Document:

<PAGE>

                                                                     EXHIBIT 4.6

                     MERRILL LYNCH MORTGAGE INVESTORS, INC.
                                    Depositor

                                       and

                                    [TRUSTEE]

                                     Trustee

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

                                 TRUST AGREEMENT

                               Dated as of [DATE]

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

                     MERRILL LYNCH MORTGAGE INVESTORS, INC.
                   MORTGAGE PASS-THROUGH CERTIFICATES [SERIES]
<PAGE>
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                  Page
<S>                                                                               <C>
ARTICLE I DEFINITIONS...............................................................6

ARTICLE II DECLARATION OF TRUST; ISSUANCE OF CERTIFICATES..........................37

ARTICLE III THE CERTIFICATES.......................................................45

ARTICLE IV ADMINISTRATION OF THE TRUST FUND........................................53

ARTICLE V DISTRIBUTIONS TO HOLDERS OF CERTIFICATES.................................56

ARTICLE VI CONCERNING THE TRUSTEE; EVENTS OF DEFAULT...............................62

ARTICLE VII PURCHASE OF MORTGAGE LOANS AND TERMINATION OF THE TRUST FUND...........75

ARTICLE VIII RIGHTS OF CERTIFICATEHOLDERS..........................................77

ARTICLE IX [[RESERVED]]............................................................80

ARTICLE X REMIC ADMINISTRATION.....................................................80

ARTICLE XI MISCELLANEOUS PROVISIONS................................................84
</TABLE>
<PAGE>
                                   ATTACHMENTS

Exhibit A    Forms of Certificates
Exhibit B    Form of Residual Certificate Transfer Affidavit (Transferee)
Exhibit C    Form of Residual Certificate Transfer Affidavit (Transferor)
Exhibit D    Servicing Agreements
Exhibit E    Purchase Agreement
Exhibit F    List of Limited Purpose Surety Bonds
Exhibit G    Form of Rule 144A Transfer Certificate
Exhibit H    Form of Purchaser's Letter for Institutional Accredited Investors
Exhibit I    Form of ERISA Transfer Affidavit
Exhibit J    Form of Letter of Representations with the Depository Trust Company
Exhibit K    Form of Initial Certification
Exhibit L    Form of Final Certification
Exhibit M    List of Servicing Officers
Exhibit N    Form of Request for Release
Exhibit O    Custody Agreement

Schedule A   Mortgage Loan Schedule
Schedule B   Mortgage Loan Representations and Warranties of the Seller

                                       ii
<PAGE>
            This TRUST AGREEMENT, dated as of [DATE] (the "Agreement"), by and
among MERRILL LYNCH MORTGAGE INVESTORS, INC., a Delaware corporation, as
depositor (the "Depositor"), and [TRUSTEE], as Trustee (the "Trustee"), and
acknowledged by Merrill Lynch Mortgage Capital Inc., a Delaware corporation, as
seller (the "Seller"), for purposes of Section 2.04.

                              PRELIMINARY STATEMENT

            The Seller has acquired the Mortgage Loans from the Originator. 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 Agreement and in this Agreement and by the Depositor
and the Trustee herein with respect to the Mortgage Loans and the other property
constituting the Trust Fund are for the benefit of the Holders from time to time
of the Certificates. The Depositor 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
(exclusive of the Additional Collateral and assets held in the Basis Risk
Reserve Fund) be treated for federal income tax purposes as comprising two real
estate mortgage investment conduits (each a "REMIC" or, in the alternative, the
"Lower Tier REMIC" and the "Upper Tier REMIC," respectively). Each Certificate,
other than the Class A-R Certificate and the Class LTR Certificate, shall
represent ownership of a regular interest in the Upper Tier REMIC. In addition,
each of the LIBOR Certificates represents the right to receive payments in
respect of Basis Risk Shortfalls and Unpaid Basis Risk Shortfalls from the Basis
Risk Reserve Fund as provided in Section 5.06. The Basis Risk Reserve Fund is
beneficially owned by the owners of the Interest Only Certificates. The Class
A-R Certificate represents the sole class of residual interest in the Upper Tier
REMIC. The Class LTR Certificate represents the sole class of residual interest
in the Lower Tier REMIC.

            The Upper Tier REMIC shall hold as its assets the several classes of
uncertificated Lower Tier Interests in the Lower Tier REMIC and each such Lower
Tier Interest, other than the interest represented by the Class LTR Certificate,
is hereby designated as a regular interest in the Lower Tier REMIC for purposes
of the REMIC Provisions. The Lower Tier REMIC shall hold as its assets the
property of the Trust Fund other than the Lower Tier Interests, the Basis Risk
Reserve Fund and the Additional Collateral.
<PAGE>
THE LOWER TIER REMIC INTERESTS

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

<TABLE>
<CAPTION>
                                            Interest       Corresponding Class of
Class Designation      Principal Amount      Rate             Certificates
-----------------      ----------------      ----             ------------
<S>                    <C>                  <C>        <C>
LT1A-1                 $________________      (1)      Class 1A, Class X-1A (7)
LT1A-2                 $________________      (2)      Class 1-A, Class X-1B (8)
LT2A-1                 $________________      (3)      Class 2A-1, Class X-2 (9)
LT2A-2                 $________________      (3)      Class 2A-2, Class X-2 (10)
LTB-1                  $________________      (4)      Class B-1, Class X-B (11)
LTB-2                  $________________      (4)      Class B-2, Class X-B (12)
LTB-3                  $________________      (4)      Class B-3, Class X-B (13)
LTB-4                  $________________      (4)      Class B-4
LTB-5                  $________________      (4)      Class B-5
LTB-6                  $________________      (4)      Class B-6
LTAR                   $________________      (5)      Class AR
LTR Certificate                      (6)      (6)      N/A
</TABLE>

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

      (1)   The interest rate for the Class LT1A-1 Interest for any Distribution
            Date (and the related Accrual Period) is a per annum rate equal to
            the Net WAC of the One-Month LIBOR Loans in Pool 1.

      (2)   The interest rate for the Class LT1A-2 Interest for any Distribution
            Date (and the related Accrual Period) is a per annum rate equal to
            the Net WAC of the Six-Month LIBOR Loans in Pool 1.

      (3)   The interest rate for the Class LT2A-1 and Class LT2A-2 Interests
            for any Distribution Date (and the related Accrual Period) is a per
            annum rate equal to the Pool 2 Net WAC.

      (4)   The interest rate for each of these Lower Tier Interests for any
            Distribution Date (and the related Accrual Period) is a per annum
            rate equal to the Subordinate Net WAC.

      (5)   The interest rate for the Class LTAR Interest for any Distribution
            Date (and the related Accrual Period) is a per annum rate equal to
            the Pool 1 Net WAC.

      (6)   The Class LTR Certificate is the sole class of residual interest in
            the Lower Tier REMIC. It does not have an interest rate or a
            principal balance.

      (7)   On each Distribution Date, the Class X-1A Certificates shall be
            entitled to a specified portion of the interest that accrues on the
            Class LT1A-1 Interest. Specifically, for each such Distribution
            Date, the Class X-1A Certificate shall be entitled to interest
            accruals on the Class LT1A-1 Interest at a per annum rate equal to
            the excess, if any, of (i) the Net WAC of the One-Month LIBOR Loans
            in Pool 1 over (2) the Certificate Interest Rate on the Class 1A
            Certificates for such Distribution Date (for the first Distribution
            Date only, multiplied by a fraction, the numerator of which is 24
            and the denominator of which is 30).

      (8)   On each Distribution Date, the Class X-1B Certificates shall be
            entitled to a specified portion of the interest that accrues on the
            Class LT1A-2 Interest. Specifically, for each such Distribution
            Date, the Class X-1B Certificates shall be entitled to interest
            accruals on the Class LT1A-2 Interest at a per annum rate equal to
            the excess, if any, of (i) the Net WAC of the Six-Month LIBOR Loans
            in Pool 1 over (2) the Certificate

                                       2
<PAGE>
            Interest Rate on the Class 1A Certificates for such Distribution
            Date (for the first Distribution Date only, multiplied by a
            fraction, the numerator of which is 24 and the denominator of which
            is 30).

      (9)   On each Distribution Date, the Class X-2 Certificates shall be
            entitled to a specified portion of the interest accruing on the
            Class LT2A-1 Interest. Specifically, for each such Distribution
            Date, the Class X-2 Certificates shall be entitled to interest
            accruals on the Class LT2A-1 Interest at a per annum rate equal to
            the excess of (i) the Pool 2 Net WAC over (ii) the Certificate
            Interest Rate on the Class 2A-1 Certificates for such Distribution
            Date (for the first Distribution Date only, multiplied by a
            fraction, the numerator of which is 24 and the denominator of which
            is 30).

      (10)  On each Distribution Date, the Class X-2 Certificates shall be
            entitled to a specified portion of the interest accruing on the
            Class LT2A-2 Interest. Specifically, for each such Distribution
            Date, the Class X-2 Certificates shall be entitled to interest
            accruals on the Class LT2A-2 Interest at a per annum rate equal to
            the excess of (i) the Pool 2 Net WAC over (ii) the Certificate
            Interest Rate on the Class 2A-2 Certificates for such Distribution
            Date (for the first Distribution Date only, multiplied by a
            fraction, the numerator of which is 24 and the denominator of which
            is 30).

      (11)  On each Distribution Date, the Class X-B Certificates shall be
            entitled to a specified portion of the interest accruing on the
            Class LTB-1 Interest. Specifically, for each such Distribution Date,
            the Class X-B Certificates shall be entitled to interest accruals on
            the Class LTB-1 Interest at a per annum rate equal to the excess of
            (i) the Subordinate Net WAC over (ii) the Certificate Interest Rate
            on the Class B-1 Certificates for such Distribution Date (for the
            first Distribution Date only, multiplied by a fraction, the
            numerator of which is 24 and the denominator of which is 30).

      (12)  On each Distribution Date, the Class X-B Certificates shall be
            entitled to a specified portion of the interest accruing on the
            Class LTB-2 Interest. Specifically, for each such Distribution Date,
            the Class X-B Certificates shall be entitled to interest accruals on
            the Class LTB-2 Interest at a per annum rate equal to the excess of
            (i) the Subordinate Net WAC over (ii) the Certificate Interest Rate
            on the Class B-2 Certificates for such Distribution Date (for the
            first Distribution Date only, multiplied by a fraction, the
            numerator of which is 24 and the denominator of which is 30).

      (13)  On each Distribution Date, the Class X-B Certificates shall be
            entitled to a specified portion of the interest accruing on the
            Class LTB-3 Interest. Specifically, for each such Distribution Date,
            the Class X-B Certificates shall be entitled to interest accruals on
            the Class LTB-3 Interest at a per annum rate equal to the excess of
            (i) the Subordinate Net WAC over (ii) the Certificate Interest Rate
            on the Class B-3 Certificates for such Distribution Date (for the
            first Distribution Date only, multiplied by a fraction, the
            numerator of which is 24 and the denominator of which is 30).

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

            On each Distribution Date the Trustee shall distribute interest and
principal on, and shall allocate Realized Losses among, the Lower Tier Interests
in the same manner that such amounts are distributed on and such losses are
allocated among the Corresponding Classes of Certificates; provided however,
that in determining distributions and the allocation of losses between the Class
LT1A-1 and Class LT1A-2 Interests, the Trustee shall make allocations to the
Class LT1A-1 Interest in accordance with the Class X-1A Percentage for such
Distribution Date and to the Class LT1A-2 Interest in accordance with the Class
X-1B Percentage for such Distribution Date.

                                       3
<PAGE>
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.

<TABLE>
<CAPTION>
                                                         Initial Class
                                                       Principal Amount or          Minimum
                      Class            Certificate       Class Notional        Denominations or
                   Designation        Interest Rate          Amount           Percentage Interest
                   -----------        -------------          ------           -------------------
<S>                                   <C>              <C>                    <C>
            Class 1A                       (1)           $_____________         $_____________
            Class 2A-1                     (2)           $_____________         $_____________
            Class 2A-2                     (3)           $_____________         $_____________
            Class X-1A                     (4)                (13)                     100%
            Class X-1B                     (5)                (14)                     100%
            Class X-2                      (6)                (15)                     100%
            Class X-B                      (7)                (16)                     100%
            Class A-R                      (8)           $_____________                100%
            Class B-1                      (9)           $_____________         $_____________
            Class B-2                     (10)           $_____________         $_____________
            Class B-3                     (11)           $_____________         $_____________
            Class B-4                     (12)           $_____________         $_____________
            Class B-5                     (12)           $_____________         $_____________
            Class B-6                     (12)           $_____________         $_____________

</TABLE>

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

      (1)   The Certificate Interest Rate with respect to any Distribution Date
            (and the related Accrual Period) for the Class 1A Certificates will
            be the least of (i) LIBOR plus ____%; (ii) the Pool 1 Net WAC and
            (iii) _____%; 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 1A Certificates will be LIBOR
            plus ____%.

      (2)   The Certificate Interest Rate with respect to any Distribution Date
            (and the related Accrual Period) for the Class 2A-1 Certificates
            will be the least of (i) LIBOR plus ____%; (ii) the Pool 2 Net WAC
            and (iii) _____%; 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 2A-1 Certificates will
            be LIBOR plus ____%.

      (3)   The Certificate Interest Rate with respect to any Distribution Date
            (and the related Accrual Period) for the Class 2A-2 Certificates
            will be the least of (i) LIBOR plus ____%; (ii) the Pool 2 Net WAC
            and (iii) _____%; 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 2A-2 Certificates will
            be LIBOR plus ____%.

