and (ii) in the case of all other Certificates (including
LIBOR Certificates that are subsequently reissued as Definitive Certificates),
the last Business Day of the month preceding the month of each Distribution
Date.

      Refinancing Mortgage Loan: Any Mortgage Loan originated in connection with
the refinancing of an existing mortgage loan.

      Related Certificate Group: The Certificate Group related to a particular
Mortgage Pool as indicated by the same numerical designation (i.e., Group 1
Certificates are related to Pool 1, Group 2 Certificates are related to Pool 2
and Group 3 Certificates are related to Pool 3).

<PAGE>

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

      Relief Act Reductions: With respect to any Distribution Date and any
Mortgage Loan as to which there has been a reduction in the amount of interest
collectible thereon for the most recently ended calendar month as a result of
the application of the Civil Relief Act, the amount, if any, by which (i)
interest collectible on such Mortgage Loan for the most recently ended calendar
month is less than (ii) interest accrued thereon for such month pursuant to the
Mortgage Note.

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

      REMIC Components: Each of the X-A1 Component, X-A2 Component, Component
XB1, Component XB2 and Component XB3.

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

      REMIC Provisions: The provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at Sections 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
regulations, including proposed regulations and rulings, and administrative
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.

      REMIC 1: As described in the Preliminary Statement.

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

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

      REMIC 1 Subordinated Balance Ratio: The ratio among the uncertificated
principal balances of each of the REMIC 1 Interests ending with the designation
"A" that is equal to the ratio among, with respect to each such REMIC 1
Interest, the excess of (x) the aggregate Scheduled Principal Balance of the
Mortgage Loans in the related Mortgage Pool over (y) the aggregate Class
Principal Amount of the Certificates in the Certificate Group related to such
Mortgage Pool.

      REMIC 2: As described in the Preliminary Statement.

      REMIC 2 Interest: Each class of interest in REMIC 2 as described in the
Preliminary Statement.

      REMIC 2 Regular Interest: Each of the REMIC 2 Interests other than the
Class LT2-R Interest.

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

<PAGE>

      REO Property: A Mortgaged Property acquired by the Trust Fund through
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted
Mortgage Loan or otherwise treated as having been acquired pursuant to the REMIC
Provisions.

      Replacement Mortgage Loan: A mortgage loan substituted by the Seller for a
Deleted Mortgage Loan which must, on the date of such substitution, as confirmed
in a Request for Release substantially in the form attached to this Agreement,
(i) 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 more than 10% less than, the Stated Principal Balance of the Deleted
Mortgage Loan; (ii) have a Maximum Rate not less than (and not more than two
percentage points greater than) the Maximum Rate of the Deleted Mortgage Loan;
(iii) have a gross margin not less than that of the Deleted Mortgage Loan and,
if Mortgage Loans equal to 1% or more of the balance of the related Mortgage
Pool as of the Cut-off Date have become Deleted Mortgage Loans, not more than
two percentage points more than that of the Deleted Mortgage Loan; (iv) have an
Effective Loan-to-Value Ratio no higher than that of the Deleted Mortgage Loan;
(v) have Adjustment Dates that are no more or less frequent than the Deleted
Mortgage Loan; (vi) have a remaining term to maturity no greater than (and not
more than one year less than that of) the Deleted Mortgage Loan; (vii) not
permit conversion of the related Mortgage Rate to a permanent fixed Mortgage
Rate; (viii) not be a Cooperative Loan unless the Deleted Mortgage Loan was a
Cooperative Loan; (ix) have the same or better FICO credit score; (x) have an
initial interest adjustment date no earlier than five months before (and no
later than five months after) the initial adjustment date of the Deleted
Mortgage Loan, (xi) comply with each representation and warranty set forth in
Schedule B of this Agreement; and (xii) shall be accompanied by an Opinion of
Counsel that such Replacement Mortgage Loan would not adversely affect the REMIC
status of the Trust Estate or would not otherwise be prohibited by this
Indenture.

      Request for Release: A request for release, substantially in the form of
Exhibit N attached hereto, properly completed and signed by a Servicing Officer
(or, if delivered on behalf of the Seller or Depositor, an Authorized Officer
thereof).

      Residual Certificate: The Class A-R Certificate.

      Residual Interest: The Residual Certificate, other than the portion
thereof representing the right to payments in respect of the Class LT1-R
Interest and the Class LT2-R Interest.

      RESPA: The Real Estate Settlement Procedures Act, 12 U.S.C Section 2601
et seq., and Regulation X, 24 C.F.R. Section 3500.21, thereunder, as the
foregoing may be amended from time to time.

      Responsible Officer: With respect to the Trustee, any officer in the
corporate trust department or similar group of the Trustee with direct
responsibility for the administration of this Agreement and also, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of his or her knowledge of and familiarity with the particular
subject.

      Restricted Certificate: Any Class X-B, Class B-4, Class B-5 or Class B-6
Certificate.

      Restricted Global Security: As defined in Section 3.01(c).

<PAGE>

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

      SAIF: The Saving's Association Insurance Fund, or any successor thereto.

      Schedule of Exceptions: As defined in Section 2.02(a) of this Agreement.

      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 which,
unless otherwise specified in this Agreement, shall give effect to any related
Debt Service Reduction and any Deficient Valuation that affects the amount of
the monthly payment due 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).

      Seller: Merrill Lynch Credit Corporation, a Delaware corporation.

      Senior Certificate: Any one of the Class A-1, Class A-2, Class A-3, Class
X-A, Class X-B or Class A-R Certificates.

      Senior Percentage: Except as provided in this definition, for each
Mortgage Pool with respect to any Distribution Date before September 2014, 100%.
The Senior Percentage for each Mortgage Pool for any Distribution Date occurring
(i) before the Distribution Date in September 2014, but in or after September
2007 on which the Two Times Test is satisfied, or (ii) in or after September
2014, is the related Pro Rata Senior Percentage. If the Two Times Test is
satisfied with respect to any Distribution Date prior to the Distribution Date
in September 2007, the Senior Percentage for such Mortgage Pool is the Pro Rata
Senior Percentage plus 50% of an amount equal to 100% minus the related Pro Rata
Senior Percentage. With respect to any Distribution Date after the Senior
Termination Date, the Senior Percentage for such Mortgage Pool will equal zero.
If on any Distribution Date the allocation to the Senior Certificates of the
related Certificate Group then entitled to distributions of principal of full
and partial principal prepayments and other amounts in the percentage required
above would reduce the sum of the Class Principal Amounts of those Certificates
to below zero, the Senior Percentage for such Distribution Date shall be limited
to the percentage necessary to reduce such Class Principal Amounts to zero.

      Senior Prepayment Percentage: With respect to any Distribution Date,
during the ten years beginning on the first Distribution Date, 100%. Except as
provided herein, the related Senior Prepayment Percentage for each Mortgage Pool
and any Distribution Date occurring on or after the tenth anniversary of the
first Distribution Date shall be as follows: (i) from September 2014 through
August 2015, the Senior Percentage plus 70% of the Subordinate Percentage for
that Distribution Date; (ii) from September 2015 through August 2016, the Senior
Percentage plus 60% of the Subordinate Percentage for that Distribution Date;
(iii) from September 2016 through August 2017, the Senior Percentage plus 40% of
the Subordinate Percentage for that Distribution Date; (iv) from September 2017
through August 2018, the related Senior Percentage plus 20% of the Subordinate
Percentage for that Distribution Date; and (v) from and after September 2018,
the Senior Percentage for that Distribution Date; provided, however, that there
shall be no reduction in the Senior Prepayment Percentage for a Mortgage Pool
unless both Step Down Conditions are satisfied; and provided, further, that if
on any such Distribution Date the Pro Rata Senior Percentage exceeds the initial
Pro Rata Senior Percentage,

<PAGE>

the Senior Prepayment Percentage for a Mortgage Pool for that Distribution Date
shall again equal 100%.

      Notwithstanding the above, if on any Distribution Date the Two Times Test
is satisfied, the Senior Prepayment Percentage for a Mortgage Pool shall equal
the related Senior Percentage for such Distribution Date. In addition, if on any
Distribution Date the allocation to the Senior Certificates of the related
Certificate Group then entitled to distributions of principal of full and
partial principal prepayments and other amounts in the percentage required above
would reduce the sum of the Class Principal Amounts of those Certificates to
below zero, the Senior Prepayment Percentage for a Mortgage Pool for such
Distribution Date shall be limited to the percentage necessary to reduce the
related Class Principal Amounts to zero.

      Senior Principal Distribution Amount: With respect to any Mortgage Pool
and Distribution Date, the sum of:

            (1)   the related Senior Percentage of all amounts described in
      clause (a) of the definition of "Principal Distribution Amount" for that
      Distribution Date;

            (2)   with respect to each Mortgage Loan in the related Mortgage
      Pool which became a Liquidated Mortgage Loan during the related Prepayment
      Period, the lesser of

                  (x)   the related Senior Percentage of the Stated Principal
            Balance of that Mortgage Loan and

                  (y)   the related Senior Prepayment Percentage of the amount
            of the Net Liquidation Proceeds allocable to principal received with
            respect to that Mortgage Loan; and

            (3)   the related Senior Prepayment Percentage of the amounts
      described in clauses (b), (c), (d), (f), (g), (h) and (i) of the
      definition of "Principal Distribution Amount".

      Senior Termination Date: For each Certificate Group, the Distribution Date
when the aggregate of the Class Certificate Principal Balances of that Group has
been reduced to zero.

      Servicer: Cendant and its successors and assigns.

      Servicer Advance: The outstanding moneys that have been advanced by the
Servicer from its funds in connection with its servicing of a Mortgage Loan
(including, but not limited to, taxes, ground rents, assessments, insurance
premiums, release fees, foreclosure and bankruptcy fees and expenses, and other
expenses) (i) that have been made by the Servicer in accordance with the terms
and provisions herein, (ii) that are recoverable through Liquidation Proceeds
and/or Insurance Proceeds, or that are made at the direction of the Seller or to
preserve its security interest in the related Mortgaged Property and (iii) for
which the Servicer has a right of reimbursement.

      Servicing Fee: As to any Distribution Date and each Mortgage Loan, an
amount equal to the product of (a) one-twelfth of the Servicing Fee Rate and (b)
the outstanding principal balance of such Mortgage Loan as of the first day of
the related Due Period.

<PAGE>

      Servicing Fee Rate: With respect to each Mortgage Loan and any
Distribution Date, 0.25% 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 and attached hereto as Exhibit M, as
such list may from time to time be amended.

      Servicing Transfer Costs: As defined in Section 6.14(b).

      Six-Month LIBOR Loan: Each Mortgage Loan bearing a Mortgage Rate that
adjusts in accordance with LIBOR for six-month U.S. dollar deposits.

      Startup Day: The day designated as such pursuant to Section 10.01(b)
hereof.

      Stated Principal Balance: As to any Mortgage Loan and Due Date, the unpaid
principal balance of such Mortgage Loan as of such Due Date as specified in the
amortization schedule at the time relating thereto (before any adjustment to
such amortization schedule by reason of any moratorium or similar waiver or
grace period) after giving effect to any previous Principal Prepayments and
Liquidation Proceeds allocable to principal and to the payment of principal due
on such Due Date and irrespective of any delinquency in payment by the related
Mortgagor.

      Step Down Conditions: As of the first Distribution Date as to which any
decrease in any Senior Prepayment Percentage applies, (i) the outstanding Stated
Principal Balance of all Mortgage Loans 60 days or more Delinquent (including
Mortgage Loans in bankruptcy, REO and foreclosure) (averaged over the preceding
six month period), as a percentage of the aggregate of the Class Principal
Amounts of the Classes of Subordinate Certificates on such Distribution Date,
does not equal or exceed 50% and (ii) cumulative Realized Losses with respect to
the Mortgage Loans do not exceed (a) with respect to each Distribution Date from
September 2014 through August 2015, 30% of the Original Subordinate Principal
Amount, (b) with respect to each Distribution Date from September 2015 through
August 2016, 35% of the Original Subordinate Principal Amount, (c) with respect
to each Distribution Date from September 2016 through August 2017, 40% of the
Original Subordinate Principal Amount, (d) with respect to each Distribution
Date from September 2017 through August 2018, 45% of the Original Subordinate
Principal Amount and (e) with respect to each Distribution Date from and after
September 2018, 50% of the Original Subordinate Principal Amount.

      Subordinate Certificate: Any of the Class B-1, Class B-2, Class B-3, Class
B-4, Class B-5 or Class B-6 Certificates.

      Subordinate Certificate Writedown Amount: The amount described in Section
5.03(b)(iii).

      Subordinate Class Percentage: As to any Distribution Date and any Class of
Subordinate Certificates, a fraction, expressed as a percentage, the numerator
of which is the Class Principal Amount of such Class on such date, and the
denominator of which is the aggregate Class Principal Amount of all Classes of
Subordinate Certificates on such date.

      Subordinate Net WAC: For any Distribution Date, the weighted average of
the Pool 1 Net WAC, the Pool 2 Net WAC and the Pool 3 Net WAC, weighted on the
basis of the Pool Subordinate Amounts for Pool 1, Pool 2 and Pool 3,
respectively, for such Distribution Date.

<PAGE>

      Subordinate Percentage: With respect to each Mortgage Pool and any
Distribution Date, the difference between 100% and the related Senior Percentage
for such Mortgage Pool for such Distribution Date.

      Subordinate Prepayment Percentage: With respect to any Distribution Date
and for any Mortgage Pool, the difference between 100% and the related Senior
Prepayment Percentage for such Mortgage Pool for that Distribution Date.

      Subordinate Principal Distribution Amount: With respect to any
Distribution Date and each Mortgage Pool, an amount equal to the sum of:

            (1)   the related Subordinate Percentage of all amounts described in
      clause (a) of the definition of "Principal Distribution Amount" for that
      Distribution Date;

            (2)   with respect to each Mortgage Loan in the related Mortgage
      Pool that became a Liquidated Mortgage Loan during the related Prepayment
      Period the amount of the Net Liquidation Proceeds allocated to principal
      received with respect thereto remaining after application thereof pursuant
      to clause (2) of the definition of "Senior Principal Distribution Amount"
      for that Distribution Date, up to the Subordinate Percentage of the Stated
      Principal Balance of such Mortgage Loan; and

            (3)   the related Subordinate Prepayment Percentage of all amounts
      described in clauses (b), (c), (d), (f), (g), (h) and (i) of the
      definition of "Principal Distribution Amount" for that Mortgage Pool and
      that Distribution Date;

            minus the sum of:

            any Principal Transfer Amount paid from the Available Distribution
      Amount of the Related Certificate Group to an Undercollateralized Group;
      and

            the amount of principal distributions made to the Senior
      Certificates pursuant to Section 5.02(h);

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

      Substitution Amount: As defined in the second paragraph of Section
2.04(b).

      Tax Matters Person: The "tax matters person" as specified in the REMIC
Provisions which shall initially be the Holder of the Class A-R Certificate.

      Telerate Page 3750: The display currently so designated as "Page 3750" on
the Bridge Telerate Service (or such other page selected by the Trustee as may
replace Page 3750 on that service for the purpose of displaying daily comparable
rates on prices).

      Trust Fund: The corpus of the trust created pursuant to this Agreement,
consisting of (i) the Mortgage Loans, including the right to all payments of
principal and interest received on or with respect to the Mortgage Loans on and
after the Cut-off Date (other than Scheduled Payments due on or before such
date), and all such payments due after such date but received prior to such date
and intended by the related Mortgagors to be applied after such date; (ii) all
of the

<PAGE>

Depositor's right, title and interest in and to all amounts from time to time
credited to and the proceeds of the Distribution Account, any Custodial Accounts
or any Escrow Accounts established with respect to the Mortgage Loans; (iii) all
of the Depositor's rights under the Mortgage Loan Purchase and Sale Agreement
and the Mortgage Loan Purchase Agreement; (iv) all of the Depositor's right,
title or interest in REO Property and the proceeds thereof; (v) all of the
Depositor's rights under any Insurance Policies relating to the Mortgage Loans;
(vi) all proceeds of the conversion, voluntary or involuntary, of any of the
foregoing into cash or other liquid assets, including without limitation, all
Insurance Proceeds, Liquidation Proceeds and condemnation awards; and (vii) the
Depositor's security interest in any collateral pledged to secure the Mortgage
Loans, including the Mortgaged Properties and any Additional Collateral relating
to the Additional Collateral Mortgage Loans, including, but not limited to, any
pledge, control and guaranty agreements and the Limited Purpose Surety Bond and
any proceeds of the foregoing.

      Trustee: Wells Fargo Bank, N.A. and any Person succeeding the Trustee
hereunder, or if any separate trustee or any co-trustee shall be appointed as
herein provided, then such separate trustee and such co-trustee, as the case may
be.

      Trustee Mortgage Files: With respect to each Mortgage Loan, the Mortgage
Documents to be retained in the custody and possession of the Trustee.

      Two Times Test: As to any Distribution Date, (i) the Aggregate Subordinate
Percentage is at least two times the Aggregate Subordinate Percentage as of the
Closing Date; (ii) the aggregate of the Stated Principal Balances of all
Mortgage Loans Delinquent 60 days or more (including Mortgage Loans in
bankruptcy, REO and foreclosure) (averaged over the preceding six-month period),
as a percentage of the aggregate of the Class Principal Amount of the
Subordinate Certificates on such Distribution Date, does not equal or exceed
50%; and (iii) cumulative Realized Losses with respect to the Mortgage Loans do
not exceed 20% of the Original Subordinate Principal Amount.

      UCC: The Uniform Commercial Code as enacted in the relevant jurisdiction.

      Undercollateralized Group: With respect to any Distribution Date, and any
Certificate Group, the aggregate Class Principal Amount of such Certificate
Group is greater than the aggregate Stated Principal Balance of the Mortgage
Loans in the related Mortgage Pool immediately prior to such Distribution Date.

      Underwriters: Merrill Lynch, Pierce, Fenner & Smith Incorporated and Bank
of America Securities LLC.

      Underwriter's Exemption: Prohibited Transaction Exemption ("PTE") 90-29
(Exemption Application No. D-8019, 55 Fed. Reg. 21459 (1990)) as amended, or any
substantially similar administrative exemption granted by the U.S. Department of
Labor to an Underwriter.

      Underwriting Agreement: The underwriting agreement, dated February 28,
2003 and the terms agreement, dated August 23, 2004, each between the Depositor
and the Underwriters, referred to collectively.

      Underwriting Standards: As to each Mortgage Loan, the Seller's or
Originator's written underwriting guidelines in effect as of the origination
date of such Mortgage Loan.

<PAGE>

      Uniform Commercial Code: The Uniform Commercial Code as in effect in any
applicable jurisdiction from time to time.

      Unpaid Basis Risk Shortfall: With respect to any Distribution Date and any
Class of LIBOR Certificates, the aggregate of all Basis Risk Shortfalls with
respect to such Certificate remaining unpaid from previous Distribution Dates,
plus interest accrued thereon at the applicable Certificate Interest Rate
determined without regard to clause (ii) of the definition therefor to the
extent not paid on prior Distribution Dates.

      Upper Tier REMIC: As described in the Preliminary Statement.

      Upper Tier REMIC Class A-1 Interest: An uncertificated interest in the
Upper Tier REMIC having the same characteristics as the Class A-1 Certificates,
but without the right to receive payments in respect of Basis Risk Shortfalls
and Unpaid Basis Risk Shortfalls.

      Upper Tier REMIC Class A-2 Interest: An uncertificated interest in the
Upper Tier REMIC having the same characteristics as the Class A-2 Certificates,
but without the right to receive payments in respect of Basis Risk Shortfalls
and Unpaid Basis Risk Shortfalls.

      Upper Tier REMIC Class B-1 Interest: An uncertificated interest in the
Upper Tier REMIC having the same characteristics as the Class B-1 Certificates,
but without the right to receive payments in respect of Basis Risk Shortfalls
and Unpaid Basis Risk Shortfalls.

      Upper Tier REMIC Class B-2 Interest: An uncertificated interest in the
Upper Tier REMIC having the same characteristics as the Class B-2 Certificates,
but without the right to receive payments in respect of Basis Risk Shortfalls
and Unpaid Basis Risk Shortfalls.

      Upper Tier REMIC Class B-3 Interest: An uncertificated interest in the
Upper Tier REMIC having the same characteristics as the Class B-3 Certificates,
but without the right to receive payments in respect of Basis Risk Shortfalls
and Unpaid Basis Risk Shortfalls.

      Upper Tier REMIC Regular Interest: Each of the REMIC Components, the Upper
Tier REMIC Class A-1 Interest, the Upper Tier REMIC Class A-2 Interest, the
Upper-Tier REMIC Class B-1 Interest, the Upper-Tier REMIC Class B-2 Interest,
the Upper-Tier REMIC Class B-3 Interest, the Class A-3 Certificates, the Class
B-4 Certificates, the Class B-5 Certificates and the Class B-6 Certificates.

      USAP Report: A report in compliance with the Uniform Single Attestation
Program for Mortgage Bankers delivered in accordance with Section 9.13.

      Voting Interests: The portion of the voting rights of all the Certificates
that is allocated to any Certificate for purposes of the voting provisions of
this Agreement. At all times during the term of this Agreement, 98.00% of all
Voting Interests shall be allocated to the Class A-1, Class A-2, Class A-3,
Class A-R, Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 and Class B-6
Certificates. Voting Interests shall be allocated among such Certificates (other
than the Class A-R Certificates) based on the product of (i) 98.00% and (ii) the
fraction, expressed as a percentage, the numerator of which is the aggregate
Class Principal Amounts for each Class then outstanding and the denominator of
which is the Aggregate Stated Principal Balance outstanding, and the remainder
of such percentage of Voting Interests shall be allocated to the Class A-R
Certificates. At all times during the term of this Agreement, 2.00% of all
Voting Interests shall be allocated among the Class X-A and Class X-B
Certificates, while they remain outstanding, in proportion to

<PAGE>

their relative Class Notional Amounts. Voting Interests shall be allocated among
the Certificates within each such Class in proportion to their Certificate
Principal Amounts or Percentage Interests.

      X-A1 Component: An interest only Component represented by the Class X-A
Certificates which has a notional amount for any Distribution Date equal to the
Class Principal Amount of the Class A-1 Certificates immediately prior to such
Distribution Date and having an interest rate with respect to any Distribution
Date (and the related Accrual Period) equal to the excess, if any, of (i) the
Pool 1 Net WAC for such Distribution Date over (ii) the Certificate Interest
Rate of the Class A-1 Certificates for such Distribution Date. The X-A1
Component shall be related to the Group 1 Certificates.

      X-A2 Component: An interest-only Component represented by the Class X-A
Certificates which has a notional amount for any Distribution Date equal to the
Class Principal Amount of the Class A-2 Certificates immediately prior to such
Distribution Date and having an interest rate with respect to any Distribution
Date (and the related Accrual Period) equal to the excess, if any, of (i) the
Pool 2 Net WAC for such Distribution Date over (ii) the Certificate Interest
Rate of the Class A-2 Certificates for such Distribution Date. The X-A2
Component shall be related to the Group 2 Certificates.

      Section 1.02. Calculations Respecting Mortgage Loans.

      Calculations required to be made pursuant to this Agreement with respect
to any Mortgage Loan in the Trust Fund shall be made based upon current
information as to the terms of the Mortgage Loans and reports of payments
received from the Mortgagor on such Mortgage Loans and payments to be made to
the Trustee as provided by the Servicer. The Trustee shall not be required to
recompute, verify or recalculate the information supplied to it by the Servicer.

                                  ARTICLE II.

                              DECLARATION OF TRUST;
                            ISSUANCE OF CERTIFICATES

      Section 2.01. Creation and Declaration of Trust Fund; Conveyance of
Mortgage Loans.

                  (a)   Concurrently with the execution and delivery of this
Agreement, the Depositor does hereby establish the Trust Fund and transfer,
assign, set over, deposit with and otherwise convey to the Trustee, without
recourse, subject to Sections 2.02 and 2.04, in trust, all the right, title and
interest of the Depositor in and to the Trust Fund. Such conveyance includes,
without limitation, (i) the Mortgage Loans, including the right to all payments
of principal and interest received on or with respect to the Mortgage Loans on
and after the Cut-off Date (other than Scheduled Payments due on or before such
date), and all such payments due after such date but received prior to such date
and intended by the related Mortgagors to be applied after such date; (ii) all
of the Depositor's right, title and interest in and to all amounts from time to
time credited to and the proceeds of the Distribution Account, any Custodial
Accounts or any Escrow Account established with respect to the Mortgage Loans;
(iii) all of the Depositor's rights under the Mortgage Loan Purchase and Sale
Agreement; (iv) all of the Depositor's right, title or interest in REO Property
and the proceeds thereof; (v) all of the Depositor's rights under any Insurance
Policies relating to the Mortgage Loans; (vi) all proceeds of the conversion,
voluntary or involuntary, of any of the foregoing into cash or other liquid
assets, including, without limitation, all Insurance Proceeds, Liquidation
Proceeds and condemnation awards; and (vii) the Depositor's

<PAGE>

security interest in any collateral pledged to secure the Mortgage Loans,
including the Mortgaged Properties and any Additional Collateral relating to the
Additional Collateral Mortgage Loans, including, but not limited to, any pledge,
control and guaranty agreements and the Limited Purpose Surety Bond and any
proceeds of the foregoing, to have and to hold, in trust; and the Trustee
declares that, subject to the review provided for in Section 2.02, it has
received and shall hold the Trust Fund, as trustee, in trust, for the benefit
and use of the Holders of the Certificates and for the purposes and subject to
the terms and conditions set forth in this Agreement, and, concurrently with
such receipt, has caused to be executed, authenticated and delivered to or upon
the order of the Depositor, in exchange for the Trust Fund, Certificates in the
authorized denominations evidencing the entire ownership of the Trust Fund.
Notwithstanding anything to the contrary in this Agreement, the Trust Fund shall
not obtain title to or beneficial ownership of any Additional Collateral as a
result of or in lieu of the disposition thereof or otherwise.

      The foregoing sale, transfer, assignment, set-over, deposit and conveyance
does not and is not intended to result in the creation or assumption by the
Trustee of any obligation of the Depositor, the Seller or any other Person in
connection with the Mortgage Loans or any other agreement or instrument relating
thereto except as specifically set forth therein.

      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.

      In connection with such transfer and assignment of the Mortgage Loans, the
Depositor shall deliver to, and deposit with, or cause to be delivered to and
deposited with, the Trustee, the documents or instruments described in Section 2
of the Custodial Agreement with respect to each Mortgage Loan; provided that in
Section 2a thereof, a lost note affidavit (including a copy of the original
Mortgage Note) may be delivered in lieu of the original Mortgage Note (each a
"Trustee Mortgage File") (the Custodial Agreement to be deemed modified by the
foregoing) so transferred and assigned.

                  (b)   The Depositor shall cause the Mortgage Notes with
respect to each Mortgage Loan to be completed either (A) in blank, without
recourse, or (B) endorsed to "Wells Fargo Bank, N.A., as Trustee of the Merrill
Lynch Mortgage Investors Trust Series MLCC 2004-D, Mortgage Pass-Through
Certificates, without recourse" and the Depositor shall cause Assignments of
Mortgage with respect to each Mortgage Loan other than a Cooperative Mortgage
Loan to be completed either (A) in blank or (B) to "Wells Fargo Bank, N.A., as
Trustee of the Merrill Lynch Mortgage Investors Trust Series MLCC 2004-D,
Mortgage Pass-Through Certificates," within 30 days of the Closing Date for
purpose of their recording; provided, however, that such Assignments of Mortgage
need not be recorded unless required in writing by the Rating Agencies;
provided, further, that with respect to each MERS Mortgage Loan where MERS is
not the Mortgagee of record, the original Assignment of Mortgage showing MERS as
the assignee of the Mortgage, with the evidence of recording thereon or copies
thereof certified by an officer of the Depositor to have been submitted for
recordation, shall be delivered to the Trustee.

      If any Mortgage has been recorded in the name of MERS or its designee, no
Assignment of Mortgage in favor of the Trustee will be required to be prepared
or delivered and instead, the Servicer shall take all actions as are necessary
to cause the Trustee to be shown as the owner of the related Mortgage Loan on
the records of MERS for the purpose of the system of recording transfer of
beneficial ownership of mortgages maintained by MERS.

<PAGE>

                  (c)   In instances where a title insurance policy is required
to be delivered to the Trustee and is not so delivered, the Depositor will
provide a copy of such title insurance policy to the Trustee, as promptly as
practicable after the execution and delivery hereof, but in any case within 270
days of the Closing Date.

                  (d)   For Mortgage Loans (if any) that have been prepaid in
full after the Cut-off Date and prior to the Closing Date, the Depositor, in
lieu of delivering the above Trustee Mortgage File, shall deliver to the Trustee
an Officer's Certificate which shall include a statement to the effect that all
amounts received in connection with such prepayment that are required to be
deposited in the Distribution Account pursuant to Section 4.01 have been so
deposited. All original documents that are not delivered to the Trustee shall be
held by the Servicer in trust for the benefit of the Trustee and the
Certificateholders.

      Section 2.02. Acceptance of Trust Fund by Trustee; Review of Documentation
for Trust Fund.

                  (a)   The Trustee, by execution and delivery hereof,
acknowledges receipt by it of the Trustee Mortgage Files pertaining to the
Mortgage Loans listed on the Mortgage Loan Schedule, subject to review thereof
as provided herein. Upon receipt by the Trustee of each Trustee Mortgage File,
the Trustee shall review each Trustee Mortgage File in accordance with the
review procedures set forth in Section 2 of Amendment No. 1 to the Custodial
Agreement.

      In making such verifications, the Trustee may rely conclusively on the
Mortgage Loan Schedule and the documents constituting the Trustee Mortgage File,
and the Trustee shall have no obligation to independently verify the validity,
enforceability, recordability, sufficiency, due authorization or genuineness of
any document in any Trustee Mortgage File or any Mortgage Loan hereunder, nor
the collectibility, insurability, effectiveness or suitability of any Mortgage
Loan hereunder. The Trustee shall prepare an initial certification to be
delivered to the Depositor, the Seller and the Servicer on the Closing Date in
the form annexed hereto as Exhibit K (the "Initial Certification") with respect
to the Mortgage Loans (other than any Mortgage Loan paid in full or any Mortgage
Loan specifically identified on the Schedule of Exceptions attached to the
Initial Certification (the "Schedule of Exceptions") as not covered by such
Initial Certification) listed on the Mortgage Loan Schedule. If the Trustee
determines from such verification that any discrepancy or deficiency exists with
respect to a Trustee Mortgage File, the Trustee shall note such omission,
discrepancy or deficiency on the Schedule of Exceptions attached to the Initial
Certification, and shall deliver a copy (which shall be electronic, if
requested) of the Schedule of Exceptions to the Depositor on the Closing Date.
During the life of the Mortgage Loans (while subject to this Agreement), in the
event the Trustee discovers any defect with respect to any Trustee Mortgage
File, the Trustee shall give written specification of such defect to the
Depositor. Except as specifically provided above, the Trustee shall be under no
duty to review, inspect or examine such documents to determine that any of them
are enforceable or appropriate for their prescribed purpose.

                  (b)   If in the course of the review described in paragraph
(a) of this Section 2.02 the Trustee discovers any document or documents
constituting a part of a Trustee Mortgage File that is missing, does not appear
regular on its face (i.e., is mutilated, damaged, defaced, torn or otherwise
physically altered) or appears to be unrelated to the Mortgage Loans identified
in the Mortgage Loan Schedule (each, a "Material Defect"), the Trustee, upon
discovering such Material Defect shall promptly identify the Mortgage Loan to
which such Material Defect relates to the Depositor, the Seller and the
Servicer. Within 90 days of its receipt

<PAGE>

of such notice (but in no case prior to the 270th day following the Closing
Date), the Depositor shall be required to cure such Material Defect (and, in
such event, the Depositor shall provide the Trustee with an Officer's
Certificate confirming that such cure has been effected). If the Servicer
notifies the Depositor and the Trustee in writing that (i) a loss has occurred
and (ii) such loss relates to a Mortgage Loan for which the Trustee previously
identified a Material Defect or for which the Servicer has identified a Material
Defect and the Depositor has not cured such Material Defect, then the Depositor
shall repurchase such Mortgage Loan at the Purchase Price therefor in the event
that such loss would, if such Mortgage Loan is not repurchased by the Depositor,
constitute a Realized Loss and such loss is attributable to the failure of the
Depositor to have cured such Material Defect. A loss shall be deemed to be
attributable to the failure of the Depositor to cure a Material Defect if, as
determined by the Depositor, upon mutual agreement with the Trustee each acting
in good faith, absent such Material Defect, such loss would not have been
incurred. Within the two-year period following the Closing Date, the Depositor
may, in lieu of repurchasing a Mortgage Loan pursuant to this Section 2.02(b),
substitute for such Mortgage Loan a Replacement Mortgage Loan subject to the
provisions of Section 2.04.

                  (c)   Within 270 days following the Closing Date, the Trustee
shall deliver to the Depositor, the Seller and the Servicer, a final
certification substantially in the form attached as Exhibit L (the "Final
Certification") evidencing the completeness of the Trustee Mortgage Files in its
possession or control, with any exceptions noted on the Schedule of Exceptions
attached to the Final Certification.

                  (d)   Nothing in this Agreement shall be construed to
constitute an assumption by the Trust Fund, the Trustee or the
Certificateholders of any unsatisfied duty, claim or other liability on any
Mortgage Loan or to any Mortgagor.

                  (e)   Upon execution of this Agreement, the Depositor hereby
delivers to the Trustee and the Trustee acknowledges receipt of the Mortgage
Loan Purchase and Sale Agreement.

      Section 2.03. Representations and Warranties of the Depositor and the
Servicer.

A.    The Depositor hereby represents and warrants to the Servicer and to the
Trustee , for the benefit of the Certificateholders as of the Closing Date or
such other date as is specified, that:

                  (i)   the Depositor is a corporation duly organized, validly
            existing and in good standing under the laws governing its creation
            and existence and has full corporate power and authority to own its
            property, to carry on its business as presently conducted, to enter
            into and perform its obligations under this Agreement, and to create
            the trust pursuant hereto;

                  (ii)  the execution and delivery by the Depositor of this
            Agreement have been duly authorized by all necessary corporate
            action on the part of the Depositor; neither the execution and
            delivery of this Agreement, nor the consummation of the transactions
            herein contemplated, nor compliance with the provisions hereof, will
            conflict with or result in a breach of, or constitute a default
            under, any of the provisions of any law, governmental rule,
            regulation, judgment, decree or order binding on the Depositor or
            its properties or the certificate of incorporation or bylaws of the
            Depositor;

<PAGE>

                  (iii) the execution, delivery and performance by the Depositor
            of this Agreement and the consummation of the transactions
            contemplated hereby do not require the consent or approval of, the
            giving of notice to, the registration with, or the taking of any
            other action in respect of, any state, federal or other governmental
            authority or agency, except such as has been obtained, given,
            effected or taken prior to the date hereof;

                  (iv)  this Agreement has been duly executed and delivered by
            the Depositor and, assuming due authorization, execution and
            delivery by the Trustee, constitutes a valid and binding obligation
            of the Depositor enforceable against it in accordance with its terms
            except as such enforceability may be subject to (A) applicable
            bankruptcy and insolvency laws and other similar laws affecting the
            enforcement of the rights of creditors generally and (B) general
            principles of equity regardless of whether such enforcement is
            considered in a proceeding in equity or at law;

                  (v)   there are no actions, suits or proceedings pending or,
            to the knowledge of the Depositor, threatened or likely to be
            asserted against or affecting the Depositor, before or by any court,
            administrative agency, arbitrator or governmental body (A) with
            respect to any of the transactions contemplated by this Agreement or
            (B) with respect to any other matter which in the judgment of the
            Depositor will be determined adversely to the Depositor and will if
            determined adversely to the Depositor materially and adversely
            affect it or its business, assets, operations or condition,
            financial or otherwise, or adversely affect its ability to perform
            its obligations under this Agreement;

                  (vi)  immediately prior to the transfer and assignment of the
            Mortgage Loans to the Trustee, the Depositor was the sole owner of
            record and holder of each Mortgage Loan, and the Depositor had good
            and marketable title thereto, and had full right to transfer and
            sell each Mortgage Loan to the Trustee free and clear, subject only
            to (1) liens of current real property taxes and assessments not yet
            due and payable and, if the related Mortgaged Property is a
            condominium unit, any lien for common charges permitted by statute,
            (2) covenants, conditions and restrictions, rights of way, easements
            and other matters of public record as of the date of recording of
            such Mortgage acceptable to mortgage lending institutions in the
            area in which the related Mortgaged Property is located and
            specifically referred to in the lender's title insurance policy or
            attorney's opinion of title and abstract of title delivered to the
            Originator of such Mortgage Loan, and (3) such other matters to
            which like properties are commonly subject which do not,
            individually or in the aggregate, materially interfere with the
            benefits of the security intended to be provided by the Mortgage, of
            any encumbrance, equity, participation interest, lien, pledge,
            charge, claim or security interest, and had full right and
            authority, subject to no interest or participation of, or agreement
            with, any other party, to sell and assign each Mortgage Loan
            pursuant to this Agreement;

                  (vii) This Agreement creates a valid and continuing security
            interest (as defined in the applicable Uniform Commercial Code (the
            "UCC"), in the Mortgage Loans in favor of the Trustee, which
            security interest is prior to all other liens, and is enforceable as
            such against creditors of and purchasers from the Depositor;

<PAGE>

                  (viii) The Mortgage Loans constitute "instruments" within the
            meaning of the applicable UCC;

                  (ix)  Other than the security interest granted to the Trustee
            pursuant to this Agreement, the Depositor has not pledged, assigned,
            sold, granted a security interest in, or otherwise conveyed any of
            the Mortgage Loans. The Depositor has not authorized the filing of
            and is not aware of any financing statement against the Depositor
            that includes a description of the collateral covering the Mortgage
            Loans other than a financing statement relating to the security
            interest granted to the Trustee hereunder or that has been
            terminated. The Depositor is not aware of any judgment or tax lien
            filings against the Depositor;

                  (x)   None of the Mortgage Loans have any marks or notations
            indicating that such Mortgage Loans have been pledged, assigned or
            otherwise conveyed to any Person other than the Trustee; and

                  (xi)  The Depositor has received all consents and approvals
            required by the terms of the Mortgage Loans to convey the Mortgage
            Loans hereunder to the Trustee;

                  (xii) As of the Closing Date, each Mortgage Loan is a
            "qualified mortgage" within the meaning of Section 860G(a)(3) of the
            Code (without regard to Treasury Regulations Section 1.860G-2(f)) or
            any similar rule that provides that a defective obligation is a
            qualified mortgage for a temporary period);

                  (xiii) As of the Closing Date, no Mortgage Loan provides for
            interest other than at either (x) a single fixed rate in effect
            throughout the term of the Mortgage Loan or (y) a single "variable
            rate" (within the meaning of Treasury Regulations Section
            1.860G-1(a)(3)) in effect throughout the term of the Mortgage Loan;

                  (xiv) As of the Closing Date, no Mortgage is the subject of
            pending or final foreclosure proceedings; and

                  (xv)  As of the Closing Date, the Depositor would not initiate
            foreclosure proceedings with respect to any Mortgage Loan based on
            such Mortgage Loan's delinquency status prior to the next scheduled
            payment date for such Mortgage Loan.

      The foregoing representations made in this Section 2.03 by the Depositor
shall survive the termination of this Agreement and shall not be waived by any
party hereto

B.    The Servicer hereby represents and warrants to the Depositor and to the
Trustee, for the benefit of the Certificateholders as of the Closing Date that:

                  (i)   The Servicer is a corporation duly organized, validly
            existing and in good standing under the laws of the State of New
            Jersey. The Servicer has in full force and effect (without notice of
            possible suspension, revocation or impairment) all required
            qualifications, permits, approvals, licenses, and

<PAGE>

            registrations, or exemption therefrom, to conduct all activities in
            all jurisdictions in which its activities with respect to the
            Mortgage Loans require it to be qualified or licensed;

                  (ii)  The Servicer has all requisite corporate power,
            authority and capacity to carry on its business as it is now being
            conducted, to execute and deliver this Agreement, and to perform all
            of its obligations hereunder. The Servicer does not believe, nor
            does it have any cause or reason to believe, that it cannot perform
            each and every covenant contained in this Agreement;

                  (iii) The execution, delivery and performance of this
            Agreement by the Servicer and consummation of the transactions
            contemplated hereby have been duly and validly authorized by all
            necessary corporate, shareholder or other action by the Servicer;
            this Agreement has been duly and validly executed and delivered by
            the Servicer; and this Agreement is a valid and legally binding
            agreement of the Servicer, enforceable against the Servicer in
            accordance with its respective terms, subject to bankruptcy,
            insolvency and similar laws affecting generally the enforcement of
            creditors' rights and the discretion of a court to grant specific
            performance of contracts;

                  (iv)  Neither the execution and delivery of this Agreement,
            nor the consummation of the transactions contemplated hereby, nor
            compliance with their respective terms and conditions shall (a)
            violate, conflict with, result in the breach of, constitute a
            default under, be prohibited by or require any additional approval
            under any terms, conditions or provisions of the Servicer's articles
            of incorporation or by-laws or any other similar corporate or
            organizational document of the Servicer; any mortgage, indenture,
            deed of trust, loan or credit agreement or other agreement or
            instrument to which the Servicer is now a party or by which it is
            bound; or any law, ordinance, rule, regulation, order, judgment or
            decree of any governmental authority applicable to the Servicer; or
            (b) result in the creation or imposition of any lien, charge or
            encumbrance of any material nature upon any of the properties or
            assets of the Servicer;

                  (v)   The Servicer holds all licenses, approvals, permits and
            other authorizations, or exemptions therefrom, required under
            applicable law to assume responsibility for servicing the Mortgage
            Loans;

                  (vi)  There is no litigation, claim, demand, proceeding or
            governmental investigation existing or pending, or to the knowledge
            of the Servicer, threatened, nor is there any order, injunction or
            decree outstanding against or relating to the Servicer that could
            (i) have a material adverse effect upon the performance by the
            Servicer of its obligations under this Agreement or (ii) to the
            Servicer's knowledge, result in any material loss or liability to
            Depositor, the Trustee, the Trust Fund or the Seller. Further, to
            the Servicer's knowledge, there is no meritorious basis for any such
            litigation, claim, demand, proceeding, or governmental
            investigation;

                  (vii) The Servicer has been approved by GNMA, Fannie Mae and
            FHLMC and will remain approved as an "eligible seller/servicer" of
            residential mortgage loans as provided in GNMA, Fannie Mae, or FHLMC
            guidelines and in good standing. The Servicer has not received any
            notification from GNMA,

<PAGE>

            Fannie Mae or FHLMC that the Servicer is not in compliance with the
            requirements of the approved "seller/servicer" status. The Servicer
            is a mortgagee approved by the Secretary of HUD pursuant to Section
            203 and 211 of the National Housing Act. The Servicer has not
            received any notification from HUD that the Servicer is not in
            compliance with the requirements of the approved mortgagee status;

                  (viii) The servicing practices to be used by the Servicer
            under this Agreement are, and shall remain, in all material respects
            in compliance with Accepted Servicing Practices, including without
            limitation, all federal, state and local laws, rules, all
            regulations and requirements in connection therewith, and Fannie Mae
            guidelines, as applicable;

                  (ix)  The Servicer has not received written notice from or on
            behalf of FHA, HUD, FDIC, Fannie Mae, FHLMC or GNMA, advising the
            Servicer of its failure to comply with applicable servicing or
            claims procedures, or resulted in a request for repurchase of
            mortgage loans or indemnification in connection with any mortgage
            loans;

                  (x)   The Servicer has in place a contingency plan that will
            enable it to perform its obligations under this Agreement in all
            material respects, at another location within five (5) Business Days
            in the event its primary location is rendered inoperative as a
            result of a natural or other disaster or emergency;

                  (xi)  The Servicer maintains and shall maintain, in good
            standing, all licenses and approvals necessary to service the
            Mortgage Loans and maintains and shall at all times maintain the
            capital requirements imposed by the licensing or approving entities
            having jurisdiction over the Servicer. The Servicer has filed
            applications for all applicable licenses and qualifications to do
            business and to service the Mortgage Loans in the U.S. Virgin
            Islands;

                  (xii) The Servicer maintains and shall at all times maintain
            error and omissions and fidelity insurance coverage of the type and
            in the amounts required by Fannie Mae;

                  (xiii) The Servicer has, and shall at all times maintain
            during the term of this Agreement, sufficient systems, including but
            not limited to the Servicer's EDP, and trained and experienced
            personnel in place to perform its obligations under this Agreement;

                  (xiv) For so long as, and to the extent that, the Servicer
            services the Mortgage Loans, the Servicer will continue to comply
            with each applicable federal, state, or local, law, statute, and
            ordinance, and any rule, regulation, or order issued thereunder,
            pertaining to the subject matter of this Agreement, including, but
            not limited to, usury, RESPA, Consumer Credit Reporting Act, Equal
            Credit Opportunity Act, Federal Deposit Insurance Corporation
            Improvement Act, Regulation B, Fair Credit Reporting Act, Fair Debt
            Collection Practices Act, Fair Housing Act, Truth in Lending Act and
            Regulation Z, Flood Disaster Protection Act of 1973, and any
            applicable regulations related thereto, and such other fair housing,
            anti-redlining, equal credit opportunity, truth-in-lending, real
            estate settlement procedures, fair credit reporting, and every other

<PAGE>

            prohibition against unlawful discrimination in residential mortgage
            lending or governing consumer credit, and all state consumer credit
            statutes and regulations, as amended. In the event the Depositor or
            the Trustee has a reasonable good faith belief in the Servicer's
            non-compliance with this representation and warranty and upon the
            Depositor's or the Trustee's written request, the Servicer shall
            deliver to the Depositor or the Trustee reasonable evidence of
            compliance with any of the requirements of this representation and
            warranty; and

                  (xv)  Neither the Servicer, its parent, nor any of its
            subsidiaries is in bankruptcy, receivership or conservatorship. The
            Servicer has the requisite financial resources and ability to meet
            its obligations under this Agreement, including, but not limited to,
            any and all indemnification obligations,

      Within 60 days of the earlier of either discovery by or notice to the
Servicer of any breach of a representation or warranty set forth in this Section
2.03(B) which materially and adversely affects the ability of the Servicer to
perform its duties and obligations under this Agreement or otherwise materially
and adversely affects the value of the Mortgage Loans, the Mortgaged Property or
the priority of the security interest on such Mortgaged Property, the Servicer
shall use its best efforts promptly to cure such breach in all material respects
and, if such breach cannot be cured, the Servicer shall, at the Trustee's
option, assign the Servicer's rights and obligations under this Agreement (or
respecting the affected Mortgage Loans) to a successor servicer selected by the
Depositor with the prior consent and approval of the Trustee. Such assignment
shall be made in accordance with this Agreement.

      Section 2.04. Discovery of Breach; Repurchase or Substitution of Mortgage
Loans.

                  (a)   Pursuant to Sections 3(a) and 3(b) of the Mortgage Loan
Purchase and Sale Agreement, the Seller has made certain representations and
warranties as to the characteristics of the Mortgage Loans (such representations
and warranties are set out in full in Schedule B of this Agreement) as of the
Closing Date and the conveyance thereof from the Seller to the Depositor, for
the benefit of the Trustee and the Certificateholders, and the Seller has agreed
to comply with the provisions of this Section 2.04 in respect of a breach of any
of such representations and warranties.

      It is understood and agreed that (i) the representations and warranties of
the Depositor and the Servicer set forth in Section 2.03 and (ii) the
representations and warranties of the Seller set forth in Sections 3(a) and 3(b)
of the Mortgage Loan Purchase and Sale Agreement shall survive delivery of the
Trustee Mortgage Files and the Assignment of Mortgage of each Mortgage Loan to
the Trustee and shall continue throughout the term of this Agreement. Upon
discovery (i) by the Depositor, the Seller, the Servicer or the Trustee of a
breach of any representation or warranty made by the Depositor under Section
2.03 which materially adversely affects the value of a Mortgage Loan or the
interest therein of the Certificateholder (a "Defective Mortgage Loan"), or (ii)
by the Depositor or the Seller of the breach by the Seller of any representation
or warranty under the Mortgage Loan Purchase and Sale Agreement in respect of
any Mortgage Loan, which breach results in the Mortgage Loan being a "Defective
Mortgage Loan" (each of such parties hereby agreeing to give written notice of
such breach to the Trustee and the other of such parties), the Trustee, or its
designee, shall promptly notify the Depositor in writing of such breach and
request that the Depositor cure or cause the cure of such breach within 90 days
from the date that the Depositor discovered or was notified of such breach, and
if the Depositor does not cure such breach in all material respects during such
period, the Trustee shall (i) in the case of an uncured breach under Section
2.03, cause the Depositor to repurchase such

<PAGE>

Defective Mortgage Loan at the Purchase Price and (ii) in the case of an uncured
breach by the Seller under the Mortgage Loan Purchase and Sale Agreement, cause
the Depositor to enforce the Seller's obligation under the Mortgage Loan
Purchase and Sale Agreement to repurchase that Defective Mortgage Loan from the
Trust Fund at the Purchase Price, in each case on or prior to the Determination
Date following the expiration of such 90-day period (subject to Section 2.04(b)
below); provided, however, that, in connection with any such breach under clause
(ii) above that could not reasonably have been cured within such 90-day period,
if the Seller shall have commenced to cure such breach within such 90-day period
and, if the defective Mortgage Loan qualifies as a "qualified mortgage" within
the meaning of Section 860G(a)(3) of the Code following such 90-day period, the
Seller shall be permitted to proceed thereafter diligently and expeditiously to
cure the same within an additional 90-day period. The Purchase Price for the
repurchased Defective Mortgage Loan shall be deposited in the related
Distribution Account, and the Trustee, or its designee, upon receipt of such
deposit and two copies of a Request for Release with respect to such Defective
Mortgage Loan, shall release to the Seller or the Depositor, as applicable, the
related Trustee Mortgage File and shall execute and deliver such instruments of
transfer or assignment, in each case without recourse, representation or
warranties, as either party shall furnish to it and as shall be necessary to
vest in such party any Defective Mortgage Loan released pursuant hereto and the
Trustee, or its designee, shall have no further responsibility with regard to
such Trustee Mortgage File (it being understood that the Trustee shall have no
responsibility for determining the sufficiency of such assignment for its
intended purpose). In lieu of repurchasing any such Defective Mortgage Loan as
provided above, the Seller may cause such Defective Mortgage Loan to be removed
from the Trust Fund (in which case it shall become a Deleted Mortgage Loan) and
substitute one or more Replacement Mortgage Loans in the manner and subject to
the limitations set forth in Section 2.04(b) below. It is understood and agreed
that the obligation of the Seller (or the Depositor, if applicable) to cure or
to repurchase (or to substitute for) any Mortgage Loan as to which a breach has
occurred and is continuing shall constitute the sole remedy against the Seller
(or the Depositor, if applicable) respecting such breach available to the
Trustee on behalf of the Certificateholders. With respect to the representations
and warranties described in Schedule B which are made to the best of the
Seller's knowledge, if it is discovered by any of the Depositor, the Seller or
the Trustee that the substance of such representation and warranty is inaccurate
and such inaccuracy materially and adversely affects the value of the related
Mortgage Loan, then notwithstanding the Seller's lack of knowledge with respect
to the substance of such representation and warranty, such inaccuracy shall be
deemed a breach of the applicable representation or warranty.

                  (b)   Any substitution of Replacement Mortgage Loans for
Deleted Mortgage Loans made pursuant to Section 2.04(a) above must be effected
prior to the last Business Day that is within two years after the Closing Date.
As to any Deleted Mortgage Loan for which the Seller substitutes a Replacement
Mortgage Loan or Loans, such substitution shall be effected by delivering to the
Trustee for such Replacement Mortgage Loan or Loans, the Mortgage Note, the
Mortgage, the Assignment to the Trustee, and such other documents and
agreements, with all necessary endorsements thereon, together with an Officers'
Certificate stating that each such Replacement Mortgage Loan satisfies the
definition thereof and specifying the Substitution Amount (as described below),
if any, in connection with such substitution. The Trustee shall acknowledge
receipt for such Replacement Mortgage Loan and, within 45 days thereafter, shall
review such Mortgage Documents as specified in this Agreement under Section
2.02(a) and deliver to the Depositor, with respect to such Replacement Mortgage
Loans, a certification substantially in the form of a revised Initial
Certification, with any exceptions noted thereon. Within one year of the date of
substitution, the Trustee shall deliver to the Depositor a certification
substantially in the form of a revised Final Certification, with respect to such

<PAGE>

Replacement Mortgage Loans, with any exceptions noted thereon. Monthly Payments
due with respect to Replacement Mortgage Loans in the month of substitution
shall not be included as part of the Trust Fund and shall be retained by the
Seller. For the month of substitution, distributions to Certificateholders shall
reflect the collections and recoveries in respect of such Deleted Mortgage in
the Due Period preceding the month of substitution and the Seller shall
thereafter be entitled to retain all amounts subsequently received in respect of
such Deleted Mortgage Loan. Upon such substitution, such Replacement Mortgage
Loan shall constitute part of the Trust Fund and shall be subject in all
respects to the terms of this Agreement and the Mortgage Loan Purchase and Sale
Agreement, including all representations and warranties thereof included in the
Mortgage Loan Purchase and Sale Agreement, in each case as of the date of
substitution.

      For any month in which the Seller substitutes one or more Replacement
Mortgage Loans for one or more Deleted Mortgage Loans, the Trustee, based upon
information provided by the Servicer, shall determine the excess (each, a
"Substitution Amount"), if any, by which the aggregate Purchase Price of all
such Deleted Mortgage Loans exceeds the aggregate Stated Principal Balance of
the Replacement Mortgage Loans replacing such Deleted Mortgage Loans, together
with one month's interest on such excess amount at the applicable Net Mortgage
Rate. On the date of such substitution, the Seller shall deliver or cause to be
delivered to the Servicer for deposit in the Custodial Account an amount equal
to the related Substitution Amount, if any, and the Trustee, upon receipt of the
related Replacement Mortgage Loan or Loans and two copies of a Request for
Release with respect to the Deleted Mortgage Loan or Loans, shall release to the
Seller the related Trustee Mortgage File or Files and shall execute and deliver
such instruments of transfer or assignment, in each case without recourse, as
the Seller shall deliver to it and as shall be necessary to vest therein any
Deleted Mortgage Loan released pursuant hereto.

      In addition, the Seller shall obtain at its own expense and deliver to the
Trustee an Opinion of Counsel to the effect that such substitution (either
specifically or as a class of transactions) shall not cause (a) any federal tax
to be imposed on the Trust Fund, including without limitation, any federal tax
imposed on "prohibited transactions" under Section 860F(a)(l) of the Code or on
"contributions after the startup date" under Section 860G(d)(l) of the Code, or
(b) any REMIC created hereunder to fail to qualify as a REMIC at any time that
any Certificate is outstanding. If 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.

                  (c)   Upon discovery by the Seller, 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 within two Business Days give written notice thereof
to the other parties. In connection therewith, the Seller or Depositor, as
applicable, shall repurchase, or the Seller, subject to the limitations set
forth in Section 2.04(b), shall substitute one or more Replacement Mortgage
Loans for the affected Mortgage Loan within 90 days of the earlier of discovery
or receipt of such notice with respect to such affected Mortgage Loan. Any such
repurchase or substitution shall be made in the same manner as set forth in
Sections 2.04(a) and 2.04(b) above. The Trustee shall re-convey to the Seller
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.

      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 such party relating to a repurchase of
a Mortgage

<PAGE>

Loan other than in compliance with the terms of this Section 2.04 and the
Mortgage Loan Purchase and Sale Agreement, to the extent that any such action
causes (i) any federal or state tax to be imposed on the Trust Fund, including
without limitation, any federal tax imposed on "prohibited transactions" under
Section 860F(a)(1) of the Code or on "contributions after the startup date"
under Section 860G(d)(1) of the Code, or (ii) any REMIC formed hereby to fail to
qualify as a REMIC at any time that any Certificate is outstanding.

                  (d)   Notwithstanding anything to the contrary in this
Agreement, Seller shall service and administer the Additional Collateral, it
being understood and agreed that only Seller shall service and administer the
related securities accounts, lines of credit and guarantees with respect to
Additional Collateral.

      Section 2.05. Grant Clause.

                  (a)   It is intended that the conveyance of the Depositor's
right, title and interest in and to property constituting the Trust Fund
pursuant to this Agreement shall constitute, and shall be construed as, a sale
of such property and not a grant of a security interest to secure a loan.
However, if such conveyance is deemed to be in respect of a loan, it is intended
that: (1) the rights and obligations of the parties shall be established
pursuant to the terms of this Agreement; (2) the Depositor hereby grants to the
Trustee for the benefit of the Holders of the Certificates a first priority
security interest in all of the Depositor's right, title and interest in, to and
under, whether now owned or hereafter acquired, the Trust Fund and all proceeds
of any and all property constituting the Trust Fund to secure payment of the
Certificates; and (3) this Agreement shall constitute a security agreement under
applicable law. If such conveyance is deemed to be in respect of a loan and the
trust created by this Agreement terminates prior to the satisfaction of the
claims of any Person holding any Certificate, 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, and all proceeds
shall be distributed as herein provided.

                  (b)   The Depositor shall, to the extent consistent with this
Agreement, take such reasonable actions as may be necessary to ensure that, if
this Agreement were deemed to create a security interest in the Mortgage Loans
and the other property described above, 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 this Agreement. The Depositor
will, at its own expense, make all initial filings on or about the Closing Date
and shall forward a copy of such filing or filings to the Trustee. Without
limiting the generality of the foregoing, the Depositor shall prepare and
forward for filing, or shall cause to be forwarded for filing, at the expense of
the Depositor, all filings necessary to maintain the effectiveness of any
original filings necessary under the relevant UCC to perfect the Trustee's
security interest in or lien on the Mortgage Loans and the other property
described above, including without limitation (x) continuation statements, and
(y) such other statements as may be occasioned by (1) any change of name of
Seller, the Depositor or the Trustee, (2) any change of location of the place of
business or the chief executive office of the Seller or the Depositor, (3) any
transfer of any interest of the Depositor in any Mortgage Loan or (4) any change
under the relevant UCC or other applicable laws. The Depositor shall not
organize under the law of any jurisdiction other than the State under which each
is organized as of the Closing Date (whether changing its jurisdiction of
organization or organizing under an additional jurisdiction) without giving 30
days prior written notice of such action to its immediate and intermediate
transferee, including the Trustee. Before effecting such change, the Depositor
proposing to change its jurisdiction of organization shall prepare and file in
the appropriate filing office any financing statements or other statements
necessary to continue the perfection of the interests of its immediate and
mediate
<PAGE>

transferees, including the Trustee, in the Mortgage Loans and the other property
described above. In connection with the transactions contemplated by this
Agreement, the Depositor authorizes its immediate or mediate transferee to file
in any filing office any initial financing statements, any amendments to
financing statements, any continuation statements, or any other statements or
filings described in this paragraph (b).

                                  ARTICLE III.

                                THE CERTIFICATES

      Section 3.01. The Certificates.

                  (a)   The Certificates shall be issuable in registered form
only and shall be securities governed by Article 8 of the New York Uniform
Commercial Code. The Book-Entry Certificates will be evidenced by one or more
certificates, beneficial ownership of which will be held in the dollar
denominations in Certificate Principal Amount, or Class Notional Amount, as
applicable, or in the Percentage Interests, specified herein. Each Class of
Book-Entry Certificates will be issued in the minimum denominations in
Certificate Principal Amount (or Class Notional Amount) specified in the
Preliminary Statement hereto and in integral multiples of $1 in excess thereof.
Each Class of Non-Book-Entry Certificates other than the Residual Certificates
shall be issued in definitive, fully registered form in the minimum
denominations in Certificate Principal Amount specified in the Preliminary
Statement hereto and in integral multiples of $1 in excess thereof. The Residual
Certificates shall be issued as single Certificates and maintained in
definitive, fully registered form in a denomination equal to 100% of the
Percentage Interest of each such Class. The Class X-A and Class X-B Certificates
shall each be issued as single Certificates in a denomination equal to 100% of
the Percentage Interest of each such Class.

                  (b)   The Certificates shall be executed by manual or
facsimile signature on behalf of the Trustee by an authorized officer. Each
Certificate shall, on original issue, be authenticated by the Trustee or an
Authenticating Agent upon the order of the Depositor upon receipt by the Trustee
of the Trustee Mortgage Files described in Section 2.01. 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 provided for herein, executed by an authorized officer
of the Trustee or of an Authenticating Agent, by manual signature, and such
certification 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. At
any time and from time to time after the execution and delivery of this
Agreement, the Depositor may deliver Certificates executed by the Trustee to the
Trustee or the Authenticating Agent for authentication and the Trustee or the
Authenticating Agent shall authenticate and deliver such Certificates as in this
Agreement provided and not otherwise.

                  (c)   The Class X-B, Class B-4, Class B-5 and Class B-6
certificates offered and sold in reliance on the exemption from registration
under Rule 144A under the Act shall be issued initially in the form of one or
more permanent global Certificates in definitive, fully registered form without
interest coupons with the applicable legends set forth in Exhibit A added to the
forms of such Certificates (each, a "Restricted Global Security").

      Section 3.02. Registration.

<PAGE>

      The Trustee is hereby appointed, and the Trustee hereby accepts its
appointment as, initial Certificate Registrar in respect of the Certificates and
shall maintain books for the registration and for the transfer of Certificates
(the "Certificate Register"). The Trustee may appoint a bank or trust company to
act as successor Certificate Registrar. A registration book shall be maintained
for the Certificates collectively. The Certificate Registrar may resign or be
discharged or removed and a new successor may be appointed in accordance with
the procedures and requirements set forth in Sections 6.06 and 6.07 hereof with
respect to the resignation, discharge or removal of the Trustee and the
appointment of a successor Trustee. The Certificate Registrar may appoint, by a
written instrument delivered to the Holders, any bank or trust company to act as
co-registrar under such conditions as the Certificate Registrar may prescribe;
provided, however, that the Certificate Registrar shall not be relieved of any
of its duties or responsibilities hereunder by reason of such appointment.

      Section 3.03. Transfer and Exchange of Certificates.

                  (a)   A Certificate (other than Book-Entry Certificates which
shall be subject to Section 3.09 hereof) may be transferred by the Holder
thereof only upon presentation and surrender of such Certificate at the office
of the Certificate Registrar duly endorsed or accompanied by an assignment duly
executed by such Holder or his duly authorized attorney in such form as shall be
satisfactory to the Certificate Registrar. Upon the transfer of any Certificate
in accordance with the preceding sentence, the Trustee shall execute, and the
Authenticating Agent shall authenticate and deliver to the transferee, one or
more new Certificates of the same Class and evidencing, in the aggregate, the
same aggregate Certificate Principal Amount (or Notional Amount) as the
Certificate being transferred. No service charge shall be made to a
Certificateholder for any registration of transfer of Certificates, but the
Certificate Registrar may require payment of a sum sufficient to cover any tax
or governmental charge that may be imposed in connection with any registration
of transfer of Certificates.

                  (b)   A Certificate may be exchanged by the Holder thereof for
any number of new Certificates of the same Class, in authorized denominations,
representing in the aggregate the same Certificate Principal Amount (or Notional
Amount) as the Certificate surrendered, upon surrender of the Certificate to be
exchanged at the office of the Certificate Registrar duly endorsed or
accompanied by a written instrument of transfer duly executed by such Holder or
his duly authorized attorney in such form as is satisfactory to the Certificate
Registrar. Certificates delivered upon any such exchange will evidence the same
obligations, and will be entitled to the same rights and privileges, as the
Certificates surrendered. No service charge shall be made to a Certificateholder
for any exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any exchange of Certificates. Whenever any
Certificates are so surrendered for exchange, the Trustee shall execute, and the
Authenticating Agent shall authenticate, date and deliver the Certificates which
the Certificateholder making the exchange is entitled to receive.

                  (c)   By acceptance of a Restricted Certificate, whether upon
original issuance or subsequent transfer, each Holder of such a Certificate
acknowledges the restrictions on the transfer of such Certificate set forth
thereon and agrees that it will transfer such a Certificate only as provided
herein.

      The following restrictions shall apply with respect to the transfer and
registration of transfer of a Restricted Certificate to a transferee that takes
delivery in the form of a Definitive Certificate:

<PAGE>

                  (i)   The Certificate Registrar shall register the transfer of
            a Restricted Certificate if the requested transfer is (x) to the
            Depositor or an affiliate (as defined in Rule 405 under the 1933
            Act) of the Depositor or (y) being made to a "qualified
            institutional buyer" (a "QIB") as defined in Rule 144A under the
            Securities Act of 1933, as amended (the "Act") by a transferor that
            has provided the Certificate Registrar with a certificate in the
            form of Exhibit G hereto; and

                  (ii)  The Certificate Registrar shall register the transfer of
            a Restricted Certificate if the requested transfer is being made to
            an "accredited investor" under Rule 501(a)(1), (2), (3) or (7) under
            the Act, or to any Person all of the equity owners in which are such
            accredited investors, by a transferor who furnishes to the
            Certificate Registrar a letter of the transferee substantially in
            the form of Exhibit H hereto.

                  (d)(i) 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 or arrangement subject to any state, local or other federal law
substantively similar to the foregoing provisions of ERISA or the Code ("Similar
Law") (collectively, a "Plan"), or to any Person directly or indirectly
acquiring a Class A-R Certificate for, on behalf of or with any assets of any
such 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, as set forth in
Exhibit B.

                  (ii)  No transfer of an ERISA-Restricted Certificate that is a
Class B-4, Class B-5 or Class B-6 Certificate shall be made unless the
prospective transferee provides the Trustee and the Depositor with (A) a
representation as set forth in Exhibit I to the effect that such transferee is
not a Plan and is not directly or indirectly acquiring the Certificate for, on
behalf of or with any assets of any such Plan, (B) if the Certificate has been
the subject of an ERISA-Qualifying Underwriting, a representation that such
transferee is an insurance company that is acquiring the Certificate with 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 (C) solely in the case of a Definitive Certificate, an Opinion
of Counsel satisfactory to the Trustee and the Depositor to the effect that the
acquisition and holding of such Certificate will not constitute or result in a
nonexempt prohibited transaction under ERISA or the Code, or a violation of
Similar Law, and will not subject the Certificate Registrar, the Depositor, the
Servicer or the Trustee to any obligation in addition to those expressly
undertaken in this Agreement, which Opinion of Counsel shall not be an expense
of the Certificate Registrar, the Depositor, the Servicer or the Trustee.

                  (iii) For purposes of paragraphs (i) and (ii) of this
Subsection 3.03(d), other than subparagraph (ii)(C), the representation as set
forth in Exhibit B or Exhibit I, as applicable, shall be deemed to have been
made to the Trustee or the Depositor 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 or the Depositor of a representation or an Opinion
of Counsel satisfactory to the Trustee or the Depositor as described above shall
be void and of no effect. None of the Certificate Registrar, the Depositor, the
Servicer or the Trustee shall be under any liability to any Person for any
registration or transfer of any ERISA Restricted

<PAGE>

Certificate that is in fact not permitted by this Section 3.03(d) nor shall the
Paying Agent 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 Certificate Registrar in accordance with the foregoing
requirements. The Certificate Registrar, Depositor, Servicer, Paying Agent
and/or 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 3.03(d) all payments made on such ERISA
Restricted Certificate at and after the time it commenced such holding. Any such
payments so recovered shall be paid and delivered to the last preceding Holder
of such Certificate that is not a Plan.

                  (iv)  Notwithstanding the foregoing, no representation or
Opinion of Counsel shall be required for the initial issuance of the ERISA
Restricted Certificates.

                  (e)   As a condition of the registration of transfer or
exchange of any Certificate, the Certificate Registrar may require the certified
taxpayer identification number of the owner of the Certificate and the payment
of a sum sufficient to cover any tax or other governmental charge imposed in
connection therewith; provided, however, that the Certificate Registrar shall
have no obligation to require such payment or to determine whether or not any
such tax or charge may be applicable. No service charge shall be made to the
Certificateholder for any registration, transfer or exchange of a Certificate.

                  (f)   Notwithstanding anything to the contrary contained
herein, no Residual Certificate or beneficial interest therein may be owned,
pledged or transferred, directly or indirectly, by or to (i) a Disqualified
Organization or (ii) an individual, corporation or partnership or other person
unless, in the case of clause (ii), such person is (A) not a Non-U.S. Person or
(B) is a Non-U.S. Person that holds a Residual Certificate in connection with
the conduct of a trade or business within the United States and has furnished
the transferor and the Certificate Registrar with an effective Internal Revenue
Service Form W-8ECI or successor form at the time and in the manner required by
the Code (any such person who is not covered by clause (A) or (B) above is
referred to herein as a "Non-permitted Foreign Holder").

      Prior to and as a condition of the registration of any transfer, sale or
other disposition of a Residual Certificate or a beneficial interest therein,
the proposed transferee shall deliver to the Trustee and the Certificate
Registrar an affidavit in substantially the form attached hereto as Exhibit B
representing and warranting, among other things, that such transferee is neither
a Disqualified Organization, an agent or nominee acting on behalf of a
Disqualified Organization, nor a Non-permitted Foreign Holder (any such
transferee, a "Permitted Transferee"), and the proposed transferor shall deliver
to the Trustee and the Certificate Registrar an affidavit in substantially the
form attached hereto as Exhibit C. In addition, the Trustee or the Certificate
Registrar may (but shall have no obligation to) require, prior to and as a
condition of any such transfer, the delivery by the proposed transferee of an
Opinion of Counsel, addressed to the Trustee and the Certificate Registrar, that
such proposed transferee or, if the proposed transferee is an agent or nominee,
the proposed beneficial owner, is not a Disqualified Organization, agent or
nominee thereof, or a Non-permitted Foreign Holder. Notwithstanding the
registration in the Certificate Register of any transfer, sale, or other
disposition of a Residual Certificate to a Disqualified Organization, an agent
or nominee thereof, or Non-permitted Foreign Holder, such registration shall be
deemed to be of no legal force or effect whatsoever and such Disqualified
Organization, agent or nominee thereof, or Non-permitted Foreign Holder shall
not be deemed to be a Certificateholder for any purpose hereunder, including,
but not limited to, the receipt of distributions on such Residual Certificate.
The Depositor, the Certificate Registrar and the

<PAGE>

Trustee shall be under no liability to any Person for any registration or
transfer of a Residual Certificate to a Disqualified Organization, agent or
nominee thereof or Non-permitted Foreign Holder or for the Paying Agent making
any payments due on such Residual Certificate to the Holder thereof or for
taking any other action with respect to such Holder under the provisions of the
Agreement, so long as the transfer was effected in accordance with this Section
3.03(f), unless the Certificate Registrar shall have actual knowledge at the
time of such transfer or the time of such payment or other action that the
transferee is a Disqualified Organization, or an agent or nominee thereof, or
Non-permitted Foreign Holder. The Certificate Registrar shall be entitled to
recover from any Holder of a Residual Certificate that was a Disqualified
Organization, agent or nominee thereof, or Non-permitted Foreign Holder at the
time it became a Holder or at any subsequent time became a Disqualified
Organization, agent or nominee thereof, or Non-permitted Foreign Holder, all
payments made on such Residual Certificate at and after either of such times
(and all costs and expenses, including but not limited to attorneys' fees,
incurred in connection therewith). Any payment (not including any such costs and
expenses) so recovered by the Certificate Registrar shall be paid and delivered
to the last preceding Holder of such Residual Certificate.

      If any purported transferee shall become a registered Holder of a Residual
Certificate in violation of the provisions of this Section 3.03(f), then upon
receipt of written notice to the Trustee that the registration of transfer of
such Residual Certificate was not in fact permitted by this Section 3.03(f),
such transfer shall be absolutely null and void and shall vest no rights in the
purported transferee and the last preceding Permitted Transferee shall be
restored to all rights as Holder thereof retroactive to the date of such
registration of transfer of such Residual Certificate. The Depositor, the
Certificate Registrar and the Trustee shall be under no liability to any Person
for any registration of transfer of a Residual Certificate that is in fact not
permitted by this Section 3.03(f), or for the Paying Agent making any payment
due on such Certificate to the registered Holder thereof or for taking any other
action with respect to such Holder under the provisions of this Agreement so
long as the transfer was registered upon receipt of the affidavit described in
the preceding paragraph of this Section 3.03(f).

                  (g)   Each Holder or Certificate Owner of a Restricted
Certificate, ERISA-Restricted Certificate or Residual Certificate, or an
interest therein, by such Holder's or Owner's acceptance thereof, shall be
deemed for all purposes to have consented to the provisions of this section.

      Section 3.04. Cancellation of Certificates.

      Any Certificate surrendered for registration of transfer or exchange shall
be cancelled and retained in accordance with normal retention policies with
respect to cancelled certificates maintained by the Trustee or the Certificate
Registrar.

      Section 3.05. Replacement of Certificates.

      If (i) any Certificate is mutilated and is surrendered to the Trustee or
the Certificate Registrar or (ii) the Trustee or the Certificate Registrar
receives evidence to its satisfaction of the destruction, loss or theft of any
Certificate, and there is delivered to the Trustee and the Certificate Registrar
such security or indemnity as may be required by them to save each of them
harmless, then, in the absence of notice to the Depositor, the Trustee or the
Certificate Registrar that such destroyed, lost or stolen Certificate has been
acquired by a protected purchaser, the Trustee shall execute and the
Authenticating Agent shall authenticate and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Certificate, a new Certificate
of like

<PAGE>

tenor and Certificate Principal Amount. Upon the issuance of any new Certificate
under this Section 3.05, the Trustee, the Depositor or the Certificate Registrar
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, the Depositor or the
Certificate Registrar) connected therewith. Any replacement Certificate issued
pursuant to this Section 3.05 shall constitute complete and indefeasible
evidence of ownership in the applicable Trust Fund, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.

      If after the delivery of such new Certificate, a protected purchaser of
the original Certificate in lieu of which such new Certificate was issued
presents for payment such original Certificate, the Depositor, the Certificate
Registrar and the Trustee or any agent shall be entitled to recover such new
Certificate from the Person to whom it was delivered or any Person taking
therefrom, except a protected purchaser, and shall be entitled to recover upon
the security or indemnity provided therefor to the extent of any loss, damage,
cost or expenses incurred by the Depositor, the Certificate Registrar, the
Trustee or any agent in connection therewith.

      Section 3.06. Persons Deemed Owners.

      Subject to the provisions of Section 3.09 with respect to Book-Entry
Certificates, the Depositor, the Trustee, the Certificate Registrar, the Paying
Agent and any agent of any of them shall treat the Person in whose name any
Certificate is registered upon the books of the Certificate Registrar as the
owner of such Certificate for the purpose of receiving distributions pursuant to
Sections 5.01 and 5.02 and for all other purposes whatsoever, and neither the
Depositor, the Trustee, the Certificate Registrar, the Paying Agent nor any
agent of any of them shall be affected by notice to the contrary.

      Section 3.07. Temporary Certificates.

                  (a)   Pending the preparation of definitive Certificates, upon
the order of the Depositor, the Trustee shall execute and the Authenticating
Agent shall authenticate and deliver temporary Certificates that are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Certificates in lieu
of which they are issued and with such variations as the authorized officers
executing such Certificates may determine, as evidenced by their execution of
such Certificates.

                  (b)   If temporary Certificates are issued, the Depositor will
cause definitive Certificates to be prepared without unreasonable delay. After
the preparation of definitive Certificates, the temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of the temporary
Certificates at the office or agency of the Certificate Registrar without charge
to the Holder. Upon surrender for cancellation of any one or more temporary
Certificates, the Trustee shall execute and the Authenticating Agent shall
authenticate and deliver in exchange therefor a like aggregate Certificate
Principal Amount (or Notional Amount) of definitive Certificates of the same
Class in the authorized denominations. Until so exchanged, the temporary
Certificates shall in all respects be entitled to the same benefits under this
Agreement as definitive Certificates of the same Class.

      Section 3.08. Appointment of Paying Agent.

      The Trustee may appoint a Paying Agent (which may be the Trustee) for the
purpose of making distributions to Certificateholders hereunder. The Trustee
shall cause any Paying Agent

<PAGE>

to execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee that such Paying Agent will hold all sums held by
it for the payment to Certificateholders in an Eligible Account (which shall be
the Distribution Account) in trust for the benefit of the Certificateholders
entitled thereto until such sums shall be paid to the Certificateholders. All
funds remitted by the Trustee to any such Paying Agent for the purpose of making
distributions shall be paid to Certificateholders on each Distribution Date and
any amounts not so paid shall be returned on such Distribution Date to the
Trustee. If the Paying Agent is not the Trustee, the Trustee shall cause to be
remitted to the Paying Agent on or before the Business Day prior to each
Distribution Date, by wire transfer in immediately available funds, the funds to
be distributed on such Distribution Date. Any Paying Agent shall be either a
bank or trust company or otherwise authorized under law to exercise corporate
trust powers.

      Section 3.09. Book-Entry Certificates.

                  (a)   Each Class of Book-Entry Certificates, upon original
issuance, shall be issued in the form of one or more typewritten Certificates
representing the Book-Entry Certificates. The Book-Entry Certificates shall
initially be registered on the Certificate Register in the name of the nominee
of the Clearing Agency, and no Certificate Owner will receive a definitive
certificate representing such Certificate Owner's interest in the Book-Entry
Certificates, except as provided in Section 3.09(c). Unless Definitive
Certificates have been issued to Certificate Owners of Book-Entry Certificates
pursuant to Section 3.09(c):

                  (i)   the provisions of this Section 3.09 shall be in full
            force and effect;

                  (ii)  the Certificate Registrar, the Paying Agent and the
            Trustee shall deal with the Clearing Agency for all purposes
            (including the making of distributions on the Book-Entry
            Certificates) as the authorized representatives of the Certificate
            Owners and the Clearing Agency and shall be responsible for
            crediting the amount of such distributions to the accounts of such
            Persons entitled thereto, in accordance with the Clearing Agency's
            normal procedures;

                  (iii) to the extent that the provisions of this Section 3.09
            conflict with any other provisions of this Agreement, the provisions
            of this Section 3.09 shall control; and

                  (iv)  the rights of Certificate Owners shall be exercised only
            through the Clearing Agency and the Clearing Agency Participants and
            shall be limited to those established by law and agreements between
            such Certificate Owners and the Clearing Agency and/or the Clearing
            Agency Participants. Unless and until Definitive Certificates are
            issued pursuant to Section 3.09(c), the initial Clearing Agency will
            make book-entry transfers among the Clearing Agency Participants and
            receive and transmit distributions of principal of and interest on
            the Book-Entry Certificates to such Clearing Agency Participants.

                  (b)   Whenever notice or other communication to the
Certificateholders is required under this Agreement, unless and until Definitive
Certificates shall have been issued to Certificate Owners pursuant to Section
3.09(c), the Trustee shall give all such notices and communications specified
herein to be given to Holders of the Book-Entry Certificates to the Clearing
Agency.

<PAGE>

                  (c)   If (i) (A) the Clearing Agency or the Depositor advises
the Paying Agent in writing that the Clearing Agency is no longer willing or
able to discharge properly its responsibilities with respect to the Book-Entry
Certificates, and (B) the Depositor is unable to locate a qualified successor
satisfactory to the Depositor and the Paying Agent, (ii) the Depositor, at its
option, advises the Paying Agent in writing that it elects to terminate the
book-entry system through the Clearing Agency or (iii) after the occurrence of
an Event of Default, Certificate Owners representing beneficial interests
aggregating not less than 50% of the Class Principal Amount (or Class Notional
Amount) of a Class of Book-Entry Certificates advise the Paying Agent and the
Clearing Agency through the Clearing Agency Participants in writing that the
continuation of a book-entry system through the Clearing Agency is no longer in
the best interests of the Certificate Owners of a Class of Book-Entry
Certificates, the Certificate Registrar shall notify the Clearing Agency to
effect notification to all Certificate Owners, through the Clearing Agency, of
the occurrence of any such event and of the availability of Definitive
Certificates to Certificate Owners requesting the same. Upon surrender to the
Certificate Registrar of the Book-Entry Certificates by the Clearing Agency,
accompanied by registration instructions from the Clearing Agency for
registration, the Certificate Registrar shall issue the Definitive Certificates.
Neither the Depositor, the Certificate Registrar nor the Trustee shall be liable
for any delay in delivery of such instructions and may conclusively rely on, and
shall be protected in relying on, such instructions. Upon the issuance of
Definitive Certificates all references herein to obligations imposed upon or to
be performed by the Clearing Agency shall be deemed to be imposed upon and
performed by the Certificate Registrar, to the extent applicable, with respect
to such Definitive Certificates and the Certificate Registrar shall recognize
the holders of the Definitive Certificates as Certificateholders hereunder.
Notwithstanding the foregoing, the Certificate Registrar, upon the instruction
of the Depositor, shall have the right to issue Definitive Certificates on the
Closing Date in connection with credit enhancement programs.

                                  ARTICLE IV.

                        ADMINISTRATION OF THE TRUST FUND

      Section 4.01. Custodial Accounts; Distribution Account.

                  (a)   On or prior to the Closing Date, the Servicer shall
establish and maintain one or more Custodial Accounts, as provided herein, into
which the Servicer shall deposit daily, within two Business Days of receipt
thereof, in immediately available funds, any Scheduled Payments and unscheduled
payments with respect to the Mortgage Loans, net of any deductions or
reimbursements permitted under this Agreement. Prior to 1:00 p.m. New York City
time on each Distribution Account Deposit Date, the Servicer shall remit to the
Trustee for deposit into the Distribution Account, all amounts so required to be
deposited into such account in accordance with the terms of this Agreement.

                  (b)   Funds in the Custodial Accounts may be invested in
Permitted Investments selected by the Servicer, which shall mature not later
than one Business Day prior to the Distribution Account Deposit Date (except
that if such Permitted Investment is an obligation of the Servicer or is managed
or advised by the Servicer or its affiliates, then such Permitted Investment
shall mature not later than such applicable Distribution Account Deposit Date)
and any such Permitted Investment shall not be sold or disposed of prior to its
maturity. All such Permitted Investments shall be made in the name of the
Servicer (in its capacity as such) or its nominee. All income and gain realized
from any Permitted Investment shall be for the benefit of the Servicer as
servicing compensation and shall be subject to its withdrawal or order from time

<PAGE>

to time, and shall not be part of the Trust Fund. The amount of any losses
incurred in respect of any such investments shall be deposited in the Custodial
Accounts by the Servicer out of its own funds, without any right of
reimbursement therefor, immediately as realized. Any such funds that are not
invested in Permitted Investments may be held uninvested.

                  (c)   The Trustee, shall establish and maintain an Eligible
Account entitled "Distribution Account of Wells Fargo Bank, N.A., as Trustee,
for the benefit of Merrill Lynch Mortgage Investors Trust Series MLCC 2004-D
Holders of Mortgage Pass-Through Certificates." The Trustee shall, promptly upon
receipt from the Servicer on each Distribution Account Deposit Date, deposit
into the Distribution Account and retain on deposit until the related
Distribution Date the following amounts:

                  (i)   the aggregate of collections with respect to the
Mortgage Loans remitted by the Servicer from the Custodial Accounts in
accordance with this Agreement, including the amount of any Advances or
Compensating Interest Payments with respect to the Mortgage Loans required to be
paid by the Servicer; and

                  (ii)  any other amounts so required to be deposited in the
Distribution Account in the related Due Period pursuant to this Agreement.

                  (d)   In the event Servicer has remitted in error to the
Distribution Account any amount not required to be remitted in accordance with
the definition of Available Distribution Amount, it may at any time direct the
Trustee to withdraw such amount from the Distribution Account for repayment to
the Servicer, as applicable, by delivery of an Officer's Certificate of the
Servicer to the Trustee which describes the amount deposited in error.

                  (e)   On each Distribution Date and Purchase Date, the Trustee
shall distribute the Available Distribution Amount to the Certificateholders and
any other parties entitled thereto in the amounts and priorities set forth in
Section 5.02. The Trustee may from time to time withdraw from the Distribution
Account and pay itself or the Servicer any amounts permitted to be paid or
reimbursed to such Person from funds in the Distribution Account pursuant to the
clauses (A) through (D) of the definition of Available Distribution Amount.

                  (f)   Funds in the Distribution Account may be invested in
Permitted Investments selected by the Trustee, which shall mature not later than
one Business Day prior to the Distribution Date (except that if such Permitted
Investment is an obligation of the Trustee or is managed or advised by the
Trustee or its affiliates, then such Permitted Investment shall mature not later
than such applicable Distribution Date) and any such Permitted Investment shall
not be sold or disposed of prior to its maturity. All such Permitted Investments
shall be made in the name of the Trustee (in its capacity as such) or its
nominee. All income and gain realized from any Permitted Investment shall be for
the benefit of the Trustee and shall be subject to its withdrawal or order from
time to time, and shall not be part of the Trust Fund. The amount of any losses
incurred in respect of any such investments shall be deposited in such
Distribution Account by the Trustee out of its own funds, without any right of
reimbursement therefor, immediately as realized. Any such funds that are not
invested in Permitted Investments may be held uninvested.