      (4)   The Certificate Interest Rate with respect to any Distribution Date
            (and the related Accrual Period) for the Class X-1A Certificates
            will equal the excess of the Net WAC of the One-Month LIBOR Loans in
            Pool 1 over the Certificate Interest Rate on the Class 1A
            Certificates (multiplied by a fraction, the numerator of which is 24
            and the denominator of which is 30 for the first Distribution Date
            only).

                                       4
<PAGE>
      (5)   The Certificate Interest Rate with respect to any Distribution Date
            (and the related Accrual Period) for the Class X-1B Certificates
            will equal the excess of the Net WAC of Six-Month LIBOR Loans in
            Pool 1 over the Certificate Interest Rate on the Class 1A
            Certificates (multiplied by a fraction, the numerator of which is 24
            and the denominator of which is 30 for the first Distribution Date
            only).

      (6)   The Certificate Interest Rate with respect to any Distribution Date
            (and the related Accrual Period) for the Class X-2 Certificates will
            equal the excess of the Pool 2 Net WAC over the weighted average
            rate of the Certificate Interest Rates on the Class 2A-1 and Class
            2A-2 Certificates (multiplied by a fraction, the numerator of which
            is 24 and the denominator of which is 30 for the first Distribution
            Date only).

      (7)   The Certificate Interest Rate with respect to any Distribution Date
            (and the related Accrual Period) for the Class X-B Certificates will
            equal the excess of the Subordinate Net WAC over the weighted
            average of the Certificate Interest Rates on the Class B-1, Class
            B-2 and Class B-3 Certificates (multiplied by a fraction, the
            numerator of which is 24 and the denominator of which is 30 for the
            first Distribution Date only).

      (8)   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.

      (9)   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 ____%; (ii) the Subordinate Net WAC
            and (iii) _____%; 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 ____%

      (10)  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 ____%; (ii) the Subordinate Net WAC
            and (iii) _____%; 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 ____%.

      (11)  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 ____%; (ii) the Subordinate Net WAC
            and (iii) _____%; 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 ____%.

      (12)  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.

      (13)  The Class X-1A Certificate is an interest-only Class and for any
            Distribution Date the Class X-1A Certificates shall bear interest at
            the interest rate described above on a Class Notional Amount equal
            to the product of (i) the Class Principal Amount of the Class 1A
            Certificates immediately before such Distribution Date and (ii) the
            Class X-1A Percentage for such Distribution Date. The initial Class
            Notional Amount of the Class X-1A Certificate as of the Closing Date
            is equal to $___________.

      (14)  The Class X-1B Certificate is an interest-only Class and for any
            Distribution Date the Class X-1B Certificates shall bear interest at
            the Certificate Interest Rate described above on a Class Notional
            Amount equal to the product of (i) the Class Principal Amount of the
            Class 1A Certificates immediately before such Distribution Date and
            (ii) the Class X-1B Percentage for such Distribution Date. The
            initial Class Notional Amount of the Class X-1B Certificate as of
            the Closing Date is equal to $___________.

      (15)  The Class X-2 Certificate is an interest-only Class and for any
            Distribution Date the Class X-2 Certificates shall bear interest at
            the Certificate Interest Rate described above on a Class Notional
            Amount equal to the

                                       5
<PAGE>
            sum of the Class Principal Amounts of the Class 2A-1 and Class 2A-2
            Certificates immediately before such Distribution Date. The initial
            Class Notional Amount of the Class X-2 Certificate as of the Closing
            Date is equal to $___________.

      (16)  The Class X-B Certificate is an interest-only Class and for any
            Distribution Date the Class X-B Certificates shall bear interest at
            the Certificate Interest Rate described above on a Class Notional
            Amount equal to the sum of the Class Principal Amounts of the Class
            B-1, Class B-2 and Class B-3 Certificates immediately before such
            Distribution Date. The initial Class Notional Amount of the Class
            X-B Certificates as of the Closing Date is equal to $__________.

            As of the Cut-off Date, the Mortgage Loans had an aggregate
Scheduled Principal Balance of $_____________.

            In consideration of the mutual agreements herein contained, the
Depositor 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:

            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 20th day of the month
preceding the month in which the Distribution Date occurs and ending on the 19th
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
24-day period beginning on the Closing Date and ending on [DATE]. The Accrual
Period applicable to the Class X-1A, Class X-1B, Class X-2, Class X-B, Class
A-R, Class B-4, Class B-5 and Class B-6 Certificates and to each Class of
Lower-Tier 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 and on all Lower-Tier Interests on the basis of a
360-day year consisting of twelve 30-day months.

            Acknowledgements: The Assignment, Assumption and Recognition
Agreements, each dated [DATE], among the Seller, the Depositor, the Trustee and
the Originator or the Servicer assigning rights under the Purchase Agreement and
the Servicing Agreements from the Seller to the Depositor and from the Depositor
to the Trustee for the benefit of Certificateholders.

            Act: The Securities Act of 1933, as amended.

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

                                       6
<PAGE>
            Additional Collateral Mortgage Loan: Each Mortgage Loan identified
as such in the Mortgage Loan Schedule.

            Additional Collateral Servicing Agreement: The Additional Collateral
Servicing Agreement, dated as of [DATE], among [SERVICER] and the Seller, a copy
of which is attached as Exhibit D.

            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 or the Servicer with respect to any Distribution Date
pursuant to this Agreement or the Mortgage Loan Servicing Agreement, as
applicable, 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.

            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 1A, Class 2A-1, Class 2A-2 and Class
A-R Certificates and the denominator of which is the Aggregate Stated Principal
Balance, but in no event greater than 100%.

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

            Agreement: This Trust 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

                                       7
<PAGE>
Principal Amount of such Class and the denominator of which is the aggregate of
the Class Principal Amounts of each Class of Subordinate Certificates.

            Applicable Credit Support Percentage: As to any Class of Subordinate
Certificates and any Distribution Date, the sum of the Class Percentages of all
Classes of Certificates that rank lower in priority than such Class.

            Apportioned Principal Balance: As to any Distribution and each Class
of Subordinate Certificates, 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 or the Pool 2 Subordinate Amount, as the
case may require), and the denominator of which is the sum of such Pool
Subordinate Amounts, in each case, 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.

            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 related 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 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

                                       8
<PAGE>
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, up to an
                  aggregate maximum amount equal to the product of (i) the
                  applicable Pool Percentage and (ii) $_______ annually, or to
                  the Servicer under the Mortgage Loan Servicing Agreement;

                  (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; 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.

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

            Bankruptcy Loss: With respect to any Mortgage Loan, losses that are
incurred as a result of a Deficient Valuation or Debt Service Reduction as
reported by the Servicer to the Trustee.

            Bankruptcy Loss Coverage Amount: As of any Distribution Date, the
Initial Bankruptcy Loss Coverage Amount as reduced by the aggregate amount of
Bankruptcy Losses allocated to the Certificates since the Cut-off Date;
provided, however, that the Bankruptcy Loss Coverage Amount may also be reduced
pursuant to a letter from each Rating Agency to the Trustee to the effect that
any such reduction shall not result in a downgrading of the then current ratings
assigned by such Rating Agency to the Senior Certificates.

            Bankruptcy Loss Coverage Termination Date: The date on which the
Bankruptcy Loss Coverage Amount is reduced to zero.

            Basis Risk Reserve Fund: A fund consisting of the Class X-1A
Sub-account and the Class X-B Sub-account created as part of the Trust Fund
pursuant to Section 5.06 of this Agreement but which is not an asset of any of
the REMICs.

                                       9
<PAGE>
            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.

            Benefit Plan Opinion: An Opinion of Counsel satisfactory to the
Trustee and Certificate Registrar to the effect that any proposed transfer will
not (i) cause the assets of the Trust Fund to be regarded as plan assets for
purposes of the Plan Asset Regulations or (ii) give rise to any fiduciary duty
on the part of the Depositor or the Trustee.

            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 1A, Class 2A-1, Class 2A-2, Class
X-1A, Class X-1B, Class X-2, Class X-B, Class B-1, Class B-2 and Class B-3.

            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, the 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.

            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 and the Group 2
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).

                                       10
<PAGE>
            Certificate Principal Amount: With respect to any Certificate (other
than a Notional 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
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. 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. Notional Certificates are
issued without Certificate Principal Amounts.

            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 Soldiers' and Sailors' Civil Relief Act of
1940, as amended.

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

            Class 2A-2 Principal Distribution Amount: With respect to each
Distribution Date prior to the earlier of (x) the Credit Support Depletion Date
and (y) the Distribution Date on which the Class Principal Amount of the Class
2A-1 Certificates has been reduced to zero, the Class 2-A2 Principal
Distribution Amount shall be an amount equal to the product of (A) the Senior
Principal Distribution Amount for Pool 2 for such Distribution Date (as modified
below) and (B) a fraction (expressed as a percentage), the numerator of which is
the Class Principal Amount of the Class 2A-2 Certificates immediately prior to
such Distribution Date and the denominator of which is the sum of the Class
Principal Amounts of the Class 2A-1 and the 2A-2 Certificates immediately prior
to such Distribution Date; provided, however, in determining the amount in
clause (A) above, (i) the related Subordinate Percentage shall be substituted
for the related Senior Percentage in each case it appears in the definition of
Senior Principal Distribution Amount and (ii) the related Subordinate Prepayment
Percentage shall be substituted for the related Senior Prepayment Percentage in
each case it appears in the definition of Senior Principal Distribution Amount.
With respect to any Distribution Date on or after the earlier of (x) the Credit
Support Depletion Date or (y) the Distribution Date on which the Class Principal
Amount of the Class 2A-1 Certificates has been reduced to zero, the Class 2A-2
Principal Distribution Amount shall be an amount equal to the Class 2A-2
Certificate's proportionate share of the Senior Distribution Amount for Pool 2
determined without the modifications described in the immediately preceding
proviso.

            Class Notional Amount: With respect to any Class of Notional
Certificates, the applicable class notional amount calculated as provided in the
Preliminary Statement hereto.

                                       11
<PAGE>
            Class Principal Amount: With respect to each Class of Certificates
(other than a Notional Certificate) the aggregate of the Certificate Principal
Amounts of all Certificates of such Class at the date of determination.

            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.

            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 residual interest in the Upper Tier REMIC.

            Class LTR Certificate: The Class LTR Certificate executed by the
Trustee and authenticated and delivered by the Authenticating Agent,
substantially in the form annexed as Exhibit A, and evidencing ownership of the
residual interest in the Lower-Tier REMIC.

            Class X-A Required Basis Risk Deposit: For any Distribution Date, an
amount equal to the lesser of (i) the Current Interest for the Class X-1A, Class
X-1B and Class X-2 Certificates for such Distribution Date, and (ii) the amount
required to maintain the balance on deposit in the Class X-A Sub-account of the
Basis Risk Reserve Fund in an amount equal to the sum of (a) the Basis Risk
Shortfalls for such Distribution Date with respect to the Class 1A, Class 2A-1
and Class 2A-2 Certificates and (b) $_____. For any Distribution Date for which
the Class X-A Required Basis Risk Deposit is less than the sum of Current
Interest for each such Class for such Distribution Date, the Class X-1A, Class
X-1B and Class X-2 Certificates shall each fund a portion of the Class X-A
Required Basis Risk Deposit in proportion to the relative amounts of Current
Interest for each such Class and for such Distribution Date.

            Class X-1A Percentage: For any Distribution Date, the percentage
equivalent of a fraction the numerator of which is the Stated Principal Balances
of the Pool 1 Mortgage Loans that are One-Month LIBOR Loans and the denominator
of which is the Stated Principal Balances of all of Pool 1 Mortgage Loans. For
purposes of determining the Class X-1A Percentage for any Distribution Date, the
Stated Principal Balances of the Mortgage Loans shall be determined as of the
Due Date of the month preceding the month in which such Distribution Date
occurs.

            Class X-1B Percentage: For any Distribution Date, the percentage
equivalent of a fraction the numerator of which is the Stated Principal Balances
of the Pool 1 Mortgage Loans that are Six-Month LIBOR Loans and the denominator
of which is the Stated Principal Balances of all of the Pool 1 Mortgage Loans.
For purposes of determining the Class X-1B Percentage for any Distribution Date,
the Stated Principal Balances of the Mortgage Loans shall be determined as of
the Due Date of the month preceding the month in which such Distribution Date
occurs.

            Class X-B Required Basis Risk Deposit: For any Distribution Date, an
amount equal to the lesser of (i) Current Interest for the Class X-B
Certificates for such Distribution Date and (ii) the amount required to maintain
the balance on deposit in the Class X-B Sub-account in an amount equal to the
sum of (a) the Basis Risk Shortfalls for such Distribution Date with respect to
the Class B-1, Class B-2 and Class B-3 Certificates and (b) $_____.

                                       12
<PAGE>
            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: [DATE].

            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.

            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, [TRUSTEE],
[ADDRESS], Attention: Merrill Lynch Mortgage Investors, Inc., [SERIES] and for
all other purposes, [TRUSTEE], [ADDRESS], or such other address as the Trustee
may designate from time to time by notice to the Certificateholders.

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

            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 any
Distribution Date, the aggregate amount of interest accrued at the applicable
Certificate Interest Rate during the related Accrual Period on the Class
Principal Amount (or Class Notional Amount) of such Class immediately prior to
such Distribution Date.

                                       13
<PAGE>
            Custodial Accounts: Each custodial account (other than an Escrow
Account) established and maintained by the Servicer pursuant to the Mortgage
Loan Servicing Agreement.

            Custody Agreement: The Custodial Agreement, dated as of [DATE],
between [________] and [_______], as custodian, a copy of which is attached
hereto as Exhibit O.

            Cut-off Date: [DATE].

            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).

            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, 28th 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 860(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 "[TRUSTEE], in trust
for registered holders of Merrill Lynch Mortgage Investors, Inc., [SERIES],
Mortgage Pass-Through Certificates." Funds in the Distribution Account
(exclusive of any earnings on investments made with funds deposited in

                                       14
<PAGE>
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
[MONTH/YEAR].

            Distribution Date: The 20th day of each month or, if such 20th day
is not a Business Day, the next succeeding Business Day, commencing in
[MONTH/YEAR].

            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.

            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.

            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 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.

                                       15
<PAGE>
            ERISA-Restricted Certificate: The Class A-R, Class LTR, Class B-4,
Class B-5 or Class B-6 Certificates.

            Escrow Account: As defined in Section 1.01 of the Mortgage Loan
Servicing Agreement.

            Event of Default: Any one of the conditions or circumstances
enumerated in Section 10.01 of the Mortgage Loan Servicing Agreement.

            Excess Loss: With respect to any Mortgage Loan, the amount of any
(i) Fraud Loss realized after the Fraud Loss Coverage Termination Date, (ii)
Special Hazard Loss realized after the Special Hazard Loss Coverage Termination
Date or (iii) Bankruptcy Loss realized after the Bankruptcy Loss Coverage
Termination Date.

            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.

            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.]

            Fraud Loss Coverage Amount: As of the Closing Date, $__________,
subject to reduction from time to time by the amount of any Fraud Losses
allocated to the Certificates. In addition, on each anniversary of the Cut-Off
Date, the Fraud Loss Coverage Amount shall be reduced as follows: [(a) on the
first anniversary of the Cut-Off Date, to an amount equal to the lesser of (i)
____% of the then current Aggregate Stated Principal Balance and (ii) the excess
of the Fraud Loss Coverage Amount as of the Cut-Off Date over the cumulative
amount of Fraud Losses allocated to the Certificates since the Cut-Off Date; (b)
on the second, third and fourth anniversaries of the Cut-Off Date, to an amount
equal to the lesser of (i) ____% of the then current Aggregate Stated Principal
Balance and (ii) the excess of the Fraud Loss Coverage Amount as of the
immediately preceding anniversary of the Cut-Off Date, over the cumulative
amount of Fraud Losses allocated to the Certificates since such preceding
anniversary; and (c) on the fifth anniversary of the Cut-Off Date, to zero];
provided, however, that the Fraud Loss Coverage Amount may also be reduced
pursuant to a letter from each Rating Agency to the Trustee to the effect that
any such reduction shall not result in the downgrading of the then current
ratings assigned by such Rating Agency to the Classes of Senior Certificates.

            Fraud Loss Coverage Termination Date: The date on which the Fraud
Loss Coverage Amount is reduced to zero.

                                       16
<PAGE>
            Fraud Losses: Realized Losses on any Mortgage Loan sustained by
reason of a default arising from fraud, dishonesty or misrepresentation in
connection with that Mortgage Loan, as reported by the Servicer to the Trustee.

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

            Group 1: All of the Group 1 Certificates.

            Group 1 Certificate: Any Class 1A, Class A-R, Class X-1A and Class
X-1B Certificate.

            Group 2: All of the Group 2 Certificates.

            Group 2 Certificate: Any Class 2A-1, Class 2A-2 and Class X-2
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.

            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.

            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 Bankruptcy Loss Coverage Amount: $_______.

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

            Initial LIBOR Rate: _______%.

            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.

                                       17
<PAGE>
            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
(i) 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, on any
Distribution Date, the Current Interest for such Class, as reduced by such
Class's share of Net Prepayment Interest Shortfalls, Relief Act Reductions and
the interest portion of Excess Losses. Any such shortfalls and losses shall be
allocated among all Classes of Senior Certificates proportionately on the basis
of the Interest Distribution Amount otherwise payable thereon and among the
Subordinate Certificates on the basis of their Apportioned Principal Balances
before taking into account any of the foregoing reductions..

            Interest-Only Certificates: Any of the Class X-1A, Class X-1B, Class
X-2 and Class X-B Certificates.

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

            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 weighted average Certificate
Interest Rate of the applicable Undercollateralized Group, plus any interest
accrued on 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: [MONTH/YEAR].

            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 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

                                       18
<PAGE>
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 1A, Class 2A-1, Class 2A-2 and Class
B-1, Class B-2 and Class B-3 Certificate.

            LIBOR Determination Date: The second LIBOR Business Day immediately
preceding the commencement of each Accrual Period for any LIBOR Certificates.

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

            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 the Mortgage Loan Servicing
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.

            Lower Tier Interest: As described in the Preliminary Statement.

            Lower Tier REMIC: As described in the Preliminary Statement.

            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.

                                       19
<PAGE>
            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.

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

            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 the Trust
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 [DATE], 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 (i) identify the
designated Mortgage Pool in which such Mortgage Loan is included and (ii)
separately identify One-Month LIBOR Loans, Six-Month LIBOR Loans and Additional
Collateral Mortgage Loans.

            Mortgage Loan Servicing Agreement: The Mortgage Loan Flow Purchase,
Sale and Servicing Agreement, dated as of [DATE], between the Seller and
[SERVICER] as amended, a copy of which is attached as Exhibit D.

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

            Mortgage Pool: Each of Pool 1 and Pool 2.

            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.

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

            Mortgagor: The obligor on a Mortgage Note.

                                       20
<PAGE>
            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 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 Due Date of the month
preceding the month of such Distribution Date, weighted on the basis of their
outstanding Stated Principal Balances (after giving effect to the Scheduled
Payments due on or before such Due Date and Principal Prepayments received prior
to such Due Date) 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), 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.

            Notional Amount: With respect to any Notional Certificate and any
Distribution Date, such Certificate's Percentage Interest of the Class Notional
Amount of such Class of Certificates for such Distribution Date.

            Notional Certificate: Any Class X-1A, Class X-1B, Class X-2 and
Class X-B Certificate.

            Offering Document: The Prospectus.

            Officer's Certificate: A certificate signed by two Authorized
Officers of the Depositor.

            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.

                                       21
<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, reasonably
acceptable in form and substance to the Trustee and who may be in-house or
outside counsel to the Depositor or the Trustee but which must be Independent
outside counsel with respect to any such opinion of counsel concerning the
transfer of any Residual Certificate or concerning certain matters with respect
to the ERISA, or the taxation, or the federal income tax status, of each REMIC.

            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 - ____%; Class B-2 - ____%; Class B-3
- ____%; Class B-4 - ____%; Class B-5 - ____%; and Class B-6 - ____%.

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

            Originator: [______________________________________].

            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 Additional Collateral Servicing
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 Notional 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 Notional
Certificate, the Percentage Interest evidenced thereby shall equal its initial
Notional Amount as set forth on the face thereof divided by the initial Class
Notional Amount of such 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

                                       22
<PAGE>
            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) demand or time deposits or certificates of deposit
            issued by any bank or trust company or savings institution to the
            extent that such deposits are fully insured by the FDIC;

                        (vi) guaranteed reinvestment agreements issued by any
            bank, insurance company or other corporation 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;

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

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

                        (ix) 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

                                       23
<PAGE>
            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;

                        (x) short-term investment funds sponsored by any trust
            company or national banking association incorporated under the laws
            of the United States or any state thereof 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

                        (xi) 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 or (ii) such instrument would require
the Depositor to register as an investment company under the Investment Company
Act of 1940, as amended.

            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.

            Plan: An employee benefit plan (within the meaning of Section 3(3)
of ERISA subject to Title I of ERISA or a plan subject to Section 4975 of the
Code or Similar Law.

            Plan Asset Regulations: The Department of Labor regulations set
forth in 29 C.F.R. 2510.3-101.

            Pledge Account Control Agreement: With respect to any Additional
Collateral Loan, as defined in the Additional Collateral Servicing Agreement.

            Pledge and Security Agreement: With respect to any Additional
Collateral Loan, as defined in the Additional Collateral Servicing Agreement.

            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.

                                       24
<PAGE>
            Pool 1 Subordinate Amount: For any Distribution Date, the excess of
(a) the Aggregate Stated Principal Balances of the Pool 1 Mortgage Loans and
over (b) the sum of the Class Principal Amounts of the Class 1A 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.

            Pool 2 Subordinate Amount: For any Distribution Date, the excess of
(a) the Aggregate Stated Principal Balance of the Pool 2 Mortgage Loans over (b)
the sum of the Class Principal Amount of the Class 2A-1 and Class 2A-2
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: Either of the Pool 1 Subordinate Amount or
the Pool 2 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.

            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

                                       25
<PAGE>
with respect to Liquidated Mortgage Loans in such Mortgage Pool, (f) the
principal portion of the proceeds of any Additional Collateral with respect to
the Mortgage Loans in such Mortgage Pool, (g) 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 (h) on the
Distribution Date on which the Trust Fund is to be terminated pursuant to
Article X hereof, that portion of the Redemption 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 the Servicing 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.

            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; provided, however, that on any
Distribution Date after a Senior Termination Date has occurred with respect to
any Mortgage Pool, the Pro Rata Senior Percentage of the remaining Senior
Certificates is the percentage equivalent of a fraction, the numerator of which
is the aggregate of the Class Principal Amounts of the remaining Classes of
Senior Certificates immediately prior to such date and the denominator of which
is the aggregate Class Principal Amount of all Classes of Certificates,
immediately prior to such 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.

            Prospectus: The prospectus supplement dated [DATE], together with
the accompanying prospectus dated [DATE], relating to the initial sale of the
Class 1A, Class 2A-1, Class 2A-2, Class B-1, Class B-2, Class B-3, Class X-1A,
Class X-1B, Class X-2, Class X-B and Class A-R Certificates.

                                       26
<PAGE>
            Purchase Agreement: The [Master Mortgage Loan Purchase Agreement,
dated as of [DATE], between the _______________ and ___________________, as
amended], a copy of which is attached hereto as Exhibit E.

            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 the Mortgage Loan Servicing Agreement, or by the Seller
pursuant to the Mortgage Loan Purchase and Sale 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, and (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, or such other amount as may be specified in
the related agreement.

            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 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.

            Redemption Date: Any Distribution Date on which Certificates may be
redeemed.

            Redemption Price: With respect to any Class of Certificates to be
redeemed, an amount equal to 100% of the related Class Principal Amount of the
Certificates to be so redeemed,

                                       27
<PAGE>
together with interest on such amount at the applicable Certificate Interest
Rate through the related Accrual Period (as increased by any Interest Shortfalls
but excluding any Unpaid Basis Risk Shortfalls), and including, in the case of
the Redemption Price payable in connection with the redemption and retirement of
all of the Certificates, 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 Trustee or the
Servicer pursuant to this Agreement or the Mortgage Loan Servicing Agreement.

            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 and Group 2 Certificates are related
to Pool 2).

            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 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.

            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 the
Trust 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

                                       28
<PAGE>
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).

            Required Basis Risk Deposit: Each of the Class X-A Required Basis
Risk Deposit and the Class X-B Required Basis Risk Deposit.

            Residual Certificate: The Class A-R and Class LTR Certificate.

            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 B-4, Class B-5, Class B-6 or Class
LTR Certificate.

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

            [S&P: Standard & Poor's Rating Services, 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 the Trust
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 the Mortgage Loan Servicing 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.

            Seller: Merrill Lynch Mortgage Capital Inc., a [___________]
corporation.

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

            Senior Percentage: Except as provided in this definition, with
respect to any Distribution Date and Mortgage Pool before [MONTH/YEAR], 100%.
The Senior Percentage for any

                                       29
<PAGE>
Distribution Date occurring (i) before the Distribution Date in [MONTH/YEAR] but
in or after [MONTH/YEAR] on which the Two Times Test is satisfied, or (ii) in or
after [MONTH/YEAR], is the Pro Rata Senior Percentage. If the Two Times Test is
satisfied with respect to any Distribution Date prior to the Distribution Date
in [MONTH/YEAR], the Senior Percentage 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
related Senior Percentage for such Mortgage Pool will equal zero. If on any
Distribution Date the allocation to the Senior Certificates 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 related Senior
Percentage for such Distribution Date shall be limited to the percentage
necessary to reduce that Class Principal Amount to zero.

            Senior Prepayment Percentage: With respect to any Distribution Date
and each Mortgage Pool, during the ten years beginning on the first Distribution
Date, 100%. Except as provided herein, the 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
[MONTH/YEAR] through [MONTH/YEAR], the Senior Percentage plus 70% of the Senior
Percentage for that Distribution Date; (ii) from [MONTH/YEAR] through
[MONTH/YEAR], the Senior Percentage plus 60% of the Senior Percentage for that
Distribution Date; (iii) from [MONTH/YEAR] through [MONTH/YEAR], the Senior
Percentage plus 40% of the Senior Percentage for that Distribution Date; (iv)
from [MONTH/YEAR] through [MONTH/YEAR], the Senior Percentage plus 20% of the
Senior Percentage for that Distribution Date; and (v) from and after
[MONTH/YEAR], the related Senior Percentage for that Distribution Date;
provided, however, that there shall be no reduction in the Senior Prepayment
Percentage 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, the Senior Prepayment Percentage
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 with respect to any Mortgage
Pool shall equal the Senior Percentage for such Distribution Date. In addition,
if on any Distribution Date the allocation to the Senior Certificates 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 related Senior
Prepayment Percentage for such Distribution Date shall be limited to the
percentage necessary to reduce that Class Principal Amount to zero.