      Section 4.02. Reports to Trustee and Certificateholders.

      On each Distribution Date, the Trustee shall have prepared and shall make
available to each Certificateholder and other interested parties a written
report setting forth the following

<PAGE>

information (based solely on the report provided to the Trustee by the Servicer
pursuant to Section 9.18).

                  (i)   the amount of the distributions, separately identified,
            with respect to each Class of Certificates;

                  (ii)  the amount of the distributions set forth in the clause
            (i) allocable to principal, separately identifying the aggregate
            amount of any Principal Prepayments or other unscheduled recoveries
            of principal included in that amount;

                  (iii) the amount of the distributions set forth in the clause
            (i) allocable to interest and how it was calculated;

                  (iv)  the amount of any unpaid Interest Shortfall, Basis Risk
            Shortfall or Unpaid Basis Risk Shortfall (if applicable) and the
            related accrued interest thereon, with respect to each Class of
            Certificates;

                  (v)   the Class Principal Amount of each Class of Certificates
            after giving effect to the distribution of principal on that
            Distribution Date;

                  (vi)  the Aggregated Stated Principal Balance of the Mortgage
            Loans in each Mortgage Pool and the applicable Net WAC of the
            Mortgage Loans at the end of the related Prepayment Period;

                  (vii) the Stated Principal Balance of the Mortgage Loans in
            each Mortgage Pool whose Mortgage Rates adjust on the basis of the
            One-Month LIBOR index and the Six-Month LIBOR index at the end of
            the related Prepayment Period;

                  (viii) the Pro Rata Senior Percentage, Senior Percentage and
            the Subordinate Percentage for each Mortgage Pool for the following
            Distribution Date;

                  (ix)  the Senior Prepayment Percentage and Subordinate
            Prepayment Percentage for each Mortgage Pool the following
            Distribution Date;

                  (x)   in the aggregate and with respect to each Mortgage Pool,
            the amount of Servicing Fee paid to or retained by the Servicer;

                  (xi)  in the aggregate and with respect to each Mortgage Pool,
            the amount of Advances for the related Due Period;

                  (xii) in the aggregate and with respect to each Mortgage Pool,
            the number and Stated Principal Balance of the Mortgage Loans that
            were (A) Delinquent (exclusive of Mortgage Loans in foreclosure) (1)
            30 to 59 days, (2) 60 to 89 days and (3) 90 or more days, (B) in
            foreclosure and Delinquent (1) 30 to 59 days, (2) 60 to 89 days and
            (3) 90 or more days and (C) in bankruptcy as of the close of
            business on the last day of the calendar month preceding that
            Distribution Date;

<PAGE>

                  (xiii) in the aggregate and with respect to each Mortgage
            Pool, for any Mortgage Loan as to which the related Mortgaged
            Property was an REO property during the preceding calendar month,
            the principal balance of that Mortgage Loan as of the close of
            business on the last day of the related Due Period;

                  (xiv) in the aggregate and with respect to each Mortgage Pool,
            the total number and principal balance of any REO properties as of
            the close of business on the last day of the preceding Due Period;

                  (xv)  in the aggregate and with respect to each Mortgage Pool,
            the amount of Realized Losses incurred during the preceding calendar
            month;

                 (xvi) in the aggregate and with respect to each Mortgage Pool,
            the cumulative amount of Realized Losses incurred since the Closing
            Date;

                  (xvii) the Realized Losses, if any, allocated to each Class of
            Certificates on that Distribution Date;

                  (xviii) the Certificate Interest Rate for each Class of
            Certificates for that Distribution Date;

                  (xix) the amount of any Principal Transfer Amounts or Interest
            Transfer Amounts paid to an Undercollateralized Group or Principal
            Transfer Amounts between Groups in the event of Rapid Prepayment
            Conditions; and

                  (xx)  for each Class of Certificates, the amounts accrued or
            paid in respect of each deemed interest rate cap agreement under
            which such Class of Certificates is deemed entitled to receive or
            deemed obligated to make payments as provided for in Section 10.01
            hereof.

      The Trustee shall make such reports available each month via its website
at http://www.ctslink.com. Assistance in using the website may be obtained by
calling the Trustee's customer service desk at (301) 815-6600.
Certificateholders and other parties that are unable to use the website are
entitled to have a paper copy mailed to them via first class mail by contacting
the Trustee and indicating such. In preparing or furnishing the foregoing
information, the Trustee shall be entitled to rely conclusively on the accuracy
of the information or data regarding the Mortgage Loans and the related REO
Properties that has been provided to the Trustee by the Servicer, and the
Trustee shall not be obligated to verify, recompute, reconcile or recalculate
any such information or data.

      Upon receipt by the Trustee of the reasonable advance written request of
any Certificateholder that is a savings and loan, bank or insurance company, the
Trustee shall provide, or cause to be provided (or, to the extent that such
information or documentation is not required to be provided by a Servicer under
this Agreement, shall use reasonable efforts to obtain such information and
documentation from the Servicer, and provide) to such Certificateholders such
reports and access to information and documentation regarding the Mortgage Loans
as such Certificateholders may reasonably deem necessary to comply with
applicable regulations of the Office of Thrift Supervision or its successor or
other regulatory authorities with respect to an investment in the Certificates;
provided, however, that the Trustee shall be entitled to be reimbursed by such
Certificateholders for the Trustee's actual expenses incurred in providing such
reports and access.

<PAGE>

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

                                   ARTICLE V.

                    DISTRIBUTIONS TO HOLDERS OF CERTIFICATES

      Section 5.01. Distributions Generally.

                  (a)   Subject to Section 7.01 respecting the final
distribution on the Certificates, on each Distribution Date the Trustee or the
Paying Agent shall make distributions in accordance with this Article V. Such
distributions shall be made by check mailed to each Certificateholder's address
as it appears on the Certificate Register of the Certificate Registrar or, upon
written request made to the Trustee at least five Business Days prior to the
related Record Date by any Certificateholder owning an aggregate initial
Certificate Principal Amount of at least $1,000,000, or in the case of a Class
of Interest-Only Certificates or Residual Certificate, a Percentage Interest of
not less than 100%, by wire transfer in immediately available funds to an
account specified in the request and at the expense of such Certificateholder;
provided, however, that the final distribution in respect of any Certificate
shall be made only upon presentation and surrender of such Certificate at the
Certificate Registrar's Corporate Trust Office; provided, further, that the
foregoing provisions shall not apply to any Class of Certificates as long as
such Certificate remains a Book-Entry Certificate in which case all payments
made shall be made through the Clearing Agency and its Clearing Agency
Participants. Wire transfers will be made at the expense of the Holder
requesting such wire transfer by deducting a wire transfer fee from the related
distribution. Notwithstanding such final payment of principal of any of the
Certificates, each Residual Certificate will remain outstanding until the
termination of each REMIC and the payment in full of all other amounts due with
respect to the Residual Certificates and at such time such final payment in
retirement of any Residual Certificate will be made only upon presentation and
surrender of such Certificate at the Certificate Registrar's Corporate Trust
Office. If any payment required to be made on the Certificates is to be made on
a day that is not a Business Day, then such payment will be made on the next
succeeding Business Day.

                  (b)   All distributions or allocations made with respect to
Certificateholders within each Class on each Distribution Date shall be
allocated among the outstanding Certificates in such Class equally in proportion
to their respective initial Class Principal Amounts or initial Class Notional
Amounts (or Percentage Interests).

      Section 5.02. Distributions from the Distribution Account.

                  (a)   Subject to Sections 5.02(g) and 5.02(h), on each
Distribution Date, the Available Distribution Amount for the related Mortgage
Pool (in the case of the Components of the Class X-A Certificates and the Senior
Certificates other than the Class X-B Certificates) and the Mortgage Pools in
the aggregate (in the case of the Subordinate Certificates and the Class X-B
Certificates) shall be withdrawn by the Trustee from the Distribution Account

<PAGE>

and allocated among the classes of Senior Certificates and Subordinate
Certificates in the following order of priority:

                  (i)   Concurrently, to the payment of the Interest
            Distribution Amount and any accrued but unpaid Interest Shortfalls
            with respect to each class of Senior Certificates (other than the
            Class X Certificates) and the Components, with, subject to the
            proviso set forth below, (x) all amounts payable in respect of
            Component XB1, Component XB2 and Component XB3 being payable to the
            Class X-B Certificates and (y) all amounts payable in respect of the
            X-A1 Component and X-A2 Component being payable to the Class X-A
            Certificates; provided, however, that on each Distribution Date,
            amounts that would otherwise be payable to the Class X-A or Class
            X-B Certificates under this clause (a)(i) will (A) in the case of
            amounts otherwise payable to the Class X-A Certificates in respect
            of the X-A1 Component, be paid to the Class A-1 Certificates to the
            extent of any Basis Risk Shortfalls and Unpaid Basis Risk Shortfalls
            for the Class A-1 Certificates as of such Distribution Date, (B) in
            the case of amounts otherwise payable to the Class X-A Certificates
            in respect of the X-A2 Component, be paid to the Class A-2
            Certificates to the extent of any Basis Risk Shortfalls and Unpaid
            Basis Risk Shortfalls for the Class A-2 Certificates as of such
            Distribution Date, and (C) in the case of amounts otherwise payable
            to the Class X-B Certificates, be paid to the Class B-1, Class B-2
            and Class B-3 Certificates to the extent of any Basis Risk
            Shortfalls and Unpaid Basis Risk Shortfalls for the Class B-1, Class
            B-2 and Class B-3 Certificates, respectively, as of such
            Distribution Date;

                  (ii)  Concurrently, to the Senior Certificates from the
            Available Distribution Amount remaining in the related Mortgage Pool
            after application of amounts pursuant to clause (i) above, as
            follows:

                        (A)   sequentially to the Class A-R and Class A-1
                  Certificates, in that order, the Senior Principal Distribution
                  Amount for Pool 1, until their respective Class Principal
                  Amounts have been reduced to zero;

                        (B)   to the Class A-2 Certificates, the Senior
                  Principal Distribution Amount for Pool 2, until its Class
                  Principal Amount has been reduced to zero; and

                        (C)   to the Class A-3 Certificates, the Senior
                  Principal Distribution Amount for Pool 3, until its Class
                  Principal Amount has been reduced to zero.

                  (iii) From the Available Distribution Amount from the Mortgage
            Pools in the aggregate remaining after the application of amounts
            pursuant to clauses (i) and (ii) above, to the Class B-1, Class B-2
            and Class B-3 Certificates, sequentially, in that order, the
            Interest Distribution Amount and any Interest Shortfalls, in each
            case, for such Class on such date;

                  (iv)  From the Available Distribution Amount from the Mortgage
            Pools in the aggregate remaining after application of amounts
            pursuant to clauses (i) through (iii) above, to the Class B-1, Class
            B-2 and Class B-3 Certificates, sequentially, in that order, such
            Class' Subordinate Class Percentage of the

<PAGE>

            Subordinate Principal Distribution Amount for each Mortgage Pool,
            until its Class Principal Amount has been reduced to zero;

                  (v)   From the remaining Available Distribution Amount from
            the Mortgage Pools in the aggregate remaining after application of
            amounts pursuant to clauses (i) through (iv) in the following order
            of priority:

                        (A)   to the Class B-4 Certificates, the payment of its
                  Interest Distribution Amount and any outstanding Interest
                  Shortfalls;

                        (B)   to the Class B-4 Certificates, such Class'
                  Subordinate Class Percentage of the Subordinate Principal
                  Distribution Amount for each Mortgage Pool, until its Class
                  Principal Amount has been reduced to zero;

                        (C)   to the Class B-5 Certificates, the payment of its
                  Interest Distribution Amount and any outstanding Interest
                  Shortfalls;

                        (D)   to the Class B-5 Certificates, such Class'
                  Subordinate Class Percentage of the Subordinate Principal
                  Distribution Amount for each Mortgage Pool, until its Class
                  Principal Amount has been reduced to zero;

                        (E)   to the Class B-6 Certificates, the payment of its
                  Interest Distribution Amount and any outstanding Interest
                  Shortfalls; and

                        (F)   to the Class B-6 Certificates, such Class'
                  Subordinate Class Percentage of the Subordinate Principal
                  Distribution Amount for each Mortgage Pool, until its Class
                  Principal Amount has been reduced to zero;

                  (vi)  To the Class A-R Certificate, any remaining amount of
            the Available Distribution Amount from the Mortgage Pools in the
            aggregate allocated as provided in Section 5.02(d).

      Amounts that would have been distributed in respect of the Class X-A and
Class X-B Certificates, but for the proviso set forth in clause (a)(i) above
shall be treated as having been distributed to the Class X-A Certificates (in
respect of the X-A1 Component, in the case of payments to the Class A-1
Certificates and the X-A2 Component, in the case of payments to the Class A-2
Certificates) and the Class X-B Certificates, as the case may be, for purposes
of determining subsequent Interest Shortfalls with respect to the Class X-B
Certificates and the Components of the Class X-A Certificates.

                  (b)   On each Distribution Date on and after the Credit
Support Depletion Date, the Available Distribution Amount for each Mortgage Pool
shall be distributed to the remaining Classes of Certificates of the related
Certificate Group (and to the related Components of the Class X-A Certificates)
on a pro rata basis, first, to pay the Interest Distribution Amount and any
accrued but unpaid Interest Shortfalls; provided, however, that on each
Distribution Date with respect to the Class A-1 or Class A-2 Certificates (as
applicable) (x) the amount of the Interest Distribution Amount that would
otherwise be payable to the X-A1 Component will be paid to the Class A-1
Certificates to the extent of any Basis Risk Shortfalls or

<PAGE>

Unpaid Basis Risk Shortfalls for the Class A-1 Certificates and (y) the amount
of the Interest Distribution Amount that would otherwise be payable to the X-A2
Component will be paid to the Class A-2 Certificates to the extent of any Basis
Risk Shortfalls or Unpaid Basis Risk Shortfalls for the Class A-2 Certificates,
second, to pay the Senior Principal Distribution Amount for such Mortgage Pool;
and third, to the Class A-R Certificate, any remaining Available Distribution
Amount from such Mortgage Pool.

      Amounts that would have been distributed in respect of the X-A1 Component
or X-A2 Component but for the proviso set forth in this Section 5.02(b) shall be
treated as having been distributed to such Components for purposes of
determining subsequent Interest Shortfalls with respect to such Components.

                  (c)   Notwithstanding the priority and allocation set forth in
Section 5.02(a)(iv) and Section 5.02(a)(v) above, if with respect to any Class
of Subordinate Certificates on any Distribution Date the sum of the related
Class Subordination Percentages of such Class and of all other Classes of
Subordinate Certificates which have a higher numerical Class designation than
such Class is less than the Original Applicable Credit Support Percentage for
such Class, no distribution of Principal Prepayments shall be made to any such
Classes and the amount of such Principal Prepayment otherwise distributable to
such Classes shall be distributed to any Classes of Subordinate Certificates
having lower numerical Class designations than such Class, pro rata, based on
the Class Principal Amounts of the respective Classes immediately prior to such
Distribution Date and shall be distributed in the sequential order provided in
Section 5.02(a)(iv) and Section 5.02(a)(v) above.

                  (d)   Amounts distributed to the Residual Certificates
pursuant to subparagraph (a)(vi) of this Section 5.02 on any Distribution Date
shall be allocated among the REMIC residual interests represented thereby such
that each such interest is allocated the excess of funds available to the
related REMIC over required distributions to the regular interests in such REMIC
on such Distribution Date.

                  (e)   For purposes of distributions provided in this Section
5.02, each Mortgage Pool shall "relate" to the Senior Class or Classes of the
applicable Related Certificate Group, the X-A1 Component shall be related to
Pool 1 and the X-A2 Component shall be related to Pool 2.

                  (f)   For purposes of distributions of interest in paragraph
(a) of this Section 5.02 such distributions to a Class of Certificates on any
Distribution Date shall be made first, in respect of Current Interest; and
second, in respect of Interest Shortfalls.

                  (g)   Notwithstanding the priority of distributions set forth
in paragraph (a) of this Section 5.02, if on any Distribution Date prior to the
Credit Support Depletion (1) either one of the Rapid Prepayment Conditions is
satisfied on such date and (2) the Certificate Principal Amount of the Senior
Certificates relating to one of the Mortgage Pools has been reduced to zero,
then that portion of the Available Distribution Amount for such Mortgage Pool
described in Section 5.02(a)(ii) that represents principal collections on the
Mortgage Loans shall be applied as an additional distribution to the remaining
Classes of Senior Certificates on a pro rata basis in reduction of, and in
proportion to, the Class Principal Amounts thereof; provided, however, that any
such amounts distributable to the Class A-R and Class A-1 Certificates shall be
distributed sequentially thereto in such order.

<PAGE>

                  (h)   If, on any Distribution Date, any Certificate Group or
Groups would constitute an Undercollateralized Group and the other Certificate
Group or Groups constitute an Overcollateralized Group, then notwithstanding
Section 5.02(a)(ii), the Available Distribution Amount for the
Overcollateralized Group or Groups, to the extent remaining following
distributions of interest and principal to the related Senior Certificates of
that Certificate Group or Groups and to the Components of the Class X-A
Certificates, if any, related to the Overcollateralized Group or Groups, shall
be distributed up to the sum of the Interest Transfer Amount and the Principal
Transfer Amount for the Undercollateralized Group or Groups to the Senior
Certificates related to the Undercollateralized Group or Groups and to the
Components of the Class X-A Certificates related to the Undercollateralized
Group or Groups in payment of accrued but unpaid interest, if any, and then to
such Senior Certificates as principal, in the same order and priority as such
Certificates would receive other distributions of principal.

      Section 5.03. Allocation of Losses.

                  (a)   On or prior to each Distribution Date, the Trustee shall
aggregate the information provided by the Servicer with respect to the total
amount of Realized Losses, with respect to the Mortgage Loans for the related
Distribution Date.

                  (b)   On each Distribution Date, the principal portion of
Realized Losses with respect to such Distribution Date shall be allocated as
follows:

                  (i)   Realized Losses shall be allocated in the following
            order:

            first, to the Classes of Subordinate Certificates in reverse order
      of their respective numerical Class designations (beginning with the Class
      of Subordinate Certificates with the highest numerical Class designation)
      until the Class Principal Amount of each such Class is reduced to zero;
      and

            second, to each Class of Senior Certificates relating to the
      Mortgage Pool which sustained such loss (allocated among the related
      Senior Classes on a pro rata basis), in each case, until the Class
      Principal Amount of each Class of Senior Certificates is reduced to zero.

                  (ii)  Reserved.

                  (iii) The Class Principal Amount of the Class of Subordinate
            Certificates then outstanding with the highest numerical Class
            designation shall be reduced on each Distribution Date by the
            amount, if any, by which the aggregate of the Class Principal
            Amounts of all outstanding Classes of Certificates (after giving
            effect to the distribution of principal and the allocation of
            Realized Losses, on such Distribution Date) exceeds the Aggregate
            Stated Principal Balance for the following Distribution Date.

                  (iv)  Any allocation of a loss pursuant to this section to a
            Class of Certificates shall be achieved by reducing the Class
            Principal Amount thereof by the amount of such loss.

                  (c)   Notwithstanding the other provisions of Section 5.03,
the first $0.22 of Realized Losses shall not be allocated to any Class of
Certificates.

<PAGE>

      Section 5.04. Advances.

      If the Servicer fails to remit any Advance required to be made under this
Agreement, the Trustee solely in its capacity as successor Servicer shall itself
make, or shall cause the successor Servicer to make, such Advance. If the
Trustee solely in its capacity as successor Servicer determines that an Advance
is required, it shall on the Business Day preceding the related Distribution
Date immediately following such Determination Date remit from its own funds (or
funds advanced by the successor Servicer) for deposit in the Distribution
Account immediately available funds in an amount equal to such Advance. Each of
the Trustee and the Servicer shall be entitled to be reimbursed for all Advances
made by it, respectively. Notwithstanding anything to the contrary herein, in
the event the Trustee (or successor servicer) determines in its reasonable
judgment that an Advance is Nonrecoverable, the Trustee (or successor servicer)
shall be under no obligation to make such Advance.

                                  ARTICLE VI.

                    CONCERNING THE TRUSTEE; EVENTS OF DEFAULT

      Section 6.01. Duties of Trustee.

                  (a)   The Trustee, except during the continuance of an Event
of Default, undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement. Any permissive right of the Trustee
provided for in this Agreement shall not be construed as a duty of the Trustee.
If an Event of Default has occurred and has not otherwise been cured or waived,
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.

                  (b)   The Trustee, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Trustee which are specifically required to be
furnished pursuant to any provision of this Agreement, shall examine them to
determine whether they are in the form required by this Agreement; provided,
however, that the Trustee shall not be responsible for the accuracy or content
of any such resolution, certificate, statement, opinion, report, document, order
or other instrument furnished by the Servicer to the Trustee pursuant to this
Agreement, and shall not be required to recalculate or verify any numerical
information furnished to the Trustee pursuant to this Agreement. Subject to the
immediately preceding sentence, if any such resolution, certificate, statement,
opinion, report, document, order or other instrument is found not to conform to
the form required by this Agreement in a material manner the Trustee shall take
such action as it deems appropriate to cause the instrument to be corrected, and
if the instrument is not corrected to the Trustee's satisfaction, the Trustee
will provide notice thereof to the Certificateholders and will, at the expense
of the Trust Fund, which expense shall be reasonable given the scope and nature
of the required action, take such further action as directed by the
Certificateholders.

                  (c)   The Trustee shall not have any liability arising out of
or in connection with this Agreement, except for its negligence or willful
misconduct. Notwithstanding anything in this Agreement to the contrary, the
Trustee shall not be liable for special, indirect or consequential losses or
damages of any kind whatsoever (including, but not limited to, lost profits). No
provision of this Agreement shall be construed to relieve the Trustee of
liability for its own negligent action, its own negligent failure to act or its
own willful misconduct; provided, however, that:

<PAGE>

                  (i)   The Trustee shall not be liable with respect to any
            action taken, suffered or omitted to be taken by it in good faith in
            accordance with the direction of Holders of Certificates as provided
            in Section 6.18 hereof;

                  (ii)  For all purposes under this Agreement, the Trustee shall
            not be deemed to have notice of any Event of Default (other than
            resulting from a failure by the Servicer (i) to remit funds (or to
            make Advances) or (ii) to furnish information to the Trustee when
            required to do so) unless a Responsible Officer of the Trustee has
            actual knowledge thereof or unless written notice of any event which
            is in fact such a default is received by the Trustee at the
            Corporate Trust Office of the Trustee, and such notice references
            the Holders of the Certificates and this Agreement;

                  (iii) No provision of this Agreement shall require the Trustee
            to expend or risk its own funds or otherwise incur any financial
            liability in the performance of any of its duties hereunder, or in
            the exercise of any of its rights or powers, if it shall have
            reasonable grounds for believing that repayment of such funds or
            adequate indemnity against such risk or liability is not reasonably
            assured to it; and none of the provisions contained in this
            Agreement shall in any event require the Trustee to perform, or be
            responsible for the manner of performance of, any of the obligations
            of the Servicer under this Agreement;

                  (iv)  The Trustee shall not be responsible for any act or
            omission of the Servicer, the Depositor or the Seller.

                  (d)   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
Corporate Trust Office of 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
relates is a Mortgaged Property.

                  (e)   The Trustee shall not be personally liable with respect
to any action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of the Certificateholders of any Class holding
Certificates which evidence, as to such Class, Percentage Interests aggregating
not less than 25% as 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.

                  (f)   The Trustee shall not be required to perform services
under this Agreement, or to expend or risk its own funds or otherwise incur
financial liability for the performance of any of its duties hereunder or the
exercise of any of its rights or powers if there is reasonable ground for
believing that the timely payment of its fees and expenses or the repayment of
such funds or adequate indemnity against such risk or liability is not
reasonably assured to it, and none of the provisions contained in this Agreement
shall in any event require the Trustee to perform, or be responsible for the
manner of performance of, any of the obligations of the Servicer under this
Agreement except during such time, if any, as the Trustee shall be the successor
to, and be vested with the rights, duties, powers and privileges of, the
Servicer in accordance with the terms of this Agreement.

<PAGE>

                  (g)   The Trustee shall not be held liable by reason of any
insufficiency in the Distribution Account resulting from any investment loss on
any Permitted Investment included therein (except to the extent that the Trustee
is the obligor and has defaulted thereon).

                  (h)   Except as otherwise provided herein, the Trustee shall
not have any duty (A) to see to any recording, filing, or depositing of this
Agreement or any agreement referred to herein or any financing statement or
continuation statement evidencing a security interest, or to see to the
maintenance of any such recording or filing or depositing or to any
re-recording, refiling or redepositing of any thereof, (B) to see to the
provision of any insurance, (C) to see to the payment or discharge of any tax,
assessment, or other governmental charge or any lien or encumbrance of any kind
owing with respect to, assessed or levied against, any part of the Trust Fund
other than from funds available in the Distribution Account, or (D) to confirm
or verify the contents of any reports or certificates of the Servicer delivered
to the Trustee pursuant to this Agreement believed by the Trustee to be genuine
and to have been signed or presented by the proper party or parties.

                  (i)   The Trustee shall not be liable in its individual
capacity for an error of judgment made in good faith by a Responsible Officer or
other officers of the Trustee, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts.

                  (j)   Notwithstanding anything in this Agreement to the
contrary, Trustee shall not be liable for special, indirect or consequential
losses or damages of any kind whatsoever (including, but not limited to, lost
profits), even if the Trustee has been advised of the likelihood of such loss or
damage and regardless of the form of action.

      Section 6.02. Certain Matters Affecting the Trustee.

Except as otherwise provided in Section 6.01:

                  (i)   The Trustee may request, and may rely 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, approval, 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 and any advice of
            its counsel 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 personally liable for any
            action taken, suffered or omitted by it in good faith and reasonably
            believed by it to be authorized or within the discretion or rights
            or powers conferred upon it by this Agreement;

                  (iv)  Unless an Event of Default shall have occurred and be
            continuing, 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

<PAGE>

            document (provided the same appears regular on its face), unless
            requested in writing to do so by the Holders of at least a majority
            in Class Principal Amount (or Percentage Interest) of each Class of
            Certificates; provided, however, that, if the payment within a
            reasonable time to the Trustee of the costs, expenses or liabilities
            likely to be incurred by it in the making of such investigation is,
            in the opinion of the Trustee, not reasonably assured to the Trustee
            by the security afforded to it by the terms of this Agreement, the
            Trustee may require reasonable indemnity against such expense or
            liability or payment of such estimated expenses from the
            Certificateholders as a condition to proceeding. The reasonable
            expense thereof shall be paid by the party requesting such
            investigation and if not reimbursed by the requesting party shall be
            reimbursed to the Trustee by the Trust Fund;

                  (v)   The Trustee may execute any of the trusts or powers
            hereunder or perform any duties hereunder either directly or by or
            through agents, custodians or attorneys, which agents, custodians or
            attorneys shall have any and all of the rights, powers, duties and
            obligations of the Trustee conferred on it by such appointment,
            provided that the Trustee shall continue to be responsible for its
            duties and obligations hereunder to the extent provided herein, and
            provided further that the Trustee shall not be responsible for any
            misconduct or negligence on the part of any such agent or attorney
            appointed with due care by the Trustee;

                  (vi)  The Trustee shall not be under any obligation to
            exercise any of the trusts or powers vested in it by this Agreement
            or to institute, conduct or defend any litigation hereunder or in
            relation hereto, in each case at the request, order or direction of
            any of the Certificateholders pursuant to the provisions of this
            Agreement, unless such Certificateholders shall have offered to the
            Trustee reasonable security or indemnity against the costs, expenses
            and liabilities which may be incurred therein or thereby;

                  (vii) The right of the Trustee to perform any discretionary
            act enumerated in this Agreement shall not be construed as a duty,
            and the Trustee shall not be answerable for other than its
            negligence or willful misconduct in the performance of such act; and

                  (viii) The Trustee shall not be required to give any bond or
            surety in respect of the execution of the Trust Fund created hereby
            or the powers granted hereunder.

      Section 6.03. Trustee Not Liable for Certificates.

      The Trustee make no representations as to the validity or sufficiency of
this Agreement or of the Certificates (other than the certificate of
authentication on the Certificates) or of any Mortgage Loan, or related document
save that the Trustee represents that, assuming due execution and delivery by
the other parties hereto, this Agreement has been duly authorized, executed and
delivered by it and constitutes its valid and binding obligation, enforceable
against it in accordance with its terms except as such enforceability may be
subject to (A) applicable bankruptcy and insolvency laws and other similar laws
affecting the enforcement of the rights of creditors generally, and (B) general
principles of equity regardless of whether such enforcement is considered in a
proceeding in equity or at law. The Trustee shall not be accountable for the use
or application by the Depositor of funds paid to the Depositor in consideration
of the assignment

<PAGE>

of the Mortgage Loans to the Trust Fund by the Depositor or for the use or
application of any funds deposited into the Distribution Account or any other
fund or account maintained with respect to the Certificates. The Trustee shall
not be responsible for the legality or validity of this Agreement or the
validity, priority, perfection or sufficiency of the security for the
Certificates issued or intended to be issued hereunder. Except as otherwise
provided herein, the Trustee shall have no responsibility for filing any
financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder or to record this Agreement.

      Section 6.04. Trustee May Own Certificates.

      The Trustee and any Affiliate or agent of the Trustee in its individual or
any other capacity may become the owner or pledgee of Certificates and may
transact banking and trust business with the other parties hereto and their
Affiliates with the same rights it would have if it were not Trustee or such
agent.

      Section 6.05. Eligibility Requirements for Trustee.

      The Trustee hereunder shall at all times (i) be an institution insured by
the FDIC, (ii) a corporation or national banking association, organized and
doing business under the laws of the United States of America or any state
thereof, authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of not less than $50,000,000 and subject to
supervision or examination by federal or state authority and (iii) not be an
Affiliate of the Servicer. If such corporation or national banking 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, the combined capital and surplus of such corporation
or national banking 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
provisions of this Section, the Trustee shall resign immediately in the manner
and with the effect specified in Section 6.06.

      Section 6.06. Resignation and Removal of Trustee.

                  (a)   The Trustee may at any time resign and be discharged
from the trust hereby created by giving written notice thereof to the Depositor
and the Servicer. Upon receiving such notice of resignation, the Depositor will
promptly appoint a successor trustee by written instrument, one copy of which
instrument shall be delivered to the resigning Trustee, one copy to the
successor trustee and one copy to the Servicer. If no successor trustee shall
have been so appointed and shall have accepted appointment within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor trustee.

                  (b)   If at any time (i) the Trustee shall cease to be
eligible in accordance with the provisions of Section 6.05 and shall fail to
resign after written request therefor by the Depositor, (ii) the Trustee shall
become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a
receiver of the Trustee of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of either of their
property or affairs for the purpose of rehabilitation, conservation or
liquidation, (iii) a tax is imposed or threatened with respect to the Trust Fund
by any state in which the Trustee or the Trust Fund held by the Trustee is
located, or (iv) the continued use of the Trustee would result in a downgrading
of the rating by any Rating Agency of any Class of Certificates with a rating,
then the Depositor shall remove the

<PAGE>

Trustee and the Depositor shall appoint a successor trustee by written
instrument, one copy of which instrument shall be delivered to the Trustee so
removed, one copy each to the successor trustee and one copy to the Servicer.

                  (c)   The Holders of more than 50% of the Class Principal
Amount (or Percentage Interest) of each Class of Certificates may at any time
upon 30 days' written notice to the Trustee and to the Depositor remove the
Trustee by such written instrument, signed by such Holders or their
attorney-in-fact duly authorized, one copy of which instrument shall be
delivered to the Depositor and one copy to the Trustee; the Depositor shall
thereupon appoint a successor trustee in accordance with this Section.

                  (d)   Any resignation or removal of the Trustee and
appointment of a successor trustee pursuant to any of the provisions of this
Section shall become effective upon acceptance by the successor trustee of
appointment, as provided in Section 6.07.

      Section 6.07. Successor Trustee.

                  (a)   Any successor trustee appointed as provided in Section
6.06 shall execute, acknowledge and deliver to the Depositor and to its
predecessor trustee, 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 like effect as if originally
named as trustee. The predecessor trustee shall deliver to the successor trustee
all Trustee Mortgage Files and documents and statements related to each Trustee
Mortgage File held by it hereunder, and shall duly assign, transfer, deliver and
pay over to the successor trustee the entire Trust Fund, together with all
necessary instruments of transfer and assignment or other documents properly
executed necessary to effect such transfer and such of the records or copies
thereof maintained by the predecessor trustee in the administration hereof as
may be requested by the successor trustee and shall thereupon be discharged from
all duties and responsibilities under this Agreement. In addition, the Depositor
and the predecessor trustee shall execute and deliver such other instruments and
do such other things as may reasonably be required to more fully and certainly
vest and confirm in the successor trustee all such rights, powers, duties and
obligations.

                  (b)   No successor trustee shall accept appointment as
provided in this Section unless at the time of such appointment such successor
trustee shall be eligible under the provisions of Section 6.05.

                  (c)   Upon acceptance by a successor trustee of appointment as
provided in this Section, the predecessor trustee shall mail notice of the
succession of such successor trustee hereunder to all Holders of Certificates at
their addresses as shown in the Certificate Register and to any Rating Agency.
The expenses of such mailing shall be borne by the Depositor.

      Section 6.08. Merger or Consolidation of Trustee.

      Any Person into which the Trustee may be merged or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any Persons succeeding
to the business of the Trustee shall be the successor to the Trustee hereunder,
without the execution or filing of any paper or any further act on the part of

<PAGE>

any of the parties hereto, anything herein to the contrary notwithstanding,
provided that, in the case of the Trustee, such Person shall be eligible under
the provisions of Section 6.05.

      Section 6.09. Appointment of Co-Trustee, Separate Trustee or Custodian.

                  (a)   Notwithstanding any other provisions hereof, at any
time, the Trustee, the Depositor or the Certificateholders evidencing more than
50% of the Class Principal Amount (or Percentage Interest) of every Class of
Certificates shall have the power from time to time to appoint one or more
Persons, approved by the Trustee, to act either as co-trustees jointly with the
Trustee, or as separate trustees, or as custodians, for the purpose of holding
title to, foreclosing or otherwise taking action with respect to any Mortgage
Loan outside the state where the Trustee has its principal place of business
where such separate trustee or co-trustee is necessary or advisable (or the
Trustee has been advised by the Servicer that such separate trustee or
co-trustee is necessary or advisable) under the laws of any state in which a
property securing a Mortgage Loan is located or for the purpose of otherwise
conforming to any legal requirement, restriction or condition in any state in
which a property securing a Mortgage Loan is located or in any state in which
any portion of the Trust Fund is located. The separate trustees, co-trustees, or
custodians so appointed shall be trustees or custodians for the benefit of all
the Certificateholders and shall have such powers, rights and remedies as shall
be specified in the instrument of appointment; provided, however, that no such
appointment shall, or shall be deemed to, constitute the appointee an agent of
the Trustee. The obligation of the Trustee to make Advances pursuant to Section
5.04 hereof shall not be affected or assigned by the appointment of a
co-trustee.

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

                  (i)   all powers, duties, obligations and rights conferred
            upon the Trustee in respect of the receipt, custody and payment of
            moneys shall be exercised solely by the Trustee;

                  (ii)  all other rights, powers, duties and obligations
            conferred or imposed upon the Trustee shall be conferred or imposed
            upon and exercised or performed by the Trustee and such separate
            trustee, co-trustee, or custodian jointly, except to the extent that
            under any law of any jurisdiction in which any particular act or
            acts are to be performed 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 by such separate trustee,
            co-trustee, or custodian at the sole discretion of the Trustee;

                  (iii) no trustee or custodian hereunder shall be personally
            liable by reason of any act or omission of any other trustee or
            custodian hereunder; and

                  (iv)  the Trustee may at any time, by an instrument in writing
            executed by it, with the concurrence of the Depositor, accept the
            resignation of or remove any separate trustee, co-trustee or
            custodian, so appointed by it or them, if such resignation or
            removal does not violate the other terms of this Agreement.

                  (c)   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, co-trustee or

<PAGE>

custodian shall refer to this Agreement and the conditions of this Article VI.
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 given to the
Servicer.

                  (d)   Any separate trustee, co-trustee or custodian 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, co-trustee or custodian 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.

                  (e)   No separate trustee, co-trustee or custodian hereunder
shall be required to meet the terms of eligibility as a successor trustee under
Section 6.05 hereunder and no notice to Certificateholders of the appointment
shall be required under Section 6.07 hereof.

                  (f)   The Trustee agrees to instruct the co-trustees, if any,
to the extent necessary to fulfill the Trustee's obligations hereunder.

                  (g)   The Trust shall pay the reasonable compensation of the
co-trustees (which compensation shall not reduce any compensation payable to the
Trustee under such Section).

      Section 6.10. Authenticating Agents.

                  (a)   The Trustee may appoint one or more Authenticating
Agents which shall be authorized to act on behalf of the Trustee in
authenticating Certificates. If such an agent is so appointed by the Trustee,
wherever reference is made in this Agreement to the authentication of
Certificates by the Trustee or the Trustee's certificate of authentication, such
reference shall be deemed to include authentication on behalf of the Trustee by
an Authenticating Agent and a certificate of authentication executed on behalf
of the Trustee by an Authenticating Agent. Each Authenticating Agent must be a
corporation organized and doing business under the laws of the United States of
America or of any state, having a combined capital and surplus of at least
$15,000,000, authorized under such laws to do a trust business and subject to
supervision or examination by federal or state authorities.

                  (b)   Any Person into which any Authenticating Agent may be
merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which any
Authenticating Agent shall be a party, or any Person succeeding to the corporate
agency business of any Authenticating Agent, shall continue to be the
Authenticating Agent without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.

                  (c)   Any Authenticating Agent may at any time resign by
giving at least 30 days' advance written notice of resignation to the Trustee
and the Depositor. The Trustee may at any time terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and the Depositor. Upon receiving a notice of

<PAGE>

resignation or upon such a termination, or in case at any time any
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 6.10, the Trustee may appoint a successor
authenticating agent, shall give written notice of such appointment to the
Depositor and shall mail notice of such appointment to all Holders of
Certificates. Any successor authenticating agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers, duties
and responsibilities of its predecessor hereunder, with like effect as if
originally named as Authenticating Agent. No successor authenticating agent
shall be appointed unless eligible under the provisions of this Section 6.10. No
Authenticating Agent shall have responsibility or liability for any action taken
by it as such at the direction of the Trustee.

      Section 6.11. Indemnification of Trustee.

      The Trustee and its respective directors, officers, employees and agents
shall be entitled to indemnification from the Depositor and the Trust Fund;
provided that the Trust Fund's indemnification under this Section 6.11 is
limited by Section 4.01(d) for any loss, liability or expense (including,
without limitation, reasonable attorneys' fees and disbursements (and, in
connection with any custody agreement the Trustee may enter pursuant to this
Agreement, including the reasonable compensation and the expenses and
disbursements of its agents or counsel)), incurred without negligence or willful
misconduct on its 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 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 written notice thereof promptly after the
            Trustee shall have knowledge thereof;

                  (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
            6.11, 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)  the Trust's Fund's indemnification obligations hereunder
            shall be limited to losses, liability, costs or expenses, payments
            in respect of which by the Trust Fund would constitute
            "unanticipated expenses" within the meaning of Treasury Regulations
            Section 1.860G-1(b)(3)(ii)).

      The provisions of this Section 6.11 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.

      Section 6.12. Fees and Expenses of the Trustee.

      As compensation for its services hereunder, the Trustee shall be entitled
to retain any and all investment earnings on amounts on deposit in the
Distribution Account pending the distribution of such funds to
Certificateholders on each Distribution Date (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of an

<PAGE>

express trust). Any expenses incurred by the Trustee shall be reimbursed to the
extent provided in Section 6.11.

      Section 6.13. Collection of Monies.

      Except as otherwise expressly provided in this Agreement, the Trustee may
demand payment or delivery of, and shall receive and collect, all money and
other property payable to or receivable by the Trustee pursuant to this
Agreement. The Trustee shall hold all such money and property received by it as
part of the Trust Fund and shall distribute it as provided in this Agreement.

      Section 6.14. Events of Default; Trustee To Act; Appointment of Successor.

                  (a)   "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 Custodial Account or to remit to the Trustee any
            payment required to be made under the terms of this Agreement on the
            day it is due;

                  (ii)  any material breach on the part of the Servicer of any
            other term, agreement, covenant, representation or warranty in this
            Agreement that has not been cured after written notice and a thirty
            (30) day curative period;

                  (iii) following entry against the Servicer of a decree or
            order of a court or agency or supervisory authority having
            jurisdiction for the appointment of a trustee, conservator,
            receiver, liquidator, assignee, custodian or sequestrator (or other
            similar official) for the Servicer in any federal or state
            bankruptcy, insolvency, readjustment of debt, marshaling of assets
            and liabilities or similar proceedings, or for the winding-up or
            liquidation of the Servicer's affairs, if such decree or order has
            remained in force undischarged or unstayed for a period of sixty
            (60) days;

                  (iv)  upon consent by the Servicer to the appointment of a
            trustee, conservator, receiver, liquidator, assignee, custodian or
            sequestrator (or other similar official) in, or commencement of a
            voluntary case under, any federal or state bankruptcy insolvency,
            readjustment of debt, marshaling of assets and liabilities or
            similar proceedings of or relating to the Servicer or of or relating
            to all or substantially all of the Servicer's property;

                  (v)   upon the Servicer's (A) admitting in writing its
            inability to pay its debts generally as they become due, (B) filing
            a petition to take advantage of any applicable insolvency or
            reorganization statute, (C) making an assignment for the benefit of
            its creditors or (D) voluntarily suspending payment of its
            obligations;

                  (vi)  the Servicer ceases to be eligible to sell mortgage
            loans to or service mortgage loans for FNMA, FHLMC or GNMA or ceases
            to be a HUD-approved mortgagee;

<PAGE>

           (vii) the Servicer (a) merges or consolidates with or into another
           Person, (b) sells substantially all of its assets or (c) sells a
           controlling interest that results in a change in control of the
           Servicer (other than any such change of control that results in the
           Servicer being owned or controlled by an Affiliate of the Servicer,
           in existence on the date of this Agreement) ; provided, however,
           that, if the entity resulting from such merger, consolidation or
           sale satisfies the eligibility requirements for a successor to the
           Servicer specified in Section 9.17 (including, without limitation,
           the requirement that each Rating Agency must deliver to the Trustee
           a letter to the effect that such transfer of servicing will not
           result in a qualification, withdrawal or downgrade of the
           then-current rating of any of the Certificates), no Event of Default
           shall be deemed to have occurred.