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

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

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

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

                                    either

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

                                    or

                                    (z) if an Excess Loss was sustained with
                        respect to such Liquidated Mortgage Loan during such
                        related Prepayment Period, the related Senior Percentage
                        of the amount of 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 clause (g) of the definition of "Principal
            Distribution Amount" for that Mortgage Pool;

provided, however, that if a Bankruptcy Loss that is an Excess Loss is sustained
with respect to any Mortgage Loan that is not a Liquidated Mortgage Loan, such
Senior Principal Distribution Amount shall be reduced on such Distribution Date
by the related Senior Percentage of the principal portion of such Bankruptcy
Loss; and provided, further, that on any Distribution Date after a Senior
Termination Date, the Senior Principal Distribution Amount for the remaining
Certificate Group will be calculated pursuant to the above formula based on all
Mortgage Loans rather than the Mortgage Loans in the related Mortgage Pool only.

            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: [SERVICER] and its successors and assigns.

            Servicer Advance: A "Servicing Advance" as defined in the Mortgage
Loan Servicing Agreement.

            Servicing Agreements: Collectively, the Mortgage Loan Servicing
Agreement and the Additional Collateral Servicing Agreement.

            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.

            Servicing Fee Rate: With respect to each Mortgage Loan and any
Distribution Date, ____% 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.

                                       31
<PAGE>
      Servicers: [SERVICER] and [SERVICER] and their successors and assigns.

      Similar Law: Provisions of state, local or other federal law substantially
similar to the prohibited transaction provisions of Title I of ERISA or Section
4975 of the Code.

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

      Special Hazard Loss: Any Realized Loss suffered by a Mortgaged Property on
account of direct physical loss, as reported by the Servicer to the Trustee, but
not including (i) any loss of a type covered by a hazard insurance policy or a
flood insurance policy required to be maintained with respect to such Mortgaged
Property to the extent of the amount of such loss covered thereby, or (ii) any
loss caused by or resulting from:

      (a)   normal wear and tear;

      (b)   fraud, conversion or other dishonest act on the part of the Trustee,
            the Servicer or any of their agents or employees (without regard to
            any portion of the loss not covered by any errors and omissions
            policy);

      (c)   errors in design, faulty workmanship or faulty materials, unless the
            collapse of the property or a part thereof ensues and then only for
            the ensuing loss;

      (d)   nuclear or chemical reaction or nuclear radiation or radioactive or
            chemical contamination, all whether controlled or uncontrolled, and
            whether such loss be direct or indirect, proximate or remote or be
            in whole or in part caused by, contributed to or aggravated by a
            peril covered by the definition of the term "Special Hazard Loss";

      (e)   hostile or warlike action in time of peace and war, including action
            in hindering, combating or defending against an actual, impending or
            expected attack:

            1.    by any government or sovereign power, de jure or de facto, or
                  by any authority maintaining or using military, naval or air
                  forces; or

            2.    by military, naval or air forces; or

            3.    by an agent of any such government, power, authority or
                  forces;

      (f)   any weapon of war employing nuclear fission, fusion or other
            radioactive force, whether in time of peace or war; or

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

                                       32
<PAGE>
      Special Hazard Loss Coverage Amount: With respect to the first
Distribution Date, $__________. With respect to any Distribution Date after the
first Distribution Date, the lesser of (a) the greatest of (i) 1.00% of the
Aggregate Stated Principal Balance, (ii) twice the Stated Principal Balance of
the largest Mortgage Loan and (iii) the aggregate of the Stated Principal
Balances of the Mortgage Loans secured by Mortgaged Properties located in the
single five-digit ZIP code area in the State of California having the highest
aggregate Stated Principal Balance of any such ZIP code area and (b) the Special
Hazard Loss Coverage Amount as of the Closing Date less the amount, if any, of
Special Hazard Losses allocated to the Certificates since the Closing Date;
provided, however, that the Special Hazard Loss Coverage Amount may also be
reduced pursuant to a letter from each Rating Agency to the Trustee to the
effect that any such reduction shall not result in the downgrading of the then
current ratings assigned by such Rating Agency to the Classes of Senior
Certificates. All Stated Principal Balances for the purpose of the definition
will be calculated as of the first day of the calendar month preceding the month
of such Distribution Date after giving effect to Scheduled Payments on the
Mortgage Loans then due, whether paid or not.

      Special Hazard Loss Coverage Termination Date: The date on which the
Special Hazard Loss Coverage Amount is reduced to zero.

      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 partial Principal Prepayments
and Liquidation Proceeds allocable to principal (other than with respect to any
Liquidated Mortgage Loan) 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 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 [MONTH/YEAR]
through [MONTH/YEAR], 30% of the Original Subordinate Principal Amount, (b) with
respect to each Distribution Date from [MONTH/YEAR] through [MONTH/YEAR], 35% of
the Original Subordinate Principal Amount, (c) with respect to each Distribution
Date from [MONTH/YEAR] through [MONTH/YEAR], 40% of the Original Subordinate
Principal Amount, (d) with respect to each Distribution Date from [MONTH/YEAR]
through [MONTH/YEAR], 45% of the Original Subordinate Principal Amount and (e)
with respect to each Distribution Date from and after [MONTH/YEAR], 50% of the
Original Subordinate Principal Amount.

      Sub-account: Each of the Class X-A Sub-account and the Class X-B
Sub-account constituting the Basis Risk Reserve Fund.

                                       33
<PAGE>
      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 and the Pool 2 Net WAC, in each case weighted on the basis of
the relative Pool Subordinate Amounts for Pool 1 and Pool 2, respectively,
immediately prior to such Distribution Date.

      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 clauses (a) through (d) 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 clause (g) 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

                                       34
<PAGE>
                  the amount of principal distributions made to the Senior
            Certificates pursuant to Section 5.02(h);

provided, however, that if a Bankruptcy Loss that is an Excess Loss is sustained
with respect to any Mortgage Loan that is not a Liquidated Mortgage Loan
Payment, such related Subordinate Principal Distribution Amount shall be reduced
on such Distribution Date by the related Subordinate Percentage of the principal
portion of such Bankruptcy Loss; and provided, further, on any Distribution Date
after a Senior Termination Date has occurred with respect to a Mortgage Pool,
the Subordinate Principal Distribution Amount will not be calculated with
respect to a Mortgage Pool, but instead will equal the amount calculated as
above based on a Subordinate Percentage or Subordinate Prepayment Percentage, as
applicable, for the Subordinate Certificates for such Distribution Date with
respect to all of the Mortgage Loans.

      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 LTR 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 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 Purchase Agreement and the
Servicing Agreements as modified by the Acknowledgements and 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) 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: [TRUSTEE] and any Person succeeding the Trustee hereunder, or if
any successor trustee or any co-trustee shall be appointed as herein provided,
then such successor 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

                                       35
<PAGE>
aggregate of the Stated Principal Balances of all Mortgage Loans Delinquent 60
days or more (including Mortgage Loans in 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.

      Underwriter[s]: Merrill Lynch, Pierce, Fenner & Smith Incorporated [and
________].

      Underwriter's Exemption: Prohibited Transaction Exemption ("PTE") 90-29
(Exemption Application No. D-8012, 55 Fed. Reg. 21459 (1990)) or any
substantially similar administrative exemption granted by the U.S. Department of
Labor to the Underwriter[s] as amended from time to time.

      Underwriting Agreement: The Underwriting Agreement, dated [DATE], between
the Depositor and the Underwriter[s].

      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.

      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, _____% of all
Voting Interests shall be allocated to the Class 1A, Class 2A-1, Class 2A-2,
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) _____% 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, ____% of all
Voting Interests shall be allocated among the Class X-1A, Class X-1B, Class X-2
and Class X-B Certificates, while they remain outstanding, in proportion to
their relative Class Notional

                                       36
<PAGE>
Amounts. Voting Interests shall be allocated among the Certificates within each
such Class in proportion to their Certificate Principal Amounts or Percentage
Interests.

      Section 1.01 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 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 Purchase Agreement and the Servicing Agreements as modified by
the Acknowledgements and 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) 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, 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.

      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

                                       37
<PAGE>
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.

      In connection with such transfer and assignment of the Mortgage Loans, the
Depositor shall hereby 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 Custody Agreement with respect to each Mortgage Loan (each a
"Trustee Mortgage File") so transferred and assigned.

      (b) 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, without recourse, or (B) endorsed to "[TRUSTEE], as Trustee of the
Merrill Lynch Mortgage Investors, Inc. Mortgage Pass-Through Certificates,
[SERIES], without recourse", within 30 days of the Closing Date for purpose of
their recording; provided, however, that such Assignments need not be recorded
if, on or prior to the Closing Date, the Depositor delivers, at its own expense,
an Opinion of Counsel (which must be Independent counsel) acceptable to the
Rating Agencies, to the effect that recording in such states is not required to
protect the Trustee's interest in the related Mortgage Loans. Subject to the
preceding sentence, as soon as practicable after the Closing Date (but in no
event more than 270 days thereafter except to the extent delays are caused by
the applicable recording office), the Depositor at its own expense and with the
cooperation of the Servicer, shall cause to be properly recorded by the Servicer
in each public recording office where the related Mortgages are recorded each
Assignment of Mortgage endorsed in the form described above with respect to each
such Mortgage Loan.

      (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 4(a) of the Custody 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

                                       38
<PAGE>
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. Trustee shall prepare an initial
certification to be delivered to the Depositor 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. Within 90 days of its receipt of such notice,
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 a loss has occurred with respect to a
Mortgage Loan for which the Trustee previously 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 therefore 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, 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
Scheduled of Exceptions attached to the Final Certification.

                                       39
<PAGE>
      (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 Acknowledgements, together
with the related Purchase Agreement, Servicing Agreements and the Mortgage Loan
Purchase and Sale Agreement.

      Section 2.03 Representations and Warranties of the Depositor.

      (a) The Depositor hereby represents and warrants 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;

            (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

                                       40
<PAGE>
      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;

            (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.

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

                                       41
<PAGE>
      Section 2.04 Discovery of Breach; Repurchase or Substitution of Mortgage
Loans.

      (a) Pursuant to Sections 2(b) and 2(d) of the Mortgage Loan Purchase and
Sale Agreement, the Seller has made certain representations and warranties as to
the characteristics of the Mortgage Loans (set forth 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 such representations and warranties set
forth in Sections 2(b) and 2(d) 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 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 materially
adversely affects the value of that Mortgage Loan or the interest therein of the
Certificateholders (a "Defective Mortgage Loan") (each of such parties hereby
agreeing to give written notice thereof 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 deliver such missing
document or cure such breach in all material respects during such period, the
Trustee shall cause the Depositor to enforce the Seller's obligation under the
Mortgage Loan Purchase and Sale Agreement and cause the Seller to repurchase
that Defective Mortgage Loan from the Trust Fund at the Purchase Price 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 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, 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, 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 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 respecting such breach available to the Trustee on
behalf of the Certificateholders.

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<PAGE>
      (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 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 selected 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) either REMIC created hereunder to fail to qualify as a REMIC at any time
that any

                                       43
<PAGE>
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 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, Seller or Depositor, as applicable, shall repurchase or, subject to
the limitations set forth in Section 2.04(b), 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 Section 2.04(a) above, if made by the Seller. 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.

      (d) The Seller indemnifies and holds the Trust Fund, the Trustee, the
Depositor 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 and any Certificateholder may sustain in connection with
any actions of such party relating to a repurchase of a Mortgage 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.

      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

                                       44
<PAGE>
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 the
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 Seller or the Depositor in any Mortgage Loan or
(4) any change under the relevant UCC or other applicable laws. None of the
Seller or the Depositor shall 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 Seller or 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 transferees, including the Trustee,
in the Mortgage Loans and the other property described above. In connection with
the transactions contemplated by this Agreement, each of the Seller and 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 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
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-1A, Class X-1B,
Class X-2 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.

                                       45
<PAGE>
      (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 B-4, Class B-5, Class B-6, Class A-R and Class LTR
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.

      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

                                       46
<PAGE>
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:

            (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) No transfer of an ERISA-Restricted Certificate in the form of a
Definitive Certificate shall be made to any Person unless the Certificate
Registrar has received (A) a certificate substantially in the form of Exhibit I
hereto from such transferee or (B) an Opinion of Counsel satisfactory to the
Certificate Registrar to the effect that the purchase and holding of such a
Certificate will not constitute or result in the assets of the Trust Fund being
deemed to be "plan assets" subject to the prohibited transactions provisions of
Title I of ERISA, Section 4975 of the Code or Similar Law and will not subject
the Trustee, the Certificate Registrar or the Depositor to any obligation in
addition to those undertaken in the Agreement; provided, however, that the
Certificate Registrar will not require such certificate or opinion in the event
that, as a result of a

                                       47
<PAGE>
change of law or otherwise, counsel satisfactory to the Certificate Registrar
has rendered an opinion to the effect that the purchase and holding of an
ERISA-Restricted Certificate by a Plan or a Person that is purchasing or holding
such a Certificate with the assets of a Plan will not constitute or result in a
prohibited transactions under ERISA, Section 4975 of the Code or Similar Law.
The preparation and delivery of the certificates and opinions referred to above
shall not be an expense of the Trust Fund, the Trustee, the Certificate
Registrar or the Depositor.

      Notwithstanding the foregoing, no opinion or certificate shall be required
for the initial issuance of the ERISA-Restricted Certificates. Notwithstanding
anything to the contrary herein, any purported transfer of an ERISA-Restricted
Certificate to or on behalf of a Plan without the delivery to the Certificate
Registrar of an Opinion of Counsel satisfactory to the Certificate Registrar as
described above shall be void and of no effect; provided that the restriction
set forth in this sentence shall not be applicable if there has been delivered
to the Certificate Registrar, an Opinion of Counsel meeting the requirements of
clause (B) of the first sentence of this paragraph (d). The Trustee, the
Certificate Registrar and the Depositor shall be under no liability to any
Person for any registration of transfer of any ERISA-Restricted Certificate that
is in fact not permitted by this Section 3.03(d) or for the Paying Agent 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 last preceding Holder of such Certificate
that is not a Plan or a Person acting on behalf of a Plan shall be entitled to
recover from any purported Holder of any ERISA-Restricted Certificate that was
in fact a Plan or a Person acting on behalf of a Plan at the time it became a
Holder or, at such subsequent time as it became a Plan or Person acting on
behalf of such a Plan , all payments made on such ERISA-Restricted Certificate
at and after either such time; provided that none of the Depositor, the
Certificate Registrar or the Trustee shall be responsible for such recovery if
they otherwise made a good faith effort to comply with this Section 3.03(d).

      (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 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 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 4224 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, 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

                                       48
<PAGE>
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 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 any subsequent time it became a Disqualified Organization, agent or nominee
thereof, or Non-permitted Foreign Holder, all payments made on such Residual
Certificate at and after either 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), 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

                                       49
<PAGE>
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 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.

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<PAGE>
      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 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;

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<PAGE>
            (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.

      (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

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<PAGE>
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 in the Mortgage Loan
Servicing Agreement, into which all Scheduled Payments and unscheduled payments
with respect to the Mortgage Loans, net of any deductions or reimbursements
permitted under the Mortgage Loan Servicing Agreement, shall be deposited. 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 the Mortgage Loan
Servicing Agreement.

      (b) The Trustee, shall establish and maintain an Eligible Account entitled
"Distribution Account of [TRUSTEE], as Trustee, for the benefit of Merrill Lynch
Mortgage Investors , Inc. Mortgage Pass-Through Certificates, [SERIES] 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
      the Mortgage Loan Servicing 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.

      (c) 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.

      (d) On each Distribution Date and Redemption 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.

      (e) 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

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<PAGE>
(except that if such Permitted Investment is an obligation of the Trustee, 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.

      Section 4.02 Reports to Trustee and Certificateholders.

      On each Distribution Date, the Trustee shall have prepared and shall make
available to each Certificateholder a written report setting forth the following
information (on the basis of Mortgage Loan level information obtained from the
Servicer).

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

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

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

      (d) 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;

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

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

      (g) 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;

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

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

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

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

      (l) 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;

      (m) 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;

      (n) 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;

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

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

      (q) the aggregate amount of Special Hazard Losses, Bankruptcy Losses and
Fraud Losses incurred during the preceding calendar month;

      (r) the cumulative amount of Special Hazard Losses, Bankruptcy Losses and
Fraud Losses incurred since the Closing Date;

      (s) the Special Hazard Loss Coverage Amount, the Fraud Loss Coverage
Amount and the Bankruptcy Loss Coverage Amount, in each case as of the related
Determination Date;

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

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

      (v) 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.

      The Trustee shall make such reports available each month via its website
at [_____________]. Assistance in using the website may be obtained by calling
the Trustee's customer service desk at [_____________]. 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,

                                       55
<PAGE>
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
the Mortgage Loan Servicing 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.

      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 Trustee and 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

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<PAGE>
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 Certificate Account.

      (a) Subject to Sections 5.02(h) and (i), on each Distribution Date, the
Available Distribution Amount for the related Mortgage Pool (in the case of 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 and allocated among the classes of Senior Certificates and Subordinate
Certificates in the following order of priority:

            (i) Concurrently, from the related Available Distribution Amount, to
      the payment of the Interest Distribution Amount and any Interest
      Shortfalls for each Class of Senior Certificates; provided, however, that
      on each Distribution Date, the Interest Distribution Amount that would
      otherwise be distributable to a Class of Interest-Only Certificates shall
      be deposited in the Basis Risk Reserve Fund to the extent of the Required
      Basis Risk Deposit for such Class and shall not be distributed to such
      Class;

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

                  (b)   concurrently to the Class 2A-1 Certificates and the
                        Class 2A-2 Certificates, an amount up to the Senior
                        Principal Distribution Amount for Pool 2 as follows:

                        (i)   to the Class 2A-2 Certificates, the Class 2A-2
                              Principal Distribution Amount for such
                              Distribution Date until the Class Principal Amount
                              of such Class has been reduced to zero; and

                                       57
<PAGE>
                        (ii)  to the Class 2A-1 Certificates, any remaining
                              Senior Principal Distribution Amount for Pool 2
                              after application of paragraph of (a)(ii)(b)(i) of
                              this Section 5.02;

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

      (v) From the Class X-A Sub-account of the Basis Risk Reserve Fund, for
payment to the Class 1A, Class 2A-1 and Class 2A-2 Certificates, concurrently,
in proportion to any Basis Risk Shortfalls related to such Classes for such
Distribution Date, and from the Class X-B Sub-account of the Basis Risk Reserve
Fund for payment to the Class B-1, Class B-2 and Class B-3 Certificates,
sequentially in that order, any related Basis Risk Shortfall or related Unpaid
Basis Risk Shortfall for such date;

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

            (A) to the Class B-4 Certificates, the Interest Distribution Amount
      and any Interest Shortfalls, in each case, for such Class and date;

            (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 Interest Distribution Amount
      and any Interest Shortfalls, in each case, for such Class and date;

            (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 Interest Distribution Amount
      and any Interest Shortfalls, in each case, for such Class and date; 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;

                                       58
<PAGE>
            (vii) To the Class A-R Certificate and the Class LTR Certificate,
      any remaining amount of the Available Distribution Amount from the
      Mortgage Pools in the aggregate allocated as provided in Section 5.02(d).

      (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 a Certificate Group, on
a pro rata basis, first, to pay the Interest Distribution Amount and any accrued
but unpaid Interest Shortfalls; second, to pay the Senior Principal Distribution
Amount for such Mortgage Pool; third, to pay any related Basis Risk Shortfall or
any related Unpaid Basis Risk Shortfall; and fourth, to the Class A-R and Class
LTR Certificate, any remaining Available Distribution Amount from such Mortgage
Pool.

      (c) Notwithstanding the priority and allocation set forth in Section
5.02(a)(iv) and Section 5.02(a)(vi) 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)(vi) above.

      (d) Amounts distributed to the Residual Certificates pursuant to
subparagraph (a)(vii) 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 paragraph (a) of this
Section 5.02, each Mortgage Pool shall "relate" to the Senior Class or Classes
of the applicable Related Certificate Group.

      (f) To the extent a Basis Risk Shortfall is experienced on the Class 1A,
Class 2A-1, Class 2A-2, Class B-1, Class B-2 or Class B-3 Certificates, the
Trustee shall withdraw from the related Sub-account of the Basis Risk Reserve
Fund an amount for distribution to such Class equal to the lesser of (1) the
amount of such Basis Risk Shortfall and (2) the amounts available therefor on
deposit in the related Sub-account as provided in Section 5.06.

      (g) 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.

      (h) 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 have been reduced to zero, then that

                                       59
<PAGE>
portion of the Available Distribution Amount for each 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 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 1A Certificates shall be distributed sequentially thereto in
such order.

      (i) If, on any Distribution Date, any Certificate Group would constitute
an Undercollateralized Group and the other Certificate Group constitutes an
Overcollateralized Group, then notwithstanding Section 5.02(a)(ii), the
Available Distribution Amount for the Overcollateralized Group, to the extent
remaining following distributions of interest and principal to the related
Senior Certificates of that Certificate Group, shall be distributed up to the
sum of the Interest Transfer Amount and the Principal Transfer Amount for the
Undercollateralized Group to the Senior Certificates related to the
Undercollateralized Group 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 each Servicer with respect to the total amount of
Realized Losses, including Excess Losses, with respect to the Mortgage Loans for
the related Distribution Date.

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

            (i) Realized Losses, Bankruptcy Losses, Fraud Losses and Special
      Hazard Losses (other than Excess 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, in the case of
            Pool 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; provided, however, any such loss
            that would otherwise be allocated to the Class 2A-1 Certificates
            shall first be allocated to the Class 2A-2 Certificates until the
            Class Principal Amount of the Class 2A-2 Certificates has been
            reduced to zero;

            (ii) the principal portion of any Excess Losses in respect of a
      Mortgage Pool shall be allocated proportionately on a pro rata basis to
      (A) the Classes of Senior Certificates of the related Mortgage Pool on the
      basis of their Class Certificate Principal Amounts; provided, however, any
      such loss that would otherwise be allocated to the Class 2A-1 Certificates
      shall first be allocated to the Class 2A-2 Certificates until the

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      Class Principal Amount of the Class 2A-2 Certificates has been reduced to
      zero; and (B) to the Classes of Subordinate Certificates on the basis of
      their Apportioned Principal Balances.

            (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, Bankruptcy Losses, Fraud Losses and Special
      Hazard Losses and Excess 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.

      Section 5.04 Advances.

      If the Servicer fails to remit any Advance required to be made under the
Mortgage Loan Servicing Agreement, the Trustee shall itself make, or shall cause
the successor Servicer to make, such Advance. If the Trustee 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 Servicer) for deposit in the Distribution
Account immediately available funds in an amount equal to such Advance. The
Trustee and the Servicer shall be entitled to be reimbursed for all Advances
made by it. Notwithstanding anything to the contrary herein, in the event the
Trustee (or successor servicer) determines in its reasonable judgment that an
Advance is non-recoverable, the Trustee (or successor servicer) shall be under
no obligation to make such Advance.

      Section 5.05 [Reserved.]

      Section 5.06 Basis Risk Reserve Fund.

      (a) On the Closing Date, the Trustee shall establish and maintain in the
Trustee's name, in trust for the benefit of the holders of the LIBOR
Certificates and the Interest Only Certificates, a Basis Risk Reserve Fund, into
which the Depositor shall deposit $______. The Basis Risk Reserve Fund shall be
an Eligible Account, and funds on deposit therein shall be held separate and
apart from, and shall not be commingled with, any other moneys, including,
without limitation, other moneys of the Trustee held pursuant to this Agreement.
The Basis Risk Reserve Fund shall not be an asset of any REMIC established
hereby.

      (b) The Basis Risk Reserve Fund will be comprised of two Sub-accounts: the
"Class X-A Sub-account," and the "Class X-B Sub-account." On each Distribution
Date, (i) Current Interest that would otherwise be distributable with respect to
the Class X-1A, Class X-1B and Class X-2 Certificates shall instead be deposited
in the Class X-A Sub-account to the extent of the applicable Class X-A Required
Basis Risk Deposit and (ii) Current Interest that would otherwise be
distributable with respect to the Class X-B Certificates shall instead be
deposited in the Class X-B Sub-account to the extent of the Class X-B Required
Basis Risk Deposit.

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      (c) On any Distribution Date for which a Basis Risk Shortfall exists with
respect to the Class 1A, Class 2A-1 and Class 2A-2 Certificates, the Trustee
shall withdraw from the Class X-A Sub-account the amount of such Basis Risk
Shortfall for distribution on such Distribution Date pursuant to Section
5.02(f).

      (d) On any Distribution Date for which a Basis Risk Shortfall exists with
respect to the Class B-1 Certificates, the Trustee shall withdraw from the Class
X-B Sub-account the amount of such Basis Risk Shortfall for distribution on such
Distribution Date pursuant to Section 5.02(f).

      (e) Funds in each of the Class X-A Sub-account and the Class X-B
Sub-account shall be invested in Permitted Investments. Any earnings on amounts
in the Class X-1 Sub-account shall be for the benefit of the Class X-1A, Class
X-1B and Class X-2 Certificateholders and any earnings on amounts in the Class
X-B Sub-account shall be for the benefit of the Class X-B Certificateholders.
The Interest-Only Certificates shall evidence ownership of the related
Sub-account for federal income tax purposes and the Holders thereof shall direct
the Trustee, in writing, as to investment of amounts on deposit therein. The
applicable Interest-Only Certificateholder(s) shall be liable for any losses
incurred on such investments. In the absence of written instructions from the
applicable Interest-Only Certificateholder as to investment of funds on deposit
in the related Sub-account, such funds shall be invested in money market funds
as described in paragraph (ix) of the definition of Permitted Investments in
Article I. For all Federal income tax purposes, amounts transferred by the
Upper-Tier REMIC to the Basis Risk Reserve Fund shall be treated as amounts
distributed by the Upper-Tier REMIC to the applicable Interest-Only
Certificateholders.

      (f) Upon termination of the Trust Fund any amounts remaining in the
related Sub-account shall be distributed to the applicable Interest-Only
Certificateholders.

                                   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 or the
Mortgage Loan Servicing 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,

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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 from liability for its
own negligent action, its own negligent failure to act or its own willful
misconduct; provided, however, that:

            (i) 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 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 the Mortgage Loan Servicing 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

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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 the Mortgage Loan Servicing
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 the Mortgage Loan Servicing Agreement.