      If an Event of Default shall occur and be continuing, then, in each and
every case, subject to applicable law, so long as any such Event of Default
shall not have been remedied within any period of time prescribed by this
Agreement, by notice in writing to the Servicer either (x) the Depositor or (y)
the Trustee may (or the Trustee shall if so directed by Certificateholders
evidencing more than 50% of the Class Principal Amount (or Class Notional
Amount) of each Class of Certificates) terminate all of the rights and
obligations of the Servicer under this Agreement in accordance with the terms of
this Agreement. On or after the receipt by the Servicer of such written notice,
all authority and power of the Servicer, whether with respect to the Mortgage
Loans or otherwise, shall pass to and be vested in the Trustee; and the Trustee
is hereby authorized and empowered to execute and deliver, on behalf of the
defaulting 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.

      If any Event of Default shall occur, the Trustee, upon becoming aware of
the occurrence thereof, shall promptly notify the Depositor and each Rating
Agency of the nature and extent of such Event of Default.

                  (b)   Within 90 days of the time the Servicer receives a
notice of termination from the Trustee pursuant to Section 6.14, the Trustee,
unless another Servicer shall have been appointed, shall be the successor in all
respects to the Servicer in its capacity as such under this Agreement and the
transactions set forth or provided for therein and shall have all the rights and
powers and be subject to all the responsibilities, duties and liabilities
relating thereto and arising thereafter placed on the Servicer thereunder,
including the obligation to make Advances; provided, however, that any failure
to perform such duties or responsibilities caused by the Servicer's failure to
provide information required by this Agreement or this Agreement shall not be
considered a default by the Trustee hereunder. In addition, the Trustee shall
have no responsibility for any act or omission of the Servicer prior to the
issuance of any notice of termination. The Trustee shall have no liability
relating to any representations and warranties of the Servicer set forth in this
Agreement. In the Trustee's capacity as such successor, the Trustee shall have
the same limitations on liability provided to the Servicer in this Agreement. As
compensation therefor, the Trustee shall be entitled to receive all compensation
payable to the Servicer under this Agreement.

      The Trustee shall be entitled to be reimbursed by the Depositor and the
Trust Fund (pursuant to Section 6.11 but without regard to any annual limitation
thereunder), in the event that the Servicer does not reimburse the Trustee under
this Agreement, for 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 (such
costs, "Servicing Transfer Costs").
<PAGE>

                  (c) Notwithstanding the above, the Trustee may, if it shall be
unwilling to continue to so act, or shall, if it is unable to so act, petition a
court of competent jurisdiction to appoint, or, with the consent of the
Depositor, appoint on its own behalf any established housing and home finance
institution servicer, or servicing or mortgage servicing institution having a
net worth of not less than $15,000,000 and meeting such other standards for a
successor servicer as are set forth in this Agreement and reasonably
satisfactory to the Depositor, as the successor to the Servicer in the
assumption of all of the responsibilities, duties or liabilities of a servicer,
like the Servicer. Any entity designated by the Trustee as a successor servicer
may be an Affiliate of the Trustee; provided, however, that, unless such
Affiliate meets the net worth requirements and other standards set forth herein
for a successor servicer, the Trustee, in its individual capacity shall agree,
at the time of such designation, to be and remain liable to the Trust Fund for
such Affiliate's actions and omissions in performing its duties under this
Agreement. 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 to the Servicer under
this Agreement. The Trustee and such successor shall take such actions,
consistent with this Agreement, as shall be necessary to effectuate any such
succession and may make other arrangements with respect to the servicing to be
conducted hereunder which are not inconsistent herewith and therewith. 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 caused by (i) the failure of the
Servicer to deliver, or any delay in delivering, cash, documents or records to
it, (ii) the failure of the Servicer to cooperate as required by this Agreement,
(iii) the failure of the Servicer to deliver the Mortgage Loan data to the
Trustee as required by this Agreement or (iv) restrictions imposed by any
regulatory authority having jurisdiction over the Servicer.

      Section 6.15. Additional Remedies of Trustee Upon Event of Default.

      During the continuance of any Event of Default, so long as such Event of
Default shall not have been remedied, the Trustee, in addition to the rights
specified in Section 6.14, shall have the right, in its own name and as trustee
of the Trust Fund, to take all actions now or hereafter existing at law, in
equity or by statute to enforce its rights and remedies and to protect the
interests, and enforce the rights and remedies, of the Certificateholders
(including the institution and prosecution of all judicial, administrative and
other proceedings and the filings of proofs of claim and debt in connection
therewith). Except as otherwise expressly provided in this Agreement, no remedy
provided for by this Agreement shall be exclusive of any other remedy, and each
and every remedy shall be cumulative and in addition to any other remedy, and no
delay or omission to exercise any right or remedy shall impair any such right or
remedy or shall be deemed to be a waiver of any Event of Default.

      Section 6.16. Waiver of Defaults.

      More than 50% of the Aggregate Voting Interests of Certificateholders may
waive any default or Event of Default by the Servicer in the performance of its
obligations hereunder, except that a default in the making of any required
deposit to the Distribution Account that would result in a failure of the
Trustee to make any required payment of principal of or interest on the
Certificates may only be waived with the consent of 100% of the affected
Certificateholders. Upon any such waiver of a past default, such default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been remedied for every purpose of this Agreement. No such waiver shall
extend to any subsequent or other default or impair any right consequent thereon
except to the extent expressly so waived.

<PAGE>

      Section 6.17. Notification to Holders.

      Upon termination of the Servicer or appointment of a successor to the
Servicer, in each case as provided herein, the Trustee shall promptly mail
notice thereof by first class mail to the Certificateholders at their respective
addresses appearing on the Certificate Register. The Trustee shall also, within
45 days after the occurrence of any Event of Default known to the Trustee, give
written notice thereof to the Certificateholders, unless such Event of Default
shall have been cured or waived prior to the issuance of such notice and within
such 45-day period.

      Section 6.18. Directions by Certificateholders and Duties of Trustee
During Event of Default.

      Subject to the provisions of Section 8.01 hereof, during the continuance
of any Event of Default, Holders of Certificates evidencing not less than 25% of
the Class Principal Amount (or Percentage Interest) of each Class of
Certificates affected thereby may direct 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; provided,
however, that the Trustee shall be under no obligation to pursue any such
remedy, or to exercise any of the trusts or powers vested in it by this
Agreement (including, without limitation, (i) the conducting or defending of any
administrative action or litigation hereunder or in relation hereto and (ii) the
terminating of the Servicer or any successor servicer from its rights and duties
as servicer) at the request, order or direction of any of the
Certificateholders, unless such Certificateholders shall have offered to the
Trustee reasonable security or indemnity against the cost, expenses and
liabilities which may be incurred therein or thereby; and, provided further,
that, subject to the provisions of Section 8.01, the Trustee shall have the
right to decline to follow any such direction if the Trustee, in accordance with
an Opinion of Counsel, determines that the action or proceeding so directed may
not lawfully be taken or if the Trustee in good faith determines that the action
or proceeding so directed would involve it in personal liability for which it is
not indemnified to its satisfaction or be unjustly prejudicial to the
non-assenting Certificateholders.

      Section 6.19. Preparation of Tax Returns and Other Reports.

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

                  (b) The Trustee shall prepare and file with the Internal
Revenue Service ("IRS"), on behalf of each of REMIC 1, REMIC 2 and the Upper
Tier REMIC, an application on IRS Form SS-4 or shall obtain a Taxpayer
Identification Number for each of REMIC 1, REMIC 2 and the Upper Tier REMIC
using another reasonable method. If the

<PAGE>

application is filed on Form SS-4, the Trustee, upon receipt from the IRS of the
Notice of Taxpayer Identification Number Assigned for each REMIC, shall promptly
forward copies of such notices to the Depositor, upon request. The Trustee will
file an IRS Form 8811.

                  (c) The Depositor shall prepare or cause to be prepared the
initial current report on Form 8-K. Thereafter, within 15 days after each
Distribution Date, the Trustee shall, in accordance with industry standards,
file with the Securities and Exchange Commission (the "Commission") via the
Electronic Data Gathering and Retrieval System (EDGAR), a Form 8-K with a copy
of the statement to the Certificateholders for such Distribution Date as an
exhibit thereto. Prior to January 31, 2005, the Trustee shall, in accordance
with industry standards, file a Form 15 Suspension Notification with respect to
the Trust Fund, if applicable. Prior to March 31, 2005, the Trustee shall file a
Form 10-K executed by the Depositor, in substance conforming to industry
standards, with respect to the Trust Fund. The Depositor shall be responsible
for preparing all filings and certificates required by the Sarbanes-Oxley Act of
2002. The Trustee agrees to promptly furnish to the Depositor, 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 Depositor
reasonably deems appropriate to prepare and file all necessary reports with the
Commission.

      Section 6.20. Annual Certificate by Trustee.

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

                  (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 6.20 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 6.20, 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.

                                  ARTICLE VII.

                         PURCHASE OF MORTGAGE LOANS AND
                          TERMINATION OF THE TRUST FUND

      Section 7.01. Purchase of Mortgage Loans; Termination of Trust Fund Upon
Purchase or Liquidation of All Mortgage Loans.
<PAGE>

                  (a) The respective obligations and responsibilities of the
Trustee, the Servicer and the Depositor created hereby (other than the
obligation of the Trustee to make payments to Certificateholders as set forth in
Section 7.02), shall terminate on the earliest of (i) the final payment or other
liquidation of the last Mortgage Loan remaining in the Trust Fund and the
disposition of all REO Property, (ii) the sale of the property held by the Trust
Fund at auction in accordance with Section 7.01(c) and (iii) the Latest Possible
Maturity Date; provided, however, that in no event shall the Trust Fund created
hereby continue beyond 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. Any
termination of the Trust Fund shall be carried out in such a manner so that the
termination of each REMIC included therein shall qualify as a "qualified
liquidation" under the REMIC Provisions.

                  (b) [Reserved]

                  (c) Any termination of the Trust Fund pursuant to clause
(a)(ii) above 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
procedures to be agreed upon by the Trustee and the Depositor. The Trustee shall
accept the highest such bid, provided that such bid equals or exceeds the amount
described in the definition of "Optional Termination Price." Notwithstanding
anything to the contrary herein, the Optional Termination Price received by the
Trustee shall be deposited by the Trustee directly into the Distribution Account
no later than the Business Day prior to the date of termination.

      The right of the Trustee to conduct an auction pursuant to the preceding
paragraph shall be conditioned upon the aggregate outstanding Stated Principal
Balance of the Mortgage Loans, at the time of such auction, aggregating ten (10)
percent or less of the Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date.

                  (d) The Servicer and the Trustee shall be reimbursed from the
Optional Termination Price for any Advances, Servicer Advances, accrued and
unpaid Servicing Fees, the cost of any auction conducted pursuant to (c) above
or other amounts with respect to the Mortgage Loans that are reimbursable to
such parties under this Agreement.

      Section 7.02. Procedure Upon Termination of Trust Fund.

                  (a) Notice of any optional termination pursuant to the
provisions of Section 7.01(c) specifying the Distribution Date upon which the
final distribution shall be made or the Purchase Date, shall be given promptly
by the Trustee by first class mail to Certificateholders mailed no later than
the first day of the month in which the Distribution Date selected for purchase
of the Mortgage Loans occurs or upon (x) the sale of all of the property of the
Trust Fund by the Trustee or in the case of a sale of assets of the Trust Fund,
or (y) upon the final payment or other liquidation of the last Mortgage Loan or
REO Property in the Trust Fund. Such notice shall specify (A) the Purchase Date
and the Distribution Date upon which final distribution on the Certificates of
all amounts required to be distributed to Certificateholders pursuant to Section
5.02 will be made upon presentation and surrender of the Certificates at the
Certificate Registrar's Corporate Trust Office, and (B) that the Record Date
otherwise applicable to such Distribution Date is not applicable, distribution
being made only upon presentation and surrender of the Certificates at the
office or agency of the Trustee therein specified. The Trustee shall give such
notice to the Certificate Registrar at the time such notice is given to Holders
of the Certificates. Upon any such termination, the duties of the Trustee and
the Certificate Registrar with respect to the Certificates shall terminate and
the Trustee shall terminate the Distribution
<PAGE>

Account and any other account or fund maintained with respect to the
Certificates, subject to the Trustee's obligation hereunder to hold all amounts
payable to Certificateholders in trust without interest pending such payment.

                  (b) In the event that all of the Holders do not surrender
their Certificates for cancellation within three months after the time 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
one year after the second notice any Certificates shall not have been
surrendered for cancellation, the Trustee may take appropriate steps to contact
the remaining Certificateholders concerning surrender of such Certificates, and
the cost thereof shall be paid out of the amounts distributable to such Holders.
If within two years after the second notice any Certificates shall not have been
surrendered for cancellation, the Trustee shall, subject to applicable state law
relating to escheatment, hold all amounts distributable to such Holders for the
benefit of such Holders. No interest shall accrue on any amount held by the
Trustee and not distributed to a Certificateholder due to such
Certificateholder's failure to surrender its Certificate(s) for payment of the
final distribution thereon in accordance with this Section.

                  (c) Any reasonable expenses incurred by the Trustee, to the
extent that such expenses, if paid or reimbursed by the Trust Fund, would
constitute "unanticipated expenses" within the meaning of Treasury Regulations
Section 1.860G-1(b)(3)(ii), in connection with any redemption or termination or
liquidation of the Trust Fund shall be reimbursed from proceeds received from
the liquidation of the Trust Fund.

      Section 7.03. Additional Trust Fund Termination Requirements.

                  (a) Any termination of the Trust Fund shall be effected in
accordance with the following additional requirements, unless the Trustee seeks
and receives an Opinion of Counsel (at the expense of such requesting party),
addressed to the Trustee, to the effect that the failure of the Trust Fund to
comply with the requirements of this Section 7.03 will not (I) result in the
imposition of taxes on any REMIC under the REMIC Provisions or (II) cause any
REMIC established hereunder to fail to qualify as a REMIC at any time that any
Certificates are outstanding:

                  (i) Within 89 days prior to the time of the making of the
            final payment on the Certificates upon notification by the Depositor
            that it intends to exercise its option to cause the termination of
            the Trust Fund, the Trustee shall adopt a plan of complete
            liquidation prepared by the Depositor of the Trust Fund on behalf of
            each REMIC, meeting the requirements of a qualified liquidation
            under the REMIC Provisions;

                  (ii) Any sale of the assets of the Trust Fund pursuant to
            Section 7.01 or 7.02 shall be a sale for cash and shall occur at or
            after the time of adoption of such a plan of complete liquidation
            and prior to the time of making of the final payment on the
            Certificates;

                  (iii) On the date specified for final payment of the
            Certificates, the Trustee shall make final distributions of
            principal and interest on the Certificates in accordance with
            Section 5.02 and, after payment of, or provision for any outstanding
            expenses, distribute or credit, or cause to be distributed or
            credited, to the Holders of the Residual Certificates all cash on
            hand after such final

<PAGE>

            payment (other than cash retained to meet claims), and the Trust
            Fund (and each REMIC) shall terminate at that time; and

                  (iv) In no event may the final payment on the Certificates or
            the final distribution or credit to the Holders of the Residual
            Certificates be made after the 89th day from the date on which the
            plan of complete liquidation is adopted.

                  (b) By its acceptance of a Residual Certificate, each Holder
thereof hereby agrees to accept the plan of complete liquidation adopted by the
Trustee under this Section and to take such other action in connection therewith
as may be reasonably requested by the Trustee.

                                  ARTICLE VIII.

                          RIGHTS OF CERTIFICATEHOLDERS

      Section 8.01. Limitation on Rights of Holders.

                  (a) The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or this Trust Fund, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or
take any action or proceeding in any court for a partition or winding up of this
Trust Fund, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them. Except as otherwise expressly provided herein, no
Certificateholder, solely by virtue of its status as a Certificateholder, shall
have any right to vote or in any manner otherwise control the Trustee or 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 person by reason of any
action taken by the parties to this Agreement pursuant to any provision hereof.

                  (b) No Certificateholder, solely by virtue of its status as
Certificateholder, shall have any right by virtue or by availing itself of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon, under or with respect to this Agreement, 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, and unless
also the Holders of Certificates evidencing not less than 25% of the Class
Principal Amount or Class Notional Amount (or Percentage Interest) of
Certificates of each Class affected thereby shall have made written request upon
the Trustee to institute such action, suit or proceeding in its own name as
Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the cost, expenses and liabilities to be
incurred therein or thereby, and the Trustee, for sixty days after its receipt
of such notice, request and offer of indemnity, shall have neglected or refused
to institute any such action, suit or proceeding and no direction inconsistent
with such written request has been given such Trustee during such sixty-day
period by such Certificateholders; 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 of
any provision of this Agreement to affect, disturb or prejudice the rights of
the Holders of any other of such 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 benefit
of all Certificateholders. For the protection and enforcement of the provisions

<PAGE>

of this Section, each and every Certificateholder and the Trustee shall be
entitled to such relief as can be given either at law or in equity.

      Section 8.02. Access to List of Holders.

                  (a) If the Trustee is not acting as Certificate Registrar, the
Certificate Registrar will furnish or cause to be furnished to the Trustee,
within fifteen days after receipt by the Certificate Registrar of a request by
the Trustee in writing, a list, in such form as the Trustee may reasonably
require, of the names and addresses of the Certificateholders of each Class as
of the most recent Record Date.

                  (b) If three or more Holders or Certificate Owners
(hereinafter referred to as "Applicants") apply in writing to the Trustee, and
such application states that the Applicants desire to communicate with other
Holders with respect to their rights under this Agreement or under the
Certificates and is accompanied by a copy of the communication which such
Applicants propose to transmit, then the Trustee shall, within five Business
Days after the receipt of such application, afford such Applicants reasonable
access during the normal business hours of the Trustee to the most recent list
of Certificateholders held by the Trustee or shall, as an alternative, send, at
the Applicants' expense, the written communication proffered by the Applicants
to all Certificateholders at their addresses as they appear in the Certificate
Register.

                  (c) Every Holder or Certificate Owner, if the Holder is a
Clearing Agency, by receiving and holding a Certificate, agrees with the
Depositor, the Certificate Registrar and the Trustee that neither the Depositor,
the Certificate Registrar nor the Trustee shall be held accountable by reason of
the disclosure of any information as to the names and addresses of the
Certificateholders hereunder, regardless of the source from which such
information was derived.

      Section 8.03. Acts of Holders of Certificates.

                  (a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Agreement to be given or taken
by Holders or Certificate Owners, if the Holder is a Clearing Agency, may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee. Such
instrument or instruments (as the action embodies therein and evidenced thereby)
are herein sometimes referred to as an "Act" of the Holders signing such
instrument or instruments. Proof of execution of any such instrument or of a
writing appointing any such agents shall be sufficient for any purpose of this
Agreement and conclusive in favor of the Trustee, if made in the manner provided
in this Section.

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

<PAGE>

                  (c) The ownership of Certificates (whether or not such
Certificates shall be overdue and notwithstanding any notation of ownership or
other writing thereon made by anyone other than the Trustee) shall be proved by
the Certificate Register, and neither the Trustee nor the Depositor shall be
affected by any notice to the contrary.

                  (d) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any Certificate shall bind
every future Holder of the same Certificate and the Holder of every Certificate
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof, in respect of anything done, omitted or suffered to be done by the
Trustee in reliance thereon, whether or not notation of such action is made upon
such Certificate.

                                   ARTICLE IX.

               ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS

      Section 9.01. Servicer to Act as Servicer.

                  (a) Commencing on the Closing Date, the Servicer shall service
each Mortgage Loan in accordance with Accepted Servicing Practices.

                  (b) The Servicer shall maintain an EDP containing all
information and programming necessary to service the Mortgage Loans in
accordance with Section 2.01(a) hereof. The Mortgage Loans shall be grouped on
the Servicer's EDP to reflect the Trust Fund as the owner of the Mortgage Loans.

                  (c) The Servicer may not waive, modify or vary any term of a
Mortgage Note without the Depositor's prior written consent. The Servicer shall
comply with all applicable federal, state and local legal and regulatory
requirements (including laws, statutes, rules, regulations and ordinances) in
connection with the modification of the Mortgage Note.

                  (d) Notwithstanding anything herein to the contrary, the
Servicer shall follow any reasonable directions given by the Trustee and/or the
Depositor with respect to the servicing of the Mortgage Loans.

                  (e) With the exception of Ancillary Fees and any other charges
expressly permitted by the Mortgage Note and applicable law, the Servicer
covenants and agrees that it will not, without the prior written consent of the
Seller, charge or collect from any Mortgagor, or trustee under a deed of trust,
any fees of any kind including, but not limited to charges for amounts expended
by the Servicer, regardless of the characterization of the fee or charge.

                  (f) The Trustee agrees to execute such limited powers of
attorney provided to it by the Servicer as are necessary and appropriate to
assist the Servicer to carry out its servicing and administrative
responsibilities under this Agreement.

                  (g) In connection with its duties hereunder, in the event the
Servicer requires an original of any document contained in a Mortgagor's file to
service a Mortgage Loan, it shall submit a written request to the Custodian and
the Custodian shall provide the original document to the Servicer within two (2)
Business Days after receipt of the written request, provided that (a) as to any
recorded document, the applicable recorder's office has returned the

<PAGE>

recorded document to the Servicer or (b) as to the original title insurance
policy, the Servicer has received such policy. When requesting a release of
documents from the Custodian, the Servicer shall use the form attached hereto as
Exhibit N. Notwithstanding the foregoing, the Servicer acknowledges and agrees
that the Seller maintains agreements with document custodians selected by it
from time to time, pursuant to which such custodians maintain Mortgage Loan
files on behalf of the Seller. The Servicer agrees to cooperate with such
custodians and request from such custodians the documents and Mortgage Files
required by the Servicer which are maintained by such custodians (with a copy of
such request sent to the Seller).

                  (h) The Servicer shall not, unless default by the related
Mortgagor has occurred or is imminent, knowingly permit any modification, waiver
or amendment of any material term of any Mortgage Loan (including but not
limited to the interest rate, the principal balance, the amortization schedule,
or any other term affecting the amount or timing of payments on the Mortgage
Loan or the collateral therefor) unless the Servicer shall have provided to the
Depositor and the Trustee an Opinion of Counsel in writing to the effect that
such modification, waiver or amendment would not cause an Adverse REMIC Event.

      Section 9.02. Title, Management and Disposition of REO Property.

                  (a) If title to a Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be taken in the name of the Trustee or its designee. Notwithstanding the
foregoing, the Servicer shall not acquire title to any Mortgaged Property, or
proceed with the management of any REO Property, for which the Servicer has
knowledge that such Mortgaged Property or REO Property is affected by hazardous
waste. The Servicer shall either itself, or through an agent, manage, conserve,
protect and operate each REO Property (and may temporarily rent the same) on
behalf of the Trust Fund.

      In the event that the Trust Fund acquires any REO Property in connection
with a default or imminent default on a Mortgage Loan, the Servicer shall
dispose of such REO Property not later than the end of the third taxable year
after the year of its acquisition by the Trust Fund unless the Servicer has
applied for and received a grant of extension from the Internal Revenue Service
to the effect that, under the REMIC Provisions and any relevant proposed
legislation and under applicable state law, the Trust Fund may hold REO Property
for a longer period without adversely affecting the REMIC status of such REMIC
or causing the imposition of a federal or state tax upon such REMIC. If the
Servicer has received such an extension, then the Servicer shall continue to
attempt to sell the REO Property for its fair market value for such period
longer than three years as such extension permits (the "Extended Period"). If
the Servicer has not received such an extension and the Servicer is unable to
sell the REO Property within the period ending 3 months before the end of such
third taxable year after its acquisition by the Trust Fund or if the Servicer
has received such an extension, and the Servicer is unable to sell the REO
Property within the period ending three months before the close of the Extended
Period, the Servicer shall, before the end of the three year period or the
Extended Period, as applicable, (i) purchase such REO Property at a price equal
to the REO Property's fair market value or (ii) auction the REO Property to the
highest bidder (which may be the Servicer) in an auction reasonably designed to
produce a fair price prior to the expiration of the three-year period or the
Extended Period, as the case may be. The Trustee shall sign any document
prepared by the Servicer or take any other action reasonably requested by the
Servicer which would enable the Servicer, on behalf of the Trust Fund, to
request such grant of extension.

      Notwithstanding any other provisions of this Agreement, no REO Property
acquired by the Trust Fund shall be rented (or allowed to continue to be rented)
or otherwise used by or on

<PAGE>

behalf of the Trust Fund in such a manner or pursuant to any terms that would:
(i) cause such REO Property to fail to qualify as "foreclosure property" within
the meaning of Section 860G(a)(8) of the Code; or (ii) subject the Trust Fund to
the imposition of any federal income taxes on the income earned from such REO
Property, including any taxes imposed by reason of Sections 860F or 860G(c) of
the Code, unless the Servicer has agreed to indemnify and hold harmless the
Trust Fund with respect to the imposition of any such taxes.

                  (b) The Servicer shall deposit or cause to be deposited in the
applicable Custodial Account, on a daily basis, all revenues received with
respect to each REO Property and shall be permitted to withdraw therefrom, to
the extent of the amount of such revenues on deposit therein, funds necessary
for the proper operation, management and maintenance of such REO Property,
including but not limited to the cost of maintaining any hazard insurance and
the fees of any managing agent acting on behalf of the Servicer.

                  (c) If the Servicer elects to dispose of an REO Property
without utilizing the services of an agent, the Servicer shall notify the
Trustee of its receipt of any and all bona fide offers to purchase that REO
Property. Each such REO Disposition shall be carried out by the Servicer at such
price, and upon such terms and conditions.

      If the Servicer utilizes the services of an approved agent to dispose of
an REO Property, the Servicer shall provide the Trustee with a copy of such
agent's marketing plan, which shall include, but not be limited to, (i) the
marketing time period, (ii) an estimate of the costs of any repairs or
improvements, (iii) the lowest acceptable sale price for the REO Property and
(iv) other proposed terms and conditions of sale. The REO Disposition shall be
carried out by the Servicer in accordance with the terms thereof. If the
Servicer receives a bona fide offer to purchase an REO Property and would like
to accept the offer, but the offer is outside the parameters of the approved
marketing plan, the Servicer shall provide the Trustee with written notification
of the terms and conditions of the offer.

      The Servicer, upon an REO Disposition, shall be entitled to reimbursement
for any related unreimbursed Servicing Advances from proceeds received in
connection with such REO Disposition. If the proceeds from an REO Disposition
are insufficient to reimburse the Servicer for any related unreimbursed
Servicing Advances, to the extent such reimbursement will constitute an
"unanticipated expense" (within the meaning of Treasury Regulations Section
1.860G-1(b)(3)(ii)) of a REMIC provided for herein, the Servicer shall be
entitled to withdraw any such deficiency from amounts on deposit in the
applicable Custodial Account. All proceeds from an REO Disposition, net of any
reimbursement to the Servicer as provided above, shall be remitted to the
Trustee within three (3) Business Days following receipt thereof.

      Section 9.03. Trustee and Depositor's Right to Examine Servicer Records.

                  (a) The Servicer shall cooperate with the Depositor and/or the
Trustee, its counsel, accountants (including outside accountants), supervisory
agents, examiners and other representatives in providing reasonable access
during normal business hours to examine and audit any and all of the books,
records, documentation or other information of the Servicer related to the
Mortgage Loans, which may be relevant to the performance or observance by the
Servicer of the terms, covenants or conditions of this Agreement.

                  (b) The examination and audit rights and other rights to
access described in clause (a) above shall be afforded by the Servicer at its
offices without charge, upon reasonable request, and during normal business
hours or at such other times as may be reasonable

<PAGE>

under applicable circumstances. The Servicer, at its expense, shall make
available all customary, reasonable office space, facilities, and equipment for
the visiting party and shall provide the visiting party with access to
reasonable cooperation with its officers and employees. The salaries, travel,
subsistence and other related expenses for the Depositor's and/or the Trustee's
representatives shall be borne by the Depositor and/or the Trustee.

      Section 9.04. Legal Proceedings Involving the Servicer and/or the Mortgage
Loans.

                  (a) The Servicer shall commence, defend, appear, or otherwise
participate in any foreclosure, condemnation, bankruptcy, or other legal
proceedings relating to a Mortgage Loan in the name of the Trustee and/or the
Trust Fund. The Servicer shall provide the Trustee, on a monthly basis, with
such written reports as it receives regarding any legal proceedings.

                  (b) The Servicer shall commence all foreclosures, bankruptcies
and other legal proceedings in the name of the Trustee and/or the Trust Fund
unless otherwise directed in writing by the Trustee.

      Section 9.05. Material Changes.

      The Servicer shall promptly report to the Trustee and the Depositor any
change in its business operations, financial condition, properties or assets
that could have a material adverse effect on the Servicer's ability to perform
its obligations hereunder. Events for which the Trustee and the Depositor must
receive notice include, but are not limited to, the following:

                  (a) any merger or consolidation, any changes in the Servicer's
ownership whether directly or indirectly (including any change in ownership of
the Servicer's parent), or any significant reorganization;

                  (b) any material changes in management ordered or required by
a regulatory authority supervising or licensing the Servicer;

                  (c) the entry against the Servicer of a decree or order of a
court or agency or supervisory authority having jurisdiction for the appointment
of a trustee, conservator, receiver, liquidator, assignee, custodian or
sequestrator (or other similar official) in any federal or state bankruptcy,
insolvency, readjustment of debt, marshaling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of its affairs, if
such decree or order has remained in force undischarged or unstayed for a period
of sixty (60) days;

                  (d) the consent by the Servicer to the appointment of a
trustee, conservator, receiver, liquidator, assignee, custodian or sequestrator
(or other similar official) in, or commencement of a voluntary case under, any
federal or state bankruptcy, insolvency, readjustment of debt, marshaling of
assets and liabilities or similar proceedings;

                  (e) upon the Servicer's (A) admitting in writing its inability
to pay its debts generally as they become due, (B) filing a petition to take
advantage of any applicable insolvency or reorganization statute, (C) making an
assignment for the benefit of its creditors or (D) voluntarily suspending
payment of its obligations;

<PAGE>

                  (f) entry of any court judgment or regulatory order in which
the Servicer is or may be required to pay a claim or claims that may have a
material adverse effect on the Servicer's financial condition;

                  (g) any admission by the Servicer to the commission of, or any
finding that the Servicer has committed, any violation of any law, regulation or
order in any proceeding or audit commenced by any governmental, or regulatory
authority, or any proceeding commenced in any court of law;

                  (h) the commencement of any class action law suits against the
Servicer; and

                  (i) the Servicer's entry into any agreement with a third party
that would result in any material change in the financial status or ownership of
the Servicer or any merger of the Servicer.

      Section 9.06. Servicer Shall Provide Information as Reasonably Required.

      During the term of this Agreement, the Servicer shall furnish any reports
or documentation that the Trustee and/or the Depositor may reasonably request.
Reports requested may include reports not specified or otherwise required by
this Agreement or reports required to comply with any regulations regarding any
supervisory agents or examiners of the Trustee and/or the Depositor, as
applicable. All reports will be delivered in accordance with the Trustee and/or
the Depositor's reasonable instructions and directions. The Servicer agrees to
execute and deliver all such instruments and take all such action as the Trustee
and/or the Depositor, as applicable, from time to time, may reasonably request
in order to effectuate the purpose and to carry out the terms of this Agreement.

      Section 9.07. Servicer Not to Resign.

      The Servicer shall neither assign this Agreement or the servicing
hereunder or delegate its rights or duties hereunder or any portion hereof (to
other than a third party in the case of outsourcing routine tasks such as taxes,
insurance and property inspection, in which case the Servicer shall be fully
liable for such tasks as if the Servicer performed them itself) nor sell or
otherwise dispose of all or substantially all of its property or assets without
the prior written consent of the Trustee and the Depositor, which consent shall
be granted or withheld in the reasonable discretion of such parties, provided,
however, that (i) the Servicer may assign its rights and obligations hereunder
without prior written consent of the Trustee and the Depositor to any entity
that is directly owned or controlled by the Servicer, and the Servicer
guarantees the performance of such entity hereunder, (ii) the Servicer is no
longer permitted to act as Servicer under applicable law as evidenced by an
Opinion of Counsel or (iii) upon a sale of its servicing rights with respect to
the Mortgage Loans with the prior written consent of the Seller. In the case of
item (i) above, the Servicer shall provide the Trustee and the Depositor with a
written statement guaranteeing the successor entity's performance of the
Servicer's obligations under the Agreement.

      Section 9.08. Custodial Accounts and Escrow Accounts.

      The Servicer shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan separate and apart from any of its own funds and
general assets. The Servicer

<PAGE>

shall create and maintain Custodial Accounts and Escrow Accounts for the deposit
of all funds, except as otherwise provided herein, received by the Servicer on
the Mortgage Loans.

      Section 9.09. Assumption Processing.

      Within three (3) Business Days of receipt by the Servicer of a request by
a Mortgagor to be released from liability for payment of a Mortgage Loan in
connection with an assumption of the related Mortgage Note, the Servicer shall
notify the Trustee of such request. Upon the completion of the assumption
processing, the Seller shall provide the Servicer with all necessary information
to enable the Servicer to update its EDP.

      Section 9.10. Books and Records.

      The Servicer shall be responsible for maintaining, and shall maintain, a
complete set of records for the Mortgage Loans. The Servicer's books and records
shall clearly reflect the ownership of the Mortgage Loans by the Trust Fund. All
documents, records and correspondence, regardless of the media in which they are
stored or maintained, are property of the Trust Fund, and the Servicer shall
hold the same in a fiduciary capacity for the Trust Fund. The Servicer may
retain copies of all such documents, records and correspondence as may be
necessary to service the Mortgage Loans under this Agreement.

      Section 9.11. Annual Statement as to Compliance.

      The Servicer will deliver to the Depositor and the Trustee on or before
February 28 of each year, 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 of the
Servicer stating 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 officer's
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 officer and the nature and status thereof.

      Section 9.12. Annual Independent Certified Public Accountants' Servicing
Reports.

      On or before March 15 of each year, beginning in 2005 or such other date
that the Depositor gives the Servicer at least 30 days prior written notice of,
in order to remain in compliance with the Section 302 Requirements, the Servicer
at its expense shall cause a nationally recognized firm of independent certified
public accountants that is a member of the American Institute of Certified
Public Accountants to furnish a USAP Report to the Trustee and the Depositor.

      Section 9.13. Officer's Certificate.

                  (a) By February 28th of each year beginning in 2005 or such
other date specified in a written notice within 15 days prior to the date on
which a Form 10-K is required to be filed with a certification by the Depositor,
an officer of the Servicer shall execute and deliver an Officer's Certificate
substantially in the form of Exhibit R 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 such parties
and their respective officers, directors and affiliates.

<PAGE>

                  (b) The Servicer shall indemnify and hold harmless the
Depositor and its officers, directors, agents and affiliates from and against
any losses, damages, penalties, fines, forfeitures, reasonable legal fees and
related costs, judgments and other costs and expenses arising out of or based
upon a breach by the Servicer or any of its officers, directors, agents or
affiliates of its obligations under this Section 9.13 any material misstatement
or omission in the Officer's Certificate required under this Section 9.13 or the
negligence, bad faith or willful misconduct of the Servicer in connection
therewith. If the indemnification provided for herein is unavailable or
insufficient to hold harmless the Depositor, then the Servicer agrees that it
shall contribute to the amount paid or payable by the 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 Servicer on the one had
and the Depositor on the other in connection with a breach of the Servicer's
obligations under this Section 9.13, any material misstatement or omission in
the Officer's Certificate required under this Section 9.13 or the Servicer's
negligence, bad faith or willful misconduct in connection therewith.

      Section 9.14. Servicing Compensation.

                  (a) Subject to the following paragraph, as compensation for
its services hereunder, the Servicer shall be entitled to a Servicing Fee
payable with respect to each Mortgage Loan. As to each Mortgage Loan, the
Servicing Fee shall be payable monthly from payments of interest on such
Mortgage Loan prior to the deposit of such payments into the applicable
Custodial Account, shall accrue at the applicable Servicing Fee Rate, and shall
be computed on the basis of the same principal amount and for the same period
respecting which such interest payment was computed.

                  (b) The Servicing Fee for each Mortgage Loan shall be payable
solely from (i) the interest portion of the related Monthly Payment (to the
extent paid by the Mortgagor, but only if a full interest payment is received),
or (ii) from any payment of interest made with respect to the Mortgage Loan from
the proceeds of foreclosure or any judgment, writ of attachment or levy against
the Mortgagor or the Mortgagor's assets, or (iii) from funds paid in connection
with any prepayment in full, or (iv) from Insurance Proceeds or Liquidation
Proceeds.

                  (c) As additional compensation hereunder, the Servicer may
retain (i) all net interest earnings on balances maintained in the Custodial
Account and Escrow Accounts and (ii) the Ancillary Fees.

                  (d) The Servicer's right to the Servicing Fee shall not be
transferred in whole or in part except in connection with any permitted transfer
of all the Servicer's obligations under this Agreement. The Servicer shall be
required to pay all expenses incurred by it in connection with its servicing
activities hereunder and shall not be entitled to reimbursement therefor except
as specifically provided for herein.

      Section 9.15. Indemnification.

      The Servicer shall indemnify and hold the Trustee, the Trust Fund and the
Depositor and their respective officers, directors, employees and agents
(collectively, the "Indemnified Parties") harmless from, and will reimburse the
Indemnified Parties for, any and all Losses incurred by any of the Indemnified
Parties to the extent that such Losses result from, are caused by or arise out
of any one or more of the following:

<PAGE>

                  (i) Any material misrepresentations made by the Servicer in
            this Agreement, or in any schedule, exhibit, or certificate
            furnished pursuant hereto;

                  (ii) Any material breach of any of the representations and
            warranties of the Servicer or the nonfulfillment of any term,
            covenant, condition or obligation of the Servicer set forth in this
            Agreement or in any schedule, statement, exhibit, or certificate
            furnished pursuant hereto, or any default or failure to perform by
            the Servicer hereunder;

                  (iii) Any failure of the Servicer to comply with Accepted
            Servicing Practices in connection with servicing the Mortgage Loans;

                  (iv) Any liabilities or obligations, contingent or otherwise,
            of the Servicer of any nature whatsoever relating to the Servicer's
            obligations under this Agreement, to the extent that any related
            Loss to the Trustee, Trust Fund or Depositor is not increased by
            negligence, bad faith or willful misconduct on the part of the
            Trustee, Trust Fund or Depositor; or

                  (v) Any non-compliance with the terms of the powers of
            attorney or the use thereof that results in a Loss to the Trustee,
            Trust Fund or Depositor.

      The indemnity provided in this Section 9.15 shall remain in full force and
effect regardless of any investigation made by the Trustee, Trust Fund or
Depositor or its representatives. The provisions of this Section 9.15 shall
survive the termination of this Agreement and the payment of the outstanding
Certificates.

      Section 9.16. Non Solicitation.

      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
9.16.

      Section 9.17. Successor to the Servicer.

      Simultaneously with the termination of the Servicer's responsibilities and
duties under this Agreement (a) the Trustee shall, in accordance with the
provisions of this Agreement (i) succeed to and assume all of the Servicer's
responsibilities, rights, duties and obligations under this Agreement, or (ii)
appoint a successor meeting the eligibility requirements set forth herein and
which shall succeed to all rights and assume all of the responsibilities, duties
and liabilities of the Servicer under this Agreement with the termination of the
Servicer's responsibilities, duties and liabilities under this Agreement. If the
Trustee shall succeed to and assume the Servicer's responsibilities, rights,
duties and obligations under this Agreement, such succession shall not be
effective prior to 90 days after the Trustee's knowledge that the Servicer shall
be terminated hereunder. The Servicer shall not be removed hereunder prior to
the effectiveness of the assumption of its responsibilities, rights, duties and
obligations by the successor thereto. Any successor to the Servicer shall be
subject to the approval of the Depositor, the Trustee and each Rating Agency.

<PAGE>

Each Rating Agency must deliver to the Trustee a letter to the effect that such
transfer of servicing will not result in a qualification, withdrawal or
downgrade of the then-current rating of any of the Certificates. In connection
with such appointment and assumption, the Trustee or the Depositor, as
applicable, may make such arrangements for the compensation of such successor
out of payments on the Mortgage Loans as it and such successor shall agree;
provided, however, that no such compensation shall be in excess of that
permitted the Servicer under this Agreement. In the event that the Servicer's
duties, responsibilities and liabilities under this Agreement should be
terminated pursuant to the aforementioned sections, the Servicer shall discharge
such duties and responsibilities during the period from the date it acquires
knowledge of such termination until the effective date thereof with the same
degree of diligence and prudence which it is obligated to exercise under this
Agreement, and shall take no action whatsoever that might impair or prejudice
the rights or financial condition of its successor. The resignation or removal
of the Servicer pursuant to the aforementioned sections shall not become
effective until a successor shall be appointed pursuant to this Section 9.17 and
shall in no event relieve the Servicer of the representations and warranties
made herein and the remedies available to the Trustee herein, it being
understood and agreed that the provisions of this Agreement regarding
indemnification and nonsolicitation shall be applicable to the Servicer
notwithstanding any such resignation or termination of the Servicer, or the
termination of this Agreement.

      Section 9.18. Statements to the Trustee.

                  (a) Not later than the 15th calendar day of each month (or if
such calendar day is not a Business Day, the immediately succeeding Business
Day), the Servicer shall furnish to the Trustee (i) a monthly remittance advice
in the format set forth in Exhibit D-1 hereto and a monthly defaulted loan
report in the format set forth in Exhibit D-2 hereto relating to the period
ending on the first day of the current calendar month and (ii) all such
information required on a magnetic tape or other similar media mutually agreed
upon by the Trustee and the Servicer.

                  (b) The Servicer shall provide the Trustee with such
information concerning the Mortgage Loans as is necessary for the Trustee to
prepare its federal income tax return as the Trustee may reasonably request from
time to time.

      Section 9.19. Limitation on Liability of the Servicer.

      Neither the Servicer nor any of its directors, officers, employees or
agents shall be under any liability to 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 Servicer or any such Person against any breach
of representations or warranties made by it herein or protect the Servicer or
any such Person from any liability which would otherwise be imposed by reasons
of willful misfeasance, bad faith or negligence in the performance of its duties
or by reason of reckless disregard of its obligations and duties hereunder. The
Servicer and any director, officer, employee or agent of the Servicer shall be
indemnified by the Trust Fund and held harmless against any loss, liability or
expense 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 or any other unanticipated or
extraordinary expense, other than 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. The Servicer shall not be under any obligation to appear in,
prosecute or defend any legal action that is not incidental to its respective
duties hereunder and which in its opinion may involve it in any expense or
liability; provided, however, that the Servicer may in its discretion undertake
any such

<PAGE>

action that it may deem necessary or desirable in respect of this Agreement and
the rights and duties of the parties hereto and interests of the Trustee and the
Certificateholders hereunder. In such event, the legal expenses and costs of
such action and any liability resulting therefrom shall be expenses, costs and
liabilities of the Trust Fund, and the Servicer shall be entitled to be
reimbursed therefor out of the Custodial Account.