      (g) The Trustee shall not be held liable by reason of any insufficiency in
the Distribution Account or the Basis Risk Reserve Fund 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 rerecording, refiling or
redepositing of any thereof, (B) to see to 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 the Mortgage
Loan Servicing 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.

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      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 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

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<PAGE>
      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 that 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 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 any State or the United States of America,
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

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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 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 of appointment by the successor trustee, 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

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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 of appointment by a successor trustee as provided in
this Section, the predecessor trustee shall mail notice of the succession of
such 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
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

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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;

            (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 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.

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      (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 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

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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; and

            (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.

      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
express trust). Any expenses incurred by the Trustee shall be reimbursed in
accordance with 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) If an Event of Default described in the Mortgage Loan Servicing
Agreement 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 the Mortgage Loan Servicing
Agreement, the Trustee, by notice in writing to the Servicer may, and 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 in accordance with
the Mortgage Loan Servicing Agreement. On or after the receipt by the Servicer
of such written notice, all authority and power of the Servicer,

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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(a), 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 the Mortgage Loan
Servicing 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 the
Mortgage Loan Servicing 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 the Mortgage Loan Servicing
Agreement. In the Trustee's capacity as such successor, the Trustee shall have
the same limitations on liability provided to the Servicer in the Mortgage Loan
Servicing Agreement. As compensation therefor, the Trustee shall be entitled to
receive all compensation payable to the Servicer under the Mortgage Loan
Servicing Agreement.

      The Trustee shall be entitled to be reimbursed by the Depositor and the
Trust Fund (pursuant to Section 6.11), in the event that the Servicer does not
reimburse the Trustee under the Servicing Agreements, 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.

      (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 the Mortgage Loan Servicing 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

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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 the Mortgage Loan Servicing 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 the Mortgage Loan Servicing
Agreement. The Trustee and such successor shall take such actions, consistent
with this Agreement and the Mortgage Loan Servicing 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 the Mortgage Loan Servicing Agreement, (iii) the failure of the
Servicer to deliver the Mortgage Loan data to the Trustee as required by the
Mortgage Loan Servicing 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 or the Mortgage Loan Servicing 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.

      Section 6.17 Notification to Holders.

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      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 or the
Mortgage Loan Servicing 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 or the Mortgage Loan Servicing
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 [[Reserved]].

      Section 6.20 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. If the Depositor
notifies the Trustee in writing or the Trustee otherwise has knowledge that a
state tax return or other return is required, then, at the sole expense of the
Trust Fund, 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

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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 the Lower Tier REMIC and Upper Tier REMIC, an
application on IRS 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. 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 Depositor 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 September 25, 2003, the Depositor shall, in accordance with industry
standards, file a Form 15 Suspension Notification with respect to the Trust
Fund, if applicable. Prior to September 25, 2003, the Depositor shall file a
Form 10-K, 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.

                                   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.

      (a) The respective obligations and responsibilities of the Trustee 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 in accordance with Section 7.01(b)
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) On any Distribution Date occurring on or after the Initial Optional
Purchase Date, the Depositor has the option to cause the Trust Fund to adopt a
plan of complete liquidation pursuant to Section 7.03(a)(i) hereof to sell all
of its property. If the Depositor elects to exercise such option, it shall no
later than 30 days prior to the Distribution Date selected for purchase of the

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assets of the Trust Fund (the "Purchase Date") deliver notices to the Trustee
and either (a) deposit in the Distribution Account the Redemption Price or (b)
state in such notice that the Redemption Price shall be deposited in the
Distribution Account not later than 10:00 a.m., New York City time on the
applicable Purchase Date. Upon exercise of such option, the property of the
Trust Fund shall be sold to the Depositor at a price equal to the Redemption
Price.

      (c) The Depositor, the Servicer and the Trustee shall be reimbursed from
the Redemption Price for any Advances, Servicer Advances, accrual and unpaid
Servicing Fees or other amounts with respect to the Mortgage Loans that are
reimbursable to such parties under this Agreement or the Mortgage Loan Servicing
Agreement.

      Section 7.02 Procedure Upon Redemption Termination of Trust Fund.

      (a) Notice of any redemption termination pursuant to the provisions of
Section 7.01, specifying the Distribution Date upon which the final distribution
shall be made or the Redemption Date of the Certificates, shall be given
promptly by the Trustee by first class mail to Certificateholders mailed in the
case of a redemption of the Certificate, no less than the first day of the month
in which the Distribution Date selected for redemption of the Certificates
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 Redemption Date, 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 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.

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      (c) Any reasonable expenses incurred by the Trustee 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 (at the request
of the party exercising the option to purchase all of the Mortgage Loans
pursuant to Section 7.01(b)), and subsequently 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 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
      7.02 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 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.

      Section 7.04 [Reserved].

                                  ARTICLE VIII

                          RIGHTS OF CERTIFICATEHOLDERS

      Section 8.01 Limitation on Rights of Holders.

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<PAGE>
      (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 of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of an Event
of Default and of the continuance thereof, as hereinbefore provided, 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 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
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

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<PAGE>
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 such 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.

      (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.

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                                   ARTICLE IX

                                  [[RESERVED]]

                                    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.

      (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 Section 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 6.20 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

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<PAGE>
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.

      (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) The Trustee shall treat the Basis Risk Reserve Fund as an outside
reserve fund within the meaning of Treasury Regulation Section 1.860G-2(h) that
is owned by the holders of the Interest-Only Certificates and that is not an
asset of any REMIC. The Trustee shall treat the rights of the Holders of the
LIBOR Certificates to receive distributions from the Basis Risk Reserve Fund to
cover Basis Risk Shortfalls and Unpaid Basis Risk Shortfalls as payments under

                                       81
<PAGE>
a cap contract written by the Holders of the Class X-1A, Class X-1B, Class X-2
and Class X-B Certificates in favor of the Holders of the LIBOR Certificates.
Thus, each Class 1A, Class 2A-1, Class 2A-2, Class B-1, Class B-2 and Class B-3
Certificates shall be treated as representing not only ownership of regular
interests in a REMIC, but also ownership of an interest in an interest rate cap
contract. For purposes of determining the issue prices of the Certificates, the
interest rate cap contracts shall be assumed to have a zero value unless and
until required otherwise by an applicable taxing authority.

      (l) "The Class LTR Holder shall act as "tax matters person" with respect
to the Lower-Tier REMIC and shall act as agent for the Class A-R
Certificateholder as "tax matters person" with respect to the Upper-Tier REMIC
and the Trustee shall act as agent for the Class LTR Holder in such roles,
unless and until another party is so designated by the Class LTR Holder."

      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 (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, the Mortgage Loan
Purchase Agreement, the Purchase Agreement, or under either the Servicing
Agreement or the Acknowledgement, (2) for any Losses other than arising out of
malfeasance, willful misconduct or negligent performance by the Trustee of its

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<PAGE>
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 the Mortgage Loan Servicing
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 the
Mortgage Loan Servicing Agreement) to make reasonable efforts to sell any REO
Property for its fair market value. In any event, however, the Depositor shall,
or shall cause the Servicer (to the extent provided in the Mortgage Loan
Servicing 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 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.

                                       83
<PAGE>
                                   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 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 the Mortgage Loan Servicing
Agreement, (iii) to make any other provisions with respect to matters or
questions arising under this Agreement or (iv) 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 clause (iii) of such sentence
adversely affect in any material respect the interests of any Holder. 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 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
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

                                       84
<PAGE>
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 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 the Mortgage Loan
Servicing Agreement, the Trustee shall not consent to any amendment of the
Mortgage Loan Servicing Agreement except pursuant to the standards provided in
this Section with respect to amendment of this Agreement.

      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.

      (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 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 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

                                       85
<PAGE>
Exchange Commission pursuant to Section 9.23(b) 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,
Attention: Contract Finance, 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, 28th
Floor, New York, New York 10080, Attention: Merrill Lynch Mortgage Investors ,
Inc. Mortgage Pass-Through Certificates, [SERIES], (b) in the case of the
Seller, [ADDRESS], Attention: Merrill Lynch Mortgage Investors , Inc. Mortgage
Pass-Through Certificates, [SERIES] and (c) with respect to the Trustee or the
Certificate Registrar, 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.

      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,

                                       86
<PAGE>
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 the Mortgage
      Loan Servicing 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.
      99 Church Street
      New York, New York 10007
      Attention:  Residential Mortgages]

      [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]

                                       87
<PAGE>
      [If to Fitch Ratings, to:

      Fitch, Inc.
      One State Street Plaza
      New York, New York 10004
      Attention:  Residential Mortgages]

      (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 Conflicts.

      To the extent that the terms of this Agreement conflict with the terms of
the Mortgage Loan Servicing Agreement, the Mortgage Loan Servicing Agreement
shall govern.

      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, 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.

                                       88
<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:
                                       Title:

                                    [TRUSTEE],
                                    as Trustee

                                    By:
                                       -----------------------------------
                                       Name:
                                       Title:

                                       89
<PAGE>
Solely for purposes of Section 2.04,
accepted and agreed to by:

MERRILL LYNCH MORTGAGE CAPITAL INC.

By:
   --------------------------------
   Name:
   Title:

                                       90
<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 either: (x) 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"), Section 4975 of the Internal Revenue
            Code of 1986, as amended (the "Code") or provisions of state,
            local or other federal law substantially similar to the foregoing
            provisions of ERISA or the Code ("Similar Law"), the trustee of
            any such plan or a person acting on behalf of any such plan or
            investing the assets of any such plan to acquire a Residual
            Certificate; (y) is an insurance company that is purchasing the
            Certificate with funds contained in an "insurance company general
            account" as
<PAGE>
            defined in Section V(e) of Prohibited Transaction Class Exemption
            ("PTCE") 95-60 and the purchase and holding of the Certificate are
            covered under Section I and III of PTCE 95-60; or (z) herewith
            delivers to the Trustee and the Certificate Registrar an opinion of
            counsel satisfactory to the Trustee and the Certificate Registrar,
            and upon which the Trustee and the Certificate Registrar shall be
            entitled to rely, to the effect that the purchase and holding of
            such Residual Certificate by the Investor will not result in the
            assets of the Trust Fund being deemed to be plan assets and subject
            to the prohibited transaction provisions of ERISA, the Code or
            Similar Law and will not subject the Trustee or the Depositor to any
            obligation in addition to those undertaken by such entities in the
            Trust Agreement, which opinion of counsel shall not be an expense of
            the Trustee or the Certificate Registrar.

      5.    That the Purchaser hereby acknowledges that under the terms of
            the Trust Agreement dated as of [DATE] (the "Agreement"), by and
            between Merrill Lynch Mortgage Investors, Inc., as Depositor and
            [TRUSTEE], as Trustee with respect to Merrill Lynch Mortgage
            Investors , Inc. Mortgage Pass-Through Certificates, [SERIES], 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

                                      B-2
<PAGE>
            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 or (iii) is a Non-U.S.
            Person that has delivered to the transferor, the Trustee and the
            Certificate Registrar an opinion of a nationally recognized tax
            counsel to the effect that the transfer of such Residual Certificate
            to it is in accordance with the requirements of the Code and the
            regulations promulgated thereunder and that such transfer of a
            Residual Certificate will not be disregarded for federal income tax
            purposes. "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 June 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.

      11.   The Purchaser will not cause income from the Residual Certificate
            to be attributable to a foreign permanent establishment or fixed
            base of the Purchaser or another U.S. taxpayer.

      12.   That the Purchaser agrees to such amendments of the Trust 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 holder of the
            Class LT-R Certificate to act as agent for the "tax matters person"
            of each REMIC created by the Trust Fund pursuant to the Trust
            Agreement.

                                      B-3
<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  .
                          -----        ----------   --

                                      B-4
<PAGE>
                                    EXHIBIT C

              RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT (TRANSFEROR)

                                                ----------------------------
                                                               Date

Re:   Merrill Lynch Mortgage Investors , Inc.
      Mortgage Pass-Through Certificates, [SERIES]

                              (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

                               SERVICING AGREEMENT

                             [Intentionally Omitted]
<PAGE>
                                    EXHIBIT E

                               PURCHASE AGREEMENT

                             [Intentionally Omitted]
<PAGE>
                                    EXHIBIT F

                      LIST OF LIMITED PURPOSE SURETY BONDS

1.    [                            Surety Bond No.         , issued [DATE],
      for [                  ] Loans.
<PAGE>
                                    EXHIBIT G

                     FORM OF RULE 144A TRANSFER CERTIFICATE

Re:   Merrill Lynch Mortgage Investors, Inc.
      Mortgage Pass-Through Certificates, [SERIES]

      Reference is hereby made to the Trust Agreement, dated as of [DATE] (the
"Trust Agreement"), by and between Merrill Lynch Mortgage Investors, Inc., as
Depositor and [TRUSTEE], as Trustee. Capitalized terms used but not defined
herein shall have the meanings given to them in the Trust 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 Trust 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 Underwriter[s] 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 , Inc. Mortgage Pass-Through
Certificates, [SERIES] (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 Trust Agreement, dated as
      of [DATE], by and between Merrill Lynch Mortgage Investors, Inc., as
      Depositor and [TRUSTEE], 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.

                                     E-7-1
<PAGE>
(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, 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 understand that in
      accordance with ERISA, the Code, Similar Law and the Exemption, no Plan
      and no person acting on behalf of such a Plan may acquire such Certificate
      except in accordance with Section 3.03(d) of the Trust Agreement.