                                   ARTICLE X.

                              REMIC ADMINISTRATION

      Section 10.01. REMIC Administration.

                  (a) REMIC elections as set forth in the Preliminary Statement
shall be made on Forms 1066 or other appropriate federal tax or information
return for the taxable year ending on the last day of the calendar year in which
the Certificates are issued. The regular interests and residual interest in each
REMIC shall be as designated in the Preliminary Statement and Section 1.01.

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

                  (c) The Trustee shall represent the Trust Fund in any
administrative or judicial proceeding relating to an examination or audit by any
governmental taxing authority with respect thereto. The Trustee shall pay any
and all tax-related expenses (not including taxes) of each REMIC, including but
not limited to any professional fees or expenses related to audits or any
administrative or judicial proceedings with respect to such REMIC that involve
the Internal Revenue Service or state tax authorities, but only to the extent
that (i) such expenses are ordinary or routine expenses, including expenses of a
routine audit but not expenses of litigation (except as described in (ii)); or
(ii) such expenses or liabilities (including taxes and penalties) are
attributable to the negligence or willful misconduct of the Trustee in
fulfilling its duties hereunder (including its duties as tax return preparer).
The Trustee shall be entitled to reimbursement of expenses to the extent
provided in clause (i) above from the Distribution Account, provided, however,
the Trustee shall not be entitled to reimbursement for expenses incurred in
connection with the preparation of tax returns and other reports as required by
Section 6.19 and this Section.

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

                  (e) The Trustee or its designee shall perform on behalf of
each REMIC all reporting and other tax compliance duties that are the
responsibility of such REMIC under the Code, the REMIC Provisions, or other
compliance guidance issued by the Internal Revenue Service or any state or local
taxing authority. Among its other duties, if required by the Code, the REMIC
Provisions, or other such guidance, the Trustee shall provide, upon receipt of
additional reasonable compensation, to the Treasury or other governmental
authority such information as is necessary for the application of any tax
relating to the transfer of a Residual Certificate to any disqualified person or
organization pursuant to Treasury Regulation 1.860E-2(a)(5) and any person
designated in Section 860E(e)(3) of the Code.

<PAGE>

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

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

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

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

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

                  (k) (i) The Trustee shall treat the Class A-1 Certificates as
representing ownership, through a grantor trust, of the Upper Tier REMIC Class
A-1 Interest. The Trustee shall treat the rights of the Holders of the Class A-1
Certificates to receive distributions in respect of Basis Risk Shortfalls and
Unpaid Basis Risk Shortfalls, as interests in interest rate cap contracts
written by the Holders of the Class X-A Certificates (as holders of interests in
the X-A1 Component) in favor of the Holders of the Class A-1 Certificates.

                  (ii) The Trustee shall treat the Class A-2 Certificates as
            representing ownership, through a grantor trust, of the Upper Tier
            REMIC Class A-2 Interest. The Trustee shall treat the rights of the
            Holders of the Class A-2 Certificates to receive distributions in
            respect of Basis Risk Shortfalls and Unpaid Basis Risk

<PAGE>

            Shortfalls, as interests in interest rate cap contracts written by
            the Holders of each of the Class X-A Certificates (as holders of
            interests in the X-A2 Component) in favor of the Holders of the
            Class A-2 Certificates.

                  (iii) The Trustee shall treat each of the Class B-1, Class B-2
            and Class B-3 Certificates as representing ownership, through
            grantor trusts, of the Upper Tier REMIC Class B-1 Interest, the
            Upper Tier REMIC Class B-2 Interest and the Upper Tier REMIC Class
            B-3 Interest respectively. The Trustee shall treat the rights of the
            Holders of the Class B-1, Class B-2 and Class B-3 Certificates to
            receive payments in respect of Basis Risk Shortfalls and Unpaid
            Basis Risk Shortfalls as interests in interest rate cap contracts
            written by the Holders of the Class X-B Certificate in favor of the
            Holders of the Class B-1, Class B-2 and Class B-3 Certificates.

                  (iv) For purposes of determining the issue prices of the REMIC
            regular interests or portions thereof represented by the
            Certificates, the interest rate cap contracts described in this
            Section 10.01(k) shall be assumed to have a zero value unless and
            until required otherwise by an applicable taxing authority.

                  (v) Each holder or beneficial owner of a Class A-1, Class A-2,
            Class X-A, Class X-B, Class B-1, Class B-2 or Class B-3 Certificate
            agrees, by its acceptance of such Certificate or a beneficial
            interest therein, to treat, for tax purposes, such Certificate in a
            manner consistent with the treatment described in this Section
            10.01(k). For information reporting purposes, the Trustee shall
            treat the rights of the holders of the Class A-1, Class A-2, Class
            B-1, Class B-2 and Class B-3 Certificates to receive payments that
            are treated under this Section 10.01(k) as payments on cap contracts
            or interest rate cap agreements as having no value unless and until
            required otherwise by an applicable taxing authority.

                  (vi) For federal income tax purposes, the Trustee shall treat
            distributions from the Trust Fund as occurring as required by the
            terms of the Upper Tier REMIC Interests, with any difference between
            such and actual distributions being treated as resulting from
            payments in respect of the interest rate cap agreements described in
            this Section 10.01(k).

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

                  (m) Neither the Trustee nor the Depositor, as assignees under
this Agreement, shall provide any consent pursuant to this Agreement or
knowingly take any action under this Agreement that would conflict with or
violate the provisions of this Article X.

      Section 10.02. Prohibited Transactions and Activities.

      Neither the Depositor nor the Trustee shall sell, dispose of, or
substitute for any of the Mortgage Loans, except in a disposition pursuant to
(i) the foreclosure of a Mortgage Loan, (ii) the bankruptcy of the Trust Fund,
(iii) the termination of each REMIC pursuant to Article VII of this Agreement,
(iv) a substitution pursuant to Article II of this Agreement or (v) a repurchase
of Mortgage Loans pursuant to Article II of this Agreement, nor acquire any
assets for any REMIC, nor sell or dispose of any investments in the Distribution
Account for gain, nor accept any contributions to any REMIC after the Closing
Date, unless it has received an Opinion of Counsel

<PAGE>

(at the expense of the party causing such sale, disposition, or substitution)
that such disposition, acquisition, substitution, or acceptance will not (a)
affect adversely the status of any such REMIC as a REMIC or of the interests
therein other than the Residual Certificate as the regular interests therein,
(b) affect the distribution of interest or principal on the Certificates, (c)
result in the encumbrance of the assets transferred or assigned to the Trust
Fund (except pursuant to the provisions of this Agreement) or (d) cause any such
REMIC to be subject to any tax including a tax on prohibited transactions or
prohibited contributions pursuant to the REMIC Provisions.

      Section 10.03. Indemnification with Respect to Prohibited Transactions or
Loss of REMIC Status.

      In the event that a REMIC fails to qualify as a REMIC, loses its status as
a REMIC, or incurs federal, state or local taxes as a result of a prohibited
transaction or prohibited contribution under the REMIC Provisions due to the
negligent performance by the Trustee of its duties and obligations set forth
herein, the Trustee shall indemnify the Certificateholders of the related
Residual Certificate against any and all losses, claims, damages, liabilities or
expenses ("Losses") resulting from such negligence; provided, however, that the
Trustee shall not be liable for any such Losses attributable to the action or
inaction of the Depositor or the Holder of the Residual Certificate, nor for any
such Losses resulting from misinformation provided by any of the foregoing
parties on which the Trustee has relied. 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 or the Mortgage
Loan Purchase and Sale Agreement, (2) for any Losses other than arising out of
malfeasance, willful misconduct or negligent performance by the Trustee with
respect to its duties and obligations set forth herein, and (3) for any special
or consequential damages to Certificateholders of the related Residual
Certificate (in addition to payment of principal and interest on the
Certificates).

      Section 10.04. REO Property.

                  (a) Notwithstanding any other provision of this Agreement, the
Trustee shall not, except to the extent provided in this Agreement, knowingly
permit any Servicer to rent, lease, or otherwise earn income on behalf of any
REMIC with respect to any REO Property which might cause such REO Property to
fail to qualify as "foreclosure property" within the meaning of section
860G(a)(8) of the Code or result in the receipt by any REMIC of any "income from
non-permitted assets" within the meaning of section 860F(a)(2) of the Code or
any "net income from foreclosure property" which is subject to tax under the
REMIC Provisions unless the Servicer has provided to the Trustee an Opinion of
Counsel concluding that, under the REMIC Provisions, such action would not
adversely affect the status of any REMIC as a REMIC and any income generated for
any REMIC by the REO Property would not result in the imposition of a tax upon
such REMIC.

                  (b) The Depositor shall cause the Servicer (to the extent
provided in this Agreement) to make reasonable efforts to sell any REO Property
for its fair market value. In any event, however, the Depositor shall, or shall
cause the Servicer (to the extent provided in this Agreement) to, dispose of any
REO Property within three years of its acquisition by the Trust Fund unless the
Depositor or the Servicer (on behalf of the Trust Fund) has received a grant of
extension from the Internal Revenue Service to the effect that, under the REMIC
Provisions and any relevant proposed legislation and under applicable state law,
the REMIC may hold REO Property for a longer period without adversely affecting
the REMIC status of such REMIC or causing the imposition of a Federal or state
tax upon such REMIC. If such an extension has been received, then the Depositor,
acting on behalf of the Trustee hereunder, shall, or shall cause the Servicer
to, continue to attempt to sell the REO Property for its fair market value for
such period longer than three years as such extension permits (the "Extended
Period"). If such an extension has not been

<PAGE>

received and the Depositor or the Servicer, acting on behalf of the Trust Fund
hereunder, is unable to sell the REO Property within 33 months after its
acquisition by the Trust Fund or if such an extension, has been received and the
Depositor or the Servicer is unable to sell the REO Property within the period
ending three months before the close of the Extended Period, the Depositor shall
cause the Servicer, before the end of the three year period or the Extended
Period, as applicable, to (i) purchase such REO Property at a price equal to the
REO Property's fair market value or (ii) auction the REO Property to the highest
bidder (which may be the Servicer) in an auction reasonably designed to produce
a fair price prior to the expiration of the three-year period or the Extended
Period, as the case may be.

                                  ARTICLE XI.

                            MISCELLANEOUS PROVISIONS

      Section 11.01. Binding Nature of Agreement; Assignment.

      This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns.

      Section 11.02. Entire Agreement.

      This Agreement contains the entire agreement and understanding among the
parties hereto with respect to the subject matter hereof, and supersedes all
prior and contemporaneous agreements, understandings, inducements and
conditions, express or implied, oral or written, of any nature whatsoever with
respect to the subject matter hereof. The express terms hereof control and
supersede any course of performance and/or usage of the trade inconsistent with
any of the terms hereof.

      Section 11.03. Amendment.

                  (a) This Agreement may be amended from time to time by the
Depositor, the Servicer and the Trustee, without notice to or the consent of any
of the Holders, (i) to cure any ambiguity or mistake, (ii) to cause the
provisions herein to conform to or be consistent with or in furtherance of the
statements made with respect to the Certificates, the Trust Fund or this
Agreement in any Offering Document, or to correct or supplement any provision
herein which may be inconsistent with any other provisions herein or with the
provisions of this Agreement, (iii) to add any other provisions with respect to
matters or questions arising under this Agreement, (iv) to modify alter, amend,
add to or rescind any of the terms or provisions contained in this Agreement or
(v) to add, delete, or amend any provisions to the extent necessary or desirable
to comply with any requirements imposed by the Code and the REMIC Provisions. No
such amendment effected pursuant to the preceding sentence shall, as evidenced
by an Opinion of Counsel, adversely affect the status of any REMIC created
pursuant to this Agreement, nor shall such amendment effected pursuant to
clauses (iii) or (iv) of such sentence adversely affect in any material respect
the interests of any Holder unless such Holder has consented thereto. Prior to
entering into any amendment without the consent of Holders pursuant to this
paragraph, the Trustee shall be provided with an Opinion of Counsel (at the
expense of the party requesting such amendment) to the effect that such
amendment is permitted under this Section. Any such amendment shall be deemed
not to adversely affect in any material respect

<PAGE>

any Holder, if the Trustee receives written confirmation from each Rating Agency
that such amendment will not cause such Rating Agency to reduce the then current
rating assigned to the Certificates.

                  (b) This Agreement may also be amended from time to time by
the Depositor, the Servicer and the Trustee, with the consent of the Holders of
not less than 66-2/3% of the Class Principal Amount (or Percentage Interest) of
each Class of Certificates affected thereby 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;
provided, however, that no such amendment shall be made unless the Trustee
receives an Opinion of Counsel, at the expense of the party requesting the
change, that such change will not adversely affect the status of any REMIC as a
REMIC or cause a tax to be imposed on such REMIC; and provided further, that no
such amendment may (i) reduce in any manner the amount of, or delay the timing
of, payments received on Mortgage Loans which are required to be distributed on
any Certificate, without the consent of the Holder of such Certificate or (ii)
reduce the aforesaid percentages of Class Principal Amount or Class Notional
Amount (or Percentage Interest) of Certificates of each Class, the Holders of
which are required to consent to any such amendment without the consent of the
Holders of 100% of the Class Principal Amount or Class Notional Amount (or
Percentage Interest) of each Class of Certificates affected thereby. For
purposes of this paragraph, references to "Holder" or "Holders" shall be deemed
to include, in the case of any Class of Book-Entry Certificates, the related
Certificate Owners.

                  (c) Promptly after the execution of any such amendment, the
Trustee shall furnish written notification of the substance of such amendment to
each Holder, the Depositor, the Servicer and the Rating Agencies.

                  (d) It shall not be necessary for the consent of Holders under
this Section 11.03 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 Holders shall be subject to such reasonable regulations as
the Trustee may prescribe.

                  (e) Notwithstanding anything to the contrary in this
Agreement, the Trustee shall not consent to any amendment of this Agreement
except pursuant to the standards provided in this Section with respect to
amendment of this Agreement.

                  (f) Neither the Seller nor the Trustee shall consent to the
assignment by the Servicer of the Servicer's rights and obligations under this
Agreement without the prior written consent of the Depositor, which consent
shall not be unreasonably withheld.

      Section 11.04. Voting Rights.

      Except to the extent that the consent of all affected Certificateholders
is required pursuant to this Agreement, with respect to any provision of this
Agreement requiring the consent of Certificateholders representing specified
percentages of aggregate outstanding Certificate Principal Amount or Class
Notional Amount (or Percentage Interest), Certificates owned by the Depositor,
the Trustee, the Servicer or any Affiliates thereof are not to be counted so
long as such Certificates are owned by the Depositor, the Trustee, the Servicer
or any Affiliate thereof.

      Section 11.05. Provision of Information.

<PAGE>

                  (a) For so long as any of the Certificates of any Series or
Class are "restricted securities" within the meaning of Rule 144(a)(3) under the
Act, each of the Depositor, the Servicer and the Trustee agree to cooperate with
each other to provide to any Certificateholders and to any prospective purchaser
of Certificates designated by such holder, upon the request of such holder or
prospective purchaser, any information required to be provided to such holder or
prospective purchaser to satisfy the condition set forth in Rule 144A(d)(4)
under the Act. Any reasonable, out-of-pocket expenses incurred by the Trustee or
the Servicer in providing such information shall be reimbursed by the Depositor.

                  (b) The Trustee shall provide to any person to whom a
Prospectus was delivered, upon the request of such person specifying the
document or documents requested, (i) a copy (excluding exhibits) of any report
on Form 8-K or Form 10-K filed with the Securities and Exchange Commission and
(ii) a copy of any other document incorporated by reference in the Prospectus.
Any reasonable out-of-pocket expenses incurred by the Trustee in providing
copies of such documents shall be reimbursed by the Depositor.

                  (c) On each Distribution Date, the Trustee shall deliver or
cause to be delivered by first class mail or make available on its website to
the Depositor, a copy of the report delivered to Certificateholders pursuant to
Section 4.02.

      Section 11.06. Governing Law.

      THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO CONFLICT OF
LAWS PRINCIPLES APPLIED IN NEW YORK.

      Section 11.07. Notices.

      All requests, demands, notices, authorizations, directions, consents,
waivers and communications hereunder shall be in writing and shall be deemed to
have been duly given when received by (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, telecopy number (212) 449-9015, Attention:
Merrill Lynch Mortgage Investors Trust Series MLCC 2004-D, (b) in the case of
the Servicer, Cendant Mortgage Corporation, 3000 Leadenhall Road, Mt. Laurel New
Jersey 08054, telecopy number (856) 917-6910, Attention: Robert E. Groody, Chief
Operating Officer, (c) in the case of the Seller, Merrill Lynch Credit
Corporation, 4802 Deer Lake Drive East, Jacksonville, Florida 32246, telecopy
number (908) 218-8848, Attention: Merrill Lynch Mortgage Investors Trust Series
MLCC 2004-D, and (d) with respect to the Trustee or the Certificate Registrar,
P.O. Box 98, Columbia, Maryland 21046, Attention: Client Manager - MLMI Trust
Series MLCC 2004-D, with a copy to it at its respective Corporate Trust Office,
or as to each party such other address as may hereafter be furnished by such
party to the other parties in writing. All demands, notices and communications
to a party hereunder shall be in writing and shall be deemed to have been duly
given when delivered to such party at the relevant address, facsimile number or
electronic mail address set forth above or at such other address, facsimile
number or electronic mail address as such party may designate from time to time
by written notice in accordance with this Section 11.07.

      Section 11.08. Severability of Provisions.

<PAGE>

      If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.

      Section 11.09. Indulgences; No Waivers.

      Neither the failure nor any delay on the part of a party to exercise any
right, remedy, power or privilege under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, remedy, power or
privilege preclude any other or further exercise of the same or of any other
right, remedy, power or privilege, nor shall any waiver of any right, remedy,
power or privilege with respect to any occurrence be construed as a waiver of
such right, remedy, power or privilege with respect to any other occurrence. No
waiver shall be effective unless it is in writing and is signed by the party
asserted to have granted such waiver.

      Section 11.10. Headings Not To Affect Interpretation.

      The headings contained in this Agreement are for convenience of reference
only, and they shall not be used in the interpretation hereof.

      Section 11.11. Benefits of Agreement.

      Nothing in this Agreement or in the Certificates, express or implied,
shall give to any Person, other than the parties to this Agreement and their
successors hereunder and the Holders of the Certificates, any benefit or any
legal or equitable right, power, remedy or claim under this Agreement, except to
the extent specified in Section 11.15.

      Section 11.12. Special Notices to the Rating Agencies.

                  (a) The Depositor shall give prompt notice to the Rating
Agencies of the occurrence of any of the following events of which it has
notice:

                  (i) any amendment to this Agreement pursuant to Section 11.03;

                  (ii) the occurrence of any Event of Default;

                  (iii) any notice of termination given to the Servicer pursuant
            to Section 6.14 or any resignation of the Servicer pursuant to this
            Agreement;

                  (iv) the appointment of any successor to the Servicer pursuant
            to Section 6.14; and

                  (v) the making of a final payment pursuant to Section 7.02.

                  (b) All notices to the Rating Agencies provided for this
Section shall be in writing and sent by first class mail, telecopy or overnight
courier, as follows:

If to Moody's, to:

            Moody's Investors Service, Inc.

<PAGE>

            99 Church Street
            New York, New York 10007
            Attention:  ABS Monitoring

            If to S&P, to:

            Standard & Poor's Ratings Service,
            a division of The McGraw-Hill Companies, Inc.
            55 Water Street
            New York, New York 10041
            Attention:  Residential Mortgages

            If to Fitch Ratings, to:

            Fitch, Inc.
            One State Street Plaza
            30th Floor
            New York, New York 10004
            Attention:  Surveillance Group

                  (c) The Trustee shall provide or make available to the Rating
Agencies reports prepared pursuant to Section 4.02. In addition, the Trustee
shall, at the expense of the Trust Fund, make available to each Rating Agency
such information as such Rating Agency may reasonably request regarding the
Certificates or the Trust Fund, to the extent that such information is
reasonably available to the Trustee.

      Section 11.13. [RESERVED].

      Section 11.14. Counterparts.

      This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original, and all of which together shall constitute
one and the same instrument.

      Section 11.15. No Petitions.

      The Trustee and the Servicer, by entering into this Agreement, hereby
covenants and agrees that it shall not at any time institute against the
Depositor, or join in any institution against the Depositor of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations relating to this Agreement or any of the
documents entered into by the Depositor in connection with the transactions
contemplated by this Agreement.

<PAGE>

      IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective officers hereunto duly authorized as of the
day and year first above written.

                                           MERRILL LYNCH MORTGAGE INVESTORS,
                                           INC., as Depositor

                                           By:_________________________________
                                                Name:  Matthew Whalen
                                                Title: President

                                           CENDANT MORTGAGE CORPORATION,
                                           as Servicer

                                           By:_________________________________
                                                Name:  Richard Bradfield
                                                Title: Vice President

                                           WELLS FARGO BANK, N.A.,
                                           as Trustee

                                           By:_________________________________
                                                Name:  Sandra Whalen
                                                Title: Vice President

Solely for purposes of Section 2.04,
accepted and agreed to by:

MERRILL LYNCH CREDIT
CORPORATION

By:___________________________________
     Name:  Kathy Ciaffa
     Title: Vice President

<PAGE>

                                    EXHIBIT A

                              FORMS OF CERTIFICATES

                             [INTENTIONALLY OMITTED]

<PAGE>

                                    EXHIBIT B

          FORM OF RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT (TRANSFEREE)

STATE OF              )
                      )       ss.:
COUNTY OF             )

      [NAME OF OFFICER], _________________ being first duly sworn, deposes and
      says:

      1.    That he [she] is [title of officer] ________________________ of
            [name of Purchaser] _________________________________________ (the
            "Purchaser"), a _______________________ [description of type of
            entity] duly organized and existing under the laws of the [State of
            __________] [United States], on behalf of which he [she] makes this
            affidavit.

      2.    That the Purchaser's Taxpayer Identification Number is [      ].

      3.    That the Purchaser is not a "disqualified organization" within the
            meaning of Section 860E(e)(5) of the Internal Revenue Code of 1986,
            as amended (the "Code") and will not be a "disqualified
            organization" as of [date of transfer], and that the Purchaser is
            not acquiring a Residual Certificate (as defined in the Agreement)
            for the account of, or as agent (including a broker, nominee, or
            other middleman) for, any person or entity from which it has not
            received an affidavit substantially in the form of this affidavit.
            For these purposes, a "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 (other than an
            instrumentality if all of its activities are subject to tax and a
            majority of its board of directors is not selected by such
            governmental entity), any cooperative organization furnishing
            electric energy or providing telephone service to persons in rural
            areas as described in Code Section 1381(a)(2)(C), any "electing
            large partnership" within the meaning of Section 775 of the Code, or
            any organization (other than a farmers' cooperative described in
            Code Section 521) that is exempt from federal income tax unless such
            organization is subject to the tax on unrelated business income
            imposed by Code Section 511.

      4.    That the Purchaser is not, and on __________________ [date of
            transfer] will not be, 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 or
            arrangement subject to any provisions of state, local or other
            federal law substantively similar to the foregoing provisions of
            ERISA or the Code (collectively, a "Plan"), and is not directly or
            indirectly acquiring a Residual Certificate for, on behalf of or
            with any assets of any such Plan.

      5.    That the Purchaser hereby acknowledges that under the terms of the
            Pooling and Servicing Agreement dated as of August 1, 2004 (the
            "Agreement"), among

<PAGE>

            Merrill Lynch Mortgage Investors, Inc., as Depositor, Cendant
            Mortgage Corporation, as Servicer and Wells Fargo Bank, N.A., as
            Trustee with respect to Merrill Lynch Mortgage Investors Trust
            Series MLCC 2004-D Mortgage Pass-Through Certificates, no transfer
            of the Residual Certificates shall be permitted to be made to any
            person unless the Certificate Registrar and Trustee have received a
            certificate from such transferee containing the representations in
            paragraphs 3 and 4 hereof.

      6.    That the Purchaser does not hold REMIC residual securities as
            nominee to facilitate the clearance and settlement of such
            securities through electronic book-entry changes in accounts of
            participating organizations (such entity, a "Book-Entry Nominee").

      7.    That the Purchaser does not have the intention to impede the
            assessment or collection of any federal, state or local taxes
            legally required to be paid with respect to such Residual
            Certificate.

      8.    That the Purchaser will not transfer a Residual Certificate to any
            person or entity (i) as to which the Purchaser has actual knowledge
            that the requirements set forth in paragraph 3, paragraph 6 or
            paragraph 10 hereof are not satisfied or that the Purchaser has
            reason to believe does not satisfy the requirements set forth in
            paragraph 7 hereof, and (ii) without obtaining from the prospective
            Purchaser an affidavit substantially in this form and providing to
            the Trustee and the Certificate Registrar a written statement
            substantially in the form of Exhibit C to the Agreement.

      9.    That the Purchaser understands that, as the holder of a Residual
            Certificate, the Purchaser may incur tax liabilities in excess of
            any cash flows generated by the interest and that it intends to pay
            taxes associated with holding such Residual Certificate as they
            become due.

      10.   That the Purchaser (i) is not a Non-U.S. Person or (ii) is a
            Non-U.S. Person that holds a Residual Certificate in connection with
            the conduct of a trade or business within the United States and has
            furnished the transferor, the Trustee and the Certificate Registrar
            with an effective Internal Revenue Service Form W-8ECI (Certificate
            of Foreign Person's Claim for Exemption From Withholding on Income
            Effectively Connected With the Conduct of a Trade or Business in the
            United States) or successor form at the time and in the manner
            required by the Code. "Non-U.S. Person" means an individual,
            corporation, partnership or other person other than (i) a citizen or
            resident of the United States; (ii) a corporation, partnership or
            other entity created or organized in or under the laws of the United
            States or any state thereof, including for this purpose, the
            District of Columbia; (iii) an estate that is subject to U.S.
            federal income tax regardless of the source of its income; (iv) 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 trustees have authority to control all
            substantial decisions of the trust; and, (v) to the extent provided
            in Treasury regulations, certain trusts in existence on August 20,
            1996 that are treated as United States persons prior to such date
            and elect to continue to be treated as United States persons.

<PAGE>

      11.   The Purchaser will not cause income from the Residual Certificate to
            be attributable to a foreign permanent establishment or fixed base
            (within the meaning of an applicable income tax treaty) of the
            Purchaser or another U.S. taxpayer.

      12.   That the Purchaser agrees to such amendments of the Agreement as may
            be required to further effectuate the restrictions on transfer of
            any Residual Certificate to such a "disqualified organization," an
            agent thereof, a Book-Entry Nominee, or a person that does not
            satisfy the requirements of paragraph 7 and paragraph 10 hereof.

      13.   That the Purchaser consents to the designation of the Trustee to act
            as agent for the "tax matters person" of each REMIC created by the
            Trust Fund pursuant to the Agreement.

      14.   That the Purchaser agrees to be bound by Section 3.03(f) of the
            Agreement.

<PAGE>

      IN WITNESS WHEREOF, the Purchaser has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
[title of officer] this _____ day of __________, 20__.

                                          _____________________________________
                                          [Name of Purchaser]

                                          By:__________________________________
                                             Name:
                                             Title:

      Personally appeared before me the above-named [name of officer]
________________, known or proved to me to be the same person who executed the
foregoing instrument and to be the [title of officer] _________________ of the
Purchaser, and acknowledged to me that he [she] executed the same as his [her]
free act and deed and the free act and deed of the Purchaser.

      Subscribed and sworn before me this _____ day of __________ 20__.

NOTARY PUBLIC

________________________________________

COUNTY OF ______________________________

STATE OF _______________________________

My commission expires the _____ day of __________ 20__.

<PAGE>

                                    EXHIBIT C

              RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT (TRANSFEROR)

                                             __________________________________
                                                           Date

Re:   Merrill Lynch Mortgage Investors Trust Series MLCC 2004-D
      Mortgage Pass-Through Certificates

      _______________________ (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
information contained in paragraph 7 thereof 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 a Residual Certificate. 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:

<PAGE>

                                   EXHIBIT D-1

                  STANDARD LAYOUT FOR MONTHLY REMITTANCE ADVICE

                             [INTENTIONALLY OMITTED]

<PAGE>

                                   EXHIBIT D-2

                STANDARD LAYOUT FOR MONTHLY DEFAULTED LOAN REPORT

<TABLE>
<CAPTION>
OUR LOAN     INVESTOR     INVESTOR      MORTGAGOR    DUE      PAYT      PRINCIPAL    PRIN-INT                             LOAN
    NO.     BK. CAT TP    LOAN NO.        NAME      DATE       NO.       BALANCE     CONSTANT      --DELINQUENCIES--      DESC.
--------    ----------    --------      ---------   ----      ----      ---------    --------     --------------------    -----
                                                                                                  PRINCIPAL   INTEREST
<S>         <C>           <C>           <C>         <C>       <C>       <C>          <C>          <C>         <C>         <C>
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

                                    EXHIBIT E

                    MORTGAGE LOAN PURCHASE AND SALE AGREEMENT

                        See Exhibit 99.1, filed herewith

<PAGE>

                                    EXHIBIT F

                      LIST OF LIMITED PURPOSE SURETY BONDS

      Ambac Assurance Corporation Surety Bond No. AB0039BE, issued February 26,
1996, for Merrill Lynch Credit Corporation.

<PAGE>

                                    EXHIBIT G

                     FORM OF RULE 144A TRANSFER CERTIFICATE

Re:   Merrill Lynch Mortgage Investors Trust Series MLCC 2004-D Mortgage
      Pass-Through Certificates

      Reference is hereby made to the Pooling and Servicing Agreement, dated as
of August 1, 2004 (the "Agreement"), among Merrill Lynch Mortgage Investors,
Inc., as Depositor, Cendant Mortgage Corporation, as Servicer and Wells Fargo
Bank, N.A., as Trustee. Capitalized terms used but not defined herein shall have
the meanings given to them in the Agreement.

      This letter relates to $__________ initial Certificate Balance of Class
Certificates which are held in the form of Definitive Certificates registered in
the name of      (the "Transferor"). The Transferor has requested a transfer of
such Definitive Certificates for Definitive Certificates of such Class
registered in the name of [insert name of transferee].

      In connection with such request, and in respect of such Certificates, the
Transferor hereby certifies that such Certificates are being transferred in
accordance with (i) the transfer restrictions set forth in the Agreement and the
Certificates and (ii) Rule 144A under the Securities Act to a purchaser that the
Transferor reasonably believes is a "qualified institutional buyer" within the
meaning of Rule 144A purchasing for its own account or for the account of a
"qualified institutional buyer," which purchaser is aware that the sale to it is
being made in reliance upon Rule 144A, in a transaction meeting the requirements
of Rule 144A and in accordance with any applicable securities laws of any state
of the United States or any other applicable jurisdiction.

      This certificate and the statements contained herein are made for your
benefit and the benefit of the Underwriters and the Depositor.

                                           ____________________________________
                                           [Name of Transferor]

                                           By:____________________________
                                                Name:
                                                Title:

Dated:_____________________________

<PAGE>

                                    EXHIBIT H

                         FORM OF PURCHASER'S LETTER FOR
                        INSTITUTIONAL ACCREDITED INVESTOR

                                      Date

Dear Sirs:

      In connection with our proposed purchase of $______________ principal
amount of Merrill Lynch Mortgage Investors Trust Series MLCC 2004-D Mortgage
Pass-Through Certificates (the "Privately Offered Certificates") of Merrill
Lynch Mortgage Investors, Inc. (the "Depositor"), we confirm that:

      (1) We understand that the Privately Offered Certificates have not been,
and will not be, registered under the Securities Act of 1933, as amended (the
"Securities Act"), and may not be sold except as permitted in the following
sentence. We agree, on our own behalf and on behalf of any accounts for which we
are acting as hereinafter stated, that if we should sell any Privately Offered
Certificates within two years of the later of the date of original issuance of
the Privately Offered Certificates or the last day on which such Privately
Offered Certificates are owned by the Depositor or any affiliate of the
Depositor we will do so only (A) to the Depositor, (B) to "qualified
institutional buyers" (within the meaning of Rule 144A under the Securities Act)
in accordance with Rule 144A under the Securities Act ("QIBs"), (C) pursuant to
the exemption from registration provided by Rule 144 under the Securities Act,
or (D) to an institutional "accredited investor" within the meaning of Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act that is not
a QIB (an "Institutional Accredited Investor") which, prior to such transfer,
delivers to the Certificate Registrar under the Pooling and Servicing Agreement,
dated as of August 1, 2004 (the "Agreement"), among Merrill Lynch Mortgage
Investors, Inc., as Depositor, Cendant Mortgage Corporation, as Servicer and
Wells Fargo Bank, N.A., as Trustee, a signed letter in the form of this letter;
and we further agree, in the capacities stated above, to provide to any person
purchasing any of the Privately Offered Certificates from us a notice advising
such purchaser that resales of the Privately Offered Certificates are restricted
as stated herein.

      (2) We understand that, in connection with any proposed resale of any
Privately Offered Certificates to an Institutional Accredited Investor, we will
be required to furnish to the Certificate Registrar a certification from such
transferee in the form hereof to confirm that the proposed sale is being made
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act. We further understand that the
Privately Offered Certificates purchased by us will bear a legend to the
foregoing effect.

      (3) We are acquiring the Privately Offered Certificates for investment
purposes and not with a view to, or for offer or sale in connection with, any
distribution in violation of the Securities Act. We have such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of our investment in the Privately Offered Certificates,

<PAGE>

and we and any account for which we are acting are each able to bear the
economic risk of such investment.

      (4) We are an Institutional Accredited Investor and we are acquiring the
Privately Offered Certificates purchased by us for our own account or for one or
more accounts (each of which is an Institutional Accredited Investor) as to each
of which we exercise sole investment discretion.

      (5) We have received such information as we deem necessary in order to
make our investment decision.

      (6) If we are acquiring ERISA-Restricted Certificates, we are not a Plan
and we are not acquiring the ERISA-Restricted Certificates for, on behalf of or
with any assets of any such Plan except in accordance with Section 3.03(d) of
the Pooling and Servicing Agreement.

      Terms used in this letter which are not otherwise defined herein have the
respective meanings assigned thereto in the Agreement.

<PAGE>

      You are entitled to rely upon this letter and are irrevocably authorized
to produce this letter or a copy hereof to any interested party in any
administrative or legal proceeding or official inquiry with respect to the
matters covered hereby.

                                           Very truly yours,

                                           ____________________________________
                                           [Purchaser]

                                           By:_________________________________
                                           Name:
                                           Title:

<PAGE>

                                    EXHIBIT I

                        FORM OF ERISA TRANSFER AFFIDAVIT

STATE OF NEW YORK        )
                         )   ss.:
COUNTY OF NEW YORK       )

      The undersigned, being first duly sworn, deposes and says as follows:

      1.    The undersigned is the ______________________ of ______________ (the
"Investor"), a [corporation duly organized] and existing under the laws of
__________, on behalf of which he makes this affidavit.

      2.    (a) With respect to a transfer of an ERISA-Restricted Certificate
that is a Class A-R Certificate, the Investor is not, and on __________________
[date of transfer] will not be, 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 Internal Revenue Code of 1986, as amended
(the "Code") or a plan or arrangement subject to any state, local or other
federal law substantively similar to the foregoing provisions of ERISA or the
Code ("Similar Law") (collectively, a "Plan"), and is not directly or indirectly
acquiring a Class A-R Certificate for, on behalf of or with any assets of any
such Plan.

            (b) With respect to a transfer of an ERISA-Restricted Certificate
that is a Class B-4, Class B-5 or Class B-6 Certificate, the Investor shall
provide the Trustee and the Depositor with (A) a representation to the effect
that the Investor is not a Plan and is not directly or indirectly acquiring the
Certificate for, on behalf of or with any assets of any such Plan, (B) if the
Certificate has been the subject of an ERISA-Qualifying Underwriting, a
representation that the Investor 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 (C) solely in the case of a
Definitive Certificate, an Opinion of Counsel satisfactory to the Trustee and
the Depositor to the effect that the acquisition and holding of such Certificate
will not constitute or result in a nonexempt prohibited transaction under ERISA
or the Code, or a violation of Similar Law, and will not subject the Trustee,
the Certificate Registrar, the Servicer or the Depositor to any obligation in
addition to those expressly undertaken in this Agreement, which Opinion of
Counsel shall not be an expense of the Trustee, the Certificate Registrar, the
Servicer or the Depositor.

      3.    The Investor hereby acknowledges that under the terms of the Pooling
and Servicing Agreement dated as of August 1, 2004 (the "Agreement"), among
Merrill Lynch Mortgage Investors, Inc., as Depositor, Cendant Mortgage
Corporation, as Servicer and Wells Fargo Bank, N.A., as Trustee, no transfer of
the ERISA-Restricted Certificates shall be permitted to be made to any person
unless the Certificate Registrar has received a certificate from such transferee
in the form hereof.

<PAGE>

      IN WITNESS WHEREOF, the Investor has caused this instrument to be executed
on its behalf, pursuant to proper authority, by its duly authorized officer,
duly attested, this ____ day of _______________ 20___.

                                           ____________________________________
                                           [Investor]

                                           By:_________________________________
                                               Name:
                                               Title:

ATTEST:

___________________________________

STATE OF                           )
                                   )      ss.:
COUNTY OF                          )

      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 that he executed
the same as his free act and deed and the free act and deed of the Investor.

      Subscribed and sworn before me this _____ day of _________ 20___.

                                           ____________________________________
                                           NOTARY PUBLIC

                                           My commission expires the
                                           _____ day of __________, 20___.

<PAGE>

                                    EXHIBIT J

                        FORM OF LETTER OF REPRESENTATIONS
                        WITH THE DEPOSITORY TRUST COMPANY

                             [INTENTIONALLY OMITTED]

<PAGE>

                                    EXHIBIT K

                          FORM OF INITIAL CERTIFICATION
            MERRILL LYNCH MORTGAGE INVESTORS TRUST SERIES MLCC 2004-D

                                ___________, 2004

To:   Merrill Lynch Mortgage Investors, Inc.
      250 Vesey Street
      4 World Financial Center, 10th Floor
      New York, New York  10080

      Cendant Mortgage Corporation
      3000 Leadenhall Road
      Mt. Laurel, New Jersey  08054

      Merrill Lynch Credit Corporation
      4802 Deer Lake Drive East
      Jacksonville, Florida  32246

      Reference is made to the Pooling and Servicing Agreement among Merrill
Lynch Mortgage Investors, Inc. (the "Depositor"), Cendant Mortgage Corporation
(the "Servicer") and Wells Fargo Bank, N.A., as trustee (the "Trustee"), dated
as of August 1, 2004 (the "Agreement"), pursuant to which the Depositor has
delivered to the Trustee, with respect to each Mortgage Loan set forth on
Schedule A hereto (the "Mortgage Loan Schedule"), the documents set forth in
Section 2.01 of the Agreement.

      With respect to each Mortgage Loan listed on the Mortgage Loan Schedule
and except as otherwise noted on the Schedule of Exceptions set forth on
Schedule B hereto, the Trustee confirms that (1) the Trustee has received all of
the documents required to be delivered to the Trustee pursuant to Section 2.01
of the Agreement, (2) the Trustee has reviewed each Trustee's Mortgage File in
accordance with Section 2.02(a) of the Agreement, and the documents contained in
each Trustee's Mortgage File conform to the requirements set forth in such
Section 2.02(a), and (3) the Trustee has physical possession of the documents in
each Trustee's Mortgage File. The Trustee has not independently verified the
validity, enforceability, sufficiency, recordability, due authorization or
genuineness or any document in any Trustee's Mortgage File or any related
Mortgage Loan, nor the collectibility, insurability, effectiveness or
suitability of any related Mortgage Loan.
<PAGE>

         All terms used herein and not otherwise defined herein shall have the
respective meaning ascribed to such term in the Agreement.

                                        WELLS FARGO BANK, N.A.,
                                        as Trustee

                                        By:_____________________________________
                                        Name:___________________________________
                                        Title:__________________________________

<PAGE>

                                    EXHIBIT L

                           FORM OF FINAL CERTIFICATION
            MERRILL LYNCH MORTGAGE INVESTORS TRUST SERIES MLCC 2004-D

                               _____________, 2004

To:   Merrill Lynch Mortgage Investors, Inc.
      250 Vesey Street
      4 World Financial Center, 10th Floor
      New York, New York 10080

      Cendant Mortgage Corporation
      3000 Leadenhall Road
      Mt. Laurel, New Jersey 08054

      Merrill Lynch Credit Corporation
      4802 Deer Lake Drive East
      Jacksonville, Florida 32246

      Reference is made to the Pooling and Servicing Agreement among Merrill
Lynch Mortgage Investors, Inc. (the "Depositor"), Cendant Mortgage Corporation
(the "Servicer") and Wells Fargo Bank, N.A., as Trustee (the "Trustee"), dated
as of August 1, 2004 (the "Agreement"), pursuant to which the Depositor has
delivered to the Trustee, with respect to each Mortgage Loan set forth on
Schedule A hereto (the "Mortgage Loan Schedule"), the documents set forth in
Section 2.01 of the Agreement.

      With respect to each Mortgage Loan listed on the Mortgage Loan Schedule
and except as otherwise noted on the Schedule of Exceptions set forth on
Schedule B hereto, the Trustee confirms that (1) the Trustee has received all of
the documents required to be delivered to the Custodian pursuant to Section 2.01
of the Agreement, (2) the Trustee has reviewed each Trustee's Mortgage File in
accordance with Section 2 of Amendment No. 1 to the Custodial Agreement, and the
documents contained in each Trustee's Mortgage File conform to the requirements
set forth in such Section 2, and (3) the Trustee has physical possession of the
documents in each Trustee's Mortgage File. The Trustee has not independently
verified the validity, enforceability, sufficiency, recordability, due
authorization or genuineness or any document in any Trustee's Mortgage File or
any related Mortgage Loan, nor the collectibility, insurability, effectiveness
or suitability of any related Mortgage Loan.

<PAGE>

      All terms used herein and not otherwise defined herein shall have the
respective meaning ascribed to such term in the Agreement.

                                        WELLS FARGO BANK, N.A.,
                                        as Trustee

                                        By:_____________________________________
                                        Name:___________________________________
                                        Title:__________________________________

<PAGE>

                                    EXHIBIT M

                           LIST OF SERVICING OFFICERS

                             [INTENTIONALLY OMITTED]

<PAGE>

                                    EXHIBIT N

                               REQUEST FOR RELEASE

To:   Wells Fargo Bank, N.A.
      1015 10th Avenue S.E.
      Minneapolis, Minnesota 55414
      (Attention: Merrill Lynch Mortgage Investors Trust Series MLCC 2004-D)

      Re:   Pooling and Servicing Agreement, dated as of August 1, 2004, among
            Merrill Lynch Mortgage Investors, Inc., as Depositor, Cendant
            Mortgage Corporation, as Servicer and Wells Fargo Bank, N.A., a
            Trustee

      In connection with the administration of the pool of Mortgage Loans held
by you as Trustee for the benefit of Certificateholders, we request the release
of the (Trustee's Mortgage File/[specify documents]) for the Mortgage Loan
described below, for the reason indicated.

File/document to be sent to:

            [Company]
            [Address]
            [Attn:]
            [Telephone Number ____]

Mortgagor's Name, Address & Zip Code:

Mortgage Loan Number:

Reason for Requesting Documents (check one)

______ 1.   Mortgage Loan Paid in Full
            ([Seller/Depositor] [Servicer], hereby certifies that all amounts
            received in connection therewith have been credited to the Custodial
            Account or the Distribution Account, as applicable.)

______ 2.   Mortgage Loan in Foreclosure

______ 3.   Mortgage Loan Repurchased or Substituted For
            ([Seller/Depositor] [Servicer], hereby certifies that any applicable
            repurchase price or substitution shortfall amount has been credited
            to the Custodial Account or the Distribution Account, as
            applicable.)

______ 4.   Mortgage Loan Liquidated
            ([Seller/Depositor] [Servicer], hereby certifies that all proceeds
            of foreclosure, insurance or other liquidation have been finally
            received and credited to the Custodial Account or the Distribution
            Account, as applicable.)

______ 5.   Other (explain) _________________________________

                                        1
<PAGE>

            If box 1, 2 or 3 above is checked, and if all or part of the
            Trustee's 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 4 or 5 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.

                                        [SELLER/DEPOSITOR]
                                        [SERVICER]

                                        By:_____________________________________
                                        Date:___________________________________

Documents returned to Trustee:

___________________________________,
as Trustee

By:________________________________
Date:______________________________

                                        2
<PAGE>

                                    EXHIBIT O

                               CUSTODIAL AGREEMENT

      THIS CUSTODIAL AGREEMENT dated as of December 15, 2000 (this "Agreement"),
between MERRILL LYNCH CREDIT CORPORATION ("MLCC") having an address at 4802 Deer
Lake Drive East, Jacksonville, Florida 32246 and WELLS FARGO BANK MINNESOTA,
N.A. ("Custodian"), having an address at Sixth and Marquette, Minneapolis,
Minnesota 55479- 0031.

                              PRELIMINARY STATEMENT

      MLCC may, from time to time, purchase certain Mortgage Loans from third
party sellers pursuant to the terms and conditions of certain mortgage loan
purchase agreements entered into between MLCC and such third parties (each, a
"Purchase Agreement"). MLCC desires that the Custodian act as custodian with
respect to the documents for the Mortgage Loans delivered from time to time to
the Custodian hereunder, and the Custodian desires to act as custodian with
respect to the documents for the Mortgage Loans.

      NOW, THEREFORE, in consideration of the mutual covenants set forth herein
and for other good and valuable consideration, the sufficiency and receipt of
which is hereby acknowledged, the parties hereto hereby agree as follows:

      1.    Definitions.

      "Additional Collateral Mortgage Loan": Each Mortgage Loan that is either a
Mortgage 100sm Loan or Parent Power(R) Mortgage Loan as to which the Additional
Collateral is provided. For purposes hereof, the term "Additional Collateral"
shall mean (i) with respect to any Mortgage 100sm Loan, the marketable
securities subject to a security interest pursuant to the related Mortgage 100sm
Pledge Agreement, or (ii) with respect to any Parent Power(R) Mortgage Loan, the
related Parent Power(R) Agreement.

      "Agreement": This Custodial Agreement and all amendments and attachments
hereto and supplements hereof.

      "Assignment": An assignment of the Mortgage, notice of transfer or
equivalent instrument in recordable form, sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to give record
notice of the sale or transfer of the Mortgage Loan.

      "Business Day": Any day other than (i) a Saturday or Sunday, or (ii) a day
on which banking or savings associations in the State of New Jersey or the State
of Minnesota are authorized or obligated by law or executive order to be closed.

      "Closing Date": With respect to each Mortgage Loan, the date upon which
the MLCC completes the purchase of such Mortgage Loan.

      "Custodian": Wells Fargo Bank Minnesota, N.A., or its successor in
interest or assigns.

                                        1
<PAGE>

      "Custodian's Mortgage File": As to each Mortgage Loan, all Mortgage Loan
documents delivered to the Custodian pursuant hereto and held by the Custodian
with respect to each Mortgage Loan.

      "Custody Receipt": An Initial Custody Receipt and/or a Final Custody
Receipt.

      "Cut-off Date": With respect to each Mortgage Loan, the first day of the
month in which the related Delivery Date occurs or such other date specified by
the Registered Holder.

      "Delivery Date": The date on which MLCC delivers or causes to be delivered
to the Custodian the Mortgage Loans listed on the related Mortgage Loan
Schedule.

      "Exception Report": The Exception Report prepared by the Custodian as part
of the Initial Custody Receipt and as updated thereafter.

      "Final Custody Receipt": A final custody receipt as to each Mortgage Loan,
which final custody receipt is delivered to MLCC, or its successor in interest
or assigns, by the Custodian in the form annexed hereto as Exhibit Two.

      "First Mortgage Loan": A Mortgage Loan that is secured by a first lien on
the Mortgaged Property securing the related Mortgage Note.

      "Gross Margin": With respect to each adjustable rate Mortgage Loan, the
fixed number of basis points set forth in the Mortgage Loan Schedule that is
added to the Index on each Interest Rate Adjustment Date in accordance with the
terms of the related Mortgage Note to determine the Mortgage Interest Rate for
such Mortgage Loan, subject to any applicable Periodic Rate Cap or Lifetime Rate
Cap.

      "Index": With respect to each adjustable rate Mortgage Loan, a rate per
annum to which the Gross Margin is added on each Interest Rate Adjustment Date
to determine the new Mortgage Interest Rate for such Mortgage Loan.

      "Initial Custody Receipt": An initial custody receipt as to each Mortgage
Loan, which initial custody receipt is delivered to MLCC, or its successor in
interest or assigns, by the Custodian in the form annexed hereto as Exhibit One.

      "Interest Rate Adjustment Date": With respect to each adjustable rate
Mortgage Loan, the date on which the Mortgage Interest Rate is adjusted in
accordance with the terms of the related Mortgage Note.

      "Lifetime Rate Cap": With respect to each adjustable rate Mortgage Loan,
the maximum Mortgage Interest Rate that may be borne thereby, as set forth in
the related Mortgage Note.

      "Loan-to-Value Ratio": With respect to any First Mortgage Loan, as of any
date of determination, the ratio on such date of the outstanding principal
balance of such Mortgage Loan to the Appraised Value of the related Mortgaged
Property.

      "Mortgage": The mortgage, deed of trust or other instrument creating a
first or second lien on real property securing the Mortgage Note.

                                        2
<PAGE>

      "Mortgage Interest Rate": The annual rate at which interest accrues on any
Mortgage Loan and with respect to any adjustable rate Mortgage Loan, as such
annual rate may be adjusted on any Interest Rate Adjustment Date and subject to
the limitations on such interest rate imposed by any Lifetime Rate Cap or any
Periodic Rate Cap.

      "Mortgage Loan": An individual Mortgage Loan, including but not limited to
all documents included in the Custodian's Mortgage File, monthly payments,
principal prepayments, proceeds from REO dispositions and any and all rights,
benefits, proceeds and obligations arising therefrom or in connection therewith,
and which is the subject of this Agreement.

      "Mortgage Loan Schedule": The list of Mortgage Loans purchased by MLCC
from a third party seller from time to time that are subject to this Agreement
which list shall set forth the following information with respect to each
Mortgage Loan:

                  (i) the loan number;

                  (ii) the Mortgagor's name, social security number, and FICO
            score;

                  (iii) the street address of the Mortgaged Property, including
            city, state and zip code, if available;

                  (iv) the Mortgage Interest Rate at origination and, in the
            case of an adjustable rate Mortgage Loan, the Mortgage Interest Rate
            in effect as of the related Cut-off Date, which rate may vary from
            that reflected in the Mortgage and Note;

                  (v) for each adjustable rate Mortgage Loan, the first Interest
            Rate Adjustment Date;

                  (vi) for each adjustable rate Mortgage Loan, the Gross Margin;

                  (vii) for each adjustable rate Mortgage Loan, the Lifetime
            Rate Cap, if applicable;

                  (viii) for each adjustable rate Mortgage Loan, the Periodic
            Rate Cap, if applicable;

                  (ix) the original term to maturity and remaining term to
                  maturity;

                  (x) the original principal balance;

                  (xi) the first payment due date;

                  (xii) the maturity date;

                  (xiii) the monthly payment in effect as of the related Cut-of
            Date;

                  (xiv) the principal balance as of the related Cut-off Date;

                  (xv) as to any First Mortgage Loan the Loan-to-Value Ratio at
            origination;

                                        3
<PAGE>

                  (xvi) a code indicating whether the Mortgaged Property is
            occupied by the Mortgagor;

                  (xvii) a code indicating the type of Residential Dwelling;

                  (xviii) a code indicating the purpose of the Mortgage Loan;

                  (xix) a code indicating the Mortgage Loan documentation type
            (i.e. limited documentation, full documentation, easy documentation,
            etc.); and

                  (xx) for each adjustable rate Mortgage Loan, a code indicating
            the type of Index.

      "Mortgage Note": The note evidencing the indebtedness of a Mortgagor
secured by a Mortgage.

      "Mortgaged Property": The underlying real property securing repayment of a
Mortgage Note, consisting of a fee simple estate in a single parcel of real
property improved by a Residential Dwelling.

      "Mortgagor": The obligor on a Mortgage Note, the owner of the Mortgaged
Property and the grantor or mortgagor named in the related Mortgage and such
grantor's or mortgagor's successor in title to the Mortgaged Property.

      "Opinion of Counsel": A document signed by an attorney, explaining the
attorney's understanding of the law as applicable to a state of facts submitted
for the purpose of an opinion.

      "Periodic Rate Cap": With respect to each adjustable rate Mortgage Loan as
to which the related Mortgage Loan Schedule indicates the existence of a
Periodic Rate Cap, the provision of the related Mortgage Note that provides for
a maximum amount by which the Mortgage Interest Rate may increase (or, if so
indicated on such Mortgage Loan Schedule, decrease) on an Interest Rate
Adjustment Date above (or below) the Mortgage Interest Rate in effect
immediately prior to such Interest Rate Adjustment Date.

      "Pledge Agreement": Any Mortgage 100 Pledge Agreement, Parent Power
Guaranty and Security Agreement for Securities Account, or Parent Power Guaranty
Agreement for Real Estate related to an Additional Collateral Mortgage Loan.

      "Registered Holder": MLCC, its successors in interest or assigns, in whole
or in part, as the case may be.

      "Residential Dwelling": Any one of the following: (i) a detached
one-family dwelling, (ii) a detached two- to four-family dwelling, (iii) a
one-family dwelling unit in a Fannie Mae-eligible condominium project, or (iv) a
detached one-family dwelling in a planned unit development, none of which is a
co-operative.

      "Second Mortgage Loan": A Mortgage Loan that is secured by a second lien
on the Mortgaged Property securing the related Mortgage Note.

                                        4
<PAGE>

      2. Delivery of Mortgage Loan Schedule and Custodian's Mortgage File.

      MLCC may, from time to time, deliver or cause to be delivered to the
Custodian a Mortgage Loan Schedule and the following documents for each Mortgage
Loan listed on such Mortgage Loan Schedule, to be held by the Custodian for the
benefit of the Registered Holder, as the owner thereof:

                  (a) The original Mortgage Note endorsed, "Pay to the order of
___________, without recourse" and signed in the name of the name of last
endorsee, by an authorized officer of the last endorsee. If the Mortgage Loan
was acquired by the last endorsee in a merger or other type of acquisition, the
endorsement must be by "[name of last endorsee], successor [by merger to or in
interest to, as applicable] [name of predecessor]"; and if the Mortgage Loan was
acquired or originated by the last endorsee while doing business under another
name, the endorsement must be by "[name of last endorsee], successor in interest
to [previous name]." The Mortgage Note shall include all intervening
endorsements showing a complete chain of title from the originator to the last
endorsee.

                  (b) The original recorded Mortgage, with evidence of recording
thereon, or, if the original Mortgage has not yet been returned from the
recording office, a copy of the original Mortgage certified by the previous
owner to be a true copy of the original of the Mortgage which has been delivered
for recording in the appropriate recording office of the jurisdiction in which
the Mortgaged Property is located.

                  (c) The original Assignment of each Mortgage, executed in
blank by either MLCC or its Servicer. If the Mortgage Loan was acquired by the
last endorsee in a merger or other type of acquisition, the assignment must be
by "[name of last assignee], successor [by merger to or in interest to, as
applicable] [name of predecessor]"; and if the Mortgage Loan was acquired or
originated by the last endorsee while doing business under another name, the
assignment must be by "[name of last assignee], successor in interest to
[previous name]."

                  (d) The original policy of title insurance (or a preliminary
title report 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 by the Seller to be a true copy of the original of the assignment
which has been delivered for recording in the appropriate recording office of
the jurisdiction in which the Mortgaged Property is located.

                  (f) With respect to a Mortgage Loan that, according to the
Mortgage Loan Schedule is covered by a primary mortgage insurance policy, the
original or a copy of primary mortgage insurance certificate, if any.

                  (g) If indicated on the Mortgage Loan Schedule, originals of
all assumption and modification agreements, if any, with originals or copies of
the underlying instruments being modified.

                  (h) With respect to each Additional Collateral Mortgage Loan,

                                        5
<PAGE>

                  1. Copy of the related Mortgage 100 Pledge Agreement for
Securities Account or the Parent Power Guaranty and Security Agreement for
Securities Account or the Parent Power Guaranty Agreement for Real Estate, as
the case may be;

                  2. copy of the UCC-1 (applicable for South Carolina and Rhode
Island only);

                  3. an original form UCC-3, if applicable;

                  4. For loans originated by a correspondent lender, an original
assignment of security interest of the related Mortgage 100 Pledge Agreement or
Parent Power Agreement, as the case may be.

            (i) With respect to each Cooperative Loan:

                  1. the original proprietary lease;

                  2. the original recognition agreement;

                  3. the original security agreement;

                  4. the original or copy of the assignment of proprietary
lease;

                  5. the original cooperative stock certificate and stock power
executed by borrower in blank;

                  6. the original UCC-1 Financing Statements; and

                  7. the original UCC-3 Financing Statements.

            (j) Power of Attorney, if applicable.

      From time to time, MLCC shall forward or cause to be forwarded to the
Custodian additional documents, original or otherwise, evidencing an assumption
or modification of a Mortgage Loan which documents shall become part of the
Custodian's Mortgage File.

      3. Obligations of the Custodian.

            (a) With respect to each Custodian's Mortgage File, the Custodian is
exclusively the custodian for the Registered Holder from and after the related
Delivery Date. The Custodian shall hold all documents constituting the
Custodian's Mortgage File received by it for the exclusive use and benefit of
the Registered Holder, and shall make disposition thereof only in accordance
with this Agreement and the instructions furnished by the Registered Holder. The
Custodian shall segregate and maintain continuous custody of all documents
constituting the Custodian's Mortgage File received by it in secure and
fire-resistant facilities in accordance with customary standards for such
custody. The Custodian represents and warrants that it will verify the receipt
of required documents, the accuracy of certain information, and indicate
discrepancies pursuant to the custody receipt requirements herein. The Custodian
makes no representations or warranties as to, and shall not be responsible to,
verify: (i) the validity, legality, enforceability, sufficiency, recordability,
due authorization or genuineness of any of the documents contained in

                                        6
<PAGE>

each Custodian's Mortgage File or any of the Mortgage Loans or (ii) the
collectibility, insurability, effectiveness or suitability of any such Mortgage
Loan. No provision of this Agreement shall be construed to impose on the
Custodian any obligation of a third party seller under this Agreement or a
Purchase Agreement under any circumstances.

                  (b) The Custodian shall, at its own expense, maintain at all
times during the existence of this Agreement and keep in full force and effect a
fidelity bond, errors and omissions insurance, theft and documents insurance and
forgery insurance in amounts and with standard coverage as is customary for
insurance typically maintained by institutions that act as custodians. The
minimum coverage under any such bond and insurance policies shall be at least
equal to the corresponding amounts required by the Government National Mortgage
Association, Fannie Mae or Freddie Mac either of the Custodian or in their
respective Seller/Servicing Guides. A certificate of an authorized officer for
the Custodian shall be furnished to the Registered Holder upon request as
evidence of its compliance with any such requirement.

      4. Custody Receipts.

                  (a) Initial Custody Receipt. The Custodian shall review the
documents delivered to it on each Delivery Date and shall deliver to MLCC as
initial Registered Holder within two (2) Business Days following the Delivery
Date, or within a mutually agreed upon time between the Bank and the Custodian,
but prior to the Closing Date, an Initial Custody Receipt with respect to the
Mortgage Loans, in which the Custodian shall certify that such Mortgage Loans
are held for MLCC (as Registered Holder) and that, as to each Mortgage Loan
listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full
or any Mortgage Loan specifically identified in such certification as not
covered by such certification), (a) all documents described in Paragraphs 2(a)
through 2(e) and to the extent provided in the Custodian's Mortgage Files
Paragraphs 2(f) through 2(j), if applicable, of this Agreement are in its
possession and (b) each Mortgage Note has been endorsed and each Assignment has
been executed as provided in Paragraph 2 hereof. If the Custodian determines
from such verification that any discrepancy or deficiency exists with respect to
a Custodian's Mortgage File, the Custodian shall note such discrepancy on the
schedule of exceptions attached to the Initial Custody Receipt as Schedule B
thereto (the "Exception Report").

      The Custodian shall also note on the Exception Report, with respect to
each Mortgage Loan, whether a certified copy of the related Mortgage was
delivered to the Custodian in lieu of the original of such Mortgage, whether a
certified copy of an intervening assignment of the related Mortgage was
delivered to the Custodian in lieu of the original of such assignment, and
whether a preliminary title report with respect to such Mortgage Loan was
delivered to the Custodian in lieu of the original policy of title insurance.

      On the first Business Day of each calendar month following delivery of the
Initial Custody Receipt until the month in which the Final Custody Receipt is to
be delivered pursuant to Subsection (b) below, the Custodian shall deliver to
the Registered Holder of the Initial Custody Receipt, an updated Exception
Report, revised to reflect any changes with respect to the status of the
exceptions noted for the related Mortgage Loans.

                  (b) Final Custody Receipt. Not later than sixty (60) days
following the date of each delivery of an Initial Custody Receipt, the Custodian
shall deliver to the Registered Holder of the Initial Custody Receipt the Final
Custody Receipt, with respect to the Mortgage Loans related to such Initial
Custody Receipt, in which the Custodian shall certify to the Registered Holder
that, as to each Mortgage Loan listed in the related Mortgage Loan

                                        7
<PAGE>

Schedule (other than any Mortgage Loan paid in full or any Mortgage Loan
specifically identified in such certification as not covered by such
certification), (a) all documents described in Paragraphs 2(a) through 2(e), and
to the extent provided in the Custodian's Mortgage Files Paragraphs 2(f) through
2(j), if applicable, of this Agreement are in its possession, (b) such documents
have been reviewed by it and appear regular on their face and relate to such
Mortgage Loan, (c) based on its examination and only as to the foregoing
documents, the information set forth in items (i), (ii), (iii) excluding the zip
code requirement, (iv), (vi), (vii), (viii) and (x) of the definition of
"Mortgage Loan Schedule" respecting such Mortgage Loan is correct, and which as
to items (iv), (vi), (viii), and (x) for adjustable rate Mortgage Loans may
reflect interest rates or amounts that as of the Cutoff Date vary from those
provided in the Mortgage Loan Documents and (d) each Mortgage Note has been
endorsed and each Assignment has been executed as provided in Paragraph 2
hereof. If the Custodian determines from such verification that any discrepancy
or deficiency exists with respect to a Custodian's Mortgage File, the Custodian
shall note such discrepancy on the Exception Report attached to the Final
Custody Receipt as Schedule B thereto. The Custodian shall also note on such
Exception Report, with respect to each Mortgage Loan, whether a certified copy
of the related Mortgage was delivered to the Custodian in lieu of the original
of such Mortgage, whether a certified copy of an intervening assignment of the
related Mortgage was delivered to the Custodian in lieu of the original of such
assignment, and whether a preliminary title report with respect to such Mortgage
Loan was delivered to the Custodian in lieu of the original policy of title
insurance. Except as specifically provided above, the Custodian shall be under
no duty to review, inspect or examine such documents to determine that any of
them are enforceable or appropriate for their prescribed purpose. Upon delivery
of the Final Custody Receipt to the Registered Holder of the Initial Custody
Receipt, the Initial Custody Receipt shall be of no further force or effect.

                  (c) Within five (5) days of receipt of written directions, in
the form attached hereto as Exhibit Six, from the Registered Holder with respect
to all or a portion of the Mortgage Loans owned by such Registered Holder, and
upon the prior tender by such Registered Holder of the applicable Initial and/or
Final Custody Receipt(s), as applicable, the Custodian shall deliver all or any
portion of the Custodian's Mortgage Files held by it to the Registered Holder,
or to such other party as the Registered Holder may direct, as provided in
Paragraph 19, at the place indicated in any such written direction from the
Registered Holder and shall deliver to the Registered Holder a new Initial or
Final Custody Receipt, as applicable, with respect to the Custodian's Mortgage
Files retained by the Custodian. The Registered Holder may require the Custodian
to complete the endorsements on any Mortgage Notes in its possession and to
complete the Assignment of Mortgages prepared by the Servicer in blank, within a
reasonable period of time. The cost of this shall be reimbursed by the
Registered Holder. A list of authorized signatures for such written directions
has been furnished to the Custodian by the Registered Holder pursuant to
Paragraph 20 hereof. Upon the Custodian's receipt of such written notification
from the Registered Holder that the Registered Holder has sold any or all of the
Mortgage Loans, which notification shall be accompanied by the Initial and/or
Final Custody Receipt(s), as applicable that relate to such Mortgage Loans, the
Custodian shall change its records to reflect that such purchaser is the owner
of such Mortgage Loans and shall immediately, upon the direction of such
Registered Holder, either deliver the related Custodian's Mortgage Files to such
purchaser at the expense of such purchaser or issue an Initial or Final Custody
Receipt in the name of such purchaser. Such purchaser, as a Registered Holder,
shall be required to simultaneously furnish to the Custodian a list of
authorized signatures for written directions pursuant to Paragraph 20 hereof.
The Custodian shall then deliver to the Registered Holder a new Initial and/or
Final Custody Receipt, as applicable reflecting all Mortgage Loans with respect
to which the Custodian still holds the related Custodian's Mortgage Files on
behalf of the Registered Holder. The Registered Holder and the Custodian agree
herein that any purchaser of any or all of

                                        8
<PAGE>

the Mortgage Loans shall succeed to the rights and obligations of the Registered
Holder under this Agreement with respect to such Mortgage Loans upon receipt of
the related Initial and/or Final Custody Receipt, as applicable subject to the
provisions of Paragraph 15 hereof.

      5. Fees and Expenses of the Custodian.

      It is understood that the Custodian will charge such fees for its services
under this Agreement as are set forth in a separate agreement between the
Custodian and MLCC, the payment of which, together with the Custodian's expenses
in connection herewith, shall be solely the obligation of the Registered Holder
with respect to the related Mortgage Loans.

      6. Removal of the Custodian.

      Any Registered Holder with respect to all or a portion of the Mortgage
Loans owned by such Registered Holder, with or without cause, may, upon thirty
(30) days' written notice to the Custodian, remove and discharge or any
successor Custodian thereafter appointed, as to such portion or all of the
Mortgage Loans the Custodian, from the performance of its duties under this
Agreement. In the event of any such removal, upon tender of the Custody Receipts
and satisfaction of any outstanding fees and expenses of the Custodian, the
Custodian shall promptly transfer to such Registered Holder or to a successor
Custodian appointed by such Registered Holder at the expense of such Registered
Holder, as directed by such Registered Holder in writing, all Custodian's
Mortgage Files related to the Mortgage Loans as to which the Custodian is being
terminated.

      7. Examination of the Custodian's Mortgage File.

      Upon reasonable prior written notice to the Custodian, but not less than
two (2) Business Day, any Registered Holder with respect to all or a portion of
the Mortgage Loans owned by such Registered Holder and its agents, accountants,
attorneys, auditors, prospective purchasers, and third-party contractors
authorized by such Registered Holder will be permitted, during normal business
hours, to examine the Custodian's Mortgage Files, documents, records and other
papers in the possession of or under the control of the Custodian relating to
any or all of the Mortgage Loans for which the Custodian holds the related
Custodian's Mortgage File for such Registered Holder at the expense of the
inspecting party.

      8. Counterparts.

      For the purpose of facilitating the execution of this Agreement as herein
provided and for other purposes, this Agreement may be executed simultaneously
in any number of counterparts, each of which counterparts shall be deemed to be
an original and all of which together shall constitute and be one and the same
instrument.

      9. Periodic Statements.

      Upon the request of any Registered Holder at any other time with at least
two (2) Business Days' notice to the Custodian, the Custodian shall provide to
the Registered Holder with respect to all or a portion of the Mortgage Loans
owned by such Registered Holder, a list of all of the Mortgage Loans for which
the Custodian holds a Custodian's Mortgage File pursuant to this Agreement. Such
list may be in the form of a copy of the Mortgage Loan Schedule with manual
deletions to denote specifically any Mortgage Loans paid off, liquidated or
repurchased or otherwise released by the Custodian since the date of this
Agreement.

                                        9
<PAGE>

      10. Governing Law.

      This Agreement shall be construed in accordance with the laws of the State
where MLCC is headquartered, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.

      11. Copies of Mortgage Documents.

      Upon the request of the Registered Holder with respect to all or a portion
of the Mortgage Loans owned by such Registered Holder, and at the cost and
expense of such party, the Custodian shall provide such Registered Holder with
copies or originals as provided in Section 21 hereof, of the Mortgage Notes,
Mortgages, Assignments and other documents to the extent that such documents are
part of the Custodian's Mortgage File relating to one or more of the Mortgage
Loans.

      12. No Adverse Interest of Custodian.

      By execution of this Agreement, the Custodian represents, warrants and
covenants that it currently does not hold, and during the existence of this
Agreement shall not hold, any adverse interest, by way of security or otherwise,
in any Mortgage Loan.

      13. Termination By Custodian.

      The Custodian may terminate its obligations under this Agreement upon at
least sixty (60) days' notice to the Registered Holder with respect to all or a
portion of the Mortgage Loans owned by such Registered Holder. The Custodian
shall then be responsible for all costs associated with such termination,
including costs associated with the transfer of the Custodial Files. If, in the
event of such termination, the Registered Holder shall appoint a successor
Custodian within such sixty day period, then upon such appointment and tender of
the related Custody Receipts, the Custodian shall promptly transfer to such
successor Custodian, as directed by the Registered Holder with respect to all or
a portion of the Mortgage Loans owned by such Registered Holder, all of the
Custodian's Mortgage Files being administered under this Agreement and shall
either complete the Assignments and endorse the Mortgage Notes as directed by
the Registered Holder or allow the Registered Holder or its agents or attorneys,
access to the Custodian's Mortgage Files for such purpose. Notwithstanding the
foregoing, if the Registered Holder fails to appoint a Custodian within such
sixty day period, the Custodian may petition any court of competent jurisdiction
for the appointment of a successor Custodian.

      14. Termination of Agreement.

      This Agreement shall terminate upon the earlier of (a) the final payment
or other liquidation (or advance with respect thereto) of the last Mortgage
Loan, (b) the disposition of all property acquired upon foreclosure or by deed
in lieu of foreclosure of the last Mortgage Loan, or (c) the delivery by the
Custodian of the last Custodian's Mortgage File pursuant to the direction of the
Registered Holder hereunder. In such event the Registered Holder with respect to
all or a portion of the Mortgage Loans owned by such Registered Holder shall so
notify the Custodian and tender all Custody Receipts, and thereafter all
documents remaining in the Custodian's Mortgage Files shall be forwarded to the
Registered Holder.

                                       10
<PAGE>

      15. Assignment of Agreement.

      The Registered Holder with respect to all or a portion of the Mortgage
Loans owned by such Registered Holder shall have the right to assign, in whole
or in part, its interests under this Agreement with respect to some or all of
the Mortgage Loans, and to designate any person or exercise any rights of the
Registered Holder hereunder, and such assignee or designee shall accede to the
rights and obligations hereunder of the Registered Holder with respect to such
Mortgage Loans. All references to the Registered Holder shall be deemed to
include its assignee or designee. In connection with any such assignment, the
Registered Holder with respect to all or a portion of the Mortgage Loans owned
by such Registered Holder may require that arrangements reasonably satisfactory
to it be made for the exchange of previously executed and outstanding Custody
Receipt(s) for a Custody Receipt representing such assignment. The Custodian may
not assign its interests or delegate its duties under this Agreement without the
prior written consent of the Registered Holder. In the event of any such
assignment or delegation, the Registered Holder shall not be responsible for any
fees of the successor Custodian in excess of the fees formerly paid by the
Registered Holder to the Custodian.

      16. Notice.

      All demands, notices and communications hereunder shall be in writing and
shall be sent to the other party at the address shown on the first page hereof,
or such other address as may hereafter be furnished to the other party by
written notice given to the other party hereto in a notice complying with the
terms and provisions of this Section 16 or on an Exhibit Six notice provided
pursuant to Section 4(c).

      Any such demand, notice or communication hereunder shall be deemed
conclusively to have been given if personally delivered at or mailed by
registered mail, postage prepaid, and return receipt requested or transmitted by
telex, telegraph or facsimile transmission and by a similar writing to the other
party at its address as described in Subclause (a).

      17. Indemnification.

            (a) Neither the Custodian nor any of its directors, officers, agents
or employees, shall be liable for any action taken or omitted to be taken by it
or them hereunder or in connection herewith in good faith and believed by it or
them to be within the purview of this Agreement, except for its or their own
negligence, lack of good faith or willful misconduct.

            (b) The Registered Holder and the Custodian agree to indemnify and
hold each other and their respective directors, officers, agents and employees
harmless against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever, including reasonable attorney's fees, that may be
imposed on, incurred by, or asserted against it or them in any action taken or
not taken by it or them hereunder. This indemnification shall include, but not
be limited to, the claims of third parties arising from or related to this
Agreement or the Mortgage Loans. This indemnification applies if such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses, disbursements, or claims were imposed on, incurred by or
asserted against the party seeking indemnification because of the breach of the
obligations, negligence, lack of good faith or willful misconduct of the other
party or any of its directors, officers, agents or employees. The foregoing
indemnification shall survive any termination of this Agreement and the
resignation or removal of the Custodian.

                                       11
<PAGE>

            (c) In the event that the Custodian fails to produce a Mortgage
Note, Assignment of Mortgage or any other document related to a Mortgage Loan
that was in its possession pursuant to Section 2 within four (4) Business Days
after required or requested by the Registered Holder or its Servicer (a
"Custodial Delivery Failure"), and provided that (i) Custodian previously
delivered to the Registered Holder an Initial Custody Receipt which did not list
such document as an exception; (ii) such document is not outstanding pursuant to
a request for release in the form annexed hereto as Exhibit Five; and (iii) such
document was held by the Custodian on behalf of the Registered Holder, then the
Custodian shall: (a) with respect to any missing Mortgage Note, promptly deliver
to the Registered Holder upon request, a Lost Note Affidavit in the form of
Exhibit Seven hereto and (b) with respect to any missing document related to
such Mortgage Loan, including but not limited to a missing Mortgage Note, (1)
indemnify the Registered Holder, and its successor in interest, in accordance
with the succeeding paragraph and, (2) obtain and maintain an insurance bond in
the name of the Registered Holder, and its successors in interest and assigns,
insuring against any losses associated with the loss of such document, in an
amount equal to the then outstanding principal balance of the related Mortgage
Loan or such lesser amount requested by the Registered Holder, at the Registered
Holder's sole option, at any time the long term obligations of the Custodian are
rated below the second highest rating category of Moody's Investors Service,
Inc. or Standard and Poor's Ratings Group, a division of McGraw-Hill, Inc.

            (d) The Custodian agrees to indemnify and hold the Registered
Holder, and its designees, harmless against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever, including reasonable
attorney's fees, that may be imposed on, incurred by, or asserted against it or
them in any way relating to or arising out of a Custodial Delivery Failure, as
defined herein, or the Custodian's negligence, lack of good faith or willful
misconduct. The forgoing indemnification shall survive any termination or
assignment of this Agreement.

      18. Reliance of Custodian.

      In the absence of bad faith on the part of the Custodian, the Custodian
may conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any request, instructions, certificate,
opinion or other document furnished to the Custodian, reasonably believed by
Custodian to be genuine and to have been signed or presented by the proper party
or parties and conforming to the requirements of this Agreement. No
representations, warranties, covenants or obligations of the Custodian shall be
implied with respect to this Agreement or the Custodian's services hereunder.

      19. Transmission of Custodian's Mortgage File.

      Written instructions as to the method of shipment and shipper(s) Custodian
is directed to utilize in connection with transmission of mortgage files and
loan documents in the performance of the Custodian's duties hereunder shall be
delivered by the Registered Holder (the "Requesting Party") with respect to all
or a portion of the Mortgage Loans owned by such Registered Holder to the
Custodian prior to any shipment of any mortgage files and loan documents
hereunder. The Registered Holder will arrange for the provision of such services
at its sole cost and expense (or, at Custodian's option, reimburse Custodian for
all costs and expenses incurred by Custodian consistent with such instructions)
and will maintain such insurance against loss or damage to mortgage files and
loan documents as the Requesting Party deems appropriate. Without limiting the
generality of the provisions of Paragraph 17 above, it is expressly agreed that
in no event shall the Custodian have any liability for any losses or damages to
any person, including, without

                                       12
<PAGE>

limitation, the Requesting Party, arising out of actions of the Custodian
consistent with instructions of the Requesting Party. In the absence of any
written instructions with respect to the transmission of the Custodian's
Mortgage Files, the parties hereby agree that the Custodian may utilize any
nationally recognized overnight courier service and shall be entitled to
reimbursement from the Registered Holder.

      20. Authorized Representative.

      Unless the Registered Holder shall have given the Custodian written notice
to the contrary, each individual designated as an authorized representative of
the Registered Holder with respect to all or a portion of the Mortgage Loans
owned by such Registered Holder, and the Custodian, respectively (an "Authorized
Representative"), is authorized to give and receive notices, requests and
instructions and to deliver certificates and documents in connection with this
Agreement on behalf of the Registered Holder with respect to all or a portion of
the Mortgage Loans owned by such Registered Holder, or the Custodian, as the
case may be, and the specimen signature for each such Authorized Representative
of MLCC as the initial Registered Holder and each such Authorized Representative
of the Custodian initially authorized hereunder is set forth on Exhibit Three
and Exhibit Four hereof, respectively. Any subsequent Registered Holder of the
Mortgage Loans shall provide the Custodian specimen signatures for each
Authorized Representative of such Registered Holder. From time to time, the
Registered Holder and the Custodian may, by delivering to the other party a
revised exhibit, change the information previously given pursuant to this
Paragraph, but each of the parties hereto shall be entitled to rely conclusively
on the then current exhibit until receipt of a superseding exhibit.

      21. Release of Custodian's File for Servicing.

      Upon written request by the Registered Holder or its Servicer with respect
to all or a portion of the Mortgage Loans owned by such Registered Holder,
pursuant to the form attached hereto as Exhibit Five, the Custodian shall use
its best efforts to promptly, and in no event no later than two (2) Business
Days after receipt of such written request completed in accordance with this
Agreement, release to the Registered Holder or its Servicer for the servicing or
foreclosure of any of the Mortgage Loans the related Custodian's Mortgage File.
All Custodian's Mortgage Files so released to the Registered Holder's Servicer
shall be held by such Servicer in trust for the benefit of the Registered Holder
in accordance with the provisions of a servicing agreement entered into between
the Registered Holder and such Servicer. The Registered Holder or its Servicer
shall return to the Custodian the Custodian's Mortgage File that has been
released to the Registered Holder or its Servicer, when the Registered Holder's
or its Servicer's need therefor in connection with such servicing or foreclosure
no longer exists, unless the Mortgage Loan shall be liquidated, in which case,
upon receipt of a certification to this effect from the Registered Holder or its
Servicer to the Custodian in the form annexed hereto as Exhibit Five, and the
Custodian shall thereupon reflect any such liquidation on the list of Mortgage
Loans maintained by it pursuant to Paragraph 9 of this Agreement.

      Custodian shall not release more than 5% of the number of Mortgage Loans
at any time without additional written consent from Registered Holder. This
limitation shall not apply to the release of Custodial Files upon payment in
full.

      22. Release of Custodian's Mortgage File for Payment.

      Upon the repurchase or substitution of any Mortgage Loan pursuant to a
Purchase Agreement or the payment in full of any Mortgage Loan, which shall be
evidenced by the

                                       13
<PAGE>

Custodian's receipt of a request for release, receipt and certification in the
form annexed hereto as Exhibit Five (which certification shall include a
statement to the effect that all amounts received in connection with such
payment or repurchase have been credited to the account of the Registered
Holder), the Custodian shall use its best efforts promptly and in no event later
than two (2) Business Days after receipt of the written request therefor
completed in accordance with this Agreement, release the related Custodian's
Mortgage File to the Registered Holder or, at the request of the Registered
Holder, its Servicer, such repurchase thereupon to be noted on the list
maintained by the Custodian pursuant to Paragraph 9 of this Agreement.

      23. Reproduction of Documents.

      This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, and (b) certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
microcard, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.

      24. Severability.

      If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, the invalidity
of any such covenant, agreement, provision or term of this Agreement shall in no
way affect the validity or enforceability of the other provisions of this
Agreement; provided, however, that if the invalidity of any covenant, agreement
or provision shall deprive any party of the economic benefit intended to be
conferred by this Agreement, the parties shall negotiate in good faith to
develop a structure the economic effect of which is as nearly as possible the
same as the economic effect of this Agreement.

      25. Amendment; Exhibits.

      This Agreement may be amended from time to time by the parties hereto only
by a written agreement signed by the parties hereto. The exhibits to this
Agreement are hereby incorporated and made a part hereof and are an integral
part of this Agreement.

      26. Captions.

      Section headings are used herein for convenience only and do not limit or
expand the scope of the provisions herein.

      28. Representations and Warranties of Custodian.

      Custodian represents and warrants to and covenants with MLCC as follows:

            (a) Custodian is a corporation duly incorporated, validly existing
and in good standing under the laws of Minnesota.

            (b) Custodian has full corporate power to execute, deliver and
perform the obligations under this Agreement. MLCC may rely on the actions of
Custodian

                                       14
<PAGE>

without further inquiry. No additional consent, authorization, or regulatory
filing is required in order for Custodian to legally perform its obligations.

            (c) This agreement constitutes a legal, valid and binding obligation
 Custodian, enforceable against Custodian in accordance with the terms herein
except as limited by bankruptcy, insolvency, liquidation or other similar laws
affecting generally the enforcement of creditor's rights.

                                       15
<PAGE>

      IN WITNESS WHEREOF, the Custodian and MLCC have caused this Agreement to
be executed as of the date and year first written above.

                                        WELLS FARGO BANK MINNESOTA, N.A.,
                                        Custodian

                                        By:_____________________________________
                                        Name:___________________________________
                                        Title:__________________________________

                                        MERRILL LYNCH CREDIT CORPORATION
                                        ("MLCC")

                                        By:_____________________________________
                                        Name:___________________________________
                                        Title:__________________________________

                                       16
<PAGE>

                                    EXHIBIT P

                       AMENDMENT NO. 1 CUSTODIAL AGREEMENT

      Amendment No. 1, dated as of January 16, 2002 (this "Amendment"), between
Merrill Lynch Credit Corporation ("MLCC") and Wells Fargo Bank Minnesota, N.A.
(the "Custodian"), to the Custodial Agreement, dated as of December 15, 2000
(the "Custodial Agreement").

                                    RECITALS

      WHEREAS, MLCC may from time to time, purchase certain Mortgage Loans from
third party sellers pursuant to the terms and condition of certain mortgage loan
purchase agreements entered into between MLCC and such parties (each, a
"Purchase Agreement");

      WHEREAS, pursuant to the Custodial Agreement, the Custodian has agreed to
take possession of mortgage notes evidencing Mortgage Loans and certain other
Mortgage Loan Documents delivered from time to time pursuant to the Custodial
Agreement;

      WHEREAS, MLCC and the Custodian have agreed, subject to the terms and
conditions of this Amendment, that the Custodial Agreement be amended to reflect
the replacement of individual certifications with a Master Trust Receipt; and

      Accordingly, MLCC and Custodian hereby agree, in consideration of the
mutual promises and mutual obligations set forth herein, that the Custodial
Agreement is hereby amended as follows:

            SECTION 1. Definitions:

            (a) Section 1 of the Custodial Agreement is hereby amended by
deleting the definitions of "Custody Receipt", "Final Custody Receipt" and
"Initial Custody Receipt."

            (b) Section 1 of the Custodial Agreement is hereby amended by
inserting the following definition into its proper alphabetical order:

            "Trust Receipt": A trust receipt in the form annexed hereto as
            Exhibit One delivered to MLCC by the Custodian covering all of the
            Mortgage Loans subject to this Custodial Agreement from time to
            time, as reflected in the Mortgage Loan Schedule and Exception
            Report attached thereto in accordance with Section 4(b).

            (c) Section 1 of the Custodial Agreement is hereby amended by
deleting the definition of " Exception Report" and replacing it in its entirety
as follows:

            "Exception Report": The Exception Report prepared by the Custodian
            as an annex to the Trust Receipt which lists all exceptions with
            respect to the Mortgage Loan Schedule and attached thereto as
            Schedule B, as updated from time to time in accordance with Section
            4 hereof.