      Terms used in this letter which are not otherwise defined herein have the
respective meanings assigned thereto in the Trust Agreement.

                                     E-7-2
<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:

                                     E-7-3
<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. The Investor either: (x) 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"),
      Section 4975 of the Internal Revenue Code of 1986, as amended (the
      "Code")or provisions of state, local or other federal law substantially
      similar to the foregoing provisions of ERISA or the Code ("Similar Law"),
      the trustee of any such plan or a person acting on behalf of any such plan
      or investing the assets of any such plan; (y) if the Certificate has been
      the subject of an ERISA-Qualifying Underwriting, is an insurance company
      that is purchasing 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 purchase and holding of
      the Certificate are covered under Sections I and III of PTCE 95-60; or (z)
      herewith delivers to the Certificate Registrar an opinion of counsel
      satisfactory to the Certificate Registrar, and upon which the Certificate
      Registrar shall be entitled to rely, to the effect that the purchase and
      holding of such Certificate by the Investor will not result in the assets
      of the Trust Fund being deemed to be plan assets and subject to the
      prohibited transaction provisions of ERISA, the Code or Similar Law and
      will not subject the Trustee or the Depositor to any obligation in
      addition to those undertaken by such entities in the Trust Agreement,
      which opinion of counsel shall not be an expense of the Trust Fund, the
      Trustee, the Certificate Registrar or the Depositor.

            3. The Investor hereby acknowledges that under the terms of the
      Trust Agreement dated as of [DATE] (the "Agreement"), by and between
      Merrill Lynch Mortgage Investors, Inc., as Depositor and [TRUSTEE], 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.

                                       I-1
<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___.

                                       I-2
<PAGE>
                                    EXHIBIT J

                        FORM OF LETTER OF REPRESENTATIONS
                        WITH THE DEPOSITORY TRUST COMPANY

                             [Intentionally Omitted]

                                       J-1
<PAGE>
                                    EXHIBIT K

                              INITIAL CERTIFICATION
                     MERRILL LYNCH MORTGAGE INVESTORS, INC.
                   MORTGAGE PASS-THROUGH CERTIFICATES [SERIES]

                                                                          [DATE]

To:   Merrill Lynch Mortgage Investors, Inc.
      250 Vesey Street
      4 World Financial Center, 28th Floor
      New York, New York 10080

      Reference is made to the Trust Agreement between Merrill Lynch Mortgage
Investors, Inc. (the "Depositor") and TRUSTEE], as Trustee (the "Trustee"),
dated as of [DATE] (the "Trust 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 Trust 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 Trust Agreement, (2) the Trustee has reviewed each Trustee's Mortgage
File in accordance with Section 2.02(a) of the Trust 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.

      All terms used herein and not otherwise defined herein shall have the
respective meaning ascribed to such term in the Trust Agreement.

                                            [TRUSTEE],
                                            as Trustee

                                            By:_________________________________
                                            Name:_______________________________
                                            Title:______________________________

                                       K-1
<PAGE>
                                    EXHIBIT L

                           FORM OF FINAL CERTIFICATION

                                                                          [DATE]

To:   Merrill Lynch Mortgage Investors, Inc.
      250 Vesey Street
      4 World Financial Center, 28th Floor
      New York, New York 10080

      Reference is made to the Trust Agreement between Merrill Lynch Mortgage
Investors, Inc. (the "Depositor") and [TRUSTEE], as Trustee (the "Trustee"),
dated as of [DATE] (the "Trust 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 Trust 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 Trust Agreement, (2) the Trustee has reviewed each Trustee's Mortgage
File in accordance with Section 4(b) of the Custody, and the documents contained
in each Trustee's Mortgage File conform to the requirements set forth in such
Section 4(b), 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.

      All terms used herein and not otherwise defined herein shall have the
respective meaning ascribed to such term in the Trust Agreement.

                                            [TRUSTEE],
                                            as Trustee

                                            By:_________________________________
                                            Name:_______________________________
                                            Title:______________________________

                                       L-1
<PAGE>
                                    EXHIBIT M

                           LIST OF SERVICING OFFICERS

                             [Intentionally Omitted]

                                       M-1
<PAGE>
                                    EXHIBIT N

                               REQUEST FOR RELEASE

To:  ___________________________

            Re:   Custodial Agreement, dated as of , 2000 between [TRUSTEE] (the
                  "Trustee") and [CUSTODIAN] (the "Custodian")

      In connection with the administration of the pool of Mortgage Loans held
by you as Custodian for the Registered Holder of the Mortgage Loans, we request
the release of the (Custodian'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

                  ([Registered Holder] [Authorized Servicer] hereby certifies
                  that all amounts received in connection therewith have been
                  credited to the account of the Registered Holder.)

______ 2.         Mortgage Loan in Foreclosure

______ 3.         Mortgage Loan Repurchased or Substituted For
                  ([Registered Holder] [Authorized Servicer] hereby certifies
                  that any applicable repurchase price or substitution shortfall
                  amount has been credited to the account of the Registered
                  Holder.)

______ 4.         Mortgage Loan Liquidated
                  ([Registered Holder] [Authorized Servicer] hereby certifies
                  that all proceeds of foreclosure, insurance or other
                  liquidation have been finally received and credited to the
                  account of the Registered Holder.)

______ 5.         Other (explain)

                                       N-1
<PAGE>
      If box 1, 2 or 3 above is checked, and if all or part of the Custodian'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 Custodian, please acknowledge your receipt by signing in the
space indicated below, and returning this form.

[Registered Holder Consent:

Name of Registered Holder:_________________
Name of Authorized Officer:________________
Title:_____________________________________

                                            [REGISTERED HOLDER]
                                            [SERVICER AUTHORIZED BY
                                            REGISTERED HOLDER]

                                            By:_________________________________
                                            Date:_______________________________

Documents returned to Custodian:

________________________________,
as Custodian

By:________________________________________
Date:______________________________________

                                       N-2
<PAGE>
                                    EXHIBIT O

                               CUSTODIAL AGREEMENT

            THIS CUSTODIAL AGREEMENT dated as of December 15, 2000 (this
"Agreement"), between [____________] ("____") having an address at [ADDRESS] and
[CUSTODIAN] ("Custodian"), having an address at [ADDRESS].

                              PRELIMINARY STATEMENT

            [____] 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 [____] and such third parties
(each, a "Purchase Agreement"). [____] 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 [____] completes the purchase of such Mortgage Loan.

      "Custodian": [CUSTODIAN], or its successor in interest or assigns.

                                      O-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 [____] 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 [____], 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 [____], 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.

                                      O-2
<PAGE>
      "Mortgage": The mortgage, deed of trust or other instrument creating a
first or second lien on real property securing the Mortgage Note.

      "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 [____]
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;

                                      O-3
<PAGE>
              (xii)  the maturity date;

              (xiii) the monthly payment in effect as of the related Cut-off
                     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;

              (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.

                                      O-4
<PAGE>
      "Registered Holder": [____], 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.

      2. Delivery of Mortgage Loan Schedule and Custodian's Mortgage File.

      [____] 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 [____] 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).

                                      O-5
<PAGE>
            (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,

                  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, [____] 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.

                                      O-6
<PAGE>
      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 each
Custodian's Mortgage File or any of the Mortgage Loans or (ii) the
collectability, 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 [____] 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 [____] (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

                                      O-7
<PAGE>
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 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.

                                      O-8
<PAGE>
      (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 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 [____], 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

                                      O-9
<PAGE>
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.

      10. Governing Law.

                                      O-10
<PAGE>

      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.

      15.   Assignment of Agreement.

                                      O-11
<PAGE>

      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.

      (a) 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).

      (b) 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.

                                      O-12
<PAGE>
The foregoing indemnification shall survive any termination of this Agreement
and the resignation or removal of the Custodian.

      (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

                                      O-13
<PAGE>
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 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 [    ] 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

                                      O-14
<PAGE>
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 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.

                                      O-15
<PAGE>
      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.

      27.   Representations and Warranties of Custodian.

      Custodian represents and warrants to and covenants with [    ] 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. [    ] may rely on the actions
            of Custodian 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 of
            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.

                                      O-16
<PAGE>
      IN WITNESS WHEREOF, the Custodian and [    ] have caused this Agreement to
be executed as of the date and year first written above.

                                    [CUSTODIAN],
                                    ("Custodian")

                                    By:
                                       ---------------------------------------
                                    Name:
                                         -------------------------------------
                                    Title:
                                          ------------------------------------

                                    --------------------------
                                    ("----")

                                    By:
                                       ---------------------------------------
                                    Name:
                                         -------------------------------------
                                    Title:
                                          ------------------------------------

                                      O-17
<PAGE>
                                   EXHIBIT ONE

                             INITIAL CUSTODY RECEIPT

                                 [Closing Date]

THIS CUSTODY RECEIPT MAY NOT BE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE TERMS
OF THE CUSTODIAL AGREEMENT REFERRED TO BELOW

Registered Holder: [                     ]

Ladies and Gentlemen:

      Reference is made to the Custodial Agreement, dated as of [DATE] (the
"Custodial Agreement"), between [                   ] ("[    ]") and [CUSTODIAN]
(the "Custodian"), pursuant to which [____] has caused to be delivered to the
Custodian a Custodian's Mortgage File for the Mortgage Loans, which are more
fully described on the Mortgage Loan Schedule attached hereto as Schedule A.

      Any capitalized term used but not defined herein shall have the same
meaning that is assigned to it in the Custodial Agreement.

      The Custodian hereby certifies that the above named person is the
Registered Holder of this Initial Custody Receipt. In accordance with the
provisions of Paragraph 4(a) of the Custodial Agreement, the undersigned, as
Custodian, hereby certifies that as to each Mortgage Loan listed in the Mortgage
Loan Schedule (a "Receipted Mortgage Loan") (except as noted on the Schedule of
Exceptions attached hereto as Schedule B), it has reviewed the Custodian's
Mortgage File and has determined that (i) 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 posses
of the Custodial Agreement are in its possession and (ii) each Mortgage Note has
been endorsed and each Assignment has been executed as provided in Paragraph 2
of the Custodial Agreement, and the Custodian further certifies that it will,
subject to the provisions of the Custodial Agreement, continue to hold the
Custodian's Mortgage File for each Mortgage Loan for the sole and exclusive use
and benefit of the Registered Holder until the Registered Holder directs the
Custodian to the contrary. The Custodian makes no representations or warranties
as to and shall not be responsible to verify (i) the validity, legality,
enforceability, recordability, sufficiency, due authorization or genuineness of
any of the documents contained in each Custodian's Mortgage File or any of the
Receipted Mortgage Loans or (ii) the collectability, insurability, effectiveness
or suitability of any such Receipted Mortgage Loan.

                              [CUSTODIAN]

                              By:
                                 ---------------------------------------------
                              Name:
                                   -------------------------------------------
                              Title:
                                    ------------------------------------------
<PAGE>
                                   SCHEDULE A

                             MORTGAGE LOAN SCHEDULE

                             [Intentionally Omitted]
<PAGE>
                                   SCHEDULE B

                             SCHEDULE OF EXCEPTIONS

                             [Intentionally Omitted]
<PAGE>
                                   EXHIBIT TWO

                              FINAL CUSTODY RECEIPT

                                     (date)

THIS CUSTODY RECEIPT MAY NOT BE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE TERMS
OF THE CUSTODIAL AGREEMENT REFERRED TO BELOW

Registered Holder: [                     ]

Ladies and Gentlemen:

      Reference is made to the Custodial Agreement, dated as of [DATE] (the
"Custodial Agreement"), between [                       ] ("[    ]") and
[CUSTODIAN] (the "Custodian"), pursuant to which [    ] has caused to be
delivered to the Custodian a Custodian's Mortgage File for the Mortgage Loans,
which are more fully described on the Mortgage Loan Schedule attached hereto as
Schedule A.

      Any capitalized term used but not defined herein shall have the same
meaning that is assigned to it in the Custodial Agreement.

      The Custodian hereby certifies that the above named person is the
Registered Holder of this Final Custody Receipt. In accordance with the
provisions of Paragraph 4(b) of the Custodial Agreement, the undersigned, as
Custodian, hereby certifies that as to each Mortgage Loan listed in the Mortgage
Loan Schedule (a "Receipted Mortgage Loan") (except as noted on the Schedule of
Exceptions attached hereto as Schedule B), it has reviewed the Custodian's
Mortgage File and has determined that (1) 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, (2) such documents have been reviewed by it and appear regular on
their face and relate to such Mortgage Loan, (3) based on its examination and
only as to the foregoing documents, the information set forth in Paragraphs (i),
(ii), (iii), (iv), (vi), (vii), (viii) and (x) of the definition of the Mortgage
Loan Schedule respecting such Mortgage Loan is correct, and (4) each Mortgage
Note has been endorsed and each Assignment has been executed as provided in
Paragraph 2 of the Custodial Agreement, and the Custodian further certifies that
it will, subject to the provisions of the Custodial Agreement, continue to hold
the Custodian's Mortgage File for each Mortgage Loan for the sole and exclusive
use and benefit of the Registered Holder until the Registered Holder directs the
Custodian to the contrary. The Custodian makes no representations or warranties
as to and shall not be responsible to verify (i) the validity, legality,
enforceability, recordability, sufficiency, due authorization or genuineness of
any of the documents contained in each Custodian's Mortgage File or any of the
Receipted Mortgage Loans or (ii) the collectability, insurability, effectiveness
or suitability of any such Receipted Mortgage Loan.