                                        1
<PAGE>

            SECTION 2. Trust Receipt. Section 4 is hereby deleted in its
entirety and replaced in its entirety with the following:

            (a) The Custodian shall review the documents delivered to it on each
Delivery Date and shall deliver to Registered Holder within the time frames
outlined in exhibit B to this amendment, but prior to Closing Date, a Mortgage
Loan Schedule and Exception Report with respect to the Mortgage Loans, and the
delivery of each Mortgage Loan Schedule and Exception Report by the Custodian
hereunder shall be the Custodian's certification that such Mortgage Loans are
held for MLCC (as Registered Holder) and that, as to each Mortgage Loan listed
in the related Mortgage Loan Schedule (other than any Mortgage Loan paid in full
or any Mortgage Loan specifically identified in such certification as not
covered by the Exception Report), (a) all documents described in Paragraphs 2(a)
through 2(e) and to the extent provided in the Custodian's Mortgage Files
Paragraphs 2(f) through 2(j), if applicable, of this Agreement are in its
possession, (b) such documents have reviewed by it and appear regular on their
face and relate to such Mortgage Loan, (c) based on its examination and only as
to the foregoing documents, the information set forth in terms (i), (ii), (iii)
excluding the zip code requirement, (iv), (vi), (vii), (viii) and (x) of the
definition of "Mortgage Loan Schedule" respecting such Mortgage Loan is correct,
and which as to items (iv) (vi), (viii) and (x) for adjustable rate Mortgage
Loan Documents and (d) each Mortgage Note has been endorsed and each Assignment
has been executed as provided in Paragraph 2 hereof. The Custodian shall
determine whether any discrepancy or deficiency exists with respect to a
Custodian's Mortgage File and shall note such discrepancy on the Exception
Report. The Custodian shall also note on such Exception Report, with respect to
each Mortgage Loan, whether a certified copy of the related Mortgage was
delivered to the Custodian in lieu of the original of such Mortgage, whether a
certified copy of an intervening assignment of the related Mortgage was
delivered to the Custodian in lieu of the original of such assignment, and
whether a preliminary title report with respect to such Mortgage Loan was
delivered to the Custodian in lieu of the original policy of title insurance.
Except as specifically provided above, the Custodian shall be under no duty to
review, inspect or examine such documents to determine that any of them are
enforceable or appropriate for their prescribed purpose.

            (b) On the date of this Amendment, the Custodian shall deliver to
MLCC, a Trust Receipt with a Mortgage Loan Schedule and Exception Report
attached thereto reflecting all Mortgage Loans subject to the Custodial
Agreement as of such date.

            (c) Each Mortgage Loan Schedule and Exception Report delivered by
the Custodian to MLCC shall supersede and cancel the Mortgage Loan Schedule and
Exception Report previously delivered by the Custodian to MLCC hereunder, and
shall replace the then existing Mortgage Loan Schedule and Exception Report to
be attached to the Trust Receipt. Notwithstanding anything to the contrary set
forth herein, in the event that the Mortgage Loan Schedule and Exception Report
attached to the Trust Receipt is different from the most recently delivered
Mortgage Loan Schedule and Exception Report, then the most recently delivered
Mortgage Loan Schedule and Exception Report shall control and be binding upon
the parties hereto.

            (d) The Custodian shall deliver to MLCC, electronically a Mortgage
Loan Schedule and Exception Report reflecting any additional Mortgage Loans
received and reviewed in accordance with the procedures set forth in Section
2(a) hereof.

            (e) Within five (5) days of receipt of written directions, in the
form attached hereto as Exhibit Six, from the Registered Holder with respect to
all or a portion of the Mortgage

                                        2
<PAGE>

Loans owned by such Registered Holder, the Custodian shall deliver all or any
portion of the Custodian's Mortgage Files held by it to Registered Holder, or to
such other party as the Registered Party may direct, as provided in Paragraph
19, at the place indicated in any such written direction from the Registered
Holder and shall deliver to the Registered Holder a new Mortgage Loan Schedule
and Exception Report, with respect to the Custodian's Mortgage Files retained by
the Custodian. The Registered Holder may require the Custodian to complete the
endorsements on any Mortgage Notes in its possession and to complete the
Assignment of Mortgages prepared by the Servicer in blank, within a reasonable
period of time. The cost of this shall be reimbursed by the Registered Holder. A
list of authorized signatures for such written directions has been furnished to
the Custodian by the Registered Holder pursuant to Paragraph 20 hereof. Upon the
Custodian's receipt of such written notification from the Registered Holder that
the Registered Holder has sold any or all of the Mortgage Loans, which
notification shall be accompanied by a Mortgage Loan Schedule identifying such
Mortgage Loans, the Custodian shall change its records to reflect that such
purchaser is the owner of such Mortgage Loans and shall immediately, upon the
direction of such Registered Holder, either deliver the related Custodian's
Mortgage Files to such purchaser at the expense of such purchaser or issue a
Mortgage Loan Schedule and Exception Report in the name of such purchaser. Such
purchaser, as a Registered Holder, shall be required to simultaneously furnish
to the Custodian a list of authorized signatures for written directions pursuant
to Paragraph 20 hereof. The Custodian shall then deliver to the Registered
Holder a new Mortgage Loan Schedule and Exception Report, reflecting all
Mortgage Loans with respect to which the Custodian still holds the related
Custodian's Mortgage Files on behalf of the Registered Holder. The Registered
Holder and the Custodian agree herein that any purchaser of any or all of the
Mortgage Loans shall succeed to the rights and obligations of the Registered
Holder under this Agreement with respect to such Mortgage Loans upon receipt of
its own Trust Receipt and Mortgage Loan Schedule and Exception Report, as
further specified in Paragraph 15 hereof.

            SECTION 3. Termination of Agreement. Section 14 of the Custodial
Agreement is hereby amended by deleting "Custody Receipts" from the sixth line
of the paragraph and replacing it with "Mortgage Loan Schedule and Exception
Report."

            SECTION 4. Assignment of Agreement. Section 15 of the Custodial
Agreement is hereby deleted in its entirety and replaced in its entirety with
the following:

                  "The Registered Holder with respect to all or a portion of the
Mortgage Loans owned by such Registered Holder shall have the right to assign,
in whole or in part, its interests under this Agreement with respect to some or
all of the Mortgage Loans, and to designate any person (such person, an
"Assignee") or exercise any rights of the Registered Holder hereunder, and such
assignee or designee shall accede to the rights and obligations hereunder of the
Registered Holder with respect to such Mortgage Loans. All references to the
Registered Holder shall be deemed to include its assignee or designee. In
connection with any such assignment, the Registered Holder with respect to all
or a portion of the Mortgage Loans owned by such Registered Holder, the
Custodian shall issue (a) a Trust Receipt in the form of Exhibit One hereto with
a Mortgage Loan Schedule and Exception Report with respect to the Mortgage Loans
subject to such assignment to the Assignee and (b) an updated Mortgage Loan
Schedule and Exception Report to the assigning Registered Holder with respect to
the Mortgage Loans which the Custodian holds for the Registered Holder. The
Custodian may not assign its interest or delegate its duties under this
Agreement without the prior written consent of the Registered Holder. In the
event of any such assignment or delegation, the Registered Holder shall not be

                                        3
<PAGE>

responsible for any fees of the successor Custodian in excess of the fees
formerly paid by the Registered Holder to the Custodian."

            SECTION 5. Indemnification. Section 17 of the Custodial Agreement is
hereby amended by deleting "an Initial Custody Receipt" from the fifth line of
subsection (c) and replacing it with "a Mortgage Loan Schedule and Exception
Report."

            SECTION 6. Exhibits. The Exhibits of the Custodial Agreement are
hereby amended by deleting "Exhibit One" and "Exhibit Two" and adding The Form
of Trust Receipt attached as Exhibit A to this Amendment as Exhibit One to the
Custodial Agreement.

            SECTION 7. Delivered Documents. On the date hereof, MLCC shall have
received the following documents, each of which shall be satisfactory to the
MLCC in form and substance:

            (a) Amendment. This Amendment No. 1, executed and delivered by a
duly authorized officer of MLCC and the Custodian; and

            (b) Other Documents. Such other documents as the Purchaser or
counsel to the Purchaser may reasonably request.

            SECTION 8. Limited Effect. Except as expressly amended and modified
by this Amendment, the Custodial Agreement shall continue to be, and shall
remain, in full force and effect in accordance with its terms.

            SECTION 9. Counterparts. This Amendment may be executed by each of
the parties hereto on any number of separate counterparts, each of which shall
be an original and all of which taken together shall constitute one and the same
instrument.

            SECTION 10. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

                            [SIGNATURE PAGE FOLLOWS]

                                        4
<PAGE>

      IN WITNESS WHEREOF, the parties have caused their names to be signed
hereto by their respective officers thereunto duly authorized as of the day and
year first above written.

                                   WELLS FARGO BANK MINNESOTA, N.A.,
                                   ("CUSTODIAN")

                                   By:_________________________________________
                                   Name: Sarah J. Kerr
                                   Title: Assistant Vice President

                                   MERRILL LYNCH CREDIT CORPORATION ("MLCC")

                                   By:__________________________________________
                                   Name:________________________________________
                                   Title:_______________________________________

                                        5
<PAGE>

                                    EXHIBIT Q

                         OFFICER'S CERTIFICATE - 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 August 1,
      2004 among Merrill Lynch Mortgage Investors, Inc., as depositor (the
      "Depositor"), Cendant Mortgage Corporation, as servicer (the "Servicer")
      and Wells Fargo Bank, N.A., as trustee (the "Trustee") - Merrill Lynch
      Mortgage Investors Trust Series MLCC 2004-D Mortgage Loan Pass-Through
      Certificates

      I, [identify the certifying individual], a [title] of the Trustee hereby
certify to the Depositor, and its officers, directors and affiliates, and with
the knowledge and intent that they will rely upon this certification, that:

      1.    I have reviewed the Monthly Statements delivered pursuant to Section
            4.02 the Agreement since the last Officer's Certificate executed
            pursuant to Section 6.20 of the Agreement [or in the case of the
            first certification, since the Cut-off Date] (the "Trustee
            Information").

      2.    Based on my knowledge, the information in the Monthly Statements ,
            taken as a whole, does not contain any untrue statement of a
            material fact or omit to state a material fact necessary to make the
            statements made, in light of the circumstances under which such
            statements were made, not misleading as of the date hereof;

      3.    Based on my knowledge, the Monthly Statements required to be
            prepared by the Trustee under the Agreement has been prepared and
            provided in accordance with the Agreement; and

      4.    I am responsible for reviewing the activities performed by the
            Trustee under the Agreement and the Trustee has, as of the date
            hereof fulfilled its obligations under the Agreement and there are
            no significant deficiencies relating to the Trustee's compliance
            with this Agreement.

Date:                                   Wells Fargo Bank, N.A., as Trustee

                                        By: ____________________________________
                                        Name:___________________________________
                                        Title:__________________________________

                                        1
<PAGE>

                                    EXHIBIT R

                        OFFICER'S CERTIFICATE - SERVICER

Merrill Lynch Mortgage Investors, Inc.
250 Vesey Street
4 World Financial Center, 10th Floor
New York, New York 10080

Wells Fargo Bank, N.A.
Sixth Street and Marquette Avenue
Minneapolis, Minnesota 55479

Re:   Pooling and Servicing Agreement (the "Agreement") dated as of August 1,
      2004 among Merrill Lynch Mortgage Investors, Inc., as depositor (the
      "Depositor"), Cendant Mortgage Corporation, as servicer (the "Servicer")
      and Wells Fargo Bank, N.A., as trustee ( the "Trustee") - Merrill Lynch
      Mortgage Investors Trust Series MLCC 2004-D Mortgage Loan Pass-Through
      Certificates

      cc. I, [identify the certifying individual], a [title] of the Servicer
hereby certify to the Trustee and the Depositor, and their respective officers,
directors and affiliates, and with the knowledge and intent that they will rely
upon this certification, that:

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

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

      3. Based on my knowledge, the Servicing Information required to be
provided to the Trustee by the Servicer under the Agreement has been provided to
the Trustee;

      4. I am responsible for reviewing the activities performed by the Servicer
under the Agreement and based upon the review required under the 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 the Agreement; and

      5. I have disclosed to the Trustee and the Depositor all significant
deficiencies relating to the Servicer's compliance with the minimum servicing
standards in accordance with a review conducted in compliance with the Uniform
Single Attestation Program for Mortgage Bankers as set forth in the Agreement.

                                        1
<PAGE>

Date:                                   Cendant Mortgage Corporation,
                                        as Servicer

                                        By: ____________________________________
                                        Name: __________________________________
                                        Title: _________________________________

                                        2
<PAGE>

                                   SCHEDULE A
                             MORTGAGE LOAN SCHEDULE
                             [INTENTIONALLY OMITTED]

<PAGE>

                                   SCHEDULE B
                  MORTGAGE LOAN REPRESENTATIONS AND WARRANTIES
                                  OF THE SELLER

      The Seller hereby represents and warrants to the Depositor as to each
Mortgage Loan, as of the Closing Date as follows:

            (a) The information set forth in the Mortgage Loan Schedule is true
and correct in all material respects as of the Cut-off Date;

            (b) As of the related Closing Date, the Mortgage Loan is not
delinquent in payment more than 30 days and the Mortgage Loan has not been
dishonored; there are no material defaults under the terms of the Mortgage Loan;
the Seller has not advanced funds, or induced, solicited or knowingly received
any advance of funds from a party other than the owner of the Mortgaged Property
subject to the Mortgage, directly or indirectly, for the payment of any amount
required by the Mortgage Loan;

            (c) To the best of the Seller's knowledge, with respect to those
Mortgage Loans as to which the Mortgagors are required to deposit funds into an
escrow account for payment of taxes, assessments, insurance premiums and similar
items as they become due, there are no delinquent taxes, ground rents, water
charges, sewer rents, assessments or other outstanding charges which constitute
a lien on the related Mortgaged Property, and all escrow deposits have been
collected, are under the control of the Servicer, and have been applied to the
payment of such items in a timely fashion, in accordance with such Mortgage. No
escrow deposits or escrow payments or other charges or payments due the Servicer
have been capitalized under the related Mortgage or Mortgage Note. With respect
to those Mortgage Loans for which escrow deposits are not required, to the best
of the Seller's knowledge, there are no delinquent taxes or other outstanding
charges affecting the related Mortgaged Property which constitute a lien on the
related Mortgaged Property;

            (d) The terms of the Mortgage Note and the Mortgage have not been
impaired, waived, altered or modified in any respect, except by written
instruments contained in the Mortgage File, approved, if necessary, by the
insurer under any Primary Mortgage Insurance Policy and recorded in all places
necessary to maintain the first priority of the lien, the substance of which
waiver, alteration or modification is reflected on the Mortgage Loan Schedule.
No Mortgagor has been released, in whole or in part, except in connection with
an assumption agreement which assumption agreement is part of the Mortgage File
and the terms of which are reflected in the Mortgage Loan Schedule;

            (e) Neither the Mortgage Note nor the Mortgage is subject to any
right of rescission, set-off, counterclaim or defense, including the defense of
usury, nor will the operation of any of the terms of the Mortgage Note and the
Mortgage, or the exercise of any right thereunder, render the Mortgage
unenforceable, in whole or in part, or subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury and to the best
of the Seller's knowledge, no such right of rescission, set-off, counterclaim or
defense has been asserted by any Person with respect thereto;

            (f) All buildings upon the Mortgaged Property are required to be
insured by a generally acceptable insurer against loss by fire, hazards of
extended coverage and such other

                                   -i-
<PAGE>

hazards as are customarily included in extended coverage in the area where the
Mortgaged Property is located, pursuant to standard hazard insurance policies in
an amount which is equal to the lesser of (A) the replacement cost of the
improvements securing such Mortgage Loan or (B) the principal balance owing on
such Mortgage Loan. To the best knowledge of the Seller, all such standard
hazard policies are in effect. On the date of origination, such standard hazard
policies contained a standard mortgagee clause naming the Seller or the
originator of the Mortgage Loan and their respective successors in interest as
mortgagee and, to the best knowledge of the Seller, such clause is still in
effect and, to the best of the Seller's knowledge, all premiums due thereon have
been paid. If the Mortgaged Property is located in an area identified by the
Federal Emergency Management Agency as having special flood hazards under the
National Flood Insurance Act of 1994, as amended, such Mortgaged Property is
covered by flood insurance in the amount required under the National Flood
Insurance Act of 1994. The Mortgage obligates the Mortgagor thereunder to
maintain all such insurance at Mortgagor's cost and expense, and on the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to maintain
such insurance at Mortgagor's cost and expense and to seek reimbursement
therefor from the Mortgagor;

            (g) To the best of the Seller's knowledge, at the time of
origination of such Mortgage Loan and thereafter, all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity or disclosure laws required to be complied with by the
Seller as the originator of the Mortgage Loan and applicable to the Mortgage
Loan have been complied with in all material respects;

            (h) The Mortgage has not been satisfied as of the Closing Date,
canceled or subordinated, in whole, or rescinded, and the Mortgaged Property has
not been released from the lien of the Mortgage, in whole or in part (except for
a release that does not materially impair the security of the Mortgage Loan or a
release the effect of which is reflected in the Loan-to-Value Ratio for the
Mortgage Loan as set forth in the Mortgage Loan Schedule), nor to the best of
the Seller's knowledge has any instrument been executed that would effect any
such release, cancellation, subordination or rescission;

            (i) Ownership of the Mortgaged Property is held in fee simple or a
leasehold estate. With respect to Mortgage Loans that are secured by a leasehold
estate, (i) the lease is valid, in full force and effect, and conforms to all of
Fannie Mae's requirements for leasehold estates; (ii) all rents and other
payments due under the lease have been paid; (iii) the lessee is not in default
under any provision of the lease; (iv) the term of the lease exceeds the
maturity date of the related Mortgage Loan by at least five (5) years; and (v)
the terms of the lease provide a Mortgagee with an opportunity to cure any
defaults. Except as permitted by the fourth sentence of this paragraph (i), the
Mortgage is a valid, subsisting and enforceable first lien on the Mortgaged
Property, including all buildings on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems affixed to such buildings, and all additions, alterations and
replacements made at any time with respect to the foregoing securing the
Mortgage Note's original principal balance. The Mortgage and the Mortgage Note
do not contain any evidence on their face of any security interest or other
interest or right thereto. Such lien is free and clear of all adverse claims,
liens and encumbrances having priority over the first lien of the Mortgage
subject only to (1) the lien of non-delinquent current real property taxes and
assessments not yet due and payable, (2) covenants, conditions and restrictions,
rights of way, easements and other matters of the public record as of the date
of recording which are acceptable to mortgage lending institutions generally, or
which are specifically referred to in the lender's title insurance policy
delivered to the originator of the Mortgage Loan and either (A) which are

                                  -ii-
<PAGE>

referred to or otherwise considered in the appraisal made for the originator of
the Mortgage Loan, or (B) which do not in the aggregate adversely affect the
appraised value of the Mortgaged Property as set forth in such appraisal, and
(3) other matters to which like properties are commonly subject which do not in
the aggregate materially interfere with the benefits of the security intended to
be provided by the Mortgage or the use, enjoyment, value or marketability of the
related Mortgaged Property. Any security agreement, chattel mortgage or
equivalent document related to and delivered in connection with the Mortgage
Loan establishes and creates a valid, subsisting and enforceable first lien and
first priority security interest on the property described therein. With respect
to each Co-op Loan, the security instruments create a valid, enforceable and
subsisting first priority security interest in the Co-op Lease and Co-op Stock
securing the related Mortgage Note subject to only to (a) the lien of the
related cooperative for unpaid assessments representing the Mortgagor's pro rata
share of payments for a blanket mortgage, if any, current and future real
property taxes, insurance premiums, maintenance fees and other assessments to
which like collateral is commonly subject, and (b) other matters to which the
collateral is commonly subject which do not materially interfere with the
benefits of the security intended to be provided; provided, however, that the
related Co-op Loan may be subordinated or otherwise subject to the lien of a
Mortgage on the cooperative building;

            (j) The Mortgage Note is not subject to a third party's security
interest or other rights or interest therein;

            (k) The Mortgage Note and the related Mortgage are genuine and each
is the legal, valid and binding obligation of the maker thereof, enforceable in
accordance with its terms subject to bankruptcy, insolvency and other laws of
general application affecting the rights of creditors. All parties to the
Mortgage Note and the Mortgage had the legal capacity to enter into the Mortgage
Loan and to execute and deliver the Mortgage Note and the Mortgage. The Mortgage
Note and the Mortgage have been duly and properly executed by such parties. The
proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvements and as to disbursements of
any escrow funds therefor have been complied with;

            (l) Seller has good title to, and the full right to transfer and
sell, the Mortgage Loan free and clear of any encumbrance, equity, lien, pledge,
charge, claim or security interest, including, to the best knowledge of the
Seller, any lien, claim or other interest arising by operation of law;

            (m) To the best of the Seller's knowledge, each Mortgage Loan is
covered by an ALTA lender's title insurance policy or other generally acceptable
form of policy or insurance acceptable to Fannie Mae or FHLMC, issued by a title
insurer acceptable to Fannie Mae or FHLMC and qualified to do business in the
jurisdiction where the Mortgaged Property is located, insuring (subject to the
exceptions contained in paragraph (ix)(1) (2) and (3) above) the Seller, its
successors and assigns, as to the first priority lien of the Mortgage in the
original principal amount of the Mortgage Loan. To the best of the Seller's
knowledge, the Seller is the sole insured of such lender's title insurance
policy, such title insurance policy has been duly and validly endorsed to the
purchaser or the assignment to the purchaser of the Seller's interest therein
does not require the consent of or notification to the insurer and such lender's
title insurance policy is in full force and effect and will be in full force and
effect upon the consummation of the transactions contemplated by this Agreement.
To the best of the Seller's knowledge, no claims have been made under such
lender's title insurance policy, and no prior holder of the related Mortgage has
done, by act or omission, anything which would impair the coverage of such
lender's title insurance policy;

                                -iii-
<PAGE>

            (n) To the best of the Seller's knowledge, there is no default,
breach, violation or event of acceleration existing under the Mortgage or the
related Mortgage Note and no event which, with the passage of time or with
notice and the expiration of any grace or cure period, would constitute a
default, breach, violation or event permitting acceleration, except for any
Mortgage Loan payment which is not late by more than 30 days, and the Seller has
not waived any default, breach, violation or event permitting acceleration;

            (o) To the best of the Seller's knowledge, there are no mechanics'
or similar liens or claims which have been filed for work, labor or material
(and, to the best of the Seller's knowledge, no rights are outstanding that
under law could give rise to such lien) affecting the related Mortgaged Property
which are or may be liens prior to, or equal or coordinate with, the lien of the
related Mortgage;

            (p) To the best of the Seller's knowledge, all improvements subject
to the Mortgage, lay wholly within the boundaries and building restriction lines
of the Mortgaged Property (and wholly within the project with respect to a
condominium unit) and no improvements on adjoining properties encroach upon the
Mortgaged Property except those which are insured against by the title insurance
policy referred to in paragraph (xiii) above and all improvements on the
property comply with all applicable zoning and subdivision laws and ordinances;

            (q) To the best of the Seller's knowledge, each Mortgage Loan was
originated by the Seller or by a savings association, a savings bank, a
commercial bank or similar banking institution that is supervised and examined
by a Federal or state banking authority, a mortgagee approved by the Secretary
of HUD pursuant to Section 203 and 211 of the National Housing Act, or a Fannie
Mae- or FHLMC-approved seller. To the best of the Seller's knowledge, each
Mortgage Loan was underwritten generally in accordance with the Underwriting
Standards as in effect at the time of origination. To the best of the Seller's
knowledge, the Mortgage contains the usual and customary provision of the Seller
at the time of origination for the acceleration of the payment of the unpaid
principal balance of the Mortgage Loan if the related Mortgaged Property is sold
without the prior consent of the mortgagee thereunder;

            (r) The Mortgaged Property at origination or acquisition was and, to
the best of the Seller's knowledge, currently is free of material damage and
waste and at origination there was, and to the best of the Seller's knowledge
there currently is, no proceeding pending for the total or partial condemnation
thereof;

            (s) The related Mortgage contains customary and enforceable
provisions such as to render the rights and remedies of the holder thereof
adequate for the realization against the Mortgaged Property of the benefits of
the security provided thereby, including, (1) in the case of a Mortgage
designated as a deed of trust, by trustee's sale or judicial foreclosure, and
(2) otherwise by judicial foreclosure. The Seller has no knowledge of any
homestead or other exemption available to the Mortgagor which would interfere
with the right to sell the Mortgaged Property at a trustee's sale or the right
to foreclose the Mortgage;

            (t) To the best of the Seller's knowledge, if the Mortgage
constitutes a deed of trust, a trustee, duly qualified if required under
applicable law to act as such, has been properly designated and currently so
serves and is named in the Mortgage, and no fees or expenses are or will become
payable to the trustee under the deed of trust, except in connection with a
trustee's sale or attempted sale after default by the Mortgagor;

                                     -iv-
<PAGE>

            (u) With respect to each Mortgage Loan, there is an appraisal on a
Fannie Mae-approved form (or a narrative residential appraisal) of the related
Mortgaged Property that conforms to the applicable requirements of the Financial
Institutions Reform Recovery and Enforcement Act and that was signed prior to
the approval of such Mortgage Loan application by a qualified appraiser,
appointed by the Seller or the originator of such Mortgage Loan, as appropriate,
who has no interest, direct or indirect, in the Mortgaged Property or in any
loan made on the security thereof, and whose compensation is not affected by the
approval or disapproval of such Mortgage Loan;

            (v) No Mortgage Loan contains "subsidized buydown" or "graduated
payment" features;

            (w) The Mortgaged Property is a single-family (one- to four-unit)
dwelling residence erected thereon, or an individual condominium unit in a
condominium, or a Co-operative Apartment or an individual unit in a planned unit
development or in a de minimis planned unit development as defined by Fannie
Mae. No such residence is a mobile home or a manufactured dwelling which is not
permanently attached to the land;

            (x) No Mortgage Loan provides for negative amortization;

            (y) No Mortgage Loan had an original term in excess of thirty (30)
years;

            (z) [RESERVED]

            (aa) As of the Closing Date, each Mortgage Loan is a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code (without regard
to Treasury Regulations Section 1.860G-2(f) or any similar rule that provides
that a defective obligation is a qualified mortgage for a temporary period);

            (bb) As of the Closing Date, no Mortgage Loan provides for interest
other than at either (x) a single fixed rate in effect throughout the term of
the Mortgage Loan or (y) a single "variable rate" (within the meaning of
Treasury Regulations Section 1.860G-1(a)(3)) in effect throughout the term of
the Mortgage Loan.

            (cc) As of the Closing Date, no Mortgage Loan is the subject of
pending or final foreclosure proceedings.

            (dd) Based on delinquencies in payment on the Mortgage Loans as of
the Closing Date, Seller would not initiate foreclosure proceedings with respect
to any of the Mortgage Loans prior to the next scheduled payment date on such
Mortgage Loan.

            (ee) Each Mortgage Note is comprised of one original promissory note
and each such promissory note constitutes an "instrument" for purposes of
section 9-102(a)(65) of the UCC.

            (ff) No Mortgage Loan is covered by the Home Ownership and Equity
Protection Act of 1994 ("HOEPA") and no Mortgage Loan is "high cost" as defined
by any applicable federal, state or local predatory or abusive lending law. Any
breach of this representation shall be deemed to materially and adversely affect
the value of the Mortgage Loan and shall require a repurchase of the affected
Mortgage Loan.

                                   -v-
<PAGE>

            (gg) Each Mortgage Loan at the time it was made complied in all
material respects with applicable local, state and federal laws, including, but
not limited to, all applicable predatory or abusive lending laws.

            (hh) No Mortgage Loan is a High Cost Loan or Covered Loan, as
applicable (as such terms are defined in the then current Standard & Poor's
LEVELS(R) Glossary which is now Version 5.6 Revised, Appendix E, attached to the
Mortgage Loan Purchase and Sale Agreement as Exhibit A) and no Mortgage Loan
originated on or after October 1, 2002 through March 6, 2003 is governed by the
Georgia Fair Lending Act.

                                  -vi-<PAGE>
2004 Annual Meeting Approved Stock Plan                             Exhibit 10.2

                              CSK AUTO CORPORATION

                          2004 STOCK AND INCENTIVE PLAN

                                    ARTICLE I

                                     PURPOSE

      SECTION 1.1 Purpose. The purpose of the CSK Auto Corporation 2004 Stock
and Incentive Plan is to promote and closely align the interests of Employees
and Directors of the Company, its Subsidiaries or Parent companies, and their
respective stockholders, by providing stock-based compensation and other
performance-based compensation. The Plan is intended to strengthen the Company's
ability to reward performance that enhances long-term stockholder value; to
increase employee stock ownership through performance-based compensation plans;
and to strengthen the Company's ability to attract and retain an outstanding
employee and executive team.

                                   ARTICLE II

                                   DEFINITIONS

      FOR PURPOSES OF THE PLAN, THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING
MEANINGS, UNLESS ANOTHER DEFINITION IS CLEARLY INDICATED BY PARTICULAR USAGE OR
CONTEXT:

      "Act" means the Securities Exchange Act of 1934, as amended.

      "Affiliate" shall have the meaning set forth in Rule 12b-2 under Section
12 of the Act.

      "Approved Leave of Absence" means a leave of absence of definite length
approved by the Chief Executive Officer or Chief Operating Officer of the
Company, or by any other officer of the Company to whom the Committee delegates
such authority.

      "Award" means an award of Options, Stock Appreciation Rights, Restricted
Stock, Stock Units, Incentive Bonuses or Other Stock Unit Awards pursuant to the
Plan.

      "Beneficial Owner" shall have the meaning set forth in Rule 13d-3 under
the Act.

      "Beneficiary" means any person or persons designated in writing by a
Participant to the Committee in a form prescribed by it for that purpose, which
designation shall be revocable at any time by the Participant prior to his or
her death; provided that, in the absence of such a designation or the failure of
the person or persons so designated to survive the Participant, "Beneficiary"
shall mean such Participant's estate; and further provided that no designation
of Beneficiary shall be effective unless it is received by the Company before
the Participant's death.

      "Board" means the Board of Directors of the Company.

      "Cause" means, with respect to any Participant, (a) any definition of "for
cause" or similar concept contained in any employment agreement, personal
services agreement, retention agreement or similar agreement applicable to such
Participant, or, in the absence of any such definition or any such agreement,
(b) fraud or embezzlement, gross negligence in the performance or nonperformance
of duties for the Company or any Subsidiary or Parent of the Company, or
material failure or refusal to perform duties at any time as an Employee or
Director of the Company or any Subsidiary or Parent of the Company.

      "Change in Control" means the occurrence of any one of the following:

            (a) any Person is or becomes the Beneficial Owner, directly or
      indirectly, of securities of the Company representing 30% or more of the
      combined voting power of the Company's then outstanding

                                       A-1
<PAGE>
2004 Annual Meeting Approved Stock Plan

      securities, excluding any Person who becomes such a Beneficial Owner in
      connection with a Qualifying Business Combination described in paragraph
      (c) below or who becomes such a Beneficial Owner as a result of a change
      in ownership percentage resulting solely from an acquisition of securities
      by the Company; or

            (b) the following individuals cease for any reason to constitute a
      majority of the number of directors then serving on the Board: individuals
      who, on the Effective Date, constitute the Board and any new director
      (other than a director whose initial assumption of office is in connection
      with an actual or threatened election contest, including, but not limited
      to, a consent solicitation relating to the election of directors of the
      Company) whose appointment or election by the Board or nomination for
      election by the Company's stockholders was approved or recommended by a
      vote of at least two-thirds ( 2/3) of the directors then still in office
      who either were directors on the Effective Date or whose appointment,
      election or nomination for election was previously so approved or
      recommended; or

            (c) there is consummated a reorganization, merger or consolidation
      of the Company with, or sale or other disposition of all or substantially
      all of the assets of the Company in one or a series of related
      transactions to, any other Person (a "Business Combination"), other than a
      Business Combination that would result in the voting securities of the
      Company outstanding immediately prior to such Business Combination
      continuing to represent (either by remaining outstanding or by being
      converted into voting securities of the surviving entity or any parent
      thereof) more than 50% of the combined voting power of the securities of
      the Company or such surviving entity or any parent thereof outstanding
      immediately after such Business Combination (a "Qualifying Business
      Combination"); or

            (d) the stockholders of the Company approve a plan of complete
      liquidation or dissolution of the Company or there is consummated an
      agreement for the sale or disposition by the Company of all or
      substantially all of the Company's assets, other than a sale or
      disposition by the Company of all or substantially all of the Company's
      assets to any other Person more than 50% of the combined voting power of
      the outstanding securities of which is owned by stockholders of the
      Company in substantially the same proportions as their ownership of the
      Company immediately prior to such sale.

      "Code" means the Internal Revenue Code of 1986, as amended, or the
corresponding provisions of any successor statute.

      "Committee" means the committee of the Board designated by the Board to
administer the Plan pursuant to Section 3.1 hereof.

      "Common Stock" means the Common Stock, par value $0.01 per share, of the
Company.

      "Company" means CSK Auto Corporation, a Delaware corporation, and except
as utilized in the definition of Change in Control, any successor corporation.

      "Director" means a member of the Board who is a "non-employee director"
within the meaning of Rule 16(b)-3 promulgated under the Act, as such may be
amended from time to time.

      "Effective Date" means the date on which approval of the Plan by the
stockholders of the Company is obtained.

      "Employee" means any person, including officers and directors, employed by
the Company or any Subsidiary or Parent of the Company.

      "Immediate Family" means any child, stepchild, parent, stepparent,
grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law,
including adoptive relationships, any person sharing the Participant's household
(other than a tenant or employee), a trust in which these persons (or the
Participant) have more than 50% of the beneficial interest, a foundation in
which these persons (or the Participant) control the management of assets, and
any other entity in which these persons (or the Participant) own more than 50%
of the voting interests.

                                       A-2
<PAGE>
2004 Annual Meeting Approved Stock Plan

      "Incentive Bonus" means a bonus opportunity awarded under Section 10.1
hereof pursuant to which a Participant may become entitled to receive an amount,
payable in cash or Shares, based on satisfaction of such performance criteria as
are specified in the Incentive Bonus Document.

      "Incentive Bonus Document" means the agreement or other document
evidencing the Award of an Incentive Bonus.

      "Incentive Stock Option" means an Option granted under Section 6.1 hereof
that is designated as an Incentive Stock Option and is intended to meet the
requirements of Section 422 of the Code and any related regulations.

      "Market Value" means (a) the mean of the highest and lowest reported sale
prices for the Shares on the New York Stock Exchange on the date on which the
determination of Market Value is being made or, if no sale is reported for such
day, on the next preceding day on which a sale of Shares was reported, all as
reported by such source as the Committee may select or (b) if the Shares are no
longer listed on the New York Stock Exchange, such market value of the Shares or
other securities to be determined in accordance with the procedures to be
established by the Committee from time to time.

      "Nonqualified Stock Option" means any Option granted under Section 6.1
hereof that is not an Incentive Stock Option.

      "Option" means a right granted under Section 6.1 hereof to purchase a
stated number of Shares at a specified price. Options awarded under the Plan may
be in the form of Incentive Stock Options or Nonqualified Stock Options.

      "Option Document" means the agreement or other document evidencing the
Award of an Option.

      "Other Stock Unit Award" means an Award granted pursuant to Section 11.1
hereof, of Shares or other securities that are valued in whole or in part by
reference to, or are otherwise based on, Shares or other securities of the
Company.

      "Other Stock Unit Award Rules" means the terms and conditions of Other
Stock Unit Awards as established by the Committee pursuant to Sections 11.1 and
11.2 hereof.

      "Parent" shall have the same definition as a "parent corporation" in
Section 424 of the Code.

      "Participant" means any Employee or Director who is granted an Award under
the Plan.

      "Person" shall have the meaning given in Section 3(a)(9) of the Act, as
modified and used in Sections 13(d) and 14(d) thereof, except that such term
shall not include (a) the Company or any of its Affiliates, (b) a trustee or
other fiduciary holding securities under an employee benefit plan of the Company
or any of its Subsidiaries, (c) an underwriter temporarily holding securities
pursuant to an offering of such securities or (d) a corporation or other entity
owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company.

      "Plan" means this CSK Auto Corporation 2004 Stock and Incentive Plan, as
amended from time to time.

      "Prior Plans" means the CSK Auto Corporation 1996 Associate Stock Option
Plan, the CSK Auto Corporation 1996 Executive Stock Option Plan, the CSK Auto
Corporation 1999 Employee Stock Option Plan and the CSK Auto Corporation
Directors Stock Plan.

      "Qualifying Performance Criteria" means the criteria set forth in Section
15.1 hereof.

      "Restricted Stock" means Shares issued pursuant to an Award granted under
Section 8.1 hereof that are subject to any restrictions on the grant, issuance,
retention, vesting, and/or transferability (including continued employment,
passage of time and/or performance conditions) that the Committee, in its
discretion, may impose.

      "Restriction Period" means the period defined in Section 8.2 hereof.

                                       A-3
<PAGE>
2004 Annual Meeting Approved Stock Plan

      "Shares" mean shares of the Company's Common Stock.

      "Stock Administrator" means the Company's third party stock administrator
or any other person or entity designated by the Committee to assist in the
administration of the Plan.

      "Stock Appreciation Right" means a right that entitles the Participant to
receive, in cash or Shares (as determined by the Committee), value equal to or
otherwise based on the excess of (a) the Market Value of a specified number of
Shares at the time of exercise over (b) the exercise price of the Stock
Appreciation Right, as established by the Committee on the date of grant.

      "Stock Unit" means a right to receive in the future a Share of Common
Stock or, at the discretion of the Committee, the value of such Common Stock in
cash pursuant to an Award granted under Section 9.1 hereof.

      "Subcommittee" means one or more separate committees appointed by the
Committee pursuant to Section 3.4 hereof.

      "Subsidiary" shall have the same definition as a "subsidiary corporation"
in Section 424 of the Code.

      "Vesting Condition" means any condition to the vesting of Restricted Stock
established by the Committee pursuant to Section 8.2 hereof.

                                   ARTICLE III

                                 ADMINISTRATION

      SECTION 3.1 Composition of Committee. This Plan shall be administered by
the Compensation Committee of the Board (the "Committee"), as appointed from
time to time by the Board. The Board, in its sole discretion, may exercise any
authority of the Committee under this Plan in lieu of the Committee's exercise
thereof, and in such instances references herein to the Committee shall refer to
the Board. The Committee shall be governed, and shall have such composition as
called for, by the Compensation Committee Charter as such may be amended from
time to time. The Committee may designate the Chief Executive Officer or Chief
Operating Officer of the Company or other Employees to assist the Committee in
the administration of the Plan, and the Committee may grant authority to such
persons to execute agreements or other documents evidencing Awards made under
this Plan or other documents entered into under this Plan on behalf of the
Committee or the Company.

      SECTION 3.2 Powers of the Committee. Subject to the express provisions and
limitations set forth in this Plan, the Committee shall be authorized and
empowered to do all things necessary or desirable, in its sole discretion, in
connection with the administration of this Plan, including, without limitation,
the following:

            (a) to prescribe, amend and rescind rules and regulations relating
      to this Plan and to define terms not otherwise defined herein;

            (b) to determine which individuals are eligible to be Participants
      under Section 4.1 hereof, to which of such Participants, if any, Awards
      shall be granted hereunder and the timing of any such Awards;

            (c) to grant Awards to Participants and determine the terms and
      conditions thereof, including, but not limited to, the number of Shares
      subject to Awards, the designation of Options as Incentive Stock Options
      or Nonqualified Stock Options, the exercise or purchase price of Shares
      subject to Awards, the circumstances under which Awards become exercisable
      or vested or are forfeited or expire, the circumstances under which Awards
      may be settled in cash or Shares, which terms may, but need not be,
      conditioned upon the passage of time, continued employment, the
      satisfaction of performance criteria, the occurrence of certain events
      (including events that the Board or the Committee determine constitute a
      Change in Control), or other factors;

            (d) to establish and verify the extent of satisfaction of any
      performance goals or other conditions applicable to the grant, issuance,
      exercisability, vesting and/or ability to retain any Award;

                                       A-4
<PAGE>
2004 Annual Meeting Approved Stock Plan

            (e) to prescribe and amend the terms of the agreements or other
      documents evidencing Awards made under this Plan (which need not be
      identical) and the terms of or form of any document or notice required to
      be delivered to the Company by Participants under this Plan;

            (f) to determine whether, and the extent to which, adjustments are
      required pursuant to Section 14.2 hereof;

            (g) to interpret and construe this Plan, any rules and regulations
      under this Plan and the terms and conditions of any Award granted
      hereunder, and to waive, amend or make exceptions to any such provisions
      in good faith and for the benefit of the Company; and

            (h) to make all other determinations deemed necessary or advisable
      for the proper operation or administration of this Plan.

      SECTION 3.3 Determinations of the Committee. All decisions, determinations
and interpretations by the Committee regarding this Plan shall be final and
binding on all Participants and Beneficiaries. The Committee shall consider such
factors as it deems relevant to making such decisions, determinations and
interpretations, including, without limitation, the recommendations or advice of
any director, officer or employee of the Company and such attorneys, consultants
and accountants as the Committee may select.

      SECTION 3.4 Delegations to Subcommittees. The Committee may delegate to
one or more separate committees (any such committee a "Subcommittee") composed
of one or more directors of the Company (who may, but need not be, members of
the Committee) the ability to grant Awards and take the other actions described
in Section 3.2 hereof with respect to non-executive employees, and such actions
shall be treated for purposes of Section 3.3 hereof as if taken by the
Committee.

                                   ARTICLE IV

                                   ELIGIBILITY

      SECTION 4.1 Eligibility. To be eligible for selection by the Committee to
participate in the Plan as a Participant, an individual must be an Employee or
Director of the Company or any Subsidiary or Parent of the Company. The
Committee may grant Awards of Options, Stock Appreciation Rights, Restricted
Stock, Stock Units, Incentive Bonuses or Other Stock Unit Awards to eligible
Employees or Directors.

                                    ARTICLE V

                           STOCK SUBJECT TO THIS PLAN

      SECTION 5.1 Aggregate Limits. The aggregate number of Shares that shall be
available for grant under this Plan shall be 4,000,000 Shares, plus any Shares
subject to awards made under Prior Plans that are outstanding on the Effective
Date and become available pursuant to Section 5.3 hereof; provided, however,
that no more than 1,000,000 Shares of the total Shares issuable under the Plan
may be available for grant in the form of Incentive Stock Options. Any Shares
granted as Options or Stock Appreciation Rights shall be counted against this
limit as one (1) Share for every one (1) Share granted. Any Shares granted as
Awards other than Options or Stock Appreciation Rights shall be counted against
this limit as 2.25 Shares for every one (1) Share granted. The aggregate number
of Shares available for grant under this Plan and the number of Shares subject
to outstanding Awards shall be subject to adjustment as provided in Section 14.2
hereof. In addition, the aggregate number of Shares available for grant under
this Plan shall not be reduced by Shares subject to Awards granted upon the
assumption of, or in substitution for, awards granted by a business or entity
that is acquired by, or whose assets are acquired by, the Company. The Shares
issued pursuant to Awards granted under this Plan may be Shares that either were
reacquired by the Company, including Shares purchased in the open market, or
authorized but unissued Shares.