                              [CUSTODIAN]

                              By:
                                 ---------------------------------------------
                              Name:
                                   -------------------------------------------
                              Title:
                                    ------------------------------------------
<PAGE>
                                   SCHEDULE A

                             MORTGAGE LOAN SCHEDULE

                             [Intentionally Omitted]
<PAGE>
                                   SCHEDULE B

                             SCHEDULE OF EXCEPTIONS

                             [Intentionally Omitted]
<PAGE>
                                  EXHIBIT THREE

         AUTHORIZED REPRESENTATIVES OF
                                       --------------------------------
                        AS THE INITIAL REGISTERED HOLDER

                             [Intentionally Omitted]
<PAGE>
                                  EXHIBIT FOUR

                     AUTHORIZED REPRESENTATIVES OF CUSTODIAN

                             [Intentionally Omitted]
<PAGE>
                                  EXHIBIT FIVE

                               REQUEST FOR RELEASE

To:

      Re:   Custodial Agreement, dated as of [DATE] between
            [                      ] ("[    ]") and [CUSTODIAN] (the
            "Custodian")

      In connection with the administration of the pool of Mortgage Loans held
by you as Custodian for the Registered Holder of the Mortgage Loans, we request
the release of the (Custodian'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
-------
            ([Registered Holder] [Authorized Servicer] hereby certifies that all
            amounts received in connection therewith have been credited to the
            account of the Registered Holder.)

       2.   Mortgage Loan in Foreclosure
-------
       3.   Mortgage Loan Repurchased or Substituted For
-------     ([Registered Holder] [Authorized Servicer] hereby certifies that any
            applicable repurchase price or substitution shortfall amount has
            been credited to the account of the Registered Holder.)

       4.   Mortgage Loan Liquidated
-------     ([Registered Holder] [Authorized Servicer] hereby certifies that all
            proceeds of foreclosure, insurance or other liquidation have been
            finally received and credited to the account of the Registered
            Holder.)

       5.   Other (explain)
-------                    ------------------------------
<PAGE>
                                      -2-

      If box 1, 2 or 3 above is checked, and if all or part of the Custodian'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 Custodian, please acknowledge your receipt by signing in the
space indicated below, and returning this form.

[Registered Holder Consent:

Name of Registered Holder:
                          ----------------
Name of Authorized Officer:
                           ---------------
Title:                                    ]
      ------------------------------------

                                             [REGISTERED HOLDER]
                                             [SERVICER AUTHORIZED BY
                                             REGISTERED HOLDER]

                                          By:
                                             ---------------------------------
                                          Date:
                                               -------------------------------

Documents returned to Custodian:

---------------------------,
as Custodian

By:
   ---------------------------------
Date:
     -------------------------------
<PAGE>
                                   EXHIBIT SIX

                             FORM OF NOTICE OF SALE

Date:

To:
   ------------------------------

From:                             (or its Successor or Assignee)
     ---------------------------- (the "Registered Holder")

Re:   Custodial Agreement, dated as of [DATE] (the "Custodial Agreement"),
      between [                       ] ("[    ]") and [CUSTODIAN] (the
      "Custodian")

Ladies and Gentlemen:

      You are hereby notified that as of [the date of sale to be inserted] (the
"Transfer Date"), the Registered Holder shall transfer and assign to [name of
subsequent Registered Holder to be inserted], having an address at
                               , the right (including the power to convey title
-------------------------------
thereto), title and interest in and to the Mortgage Loans identified in the
Mortgage Loan Schedule attached hereto as Schedule A (the "Schedule A Mortgage
Loans"), and you are hereby instructed to [IF THE CUSTODIAL AGREEMENT SHALL BE
ASSIGNED TO THE SUBSEQUENT REGISTERED HOLDER, INCLUDE THE FOLLOWING: hold the
Schedule A Mortgage Loans pursuant to the terms of the Custodial Agreement for
the sole and exclusive benefit of [name of subsequent registered holder to be
inserted] subject to the terms thereof, by which [name of subsequent registered
holder to be inserted] hereby agrees to be bound as the "Registered Holder"
thereunder, including the obligation to indemnify and to pay the Custodian's
fees and expenses with respect to such Schedule A Mortgage Loans.] [IF THE
RELATED CUSTODIAL FILES SHALL BE DELIVERED TO THE SUBSEQUENT REGISTERED HOLDER,
INCLUDE THE FOLLOWING: release the Custodial Files with respect to such Schedule
A Mortgage Loan to [name of subsequent registered holder to be inserted] upon
the direction of the Registered Holder on the Transfer Date.]

      [IF THE CUSTODIAL AGREEMENT SHALL BE ASSIGNED TO THE SUBSEQUENT REGISTERED
HOLDER, INCLUDE THE FOLLOWING: Effective as of the Transfer Date, the Registered
Holder hereby assigns its interest in the Custodial Agreement to [name of
subsequent registered holder to be inserted] to the extent of the Schedule A
Mortgage Loans, and [name of subsequent registered holder to be inserted] agrees
to be bound, as the "Registered Holder" thereunder, by all of the terms,
covenants and conditions of the Custodial Agreement as they relate to the
Schedule A Mortgage Loans, and from and after the date hereof, [name of
subsequent registered holder to be inserted] shall assume for the benefit of the
Registered Holder all of the Registered Holder's obligations as the "Registered
Holder" thereunder with respect to the Schedule A Mortgage Loans.
<PAGE>
      This notification may be revoked by the Registered Holder by notice to the
Custodian at any time prior to the transfer of ownership of the referenced
Mortgage Loans to [name of subsequent purchaser].

                                         [NAME OF REGISTERED HOLDER]
                                         or its successor or assignee

                                         By:
                                            --------------------------------
                                         Name: [to be signed by an authorized
                                               representative]
                                         Title:

                                         [SUBSEQUENT REGISTERED HOLDER]

                                         By:
                                            ------------------------------------
                                         Name: [to be signed by an authorized
                                               representative]
                                         Title:

                                      M-1
<PAGE>
                                   SCHEDULE A

                             MORTGAGE LOAN SCHEDULE

                             [Intentionally Omitted]
<PAGE>
                                   SCHEDULE B

                  MORTGAGE LOAN REPRESENTATIONS AND WARRANTIES
                                  OF THE SELLER

                 PLEDGED MORTGAGE RERESENTATIONS AND WARRANTIES
                  ON LOANS PURCHASED DIRECTLY FROM ORIGINATORS

I.    MORTGAGE LOANS PURCHASED UNDER THE [MASTER MORTGAGE LOAN PURCHASE
      AGREEMENT DATED AS OF [DATE] BETWEEN MERRILL LYNCH MORTGAGE CAPITAL INC.
      (THE "SELLER") AND                (AS AMENDED OR MODIFIED TO THE DATE
                        ----------------
      HEREOF, THE "MASTER PURCHASE AGREEMENT").

      With respect to each Mortgage Loan, the Seller hereby makes the following
representations and warranties. Such representations and warranties speak as of
the Closing Date with respect to the Mortgage Loans (as such capitalized terms
are defined in the Trust Agreement or the Master Purchase Agreement), unless
otherwise indicated. The Seller hereby represents and warrants, as to each
Mortgage Loan as of each respective Closing Date or such other date as may be
specified below, that:

      [Insert Mortgage Loan Representations and Warranties]<PAGE>
                                                                  EXHIBIT 10.51

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
IT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF
A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THIS NOTE UNDER SUCH ACT OR
AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A OF SUCH ACT.

                                 PROMISSORY NOTE

$4,800,000                                                       October 1, 2002

         FOR VALUE RECEIVED, the undersigned IRON AGE HOLDINGS CORPORATION, a
Delaware corporation (the "BORROWER"), promises to pay to IRON AGE CORPORATION,
a Delaware corporation (the "LENDER"), or order, the principal amount of FOUR
MILLION EIGHT HUNDRED THOUSAND AND 00/100THS DOLLARS ($4,800,000) or such lesser
unpaid principal amount of the Loan (as defined below), together with daily
interest from the date hereof, computed on the basis of a 365-day year, on the
aggregate principal amount of the Loan from time to time unpaid at a per annum
rate of 14%, all payable as set forth herein.

         Subject to the terms and conditions hereof and so long as no Payment
Default or Bankruptcy Default (each as defined below) exists hereunder, from
time to time on no more than five occasions on and after the date hereof and
prior to October 1, 2004, the Lender will make loans to the Borrower in such
amounts as may be requested by the Borrower in accordance herewith; PROVIDED,
HOWEVER, that the aggregate principal amount of the loans made by the Lender
under this Note shall in no event exceed $4,800,000. The aggregate principal
amount of the loans outstanding from time to time under this Note is referred to
as the "LOAN".

         The Borrower may from time to time on no more than five occasions
request a loan under this Note by providing to the Lender a notice, which notice
must be received by the Lender not later than noon (Pittsburgh time) on the
requested closing date for such loan. Such notice must specify (a) the amount of
the requested loan and (b) the requested closing date therefor, which shall be a
business day. Each such loan will be made (i) by wire transfer of immediately
available funds to an account designated in writing by the Borrower to the
Lender or (ii) in such other manner as the Borrower and the Lender may at the
time agree.

         On October 1, 2009 or any accelerated maturity of the Loan provided for
herein, the Borrower will pay to the Lender for credit to the Loan an amount
equal to the Loan then due, together with all accrued and unpaid interest on the
Loan. In addition, the Borrower will on demand pay daily interest on any overdue
installments of principal and, to the extent not prohibited by applicable law,
on any overdue installments of interest owed under this Note at a per annum rate
of 18%.

<PAGE>

         The Borrower may not make any prepayment of the Loan at any time prior
to the indefeasible payment in full of the 12 1/8% Senior Discount Notes due
2009 (the "SENIOR DISCOUNT NOTES") issued by the Borrower pursuant to the
Indenture dated as of April 24, 1998 between the Borrower and The Chase
Manhattan Bank, as trustee. At any time after the indefeasible payment in full
of the Senior Discount Notes, the Borrower may from time to time prepay all or
any portion of the Loan, without premium or penalty. Upon all prepayments of the
Loan, the Borrower shall pay to the Lender the principal amount to be prepaid
together with unpaid interest in respect thereof accrued to the date of
prepayment. No portion of the Loan prepaid hereunder may be reborrowed.

         Any payment under this Note shall be made to the Lender in lawful money
of the United States of America on the date such payment is due at (a) the
office of the Lender at Robinson Plaza Three, Suite 400, Pittsburgh,
Pennsylvania 15205, to the attention of the chief financial officer, or (b) such
other address as the Lender may specify in writing to the Borrower.

         If the Borrower shall fail to make any payment of the Loan, or any
accrued and unpaid interest thereon, and such failure shall continue for a
period of three business days (each such failure, a "PAYMENT DEFAULT"), then the
Lender: (a) may, by written notice to the Borrower, terminate the obligation of
the Lender to make any further loans hereunder; (b) may, by written notice to
the Borrower, declare all or any part of the Loan then outstanding, together
with all accrued and unpaid interest thereon, to be immediately due and payable;
and (c) may proceed to enforce payment of the Loan in such manner as the Lender
may elect.

         In addition, in the event that the Borrower shall:

                  (a) commence a voluntary case under Title 11 of the United
         States Code, as from time to time in effect (the "BANKRUPTCY CODE");

                  (b) have filed against it a petition commencing an involuntary
         case under the Bankruptcy Code;

                  (c) seek relief as a debtor under any applicable law, other
         than the Bankruptcy Code, of any jurisdiction relating to the
         modification or alteration of the rights of creditors, or consent to or
         acquiesce in such relief;

                  (d) have entered against it an order by a court of competent
         jurisdiction (i) finding it to be bankrupt or insolvent, (ii) ordering
         or approving any modification or alteration of the rights of his
         creditors or (iii) assuming custody of, or the appointment of a
         receiver or other custodian for, all or a substantial portion of its
         property; or

                  (e) make an assignment for the benefit of, or enter into a
         composition with, its creditors, or appoint, or consent to the
         appointment of, or suffer to exist a receiver or other custodian for,
         all or a substantial portion of its property (each event described in
         clauses (a) through (e), a "BANKRUPTCY DEFAULT");

                                      -2-
<PAGE>

then (A) the Loan then outstanding, together with all accrued and unpaid
interest thereon, shall be automatically and immediately due and payable and (B)
the Lender may proceed to enforce payment of the Loan in such manner as the
Lender may elect.

         The parties hereto, including the Borrower and all guarantors and
endorsers, hereby waive presentment, demand, notice, protest and all other
demands and notices in connection with the delivery, acceptance, performance and
enforcement of this Note, except as specifically otherwise provided herein, and
assent to extensions of time of payment, or forbearance or other indulgence,
without notice.

         Any reference in this Note to the Borrower shall be deemed to include
the successors and assigns of the Borrower; PROVIDED, HOWEVER, that the Borrower
may not assign its obligations hereunder without the prior written consent of
the Lender. Any reference in this Note to the Lender shall be deemed to include
the successors and assigns of the Lender.

         Notwithstanding the place where this Note may be executed, the Borrower
expressly agrees that all the terms and provisions hereof shall be governed by
and construed in accordance with the laws (other than the conflict of laws
rules) of the State of Delaware.

         IN WITNESS WHEREOF, the undersigned has executed this Note as of the
day and year first above written.

                                            IRON AGE HOLDINGS CORPORATION

                                            By ________________________________
                                               Name:
                                               Title:

                                      -3-

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