      SECTION 5.2 Individual Limits. The aggregate number of Shares that may be
granted as Options or Stock Appreciation Rights under this Plan during any
calendar year to any one Participant shall not exceed 500,000 Shares. The
aggregate number of Shares that may be granted as Restricted Stock, Stock Units
or Other Stock Unit Awards under this Plan during any calendar year to any one
Participant shall not exceed 250,000 Shares. Notwithstanding anything to the
contrary in this Plan, the foregoing limitations shall be

                                       A-5
<PAGE>
2004 Annual Meeting Approved Stock Plan

subject to adjustment under Section 14.2 hereof, but only to the extent that
such adjustment will not affect the status of any Award intended to qualify as
"performance-based compensation" under Section 162(m) of the Code. The foregoing
limitations shall not apply to the extent that (a) compensation in connection
with specific Awards made under the Plan is not intended to be treated as
"performance-based compensation" under Section 162(m) of the Code or (b) such
limitations are no longer required in order for compensation in connection with
Awards under this Plan to be treated as "performance-based compensation" under
Section 162(m) of the Code.

      SECTION 5.3 Share Add-Backs. For purposes of Section 5.1 hereof, the
aggregate number of Shares available for Awards under this Plan at any time
shall not be reduced by (a) Shares subject to Awards that have been canceled,
expired, forfeited or settled in cash, (b) Shares subject to Awards that have
been retained by the Company in payment or satisfaction of the purchase price or
tax withholding obligation of an Award, or (c) Shares subject to Awards that
otherwise do not result in the issuance of Shares in connection with payment or
settlement of an Award. Any Shares that again become available for grant
pursuant to clauses (a) through (c) of this Section 5.3 shall be added back as
one (1) Share if such Shares were subject to Options or Stock Appreciation
Rights and as 2.25 Shares if such Shares were subject to Awards other than
Options and Stock Appreciation Rights. In addition, Shares that have been
delivered (either actually or constructively by attestation) to the Company in
payment or satisfaction of the purchase price or tax withholding obligation of
an Award or an award under any of the Prior Plans shall be available for Awards
under this Plan. Shares subject to awards made under Prior Plans that do not
result in the issuance of Shares for the reasons listed in clauses (a) through
(c) of this Section 5.3 shall be available for grant under this Plan. Each Share
that again becomes available for grant in connection with awards under Prior
Plans shall be added back as one (1) Share.

                                   ARTICLE VI

                         TERMS AND CONDITIONS OF OPTIONS

      SECTION 6.1 Option Grants. The Committee may grant an Option or provide
for the grant of an Option, either from time to time in the discretion of the
Committee or automatically upon the occurrence of specified events, including,
without limitation, the achievement of performance goals, the satisfaction of an
event or condition within the control of the recipient of the Award or within
the control of others. All Options under the Plan shall be granted subject to
the terms and conditions set forth in this Article VI.

      SECTION 6.2 Option Price. The option price per share with respect to each
Option shall be determined by the Committee but shall not be less than 100% of
the Market Value of the Common Stock on the date the Option is granted;
provided, however, that the option price per share of any Incentive Stock Option
will be equal to or greater than 110% of the Market Value of a Share as of the
date of grant if the Participant receiving the Incentive Stock Option owns,
immediately before the Incentive Stock Option is granted, stock representing
more than 10% of the total combined voting power of all classes of stock of the
Company or any Subsidiary or Parent of the Company; provided further, that the
option price per share with respect to an Option that is granted in connection
with a merger, stock exchange, or other acquisition as a substitute or
replacement award for options held by optionees of the acquired entity may be
less than 100% of Market Value on the date the Option is granted.

      SECTION 6.3 Duration. The Committee shall establish the term of an Option,
provided that in no event shall any Option be exercisable subsequent to the
tenth anniversary of the date on which it is granted; provided, however, that in
the case of an Incentive Stock Option granted to a Participant who owns stock as
of the date of the grant representing more than 10% of the total combined voting
power of all classes of stock of the Company or any Subsidiary or Parent of the
Company, the term of the Incentive Stock Option shall be five (5) years from the
date on which it is granted or such shorter term as the Committee may determine.

                                       A-6
<PAGE>
2004 Annual Meeting Approved Stock Plan

      SECTION 6.4 Exercise. Except as provided in Section 6.9 hereof, the Shares
covered by an Option may not be purchased prior to the first anniversary of the
date on which the Option is awarded, or such longer period or periods, and
subject to such conditions, as the Committee may determine, but thereafter may
be purchased upon such terms and at such times as the Committee may determine as
shall be provided in the Option Document. To the extent that the right to
purchase Shares has accrued thereunder, Options may be exercised from time to
time by notice to the Company stating the number of Shares with respect to which
the Option is being exercised.

      SECTION 6.5 Payment. Except as set forth herein, Shares purchased under
Options shall, at the time of purchase, be paid for in full in cash. All, or any
portion, of the option price may, at the discretion of the Committee, be paid
(i) under an arrangement with the Stock Administrator where payment is made
pursuant to an irrevocable direction to the Stock Administrator to deliver all
or part of the proceeds from the sale of Shares issuable under the Option to the
Company or (ii) by the surrender (either actually or constructively by
attestation) to the Company, at the time of exercise, of Shares of previously
acquired Common Stock owned by the Participant, to the extent that such payment
does not require the surrender of a fractional share of such previously acquired
Common Stock or (iii) by authorizing the Company to withhold Common Stock
otherwise issuable on exercise of the Option. Such Shares previously acquired
and used to pay the option price shall be valued at Market Value on the date the
Option is exercised or as otherwise determined in accordance with the procedures
to be established by the Committee. A Participant shall have none of the rights
of a stockholder until the Shares are issued to him or her.

      SECTION 6.6 Restrictions. The Committee shall determine, with respect to
each Option, the nature and extent of the restrictions, if any, to be imposed on
the Shares that may be purchased thereunder. Without limiting the generality of
the foregoing, the Committee may impose conditions restricting absolutely or
conditionally the transferability of Shares acquired through the exercise of
Options for such periods, and subject to such conditions, including continued
employment of the Participant by the Company or any Subsidiary or Parent of the
Company, as the Committee may determine.

      SECTION 6.7 Incentive Stock Options. Incentive Stock Options granted under
this Plan will be subject to the following additional conditions, limitations
and restrictions:

            (a) Eligibility. Incentive Stock Options may be granted only to
      Employees of the Company or a Subsidiary or Parent of the Company.

            (b) Timing of Grant. No Incentive Stock Option will be granted under
      this Plan after the tenth anniversary of the date on which the Plan is
      adopted by the Board or, if earlier, the date on which the Plan is
      approved by the Company's stockholders.

            (c) Amount of Award. The aggregate Market Value (as of the date of
      grant) of the Shares with respect to which the Incentive Stock Options
      awarded to any Participant first become exercisable during any calendar
      year may not exceed $100,000. For purposes of this $100,000 limit, the
      Participant's Incentive Stock Options under this Plan and all other plans
      maintained by the Company and its Subsidiaries will be aggregated. To the
      extent any Incentive Stock Option would exceed the $100,000 limit, the
      Incentive Stock Option will afterwards be treated as a Nonqualified Stock
      Option for all purposes.

      SECTION 6.8 Transferability of Options. In no event will the Committee
permit an Incentive Stock Option to be transferred by a Participant other than
by will or the laws of descent and distribution, and any Incentive Stock Option
awarded under this Plan will be exercisable only by the Participant during the
Participant's lifetime. During a Participant's lifetime, Nonqualified Stock
Options shall be transferable during the lifetime of the Participant by gift or
pursuant to a domestic relations order to members of the Participant's Immediate
Family to the extent and in the manner determined by the Committee and subject
to the prior written consent of the Committee.

      SECTION 6.9 Termination of Relationship. Unless the Committee shall
determine otherwise, at such time as a Participant ceases to be an Employee or
Director of the Company or any Subsidiary or Parent of the Company for any
reason and except as provided in subsections (a), (b) or (d) below, Options
shall expire

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immediately as to those Shares for which they were not then exercisable, and as
to the remaining Shares for which the Options were exercisable at the time of
such termination, such Options shall expire on the earlier of the expiration of
the term of the Options or according to the following schedule:

            (a) Retirement. If (i) a Participant ceases to be an Employee or
      Director of the Company or any Subsidiary or Parent of the Company by
      reason of retirement provided that the Participant has attained age 65 and
      the sum of the Participant's age and years of service with the Company is
      75 or higher, and (ii) upon such termination all conditions to
      exercisability of the Options required pursuant to Section 6.4 hereof
      other than such holding period have been satisfied, the holding period
      required pursuant to Section 6.4 hereof shall automatically be deemed to
      have been satisfied, and the Options shall expire, unless exercised, one
      (1) year after such termination.

            (b) Death or Disability. If (i) a Participant ceases to be an
      Employee or Director of the Company or any Subsidiary or Parent of the
      Company prior to the end of the holding period required by Section 6.4
      hereof by reason of death or disability under the provisions of an
      applicable long-term disability plan, and (ii) upon such termination all
      conditions to exercisability of the Options required pursuant to Section
      6.4 hereof other than such holding period have been satisfied, the holding
      period required pursuant to Section 6.4 hereof shall automatically be
      deemed to have been satisfied, and the Options shall expire, unless
      exercised by the Participant, or if such termination was as a result of
      Participant's death, by Participant's legal representatives or heirs, one
      (1) year after such termination.

            (c) Cause. Options shall expire upon receipt by the Participant of
      the notice of termination if he or she is terminated for Cause.

            (d) Change in Control. Notwithstanding anything to the contrary in
      this subsection (d), unless the Committee shall expressly provide
      otherwise in the Option Document at the time of grant, in the event a
      Participant ceases to be an Employee or Director of the Company or any
      Subsidiary or Parent of the Company because such Participant's
      relationship is involuntarily terminated by the Company or any of its
      Subsidiaries (other than termination as a result of death or disability or
      for Cause as described in subsections (b) and (c) above) within one (1)
      year following a Change in Control, any holding period or other condition
      required pursuant to Section 6.4 hereof shall automatically be deemed to
      have been satisfied, the Options shall become fully vested and
      exercisable, and the Options shall remain exercisable for a period of one
      (1) year following such termination.

            (e) All Other Terminations. Options shall expire, unless exercised,
      three (3) months after the date of such termination; provided, however, if
      an Incentive Stock Option is exercised by an Employee more than three (3)
      months after the termination of such Employee's employment for any reason
      (or more than twelve (12) months following such Employee's death or if
      such Employee is permanently and totally disabled, within the meaning of
      Section 22(e) of the Code), the Incentive Stock Option will afterwards be
      treated as a Nonqualified Stock Option for all purposes. For purposes of
      this Section 6.9, unless the Committee determines otherwise in its
      discretion, a Participant's relationship as an Employee or Director of the
      Company or any Subsidiary or Parent of the Company will be treated as
      continuing intact while the Participant is on military leave, sick leave
      or another Approved Leave of Absence if the period of leave does not
      exceed ninety (90) days, or a longer period to the extent that such
      Participant's right to reemployment with the Company or a Subsidiary or
      Parent of the Company is guaranteed by statute or by contract. If the
      period of leave exceeds ninety (90) days and the Participant's right to
      continue as an Employee or Director is not guaranteed by statute or
      contract, the relationship will be deemed to have ceased on the 91st day
      of such leave.

      SECTION 6.10 Deferral. The Committee may permit a Participant to elect to
defer receipt of all or part of the Shares issuable upon the exercise of
Options, pursuant to rules and regulations adopted by the Committee.

      SECTION 6.11 Option Document. Each Option Document shall contain
provisions regarding (a) the number of Shares that may be issued upon exercise
of the Option, (b) the purchase price of the Shares and the means of payment for
the Shares, (c) the term of the Option, (d) terms and conditions on the vesting

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2004 Annual Meeting Approved Stock Plan

and/or exercisability of an Option, (e) restrictions on the transfer of the
Option and forfeiture provisions and (f) such further terms and conditions, in
each case not inconsistent with this Plan as may be determined from time to time
by the Committee.

      SECTION 6.12 No Option Repricing. Without the approval of stockholders,
the Company shall not reprice any Options, except for adjustments under Section
14.2 hereof as determined by the Committee. For purposes of this Plan, the terms
"reprice" and "repricing" shall have the meanings given them under the relevant
rules of the New York Stock Exchange.

                                   SECTION VII

                TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS

      SECTION 7.1 Stock Appreciation Rights. Stock Appreciation Rights may be
granted to any Employee or Director of the Company or any Subsidiary or Parent
of the Company. Stock Appreciation Rights may be granted to Participants either
alone ("freestanding") or in addition to or in tandem with other Awards granted
under the Plan and may, but need not, relate to a specific Option granted under
Section 6.1 hereof. The provisions of Stock Appreciation Rights need not be the
same with respect to each grant or each recipient. Any Stock Appreciation Right
granted in tandem with an Option may be granted at the same time such Option is
granted or at any time thereafter before exercise or expiration of such Option.
All Stock Appreciation Rights under the Plan shall be granted subject to the
same terms and conditions applicable to Options as set forth in Article VI
hereof, including, without limitation, the terms and conditions set forth in
Sections 6.2, 6.3 and 6.4 hereof relating to option price, duration and exercise
conditions; provided, however, that Stock Appreciation Rights granted in tandem
with a previously granted Option shall have the terms and conditions of such
Option. Subject to the provisions of Article VI hereof, the Committee may impose
such other conditions or restrictions on any Stock Appreciation Right as it
shall deem appropriate. Stock Appreciation Rights may be settled in Shares or
cash as determined by the Committee.

                                  ARTICLE VIII

               TERMS AND CONDITIONS OF AWARDS OF RESTRICTED STOCK

      SECTION 8.1 General. Restricted Stock may be granted to any Employee or
Director of the Company or any Subsidiary or Parent of the Company. The
Committee may specify that the grant, vesting or retention of any or all
Restricted Stock is intended to satisfy the requirements for "performance-based
compensation" under Section 162(m) of the Code, provided that the performance
criteria for the grant, vesting or retention of any such Restricted Stock shall
be a measure based on one or more Qualifying Performance Criteria selected by
the Committee and specified at the time the Restricted Stock is granted. The
Committee shall certify the extent to which any Qualifying Performance Criteria
has been satisfied, and the amount payable as a result thereof, prior to payment
of any Restricted Stock that are intended to satisfy the requirements for
"performance-based compensation" under Section 162(m) of the Code.

SECTION 8.2     Restrictions.

      (a) Restriction Period and/or Vesting Conditions. With respect to each
grant of Restricted Stock under the Plan, the Committee shall determine:

            (i) the time period or periods, if any, including any conditions for
      determining such period or periods, during which the restrictions on such
      Restricted Stock shall apply (the "Restriction Period"); provided that in
      no event, other than as provided in Section 8.3 hereof, shall such
      restrictions terminate prior to three (3) years after the date of grant if
      the vesting of the Restricted Stock is based solely on continuous
      employment or service as a Director or the passage of time; provided
      further, that the restrictions on such Restricted Stock may lapse in
      monthly pro rata installments (i.e., 1/36 per month for 3 years), and/or

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2004 Annual Meeting Approved Stock Plan

            (ii) other terms or conditions, if any, including the attainment of
      performance goals (including the attainment of Qualifying Performance
      Criteria), to the right of the Participant to receive such Restricted
      Stock ("Vesting Conditions"); provided, however, that in no event, other
      than as provided in Section 8.3 hereof, shall the restrictions on such
      Restricted Stock terminate prior to one (1) year after the date of grant
      if the vesting of such Restricted Stock is subject to the attainment of
      Qualifying Performance Criteria (such one (1) year period to be deemed a
      Restriction Period).

      (b) Rights in Restricted Stock. At the time of grant of Restricted Stock
to a Participant, an electronic account representing the number of Shares
granted shall be registered in the Participant's name but shall be held by the
Company for his or her account. The Participant shall have the entire beneficial
ownership interest in, and all rights and privileges of a stockholder as to,
such Restricted Stock, including the right to vote such Restricted Stock and,
unless the Committee shall determine otherwise, the right to receive dividends
thereon payable in shares of Restricted Stock subject to the same restrictions
as the Restricted Stock with respect to which it is paid, subject to the
following restrictions, except as provided by this Section 8.2 and Section 8.3
hereof: (i) the Participant shall not be entitled to delivery of the Shares
until the expiration of the Restriction Period, if any, and/or the satisfaction
of any Vesting Conditions; (ii) none of the Restricted Stock may be sold,
transferred, assigned, pledged, or otherwise encumbered or disposed of during
the Restriction Period, if any, and/or prior to the satisfaction of any Vesting
Conditions; and (iii) all of the Restricted Stock shall be forfeited and all
rights of the Participant to such Restricted Stock shall terminate without
further obligation on the part of the Company unless the Participant continues
to be an Employee or Director of the Company or any Subsidiary or Parent of the
Company for the entire Restriction Period, if any, and any applicable Vesting
Conditions have been satisfied. Any Shares or other securities or property
received as a result of a transaction listed in Section 14.2 hereof shall be
subject to the same restrictions as such Restricted Stock unless the Committee
shall determine otherwise.

      SECTION 8.3 Termination of Relationship. Unless the Committee shall
determine otherwise, at such time as a Participant ceases to be an Employee or
Director of the Company or any Subsidiary or Parent of the Company, Restricted
Stock held by such Participant shall be treated as provided below:

            (a) Retirement. If (i) a Participant ceases to be an Employee or
      Director of the Company or any Subsidiary or Parent of the Company prior
      to the end of any Restriction Period by reason of retirement provided that
      the Participant has attained age 65 and the sum of the Participant's age
      and years of service with the Company is 75 or higher, and (ii) all
      Vesting Conditions, if any, have been satisfied, the remaining
      restrictions with respect to such Participant's Restricted Stock,
      including with respect to any remaining Restriction Period, shall lapse.
      The Shares shall be delivered to the Participant in accordance with the
      provisions of Section 8.4 hereof.

            (b) Death or Disability. If (i) a Participant ceases to be an
      Employee or Director of the Company or any Subsidiary or Parent of the
      Company prior to the end of any Restriction Period by reason of death or
      disability under the provisions of an applicable long-term disability
      plan, and (ii) all Vesting Conditions, if any, have been satisfied, the
      remaining restrictions with respect to such Participant's Restricted
      Stock, including with respect to any remaining Restriction Period, shall
      lapse. The Shares shall be delivered to the Participant's Beneficiary in
      accordance with the provisions of Section 8.4 hereof.

            (c) Change in Control. Notwithstanding anything to the contrary in
      this Section 8.3, unless the Committee shall expressly provide otherwise
      in the document(s) evidencing Restricted Stock at the time of grant, in
      the event a Participant ceases to be an Employee or Director of the
      Company or any Subsidiary or Parent of the Company because such
      Participant's relationship is involuntarily terminated by the Company or
      any Subsidiary or Parent of the Company or any purchaser, successor or
      assign (other than a termination as a result of death or disability or for
      Cause as described in subsections (a) and (b) above) within one (1) year
      following a Change in Control, the remaining restrictions with respect to
      Restricted Stock, including with respect to any remaining Restriction
      Period or Vesting Conditions, shall lapse, and the Committee may, in its
      sole discretion, elect to satisfy its obligations either in cash, in
      Shares, in shares of equity securities of the entity (or its parent)
      resulting from such Change in Control or in any combination of the
      foregoing.

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2004 Annual Meeting Approved Stock Plan

            (d) All Other Terminations. If a Participant ceases to be an
      Employee or Director of the Company or any Subsidiary or Parent of the
      Company prior to the end of a Restriction Period for any reason other than
      death, disability, retirement or involuntary termination within one year
      after a Change in Control as provided in subsections (a), (b) or (c)
      above, the Participant shall immediately forfeit all Restricted Stock then
      subject to any restrictions, including with respect to any Restriction
      Period or Vesting Conditions, except that the Committee may, if it finds
      that the circumstances in the particular case so warrant, allow a
      Participant to retain any or all of the Restricted Stock then subject to
      the restrictions of Section 8.2 hereof and all restrictions applicable to
      such Restricted Stock shall lapse. The Shares shall be delivered to the
      Participant in accordance with the provisions of Section 8.4 hereof.

      SECTION 8.4 Payment of Restricted Stock. At the end of the Restriction
Period, if any, and after all Vesting Conditions, if any, have been satisfied,
or at such earlier time as provided for in Section 8.3 hereof, all restrictions
applicable to the Restricted Stock shall lapse, and the Shares equal to the
number of Restricted Stock, free of all restrictions, shall be delivered to the
Participant or his or her Beneficiary, as the case may be.

                                   ARTICLE IX

                                   STOCK UNITS

      SECTION 9.1 Stock Units. The Committee may also grant Awards of Stock
Units under the Plan to any Employee or Director of the Company or any
Subsidiary or Parent of the Company. The Committee may specify that the grant,
vesting or retention of any or all Stock Units is intended to satisfy the
requirements for "performance-based compensation" under Section 162(m) of the
Code, provided that the performance criteria for the grant, vesting or retention
of any such Stock Units shall be a measure based on one or more Qualifying
Performance Criteria selected by the Committee and specified at the time the
Stock Units are granted. The Committee shall certify the extent to which any
Qualifying Performance Criteria has been satisfied, and the amount payable as a
result thereof, prior to payment of any Stock Units that are intended to satisfy
the requirements for "performance-based compensation" under Section 162(m) of
the Code. Awards of Stock Units shall be payable in Shares or cash as determined
by the Committee. The Committee may permit a Participant to elect to defer
receipt of payment of all or part of any Award of Stock Units pursuant to rules
and regulations adopted by the Committee. Unless the Committee provides
otherwise at the time an Award of Stock Units to a Participant is made, all
Stock Units granted under the Plan shall be subject to vesting periods and/or
periods of restriction which are not less stringent than those specified in
Section 8.2 hereof with respect to awards of Restricted Stock.

                                    ARTICLE X

                    TERMS AND CONDITIONS OF INCENTIVE BONUSES

      SECTION 10.1 Incentive Bonuses. Each Incentive Bonus Award will confer
upon the Participant the opportunity to earn a future payment tied to the level
of achievement with respect to one or more performance criteria established for
a performance period established by the Committee.

      SECTION 10.2 Incentive Bonus Document. Each Incentive Bonus Document shall
contain provisions regarding (a) the target and maximum amount payable to the
Participant as an Incentive Bonus, (b) the performance criteria and level of
achievement versus these criteria that shall determine the amount of such
payment, (c) the term of the performance period as to which performance shall be
measured for determining the amount of any payment, (d) the timing of any
payment earned by virtue of performance, (e) restrictions on the alienation or
transfer of the Incentive Bonus prior to actual payment, (f) forfeiture
provisions and (g) such further terms and conditions, in each case not
inconsistent with this Plan, as may be determined from time to time by the
Committee.

      SECTION 10.3 Performance Criteria. The Committee shall establish the
performance criteria and level of achievement with respect to such criteria that
shall determine the target and maximum amount payable under an Incentive Bonus
Award, which criteria may be based on Company performance with respect

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2004 Annual Meeting Approved Stock Plan

to financial-related or other goals and/or personal achievement of individual
performance goals. The maximum amount payable as an Incentive Bonus may be a
multiple of the target amount payable. The maximum amount payable as an
Incentive Bonus under this Plan during any calendar year to any one Participant
shall not exceed $4,000,000 unless such Incentive Bonus is not intended to be
treated as "performance-based compensation" under Section 162(m) of the Code or
such limitation is no longer required under Section 162(m) of the Code. The
Committee may specify the percentage of the target Incentive Bonus that is
intended to satisfy the requirements for "performance-based compensation" under
Section 162(m) of the Code, provided that the performance criteria for any
portion of an Incentive Bonus that is intended by the Committee to satisfy the
requirements for "performance-based compensation" under Section 162(m) of the
Code shall be a measure based on one or more Qualifying Performance Criteria
selected by the Committee and specified at the time the Incentive Bonus Award is
granted. The Committee shall certify the extent to which any Qualifying
Performance Criteria has been satisfied, and the amount payable as a result
thereof, prior to payment of any Incentive Bonus that is intended to satisfy the
requirements for "performance-based compensation" under Section 162(m) of the
Code.

      SECTION 10.4 Timing and Form of Payment. The Committee shall determine the
timing of payment of any Incentive Bonus. The Committee may provide for or,
subject to such terms and conditions as the Committee may specify, may permit a
Participant to elect for the payment of any Incentive Bonus to be deferred to a
specified date or event. An Incentive Bonus may be payable in Shares or in cash.
Any Incentive Bonus that is paid in cash shall not affect the number of Shares
otherwise available for issuance under this Plan.

      SECTION 10.5 Discretionary Adjustments. Notwithstanding satisfaction of
any performance goals, the amount paid under an Incentive Bonus Award on account
of either financial performance or personal performance evaluations may be
reduced by the Committee on the basis of such further considerations as the
Committee shall determine.

                                   ARTICLE XI

                             OTHER STOCK UNIT AWARD

      SECTION 11.1 Other Stock Unit Award. Subject to the terms and provisions
of this Plan and applicable law, the Committee, at any time and from time to
time, may issue to Participants, either alone or in addition to other Awards
made under this Plan, Other Stock Unit Awards that may be in the form of Shares
or other securities. The value of each such Award shall be based, in whole or in
part, on the value of the underlying Shares or other securities. The Committee,
in its sole and complete discretion, may determine that an Award, either in the
form of an Other Stock Unit Award under this Section 11.1 or as an Award
otherwise granted pursuant to this Plan, may provide to the Participant (a)
dividends or dividend equivalents (payable on a current or deferred basis) and
(b) cash payments in lieu of or in addition to an Award. Subject to the
provisions of this Plan, the Committee in its sole and complete discretion shall
determine the terms, restrictions, conditions, vesting requirements, and payment
rules (all of which are sometimes hereinafter collectively referred to as "Other
Stock Unit Award Rules") of the Award. The Award for any such Other Stock Unit
Award shall specify the Other Stock Unit Award Rules of each Award as determined
by the Committee. However, each Other Stock Unit Award need not be subject to
identical Other Stock Unit Award Rules.

      SECTION 11.2 Other Stock Unit Award Rules. The Committee, in its sole and
complete discretion, may grant an Other Stock Unit Award subject to the
following Other Stock Unit Award Rules:

            (a) All rights with respect to such Other Stock Unit Awards granted
      to a Participant shall be exercisable during his or her lifetime only by
      such Participant or his or her guardian or legal representative.

            (b) Other Stock Unit Awards may require the payment of cash
      consideration by the Participant upon receipt of the Award or provide that
      the Award, and any Shares or other securities issued in conjunction with
      the Award, be delivered without the payment of cash consideration.

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2004 Annual Meeting Approved Stock Plan

            (c) The Committee, in its sole and complete discretion, may
      establish certain Qualifying Performance Criteria that may relate in whole
      or in part to receipt of the Other Stock Unit Awards.

            (d) Other Stock Unit Awards may be subject to a deferred payment
      schedule. Furthermore, all Other Stock Unit Awards granted under the Plan
      shall be subject to vesting periods and/or periods of restriction which
      are not less stringent than those specified in Section 8.2 hereof with
      respect to awards of Restricted Stock.

            (e) The Committee, in its sole and complete discretion, as a result
      of certain circumstances, including, without limitation, the assumption
      of, or substitution of stock unit awards of a company with which the
      Company participates in an acquisition, separation, or similar corporate
      transaction, may waive or otherwise remove, in whole or in part, any
      restriction or condition imposed on an Other Stock Unit Award at the time
      of grant.

                                   ARTICLE XII

                       DIVIDENDS AND DIVIDEND EQUIVALENTS

      SECTION 12.1 Dividends and Dividend Equivalents. Any Award may provide the
Participant with the right to receive dividend payments or dividend equivalent
payments on the Shares subject to the Award, whether or not such Award has been
exercised or is vested. Such payments may be made in cash or may be credited as
cash or Stock Units to a Participant's account and later settled in cash or
Shares or a combination thereof, as determined by the Committee. Such payments
and credits may be subject to such conditions and contingencies as the Committee
may establish.

                                  ARTICLE XIII

                        REGULATORY APPROVALS AND LISTING

      SECTION 13.1 Regulatory Approvals and Listing. The Company shall not be
required to issue to a Participant or a Beneficiary, as the case may be, any
certificate for any Shares upon exercise of an Option or Stock Appreciation
Right or for any Restricted Stock granted under this Plan or to make any payment
with respect to any Incentive Bonus, Stock Unit or Other Stock Unit Award
granted under this Plan prior to (a) the obtaining of any approval from any
governmental agency which the Company, in its sole discretion, shall determine
to be necessary or advisable, (b) the admission of such Shares to listing on any
stock exchange on which the Common Stock may then be listed, and (c) the
completion of any registration or other qualification of such Shares under any
state or federal law or rulings or regulations of any governmental body which
the Company, in its sole discretion, shall determine to be necessary or
advisable.

                                   ARTICLE XIV

                          CHANGES IN CAPITAL STRUCTURE

      SECTION 14.1 Corporate Actions Unimpaired. The existence of outstanding
Awards (including any Options) shall not affect in any way the right or power of
the Company or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations, exchanges, or other changes in the Company's
capital structure or its business, or any merger or consolidation of the
Company, or any issuance of Shares or other securities or subscription rights
thereto, or any issuance of bonds, debentures, preferred or prior preference
stock ahead of or affecting the Shares or other securities of the Company or the
rights thereof, or the dissolution or liquidation of the Company, or any sale or
transfer of all or any part of its assets or business, or any other corporate
act or proceeding, whether of a similar character or otherwise. Further, except
as expressly provided herein or by the Committee, (a) the issuance by the
Company of shares of stock or any class of securities convertible into shares of
stock of any class, for cash, property, labor or services, upon direct sale,
upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into such shares
or other securities, (b) the payment of a dividend in property other

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2004 Annual Meeting Approved Stock Plan

than Shares, or (c) the occurrence of any similar transaction, and in any case
whether or not for fair value, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number of Shares subject to Options
or other Awards theretofore granted or the purchase price per Share, unless the
Committee shall determine, in its sole discretion, that an adjustment is
necessary to provide equitable treatment to a Participant.

      SECTION 14.2 Adjustments Upon Certain Events. If the outstanding Shares or
other securities of the Company, or both, for which the Award is then
exercisable or as to which the Award is to be settled shall at any time be
changed or exchanged by declaration of a stock dividend, stock split,
combination of shares, extraordinary dividend of cash and/or assets,
recapitalization, or reorganization, the Committee shall appropriately and
equitably adjust the number and kind of Shares or other securities which are
subject to this Plan or subject to any Awards theretofore granted, and the
exercise or settlement prices of such Awards, so as to maintain the
proportionate number of Shares or other securities without changing the
aggregate exercise or settlement price.

                                   ARTICLE XV

                         QUALIFYING PERFORMANCE CRITERIA

      SECTION 15.1 Qualifying Performance Criteria. For purposes of this Plan,
the term "Qualifying Performance Criteria" shall mean any one or more of the
following performance criteria, either individually, alternatively or in any
combination, applied to either the Company as a whole or to a business unit or
Subsidiary or Parent, either individually, alternatively or in any combination,
and measured either annually or cumulatively over a period of years, on an
absolute basis or relative to a pre-established target, to previous years'
results or to a designated comparison group, in each case as specified by the
Committee in the Award: (a) cash flow (before or after dividends), (b) earnings
per share, (c) earnings calculated before interest, taxes, depreciation and
amortization (including on a per share basis), (d) stock price, (e) return on
equity, (f) total stockholder return, (g) return on capital (including return on
total capital or return on invested capital), (h) return on assets or net
assets, (i) market capitalization, (j) total enterprise value (market
capitalization plus debt), (k) economic value added, (l) debt leverage (debt to
capital), (m) revenue, (n) income or net income, (o) operating income, (p)
operating profit or net operating profit, (q) operating margin or profit margin,
(r) return on operating revenue, (s) cash from operations, (t) operating ratio,
(u) operating revenue, (v) market share, (w) same or comparable store sales, (x)
adjusted free cash flow, (y) inventory turnover, (z) achievement of reasonably
specific transactional accomplishments (e.g., mergers, acquisitions, business
combinations and the like), and (aa) achievement of individual performance goals
that are based upon the Company's achievement of (i) pre-established targets or
(ii) a level of performance relative to one or more of the Company's
competitors, in each case with respect to one or more of the performance
criteria set forth in (a) through (z) above. To the extent consistent with
Section 162(m) of the Code, the Committee may appropriately adjust any
evaluation of performance under a Qualifying Performance Criteria to exclude any
of the following events that occurs during a performance period: (A) asset
write-downs, (B) litigation, claims, judgments or settlements, (C) the effect of
changes in tax law, accounting principles or other such laws or provisions
affecting reported results, (D) accruals for reorganization and restructuring
programs, (E) vesting of retirement agreements or supplemental retirement
agreements, (F) closed store charges, (G) financing costs and expenses related
to corporate refinancings, and (H) any extraordinary, unusual, non-recurring or
non-comparable items (1) as described in Accounting Principles Board Opinion No.
30, (2) as described in management's discussion and analysis of financial
condition and results of operations appearing in the Company's Annual Report to
stockholders for the applicable year,or (3) publicly announced by the Company in
a press release or conference call relating to the Company's results of
operations or financial condition for a completed quarterly or annual fiscal
period.

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2004 Annual Meeting Approved Stock Plan

                                   ARTICLE XVI

                                      TAXES

      SECTION 16.1 Withholding Requirements. The Committee may make such
provisions or impose such conditions as it may deem appropriate for the
withholding or payment by a Participant or Beneficiary of any taxes that the
Committee determines are required in connection with the grant, vesting,
exercise, payment or settlement of any Award under this Plan, and a
Participant's or Beneficiary's rights in any Award and in any Shares or other
benefits thereunder shall be subject to satisfaction of such conditions.

      SECTION 16.2 Payment of Withholding Taxes. Notwithstanding the terms of
Section 16.1 hereof, the Committee may provide in the agreement or other
document evidencing an Award or otherwise that all or any portion of the taxes
required to be withheld or, if and to the extent permitted by the Committee,
desired to be paid by the Participant, in connection with the exercise, vesting,
settlement or transfer of any Award may be paid by withholding Shares otherwise
issuable or subject to such Award, or by the Participant's delivering previously
acquired Shares (either actually or constructively by attestation), in each case
having a Market Value equal to the amount required or elected to be withheld or
paid, or by the Stock Administrator paying such amount pursuant to an
irrevocable commitment by the Stock Administrator to deliver to the Company
proceeds from the sale of the Shares issuable under the Award. Any such election
is subject to such conditions or procedures as may be established by the
Committee and may be subject to approval by the Committee.

                                  ARTICLE XVII

                                 TRANSFERABILITY

      SECTION 17.1 Transferability. Unless the agreement or other document
evidencing an Award (or an amendment thereto authorized by the Committee)
expressly states that the Award is transferable as provided hereunder, no Award
granted under this Plan, nor any interest in such Award, may be sold, assigned,
conveyed, gifted, pledged, hypothecated or otherwise transferred in any manner
prior to the vesting or lapse of any and all restrictions applicable thereto,
other than (a) by will or the laws of descent and distribution or (b) during the
lifetime of the Participant, by gift or pursuant to a domestic relations order
to members of the Participant's Immediate Family to the extent and in the manner
determined by the Committee and subject to the prior written consent of the
Committee; provided, however, in no event may a Participant transfer an
Incentive Stock Option other than by will or the laws of descent and
distribution. Further, any Shares deferred under Section 6.10 hereof, Stock
Units deferred under Section 9.1 hereof, or Incentive Bonuses deferred under
Section 10.4 hereof shall not be sold, assigned, conveyed, gifted, pledged,
hypothecated or otherwise transferred in any manner. Any Award transferred in
accordance with this Plan, will be subject to all of the same terms and
conditions as provided in the Plan or other document evidencing such Award. No
transfer of any Award will be effective until the Committee consents to the
transfer in writing.

                                  ARTICLE XVIII

                                TERM OF THIS PLAN

      SECTION 18.1 Term of This Plan. No Awards shall be granted pursuant to the
Plan after the tenth anniversary of the Effective Date, but any Award
theretofore granted may extend beyond that date and the terms and conditions of
this Plan shall continue to apply thereto.

                                   ARTICLE XIX

                      TERMINATION OR AMENDMENT OF THIS PLAN

      SECTION 19.1 Termination or Amendment. The Board may amend, alter or
discontinue the Plan and the Board or the Committee may to the extent permitted
by the Plan amend any agreement or other document evidencing an Award made under
this Plan but, except as provided pursuant to the anti-dilution adjustment

                                      A-15
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2004 Annual Meeting Approved Stock Plan

provisions of Section 14.2 hereof, no such amendment shall, without the approval
of the stockholders of the Company:

            (a) increase the maximum number of Shares for which Awards may be
      granted under this Plan;

            (b) reduce the price at which Options may be granted below the price
      provided for in Section 6.2 hereof;

            (c) reduce the option price of outstanding Options;

            (d) extend the term of this Plan;

            (e) change the class of persons eligible to be Participants; or

            (f) increase the individual maximum limits in Sections 5.2 and 10.3
      hereof.

      The Board may amend, alter or discontinue the Plan and the Board or the
Committee may to the extent permitted by the Plan amend any agreement evidencing
an Award made under this Plan, but no amendment or alteration shall be made
which would impair the rights of any Participant, without such Participant's
consent, under any Award theretofore granted, provided that no such consent
shall be required if the Committee determines in its sole discretion and prior
to the date of any Change in Control that such amendment or alteration either
(i) is required or advisable in order for the Company, the Plan or the Award to
satisfy any law or regulation or to meet the requirements of any accounting
standard, or (ii) is not reasonably likely to significantly diminish the
benefits provided under such Award, or that any such diminishment has been
adequately compensated.

                                   ARTICLE XX

                                LEAVE OF ABSENCE

      SECTION 20.1 Leave of Absence. Unless the Committee shall determine
otherwise, a leave of absence other than an Approved Leave of Absence shall be
deemed a termination of employment for purposes of this Plan. An Approved Leave
of Absence shall not be deemed a termination of employment for purposes of this
Plan, but the period of such Approved Leave of Absence shall not be counted
toward satisfaction of any Restriction Period or any holding period described in
Section 6.4 hereof.

                                   ARTICLE XXI

                               GENERAL PROVISIONS

      SECTION 21.1 Employment At Will. Neither the Plan nor the grant of any
Award nor any action by the Company or any Subsidiary or Parent of the Company
or the Committee shall be held or construed to confer upon any person any right
to be continued in the employ of the Company or any Subsidiary or Parent of the
Company. The Company and each Subsidiary and Parent expressly reserve the right
to discharge, without liability but subject to his or her rights under this
Plan, any Participant whenever in the sole discretion of the Company or any
Subsidiary or Parent of the Company, as the case may be, its interest may so
require.

      SECTION 21.2 Governing Law. This Plan and any agreements or other
documents hereunder shall be interpreted and construed in accordance with the
laws of the State of Delaware and applicable federal law. The Committee may
provide that any dispute as to any Award shall be presented and determined in
such forum as the Committee may specify, including through binding arbitration.
Any reference in this Plan or in the agreement or other document evidencing any
Award to a provision of law or to a rule or regulation shall be deemed to
include any successor law, rule or regulation of similar effect or
applicability.

      SECTION 21.3 Resale or Transfer of Shares. The Committee may impose such
restrictions, conditions or limitations as it determines appropriate as to the
timing and manner of any resales by the Participant or other subsequent
transfers by the Participant of any Shares received in connection with an Award,
including without limitation (a) restrictions under an insider trading policy,
(b) restrictions designed to delay and/or

                                      A-16
<PAGE>
2004 Annual Meeting Approved Stock Plan

coordinate the timing and manner of sales by the Participant and other
participants and (c) restrictions as to the use of a specified brokerage firm
for such resales or other transfers.

                                  ARTICLE XXII

                             NON-EXCLUSIVITY OF PLAN

      SECTION 22.1 Non-Exclusivity of Plan. Neither the adoption of this Plan by
the Board nor the submission of this Plan to the stockholders of the Company for
approval shall be construed as creating any limitations on the power of the
Board or the Committee to adopt such other incentive arrangements as either may
deem desirable, including without limitation, the granting of stock options,
stock appreciation rights, restricted stock, stock units or incentive bonuses
otherwise than under this Plan, and such arrangements may be either generally
applicable or applicable only in specific cases.

                                  ARTICLE XXIII

                   COMPLIANCE WITH OTHER LAWS AND REGULATIONS

      SECTION 23.1 Compliance with Other Laws and Regulations. This Plan, the
grant and exercise of Awards thereunder, and the obligation of the Company to
sell, issue or deliver Shares under such Awards, shall be subject to all
applicable federal, state and local laws, rules and regulations and to such
approvals by any governmental or regulatory agency as may be required. The
Company shall not be required to register in a Participant's name or deliver any
Shares prior to the completion of any registration or qualification of such
Shares under any federal, state or local law or any ruling or regulation of any
government body which the Committee shall determine to be necessary or
advisable. This Plan is intended to constitute an unfunded arrangement for a
select group of management and other key employees. No Option shall be
exercisable unless a registration statement with respect to the Option is
effective or the Company has determined that such registration is unnecessary.
Unless the Awards and Shares covered by this Plan have been registered under the
Securities Act of 1933, as amended, or the Company has determined that such
registration is unnecessary, each person receiving an Award and/or Shares
pursuant to any Award may be required by the Company to give a representation in
writing that such person is acquiring such Shares for his or her own account for
investment and not with a view to, or for sale in connection with, the
distribution of any part thereof.

                                  ARTICLE XXIV

                            LIABILITY OF THE COMPANY

      SECTION 24.1 Liability of the Company. The Company and any Affiliate which
is in existence or hereafter comes into existence shall not be liable to a
Participant or other persons as to: (a) the non-issuance or sale of Shares as to
which the Company has been unable to obtain from any regulatory body having
jurisdiction the authority deemed by the Company's counsel to be necessary to
the lawful issuance and sale of any Shares hereunder; and (b) any tax
consequence expected, but not realized, by any Participant or other person due
to the receipt, exercise or settlement of any Option or other Award granted
hereunder.

                                   ARTICLE XXV

                                 EFFECTIVE DATE

      SECTION 25.1 Effective Date. The Plan shall become effective upon approval
of the stockholders of the Company.

                                      A-17

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